Commission faces audit into native logging
Commission faces audit into native logging

WA Auditor-General Colin Murphy has launched an inquiry into the Forest Products Commission’s operations, sparking further debate about the viability of native forest logging.

The inquiry will test whether the FPC has appropriate controls for estimating timber volumes and to reduce the risk of it not meeting contractual commitments, according to Mr Murphy’s website.

The audit will also look at whether processes for selling native forest products are consistent with State Government and FPC policies.

An FPC spokesman dismissed the inquiry as routine, however a spokeswoman from the Auditor-General’s office described the audit as a compliance or limited scope performance audit.

The FPC posted losses after tax of $13.78 million in 2011 and $12m in 2010, but reported a net profit of $12.9m in 2012.

In the commission’s 2012 annual report, FPC chairman Michael Gurry described the year as a successful one following restructuring of its operations and finances.

However, long-time FPC critic Peter Lane said a question mark remained over the latest profit.

He said a major factor influencing whether the FPC made a profit or loss was the valuation of biological assets, and revaluations had affected the 2011-12 result.

The commission’s borrowings in 2010-11 stood at $82.8m but in 2011-12 its debt was repaid and borrowings reduced to zero, Mr Lane said.

“This was achieved primarily through the injection of $71.6m of equity by the Government and a further $15.9m in Government grants and subsidies.”

The FPC said it reported a $12.9m profit as a result of cuts in operating expenditure, improved sales of native timber and an increase in softwood chip exports.

It said forestry contributed $1.06 billion a year to the community, with about 3400 people employed in timber related industries.

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