Privatising the Nation’s Woodlands
A proposal to lease out a quarter of Forestry Commission Scotland’s estate has sent shock
waves through the industry and beyond.

It looked quite innocuous and unremarkable at first sight when it was released on November 4 – another consultation paper, this one concerning climate change. Entitled Climate Change and the National Forest Estate in Scotland, a hint of things to come appears in Scottish Minister for Environment, Michael Russell’s, foreword, where he states: “We can – and must – make good use of our potential for producing renewable energy and using trees to store carbon.

“This consultation paper suggests some proposals for legislation that will allow us to become more innovative and imaginative in how we do this. Key elements include the establishment of joint ventures, to develop renewable sources of energy on the national forest estate, and the development of a new approach to cutting rights, allowing lease arrangements to release financial resources for investment in creating new woodlands. We are also proposing that a
suitably constituted not-for-profit voluntary body could help secure the public interest in such forests and bring renewed vigour to the task of woodland creation.”

The paper enlarges on this by proposing that the functions of the Forestry Commission in Scotland should be changed, through secondary legislation, enabling Scottish ministers to lease land for forestry purposes while Forestry Commission Scotland grants cutting rights over this forest. By transferring the ownership of this leased land to the not-for-profit trust mentioned above, the funds generated from the sale of cutting rights to promote woodland creation could be used ‘to mitigate climate change’.

The target of 10,000 hectares of planting in Scotland is not being met at the moment – only half that is being planted – and this shortfall is being used as justification for the measures outlined. It is proposed that a quarter of FCS’s land should be offered for lease (some 160,000 hectares) for 75 years, preferably to a single entity. Leasing would be through an open tendering process, and the leaseholder would have responsibility for managing the forest and would be able, as well as having cutting rights, to undertake renewable energy projects. The good news is that new planting will include commercial forestry in a similar or greater proportion than the existing national estate – so, the emphasis should be on trees rather than on cycle tracks.

After outlining the proposals, the consultation paper invites readers to respond to four questions:
1. What are your views on allowing the Forestry Commissioners to enter into joint ventures, with the intention of participating in renewable energy programmes on the national forest estate?
2. What are your views on allowing Scottish Ministers and Forestry Commissioners to offer leases and cutting rights over parts of the national forest estate?
3. What are your views on (i) transferring the proceeds from leases and cutting rights to a not-for-profit trust, for investment in woodland creation; (ii) transferring the landlord’s interest in this land to a notfor- profit trust; and (iii) Ministers stipulating the constitution of such a not-for-profit trust?
4. Are there other actions which need to be taken, or are there other changes in legislation which need to be made, in order to allow the public and private forestry sector to contribute to Scotland’s target of reducing emissions by 80% by 2050? If so, please outline what these
are. The paper can be downloaded from www.forestry.gov.uk/fcsclimateconsultation.
Responses have to be in by 27 January 2009.

There are many loose ends still to be tied up, not least the implications for the future of the Forestry Commission, throughout the UK, and for the clients it has hitherto supported. Read on…

Government consultations – it seems that they are two a penny these days. You may wonder if there’s a competition between government departments to see who can produce the most each year. Not to be outdone by its bigger and more powerful cousins, the Forestry Commission is no exception and there has been a plethora of FC consultations of late. Most recently, we have had the FC Wales consultation on proposals to revise Woodlands for Wales and hard on its heels we now have a consultation launched by the Scottish Minister for Environment.

Many in the forestry industry have neither the time, nor the inclination to plough through consultations and then reply to them, especially if the title seems uncontroversial. Let’s take this latest FC Scotland consultation, Climate change and the National Forest Estate – consultation on forestry provisions in the Scottish Climate Change Bill. It seems to be uncontroversial enough doesn’t it? We all know how well placed forestry and forest products are in relation to mitigating the effects of climate change – providing carbon stores, wood fuels, sustainable construction products etc, so surely there isn’t anything to worry about
in this consultation? You could be forgiven for thinking this – after all, only four questions are posed, (surely a record in recent government consultations, where lengthy and often difficult to understand questions are presented).

However, it is often said that you can engineer whatever answer you want by carefully wording the question. In this case, the consultation suggests proposals for legislation which
will allow FC Scotland to become more innovative and imaginative in optimising its potential for producing renewable energy and using trees to store carbon. Key elements include the formation of joint ventures, to develop renewable sources of energy and the development of
a new approach to cutting rights, allowing lease arrangements to release financial resources for investment in creating new woodlands. A new not-for-profit voluntary body (a trust) is proposed which could secure the public interest in such forests. Is that the sound of alarm
bells we hear ringing? We note that the Minister for Environment has asked FC Scotland
to undertake a wider options review, to ensure that all opportunities are explored.

We are told that the basis of this consultation is a desire by the Scottish Government and its forestry department, FC Scotland, to develop renewable energy projects to help meet ambitious greener energy targets and to plant more trees – who can argue with that?
Most of us have been calling for more trees – at least more commercial conifer crops anyway – for years. Scottish Ministers are asking FC Scotland to work up options for making better use of the national forest estate in the fight against climate change, while safeguarding the important public benefits that the estate generates for communities throughout Scotland. “What about the economic benefits and the commercial interests of existing businesses dependent upon the FC estate?” we hear you say.

