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NSW Crest

Administrative Decisions Tribunal
New South Wales

Medium Neutral Citation:
Nature Conservation Council of NSW v Department of Trade and Investment, Regional Infrastructure and Services [2012] NSWADT 195
Hearing dates:
6 and 7 March 2012
Decision date:
20 September 2012
Jurisdiction:
General Division
Before:
S Montgomery, Judicial Member
Decision:

1. The decision under review is set aside insofar as it relates to the Agreements that are the subject of this application. In its place the decision is made that the redacted information in the Agreements is to be released to the Applicant within 30 days of the publication of this decision.

2. The decision under review is affirmed insofar as it relates to the TEPCO document.

Catchwords:
Government Information Public Access - scope of request - whether public interest considerations against disclosure outweigh the public interest considerations favouring disclosure - whether disclosure could reasonably be expected to prejudice commercial-in-confidence provisions of a government contract- whether disclosure could reasonably be expected to diminish the competitive commercial value of any information to any person- whether disclosure could reasonably be expected to prejudice any person's legitimate business, commercial, professional or financial interests
Legislation Cited:
Administrative Decisions Tribunal Act 1997
Government Information (Public Access) Act 2009
Cases Cited:
Allen Taylor & Co Ltd & Anor v Forestry Commission of NSW & Anor (SCA, 291263 of 2010)
Attorney-General's Department v Cockcroft (1986) 10 FCR 180
Cianfrano v Director General, NSW Treasury [2005] NSWADT 7
Commissioner of Police, NSW Police Force v Camilleri [2012] NSWADTAP 19
Director-General, Department of Environment, Climate Change and Water v Forestry Commission of New South Wales [2011] NSWLEC 102
Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 46 FLR 409
Flack v Commissioner of Police, NSW Police (2011) NSWADT 286
Foster v Federal Commissioner of Taxation (1951) 82 CLR 606
Freeland v General Manager, Liverpool City Council [1999] NSWADT 95
Griffin Energy Pty Ltd v Western Power Corporation [2006] FCA 1241
Hurst v Wagga Wagga City Council [2011] NSWADT 307
McKinnon v Secretary, Department of Treasury [2006] HCA 45
Media Research Group Pty Ltd v Department of Premier and Cabinet [2011] NSWADTAP 7
Neary v State Rail Authority [1999] NSWADT 107
R v Australian Broadcasting Tribunal; ex parte Hardiman (1980) 144 CLR 13
R v Ritson; R v Stacey (2010) NSWDC 160
Re: Maher and the Attorney General's Department (No 2) (1986) 4 AAR 266
Retain Beacon Hill High School Committee Inc v NSW Treasury [2007] NSWADT 55
Richards v Commissioner, Department of Community Services (2011) NSWADT 98
Sobh v Victoria Police (1994) 1 VR 41
Watt v Forests NSW [2007] NSWADT 197
XZ v Commissioner of Police, NSW Police Force [2009] NSWADTAP 2
Category:
Principal judgment
Parties:
Nature Conservation Council of NSW (Applicant)
Department of Trade and Investment, Regional Infrastructure and Services (First Respondent)
Allen Taylor & Company Limited (Second Respondent)
Duncan's Holdings Limited (Third Respondent)
Representation:
Counsel
P Knowles (Second and Third Respondent)
I Ratcliff, Environmental Defender's Office (NSW) Ltd, (Applicant)
D Anderson (First Respondent)
Freehills (Second and Third Respondent)
N Case, Information Commissioner
File Number(s):
113211

REasons for decision

1GENERAL DIVISION (S MONTGOMERY, (JUDICIAL MEMBER)): The Nature Conservation Council of NSW Incorporated ("the Applicant") has applied to the Tribunal for review of a determination by the Department of Trade and Investment, Regional Infrastructure and Service ("the First Respondent") in regard to an application by the Applicant under the Government Information (Public Access) Act 2009 ("the GIPA Act"). The application was made to Forests NSW. Forests NSW is now part of the First Respondent. In its application under the GIPA Act the Applicant sought to obtain documents relating to various wood supply agreements and other similarly related matters. The documents relate to the sustainable yield of hardwood.

2In a revised request dated 17th January 2011 the Applicant sought:

1. All long-term wood supply contracts (5 years or greater) between Forests NSW and sawmill customers for supply of timber.

2. The annual hardwood Price Schedule (as referred to in The Price System', FNSW 2000) for the last financial year (2009/2010).

3. The Log Value Pricing System for the last financial year (2009/2010), preferably as an excel spreadsheet (referred to in 'The Price System', FNSW 2000).

4. Any documents on the major log price review recently completed by Forests NSW and the structural price increases implemented as a result.

5. The report of the Timber Market Survey for 2008/09.

6. The digital Geographic Information System layer/s of all Forests NSW hardwood timber plantations and all Forests NSW softwood plantations.

