(Bloomberg) -- Zoom, one of the few success stories of the Covid-19 pandemic, now faces a new competitor in an app backed by Asia’s wealthiest person Mukesh Ambani.Ambani’s Reliance Industries Ltd., which has scored billions of dollars of investments from Facebook Inc. to Intel Corp. for its digital businesses, has launched the JioMeet video conferencing app after beta testing. The app has already garnered more than 100,000 downloads on the Google Play Store after becoming available Thursday evening.Like Google Meet, Microsoft Teams and other services, JioMeet offers unlimited high-definition calls -- but unlike Zoom, it doesn’t impose a 40-minute time limit. Calls can go on as long as 24 hours, and all meetings are encrypted and password-protected, the company said on the JioMeet website.The launch coincided with a nationwide ban on dozens of popular apps from Chinese technology giants including ByteDance Ltd.’s TikTok and Alibaba Group Holding Ltd.’s UC Web, on grounds they threatened security and data privacy. JioMeet went viral Friday on social media alongside the hashtag MadeinIndia.The app is one facet of Ambani’s rapidly expanding digital empire, which includes India’s largest telecom operator with nearly 400 million users. On Friday, Reliance announced Intel Capital has invested $253 million into Jio Platforms Ltd., a unit of Ambani’s oil-to-retail conglomerate. The U.S. chipmaker’s arm is the 11th investor in about as many weeks to announce its backing for the digital services platform, which has now raised about 1.2 trillion rupees ($15.7 billion).“JioMeet will be a very credible disruptor in the space,” said Utkarsh Sinha, managing director of boutique consultancy Bexley Advisors. “Just the fact that it has no time limits on calls makes it a serious challenger to Zoom, despite its entrenchment.”Jio Platforms is amassing a wide range of services from music streaming to online retail and payments, fast turning into an ecommerce juggernaut that can take on Alphabet Inc.’s Google and Amazon.com Inc on its own home turf. Like elsewhere, video conferencing apps have become lifelines for millions of Indians working in cramped homes during Covid-19 lockdowns.JioMeet is also debuting at a time Zoom users have accused the service of security flaws. It’s been accused of siding with China after deactivating accounts of pro-democracy activists in the U.S and Hong Kong, which it said was intended to comply with Chinese law.(Adds total investment in Jio in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
A look at the shareholders of Arcimoto, Inc. (NASDAQ:FUV) can tell us which group is most powerful. Institutions will...
(Bloomberg) -- The world’s biggest pension fund posted a record loss in the first three months of 2020 after the coronavirus pandemic sparked a global market rout in the period.Japan’s Government Pension Investment Fund lost 11%, or 17.7 trillion yen ($164.7 billion), in the three months ended March, it said in Tokyo on Friday. The decline in value was the steepest based on comparable data back to April 2008, reducing the fund’s total assets to 150.63 trillion yen. Foreign stocks were the worst performing investment, followed by domestic equities.The results come just months after the fund revamped top management and revised its asset allocation to focus more on overseas debt. The loss, which wiped out gains for the fiscal year, may attract political attention as social security remains a major concern for tens of millions of Japan’s retirees.“The decline in domestic and foreign equities led to a negative return for the fiscal year,” said Masataka Miyazono, the president of GPIF. “Both equity markets performed strongly during 2019 even under pressures from the U.S.-China trade negotiations. The global coronavirus pandemic led to investors taking a risk-off stance.”Overseas bonds were the only major asset to generate a positive quarterly return. The securities gained 0.5%, compared with losses of 0.5% for domestic bonds, 18% for local equities and 22% for foreign stocks. In April, GPIF raised its asset allocation to foreign bonds by 10 percentage points to 25%, while keeping the target for foreign and domestic stocks unchanged at 25%.Naoki Fujiwara, the chief fund manager at Shinkin Asset Management Co., said the losses were expected. Equities have rebounded since March, so the pension fund should be recouping losses for the April-June period, Fujiwara said.“The current portfolio is exposed to equity volatility,” he said. “We’re in a low-yield environment right now, and will likely be for the next two years, so maybe it’s alright for now, but in the long run, the pension fund should correct the allocation of equities.”Read more: An Ex-Goldman Bond Trader’s Quiet Rise to Managing $1.6 TrillionUnder the new guidance of GPIF President Miyazono and Chief Investment Officer Eiji Ueda, the fund must navigate a volatile market torn between an ongoing coronavirus pandemic and promises of economic stimulus measures. Fears of a second wave of outbreak are already hampering the global equity markets recovery.The GPIF isn’t rushing to buy foreign bonds, which are 3% below its allocation target, Miyazono told reporters in Tokyo. The fund has a long-term investment timeframe much longer than 