It stated that the planting target of 10,000 hectares per year is not being met and that measures are necessary to meet the aspiration. Has the Government or the FC asked itself the question why its target of new planting isn’t being met? If they haven’t, they should,
and quickly! Perhaps it’s because the current grant scheme is too bureaucratic, or perhaps the support simply doesn’t make it worthwhile for anyone to plant trees. One might also question if sufficient land can be purchased for new planting and at what price? Food security is a key issue today and competition for good land is stiff.

The Minister briefed a selection of hand-picked (by ConFor) industry leaders on the day the consultation was launched; what was said at this meeting and which now appears to be public knowledge is that consideration is being given to leasing about one quarter (possibly
160,000 hectares) of the public forest estate in Scotland (which areas we wonder?), preferably to a single entity (who?), possibly for a period of 75 years. The leaseholder would
be responsible for managing the forest and would have cutting rights, as well as undertaking renewable energy projects. Such moves would require ministerial backing.

All of this is, as I am sure you will agree, very different to the laudable principles of simply developing renewable energy projects and planting more trees. All is not what it seems…

So what are the implications of this and who will stand to benefit? These are the key questions we must consider. One thing is certain; this development is posing a great many
questions and is giving rise to much consternation and speculation in the sector. There is something of a vacuum; there’s little or no detail and inevitably this fuels speculation and, it has to be said, conspiracy theories too.

No doubt the Minister and his officials will be keen to speak to ‘stakeholders’, but will the genuine concerns already being expressed by some in industry be heeded? In these situations there is always the fear that we are being presented with a fait accompli and that deals
have already been done, or are at least being lined up. Will all of the money raised from this initiative be ploughed back into forestry, as we would hope? Not all of it necessarily, it would seem. Indeed, given the increasingly huge level of indebtedness of the government, there must be a significant risk to think that the money will simply disappear into government coffers, with perhaps only a small proportion being made available for forestry – after all, who’s going to kick up a fuss; there aren’t many votes in forestry are there?

Whilst some are only too keen to criticise the dear old Forestry Commission whenever possible, a more reasoned view is that, whilst it may not be perfect, it has enabled the industry to develop and prosper by ensuring continuity of wood supply to sawmillers and other wood processors in good times and bad. Businesses require confidence and being assured of the availability of raw material is a vital component for success.

Since there is a stated preference for FC to enter into a new arrangement with a single entity, one is tempted to enquire if deals have already been done behind closed doors. Many are speculating that certain well known names are bound to be involved, and that there are bound to be strategic alliances in place for supply purposes. Where will this leave current
buyers of FC timber? Is there a risk that wood supply could be stitched up? Quite possibly, it would seem, but wouldn’t this raise questions about competition? It’s easy to focus on those names known to us all and their ‘friends’, but perhaps we shouldn’t rule out the possibility
that an ‘outsider’, perhaps from the energy sector backed by megabucks and public subsidy, could come and snatch the rug from under the feet of the ‘usual suspects’. Imagine this:

FC does a deal to supply wood fuels to a major energy supplier (just think of the political brownie points that will earn the FC), but what about the existing industry which is reliant
on FC wood? Irreparable damage are two words which readily spring to mind. It hardly bears thinking about, but think we must…

Is the FC in danger of making a big mistake, all for the sake of political expediency? Some think so and it has been said that FC isn’t exactly renowned for its commercial ‘nous’.
The government will undoubtedly be keen to get the best possible price for this unique opportunity to lease a large chunk of the national forest estate for 75 years, but if too many constraints are imposed on the potential landlord, which many believe will be required to safeguard the interests (not least the jobs) of other FC customers, this may well reduce the attractiveness of the offer to potential bidders.

What safeguards will there be for current buyers of FC wood? Would a new leaseholder treat everyone fairly? Or would they cream off the best of the crop for themselves and their friends, leaving everyone else to fight over the crumbs from the table? Some players would undoubtedly revel in such a prospect.

As we have seen, it has been suggested that the new ‘landlord’ might be a trust, which might offer membership; “A flight of fancy,” I hear you say (amongst other things), but in the words of the famous Gershwin song, it ain’t necessarily so! Selling the family silver, privatisation by the back door, the thin end of the wedge, FC protecting favourites…

Or is it simply a sledgehammer to crack a nut? This is a consultation which cannot be ignored. The deadline for responses is 27 January 2009. Don’t miss it, or things may never be the same again. Apathy must not be allowed to win the day. Political activity may also be required to alert MSPs to the pitfalls of the proposals. The cynical amongst us (or is it the
realistic amongst us?) might suspect the consultation to be a sham and that FC has already decided on the way ahead – and perhaps even identified who it would prefer to be the new ‘landlord’ of a large proportion of the Scottish national forestry estate. Is this really what our
industry wants, or deserves? These are the thoughts of an old hand.