Committee Reports > List of Committees > Dáil > 1986 > Committee on Public Expenditure > Report No. 21 - A review of state expenditure on The Forest and Wildlife Service

Appendix (i)

ADVISORY PANEL ON PUBLIC EXPENDITURE - FORESTRY GROUP

Report to Committee on Public Expenditure

A. Summary of Concerns

Having completed its consideration of the operations of the Department of Fisheries and Forestry - Forest & Wildlife Service (“FWS”), the Panel is concerned that:-

(i)the cost effectiveness of the FWS programme in relation to State forests, insofar as this can be judged, would reveal a deficit to the extent that the investment being built up is less valuable than the cost of that investment expressed in equivalent currency terms;

(ii)the relationship between the FWS as a seller of wood as raw material and the wood processing industry does not seem to be a happy one; as wood is sold at the moment there are transport inefficiencies and the sawmillers appear to be very concerned at the lack of understanding of their requirements. This position leads to a situation in which the sawmilling industry have fears as to the future viability of their industry;

(iii)the reduction in the level of new planting activity from 10,000 hectares per annum achieved in the 1960s and early 1970s to the current level of about 7,000 hectares per annum is not accompanied by a corresponding reduction in overhead costs;

(iv)the method of financial reporting, while being apparently adequate as regards controlling any overspending against budget, seems to be inadequate to test the cost efficiency of expenditure; and

(v)generally the FWS, while being involved in a commercial sector, is not required to operate according to normal commercial criteria.

A summary of our Recommendations is given in Section C.

B. REPORT

1.Scope of Work:

The Panel has met on four occasions under the Chairmanship of Ms. Mary Finan and has reviewed the general reply by the Department of Fisheries and Forestry - Forest & Wildlife Service (“FWS”) to the Questionnaire prepared by the Dail Committee on Public Expenditure, together with other documentation, and has had the benefit of considerable input from those members with expertise and experience in private afforestation and in the timber industry.

2.Background:

The FWS occupies a singular position amongst the Departments of State in that, while it has a substantial grant-in-aid (1984 - gross £46,964,000) and is thus involved in the considerable expenditure of State monies, it is also directly involved in the establishment of a considerable national asset. It is further directly involved in the provision, now and later, of a native element in raw material supplies to the Irish timber industry. It follows that the FWS is substantially involved in a commercial sector and ought to operate to a very large extent along commercial lines in the acquisition of lands for afforestation purposes, in the planting and management of State forests and in the marketing and sale of the State timber harvest if its programme is to be justified on a cost effective basis.

To the extent that there is any deficiency or non-commercial factor involved in the afforestation activities, there must consequently be a reduction in income available to FWS (which, of course, increases the amount of the net grant-in-aid) and/or a compensatory effect on prices which must inhibit the profit-making capacity and growth potential of the Irish timber industry. The national emphasis on import substitution should make it incumbent on FWS to make available to the native sawmilling industries acceptable quantities of home grown timber at competitive prices. Such an objective is not incompatible with the objective of obtaining a real return on the State investment in forests, but can only be achieved by having a proper management approach designed, inter alia, to eliminate inefficiencies arising from dual reporting structures and real reduction in what seems to be a very high average cost of planting.

3.Expenditure and Performance:

The gross estimate for 1984 in the sum of almost £47m. represents a 3% increase over 1983. Of the gross expenditure estimate, 25.12%, or almost £12m., is attributable to salaries, wages and allowances, which represents an increase of 6% over 1983, while forest development and management account for 56.65% (£26.6m.) of the gross expenditure and represents an increase of 5% over the similar sub-head provision for 1983.

Performance trends for 1984 are not available, but the performance trends for 1983, which are provisional, show a declining level of activity in terms of new planting; for example, in 1983 the provisional number of hectares subject to new planting was 5,700 compared with just over 6,000 in 1982, just over 8,000 in 1978 and 9,300 in 1972/’73, although there has been some increase in the acreages reforested over this period. We would thus be concerned at the apparent maintenance of an overhead structure geared for a planting programme of 10,000 hectares notwithstanding the decline in the level of activity. We cannot detect in the general reply to the Committee’s Questionnaire any explanation for this factor.

The Panel found it virtually impossible to obtain any intelligible measure of performance or guidance as to cost effectiveness from the material contained in the general reply to the Committee’s Questionnaire, or from the accounts of the FWS as at present made available. For this reason, the Panel would be very supportive of the recommendation in the Report of the Review Group on Forestry (November 1985) that a very much more effective system of financial reporting is an urgent necessity. The present accounting system does not in any way facilitate the breakdown of overheads and direct costs. Indeed, the format of the Annual Report of the FWS to the Minister is suggestive of a very poor awareness of the commercial responsibilities of the service. The failure of the Report to change in line with changing circumstances is perhaps a symptom of apparent inertia of the Service itself.