10-20 years, he said, adding that there will be no impact on pension payouts from a single year’s results.Investments in ESG indices reached a record high of 5.7 trillion yen. The GPIF, a leader in socially responsible investing, has invested in indexes such as the FTSE Blossom Japan, MSCI Japan ESG Select Leaders and MSCI Japan Empowering Women.During the January-March quarter, the MSCI All-Country World Index of global stocks slumped 22%, the worst since the global financial crisis. Yields on the 10-year U.S. Treasuries slumped 125 basis points to near record lows during the same period, fueled by unprecedented measures from the U.S. Federal Reserve and intense demand for haven assets. From April, the GPIF has adjusted its portfolio, setting a general target to keep 25% each in all four asset classes, with the allocation of each assets allowed to deviate by different ranges.(Adds second chart, ESG holdings in 10th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
South Korea's LG Chem Ltd plans to start producing batteries for Tesla Inc vehicles at a domestic factory this year after the U.S. electric carmaker raised orders to cope with demand, a person familiar with the matter said on Friday. "Tesla is asking not only LG Chem but other suppliers to increase supplies, as its cars are selling well," the person told Reuters. A second person with knowledge of the situation also said LG Chem is converting some of its production in South Korea to produce batteries for Tesla.
(Bloomberg Opinion) -- U.S. President Donald Trump is furious at Germany for many reasons, not all of them fathomable. In phone conversations with Angela Merkel, he’s allegedly called the German chancellor “stupid” and denigrated her in “near-sadistic” tones. Though this be madness, as the Bard might say, there is — on rare occasions — method in it. One such case is Nord Stream 2.It is an almost-finished gas pipeline under the Baltic Sea between Russia and Germany, running right next to the original Nord Stream, which has been in operation since 2011. “We’re supposed to protect Germany from Russia, but Germany is paying Russia billions of dollars for energy coming from a pipeline,” Trump roared at a recent campaign rally. “Excuse me, how does that work?”As is his wont, the president thereby conflated many things. One of his grievances is that Germany has long been scrimping on its military spending, in effect free-riding on U.S. protection, for which he wants to punish his “delinquent” ally. Another is that the European Union, which he considers Germany’s marionette, allegedly takes advantage of the U.S. in business. Trump also wants to sell Europe more American liquefied natural gas (LNG).But Trump isn’t the only American trying to stop Nord Stream 2. In December, Congress aimed sanctions at a Swiss company that supplied the ships to lower the pipes into the water. This delayed the pipeline’s launch. Then Russia sent another vessel to finish the job. So this week a bipartisan group of Senators moved to widen the sanctions in order to kill Nord Stream 2 altogether.The problem is that if this new round becomes law, it will amount to an all-out economic assault on Europe. It could hit individuals and companies from many countries that are only tangential to the project — by underwriting insurance for the pipeline, say, or providing port services to the ships involved.Considering this an instance of illegal American extraterritoriality, the German government now plans to make the EU retaliate against the U.S. Trump, in the heat of America’s “silly season” leading up to November, could then strike back with new tariffs on German cars or a full-blown trade war. The transatlantic alliance, which was already frayed, is close to tearing.To me, this situation increasingly resembles “chicken,” a classic in game theory. The question is whether both sides are merely feigning recklessness (as the game assumes) or are already too far gone. And that applies just as much to the Germans. They like to play the reasonable side in transatlantic fights but deserve just as much blame as Trump and Congress for causing this mess.If Russia were a normal country, the German rationale for this pipeline might make sense. Europe will need more gas, especially to replace much dirtier coal and to supplement renewable sources of energy on the way to becoming carbon-neutral. And to get that gas, it makes sense to diversify — between Norwegian imports, American LNG or any other sort, including the Russian stuff. And piping it into Europe along the shortest route — through the Baltic — is efficient.But Russia is far from a normal country. It has for years been waging hybrid warfare in Europe, ranging from disinformation campaigns to aggression in Ukraine. At Germany’s urging, Russia recently extended a contract with Kiev to keep piping gas through Ukraine for several more years. But in the longer term, the new pipeline gives Russia dangerous geopolitical and strategic options.With two pipelines through the Baltic and another big one through the Black Sea, Russia could in the future cut all central and eastern European countries out of billions in transit fees. The country already controls almost 40% of the EU’s gas market even without Nord Stream 2. Once that