October 2016 Wood Matters Page 1

Wood Matters – October 2016

Clarkys Comment – Tree Felling Observers

Peter Clark CEO PF Olsen Ltd

It is well known in forestry internationally that breaking out (hooking up tree stems to cables or chains for in-haul) and tree felling are tasks where injuries and deaths are more likely to occur. In New Zealand Safe Operating Procedures (SOPs) have been developed for both tasks, along with certification regimes. In addition there is a strong NZ forest industry drive to use grapples rather than humans for breaking out, and specialised felling heads on excavator or specialised felling machine bases for tree felling. Breaking out is a safe operation if the SOP is followed. Quite simply if the breaker-out is standing in the proper place at the time of in-haul he/she will be safe. But manual tree felling is not so simple to manage. There are lots of decisions to make, precise cuts to be made and apart from the tree itself, always the opportunity for loose or dislodged tree parts to fall from above, along with some very tricky trees to fell. It is these ‘falling objects’ that have our attention. Many readers will know that New Zealand updated its safety law during 2015 – the Health and Safety at Work Act (HSWA 2015). Alongside, we have also been issued a number of regulations, for example the General Risk and Workplace Management Regulations (GRWM 2016). These Regulations list six ‘particular’ (critical) risks, which must be managed according to the prescribed hierarchy of controls. These particular risks include ‘remote or isolated work’ and ‘raised or falling objects’ and both can apply in tree felling. We have absolutely no choice but to manage tree felling with the best management controls available. Not to be underestimated is the fact that tree felling is also a physically demanding task requiring full concentration. Humans don’t have enough eyes to see everything going on around both the base and the tops of the trees all at once. Should we be surprised that occasionally things go wrong! So what are we doing in response to those particular risks? The response to this risk has been to make a ‘person available to assist the tree feller’ – called a tree felling observer in New Zealand. Tree felling observers have been compulsory for many years to assist in the management of an unplanned tree drive – where two or more trees need to be driven to the ground (ACOP for Safety and Health in Forest Operations 11.7.4). More recently, observers are seen as a practical response for all difficult trees and when felling in hazardous areas. In an effort to avoid serious felling accidents in the future, PF Olsen has re-thought its response to tree felling risks. The big issue for us was understanding if there was any part of manual tree felling that was any less risky than any other part? In all honesty, highly qualified tree fellers were being hurt even in relatively innocuous settings where the circumstances left us scratching our heads! Others in the forestry industry have had similar experiences according to reports reviewed by us.

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In view of that, we elected to start trialling full-time felling observers for all manual tree felling in March 2014. Following feedback from tree fellers, contractors and supervisory staff after an 18-month trial period in the Central North Island the Company extended the policy to all its manual clear felling operations nationwide. In summary we have found: Negatives:

Adds to daily crew cost and therefore increased harvest rate/tonne.

Puts an extra person in the danger zone.

Requires an additional qualified feller or trainee feller in the crew; possibly two to cover any absence of one of the fellers.

Positives:

Having an observer assisting the tree feller in the 5 step tree falling process is improving decision-making and is resulting in a higher standard of tree felling.

Having an observer present full time is reducing tree feller exposure to the ‘7 harms’ as outlined in Safe Manual Tree Felling from page 11.

Reduced fatigue. Observers and tree fellers rotate their position “tank for tank” (using up a tank of gas before swapping) i.e. two persons using one chainsaw sharing the felling and observer roles.

Much needed opportunity for training new fellers at no additional cost.

Families like it – “Someone is looking after my loved one.”

On balance we have determined that the positives outweigh the negatives. Feedback received from fellers nationwide since the observer policy was implemented has been positive with the vast majority of fellers fully supporting the initiative. Different companies have tackled tree felling risks in different ways. It is good to see some conversations commencing that over time will pick up the best ideas and practices of all and have them promulgated in a revised ACOP. In the meantime, at PF Olsen at least, observers are here to stay. Of course machine felling is even safer. On-going developments in tethered machines working on steep slopes will open up more opportunities to use them wherever the terrain and contractor circumstances permit.