The reply to the Questionnaire, as one would anticipate, does indicate careful control over the expenditure of funds. There is, however, less evidence of a similar control over the efficiency in the use of funds, or in an all pervading sense of a “value for money” concept in the decision-making process for the allocation of cash.

Two items in the 1984 estimates in particular appear to call for explanation.

(a)Expenditure on game development and management was running at something over £500,000 per annum, and represented a substantial increase on the previous year. It is noted, incidentally, that the expenditure on wildlife conservation was approximately one-third of this. It seems to the Panel that the number of members of the public benefiting from wildlife conservation would be larger than those who benefit from game development and, in any event, it would seem that there should be a good case for making game development self-financing.

(b)There is an item in the estimate of £168,000 for forestry education. From enquiries made by the Panel there appears to be very little forestry education, in fact, conducted at the moment or, indeed, in 1984.

4.Investment Performance:

As already pointed out, the FWS is involved in the heavy expenditure of Government funds in the production of the national asset.

In reviewing this expenditure in terms of a “value for money” concept, one needs to consider the present estimated value of the State forests if one is to obtain any guidance as to what kind of return is being obtained on the FWS investment.

In considering this, we have studied the Report of the Review Group on Forestry (November 1985). This Review Group, with the assistance of FWS personnel, carried out detailed work in calculating (a) the cumulative net investment made by the State in the establishment and management of plantations and (b) the present value of the plantations owned by the State (see Chapter 4 and Appendix 4 of the November 1985 Report). According to the Report, the total investment (net) made by the State expressed in 1983 £s. has been £876m. [It is understood that in calculating the figure of £876m. allowance has been made for activities associated with the Department which are not related to commercial management of the plantations].

The value of the State forests is, as one would expect, a matter of debate and uncertainty. The Report produced a range of possible values for the State forests for comparison with the investment figure. It also emphasised that no analysis could provide a definitive valuation whatever the basis for it.

In Table 1, Appendix 4 of the Review Group’s Report a range of values is given for the State forests based on the assumption of no timber price increases, but assuming an annual productivity increase of 0.5% p.a. The valuation at 1983 £s. depends on the discount rate applied as follows:-

We consider that discount rates of 2% or less are not realistic and would consequently believe that the most probable estimate of true value is that of £366m., which compares with the Review Group’s estimation of £876m. as the cost of the investment in 1983 £s.

If an assumption of annual timber price increases of 0.5% is made, the valuations made otherwise on the same basis emerge in 1983 £s. as:-

Again, opting for the 3% discount rate as the most realistic, the value emerges at less than cost. However, it does appear to the Panel that the wood prices incorporated are high, particularly when compared with wood prices obtaining in the U.K. and elsewhere. Given the rates of return and uncertainties associated with growing crops of timber over a long period, the Panel feels that in valuing forests there should be some potential “upside” in timber prices. For these reasons, we consider it prudent not to make any assumption as to timber price increases and, accordingly, we think that the figure of £366m. is the most appropriate of the figures given as estimates of the value of the State forests expressed in 1983 £s.

In short, it does not seem to the Panel that it can be assumed that the present value of the State forest is equal to the cost of putting it there if expressed in equivalent currency value. This does not seem to be a satisfactory economic performance. FWS should have a target of a real return in excess of 3% p.a.

In fairness to the FWS, it should further be noted that it is probably not wholly appropriate to assess the performance of the FWS in investment management terms. For a considerable period during which the investment was being made the FWS had no clear mandate to operate commercially. It further appears that for many years there existed land acquisition and use policies which were hostile to the development of well chosen forestry plantations. It would be the understanding of the Panel that the FWS has certainly been encouraged into forestry investments on occasions in the past for reasons other than the securing of a good investment return.

There is a clear need for consistent application of commercial criteria in the State forests’ investment programme.

5.Inter-Relation of FWS with Industrial Sector:

The expenditure incurred by the FWS can also be viewed as expenditure on the production of the raw material for the timber industry. Its methods of operation have a direct bearing on the success or failure of that industry and indirectly, in the event of failure, on other Departments’ estimates in terms of supports for industry, unemployment assistance in the event of failure, etc., etc.

