coillte policy doc

7/29/2019 Coillte Policy Doc

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Fianna FáiL PoLicy PaPer

The Future

o Coillte

S e P t e mbe r

2 01 3



FIANNA FÁIL POLICY PAPER ON THE FUTURE OF COILLTE

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FIANNA FÁIL POLICY PAPERON THE FUTURE OF COILLTE




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Contents

Executive Summary 3

Fianna Fáil Vision for Coillte 5

An Independent, Commercially Focused Coillte 7

Increased Afforestation and Renewable EnergyCooperation 9

Enhancing the Use of Forest Land 11

Tourism and Community Initiatives 13

Conclusion 15




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Executive Summary

• Fianna Fáil believes that Coillte should remain as a separate state owned,commercial company which acts as a custodian of public forests for thecitizens of Ireland and ensures that the delicate interdependence of theIrish forestry industry is not undermined.

• Coillte should cooperate with Bord na Mona in developing renewableenergy solutions but remaining as an independent entity, recognising thefact that both companies have significantly different core businessactivities. Coillte should be developed primarily as a forestry company.Where appropriate Coillte land could be used for purposes other than itscore business. Development of rural recreation or other commercialinterests in the areas of communications or renewable energy may

guarantee the sustainable future of Coillte and as such should bewelcomed.

• Fianna Fáil policy would see Coillte increase net afforestation effortsthroughout Ireland and in particular, rural areas which are consideredunemployment black spots. An afforestation target of 20,000 ha per annum should be implemented between 2014 and 2020 by Coillte bringingIreland’s percentage of forest cover closer to the EU average.

• This afforestation should be funded as far as practicable through Coillte’sprofits and capital investment programme in order to guarantee supplyand profit in the future. New afforestation projects would have anincreased density to maximise economic yields for the company.

• Fianna Fáil wants new planting to have a balanced mix of commercialconifer and broadleaf trees with at least 50% of new planting to be nativeIrish trees such as Alder and Oak trees.

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Fianna Fáil believes that agriculture lands held by NAMA should beconsidered for afforestation where commercial or residentialdevelopment is no longer economically viable.

• Coillte should develop community forests and begin an “Adopt a Tree”campaign where an individual or a group, including families, can sponsor the planting of a tree. This would be similar to the previous Millenniumforest project.




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• Fianna Fáil policy would see Coillte increase its focus on rural recreationand tourism efforts, increasing the number of forest walkways andcycleways.

• Coillte in conjunction with all significant state land owners, including theNational Parks & Wildlife Service and the Office of Public Works, should

conduct an audit of current state owned land with a view to increasingtree plantation on this land where appropriate




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Fianna Fáil Vision for Coillte

Coillte, operating as a commercial semi state, has been a success. The company

was established by Fianna Fáil under the Forestry Act 1988 to carry on the business

of forestry and related activities on a commercial basis. Coillte has managed to build

a successful wood product industry in Ireland and increase its own forest estate inarea from 376,000 ha to 445,421 ha. (445,315 ha are forested) since 1989.

The company is profitable and has gone from strength to strength despite the recent

economic downturn. Coillte’s turnover in 2012 reached €262.2m with profits after tax

of €15.2 million. Coillte accounts for more than 80% of all timber supplied to the

market in Ireland each year. The company has also diversified its activities by

embracing and expanding its business to supply panel products and new renewable

energy products in a growing market. These economic activities directly employ

around 1,000 people in the company.

Importantly, Coillte provides a vital leisure, tourism and amenity benefit to the

citizens of Ireland. The company currently manages 10 forest parks, over 150

recreation sites and 3 mountain bike facilities, along with over 50% of all off road

long distance hiking routes in Ireland. Coillte’s annual report has previously noted

that visits to their forests are estimated to deliver over €270 million to the tourism

industry nationally each year.

Fianna Fáil believes in a viable, independent Coillte focusing on delivering for the

Irish citizen and guaranteeing commercial success for the wider wood industry. It is

important that Coillte balance the need for commercial success with that of

protecting Ireland’s forestry heritage and we believe that the best way to achieve this

is by keeping the company in state ownership. We opposed the proposed sale of

Coillte’s timber harvesting rights and are also opposed to the merger of Coillte with

Bord na Móna.

