Logging regulator not adequately detecting illegal logging, Victorian Auditor-General's Office finds

Victoria's logging regulator is failing to fully use its powers, and cannot assure the public it is effectively reducing the risk of illegal logging, according to a report by the Victorian Auditor-General's Office (VAGO).

The report, published on Thursday, is critical of how the Office of the Conservation Regulator (OCR) reviews its own activities, as well as its ability to investigate allegations of widespread or systemic breaches of the law by the state owned logging company, VicForests.  

The OCR oversees the regulation of wildlife, forests and public land in Victoria.

VAGO takes issue with the data used by the OCR, and says it relies heavily on information provided by the logging company it is tasked with regulating, as well as complainants.

VicForests has been the subject of many allegations of illegal logging, several of which were upheld by the OCR.

The allegations include claims of illegally logging steep slopes in water catchments, and the associated and increased risk to the health of Victoria's water supplies.

In the report, auditor-general Andrew Greaves said weaknesses in the OCR's systems meant it "cannot assure government and the public that it is effectively and efficiently reducing the risk of regulatory failure and achieving its outcomes".

In a written statement supplied to the ABC, Chief Conservation Regulator Kate Gavens noted the report focused on one part of the regulator's activities: how it assesses community allegations of non-compliance with the law, and not on its pro-active regulation.

She said that was "an important part of the conservation regulator's work that cannot be considered in isolation from its broader regulatory approach".

"Our focus will continue to be on proactive actions to enforce regulations, promote compliance and protect biodiversity," said Ms Gavens.

The Office of the Conservation regulator accepted — in full or in principle — all of the report’s recommendations.

As a case study, Mr Greaves and his office examined allegations of widespread and systemic illegal logging in Victoria's water catchments, which have been reported extensively by the ABC.

After receiving those complaints from Professor David Lindenmayer and Dr Chris Taylor from the Australian National University, the OCR concluded they could not be substantiated. 

But in the two specific instances the OCR did investigate, it found unlawful logging of steep slopes had occurred. 

The lack of substantiation of the allegations of widespread and systemic illegal logging was despite FOI documents obtained by the ABC showing the OCR's own analyses of the allegations were consistent with the complaints.

The auditor-general found the same thing, saying: "OCR's spatial analysis of harvest areas and slope in water catchment areas found comparable results to the allegations in the complaint."

But he concluded the OCR does not have a procedure in place to investigate those sorts of complaints.

No 'enforceable undertakings' issued 

The report also found that despite the OCR being set up in 2019 with a specific mandate to introduce a "graduated and proportionate response to noncompliance", the OCR has not yet achieved that.

Doing that requires using a range of enforcement actions, but the OCR has continued to rely largely on "letters of advice."

"Enforceable undertakings are another way to ensure compliance, but to date none have been issued," said Auditor-General Andrew Greaves.

One of the auditor-general's recommendations was for the OCR to develop a procedure to issue those undertakings. 

The OCR only accepted that recommendation "in principle", instead committing to "clarify its approach to the use of enforceable undertakings and injunctions".

The auditor-general said the data systems at the OCR were such that it "does not always have access to necessary and sufficient data to determine whether non-compliance has occurred in its assessment of complaints".

He also found the regulator did not adequately evaluate its own performance, such that it cannot give the public or the government confidence that it is an effective regulator.

Despite all the criticisms, the auditor-general found the OCR had "made progress" improving timber harvesting regulation.

In its official response to the report, the Department of Environment Land Water and Planning (DELWP), which the OCR is part of, said it was pleasing the report recognised the progress the OCR had made.

"I note and appreciate VAGO's recognition of the need to continue to build on those new foundations," wrote John Bradley, secretary of the department.

Professor David Lindenmayer said the report was a vindication of the work he and his team at the Australian National University (ANU) had done.

"The VAGO report says the OCR have failed as a regulator. I have seen no evidence to disagree with VAGO," he said.

"Our work always maintained there was widespread evidence of illegal logging on steep slopes and supposed logging exclusion zones.

"We analysed the Victorian government's own datasets — not once but twice using three different methods and always found the same thing — widespread breaches.

Professor Lindenmayer said he would be writing to the premier, environment minister and the OCR demanding they remove "false and misleading" reports they published, saying they found no evidence of widespread breaches.

Logging industry 'shielded'

Four years ago, a damning report on how logging is regulated in Victoria led to the creation of the OCR.

Danya Jacobs, a lawyer at Environment Justice Australia, said the new review showed little had changed since that time.

"Since the last report four years ago, there has yet to be a single prosecution of the logging industry for breaching environment rules despite more than 120 allegations of breaches over the last three years," she said.

"Less than 30 had some kind of action taken in response, more than 90 were said to require no action, and only two were referred for investigation."

Ms Jacobs has won several injunctions against VicForests through the courts, an activity the report four years ago described as being a "third party regulator" of VicForests.

"That is exactly what happened in response [to] the ANU's meticulous investigation into extensive unlawful logging on steep slopes in the Yarra Ranges. The department weakened that rule to permit more logging."

After the ABC reported allegations of failures by the OCR in 2021 least one referral was made to Victoria's Independent Broad-based Anti-corruption Commission (IBAC), alleging corrupt behaviour by the OCR.

In a written statement provided to the ABC, VicForests noted that the report was not about VicForests' activities and said it welcomed "the auditor-general's report, and with it any ongoing improvements and clarifications to assist industry compliance."

"VicForests recognises and respects the role of the conservation regulator - and we have strong policies and procedures in place to ensure legislative and regulatory compliance."

A spokeswoman for the Victorian Government welcomed the report, highlighting that it noted progress on improving the regulation of logging.

"We support OCR's acceptance of all recommendations of the VAGO audit, consistent with the Regulator's pre-existing work program, and its work to protect our wildlife and our forests for all Victorians," the spokesperson said,.

"We're also strengthening the Conservation Regulator with new infringement powers for anyone breaching the Code of Practice -- bringing its disciplinary powers in line with other regulators in Victoria."

Editor's note: This article has been updated to clarify that Danya Jacobs has won several injunctions against VicForests, rather than several civil cases