Because of size and near monopoly situation, the FWS is in a position to dominate the timber industry. While forestry may be a marginal economic activity in Ireland, accounting for only .3% of GNP in 1985, there ought to be no question but that the needs of the timber industry be considered when framing forestry policy. The suspicion is paramount that forestry policy may be determined more by FWS organisational needs rather than by the less explicit but more compelling requirements of the international marketplace. Irish sawmillers must compete on export markets against Russian and Swedish competitors (whose price competitiveness is assisted by the trade and economic policies of their respective Governments).

The Panel would be critical of the marketing policy adopted by the FWS in that a number of its practices, while perhaps not wasteful of money in the terms of the FWS estimate, are so wasteful when considered from the national point of view. Because of its unique position as compared with other Government Departments, the activities of the FWS cannot be viewed in isolation from the industrial timber processing sector which it services. Indeed, the FWS can scarcely avoid a direct responsibility for the fostering of the timber processing industry. This responsibility ought to include the maintenance of the processing of its products within the State so as to ensure that the added value from processing is Irish and not foreign. Consequently, the objects of the FWS in relation to State forests, based on our natural advantages as producers of fast-growing timbers, ought to be twofold: (a) production of a reasonable real return on investment, as already discussed; and (b) production of a consistent supply of raw material to the Irish timber industry at competitive prices and acceptable quality. The following comments in this regard may be helpful:-

(a)The Tender System:

The sale of timber by the FWS by tender appears to operate on a basis such that potential purchasers are not made aware of where and when in the immediate future they can obtain their next supply. This appears to involve sawmills in making purchases of timber at considerable distances from their place of operations, although further supplies may become available close to the place of operation within a short period of time. In other words, a timber processor may be purchasing his requirements on the doorstep of another processor who also may have to travel for supplies. The inevitable consequence is the unnecessary, but very substantial increase, in expensive transport costs.

The Panel would recommend, as a matter of urgency, that an exact forecast of available supplies, species, location and timing of sale should be made available each year by the FWS. This would allow processors to plan purchases and reduce unnecessary transport costs. There is a clear need to eliminate the wrong sequencing of deliveries so as to obviate under-utilisation of resources for the various sectors and avoid waste.

(b)Export of Unprocessed Timber:

Unprocessed wood should not be exported out of the State any more than, e.g. cattle on the hoof, because such exports deprive the economy of the opportunity for added value employment, etc. This is particularly so where there is within the State sawmilling capacity greater than the output of the FWS. It is therefore essential that there is no incentive to export unprocessed wood.

We understand that a system of quotas operates and that this is designed to secure the upgrading of Irish timber. However, the operation of this quota system needs to be reviewed in this context.

(c)Special Contracts:

It is understood that special contracts have been executed between the FWS and processors such a Medite in Clonmel and Finsa in Scariff, involving guarantees of supply and supplies at less than market price. The Panel has reason to believe that the FWS recovery is of the order of 50% of the price paid by other processors. We have asked for, but to date have not been supplied with, copies of the relevant contracts and we consider that the Committee should insist on having sight of them. Further, when the Committee obtains copies of the relevant contracts we would recommend that they take expert private sector advice on the terms of the contracts and their implications for the industry.

It seems to the Panel that it is a reasonable presumption that such special contracts are entered into by the FWS in response to the dictates or requirements of other State Agencies or Departments and, consequently, it is the view of the Panel that the income foregone by the FWS on such sales at less than market value should not be borne by the vote of the FWS but should be borne by the relevant Agency or Department which promoted the special contract. Such treatment would enable a better view to be taken of the results achieved by the FWS.

In any event, this position needs to be reviewed to ensure that the indigenous Irish processor is getting his timber supplies from native forests at commercial prices and that there is no inflation of the price to him by reason of the existence of such special contracts. It has been represented to the Panel that at one time during 1985 one of the State-aided companies mentioned was offering £18.50 for pulp delivered to its plant by the indigenous sawmill industry while at the same time the FWS was demanding £19.00 at forest for pulp from the same industry (with the purchaser being responsible for transport charges).

It has also been represented to the Panel that where Medite and Finsa are allocated a forest for thinning there is no control exercised to ensure that volumes of wood suitable for processing are allocated to that use and not pulped.

Where normal market forces obtain, the practice is that the sawmilling industry purchases wood from the forest and the pulp industry gets its supplies from the sawmillers’ residue. Because of the special contracts, Medite are not sufficiently encouraged to buy wood residues and as a result Irish processors are exporting pulp wood because of the unsatisfactory price offered for clean chips. It is further suggested that the price offered to sawmillers is, in fact, less than the purchaser’s own cost of producing pulp wood from its low cost purchases.