goes online, the rest of Europe may become too dependent and therefore vulnerable to blackmail. When Trump calls Germany “a captive to Russia,” he has half a point.This is why Poland and the Baltic republics of Latvia, Lithuania and Estonia also oppose Nord Stream 2. As NATO’s eastern front line and former victims of invasion and aggression, they fear Russia more viscerally than Germans do nowadays. Psychologically, the Poles distrust any deal between Germany and Russia over their heads, because it reminds them of the Molotov-Ribbentrop Pact of 1939, which carved up their region between Nazi and Soviet spheres of influence.My question to the Germans, then, is why they have for years been deaf to these strategic concerns by their partners in NATO and the European Union, while coddling their own pro-Russian business lobbies and, of course, the Kremlin.German intransigence looks even more unsavory when considering who within Germany is most passionately in favor of the pipeline. Support for it skews sharply to the left, with its long tradition of anti-American and pro-Russian leanings. The most egregious example is Gerhard Schroeder, a Social Democrat who was Angela Merkel’s predecessor as chancellor. He’s always been buddies with Russian President Vladimir Putin. These days he also chairs the supervisory board of Nord Stream AG, which is owned by Gazprom PJSC and thus controlled by the Kremlin, as well as the board of Rosneft Oil Co PJSC, a Russian oil giant.This week, Schroeder testified to the Bundestag that Germany and Europe should prepare tough countermeasures against U.S. sanctions. He won support from The Left, a party that descends from the former regime in East Germany.Nord Stream 2 was and is a terrible idea. It’s a geopolitical project disguised as a private business deal. It has shown Germany to be an insensitive and naïve ally, and the U.S. to be a truculent one. It is now rending what little remains of their former relationship. If there is any way to leave these pipes buried and forgotten under the sea, all involved should discreetly and diplomatically search for it. Otherwise, this game of chicken will end the way it’s not supposed to.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andreas Kluth is a columnist for Bloomberg Opinion. He was previously editor in chief of Handelsblatt Global and a writer for the Economist. He's the author of "Hannibal and Me." For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Tencent Holdings, China's biggest social media and video game company, launched a new California-based studio this week, as it looks to further expand its presence overseas. The new studio, LightSpeed LA, will be led by former Rockstar veteran Steve Martin and will focus on the development and publishing of AAA titles, Tencent Games' LightSpeed and Quantum Studios said in a statement to Reuters. "We're ushering in a new era of game culture by combining world-class development with a stress-free work environment," Martin said in the statement.
(Bloomberg) -- The chaos that engulfed the gold market in March as the global pandemic choked off physical trading routes is rippling through other precious metals, resulting in price dislocations and a surge in exchange inventories for silver and platinum.The gold market was thrown into turmoil in March as lockdowns grounded planes and closed refineries, leading traders to worry they wouldn’t be able to get gold to New York in time to deliver against futures contracts. That caused futures, which typically trade close to the London spot price, to soar to a premium, inflicting losses on banks that struggled to close arbitrage bets and spurring them to shift some positions out of New York futures.There are signs that the dynamic isn’t limited to gold. Silver and platinum futures have traded at elevated levels relative to spot metals since early April. And as in the case of gold, the premiums are spurring big increases in on-exchange inventories in New York.On Monday, first-notice data for the July silver contract on the Comex in New York showed the largest single day of deliveries in almost 25 years. Deliveries for platinum on the New York Mercantile Exchange were more than five times the next largest month this year.Those deliveries serve as a way for banks to reduce their exposure to price dislocations and limit risk, said David Holmes, a senior vice president at Heraeus Metals New York, a precious metals refiner.The blowout in gold spreads earlier this year led to big losses for some banks, which typically sell futures in New York as a hedge for their positions in the London over-the-counter market. HSBC Holdings Plc. lost $200 million in a single day of trading, illustrating the challenges to banks due to the turmoil in the exchange-for-physical price, or EFP.Wider SpreadsSilver and platinum have been seeing similar price differentials. The spread between silver futures and spot prices ended the second quarter at the highest in nearly four decades. Platinum’s EFP spiked to the highest since early 2008. And palladium had the largest spread on record, dating back to late 1993.The turmoil caused stockpiles to jump amid efforts to meet the apparent shortages. On-exchange inventories for silver and platinum surged to a record and remain close to those levels.Meanwhile, futures positions have been shrinking in the wake of the pandemic-induced dislocations, creating a glut of metal akin to gold’s stockpiles. Platinum open interest, a tally of outstanding futures contracts, is near the lowest in eight years and is down more than 56% from a peak in January. Open interest in silver futures is down nearly a third from a February high. Gold positions reached the lowest in a year before recovering, while palladium is at a more than 16-year low.“If a bank is short, it’s hard to close the arbitrage,” Holmes said. “Therefore, instead of increasing their position as the arbitrage grew wider, they’ve had to either hold constant their position or even reduce it.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