This policy document outlines a number of creative and constructive proposals to

ensure Coillte’s future success as a semi-state company, recognising its central

activities in the success of the wood industry in Ireland and its role as a guardian of

Irish forest heritage.

Fianna Fáil wants to see a return to large scale afforestation by Coillte using its own

profits to expand and guarantee future supply to the wood industry. We want to see

cooperation between Coillte and Bord na Móna in the area of renewable energy but

as separate companies, not as one entity. We want a particular focus on planting




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native Irish trees in new forest plantation and the development of Community

Forests.

Agriculture lands held by NAMA should be considered for afforestation where

commercial or residential development is no longer economically viable. Overall, we

want Coillte to remain as a separate state owned, commercial company which acts

as a custodian of public forests for the citizens of Ireland and ensures that the

delicate interdependence of the Irish forestry industry is protected for the future.




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An Independent, Commercially Focused Coillte

• Coillte to be maintained as an independent commercially focusedsemi-state company.

• Coillte’s commercial semi-state status will protect the delicateinterdependence of the Irish forestry industry and ensure that there is anadequate continuous supply of wood products for board and millingindustries.

Coillte as a semi state company has achieved many of its goals which were set out

in the Forestry Act 1988. The company’s initial focus on increased afforestation

resulted in a dramatic increase in forestry cover in Ireland from approximately 5.6%

in 1980 to over 10% today. Coillte was the driving force behind much of this

afforestation. The forestry company owns approximately 450,000 hectares of land,90% of which is forest.

Fianna Fáil wants to maintain Coillte as an independent, commercially focused semi-

state company given its success in the past and impressive potential for the future.

As a profitable semi-state company with a turnover of €262.2m and profits after tax

of €15.2 million in 2012 the potential for Coillte to expand its successful business

model is considerable.

The forward sale of harvesting rights of some of the timber that is currently owned

and managed by Coillte to raise state funds is not an option for the viability or

sustainable long term future of the public company. Selling the profitable section of

Coillte’s business while leaving the remaining debt, deficit funding requirement and

pension liabilities of the company in public hands would result in the state having to

financially support the remaining part of the company. It has been estimated that

under any such plan Coillte would have to engage in some reduction in staffing

numbers from its current level of 967. The Bacon Report on Coillte in January 2013

estimated that the potential long term costs of the sale of harvest rights in Coillte

could be approximately €1.3 billion, undermining the case to sell those rights.

Interdependence is a central feature of the Irish timber processing sector. The

current operation of Coillte ensures a secure supply for the domestic timber

processing sector at foreseeable prices. Coillte as the main provider of raw materials

for this industry has been central in ensuring the industry has security of supply by

committing to placing a known and specific amount of timber on the market each

year. Any sell off to a private operator may result in wood products being exported

before being processed in Ireland. The new operator would also be under no




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obligation to specify the amount of timber it will release into the market in the coming

year.

Fianna Fáil firmly believes that the reasons outlined above show that keeping Coillte

as an independent, commercially focused, semi-state company is the best option for

securing both the company’s future and that of the timber industry in Ireland.




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Increased Afforestation andRenewable Energy Cooperation

• Coillte to increase afforestation efforts throughout Ireland and in

particular, rural areas which are considered unemployment black spots.An afforestation target of 20,000 ha per annum should be implemented byCoillte between 2014 and 2020.

• New afforestation to be at an increased density to maximise economicyields of the company and guarantee supply and profit in the future.

• Coillte to cooperate with Bord na Mona in developing renewable energysolutions but remaining as an independent entity.

Coillte’s initial success in afforestation projects in Ireland has resulted in the Irish

forest estate coverage increasing to an area of over 744,000 hectares by December

2011. This equates to 10.6% of Ireland’s land area as opposed to just 5.6% of land

area as recently as 1980. By comparison, the average level of forest cover in the

European Union (EU) is 38%. The main source of growth in recent years has been

driven by private forestry investment. Coillte dramatically reduced its afforestation

programme after the European Court of Justice ruled that the company was a public

body in the Case C-339/00, Ireland v. Commission of the European Communities

and as such could not avail of grants from the EU institution to increase its forestryportfolio. The price of land also increased greatly in Ireland at the start of the 21st

century. This made an expansion programme of afforestation by Coillte

uneconomical in the short to medium term.