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Log Market - October

Peter Weblin Chief Marketing Officer PF Olsen Ltd

Introduction

Unpruned and pruned export log prices increased $2/JAS m3 and $4/JAS m3 respectively in October. This confirms that pruned export log prices troughed last month having fallen up to $50/JAS m3 in the prior three months. The expectation is a modest continued firming trend in export log prices for the foreseeable future. The big drivers of CFR price (US$ price in destination port), exchange rate, and ocean freight costs were remarkably stable during the month, resulting in a modest increase in log prices ($2-$4/JAS m3). Demand is steady and prices firmed slightly in China and India and are stable in Korea and Japan. The domestic market had price adjustments for fourth quarter supply (Oct-Dec 2016). Domestic log prices are typically set per quarter in contrast to export logs which are typically priced on a monthly basis. Pruned log prices fell on average $3/tonne with strong demand for good quality logs. Structural log demand remained firm with prices inching up $1/tonne on average. Domestic industrial and pulp log prices were steady. Due to the welcome stability on the log market at present and heavy work demands on the editor, the October issue of the PF Olsen Log Market Report is shorter than usual. We include the usual metrics for your information but don’t have the fuller commentary. To make up for this, next month’s Log Report will be more comprehensive and include intelligence gleaned from an upcoming in-market trip to China which includes visits to logistics and wood processing facilities.

PF Olsen Log Price Index to October 2016

The PF Olsen log price index is up marginally in October to $118. The index is now $31 higher than its 6-year low of $87 in July 2014 and $10 above the two-year average and $13 above the five-year average.

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Basis of Index: This Index is based on prices in the table below weighted in proportions that represent a broad average of log grades produced from a typical pruned forest with an approximate mix of 40%

domestic and 60% export supply.

Indicative Average Current Log Prices – October 2016

Note: Actual prices will vary according to regional supply/demand balances, varying cost structures and

grade variation. These prices should be used as a guide only and specific advice sought for individual forests.

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Forestry and the Emissions Trading Scheme

Erin Leahy Registered Forestry Consultant NZIF PF Olsen Ltd

International News

NZ has ratified the Paris Agreement and formally submitted the emission reduction target of 30 percent below 2005 levels by 2030. New Zealand had intended on ratifying later in the year, but fast-tracked the process when it became clear that only countries that had ratified the agreement are likely to be part of the development of the rules. Having access to international carbon markets is crucial to New Zealand meeting our emission reduction targets. The Paris Agreement requires 55 countries representing 55% of global greenhouse emissions. India and the European Union have this month ratified the agreement meaning the emissions threshold has been met and the Paris Agreement will become binding on the 4th November 2016.

Domestic News

NZ ETS Review

An update on the status of the ETS review was recently released by the Ministry for the Environment. Policy decisions following stage two are expected in mid-2017 and will require further engagement with stakeholders. If legislative changes are required to implement these decisions, these changes are expected to be made in 2018. The key themes from submissions on stage two of the review were:

the need for regulatory or policy stability – this was the strongest theme and it was expressed across all sectors

the need for a long-term plan for how the NZ ETS will help New Zealand meet its emission reduction targets

forestry submitters said that a stable NZU price that incentivises forestry investment is needed, and emphasised that stability in NZ ETS settings is important for the sector.

Further consultation with stakeholders will be conducted over the coming months.

ETS Facts and Figures 2015

Released this month was the Environmental Protection Authority 2015 ETS Facts and Figures. This report is a snapshot of ETS activity across all sectors for the 2015 calendar year. The reported emissions for 2015 were 74 million tonnes. However due to the 2 for 1 surrender and the fact that agriculture are required to report but not surrender emissions, the total surrender in 2015 was 20.4 million NZUs and AAUs. The 2015 year is the first year that units of an international origin were not able to be surrendered (compared to 97% surrender using international units in 2014). Participation of post-1989 forest land in the ETS has increased from 277,212 hectares in 2014 to 301,779 hectares in 2015, likely representing a delay in re-registrations following arbitrage. The highest level of post-1989 registered area was recorded in 2012 at 370,042 hectares.