7. Current plantation plans for Forests NSW softwood and hardwood plantations.

8. Any documents detailing the mid-to long-term, plans that FNSW has developed/is developing, to handle the reduction in supply envisaged by the Regional Forest Agreements, after the current Wood Supply Agreements end in 2023 for the North Coast.

9. A copy of the report on the review of sustainable yield that has been conducted in the South Coast region.

10. A copy of the 2009 report on the review of sustainable yield that has been conducted in the North Coast region.

11. A copy of the reports, or if not complete the latest drafts thereof, on the review of sustainable yield that has been conducted in the Eden and Tumut region.

12. Any report/s on the recent review of sustained yield for hardwood plantations by Forests NSW.

13. Any reports or documents on the estimation of the likely future timber yields from the TEPCO plantations purchased by Forests NSW in 2010.

3The First Respondent identified a number of documents falling within the scope of the request. Those documents included various wood supply agreements made between entities of the State of NSW, and various interested third parties, including the Second Respondent and the Third Respondent (collectively "the Agreements"). Objections were made from third parties to the release of the Agreements. The First Respondent determined to release the Agreements in part.

4The Applicant sought to exercise its right of review of the First Respondent's determination. However, at a planning meeting on 6 September 2011, the First Respondent's representative, Mr Taylor, alleged that this application was out of time. I determined to extend the time for the making of the application to the date of filing of the application.

5In its application to the Tribunal the Applicant stated that it sought review of the decision on the basis that there was no overriding public interest factor against release of the information, or in the alternative, the public interest factors in favour of release of any such information overrides any such factors.

6Allen Taylor & Company Limited ("the Second Respondent") and Duncan's Holdings Limited ("the Third Respondent") were subsequently joined as parties to the proceedings. The Second and Third Respondents are subsidiaries of Boral Limited ("Boral"). The Third Respondent is a wholly owned subsidiary of the Second Respondent.

7The Second Respondent is a party to the following agreements which come within the Applicant's request:

(a) a wood supply agreement dated 26 August 2003 (the 'Coastal Agreement');

(b) a wood supply agreement dated 30 November 2004 (the 'Walcha Agreement');

(c) a wood supply agreement dated May 2004 (the 'Pulplog Agreement');

(d) an assignment deed dated 30 November 2004 (relating to the Walcha Agreement); and

(e) a variation agreement dated 11 September 2009 (relating to the Pulplog Agreement).

8The Third Respondent is also a party to the Coastal Agreement.

9The First Respondent determined that redacted versions of the Agreements should be disclosed. The information redacted included information relating to:

(a) resource price;

(b) resource allocation and/or description;

(c) take-or-pay/contract termination provisions; and

(d) the term of the Agreements.

10Item 13 of the Applicant's GIPA request sought documents on the estimation of the likely future timber yields from the TEPCO plantations purchased by Forests NSW in 2010. The First Respondent determined that a document titled 'Valuation of TEFA Plantation, Timber and Carbon Sequestration Benefits as at 31 March 2010' ("the TEFA document") fell within the scope of that request. The First Respondent determined that it was appropriate to release a redacted version of the TEFA document. The redacted version of the TEFA removed various matters in relation to:

(a) the valuation of the TEFA plantation as a whole;

(b) the valuation of the timber component of the plantation;

(c) the valuation of the carbon component of the plantation;

(d) various input dollar costs;

(e) crop cashflows;

(f) discount rates.

11That information was redacted from the TEFA document because it was determined that the information did not fall within the description of "any report or document on the estimation of the likely future timber yields from the TEPCO plantations purchased by Forests NSW in 2010".

12The Second and Third Respondents have no interest in the question of whether or not that document is disclosed. Their interest is limited to the issue of whether the redacted material I the Agreements should be released.

13The Office of Information Commissioner (the OIC") is an independent statutory appointment under the Government Information (Information Commissioner) Act 2009 (NSW) (the GIIC Act"). She exercises her right under section 104 of the GIPA Act to appear and be heard. The OIC has not conducted a review of the First Respondent's decision in this application and has not had access to the information that is the subject of this application. In these proceedings Ms Case appeared on behalf of the OIC and made submissions in regard to the construction of the relevant provisions in the GIPA.

The relevant provisions

14Section 3 of the GIPA Act provides:

3 Object of Act

(1) In order to maintain and advance a system of responsible and representative democratic Government that is open, accountable, fair and effective, the object of this Act is to open government information to the public by:

(a) authorising and encouraging the proactive public release of government information by agencies, and

(b) giving members of the public an enforceable right to access government information, and

(c) providing that access to government information is restricted only when there is an overriding public interest against disclosure.

(2) It is the intention of Parliament:

(a) that this Act be interpreted and applied so as to further the object of this Act, and

(b) that the discretions conferred by this Act be exercised, as far as possible, so as to facilitate and encourage, promptly and at the lowest reasonable cost, access to government information.

