The North Coast Environmental Council says Forests NSW is unable to meet its timber commitments and claims timber mills will have to be paid compensation.
Council president Susie Russell says the state government gave mills long-term commitments for maximum amount of wood they thought they could get out of the forest but that has proven to be an overestimate.
There is a precedent for this. In 2006 Boral was paid out for insufficient supply.
Ms Russell said she attended the Boral AGM last month, where they said they had a supply problem and had been losing money on timber for the last six years.
‘Boral are very angry because they are not getting the wood that they budgeted for,’ she told ABC’s Rural Report.
She is calling on the government to take immediate action.
‘The opportunity exists to write down significantly the contract or buy out Boral completely.’
If nothing is done, she says timber supplies will crash in the near future and the group estimates that in five years the industry in NSW will have to close.
‘They are cutting, literally, into the future saw-logging supply, with the forests looking like a plantation of sticks.
‘As the age of the forests get younger there is no habitat for owls, possums, gliders and many smaller birds that need mature trees to nest in.’
She said that if drastic action isn’t taken there is going to be an increasing level of conflict in the forests where, for example, high-quality koala habitat is being logged to meet commitments.