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Unconscionable conduct in contract backdowns

Forest Industry Contractors Association

26 May 2006

For Immediate Release

Unconscionable conduct exposed in contract negotiation backdowns

Forest Industry Contractors Association (FICA) claims that unconscionable conduct is rife in the forest industry.

FICA, the national body representing forestry contractors, directs these claims at the management of large forestry companies, who are refusing to discuss compensation for the increasing costs of diesel fuel that forestry contractors are forced to absorb.

Spokesman for FICA, John Stulen, said that there is reluctance on the part of forest managers to recognise the true cost escalations for diesel costs and accuses them of using delaying tactics to avoid coming to the negotiating table with contractors.

“Forest managers are fully aware of the extra costs being borne by their logging contractors. It is unacceptable that they use such tactics in the knowledge that the contractors must continue to operate at full production to ensure they are not in default of other contract stipulations.”

“The crazy part about their indifference to this situation is that they are plainly aware of the provision for fuel cost increases built into the road transport contracts, which are also negotiated by them.”

Mr Stulen is adamant the practice is allowed to continue because Australian legislation preventing this kind of conduct has not been implemented in New Zealand. Australian states, such as Victoria, have specific legislation to protect the livelihood of forest contractors.

Mr Stulen also notes that there is evidence that this conduct is more likely to occur with the larger forest companies. Small owners, he says, are much more in tune with the financial health of their forest contractors and have generally responded quickly to the burden on contractors caused by these price increases.

The increase value of fuel has brought another unwelcome occurrence –theft of diesel from contractors’ storage tanks. The effects of these thefts are two-fold, with valuable time being taken to travel to town for replacement fuel supplies and to lodge insurance claims.

It all adds up to a grim outlook for a sector of workers who have already been forced to work at less than optimum rates over the past two to three years, while log export prices have remained low.

However, Mr Stulen is hopeful that pressure from the combined contracting federations around the country will eventually bring about the changes seen across the ditch.

“Our Australian counterparts present a united front to bring pressure on their forest managers. If we want to see the same results in this country, then we need to follow their example. We need to fight for law reforms to ensure the financial wellbeing of our contractors – the sooner the better.”


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