Land prices have now returned to a more suitable level to begin investing once again

in an afforestation project. Fianna Fáil believes that Coillte must restart a programme

to expand its forest estate by using its current profits and capital expenditure to

purchase suitable land for forest expansion. Fianna Fáil believes an afforestation

target of 20,000 ha per annum should be implemented between 2014 and 2020. This

target would bring Ireland’s forest cover to 884,000 ha. It would also future proof

secure supply to the Irish timber processing industry in the long term and enhance

Coillte’s ability to invest in renewable energy projects in the future.

An increase in forestry in Ireland under this plan would result in higher sustainable

employment in rural areas, an increase in the stock of renewable resources in

Ireland and bring about a further reduction in carbon. It would also provide more




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amenities for the Irish tourist industry. Importantly for the Irish timber industry the

increase in forestry would also secure the long term supply of raw materials.

This forest expansion programme should prioritise afforestation in rural employment

black spots where suitable land can be found. Employment created during the

plantation of forestry can be sustained by the management and upkeep of the forests

in the long term. Although the increase in initial employment numbers may be low,

the long term employment opportunities of a tourist friendly, well-managed forest

could create a sizeable number of jobs which would create a positive economic

impact on the area.

Further employment opportunities are possible with the advance of Coillte’s

renewable energy section, Coillte Enterprise. Coillte has utilised its land mass to

construct a number of wind farms and embrace the renewable energy market.

Approximately 20% of installed wind energy generation capacity in Ireland is situatedon land, formerly owned by Coillte. Coillte also is a leader in Ireland in the provision

of carbon-neutral Biomass to Heat solutions to the Commercial and Industrial sectors

in Ireland.

The potential of these two renewable energy resources should be grasped fully by

Coillte to ensure that the company has a sustainable and profitable future and to

increase employment in rural areas. Fianna Fail believes that the best way to

achieve these aims is for Coillte to remain an independent semi-state entity focusing

on its own forestry and renewable energy industry, promoting tourist activity in the

countryside and building on its successful panel products business.

Fianna Fáil is therefore opposed to the merging of Bord na Móna and Coillte. The

two companies’ principle activity and reason for existence diverge greatly. Coillte’s

role in forestry management and expansion should not be diluted by the creation of a

semi-state renewable energy company. Nor should its role as a custodian of public

forests for the citizens of Ireland be undermined by a specific focus on energy

services. Where collaboration with Bord na Móna is practical and mutually beneficialit is obvious that the two companies can and should engage in business agreements

to further their potential business interests, particularly in the area of renewable

energy. However, if Coillte is to fulfil its original purpose of carrying on the business

of forestry and establishing and carrying on woodland industries it is important that

the company keep its current status as an independent entity.




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Enhancing the Use of Forest Land

• New afforestation to be at an increased density to maximise economicyields of the company.

• New planting to have a balanced mix of commercial conifer and broadleaf trees with at least 50% of all new trees planted coming from native Irishspecies such as Alder and Oak trees.

• Agriculture lands held by NAMA to be considered for afforestation wherecommercial or residential development is no longer economically viable.

In order to maximise economic output from Coillte’s forestry holdings it is proposed

that future afforestation plans have a high level of tree density. High densities willimprove the economic return of proposed new forests and maximise the land use of

any investment. Increased density yields will also result in the Irish timber industry

remaining competitive on the international market and keep control on investment

costs overall. The current requirement that 15% of any area to be afforested is left

unplanted should be reduced to 10% to allow higher yields. As most Irish forests are

small in scale it is important that tree density is high in those forests and that the

estates are well managed and cost effective.

Any new afforestation programme carried out by Coillte must also reflect theimportance of native Irish trees in the plantation process. Coillte, as a semi-state

company, should act to promote native Irish trees across the country. Currently there

is a high degree of diversity in Irish forests which is to be welcome. However, a

renewed focus on native Irish trees is needed to ensure positive ecological and

aesthetic benefits which are reflective of Ireland’s indigenous tree species. These

trees are more amenable to recreational activity, the creation of parklands which are

in keeping with Irish forest life and often offer a longer term investment opportunity

than non-native species. Fianna Fáil would like to see any new afforestation

programme having at least 50% of the new planted trees being of a native Irish

species.