15Section 5 of the GIPA Act provides:

5 Presumption in favour of disclosure of government information

There is a presumption in favour of the disclosure of government information unless there is an overriding public interest against disclosure.

16Section 9(1) of the GIPA Act provides:

9 Access applications

(1) A person who makes an access application for government information has a legally enforceable right to be provided with access to the information in accordance with Part 4 (Access applications) unless there is an overriding public interest against disclosure of the information.

17Section 12 of the GIPA Act provides:

12 Public interest considerations in favour of disclosure

(1) There is a general public interest in favour of the disclosure of government information.

(2) Nothing in this Act limits any other public interest considerations in favour of the disclosure of government information that may be taken into account for the purpose of determining whether there is an overriding public interest against disclosure of government information.

Note. The following are examples of public interest considerations in favour of disclosure of information:

(a) Disclosure of the information could reasonably be expected to promote open discussion of public affairs, enhance Government accountability or contribute to positive and informed debate on issues of public importance.

(b) Disclosure of the information could reasonably be expected to inform the public about the operations of agencies and, in particular, their policies and practices for dealing with members of the public.

(c) Disclosure of the information could reasonably be expected to ensure effective oversight of the expenditure of public funds.

(d) The information is personal information of the person to whom it is to be disclosed.

(e) Disclosure of the information could reasonably be expected to reveal or substantiate that an agency (or a member of an agency) has engaged in misconduct or negligent, improper or unlawful conduct.

(3) The Information Commissioner can issue guidelines about public interest considerations in favour of the disclosure of government information, for the assistance of agencies.

18Section 13 of the GIPA Act provides:

13 Public interest test

There is an overriding public interest against disclosure of government information for the purposes of this Act if (and only if) there are public interest considerations against disclosure and, on balance, those considerations outweigh the public interest considerations in favour of disclosure.

19Section 14 of the GIPA Act provides:

14 Public interest considerations against disclosure

(1) It is to be conclusively presumed that there is an overriding public interest against disclosure of any of the government information described in Schedule 1.

(2) The public interest considerations listed in the Table to this section are the only other considerations that may be taken into account under this Act as public interest considerations against disclosure for the purpose of determining whether there is an overriding public interest against disclosure of government information.

(3) The Information Commissioner can issue guidelines about public interest considerations against the disclosure of government information, for the assistance of agencies, but cannot add to the list of considerations in the Table to this section.

(4) The Information Commissioner must consult with the Privacy Commissioner before issuing any guideline about a privacy-related public interest consideration (being a public interest consideration referred to in clause 3 (a) or (b) of the Table to this section).

20The Table to section 14 of the GIPA Act relevantly provides:

Table

...

4 Business interests of agencies and other persons

There is a public interest consideration against disclosure of information if disclosure of the information could reasonably be expected to have one or more of the following effects:

(a) undermine competitive neutrality in connection with any functions of an agency in respect of which it competes with any person or otherwise place an agency at a competitive advantage or disadvantage in any market,

(b) reveal commercial-in-confidence provisions of a government contract,

(c) diminish the competitive commercial value of any information to any person,

(d) prejudice any person's legitimate business, commercial, professional or financial interests,

(e) prejudice the conduct, effectiveness or integrity of any research by revealing its purpose, conduct or results (whether or not commenced and whether or not completed).

...

21Section 15 of the GIPA Act provides:

15 Principles that apply to public interest determination

A determination as to whether there is an overriding public interest against disclosure of government information is to be made in accordance with the following principles:

(a) Agencies must exercise their functions so as to promote the object of this Act.

(b) Agencies must have regard to any relevant guidelines issued by the Information Commissioner.

(c) The fact that disclosure of information might cause embarrassment to, or a loss of confidence in, the Government is irrelevant and must not be taken into account.

(d) The fact that disclosure of information might be misinterpreted or misunderstood by any person is irrelevant and must not be taken into account.

(e) In the case of disclosure in response to an access application, it is relevant to consider that disclosure cannot be made subject to any conditions on the use or disclosure of information.

22Section 105 of the GIPA Act provides:

105 Onus on agency to justify decisions

(1) In any review under this Division concerning a decision made under this Act by an agency, the burden of establishing that the decision is justified lies on the agency, except as otherwise provided by this section.

(2)If the review is of a decision to provide access to government information in response to an access application, the burden of establishing that there is an overriding public interest against disclosure of information lies on the applicant for review.

...

23The Interpretative provisions in Schedule 4 to the GIPA Act provides:

1 Definitions

In this Act:

...

commercial-in-confidence provisions of a contract means any provisions of the contract that disclose:

(a) the contractor's financing arrangements, or

(b) the contractor's cost structure or profit margins, or

(c) the contractor's full base case financial model, or

(d) any intellectual property in which the contractor has an interest, or

(e) any matter the disclosure of which would place the contractor at a substantial commercial disadvantage in relation to other contractors or potential contractors, whether at present or in the future.

