A solution to what one of Australia’s only legal practitioners with a working knowledge of the regional forestry agreements has called “a maelstrom of legal nonsense” has been hiding in plain sight for nearly five years — and Environment Minister Murray Watt, now charged with reforming the Environment Protection and Biodiversity Conservation Act, has the agency to finally follow through on a quick and elegant fix that was proposed, debated and recommended during the Morrison government’s own term…but was ignored by one of its senior senators, and later “shot down” by it’s own Environmental Minister!
Today, Wood Central obtained the April 2021 Senate Estimates Committee transcript and recommendations of the then Environment and Communications Legislative Committee, which identified a mechanism modelled on one of the most consequential corporate governance reforms in Australian legal history.
The proposed fix is the business judgment rule — as outlined in section 180(2) of the Corporations Act 2001 — the same legal principle that was the cornerstone of Julia Gillard’s harmonisation of the Work Health and Safety in 2011, which led to the establishment of reasonable practicability responsiblities for any person conducting a business or undertaking as outlined in Section 18 of the act.
Stuart Coppock, one of the only practitioners with deep working knowledge of how the RFA framework operates, put the case to senators frankly. “The RFAs, as currently drafted, leave field operators legally exposed even when they have done everything the agreement requires of them,” Coppock told the committee. “That is a fundamental drafting problem.”
Introduced in 2000, the business judgment rule clarified what had become an unworkably subjective standard for directors’ duty of skill and care. The provision does not remove that duty — it provides a defence where a decision was made in good faith, for a proper purpose, and where the judgment exercised served that duty of care.
In forestry, the application is direct.
A field operation must remain fully compliant with the RFA — in New South Wales, that means the Coastal Integrated Forestry Operations Agreement on public land and the Private Native Forestry Code of Practice on private land, governed by state and Commonwealth instruments including the EPBC Act, the Biodiversity Conservation Act, the Forestry Act, the Local Land Services Act and the NSW Land and Environment Court. Compliance obligations and enforcement proceedings remain in place.
What the judgment rule adds is a litigation defence — available only where the conduct met the highest standard of skill and care that best forestry practice demands. “This is not about removing obligations,” Coppock said. “The duty of care remains. What the judgment rule provides is a defence where the standard of skill and care actually exercised in the field was the highest available. Courts already understand that framework — it is well-settled law.”
Wood Central understands the rule attracted strong support from Senior Labor Senator Raff Ciccone, who was one of the most active proponents of including it as Recommendation 2 of the committee’s final report on the EPBC Amendment (Regional Forest Agreements) Bill 2020.
That recommendation called on the Australian Government to expedite amendments to both the EPBC Act and the Regional Forest Agreements Act 2002, introducing a test of judgment like that which applies to company directors under the Corporations Act 2001, and to balance environmental protection with the operational realities of native forestry. At the same time, the Sydney Morning Herald reported that the then CFMEU Manufacturing Division (and now TFTU) was among the most vocal advocates for reforms to the regional forestry agreements ahead of anticipated reforms to the EPBC.
So, what happened to the recommendations?
Today, Wood Central spoke to Maree McCaskill, CEO of Timber NSW, who pushed hard for the recommendation as part of the NSW hardwood industry’s submission to the Bill. “From what I understand, the recommendation was ignored because it wasn’t supported by then-Nationals Senate leader Bridget McKenzie as part of her own private members bill,” McCaskill said. The politics was straightforward. “Realistically, the politics of a Coalition government driven by the then-Environment Minister (and now deposed leader) Sussan Ley, refused to support McKenzie’s private members bill because it was not Coalition policy, it sank any hope of making any reform leading up to the 2022 election.”
“Our proposal differed significantly from the approach pushed by McKenzie, and had it been adopted, we would not be in the legal mire we find ourselves today,” McCaskill said. “But thankfully, with new eyes on this critical legislation, we are now pushing for support before it’s too late.”
The judgment rule has 30 years of established precedent in Australian corporate law, support from within the ALP caucus, backing from the only union dedicated to timber workers, and a cross-party Senate committee already on the record supporting it. And whilst the Coalition killed it once, there are far fewer Coalition representatives left in the house to botch the reform this time.
The votes are not the problem—and the Albanese government has every reason to find a solution and finish the job.