In the meantime, the firm’s chief executive is pocketing millions of dollars every month by selling shares that have tripled in price on news of Moderna’s development progress, a Reuters analysis of corporate filings shows. The sales - by CEO Stéphane Bancel, his childrens’ trust and companies he owns - amount to about $21 million (£17 million) between January 1 and June 26, including $6 million in May. The lucrative liquidations highlight the unusually powerful incentives for biotech executives to highlight development milestones for drugs that often never get approved or sold, according to interviews with seven executive-compensation experts.
Previous trial results had shown that the drug did not help patients with less severe COVID-19, the disease caused by the novel coronavirus, and shares of Regeneron fell about 3% in after hours trading. Other drugs in the same class, including Roche Holding AG's Actemra, are also being studied as treatments for COVID-19. Patients who required mechanical ventilation or high-flow oxygen therapy or treatment in an intensive care unit were considered critically ill.
Early signs of the shift came Wednesday, when positive data for one of Pfizer Inc’s COVID-19 vaccine candidates sent shares of the large U.S. drugmaker up more than 3%. Although the news had little effect on shares of Pfizer’s large rivals in the vaccine race, smaller peers Moderna Inc and Inovio Pharmaceuticals Inc, both of which have previously shown promising COVID-19 data of their own, ended down more than 4% and 25%, respectively. For the week so far, shares of bigger players in the vaccine race, such as Johnson & Johnson and Merck , have also outperformed Inovio and Moderna.
Boeing Co's communications chief Niel Golightly abruptly resigned on Thursday, following an employee's complaint over an article the former U.S. military pilot wrote 33 years ago arguing women should not serve in combat. The job has become the industry's biggest hot seat as Boeing fends off criticism for its handling of the 737 MAX crisis. "My article was a 29-year-old Cold War navy pilot's misguided contribution to a debate that was live at the time," Golightly said in a statement included in Boeing's announcement.
The Coronavirus Epidemic has negatively impacted the supply chains for numerous industry sectors worldwide the past few months. Many commodity products saw reduced trade during March and April, a result of reduced demand, closures of manufacturing facilities to protect workers, constraint in the handling capacity of goods at many ports, and widespread financial distress. Source: Timberbiz However, one sector that has remained fairly strong during the initial period of the epidemic is the forest products industry. Demand for toilet paper, face masks, disinfecting wipes, corrugated paper for cardboard boxes, and wood products for home renovations are just a few forest products that have been in unusually high demand in many countries during this spring. Global trade of lumber, logs, wood chips and pulp increased in March as compared with the previous month. Softwood Logs – China increased imports by 14% m-o-m, with most of the added logs originating from New Zealand, Germany and Russia. Log imports to South Korea rose 19%, while Australia and Canada shipped about 70% more logs in March than in the previous month. Softwood Lumber – Lumber shipments from New Zealand and Canada were up 32% and 25% m-o-m, respectively. Lumber importation was up in most of the major markets in March, including China (+59% m-o-m), the US (+27%), the United Kingdom (+13%), and Japan (+10%). Wood Pulp – Three of the four largest pulp-exporting countries, Brazil, the US and Chile, increased their shipments between 12% and 26% in March (m-o-m). The five top importing countries all purchased more pulp in March than in February, with China and South Korea increasing their volumes the most (40% and 29% respectively). Hardwood Chips – China, Portugal, and South Korea imported more chips for their pulp industry in March than in the previous month. Most of the major chip-exporting countries, including Australia, Thailand, South Africa, and Brazil shipped more chips in March than in February. In the coming months, numerous countries around the world are planning to ease lockdown policies and loosen the rules that are restricting house constructions, international commerce and consumer shopping. These changes may further benefit many companies in the forest industry sector.