Consideration of the legislative regime

24A person who makes an application for access to government information has a legally enforceable right to access the information requested, unless there is an "overriding public interest against disclosure" of the information: section 9(1) of the GIPA Act. The public interest balancing test for determining whether there is an overriding public interest against disclosure is set out in section 13 of the GIPA Act. Section 12 of the GIPA Act provides that this balance is always weighted in favour of disclosure. The GIPA Act does not limit the types of matters that can be called in aid of disclosure. Section 12 provides a number of non-exhaustive examples of the types of matters that can be taken into account. Section 5 of the GIPA Act establishes a presumption in favour of disclosure of government information and sections 97 and 105 place the onus for rebutting this presumption or "justifying the decision" not to release information, on the respondent agency.

25The presumption in favour of disclosure can only be rebutted by proving that there is a "conclusive presumption of an overriding public interest against disclosure" or "overriding public interest consideration against disclosure": section 14 of the GIPA Act.

26There is an overriding public interest against disclosure if (and only if) there are public interest considerations against disclosure and, on balance, those considerations outweigh the public interest considerations in favour of disclosure: section 13 of the GIPA Act.

27The Appeal Panel in Commissioner of Police, NSW Police Force v Camilleri [2012] NSWADTAP 19 considered that the GIPA Act requires a structured approach to the decision-making task. The Appeal Panel observed that unless a conclusive presumption applies, the GIPA Act envisages a two-step approach to the question of whether information has been properly refused. The case for refusal must rest on the considerations in the Table to section 14, with the Tribunal's task to then weigh that case against the factors favouring disclosure.

28The Appeal Panel stated that the section 14 questions need to be examined at a broad operational level and that it would not be usual to introduce considerations connected with the particulars of the instant situation at this stage of the process. By contrast, it would be proper to have regard to specific aspects of the instant case at the section 13 stage.

29The Tribunal decisions in Flack v Commissioner of Police, NSW Police (2011) NSWADT 286 ("Flack) and Hurst v Wagga Wagga City Council [2011] NSWADT 307 ("Hurst") adopted the approach that the test in section 13 of the GIPA Act requires decision makers to:

(i) identify relevant public interest considerations in favour of disclosure,

(ii) identify relevant public interest considerations against disclosure,

(iii) attribute weight to each consideration for and against disclosure, and

(iv) determine whether the balance of the public interest lies in favour of or against disclosure of the government information.

30The public interest test must be applied in accordance with the principles set out in section 15 of the GIPA Act.

The First Respondent's determination

31There are two categories of documents that are the subject of these proceedings and which the Applicant submits should be released in full.

32The first category is the Agreements. The second category is a single document - the TEFA document.

33The First Respondent determined to release the Agreements in part. The information redacted from the Agreements included information relating to:

(a) resource price;

(b) resource allocation and/or description;

(c) take-or-pay/contract termination provisions; and

(d) the term of the Agreements.

34Material was withheld pursuant to section 14 of the GIPA Act on the basis that the disclosure of certain information would harm the sawmill customers insofar as they contain commercially sensitive information, which would unfairly harm their competitive position, or would otherwise harm their commercial and financial interests.

35The First Respondent determined to release the TEFA document subject to some redactions, on the basis that some of the material fell outside the scope of the Applicant's request.

36The First Respondent's reasons for its determination that redacted versions of the Agreements should be released is set out in letters sent to the Applicant dated 2 June 2011 and 13 September 2011.

37The 2 June 2011 letter provided:

Document 1 consists of the wood supply agreements, 5 years or greater, between Forests NSW and sawmill customers for the supply of timber. Objections were made from third parties to the release of these agreements. My decision is to release the agreements in part, employing the provisions of s14 (4)(a)(b)(c)(d) of the GIPA Act which states:

4 Business interests or agencies and other persons

There is a public interest consideration against disclosure of information if disclosure of the information could reasonably be expected to have one or more of the following effects:

(a) undermine competitive neutrality in connection with any functions of an agency in respect of which it competes with.any person or otherwise place an agency at a competitive advantage or disadvantage in any market,

(b) reveal commercial-in-confidence provisions of a government contract,

c) diminish the competitive commercial value of any information to any person, (d) prejudice any person's legitimate business, commercial, professional or financial interests

These agreements contain a clause that prevents any party disclosing the contents or terms of the Agreement. Some, but not all, of these agreements continue on to state that disclosing the contents of the Agreement can occur, with limited exceptions. One of those exceptions contemplates disclosure under GIPA where no objection to that disclosure is made and upheld.

It is my assessment that the disclosure of certain information would harm the sawmill customers insofar as they contain commercially sensitive information which would unfairly harm their competitive position, or would otherwise harm their commercial and financial interests.

Specifically, the information exempt includes:

· Resource allocation and/or description;

· Resource price;

· Take or pay/contract termination provisions

Under s. 9(1) of the GIPA Act, you have a legally enforceable right to be provided with access to the information sought, unless there is an overriding-public interest against disclosure of the information.

