Key effectiveness indicators

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

Service: Provide healthy forests for future generations

Native forest harvesting levels are based on the average annual allowable cut which is indicated in the FMP, which accounts for all resource as either sawlog or other bole volume.

First and second grade jarrah and karri sawlogs

The quantities of sawlog harvested must be consistent with the annual allowable cut in the FMP.

The annual allowable cut of first and second grade sawlogs for jarrah and karri are:

  FMP 2004 - 2013 FMP 2014 - 2023
Jarrah 131,000 m3 132,000 m3
Karri 54,000 m3 59,000 m3

In 2016–2017, production of jarrah sawlogs (99,541 m3) was similar to the previous year.  Karri sawlog production (50,395 m3) was an increase on the previous year, reflecting a build up in log yard stocks at the end of the financial year, coupled with stronger demand for karri in the production of engineered wood products.

The graph compares the quantity of first and second grade sawlogs produced by the FPC compared with the allowable cut. The FPC produces a range of different sawlog products and calculates the proportion of first and second grade material contained within these logs.

Graph illustrating the gap between allowable cut and the actual production of first and second grade. Consistently there has a been a gap between production and the allowable limit since 2004

Other bole volume for jarrah, karri and marri

For the previous FMP 2004 -2013, the annual allowable cut of other bole volume (excluding first and second grade sawlogs) for jarrah and karri was 534,000 m3 and 160,000 m3 respectively. For all marri logs, the total sustained yield was 196,000 m3. The previous FMP only had a single limit for these products.

The current FMP now has upper and lower limits for the harvest of other bole volume logs which are detailed in the below table.

Data presented in the graph covers a period which overlaps two FMPs.

  Jarrah Karri Marri
Annual upper limit* 521,000 m3 164,000 m3 254,000 m3
Annual lower limit* 292,000 m3 164,000 m3 140,000 m3

*Excludes first and second grade sawlogs for jarrah and karri.

KPIs for other bole volume for 2013-2014 onwards, report actual harvest against the current FMP lower limit. The annual upper limit is only accessible following the development of new markets for lower grade wood products. Reports from previous years continue to record the annual harvest against the single FMP upper limit.

For 2016–2017:

  • The production of karri other bole of 108,771 m3 is approximately 12,000 m3 lower compared with the previous year. This is primarily due to a lower volume of fire salvaged timber.
  • The quantity of jarrah (199,768 m3) and marri (17,402 m3) other bole volume harvested is a substantial increase on previous years reflecting increased utilisation of residue from sawlog operations. This is an encouraging trend that indicates improved performance against silvicultural guidelines, facilitated by changes in production techniques and the expansion of native forest markets.

Graph illustrating an increase in the 1st grade cuts of Jarrah and Karri in recent years, despite decreased volume

2. Harvest of green sandalwood maintained at allowable cut

Service: Provide healthy forests for future generations

The annual allowable harvest for green sandalwood is determined by the Sandalwood (Limitation on Removal of Sandalwood) Order (No.2) 2015 and is 1,250 tonnes per annum, of which 1,125 tonnes is licensed to the FPC. In previous years, the total quantity of green sandalwood available for harvest was 1,500 tonnes per annum, of which 1,250 tonnes per annum was licensed to the FPC. The graph to the right shows the actual quantity of green sandalwood harvested in the last five years.

Since 2006, improved harvesting techniques have resulted in greater utilisation of sandalwood products. These products were previously not able to be efficiently processed and were not accounted for in total production. While this increased utilisation is good in terms of efficiency, it resulted in the FPC unintentionally exceeding its allowable cut in 2012-2013. It has now been rectified.

The demand for third grade sandalwood has been negatively impacted by an increase in the availability of other low-grade products competing in the same market.

During 2016–2017, the FPC harvested 89 per cent of its licence under the Order in Council, however while demand remained strong, the FPC’s production capacity was restricted by weather conditions and the transition to new contracts.

Graph illustrating a gradual decline in the green harvest in recent years, led by reduction in demand for third grade materials

 

3. Extent of karri forest regenerated relative to area harvested

Service: Provide healthy forests for future generations

Karri regeneration

This indicator is expressed as the area of karri forest regenerated relative to total karri forest harvested (excluding roads, mine sites and areas of harvested forest not requiring treatment). Regeneration is accounted for in calendar years, consistent with the FMP. 