Tree planting was at the top of the international agenda in early 2020 when the World Economic Forum announced the Trillion Trees initiative, an effort to protect and plant enough trees to fight climate change and transform rural economies. Source: Timberbiz Many other companies and funders are also working to plant tens of millions of trees worldwide. But planting trees isn’t enough – growing trees the right way involves engaging local communities, selecting the right species for the landscape, maintaining trees for years after planting, measuring impact over time and much more. World Resources Institute (WRI) has developed TerraMatch to help fill this gap. TerraMatch is a new (beta) platform that connects funders with projects growing trees the right way. It combines investment from the private sector, expertise from local project developers, and decades of research-driven work to restore deforested and degraded land. The methodology behind TerraMatch has already moved funding to projects in developing countries, creating jobs and restoring landscapes. Across nine countries in Africa and Latin America, WRI has matched funders with projects that have started growing more than 2 million trees on farms and in forests. What is stopping funders from growing millions of trees right now? According to WRI they have trouble finding enough high-quality projects run by trusted implementers. They often don’t know which trees are appropriate for the landscape and will thrive for decades after they sprout. Some efforts do little more than plant seedlings without maintenance or monitoring. And some do not engage local communities effectively or address concerns they might have. WRI vets all projects and funders to create a serious community dedicated to growing trees the right way. Approved developers post project pitches onto the platform, reviewed by WRI, which contain key information on location, species of trees involved, historical survival rates of their trees, local benefits for people, their methods of restoration, and more. TerraMatch also provides a space for tree-growers to explain the true costs of their work beyond the simple act of planting. At the same time, funders post offers of their own, explaining what kinds of projects they hope to fund and how much they want to spend. Then, both parties search through the system and match, beginning a conversation that can lead to transformative impact.
COVID-19 has caused upheaval in many ways for many people. The forestry industry has been no exception. However, the industry is recovering and is well positioned to support regional and national economic resilience in the months and years ahead. Source: Timberbiz OneFortyOne New Zealand (based in Nelson Tasman and Marlborough) is keeping a balanced approach to COVID-19 recovery says Executive General Manager – New Zealand, Lees Seymour. “An integrated model, where we grow, harvest, mill, and market our wood products, has always been a cornerstone of the way we do business,” Mr Seymour said. “It’s proven to be important for our ability to respond to COVID-19 in the short term and for the future-proofing of our business recovery post COVID-19.” After shutting down its operations during lockdown level 4, the company progressively resumed its activities as lockdown restrictions eased. “We began replanting 2000 hectares of hill country in Te Tauihu/the top of the South Island at the end of May,” he said. “This shows our ongoing confidence in the forestry industry, and our commitment to environmental stewardship. That’s always been an important part of our business.” Approximately 60% of OneFortyOne New Zealand’s log harvest is delivered to the domestic market. Kaituna’s timber customers are dominated by the domestic market (50%) followed by Australia, which represents 35% of Kaituna Sawmill’s customers. Customers in South East Asia receive 15% of Kaituna’s processed wood. “What this means for our business is strong integration with the domestic economy and other New Zealand businesses that support this country’s recovery, resilience, and growth,” Mr Seymour said. “It also means we have an existing clear line of sight and deep, functional relationships between those who grow our trees, those who harvest them, those who mill them, and those who market our wood fibre products.” However, Mr Seymour said that the export market still has an important role to play in terms of spreading risk due to cyclical downturns in the domestic market. “It diversifies customer opportunities, offers alternative markets for products that are not in demand from our