Key effectiveness indicators

1. Quantity of native forest hardwood log timber harvested compared to the FMP sustainable levels and targets

The FMP is developed by the DBCA and sets the lower and upper limits for the average annual allowable cut for the South West’s native forest over a 10-year period. This is to ensure the levels of harvest can be sustained over an extended period, whilst considering a range of factors such as changing climate conditions. The FMP allowable cut limits are reviewed by an independent expert panel, as part of the FMP’s development.

The harvested volume may vary between years depending on the customer demand for log products, and the volumes harvested in previous years. The FPC monitors harvest levels to ensure volumes removed stay within average annual sustainable limits over a 10-year period. The cumulative average annual allowable cut is monitored and total removal of timber is not to exceed the allowable cut over the 10-year life of the FMP.

In 2018 there was a reduced demand from two major jarrah customers. In 2018 the demand for karri Laminated Veneer Lumber (LVL) was higher resulting in increased utilisation of karri first and second grade sawlog.

This key effectiveness indicator is measured in calendar years rather than financial year to be consistent with the FMP. In addition, the FPC has reported on timber harvested for both first and second grade sawlogs, and other bole volume in cubic metres (rather than tonnes) to enable comparison with the FMP annual allowable cut.

First and second-grade jarrah and karri sawlogs

Target: Native forest harvest level does not exceed the level prescribed in the FMP

* Refer to FMP Table 4, which specifies lower limits for average annual allowable cut of first and second grade jarrah and karri sawlogs.

Other bole volume for jarrah, karri and marri

Target: Other bole volume harvest does not exceed the level prescribed in the FMP

Other bole volume is log product that does not meet first or second grade sawlog standards as recognised under the FMP.

* Refer to FMP Table 5, which specifies lower limits for average annual allowable cut of other bole volume.

2. Harvest of sandalwood does not exceed Order in Council

Harvest of sandalwood does not exceed Order in Council

Target: Sandalwood harvest does not exceed the level prescribed in the Order in Council

An annual quota for the harvesting of wild sandalwood from Crown land is set by the Sandalwood (Limitation of Removal of Sandalwood) Order 2015 (Order in Council). Under the Order in Council (OIC) an annual quota of 2,500 tonnes is available for harvest. The proportion of the total quantity of sandalwood that may be pulled or removed from Crown land and alienated land during 2018-2019 was allocated based on 90 per cent from Crown land and 10 percent from alienated land. As the FPC manages the harvesting of sandalwood on crown land, the FPC will ensure the annual amount of 2,250 tonnes (with a maximum of 1,125 tonnes of green wood) has not been exceeded. The quantity includes all parts of the tree except leaves, bark and small branches.

This key effectiveness indicator is reported by financial year. The graph below represents the quantities of green and dead wood harvested over the last three years, with levels not exceeding the quantities available to the FPC under the OIC.

 

3. Effectiveness of forest regeneration

Regeneration of the forest is critical to sustainability. It is essential for maintaining productive capacity and maintenance of biological diversity.

Regeneration is carried out in accordance with relevant guidelines. Regeneration success is monitored, and remedial action taken as necessary. Remedial action may include infill planting, re-seeding (sandalwood) and/or protection of regeneration from browsing animals (e.g. rabbits). Karri and jarrah regeneration is monitored as part of meeting FMP requirements. Sandalwood regeneration is carried out as part of the FPC’s highly successful Operation Woylie seeding program, which has been designed to mimic the role of the native woylie in regeneration.

Karri 

Target: 95 per cent of the area regenerated requires no remedial action

Regeneration is conducted to ensure species composition (biological diversity) and forest productivity is maintained. Karri dominant forest is re-established through the planting of nursery raised seedlings. Regeneration surveys are completed on every hectare of karri forest 
at around six months following planting. The FPC’s target is that at least 95 per cent of areas regenerated require no remedial action. The level of stocking (stems per hectare) required is set out in the DBCA’s Silvicultural Guidelines for Karri 2014.

Data for this key effectiveness indicator is reconciled on a calendar year basis. Note that financial year data for previous years is not available. The results presented in the 2017-2018 annual report were for the calendar year incorrectly labelled as financial year results. Over the last three calendar years, no karri planted areas have required remedial treatment.