In making such a determination, agencies must apply the public interest test under s. 13, which provides that there will only be an overriding public interest against disclosure where public interest considerations in favour of disclosure are, on balance, outweighed by those against disclosure.

Under s. 5 of the GIPA Act, there is a presumption in favour of disclosing government information.

I have applied the public interest test and have determined that due to the confined scope of exemptions and the fact that the predominate clauses of the Agreements are proposed for release that this has satisfied the legitimate public interest in disclosure whilst also maintaining the confidentiality of commercially sensitive information.

Documents 2 and 3 have been released in full.

Document 4 has been provided as it addresses your request for documents on the estimation of the likely future timber yields from the TEPCO plantations purchased by Forests NSW in 2010. Costs in this document have been deleted as they do not pertain to your request.

38On 13 September 2011 the First Respondent made an internal review decision that varied the original 2 June 2011 decision. The basis for the new determination was set out in a letter to the Applicant. That letter provided:

I have applied the public interest test and after considering their nature, the information contained within them and the circumstances in which they were prepared I am of the opinion there are overriding public interests against disclosure of some information contained within the Wood Supply Agreements.

In addition to objections to the release of the documents in their entirety, objections were made to a range of specific clauses and provisions. I did not consider that the objections to the release of entire documents and some of the specific clauses and provisions met the threshold to be considered overriding public interests against their disclosure, but did accept this to be the case concerning the release of four (4) broad categories of information. These covered the issues of

· Resource allocation and/or description

· Resource price

· Take or pay/contract termination provisions; and,

· Term of the Agreements

and relied upon the public interest arguments against disclosure specified in clauses 4(b), 4(c) and 4(d) of the Table at Section 14 of the GIPA Act.

You should also be aware that I did not agree that some matters which were previously considered should be withheld met this test, and therefore decided upon review should be disclosed.

The various third parties operate in a complexity of commercial arrangements of both time and price with respect to:

· Competitive log supply of which Forests NSW is the market price driver, but not the exclusive supplier

· On-selling of logs between timber producers

· Supplies of partially processed raw material

· Marketing through 'in house' outlets and also accessing other suppliers

· Marketing through agents

· Direct sales to wholesalers

· On-selling through other producers

· Direct trade sales

· Direct retail sales

It was advised that the volume and species of wood supplied under the agreements was pivotal to the business strategy of the third parties in that it determines the product categories and market segments they will operate in and customers they will supply.

Disclosure of this information would unfairly enable competitors to pre-empt strategic decisions and calculate pricing/cost structures by geographical location to identify and target the areas of most commercial benefit in which to compete.

The price of the wood fibre was stated as representing a significant component of the price of the finished wood product that is sold to the market. Disclosure of this information was therefore considered to unfairly adversely affect their negotiating position with customers. In addition, the product supplied under some of the agreements are marketed to a single overseas customer. Disclosure of the amount paid for that timber would enable competitors to more effectively compete for that customer's business.

Some companies in competition with each other are also customers. If information on the 'take or pay' provisions were disclosed these customer/competitors would be able to time reductions in their purchasing at critical times to financially disadvantage the supplier. Such timed reductions in the volume of material being sourced under the agreements could possibly also force the application of the contract termination provisions.

The term of the various agreements was stated as being sensitive as disclosure would provide competitors with information on when to time negotiations with their major customers and other third parties. These other third parties supply additional product necessary to continue meeting the demands of major customers and such guarantee of supply is a significant factor in renewal negotiations.

Each item in the documents was assessed jointly and severally in considering whether they should be released. One such consideration was the practical detriment that may arise to the legitimate business and commercial interests of the third parties, together with the offsetting expectation that the public should be aware of how effectively State resources are being managed and the economic return achieved.

I consider the arguments made by the third parties are valid in that release of this information would reveal commercial-in-confidence provisions of a government contract (clause 4(b)), diminish the competitive commercial value of the information (clause 4(c)) and prejudice their legitimate business, commercial, professional and/or financial interests (clause 4(d)). On balance I find the public interest considerations against disclosure outweigh those in favour of disclosure. Accordingly, information specific to the above items should be withheld.

The issues

39The Applicant has reasonably summarised the issues for determination as follows:

In relation to the wood supply contracts sought by the Applicant, there does not appear to be an argument that the contracts as a whole ought to be withheld. The matter at issue is whether the redacted information within those contracts should be released;

Regarding the TEPCO document, the question is whether the redacted information was relevant to the request for access to information.

40While the Second and Third Respondents have appeared in the matter and presented argument in relation to the Agreements to which they are a party, the matter also concerns agreements to which the Second and Third Respondents are not a party.