6.Future:

There is an obvious need for long-term planning which, while subject to constant review and updating, should be consistently pursued if the full future potential of forestry is to be realised.

As already noted, we have had the opportunity of reviewing the Report to the Minister for Fisheries & Forestry prepared by the Review Group on Forestry (November 1985). In general, we support the recommendations in the Report. The Panel, of course, has not had the same opportunity or resources for in-depth study and analysis of the problems, but is satisfied that the approach recommended by the Review Group is the correct one to achieve the development of our national asset and provide material for the development of a timber industry and for the development of both import substitution on the home market and export opportunities.

This Panel takes the view that a decision on the recommendations made by the Review Group is a matter of urgency. Afforestation is a matter of long-term investment, but the performance of that investment and its management should be constantly monitored on normal competitive commercial principles. In the national interest this monitoring must take place in an environment and context which, while seeking proper return on the State’s investment, also allows for and encourages the development of the downstream activities in the timber processing industry which will enable the nation to extract the maximum added value from the product derived from that one of its natural resources which will have been cultivated. The Review Group’s recommendations provide the structure for a more efficient and tightly controlled management of the FWS, having as its objective the elimination of losses and the generation of employment.

In particular, the continuance of the present structure does not seem consistent with the development of a commercial enterprise. Because of the long-term nature of the investment, long-term planning is necessary, but such planning is valuable only if it is not subjected to frequent changes dictated by political considerations. The structure recommended by the Review Group is outlined here and its more detailed proposals are set out in Appendix I:-

7.Other Changes:

Further, the Panel supports any change, but particularly that recommended by the Review Group which will:-

(a)achieve a proper accounting system as recommended by the Review Group;

(b)eliminate the dual reporting structure by the installation of an integrated and unified management structure;

(c)improve marketing and sales procedures so as to cater for the needs of the dependent industry;

(d)adopt a proper long-term strategy in relation to land acquisition, research and forest development.

It is also a matter of some urgency that work now being carried out by the IIRS on grading standards for Irish sawn wood should be completed. Such Irish standards should recognise the significant difference between our fast grown timber and the slower grown Continental and North European product.

The Panel further urge the review of the marketing strategy of the FWS in the interval leading up to the adoption and implementation of the Review Group’s recommendations. A recent study of the timber industry has indicated a worrying lack of profitability which, if not stemmed, must give rise to unemployment. The selling price of sawn logs to the industry seems to be significantly higher in this country than in, e.g. the U.K. Added to this the issue already discussed of sawmills having to haul timber for excessively long runs because of a lack of co-ordination in marketing adds to the inflation of raw material cost. We have no information as to whether the high cost charged to the industry is the result of the subsidised rates given to two mills. In any event, it appears clear that the price structure needs to be reviewed to take some account of the needs of the industry and that the availability of supplies should be made known to the industry as a whole in advance for each twelve months period.

8.Private Forestry:

The Report of the Review Group notes that there are 500,000 hectares of wet mineral soils which have poor prospects in conventional agriculture and which would be extremely productive in afforestation. The Report also notes that £1m. allocated by the State to the private sector afforestation could produce approximately 200 jobs in plantation establishment work, which compares with only 40 jobs if the State were to allocate the same amount to its own planting programme.

It is the opinion of the Panel that the State should actively support the release of these wet mineral soils into afforestation from their present state of either low intensity agricultural use or, indeed, complete dereliction. The State should also vigorously strive to enlist the support of the EEC in the same.

There is little evidence of a coherent policy for private afforestation and its development. There is a very substantial opportunity in this area and it is recommended that an ambitious programme should be devised and actively promoted with the object of creating a climate which will engender investor confidence in afforestation and its future. The target should be of the order of 10,000 hectares of private planting per annum which would compare with the 16,000 hectares privately planted in the U.K. in 1985. It is estimated that private planting of 10,000 hectares per annum would have the additional advantage of creating 600 new jobs in the private sector.

There may be opportunities also in the attraction of social welfare recipients into jobs which would be partly funded by the FWS and partly by social welfare in the State woods. The pruning of existing plantations is an example.

In this connection the Panel recommends that the controls on contractors engaged under the House Improvements Grant Scheme should be extended to contractors engaged by the FWS, or on work qualifying for afforestation grants.

