Sandalwood industry left in limbo as WA government mulls new rules

In short:

Western Australia's government is renewing the 2015 Sandalwood Order that governs the state's $40 million native industry.

The government has indicated it will reduce wild harvest by 500 tonnes and restructure the industry under the Department of Biodiversity, Conservation and Attractions.

What's next?

Existing regulations will continue until the end of the year, with a new Sandalwood order to take effect on January 1.

Sandalwood producers in Western Australia say a lack of communication over looming changes to rules governing their lucrative industry has left them in limbo.

The native wood, prized for its use in perfumes, cosmetics and incense around the world, can fetch as much as $25,000 a tonne on the open market.

Under the current Sandalwood order, in place since 2015, 2,500 tonnes of wild sandalwood can be harvested annually.

But with that order due to expire at the end of this year, producers say the government has not been clear enough on what will replace it.

Chief amongst their concerns is a proposed shift in oversight from the Forest Products Commission, the state's dedicated forestry body, to the larger Department of Biodiversity, Conservation and Attractions (DBCA), which governs WA's national parks and conservation estate.

Harvesters facing uncertain future

Harvester Michael Matthiessen got into the industry after moving to Kalgoorlie-Boulder, 600km east of Perth, 20 years ago.

While in favour of harvest reduction and a greater focus on regeneration, he said the shift to DBCA oversight had not been fully explained, and it was putting the industry in danger.

"I definitely think there's a risk to the industry if the transition isn't managed properly," he said.

"No one has been asking the questions to myself or other contractors that would give our perspective on the industry.

"And what is and isn't important going forward."

With sandalwood trees taking upwards of two decades to mature, Mr Matthiessen said harvesters needed to plan years in advance, making uncertainty challenging.

"It takes a lot of time, effort, resources and experience to be a really efficient and effective harvesting contractor," he said.

"Once it's gone, it's going to be quite difficult to recover."

The ABC asked WA Premier Roger Cook about the industry's concerns and he said the government were stepping through the process carefully.

"We're consulting widely and doing some work inside the FPC at the moment just to make sure we've got the best settings," he said.

Exporters warn of international impact

Exporters share the on-the-ground harvester's concerns.

Wescorp Sandalwood executive chair Fleur Coakley said the industry was being left in the dark.

"FPC contracts are coming up to finish at the end of December, and none of us knows what's happening beyond that," she said.

"If it's not managed well and there isn't that cycle of investment going in … that's what my customers internationally are already concerned about."

Ms Coakley recently joined a number of industry stakeholders, backed by the state opposition, to call for greater transparency from the government.

"Everyone's not sure whether we invest or whether we start doing plan B," she said.

"There's really no clarity at all and no formal announcement for any of us."

Ms Coakley is worried that the lack of clarity is creating uncertainty among investors and is worried about the impacts on the international market.

She wants the state to take a greater focus on illegal harvesting and regeneration.

"We've had different views, different approaches, and there's no continuity of discussing how transitions will happen or how this might work," Ms Coakley said.

"Having those different government departments, different ministers, it's really confused all of us."

WA Forestry Minister Jackie Jarvis and Environment Minister Mathew Swinbourn were both contacted to comment on industry's concerns.

Neither minister responded; however, in a written statement, a state spokesperson said a draft review was available and being reviewed by an independent panel.

"The Cook government is committed to facilitating discussion between interested parties to collaborate on what a future sustainable wild sandalwood industry could look like," the statement said.

The FPC and DBCA declined to comment.

Alternate models

Not everyone in the industry shares these concerns; Kalgoorlie-Boulder-based oil producer Dutjahn is one of the state's largest oil producers.

Director Keith Drage argues the industry has had time to prepare.

"Everybody's been aware that the current order … expires at the end of 2026," he said.

"Obviously we have very much a vested interest in what happens between now and then and thereafter."

Mr Drage said a transition away from government harvest on crown land to a mixture of independent Aboriginal operators and plantation resources was an inevitable outcome.

"We've always seen … that that was going to eventuate," he said.

"A diminishing wild harvest in Aboriginal hands is something that we've always built our business model around."