National Forum

"Getting Paid to Keep Your Native Forests!
A unique program provides financial incentives to landowners for conservation covenants to protect the most important forests on private land
Steven Smith,
Private Forest Reserves Unit
Resource Management and Conservation Division
Department of Primary Industries, Water and Environment, Tasmania

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ABSTRACT

The Private Forest Reserves project is establishing a system of Private Forest Reserves ('private CAR reserves') by assisting landowners to place perpetual conservation covenants on their land titles to voluntarily protect forests of great conservation significance. The aim is to protect 100,000 ha of such forests (i.e. ave. $300/ha). The total extent of these forests on private land is estimated to be about 500,000 ha.

Scientific rigor and objectivity are ensured through an assessment process that includes an independent Scientific Advisory Group. An Advisory Committee comprised of a broad range of key stakeholder representatives facilitates transparency, accountability and strategic overview.

Restrictive conservation covenants, management agreements and operations plans have been completed for 15 landowners and cover 1,989 ha. Funds provided to landowners to secure these covenants, are based on approximately one third of market value of the forested land, and amount to $394,480 (ave. $198/ha). Ministerial approval has been given to covenant a further 42 properties to protect an extra 8,000 ha. Based on current progress, it is estimated that by December 2003, Ministerial approval will have been given to protect 100,000 ha, and that all covenants to protect this area will have been secured by December 2004.

In exceptional cases, where no other options exist to protect a forest type, purchase may be considered. To date, 12 properties have been purchased to protect 3,266 ha, at a cost of $3,336,475 (ave. $1,022/ha).

Rapid progress has been made since the first covenants were put in place in June 2000. The interest shown by rural landowners has increased dramatically and well-respected landowners are becoming 'champions' for the Program.

Application of capital gains tax to financial considerations paid to landowners continues to be a significant barrier to participation by landowners, and is contrary to the Prime Minister's policy of encouraging philanthropy in nature conservation.

Various strategies, both reactive and proactive, are being used to establish the Private Forest Reserves system. Marketing and promotion are targeted at rural landowners and result in many direct expressions of interest. Landowners are also referred by other programs directed at conservation on private land, such as Bushcare, Coastcare, and the Protected Areas on Private Land program, which focuses on covenanting non-forest native vegetation on private land. Landowners, who have been identified as having significant native forests, that are strategically important for establishment of extensive Private Forest Reserves, are also being approached directly by the Private Forest Reserves Unit

Landowners may be referred to the Private Forest Reserves Unit by the State's forest management regulators - the Forest Practices Board, which assesses timber harvesting plans and applications to establish Private Timber Reserves. The Forest Practices Board has responsibility for implementation of the Forest Practices Act 1985 and the statutory Forest Practices Code, which applies to commercial forestry activity both on Crown and on private land.

The Forest Practices Board has responsibility for implementing Tasmania's Permanent Forest Estate Policy. Under this policy, the total area of native forests statewide is to be maintained at or above 80% of 1996 levels, and the area of each forest community within each of the State's 9 bioregions is to be maintained at greater than 50% of the 1996 level. The Permanent Forest Estate Policy is being reviewed with the intention of ensuring that rare, vulnerable and endangered communities are adequately protected. The Forest Practices Act will be amended to include non-commercial tree clearing.

Native vegetation can also be protected under the Land Use Planning and Approvals Act 1993 and the Resource Management and Planning System. Under this system, Local Governments are required to ensure that planning schemes have regard to the principles of sustainability as defined in the Act, and some chose to impose planning controls to protect vegetation of greatest conservation significance.

Under a new State Government initiative, a policy framework, similar to that developed for forest conservation, will be established to determine conservation priorities for non-forest native vegetation and to facilitate conservation of native vegetation on private land using the range of available mechanisms and incentives.

INTRODUCTION

The Tasmanian Regional Forest Agreement (RFA), signed in November 1997, resulted in $30 million dollars being made available, from the Natural Heritage Trust and from a special Commonwealth grant, to protect forest communities on private land, which could not adequately be protected on public land. The overall objective is to ensure that each of the 50 forest communities in the State are protected in accordance with internationally agreed criteria (JANIS).