In order to achieve the plantation of 20,000ha of trees per annum to 2020, Fianna

Fáil proposes that Coillte, in conjunction with the National Assets Management

Agency (NAMA) examine all agriculture lands held by NAMA to be considered for

afforestation where commercial or residential development is no longer economically

viable. The afforestation of this land has the potential to raise the value of the land

significantly. Under Section 10 of the NAMA Act, NAMA is required to obtain the best

achievable financial return for the State having regard to the cost of acquiring and

dealing with loans and any other costs incurred in preserving or enhancing the value




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of property securing them. Fianna Fáil believes that the plantation of forests where

commercial or residential development is no longer economically viable would result

in the state obtaining the best achievable financial return on these lands. Not only

would such a plan contribute to the economic renewal of the Irish state by creating

and increasing employment in these areas, the afforestation of these NAMA lands

would leave a positive lasting legacy in terms of amenity value, CO2 reduction and

ecological benefits for the local community.




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Tourism and Community Initiatives

• Coillte to develop community forests and begin an “Adopt a Tree”campaign where an individual or a group, including families, can pay for

the planting of a tree and be given the location of that tree. This would besimilar to the previous Millennium forest project.

• Coillte to increase its focus on rural recreation and tourism efforts,increasing the number of forest walkways, cycleways and other recreational activities.

• Coillte in conjunction with all state land owners and agencies, includingthe National Parks & Wildlife Service and the Office of Public Works, toconduct an audit of current state owned land with a view to increasingtree plantation on this land where appropriate.

Irish people have a strong affinity to their forests. They have shown that they fully

support the public ownership of forests for common community benefit in the recent

campaign to secure Coillte’s future as a state owned company. In order to utilise this

goodwill and implement an ambitious afforestation programme, Coillte should initiate

an “Adopt a Tree” campaign where an individual or a group, including families, can

sponsor the planting of a tree in new forests. Those who subscribe to adopt a tree

should be given the trees location and their names should be published on a

subscribers board at the entrance to the forest. Direct public subscription to the

afforestation programme will allow Coillte expand the forest estate at a quicker rate

than relying solely on its own profits or capital expenditure.

The expansion of these forests will also give Coillte the opportunity to increase its

focus on rural recreation and tourism efforts, increasing the number of forest

walkways and cycleways which will provide a boost to local tourism in the areas

selected for afforestation. Coillte are to be complimented for their continued

innovative use of its current forest estate. The advance of Coillte’s walking, hikingand bike tracks, orienteering courses and zip line adventures are all to be welcome.

These developments should be built upon to encourage tourism in rural areas.

Fianna Fáil believes that any new forest plantation must be examined as to how best

tourism levels could be increased in the area using the new Coillte owned land.

Coillte should utilise its current estate to enhance and invest in its current amenities

and encourage access by the public.

Finally, Coillte, in conjunction with the National Parks & Wildlife Service and the

Office of Public Works should conduct an audit of current state owned land with a




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view to increasing tree plantation and tourism potential on this land where

appropriate. A review of the state’s current parks in this manner will provide an

overview of potential areas where tourism can be increased through the cooperation

on Coillte, the National Parks and Wildlife Service and the OPW.




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Conclusion

The future of Coillte is a bright one. The company’s success in building a strong

forestry industry in Ireland and increasing forest cover in Ireland has been

impressive. The company’s current diversification of its business is a welcome

strategy and one which will secure its future in the long term. Now is the time for

Coillte to take the next advance forward in an ambitious afforestation programme as

an independent, state owned, commercially focused company.

Fianna Fáil proposes that Coillte must now:

• Remain as an independent, state owned and commercially focusedcompany;

• Implement an afforestation target of 20,000 ha per annum between 2014and 2020;

• Ensure 50% of new planting to be native Irish trees such as Alder and Oaktrees;

• Cooperate with Bord na Mona in developing renewable energy solutions;

• Increased forest density to maximise economic yields for the company;

• Seek NAMA lands to be considered for afforestation where economicallyviable;

• Develop community forests and begin an “Adopt a Tree” campaign;

• Increase its focus on tourism efforts;

• Conduct an audit of current state owned land with a view to increasing

tree plantation on this land where appropriate.



Éamon Ó Cuív TD & miChael moynihan TDDáil Éireann, Leinster House, Kildare Street, Dublin 2.

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