Meeting the Minister - May 2008
The FCA raises some thorning issues. The meeting with Michael Russell MSP, the Minister for the Environment who has responsibility for Forestry, was arranged by FCA Chairman Donald Maclean in response to the frustration felt by both himself and the membership regarding the failure of ConFor and the Forestry Commission to recognise and consult with the contracting sector of the forest industry.



Preliminary meeting
Prior to meeting the minister at the Atlantic Queue (Glasgow) offices of Scottish Enterprise, members of the FCA who had agreed to meet him held a preliminary meeting to discuss the priority issues and how they could be most effectively presented. It was agreed that the following specific issues should be raised:

The basis of payment for timber should be reviewed, with the preferred method to be based
on harvester head-generated volume readings.
Access to FC information on their awarding of contracts procedures, and increased transparency of FC accounts with regard to the quantities of timber bought/ sold and their alignment with the quantities for which the harvesting and transport contractors are paid.
Gangmasters licensing.
Fuel costs.
Recruitment, training and apprenticeship schemes that allow experience to be acquired beyond initial training, the role of Lantra and the certification of operators.
The availability of information about grants and subsidies, particularly with respect to woodfuel and biomass.

Since protocol dictates that the chairman should play a neutral role in proceedings, and since Donald Maclean had done much of the preparation work on many of the issues, it was decided that Brendan Burns should take the chair, allowing Donald to more effectively present
the FCA case. Although there had been no discussion when the meeting with the minister had been set up as to whether representation from the FC was desirable, it was anticipated that it was possible that the minister could have invited them. It was recognised that the presence of FC representatives who were in a position to influence the awarding of contracts could be an inhibiting factor for some of the FCA membership, but after discussion it was agreed that if the FCA was asking for better consultation links with the Commission it would send out the wrong signal if the FCA were to be instrumental in refusing to take advantage of what was a potential consultation opportunity. It was therefore decided not to ask the FC representatives to withdraw from the meeting, in spite of certain members being worried about the potential for recriminations for speaking their minds. (The fact that such a situation exists demonstrates the need for better relationships between the FCA and the Commission.)

Main meeting
This was attended by Michael Russell MSP, Minister for the Environment, Bob McIntosh, FCS Chief Executive, Les Bryson, FCS Head of Operations, Margaret Watson, Scottish Enterprise, Charlie Fulton, Scottish Enterprise, Donald Maclean, FCA Chairman, Tim Malyon, FCA Scottish Policy Committee Vice Chairman, Brendan Burns, FCA Scottish Policy Committee (co-opted member) plus 20 FCA members. Brendan Burns opened the meeting by ensuring that all present were aware of the critical role played by the FCA in representing the UK timber harvesting sector which was responsible for the production of feed stock for the all the homegrown timber industries. To illustrate the point he stated that, out of the UK population of 1,100 harvesting machines, 1,035 (or 94%) were operated by private companies. He concluded his opening remarks by expressing the deeply felt concerns that this critical sector of the industry was not represented, nor consulted, by the various bodies responsible for the strategic decisions affecting the industry, and that attempts made by the FCA to correct this omission had been totally and firmly rejected. At this point he called on Donald Maclean to explain in more detail the extent of the problem.

Donald openly admitted that the FCA members’ preliminary meeting had held a discussion as to whether or not the FC should be present. He then went on to briefly outline the various frustrations that the FCA had encountered in its attempts to liaise with the various forest industry establishments, resulting in him being forced to call for the meeting. He explained that it was, however, agreed that the FCA should demonstrate its recognition of the need to go forward through cooperation between the FCA and the forest industry establishments, and the decision was taken that this willingness to work with the Commission would be best demonstrated by allowing the FC to be present, in spite of the reluctance that some attendees might have to voice their concerns and air their problems. Donald then listed the issues for discussion as agreed by the attendees at the preliminary meeting. Michael Russell welcomed all present to the meeting and explained that he had been in post for 11 months, but, as MSP for Dumfries and Galloway, he was greatly interested in forestry and recognised the impact, potential and optimism that existed within the forest industry. He was also aware that FC represented only a third of industry, but that he represented the whole of the industry in Government policy terms. “I’m not here to defend the FC so if you can make a sound case that there is a particular problem, then I will get it changed. I want to use this meeting to focus on ‘can do’ items and clear away obstacles. Where there is confrontation then solutions have to be found, but both sides must realise that they will not always get everything they want.” Weight/volume payment issue Les Bryson explained, “We’re with you on this.

We want to move towards payment based on ‘headbased’ figures.” He also announced that the FC was actively working on the technicalities involved in tuning their harvester data systems to make the output compatible with FC IT systems, and that once that was completed new ‘protocols’ will be drafted for payment to contractors on the basis of head readings, and that the intention was to put them out for consultation. Existing systems used on the continent were discussed.

It was agreed that none were suitable for ‘straight copying to UK’, but that much could be learned from their experience. Jock McKie of John Deere Forestry confirmed that the majority of machines in the UK were less than four years old and therefore had the technical capability of producing accurate records of timber cut, and claimed that UK forestry machines had the highest technical spec in Europe. Bob McIntosh claimed that sawmills now had superior systems to scan logs with more accuracy than machines, but it was pointed out that by the time logs are in the mill they cannot be traced back to the harvesting machine, and therefore the information from mill scanning systems cannot be used as a basis of payment for the contractor since there is the possibility of theft and other losses between the forest and the mill.