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What about emissions by sectors? Reported emissions from agriculture have increased year on year since reporting requirements began in 2012 and were 33 million tonnes in 2015 (46% of all emissions). The energy and industry sector achieved a small reduction in emissions in 2015 (5%). Liquid forest fuels has increased emissions (3%). Emissions from the waste sector have remained at about the same level as 2014. The ETS Facts and Figures are available on our website.

New Zealand Emissions Trading Register

The New Zealand Emissions Units Register (NZEUR) has been replaced with a new platform, the New Zealand Emissions Trading Register (NZETR) which was launched on the 29th August. If you are the account holder or a primary representative on an existing NZEUR account, you will have received correspondence from the EPA. To gain access to the new site you will need a government RealMe login, and a migration code that will have been sent to you.

Price Update

NZUs are currently trading at around $18.75 per NZU, at similar price levels to last month. The figure below shows the recent carbon credit prices for EUAs, CERs, NZUs and ERUs. Note that from 1st June 2015 only NZUs or New Zealand AAUs are valid units in the NZ ETS. EUAs are valid units for trading within the European Union. Figure 1: Recent Carbon Prices - NZ$/t CO2e – Real (CPI adjusted)

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Has RMA future proofed NZ for sustainable growth?

Looking at the question from a broad perspective Kit made the case that at a very fundamental basis, the Part 2 Principles and Purpose of the Act - to protect the “life supporting capacity of air, soil and water, New Zealand was not performing well. From an industry perspective significant drivers to this had been and still were a failure to remove economic distortions in land use created through taxation and an unwillingness to implement and use economic instruments to encourage endpoints and behaviours the nation needed or discouraging those that caused problems. Combined with the history of the RMA, Kit argued that the practical reality had seen huge effort and time devoted to “sweating the small stuff” while the big issues deteriorated. Rules and laws were needed he said, but the challenge still before us was how to develop better means to better conversations, how to support rule making with tools, data and models that put an understandable context before people and how to integrate those public and goal setting conversations with economic instruments that very often would drive change faster than the law and plan making. New Zealand’s history in this area in relation to the forest industry had led and would continue to lead to significant opportunities being lost for NZ both in terms of economic efficiency and rural environmental performance. Other themes of relevance to the primary sector that came out strongly from other presentations were the pressing need to get control of the issues around water quality, the national environmental and biodiversity benefits that could accrue from a nationally restored riparian network and the challenges facing the nation over its response to carbon emissions and climate change. On this topic Simon Upton (previous Minister for the Environment in 1990, and now Director of the OECD Environment Directorate) made clear the challenge facing the world to get carbon neutral. In the NZ context, Upton argues that the ETS had not served us well and there was a case to split the market to deal with short lived gases such as CH4 and long lived gasses such as CO2 and N2O. Forestry he said, could play a useful role in the former but due to the lack of stability and permanence in the estate (as evidenced by the conversions of recent years) its impact on the long term gasses was modest. In respect of agricultural emissions, agriculture needed to be brought into such a modified Emissions Trading Scheme.

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Robotic Tree-to-Tree felling machine