The Second and Third Respondents' case

41The Second and Third Respondents' case concerns un-redacted copies of the Agreements. They seek to limit the release of information contained in the Agreements. They contend that disclosure of the unredacted Agreements would trigger at least three of the public interest considerations against disclosure. They say that disclosure could reasonably be expected to:

(a) reveal commercial-in-confidence provisions of a government contract - Part 4(b) of the Table;

(b) diminish the competitive commercial value of any information to any person - Part 4(c) of the Table; and

(c) prejudice any person's legitimate business, commercial, professional or financial interests - Part 4(d) of the Table.

42They contend that, in the circumstances of this case, these considerations are not outweighed by any considerations which favour the release of the redacted information.

43They rely on the evidence of Mr Keith Davidson, General Manager Fibre Resources in the Timber Division of Boral.

44In that capacity Mr Davidson is responsible for contract management of key supply agreements with the First Respondent. He is familiar with the relevant aspects of the Second and Third Respondents' business and the industry within which they operate. He has been involved in discussions on the impacts of log supply issues on their business strategies.

45His evidence is that the hardwood industry in New South Wales is a fragmented sector with in excess of 150 companies. Timber is sourced from two principal sources:

(a) state forests, which are managed by the First Respondent;

and

(b) private native forests, which are privately owned (and in some cases, owned by the participants, being the timber processors).

46The First Respondent is the predominant supplier to the industry. There are a number of different timber products produced from both the state forests, and the private native forests, predominantly being:

(a) poles;

(b) high quality sawlogs;

(c) salvage logs; and

(d) pulp logs.

47In the Second and Third Respondents' Timber business, poles, sawlogs and pulp logs are all purchased from both state forests and private native forests.

48Mr Davidson stated that in his experience, participants in the hardwood timber industry hold information relating to their businesses tightly. In particular, the following types of information are tightly held:

(a) information as to the volume of timber purchased from the First Respondent;

(b) information as to the volume of timber purchased from the private native forests;

(c) information on the mix of products purchased from both the First Respondent and the private native forests;

(d) information on the mix of species purchased from both the First Respondent and the private native forests;

(e) information on the price paid for timber, particularly from the private native forests; and

(e) information on the geographic location of the source of timber purchased from both the First Respondent and the private native forests.

49Mr Davidson also stated that in his experience, reports containing information regarding the supply of hardwood from the First Respondent to the various industry participants are rarely published. He is not aware of any publicly available information recording:

(a) the total volume of timber supplied by the First Respondent to each industry participant;

(b) the volume of particular products supplied by the First Respondent to each industry participant;

(c) the volume of particular species supplied by the First Respondent to each industry participant; or

(d) the price paid for timber.

50He stated that to his knowledge, Boral does not publish information of that kind.

51Mr Davidson provided an overview of Boral's hardwood, and softwood operations. He stated that the Agreements are critical to the success of Boral's Hardwood business. Boral's Hardwood business is dependent on the security of supply offered by those agreements.

52Mr Davidson's evidence is that Boral is the largest domestic processor of native forest products in NSW. He said that East Coast Hardwoods takes between 70 and 80% of the high quality sawlogs produced from the state forests located between Sydney and the Queensland border. Boral has invested heavily in the timber industry over the last decade. Since 2001, Boral has invested approximately $125 million in new and existing facilities. It invests in scale operations in order to purchase logs from increasingly disperse harvesting operations run by the First Respondent. He said that Investment of this type requires minimum volumes of certain products to provide economic returns.

53Mr Davidson's evidence is that the Agreements oblige the Second and Third Respondents to take timber, even when the harvesting operations are a long distance from their processing plants. They take this timber at marginal, and in some cases, unprofitable rates.

54Mr Davidson referred to Clause 39 of each of the Agreements. That clause provides that the parties may not disclose their contents or terms without prior written consent of the other parties, subject to certain exceptions. He stated that the Second and Third Respondents do not wish for some of the information contained in the Agreements to be disclosed. That includes information relating to:

(a) the price paid for timber supplied to the Second and Third Respondents;

(b) resource allocation and description (including information regarding the volume, description and source of timber supplied to the Second and Third Respondents);

(c) the 'take or pay' and termination provisions of the Coastal and Walcha Agreements; and

(d) the term of the Pulp PSA.

55Mr Davidson's evidence is that the information is confidential and, from the Second and Third Respondents' perspective, commercially sensitive.

56Mr Davidson stated that the price of timber supplied to the Second and Third Respondents is comprised of two components:

(a) a royalty or stumpage price, being the price paid for the timber fibre; and

(b) a delivery charge, being the price paid for both the harvesting and haulage of the timber. This comprises two main components: a harvesting cost and a haulage cost.

57Mr Davidson stated that in his experience, the harvesting rate will vary for different price zones and compartments (being certain geographic location), due to the varying difficulty of harvesting different areas. It is the same for each customer for each price zone.

58Mr Davidson also stated that in his experience, the haulage rate varies depending on the haulage distance from the price zone to the mill. The haulage rate per kilometre is the same for each customer.