Michael Russell proposed that when FC has concluded their technical work, a consultation group composed of both the FC and FCA should establish the protocols that are mutually acceptable, and that the target date should be mid-May. The draft protocols should then be put out to the wider contractor base for further consultation. He emphasised the point by adding: “If in three months’ time there has been no progress then a further meeting will be convened and a method identified to remove the impediment to progress.” When asked if it was the Commission’s intention to encourage the use of this proposed new system in standing sales, Les Bryson made it clear that the FC has no control over standing sales merchants’ systems.

Donald Maclean had not been aware of the work being done in the efficacy of payment based on ‘head’ readings and welcomed the inclusion of the FCA in the consultation process on this problem, but asked if a standing consultation mechanism between the FC and the FCA could be established to deal with all the everyday problems that occur. Michael Russell invited the FCA to again contact him if there had been no satisfactory progress on this point within the next three or four months.

Access to contract information
The issue of the awarding of contracts was raised and concerns were expressed that, since no information was available about successful tenders, it was difficult for contractors to improve their tendering procedures to make them more competitive. Les Bryson explained the issue of confidentiality of contracts between grower and buyer which would act as a restriction on information going out to other contractors, and a more general discussion ensued about the uses to which the Commission’s income was put.

Michael Russell explained that the FC was more than a business, and should also be regarded as a public service that is expected to deliver health and social benefits through the establishment of amenities for outdoor activities. Neither operation should be regarded as a government-owned business. The Commission has two objectives, firstly to underpin the strategic need that the UK has for a timber resource, and secondly to ensure the public has access to woodlands etc. Income from the Commission’s commercial activities is used to offset its expenditure on its amenity and social responsibilities.

The discussion then returned to the more particular concern about the alignment of timber quantities bought/sold when compared with payment to contractors, and the Commission’s failure to conduct ‘impact assessments’ after changes to working conditions had been introduced. This discussion was halted by the minister, who observed that he had heard, particularly from chair, “A succession of strong and emotive words which were not helpful.” He then set out ground rules for future discussions and consultations, including an understanding that it would be the responsibility of those taking part to disseminate the outcomes of the discussions to their constituent membership. He concluded by clearly stating, “If things don’t improve, talk to me directly, but a spirit of cooperation is essential.”

Gangmasters licensing
Michael Russell reported that Charlie Fulton had written a very helpful letter on this topic in which recommendations had been made, and that he had taken Charlie’s position on this and raised it at the highest level.

Further discussion ensued on a particular case where a contractor had received a written warning from the Gangmasters Licensing Authority (GLA) in spite of his complying with advice that he had received from the Commission. Les Bryson explained that this had come about as a result of a hold-up in communications between the GLA and his office. Michael Russell asked that a letter be sent to the contractor in question by Les Bryson explaining the circumstances so that the contractor would have an effective defence against his written warning.

Fuel costs
Michael Russell again was well aware of the problem and its impact on the industry. Figures, based on invoices, were produced from the floor of the meeting showing that a ten-pound piece of work had, within a month, increased by ninety-nine pence due to the increase in fuel cost. If the inevitable knock-on increase in virtually all other expenditure that was yet to emerge was also taken into account, the increase in cost would be even greater. The point was also emphasised from the floor that contractors were being asked to bid for three-year contracts.

With no guarantees or advice being made available from government about the extent of future price rises, it was impossible to offer realistic tender prices. The minister agreed that he would make representation at highest level on the impact that fuel prices were having on forestry, and that fuel prices should be on the agenda, along with protocols for payment by weight and other contract- related issues at the proposed Commission/FCA meeting to be set up by the Commission within the agreed time frame.

Operator training and experience issues
Margaret Watson of Scottish Enterprise outlined the Barony Pilot scheme and the outcomes. The pilot scheme had worked well but had proved to be very expensive and there was a need to look at ways similar schemes could be funded.

Michael Russell reported that he had visited the Barony while the course was being run and was aware that actual workplace experience was a major problem, and he asked the floor what the major problems were in giving new operators the experience necessary to become profitable. It was explained that, in the first instance, only one in ten would persevere long enough to make the grade and that it would typically take a minimum of a year to attain the level of competence necessary for a new operator to show a profit from a typical site. Michael Russell recognised the complexity of the problem and observed that other industries had similar training issues. He promised that he would review possible options before making suggestions for further discussion on the matter.

On the subject of Lantra and its role in the industry he admitted that he was already aware of the existence of issues involving their relationship with the forestry industry and he again promised to take the problem away and come back with possible solutions.

Woodfuel and biomass
On the subject of the availability of information about grants and subsidies, particularly in relation to the ‘Caithness Scheme’, the minister admitted that lessons had been
learned but that the bigger picture showed that, “Woodfuel has a great future, especially in heat and power applications.” The availability of ROCs (Renewables Obligation Certificates) and other subsidies was discussed and it was agreed that information needs to be more readily available. The minister promised a briefing paper on biomass for the next meeting.

The minister’s time schedule prevented further discussion, but before closing the meeting he reiterated his request to the FCA to again contact him, “If there has been no satisfactory progress within the next three or four months.”
Jim Christie