The Private Forest Reserves project (PFRP) aims to establish a system of reserves for native forests on private land. The reserves will be part of the State's comprehensive, adequate and representative (CAR) reserves system and known as Private Forest Reserves (or 'private CAR reserves').

Assistance is provided to landowners to place perpetual conservation covenants on their land titles to voluntarily protect targeted forests of great conservation significance. The aim is to protect 100,000 ha of such forests (i.e. ave. cost $300/ha) by July 2002. The total extent of these forests on private land is estimated to be about 500,000 ha.

Regulation of the forest industry in Tasmania is the responsibility of the State's forest management regulators - the Forest Practices Board. The Board has responsibility for implementation of the Forest Practices Act 1985 and the statutory Forest Practices Code, which applies to commercial forestry activity both on Crown and on private land. The Board assesses timber harvesting plans and applications to establish Private Timber Reserves.

Native vegetation can also be protected under the Land Use Planning and Approvals Act 1993 and the Resource Management and Planning System. Under this system, Local Governments are required to ensure that planning schemes have regard to the principles of sustainability as defined in the Act, and some Councils impose planning controls to protect vegetation of greatest conservation significance.

METHODS

Conservation Targets and the 'Candidate Map' - During development of the RFA, Tasmania's native forests were classified into 50 types (based mainly on dominant tree species). Assessments were made of the degree of clearing of each type compared to its putative 1750 distribution (i.e. pre European colonisation). Calculations were made of the area of each forest type that would need to be reserved to meet the target of 15% of its 1750 distribution. Some forest communities had been cleared to such an extent that it was impossible to reach the 15% target, so alternative targets of either 60% or 100% of their 1750 distribution were set.

Reservation targets for about half of the communities could be or had been met on public land. The PFRP aims to meet conservation targets for the other communities - those which occur primarily in the drier, more arable and more altered areas of Tasmania (viz. eastern and northern Tasmania). The PFRP also gives a high priority to reservation of old-growth forest communities that are inadequately protected on public land, and to habitats of forest-dependent threatened species.

A Strategic Plan for the PFRP, approved by State and Commonwealth Ministers in 1998, sets out the targets on private land for each forest community, and outlines the methodology to be used. The total area of targeted forests on private land is about 500,000 ha, and the map of these forests is known as the Candidate Map.

Project governance - The Private Forest Reserves Unit was established in the Resource Management and Conservation Division, Department of Primary Industries, Water and Environment to establish the system of reserves on private land. The Unit consists of a Manager, Senior Conservation Officer and 6 Conservation Officers, Administration Officer, and GIS Officer. Ten Negotiators are contracted to provide part-time negotiation services and a consultant provides part-time marketing and communication services.

An independent Scientific Advisory Group (CARSAG), consisting of a range of specialists from various agencies and non-government organisations, meets fortnightly and assesses the conservation priority and urgency of forested properties. Conservation Officers present comprehensive survey reports to the Group. If recommended by CARSAG, a brief is prepared for a Negotiator to negotiate a project proposal and management agreement with the landowner.

An Advisory Committee comprised of a broad range of key stakeholder representatives facilitates transparency, accountability and strategic overview. The Committee considers project proposals monthly and ensures that proposals are in accordance with the Strategic Plan.

Strategies for targeting landowners:
Reactive - To achieve the ambitious goals for this project within the agreed timeline requires both reactive and proactive strategies. Landowners with native forests are encouraged to contact the Private Forest Reserves Unit to determine whether their forests are suitable as Private Forest Reserves. The range of people working with landowners to facilitate nature conservation on private land (including Land for Wildlife, Bushcare, Local Councils, regional NHT devolved grants and Protected Areas on Private Land) are urged to refer suitable landowners to the Unit. Referrals also come to the Unit from other agencies such as the Forest Practices Board and Private Forests Tasmania.

Proactive - CARSAG analysed the target forests on private land and produced a list of the top 500 'potential Strategic Reserves', in the Strategic Reserve Design project. Each potential Strategic Reserve represents a cluster of different landowners. Conservation Officers and Negotiators are targeting these landowners with the aim of establishing contiguous Private Forest Reserves with good reserve design characteristics.