59In respect of timber supplied by the First Respondent, each year, the First Respondent provides all of its customers with:

(a) a Royalty Schedule, which sets out the royalty or stumpage price to be charged for each group of species of timber by price zone (being a geographic location) and diameter class;

(b) a Delivery Charge Schedule, which sets out the delivery charge per cubic metre to be charged for each price zone for each delivery site - although the harvesting rates for each price zone are the same and the per kilometre haulage rates the same, the schedule given to each customer is different.

60Mr Davidson stated that the price of timber supplied to the Second and Third Respondents represents a significant (and perhaps the largest single) component of the price of finished timber products that the Second and Third Respondents sell to the market.

61Mr Davidson also stated that Boral on-sells timber under the Coastal and Walcha Agreements. That is, it sells unprocessed logs of certain less profitable species. When it on-sells timber, it charges only a small margin on the price paid to the First Respondent. In Mr Davidson's opinion, the disclosure of information regarding the price that the Second and Third Respondents pays the First Respondent would:

(a) diminish the competitive commercial value of that information to the Second and Third Respondents, including by

(i) enabling competitors to estimate their cost structure with a degree of accuracy, and thereby, disadvantage them in the market for timber sales; and

(ii) in respect of the Pulp WSA, allowing competitors to more effectively compete for Boral's single export customer's business (particularly, in circumstances where they would have information allowing them to estimate Boral's cost structures, while Boral would have not have the same information about its competitors' cost structures);

(b) prejudice the Second and Third Respondents' business, commercial and financial interests, including by providing Boral's customers (including its single export customer) for finished timber products and on-sell timber with an advantage in negotiations on price.

62Mr Davidson is also of the opinion that the disclosure of information regarding the process for and timing of the price reviews under the Agreements has the potential to undermine Boral's ability to negotiate market price increases with its customers.

63Mr Davidson stated that in his experience, the volume and species of hardwood timber supplied to the Second and Third Respondents under the Agreements is information which is a pivotal input in determining the business strategies of the Hardwood business and in ensuring that the Second and Third Respondents remains competitive in the marketplace. He stated that this is so for the following reasons:

(a) it determines the product categories and market segments in which the Second and Third Respondents will operate;

(b) it determines the customers that the Second and Third Respondents will supply; and

(c) it informs their strategies for negotiations with customers on price.

64As an example, he stated that the volume of a certain species of timber that will be delivered over the next 12-month period is used to determine sales strategies for the next 18 months.

65Mr Davidson is of the opinion that the disclosure of information regarding the volume and species of timber supplied by the First Respondent to the Second and Third Respondents would:

(a) diminish the competitive commercial value of that information to the Second and Third Respondents, including by enabling their competitors to pre-empt their strategic decisions, and disadvantage them in the market for timber sales; and

(b) prejudice their business, commercial and financial interests, including by providing their customers with additional information for use in negotiations on price.

66Mr Davidson is also of the opinion that the disclosure of information regarding the volume of timber to be supplied from certain locations would provide their competitors with the ability to calculate the delivery charge that the Second and Third Respondents paid for that timber.

67Mr Davidson stated that competitors of the Second and Third Respondents in the market for hardwood logs sales also, from time to time, purchase finished timber products and/or on-sell logs from the Second and Third Respondents as customers. In his opinion, the disclosure of information regarding the take or pay provisions in the Coastal and Walcha Agreements would prejudice the Second and Third Respondents' business, commercial and financial interests. The disclosure would provide competitors who are also customers with information that could be used to deliberately reduce purchasing requirements, to maximise the financial imposition and resource burden on the Second and Third Respondents.

68He said that under the take or pay provisions, Boral is required to pay for the timber it purchases as well as a penalty if it does not purchase above an agreed amount. If a customer were to withhold orders for on-sell logs (because they became aware that Boral was close to failing to meet minimum take or pay obligations), Boral would incur a penalty under the provisions.

69Boral's woodchip is exported to a single overseas customer. Mr Davidson stated that timber supplied under the Pulp WSA comprises the main source of timber processed and exported in Boral's Residues business. The timber sources used in the Residues business both rely on contracts with third parties. He said that the export of woodchip requires certainty of access to chip loading facilities at the Port of Newcastle. Boral is reliant on lease arrangements with the Port of Newcastle to maintain access to market.

70Mr Davidson stated that he is aware that a number of Boral's competitors have approached the First Respondent regarding supply of pulp products for export. He is of the opinion that the disclosure of information regarding the term of the Pulp WSA would arm competitors for the chip customers' future business with information as to when they should time their negotiations with that customer, third party suppliers, or with the Port of Newcastle. This would:

(a) diminish the competitive commercial value of that information to the Second and Third Respondents; and

(b) prejudice their business, commercial and financial interests.