Russell Dale CEO Future Forests Research Ltd

One output of the FFR Steep Land Harvesting programme, a robotic tree-to-tree machine, dubbed the “stick insect”, was demonstrated in September to a small group of forest industry representatives at Bottle Lake Forest Park near Christchurch. The concept of the Robotic Tree-to-Tree Felling Machine, where the machine uses standing trees as a means of locomotion, has been developed as an alternative to tracked feller bunchers to overcome the issues of operator safety, steep terrain, and soil damage by remaining above the ground, and being teleoperated, therefore overcoming the difficulties of ground surface travel. Through the Primary Growth Partnership with the Ministry for Primary Industries the concept of the “stick insect”, originally generated by Dr Richard Parker at Scion in 2002, has been developed to a proof of concept prototype. When the FFR Steep Land Harvesting programme started in in 2010 with the vision of “No worker on the slope, no hand on the chainsaw”, one of the programme goals was to develop alternative tree felling systems with the aim of eliminating manual chainsaw felling. Scion, in collaboration with University of Canterbury mechatronics programme final year engineering students and post graduates, developed the mobility system and the control system. A recent development has been the addition of an on-board battery power and a hand held remote controller to enable teleoperation of the machine. While this is an early prototype, the industry stakeholders who attended the field day agreed that the prototype model demonstrated the potential of the concept and that the original vision should be pursued with the aim of scaling up the tree felling system to a machine that is capable of felling small trees in a production thinning environment. Further development of the prototype is part of a wider automation and robotics technology proposal to be submitted to the Primary Growth Partnership in the New Year.

The “stick insect” going through its paces at Bottle Lake Forest Park

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D&A management programme In January 2010 PF Olsen commenced its drug and alcohol management programme. Shortly thereafter, on Tuesday 20th December 2011, the Central North Island Random Testing Programme (CNIRTP) Steering Committee held its inaugural meeting, so the programme has been in place for almost 7 years and the next meeting of the committee will be its five-year anniversary. In 2009, following the release of the Forest Owners Association Drugs and Alcohol Code of Practice, PF Olsen set about trying to understand how a testing programme might work. Importantly one that contractors would support and have confidence in. This required contractor feedback, so the Company launched a formal survey in 2009 of all its employees and contractors. “…We needed to canvass what they thought to be considered fair and reasonable, including options for how a system might run at work sites,” says Mike Spiers, Chairman of the CNIRTP Steering Committee “…from the early days, it was very clear that the contractors wanted to play a larger role and to not lose control of their own employment environments. That led to our thinking that the programme was more suited to a ‘collective’ approach rather than something run ‘top-down’ from the company.” Additionally, suppliers (testing agents) needed to be sourced and evaluated; tenderers suggestions ranged from towing caravans into the forest, putting up tents, and bringing in buses, and some ideas were not very practical! Eventually it was decided to run with New Zealand’s foremost supplier – now called The Drug Detection Agency (TDDA). That relationship continues to this day. Much of the testing system was already in place by the time the idea of a steering committee was proposed, however, its operation coincided with some sticky issues that had begun to surface with the programme. For example, some of the early problems included how to avoid cheating and solving the time taken onsite to test a larger crew – where productivity had been halted. Needless to say, there has been a lot of learning through trial and error and a lot of initiatives trialled to help promote our goal – “A workplace that is free from the use of alcohol and other drugs.” Today, we have a system that the contractors like, it meets the requirements of the AS/NZS 4308:2008 drug testing standard, and operates within the bounds of the law especially the Privacy Act. Indeed, there is a lot of rigour in the current system just to ensure and safeguard the rights that our Workers have in law and we think they appreciate this care of them. TDDA have grown along with the programme and even have a representative on the steering committee. Dealing with testing programmes from around Australasia and even the United States of America, they keep us up-to-date with innovations and trends from across the world and are a ready source of guidance. For example, in 2015 TDDA noticed a significant trend resulting from Reasonable Cause Testing. That information (data) was very compelling and so the steering committee organised ‘Reasonable Cause Testing Workshops’ for all PF Olsen contractor Principals, crew foremen and company employees. One hundred and fifty four attended and almost everyone commented positively on the education delivered and received. The result has been an increase in this type of testing and greater confidence to take an action when something doesn’t look right while at work. In January 2016 the CNIRTP commenced testing for Synthetic Cannabis (SynCan). Interestingly, while it was available to do so much earlier, the committee decided that it would delay implementing this form of testing until all of the legal requirements were properly satisfied; specifically the development of cut-off limits. Also, prior to its introduction the committee felt that it should take a second formal survey of the collective – primarily to gain a mandate to introduce SynCan testing. The results, which supported the introduction of SynCan testing, were outlined in the March 2016 edition of WoodMatters. This approach

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has certainly added to ‘buy-in’ by all of those involved and has contributed overall to a noticeable shift in culture. At the end of the day, the success of the collective approach can be clearly seen in its results. The graph below shows the quantum of the issue we were dealing with at the outset and the success of the programme to date. We feel sure that these results will have undoubtedly contributed to the harm reduction experienced by the company.