The area harvested refers to the calendar year reported. The regenerated area is prepared and planted in winter and is based on the area harvested in the previous year, as well as any areas harvested in the early part of the current calendar year.

The additional area cut over versus area regenerated in 2016 reflects an increase in demand for karri sawlog during the second half of 2016.

  2015 (hectares) 2016 (hectares)
Area of karri forest clear-felled or partially harvested 229 475
Area of regeneration completed 316 370

The area reported is the net area cut over, which is equal to the entire coupe area less the area of informal reserves and other uncut patches within the coupe.

Graph showing the levels of cut land versus regenerated. In 2016 more land was cut than regenerated, but this pattern was the opposite in the previous 3 years

 

4. Timeliness of karri forest regeneration

Service: Provide healthy forests for future generations

The FMP requires replanting of karri forest immediately following harvest. This ensures a level of habitat restoration and recovery and also ensures the sustainability of the industry in the long-term.

The area of karri forest regenerated is measured within specified timeframes following harvesting. The targets are 75 per cent of the area requiring treatment completed within 18 months following harvesting (excluding areas thinned) and 100 per cent completed within 30 months following harvesting. The percentage regenerated is based on a sample of coupes.

The area not completed from the 2016 harvest year was due to the need to complete silviculture treatments in adjacent jarrah forests.

Graph illustrating the FPC meeting its goal of regenerating cleared Jarrah forests

 

5. Effectiveness of regeneration of karri forest

Service: Provide healthy forests for future generations

Regeneration success is critical to ensure sustainability. The FMP requires the FPC to closely monitor forest regeneration work and monitor seedling survival rates. The first year following planting is critical to long-term seedling survival. The chart below measures the percentage of the sampled regeneration that meets the stocking standard set out in the Silviculture Guideline For Karri 2014

The target is that no more than 95 per cent of the area regenerated requires no remedial action. This target has been met each year in the last five years.

Graph illustrating the FPC meeting its goal of 95% of regenerated land not requiring remedial action

 

6. The achievement of thinning schedules in karri forest

Service: Provide healthy forests for future generations

Thinning promotes forest health and productivity by removing some of the standing trees to reduce competition for water, nutrients and light. 

The graph below depicts the area scheduled for thinning (light bar) each year and the area actually thinned (dark bar). The lower and upper guides show the area scheduled to be thinned within 10 per cent.

To ensure maximum utilisation of forest products, thinning is only carried out when markets are available for thinned wood. Over the last few years, the market for karri thinning have been limited due to reduced product demand. To ensure future areas scheduled for thinning are completed, the FPC is working with industry to find new markets for karri products from karri thinning.

Graph illustrating the areas of Karri forest prescribed for thinned versus how much was thinned; Each year less area is thinned compared to what was prescribed

 

7. Area of softwood plantation established against target

Service: Provide healthy forests for future generations

The planting of second and third rotation pine plantations is critical to ensure the supply of softwood to the timber industry. 

Plantation establishment operations are carried out during winter and therefore spans financial years. Therefore areas of establishment reported in the annual report are those established during the previous winter. It should be noted that each year a percentage of this replanting program is generated as a consequence of losses through wildfire, which in recent years have been significant.

Graph illustrating the goals for planting 2nd and 3rd rotation timber versus the achievement of that goal. The goals and achievement are consistent over the last 5 years

 

8. Total payments to government (provide a return on investment to government)

Service: Facilitate a vibrant forestry industry to deliver social and economic benefits, particularly in regional Western Australia

This measure highlights the direct financial return to the State Government in the form of dividends and taxes from the previous financial year. 

For 2016–2017, the FPC paid dividend and taxes of $4.6 million. This includes stamp duty of $0.4 million on a land purchase.

Graph illustrating the FPC exceeding its goals of paying tax and a dividend to the state government

 

9. Net profit before interest and tax (NPBIT)

Service: Facilitate a vibrant forestry industry to deliver social and economic benefits, particularly in regional Western Australia

Earnings before interest and tax do not include changes in biological assets, onerous contracts, Commonwealth grants and contributions, adjustments in doubtful debts and change in provision for native forest regeneration.

Earnings before interest and tax in 2016–2017 was $11.1 million. This result exceeded budget by $2.7 million primarily due to a better than expected result in native forest and plantations.

Graph illustrating the FPC exceeding its goals of earnings before interest and tax over the last 5 years