domestic customers, and provides a channel for salvage from fire or pests as well as securing ongoing job opportunities.” The success of OneFortyOne New Zealand’s balanced approach to domestic and export markets is evident in the business’ longevity and its direct employment of almost 120 people in Nelson Tasman and Marlborough. The business also supports a contractor and supplier network of 300 people. “We take a long view in our business. Trees are a crop that take 25-30 years to grow to the point of harvest. We see things in multi-generational terms, and we believe in doing things the right way for our people, our environment, and our community. That means our business is founded on the principles of prioritising worker safety, environmental guardianship, and community engagement,” Mr Seymour said. “As an example, we protect the more than 9000 hectares of indigenous vegetation reserves within the plantation, including wetlands, and other forest areas that provide habitat to New Zealand’s fauna and flora, and we invest more than $200,000 in community projects every year. That’s important to us and to our community because business success is as much to do with the way a company goes about its business as it is about the results it achieves.” Mr Seymour believes that as the wider forestry industry approaches challenges posed by COVID-19 it can look to the lessons businesses such as OneFortyOne New Zealand have learned over the years. “There is a lot of experience and knowledge in our industry that can be constructively supported by work on domestic market development. Now is the time to get alongside one another, share our expertise, and work together to make the most of our industry as a key provider of economic recovery and growth.” OneFortyOne New Zealand is looking to the government to support innovation in wood processing and is encouraged by the recent announcement providing funding for trades training and apprenticeships. The government has included forestry, mechanical engineering and technology as training areas that it identifies as likely to lead to employment. “As a regional employer this training support is welcome,” he said. “We know that forestry provides lasting employment at a range of levels and is a great career option for people. It’s a sophisticated and well-developed industry that grows and nurtures talent. We want young people and those considering retraining in a new industry to consider all the options that forestry provides for rewarding, interesting and valuable work.”
Building approvals data has begun to reflect COVID-19 shock, according to the Housing Industry Association. Building approvals in May fell by 16.4% nationally as the impact of COVID-19 restrictions impeded the flow of new building projects to be undertaken according to HIA economist Angela Lillicrap. Source: Timberbiz “The decline in approvals in May was widespread with all states experiencing a contraction in approvals. This is the first ABS housing data that reflects the impact of COVID-19 on home building,” she said. “The decline in approvals in May is only the start of the COVID-19 shock in home building. We anticipate building approvals data will continue to decline for a number of months, due to the lag in the approvals process.’’ Ms Lillicrap said that economic uncertainty in the months prior to May were a significant factor leading to the decline in approvals in May. HIA new home sales in the preceding months had fallen dramatically and slower processing times due to staffing constraints within councils may also have played a role. “This decline in approvals would typically impact work on the ground in the second half of the year,’’ Ms Lillicrap said. “HomeBuilder and an easing of restrictions should assist in bringing consumers who delayed their purchasing decisions back to the market and minimise the adverse impact of the COVID-19 shock on employment in the sector, but this will not be reflected in ABS data for some months,” she said. “Detached house approvals fell by only 4.1% in the month. We expect this is just the start of the decline in approvals. “Multi-unit approvals fell by 34.5% to an 8-year low. This sector faces very difficult market conditions due to the decline in student numbers and halt in migration. In addition, HomeBuilder is unlikely to have a significant impact on this part of the market.” In seasonally adjusted terms, building approvals for May 2020 quarter declined in Tasmania (-23.3%), Victoria (-14.3%), New South Wales (-11.3%), South Australia (-9.3%), Western Australia (-8.9%) and Queensland (-7.4%).