Jarrah

Target: 90 per cent of the areas cutover for regeneration are completed within 30 months

Jarrah forest consists of a mosaic of different forest structures, as such the silvicultural objective for each area of forest varies depending on its structure and a range of other factors such as forest condition in the surrounding landscape. Regeneration most often requires follow up treatment post-harvest. For example, it may be necessary to remove competition from specific trees which are restricting light, nutrients and water to allow successful regeneration. 

Following jarrah harvesting, prescribed burning is carried out by DBCA, which is essential for reducing fuel loads (from harvest residue) and releasing nutrients back into the soil. Natural regeneration is stimulated from the prescribed burn and associated nutrient release, which supports the growth of ground coppice and seedlings.

Areas cutover (harvested to regeneration release) also need to be prescribed burnt within 30 months to help ensure regeneration. Once an area is older than 30 months since it was cutover for regeneration release, it can be assessed to see if it was prescribed burnt within the time required to meet compliance. Table 1 shows the time period included and criteria used to assess compliance. The results below are presented for the previous calendar years as cumulative results using data from areas cutover since January 2014. As jarrah prescribed burning is still occurring late in the financial year, financial year results are not available. Note that previous results reported in the 2017-2018 annual report have been amended as areas that had been harvested recently and which had not reached 30 months since harvest were incorrectly included in the previous year’s analysis.

Please note that the analysis is based on best available information. Harvest dates used for the analysis may vary from actual dates of harvest due to availability of electronic information. Future refinements to electronic data capture are likely to result in adjustments to previous results in future years. 

Table 1. Time period and criteria used for assessing compliance for jarrah regeneration

Calendar year (January to December) Areas cutover included in the analysis Criteria used to assess compliance
2017 As at 31 December 2017 areas were ≥ 30 months since they were cutover for regeneration release with the earliest date of the area cutover being 
1 January 2014
Compliant if area was prescribed burnt within 30 months of the area being cutover for regeneration release
Not-compliant if the area was not prescribed burnt within 30 months of the area being cutover for regeneration release
2018 As at 31 December 2018 areas were ≥ 30 months since they were cutover for regeneration release with the earliest date of the area cutover being 1 January 2014

* The cumulative result uses data from areas cutover for regeneration release from January 2014.

Sandalwood

Target: Average 50,000 seedlings established annually

Areas targeted for Western Australian wild sandalwood harvest and regeneration are based on a number of criteria including fire risk, and grazing pressure. Rainfall amount and timing is also likely to be a key factor influencing regeneration success. Each year, following harvest, the FPC plants sandalwood seeds over seeding rip lines within the driplines of host plants. This commences around September and continues through to April. Regular inspections are conducted during regeneration operations to ensure adherence to the FPC’s procedures. Seedling survival is monitored the first summer after seeding to calculate number of seedlings per kilometre successfully established.

Establishment success will vary from year to year due to rainfall and other factors. Therefore, this key effectiveness indicator is assessed over a cumulative average, with a target of 50,000 seedlings established annually. Seedling establishment survey results indicate that in 2017-2018 financial year the average seedling survival over the previous seven years was 48,925 seedlings per annum. In 2018-2019 financial year the average over the previous eight years was 46,976 seedlings per annum.

In 2018-2019, the FPC expanded its seeding program significantly and sowed 20.8 tonnes (note that 14.25 tonnes was sown in the previous year) of sandalwood seed. This regeneration work will help the FPC to increase its average seedling establishment result for future years.

Seedling establishment is currently below the target of 50,000 seedlings established annually. Both 2017 and 2018 winters received very low rainfall across seeding operation areas. However, additional seeds may germinate in subsequent years as seeds remain viable for several years in the soil.

 

4. The achievement of thinning schedules

Thinning is important for forest health and productivity. By removing some of the standing trees, it reduces the competition for water, nutrients and light. It also helps protect catchments from a drying climate. As such, it is required under the FMP for forest health and ensuring future sustained yield. The FPC does not receive funding for non-commercial thinning and therefore karri forest and softwood plantation thinning is carried out when markets are available.

In 2018-2019 financial year the FPC commenced non-commercial thinning within sandalwood plantations, as the thinning program is necessary for the health and vitality of the hosts and sandalwood. Thinning is carried out to ensure an appropriate sandalwood stocking rate for the rainfall and/or to maintain an appropriate host-to-sandalwood ratio.

Karri

Target: Meet Forest Management Plan thinning schedules 

This key effectiveness indicator is based on the FMP thinning schedule for karri forest. The FMP prescribes the target for first thinning. As the FMP schedule is based on a calendar year, this key effectiveness indicator is reported on a calendar year basis. Achievement of thinning targets is limited by market demand.