Covenants, Management Agreements and Purchases:
Conservation covenants - Landowners are encouraged to place restrictive conservation covenants in perpetuity on land title. The covenant, under the National Parks and Wildlife Act 1970, refers to management activities that may be permitted with approval from the Director of Parks and Wildlife. Such approval is given in the form of an 'Operations Plan' - reviewed periodically to ensure that conservation values are being maintained.

Management agreements - If management issues are identified that require on-going management (such as weed control) , periodic stewardship payments may be negotiated by the landowner. In such cases, a Management Agreement details the payments and time frames.

If a landowner has native forests of high conservation significance, and is not prepared to accept a conservation covenant in perpetuity, a fixed-term covenant (viz. 20 years), or a management agreement without a covenant, may be negotiated.

Purchases - In exceptional cases, where a property represents the only or the best opportunity to protect a forest community, purchase may be considered. Purchased properties are generally given formal reserve status and become part of the Crown reserve system. In some cases, properties may be sold on condition that the purchaser agrees to place a conservation covenant on the land title.

Incentives - A financial package is offered to landowners, based on about one third of the market value of the land and the area of targeted forests. The maximum package is offered to establish a reserve that meets IUCN class 1 criteria, and is reduced in relation to concessions, such as domestic firewood collection etc. If recurring stewardship payments are negotiated, they are deducted from the total package, and the remainder is paid as an up-front payment to the landowner, at the time of recording a covenant on the land title.

Landowners are provided with information about fauna and flora conservation values on their land and given advice and assistance with conservation management, including assistance with fencing.

Land with a conservation covenant is exempt from State Land Tax.

Some Local Councils are considering providing rate discounts for landowners with conservation covenants in the PFRP.

Alternative approaches
Revolving Fund - In accordance with the Strategic Plan, properties may be identified as being suitable for purchase, covenanting and re-sale. Criteria for suitable properties have been determined, and a pilot project is being undertaken to investigate the most efficient way of implementing a 'Revolving Fund' within the PFRP.

Competition and 'tendering' - For forest communities with much greater distributions on private land than are required to meet conservation targets, a number of strategies ensure that competition contributes to achievement of optimum conservation outcomes.

A strategy was produced for each of these communities, identifying the distribution of the forest type on private land and indicating the forested areas of greatest strategic importance due to their condition (i.e. lack of weeds and disturbance), area and context.

Negotiators ensure that the PFRP gains optimum conservation results at minimum costs, by conducting simultaneous negotiations with a broad range of landowners with that forest type. In effect, landowners are simultaneously able to 'tender' to provide conservation services for the public good, in a competitive environment. The successful 'tenders' are those that are judged as providing the best value in terms of long-term and strategic conservation outcomes and cost.

RESULTS

From July 1998 until June 2000, the necessary processes and structures were established, legal instruments were developed, and the project was marketed to landowners with target forests. Negotiations were initiated with over 270 landowners covering nearly 80,000 ha, and 14 agreements were reached and gained Ministerial approval.

Rapid progress has been made since the first covenants were put in place in late June 2000. The interest shown by rural landowners has increased dramatically and well-respected landowners are becoming 'champions' for the Program.

Restrictive conservation covenants, management agreements and operations plans have been completed for 15 landowners and cover 1,989 ha at a cost of $394,480 (ave. $198/ha). Ministerial approval has been given to covenant a further 42 properties to protect an extra 8,000 ha. Based on current progress, it is estimated that by December 2003, Ministerial approval will have been given to protect 100,000 ha, and that all covenants to protect this area will have been secured by December 2004.

In exceptional cases, where no other options existed to protect a forest type, properties have been purchased. To date, 12 properties have been purchased to protect 3,266 ha, at a cost of $3,336,475 (ave. $1,022/ha).

The progressive results of the project are shown in tables 1 to 5.

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DISCUSSION

Prognosis:
The current average amount paid to landowners to covenant a forest is $191/ha (see Table 5) . Assuming that the average cost of covenanted forests increases (to be conservative) to $250/ha, and extrapolating from experience to date, it is predicted that by July 2002 approval will have been given to secure 55,000 ha. Furthermore, it is predicted that by December 2002 approval will have been given to secure 71,500 ha, and that by December 2003, approval will have been given to secure 100,000 ha.