Bunnings decision to stop selling timber logged by VicForests has been widely condemned by industry bodies, with VicForests claiming up to 170 jobs in regional Victoria are now at risk. Bunnings on Wednesday announced it would stop selling timber logged by VicForests after a court found the state government-owned forestry agency breached conservation laws. Source: Timberbiz “Bunnings has a zero-tolerance approach to illegally logged timber that dates back two decades, and our commitment is to only source timber products from legal and well managed forest operations,” Bunnings’ director of merchandise, Phil Bishop, said. Mr Bishop said that in light of the recent federal court finding that VicForests breached the code of practice in its regional forestry agreement for the central highlands, Bunnings could no longer stock products that used its timber. Bunnings, and Officeworks, previously announced in 2018 they would only stock Forest Stewardship Council (FSC) certified products by 2020, ruling out timber and paper from VicForests. VicForests says it is disappointed and deeply concerned by Bunnings’ decision. In a statement VicForests said the decision had put up to 170 regional jobs in jeopardy, many of which had already been impacted by this summer’s disastrous bushfires, Coronavirus (COVID-19) and illegal protest action. Bunnings’ claims its decision is based on the initial ruling of the Federal Court on the Friends of the Leadbeater’s Possum case. VicForests will appeal this verdict once final orders are issued by the court. VicForests said that its management of native timber harvesting, in conjunction with Victoria’s strict environmental regulations, ensures that it meets the highest standards of forest management. Bunnings’ claim that it is “working closely with affected suppliers on a transition plan” was disingenuous given the decision was effective immediately. The Victorian Hardwood Sawmillers Association condemned Bunnings’ decision as a blow to Victorian manufacturing jobs that will do nothing for the environment. VHSA spokesman Leonard Fenning said the decision was premature given VicForests had confirmed it will be appealing last month’s Federal Court decision. “Bunnings should allow for the due legal process to conclude before making such a drastic and immediate decision that threatens thousands of local jobs that depend on Victoria’s sustainably managed native timber industry,” Mr Fenning said. “Anti-forestry groups have been aggressively targeting Bunnings for years with misinformation campaigns about Victoria’s hardwood timber industry, and it is disappointing that Bunnings has succumbed to these extreme activist groups. “This is a lose-lose result for Aussie workers and the environment. Bunnings knows all too well that the sustainably sourced Victorian timber currently on their shelves will be replaced with imported timber from countries with poor environmental records and poor working conditions.” Mr Fenning said the Victorian and Commonwealth Governments must provide certainty to the Victorian timber industry and immediately secure future of the Victorian Regional Forest Agreements. “Now is the time to back local manufacturing jobs in a sustainable, renewable industry – we urge all Australians to insist on Aussie grown and Aussie made. It’s good for jobs, the environment and our regional communities,” he said. The Australian Forest Products Association described Bunnings’ decision as “short-sighted”. AFPA CEO Ross Hampton said the decision was “a knee-jerk reaction to pander to extremist activist groups that will only lead to more imported timber from less sustainably managed forests overseas’. “This decision puts at risk tens of thousands of Australian manufacturing jobs at a time when our country can least afford to lose them, especially in regional communities,” Mr Hampton said. He was disappointed that Bunnings had been duped by anti-forestry disinformation campaigns that misrepresented the sustainability of Victoria’s native hardwood timber industry and warned it would have the perverse consequence of driving more deforestation in South-East Asia. “The truth is that Victoria has one of the most regulated, sustainably managed native forestry industries in the world, harvesting the equivalent of just 4 trees out of 10,000,” Mr Hampton said. No old growth trees were used, and every area harvested was, by law, reseeded and regenerated. “All Victorian native forest hardwood is harvested according to the highest standards under the world’s largest forestry certification scheme – PEFC, known in Australia as Responsible wood,” Mr Hampton said. “Bunnings and its customers should be under no illusion that green groups will stop at Victoria – they are hell bent on ending all native forestry in Australia, which will mean even more imported timber from countries at high risk of deforestation and illegal logging, and it will be manufactured in countries with poor working conditions.” Mr Bishop said that while Bunnings only sold a small portion of VicForests’ total harvest, the company acknowledged this decision might have an impact on the industry and it was working closely with affected suppliers on a transition plan. That would include buying any timber already processed by the affected suppliers and discussing whether those suppliers could obtain timber from alternative sources. “Ultimately, we believe that customers and team members have the right to expect that the timber they purchase is sourced from responsible and lawful forestry operations.’’ VicForests said it was deeply concerned by Bunnings’ decision and it would be appealing against the federal court judgment once final orders were made in the case. The court found in May that because VicForests had breached the code of practice, its exemption from national environment laws did not apply. The court ruled the agency had breached laws protecting threatened species including the greater glider and the Leadbeater’s possum. “We will be discontinuing all sourcing of timber from VicForests and will no longer be accepting raw material input into our supply chain from VicForests as of 30 June,” Mr Bishop said.