Note that financial year data for previous years is not available. The results presented in the 2017-2018 annual report were results for the calendar year incorrectly labelled as financial year results.

Softwood plantations

Target: 95 per cent of softwood plantations are thinned within two years of the scheduled operation

To promote optimal growth of softwood plantations, stands are typically thinned twice during the life of the FPC’s softwood plantations. Through this key effectiveness indicator the FPC monitors if plantations are thinned within the two year age period when thinning is considered beneficial. A 95 per cent target allows for shortfalls due to market conditions not being favourable for commercial softwood thinning.

In 2018-2019 financial year 85 per cent (10% short of target) of softwood plantations were compliant with thinning schedules.

Sandalwood plantations

Target: Plantations stocking is assessed and, if required, thinned by 14 years of age

The 2018-2019 financial year is the first year that the FPC has commenced thinning of sandalwood plantations. A four year thinning program was set to commence from 2018-2019 financial year, with the first financial year target set at 200 hectares. The thinning program is based on a comprehensive assessment of the sandalwood plantation estate in 2015. In 2018-2019 the FPC completed its annual scheduled thinning program through a non-commercial thinning operation.

 

5. All aspects of road construction within guidelines

Target: 90 per cent of assessed roads compliant

As part of maintaining access to the forest for harvest operations, the FPC may be required to build new road alignments. Roads are constructed to meet legal and safety requirements in accordance with the FPC’s procedures. The FPC assesses compliance by the FPC’s roading contractors and in particular, new roads are checked to assess that:

  1. The road has been cleared to the correct width.
  2. The right alignment has been cleared.
  3. Crowning elevation meets the correct specification.
  4. Carriage width is at the correct specification.
  5. Off-shoot drains are constructed and spaced to requirements.
  6. Entry and exit points of pipes are clear.

Corrective action is taken if roads are found not to be compliant.

 

6. All operations commence with required approvals

Target: 100 per cent of pre-operation planning approvals completed and approved prior to commencement

Prior to undertaking disturbance operations, the FPC ensures that approval has been obtained. Approval is in the form of a signed and authorised planning document, which may also need to be renewed if an operation continues beyond the initial authorisation period. Approval to commence operations involves careful planning to ensure a range of forest values are protected and/or accommodated. Values include environmental, economic, social and heritage values. For areas regulated by the DBCA, the FPC must obtain approval from the Parks and Wildlife Service of the DBCA. 

Meeting this key effectiveness indicator is important for ensuring ecologically sustainable management of the forest. One hundred per cent of pre-operations planning approvals have been obtained for the last three financial years.

Note that previous results now also reflect the percentage of plantation harvest operations where pre-approval was obtained, as this data was previously excluded from the key effectiveness indicator reporting.

 

7. Independent certification maintained

Target: The FPC maintains appropriate certification

The FPC maintains certification to internationally recognised management standards. This provides independent verification that the FPC is managing their operations in accordance with standard requirements.

During 2018-2019 the FPC was externally audited against the International Standard ISO 14001:2015 (for an Environmental Management System) and the Australian Forestry Standard (AFS) AS 4708:2013. As part of this process, the FPC transitioned from ISO 14001:2004 to ISO 14001:2015. The FPC’s primary forest certification, AFS, is internationally recognised by the PEFC. The AFS certification excludes the FPC’s sandalwood business and some other operations, but the FPC are currently in the process of investigating independent verification of legal sources through the PEFC Chain of Custody for Forest Based Products (PEFC ST 2002:2013).

 

8. Planned firebreak activities achieved

Target: 90 per cent of firebreaks adequate and trafficable

The FPC is responsible for the management of over 570 individual plantations across the South West of Western Australia. Maintaining firebreaks in these plantations is important for managing the threat from fire. The FPC inspects firebreaks as part of routine plantation inspections prior to and during the fire season. Firebreaks are assessed to ensure they are trafficable, and the relevant fuel free clearances are maintained. If a firebreak is found to not meet requirements, the FPC takes appropriate action to ensure this is rectified.

In 2018-2019, the FPC continued to invest in firebreak maintenance. In 2018-2019, 90% of firebreaks inspected were assessed as being compliant which is in line with the FPC’s target. This result is an improvement compared to the previous two financial years.