The graph shows a reduction in positive tests from 16.2% to 2.8% in 6 years – and our goal – ZERO!

It is fair to say that a huge part of the result has been achieved by our contractors many of whom are now running their own programmes in tandem with the CNIRTP. This has been a very encouraging development for the steering committee and something it now encourages across the collective. The committee has also arranged for rewards – smoko shouts – for when contractors produce a second consecutive clear round of testing. The ‘shout’ has become a real source of pride for those workers involved. It represents that they have worked alongside their mates to maintain a drug free worksite and produce this excellent result. It is no small change in their lives! More recently, the steering committee has engaged with other New Zealand businesses that are similarly working with programmes to manage drugs and alcohol in the workplace. This has provided some extra insights and will no doubt help to shape our future direction. Without a doubt, the future still holds uncertainty and is subject to change with every new drug type introduced into society. In that case, it is the goal of the CNIRTP (steering committee and collective) to keep ahead of the curve, to remain relevant, and to serve the workers it represents. For PF Olsen doing the ‘right thing’ is paramount and we are committed to the safety of everyone working in our forests and to achieve our goal – Zero – “a workplace that is free from the use of alcohol and other drugs.”

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Update from the Kaharoa Kokako Trust The Kaharoa Kokako Trust (www.kokako.org.nz) and our volunteers have been extremely busy in the last few months. Firstly there was the marking and cutting of new bait station lines and the installation of about 150 new bait stations in preparation for this year’s pest control operation.

Then we provided assistance in the capture and translocation carried out by the Otanewainuku Kiwi Trust (www.kiwitrust.org), of 11 adult kokako to augment their existing population. Prior capture of kokako from Kaharoa and Rotoehu had established a small and thriving population at Otanewainuku and these birds were to spread the genetic base. 11 were caught in surprisingly quick time and the activity even found its way onto national television news. For the first time school children were included in this operation representing the local country schools from each area; hopefully encouraging the next generation to continue this work.

Unlikely looking track clearers at Kaharoa Finally we have just completed the annual pest control. This involved two weekends of pre-baiting (in the rain), putting out the toxins into the bait stations (in the rain) and finally removal of the uneaten bait (only the odd very light shower!!). In a couple of weeks measurements to determine remaining rats and possums will be carried out which will identify how well this pest management operation went. The forest is full of singing tui, warblers, robins and other bird life and volunteers reported hearing or seeing kokako, kaka and the first of this season’s shining cuckoos. A great time of year to be in the bush and a clear indication of ongoing success which PF Olsen continue to support as a major sponsor.

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Feeding helps limit trauma after capture, banding and subsequent release. Bananas are a firm kokako favourite!!

Stakeholders in Methyl Bromide Reduction Inc Details for the upcoming AGM are as follows:

Thursday 24 November 2016 10:00am to 11:30am

Venue Classic Fliers 9 Jean Batten Drive, Mount Maunganui, Tauranga 3116, New Zealand

Followed by an Annual Research Update 11:30am to 4:00pm

For further information please contact the Executive Officer Ian R Gear

New staff

Welcome to Debbie Trouth who commenced as part-time Administration Assistant in Christchurch. Debbie has almost 20 years’ Admin experience including progressing from Checkout Operator to Accounts, IT and PA with the Warehouse Group. Married with three sons aged between 7 and 15, Debbie still plays netball (20 years and counting) and also enjoys running.