Bunnings’ decision to stop sourcing timber from VicForests has been slammed by politicians representing Gippsland. The Federal Member for Gippsland Darren Chester said Bunnings had shown complete contempt for their suppliers while State Shadow Assistant Minister for Forestry, Gary Blackwood said the move by Bunnings was a knee-jerk reaction. Source: Timberbiz The decision has also been met with wide-spread condemnation on social media, with many people advocating a boycott of Bunnings. And Gippsland East Nationals MP, Tim Bull described the decision as woeful. Mr Chester said it was extraordinary that Bunnings would make this premature decision without any genuine consultation with its local suppliers and jeopardise the financial futures of dozens of timber workers and their families in Gippsland. “At a time when all jobs are at a premium and Gippsland is recovering from the combined impacts of drought, bushfires and the coronavirus, Bunnings management is demonstrating no respect for working class families,” he said. “Management should reconsider its decision, particularly while legal challenges are still pending in relation to the case involving VicForests that Bunnings is concerned about. “We have a world-class timber industry in Victoria where 94% of forest is protected and a small proportion of native forests are harvested each year under VicForests’ control, then forests are allowed to regenerate in a sustainable cycle over 80 years. “It’s the ultimate renewable industry with young growing trees absorbing more carbon dioxide, compared to mature forests, and timber harvested according to the strictest standards in the world. “Gippsland timber mills have invested in new technology to add value to the trees harvested with manufactured products that are in high demand. Wood that used to end up as waste or low value wood chips, is now joined and glued to make high value products that are available for home handymen and the construction sector to purchase. “Bunnings has shown complete contempt for their suppliers and hard-working timber industry families with a premature decision which is all about virtue signalling and nothing about the environmental sustainability of the industry. “The VicForests issue is still subject to appeal in the courts system and I fear that Bunnings will replace the Australian-made product on those shelves with imported timber which is harvested with less environmental scrutiny.” Mr Blackwood said the decision would cost local jobs and undermine employment in regional Victoria. He said it was also premature given that a court case that lead to the decision by Bunnings was subject to appeal. “Bunnings has shown they are happy to walk away from Victorian timber jobs based on a court case which I am reliably told is subject to an upcoming appeal,” Mr Blackwood said. “Their discontinuation of all timber supply from VicForests before that process is complete is a knee-jerk reaction that will have significant ramifications for our regional communities, local harvesters, contractors, haulage and machinery operators. “Victoria has world leading harvesting and management practices and by potentially moving to less regulated markets, Bunnings is telling consumers they would rather cheaper product that helps their bottom line than Victorian product that supports local jobs. “It is a very sad day when a company the size of Bunnings is influenced by a handful of inner-city Greens and prepared to undermine Gippsland jobs before a full appeal by VicForests is concluded,” said Mr Blackwood. Mr Bull said the “woeful decision from Bunnings” could not have come at a worse time. “Our communities have been impacted by drought, fire and now COVID-19 and the local economy is really struggling,” he said. “For Bunnings management to come in on the back of that and make this announcement shows no understanding of our plight. “To discontinue sourcing all timber from VicForests is a massive over-reaction and one that will hurt our local communities. On top of this Bunnings could not tell me where it will source its hardwood from in the future,” Mr Bull said. “They could only agree it will not come from Victoria as there is no hardwood plantation, so it will likely come from interstate or overseas. “To me Bunnings management has shown its true colours here. When our communities are in need, have been decimated by fire and an economic downturn, they come out and make things a whole lot worse. “I explained the impact this will have on towns like Heyfield, but they just want to trot out lines like ‘we will work with suppliers to achieve the best outcomes for them’. Well that does not help our mill workers and their families,” Mr Bull said. Assistant Minister for Forestry and Fisheries Jonno Duniam said Australian jobs would be lost as a consequence of Bunnings’ ill-advised action. “Bunnings shelves will be stacked with more imported timber, rather than Australian grown structural hardwood timber, Australian solid timber panels and Australian kitchen benchtops,” Senator Minister Duniam said. “This decision will cost many hundreds of jobs across harvesting, sawmills and processing, particularly in our regional communities. “Bunnings is kicking Australia’s timber industry while it’s down, and at a time when Australian companies and Australians should be backing Australian products and supporting Australian jobs. “VicForests is globally recognised for its forest practices and is certified according to the highest standards under the world’s largest forestry certification scheme, the Program for the Endorsement of Forest Certification (PEFC). “I have urged Bunnings to reverse this decision, to choose Australian timber over imported timber and to back Australian jobs, as the nation begins to rebuild in the wake of COVID-19. “The Morrison Government has a plan to grow our world-class and world-leading sustainable forestry industry, and to support the hardworking and honest Australians who work in it. Bunnings’ decision flies in the face of this.”