It appears that the novel approach to conservation represented by the PFRP may be successful in achieving its long-term conservation goals. However, it is likely to take longer than first planned. Landowners require considerable time to decide to place a perpetual conservation covenant on their land. In many cases, consultation is needed with family members, business partners and financial institutions. It is a decision with long-term implications for their business planning and commits future generations to on-going conservation management. Nevertheless, increasing numbers of landowners are deciding that conservation covenants are compatible with their vision and business plans and are deciding to establish Private Forest Reserves on their land.

Issues:
Governance and project planning - To optimise opportunities to achieve the conservation objectives of the PFRP and to satisfy requirements of probity and accountability, it is essential that suitable governance, planning and quality assurance occur. While these elements of project management are now in hand, the lack of planning documentation before the project commenced contributed to some un-necessary misapprehensions.

A project execution plan would have shown that the initial emphasis of the project needed to be on purchasing areas of very high conservation priority that had been identified during development of the RFA. As a unique and novel major project, it was also inevitably going to take time to establish the necessary structures and processes for targeting landowners and establishing reserves on covenanted land. It would have been obvious that administrative costs would initially have been relatively high compared to property costs, and that, in relative terms, administrative costs would rapidly decrease - as they have.

Capital gains tax - State and Commonwealth Governments agreed in 1997 that $30 million would be required to protect 100,000 ha of forests on private land to complement the CAR reserve system on public land. However, up to $10 million may be retrieved by the Commonwealth through the application of capital gains tax to participants in the PFRP - thus jeopardising the chances of protecting some of the more significant forests on private land.

Capital gains tax has been a significant barrier for the project since its inception. Despite the Prime Minister's policy of encouraging philanthropy in nature conservation, landowners, who are asked to contribute to the public good by placing conservation covenants on their land to protect forests of the highest priority for conservation, are considered to have made a capital gain. Although these landowners are permanently divesting themselves of certain rights (e.g. to harvest timber), the modest financial payment paid to them as an incentive, is taxed as a capital gain.

Policy and legislation The Forest Practices Board has responsibility for implementing Tasmania's Permanent Forest Estate Policy. Under this policy, the total area of native forests statewide is to be maintained at or above 80% of 1996 levels, and the area of each forest community within each of the State's 9 bioregions is to be maintained at greater than 50% of the 1996 level. The Permanent Forest Estate Policy is being reviewed with the intention of ensuring that rare, vulnerable and endangered communities are adequately protected.

Under a new State Government initiative, the Forest Practices Act 1985 will be amended to include non-commercial as well as commercial tree clearing.

As part of the same initiative, a policy framework modelled on that developed for forest conservation, will be established to determine conservation priorities for non-forest native vegetation and to facilitate conservation of native vegetation on private land. A range of available mechanisms and incentives will be considered - including those used in the Private Forest Reserves project.

CONCLUSION

The Private Forest Reserves project complements a suite of different approaches to achieving conservation on private land in Tasmania. The range of approaches include:

voluntary, non-binding programs such as Land for Wildlife;
voluntary, temporarily binding programs such as NHT Bushcare and the Fencing Incentives Scheme of Tasmania;
voluntary, permanently binding approaches such as Protected Areas on Private Land and Private Forest Reserves; and
non-voluntary, binding approaches associated with the Threatened Species Protection Act 1995 and the Permanent Forest Estate policy, and the Commonwealth's Environmental Protection and Biodiversity Conservation Act 1999.

The Private Forest Reserves project involves a significant commitment to scientific assessment of forest values, strategic targeting, and negotiation of management agreements to ensure long-term conservation. The key outputs from the project will be a system of Private Forest Reserves, managed in partnership between private landowners and Government, that complements the State's comprehensive, adequate and representative reserve system. Assessment of the cost effectiveness of the Private Forest Reserves project needs to consider the long-term security that is being achieved for conservation and the development of long-term partnerships with landowners to manage forests of the highest conservation priority.

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Enquiries: Dr Steven Smith, Manager
Private Forest Reserves Project
GPO Box 44A
Hobart, Tasmania 7001
Web Site: www.privaterfa.tas.gov.au
Email: sjsmith@dpiwe.tas.gov.au
Telephone: 130066026
Facsimile: 0362 332457