 

9. Area of softwood plantation established against target

Target: 100 per cent of the target area of softwood plantation established

The replanting and establishment of harvested pine plantations (as a second rotation – 2R), and the establishment of new plantations (first rotation – 1R) are critical to the achievement of the Softwood Industry Strategy for Western Australia. This will ensure a viable and sustainable softwood industry by providing a softwood resource into the future.

The FPC softwood planting season occurs in winter. As the winter planting season crosses over into two financial years, this key effectiveness indicator is measured on a calendar year basis.

Note that the previous actual result for second rotation establishment presented in the 2017-2018 annual report was based on data for the 2017 calendar year, but the combined target provided for 1R and 2R was a 2017-2018 financial year target. For consistency, this year a calendar year target has been presented with the corresponding calendar year actual result. Further, the previous result reported for second rotation establishment has been amended to reflect a re-classification of area based on the definition of first rotation.

In 2017, 2R establishment was lower than the target set resulting in a one per cent shortfall in meeting the combined 1R and 2R target. In 2018 calendar year the FPC exceeded target.

Table 2. Targets and actual figures for plantation establishment

  Total target (1R and 2R) Total actual (1R and 2R) 1R target 1R actual 2R target 2R actual
2017 (hectares) 3,437 3,418 1,650 1,660 1,787 1,758
2018 (hectares) 2,308 2,460 1,600 1,637 708 823
 

 

 

10. Expansion of the plantation estate

Target: 95 per cent of land planned to be established each year to be planted subject to the availability of seedlings

The FPC sets a budget target for first rotation (1R) planting for the purpose of expanding the softwood plantation estate. Plantation expansion is part of the strategy set out in the Softwood Industry Strategy for Western Australia. To maintain a sustainable softwood industry, the FPC must expand its resource to provide for future demand.

Planting occurs in the winter, and crosses into two financial years. Therefore, the FPC reports hectares established against target for each calendar year.

Note that results reported in the 2017-2018 annual report were based on calendar year data and not financial year results. Therefore, the results are presented for calendar years this year. Further, the previous results have been amended to reflect a re-classified definition of first rotation.

For the last two calendar years the FPC has exceeded its 1R establishment target.

Table 3. Targets and actual figures for plantation expansion

  1R target 1R actual
2017 (hectares) 1,650 1,660
2018 (hectares) 1,600 1,637

11. Increase in low-value resource delivered to and processed by local markets

Target: Increase in low-value resource delivered to and processed by local markets

The intention of this key effectiveness indicator is to ensure the FPC maximises the utilisation of forest products and to ensure these products are processed locally where possible. For the purpose of reporting on this KPI, ‘low-value resource’ is regarded as non-sawlog, residue products.

The FPC seeks to maximise utilisation of forest products, support domestic industry and maximise value from each forest product. This in turn provides social and economic benefit to regional Western Australia. In addition, increased utilisation of non-sawlog forest products helps provide ecological and silvicultural benefits. For example, it helps the FPC to achieve commercial thinning targets, and reduces fire hazards and regeneration costs.

Low-value forest products for the purpose of this KPI include biomass, firewood, chiplogs, residue logs and mulch. No Sandalwood products are included in this KPI, as all sandalwood is considered high-value.

While domestic sawmilling has been unfavourably affected by a national decline in the building sector during 2018-2019 (primary reason why there has been a reduction in the percentage of domestic sales), strong demand for low-value forest products across both softwood and native forests has supported improved utilisation, market diversification and achievement of silvicultural objectives. 

As woodchip is processed domestically, there has been a moderate increase in the volume of low-value resource processed by local markets since 2017-2018 financial year. 

 

12. Operating profit

Target: The FPC achieves a profit before abnormal accounting items, grants and subsidies from State Government and movements in biological asset valuations

The FPC has achieved a $0.03 million profit result for the 2018-2019 year, following lower than budgeted sales in all production areas and a change in accounting policy. The result included an amortisation expense for native forest of $2.2 million and additional fire suppression costs of $2.6 million for the Lewana plantation that was unbudgeted.

Following the change in the classification of biological assets to intangible assets, per note 9.11 of the financial statements, the change in accounting resulted in the native forest segment achieving an additional $11.9 million for the 2017-2018 year. The revised higher result for 2017-2018 of $18.5 million (previously reported as $6.6 million) included additional income of $11.9 million following the reversal of impairment of the native forest right of use asset (refer to note 2.2 of the financial statements).