THE state government has rejected a proposal from Australian Sustainable Hardwoods management to keep the massive Heyfield mill viable in the short-term.
The counter-offer, for VicForests to supply the offered 80,000 cubic metres of saw logs for the first seven months of a new contract, would keep the mill’s 250 workers employed.
That would have given the government seven months to make a more informed decision and allow more research into Leadbeater possum numbers, but was rejected out of hand by the government.
Following seven weeks of negotiations, which gave ASH workers false hope of keeping their jobs, last Tuesday’s offer was the same offer VicForests initially made to ASH, with the exception of an additional $4.7 million industry support package including support for a business case for retooling.
That is $35.3 million less than ASH management said it needed to retool to transition to plantation timber.
The minimum supply for the mill to remain viable is 130,000 cubic metres of sawlog per annum under current tooling.
ASH management expect to begin the closure process in April, with the most significant reduction occurring during closure of the Green Mill in August, and complete closure expected late 2018.
VicForests will continue to honour the existing supply agreement until it expires on June 30.
ASH management is in discussions with the CFMEU working through an orderly support program for staff and processes for redundancies.
Premier Daniel Andrews announced ASH had rejected the government’s offer at 8.30am on Friday on Melbourne commercial radio, before the workers were informed of the decision by ASH management, and failed to mention the counteroffer by ASH.
Premier Andrews argued “the majority of Victoria’s mills currently operate with timber supplies significantly below the levels offered to ASH”, which remains Australia’s largest hardwood manufacturer.
In an unheralded move, the government asked, on radio, for the ASH management to facilitate the sale of its Heyfield mill to a new operator, to “safeguard an equitable and fair outcome for workers and the community”.
In the event that a new operator cannot be found, the Premier contended the government was “prepared to ensure that operations at the Heyfield mill continue as per the same commercial terms offered to ASH today”.
How a different operator could keep the mill running profitably with the reduced timber supply was not explained by the Premier.
Reaction to the Premier’s announcement has been swift.
Gippsland East MLA Tim Bull said the closure was “a kick in the guts” for the local community.
“It is now clear that for Daniel Andrews to say he cares about jobs, is nothing more than weasel words,” Mr Bull said.
“Almost eight weeks ago the government released a statement saying it would negotiate in good faith for a positive outcome, however after all that time it has not changed its offer of timber volume at all. Why did it take eight weeks to decide to do nothing?” he said.
“It’s clear that this government has never intended to negotiate at all and has simply been stringing the workers and their families along with false hope.
“As late as yesterday afternoon, ASH offered to accept the 80,000 cubic metres on offer to be able to continue to operate until early 2018. This would have allowed more time to find a possible resolution, but even this was rejected,” Mr Bull said.
“Daniel Andrews has not bothered to visit Heyfield throughout this process, which shows his care factor on this issue is zero and he never really intended to resolve this.”
Gippsland South MLA Danny O’Brien labelled the closure an “utter disgrace and an indictment on the Labor Party”.
“Never before have I been so angry about such a bad public policy decision,” Mr O’Brien said.
“For the government to have strung along these workers and the Gippsland community for eight weeks now and come back with exactly the same offer on timber volume is shameful and the Premier stands condemned.”
The CFMEU plans a rally for its members’ Heyfield mill jobs at Trades Hall, Carlton on Tuesday at 11am, with 200 timber trucks likely to block city traffic and demonstrate the industry’s rejection of the government’s position.