The Panel is also conscious of the recent public debate on the possibility of the State realising some of its investments in plantations by sale to the private sector. We would agree with the conclusion of the Review Group on Forestry that a decision on any such sale is a policy matter for the Minister. In principle, we agree with the Review Group that there is no reason why such sales should not take place, even on a fairly substantial scale, if the prices realised are satisfactory, but we would recommend that if this policy is adopted the proceeds of sale should be re-invested in State afforestation, or in private forests. It would be normal commercial practice for the owner of any large portfolio of investments, whether property, gilt edged or equity, to vary these to suit his requirements in such areas as cash flow management, rationalisation, or the optimum use of funds.

9.Non-Commercial Activities:

We endorse the view of the Review Group that the amenity conservation and wildlife activity should be amalgamated in one Department or Agency and funded separately from commercial activities.

There is clearly considerable public interest in the non-commercial activities of the Department and there appears to be a steady growth in the use of the amenities provided, which reflects the growing demand for information and advice on conservation. In this connection we note that the Review Group received a large number of submissions from interested parties.

The objective ought to be one of ensuring that the public gets good value for money from the public funds allocated for the non-commercial activities. In this context it would seem that the non-commercial activities of the FWS should be highly responsive to informed public opinion. This involves the assessment of actual and potential public requirements and translating this into clearly stated policies and priorities. Success can only be measured by reference to the increase in the use of amenities and the extensiveness of the sections of the communities catered for. Procedures should be in place to reflect such increases.

Conservation and wildlife protection are, in certain respects, in opposition to the use of forests as public amenities. Here the FWS needs to be responsive to research on threats to the environment.

Consideration should be given to the publication of a review of environmental issues each year with an assessment of the action required to avoid environmental damage and to the setting up of formal links with interested parties concerned with recreational and conservation issues at both national and regional level.

C. Summary of Recommendations

Having regard to the foregoing, the following is a summary of our recommendations:-

(i)That a much more effective system of financial reporting be introduced as a matter or urgency (paragraph 4);

(ii)That consideration be given to whether activities in relation to game development can be made self-financing (paragraph 4);

(iii)That commercial criteria should be consistently applied in connection with all matters related to the State’s forest investment programme (paragraph 5);

(iv)That an exact forecast of available timber supplies, of location and of timing of sale should be made available each year by the FWS (paragraph 5(a));

(v)That the operation of the quota system be reviewed to eliminate incentives for the export of unprocessed wood in circumstances where there is an inadequacy of supply of raw material to the Irish sawmilling industry (paragraph 5(b);

(vi)Where processing facilities are granted special facilities by the FWS in terms of price or supply, the cost of this subsidy should not be borne by the accounts of FWS but should be borne by the vote of the State Agency or Department which promoted the special contract so as to enable a proper view to be taken of the results in fact achieved by the FWS according to commercial criteria (paragraph 5(c));

(vii)That proper controls should be applied in relation to all contracts allocated by FWS for the thinning of forests so as to ensure that sawable material is not pulped (paragraph 5 (c));

(viii)That a decision on the recommendations made by the Review Group on Forestry in its Report of November, 1985 to the Minister for Fisheries and Forestry should be made as a matter of urgency (paragraph 7);

(ix)Elimination of the dual reporting structure by the installation of an integrated and unified management structure paragraph 7(b);

(x)Adoption of a proper long-term strategy in relation to land acquisition, research and forest development (paragraph 8);

(xi)That an ambitious programme should be devised and actively promoted to give effect to a coherent policy for private afforestation and its development (paragraph 8);

(xii)That contractors engaged by the FWS should be subjected to the same controls as those engaged under the House Improvements Grant Scheme (paragraph 8);

(xiii)If sales of State forests to the private sector do take place, that this should be on the basis of a satisfactory pricing policy and should be subject to the condition that the proceeds of sale are re-invested in State afforestation, or in private forests (paragraph 8);

(xiv)That amenity conservation and wildlife activity should be amalgamated in one Department or Agency and funded separately from commercial activities (paragraph 9);

(xv)That procedures should be introduced to measure the increase in the use of amenities and the extensiveness of the sections of the public catered for by such amenities and that the FWS should be responsive to research on threats to the environment (paragraph 9);

(xvi)That consideration be given to the publication of a review of environmental issues each year with an assessment of the action required to avoid environmental damage and to the setting up of formal links with interested parties.

APPENDIX 1

REVIEW GROUP MAIN RECOMMENDATIONS

5.8We propose that the NFE should:

-have commission status with a degree of independence in regard to day-to-day activities somewhat similar to that of the Revenue Commissioners: its staff would continue to have civil service status;

-execute the policy of the Minister in relation to State and private forestry;

-operate with commercial objectives: it would be independent of the Minister and Department in day-to-day activities;

-achieve a financial rate of return set by the Minister;

-undertake non-commercial activities, such as amenity and nature reserve management, on a fee or contract basis;

-be free to manage its assets and deal in them, subject to overall Government policy;

-operateits own bank accounts and furnish a quarterly financial report to the Minister;

-be headed by a Director-General (DG) reporting to a Board of 5 to 7 members: the Board would include the DG, one or two senior staff members and some part-time members. The Chairman should be part-time.

5.9We further propose that the national forest estate should be divided into three Regions. We consider that the size of the country and the area under forests would not justify any greater subdivision of the estate.

5.10A high degree of flexibility and commercial freedom is essential to the success of the NFE. We, therefore, recommend:

-that the NFE should have a separate Vote and that the DG should be the Accounting Officer for that Vote;

-that funds should be allocated en bloc to the NFE rather than on a subhead by subhead basis;

-that the NFE should be given as high a degree of financial freedom as is possible within the framework of Government accounting controls and procedures.

5.11The advantages of our proposed structure are that it will:

(i)establish clear commercial objectives;

(ii)facilitate the development of entrepreneurial skills and commercial management techniques;

(iii)have a high degree of autonomy and the freedom to resist outside pressures;

(iv)allow flexibility in dealing with staff levels and mobility; and

(v)encourage, through the delegation of authority, greater individual responsibility and job satisfaction.

Minister’s Functions in relation to the NFE

5.12The Minister’s functions should involve:

-setting the general outline of policy (including that on planting, harvesting and any dealings by the NFE in its assets);

-the allocation of resources to the NFE, with the agreement of the Minister for Finance;

-the setting of a rate of return on forestry investment which the NFE is required to meet;

-reviewing the rate of return achieved by the NFE;

-reviewing the operation of the NFE in the event of failure to meeting the rate of return.

National Forest Enterprise’s Functions

5.13We consider that the functions allocated to the NFE should involve:

(i)execution of the Minister’s commercial forestry policy;

(ii)formulation of commercial strategy for the Regions, regulating the Regions and where necessary co-ordinating their activities (e.g. in marketing of timber);

(iii)allocation of funds for further forestry investment in the Regions;

(iv)promotion of a better understanding of forestry as a productive land use and as a creator of wealth and employment;

(v)stimulation of private investment in forestry using, where appropriate, the Regions as agents;

(vi)devising and revising accounting systems;

(vii)auditing the financial and technical reports from the Regions;

(viii)production and submission to Minister of the Annual Report of the NFE;

(ix)forest research - including such research as the Department may commission;

(x)participation with the Regions and other agencies in the marketing of forest products and in the securing and developing of wool-using industries: this would include liaison with other State Departments and other appropriate agencies;

(ix)forest research - including such research as the Department may commission;

(x)participation with the Regions and other agencies in the marketing of forest products and in the securing and developing of wood-using industries: this would include liaison with other State Departments and other appropriate agencies;

(ix)provision of central services to the Regions; and

(xii)carrying out such other activities as the Department may request on a payment basis.

Regions

5.14The NFE would be divided into three Regions, each of which would have a Regional Manager and Management Committee of senior staff.

Interaction between Regions will be to the benefit of the NFE because:

(i)with good technical auditing and financial accounting, there will be effective comparison between the performances of individual Regions;

(ii)comparisons will provide a stimulus to the management in each Region to operate efficiently; and

(iii)regional autonomy will enable systems to be developed which will identify superior practices in silviculture and in all aspects of forest production and marketing.

Functions of Regions

5.15The main responsibilities which we recommend should rest with the Regions are:

-to manage the State-owned forests in the Region subject to the overall strategy of the NFE;

-to manage their share of new State forestry investment funds and the funds allocated to the management and development of existing plantations;

-to produce statistical and financial data;

-to manage cash flow for the Region;

-to market the production of its woods subject to the NFE’s overall strategy;

-to improve the efficiency of its operation;

-to provide supervision and technical assistance in the development of private forestry;

-to provide and charge for amenity facilities as arranged with the NFE.

Other Ministerial Functions

5.16Other Ministerial functions - in addition to responsibility for the NFE - would include:

(i)Parliamentary business including legislation;

(ii)relations with other Government Departments and international bodies;

(iii)policy on amenity management and development, employing, where necessary, the NFE; and

(iv)wildlife conservation and game development.