The First Respondent's case

71Mr Anderson filed submissions on behalf of the First Respondent. Its case with respect to the Agreements reflects that of the Second and Third Respondents. It says that the redacted information is unique to each wood supply agreement, is of an important nature, category or description and lies at the heart of each agreement. It says that the redacted information comprises and, if disclosed, would reveal commercial-in-confidence material.

72In support of that submission Mr Anderson relies on the decision in Griffin Energy Pty Ltd v Western Power Corporation [2006] FCA 1241 in which information regarding the technical characteristics and design of a power station, financial information relating to the project in question, including pricing information, as well as information relevant to the future operation of the power station was accepted as commercial-in-confidence. Mr Anderson contends that the redacted information in this matter is of a similar type or category as the types of information that were the subject of Griffin.

73The First Respondent contends that release of the redacted information could reasonably be expected to diminish the competitive commercial value of the information because it may mean that competitors to the Second and Third Respondents would obtain important information that may enable them to operate in such a way that the competitive advantage of each of the parties to the agreement was reduced.

74Mr Anderson relies on the decision in Cannon and Australian Quality Egg Farms Limited (1994) 1 QAR 491 which discussed the limbs to be satisfied to meet the threshold of 'commercial value' being diminished. In Cannon the Commissioner said that information has commercial value to an agency or another person if it is valuable for the purposes of carrying on the commercial activity in which that agency or other person is engaged. Similarly, information may be valuable because it is important or essential to the profitability or viability of a continuing business operation, or a pending, "one-off' commercial transaction. In addition information has commercial value to an agency or person if a genuine arms-length buyer is prepared to pay to obtain that information from that agency or person, such that the market value of the information would be destroyed or diminished if it could be obtained under Freedom of Information legislation from a government agency which has possession of it.

75In Freeland v General Manager, Liverpool City Council [1999] NSWADT 95 the Tribunal held that the disclosure of land valuations obtained by the Council in relation to the sale of a site would disclose information of commercial value to the Council, which would be reduced by their disclosure and could prejudice the sale of the property.

76In Watt v Forests NSW [2007] NSWADT 197, Mr Watt sought information about the royalty rates paid by South East Fibre Exports Pty Ltd ("SEFE"). SEFE was Forests NSW's only customer for native forest pulpwood in the South Coast forestry region. Forest NSW argued that the royalty rate was fairly stable and therefore commercially valuable, even though the rate was more than 3 years old. I accepted that a royalty rate could be commercial information. I also accepted the current rate would be valuable for the purposes of carrying on the commercial activity because it was a rate under which Forests NSW and SEFE carried out their respective obligations. However, because Mr Watt was able to put forward evidence that another state had released information regarding rates without any apparent impact on its commercial viability and the fact that it was not current, I formed the view that the disclosure would not impact on its commercial value and ordered the disclosure of the information.

77Mr Anderson contends that Cannon, Freeland and Watt all lend support to the position adopted by the First Respondent that certain types of information in the wood supply agreements, such as those categories of information identified in this matter, could, if released, diminish the commercial value of information. He submits that the decision in Watt turned in part on the fact that the relevant information was out of date. The information in the Agreements in this case is relatively current and thus Watt reasonably ought to be distinguished from the current case.

78In relation to the whether the release of the above information could reasonably be expected to prejudice any person's legitimate business, commercial, professional or financial interests, the First Respondent contends that it could do so because competitors to the parties to each of the Agreements may obtain important information that may enable them to operate in such a way that the competitive advantage of each of the parties to the agreement was reduced.

79In support of that submission Mr Anderson relies on the decisions in Vincent Neary v State Rail Authority [1999] NSWADT 107, Retain Beacon Hill High School Committee Inc v NSW Treasury [2007] NSWADT 55 and Cianfrano v Director General, NSW Treasury [2005] NSWADT 7. He contends that Neary, Retain Beacon Hill and Cianfrano all lend support to the position adopted by the First Respondent.

80The First Respondent acknowledges that these cases do not consider the provisions of the GIPA Act. Nevertheless, it is submitted that as those cases consider analogous provisions of the now repealed Freedom of Information Act 1989 ("the FOI Act") they are instructive for the purposes of these proceedings.

81In regard to the question of whether the information that was redacted from the TEFA document falls within the scope of the Applicant's request, the First Respondent submitted that the redacted material was simply outside the scope of the Applicant's GIPAA request. The First Respondent contends that the redacted information does not fall within the description of "any report or document on the estimation of the likely future timber yields from the TEPCO plantations purchased by Forests NSW in 2010".

82That material was redacted and not provided in accordance with the provisions of section 75 of the GIPA Act.

The Applicant's case

83The Applicant sought review of the First Respondent's determination to withhold some of the information that it sought in its request. It is the Applicant's submission that the disclosure of the redacted information could not reasonably be expected to have the effects set out in clauses 4(b), 4(c) and 4(d) of the Table at Section 14 of the GIPA Act.

84The Applicant contends that the commercial sensitivity of much of the redacted information falls away because of the level of Information already in the public arena.

85It further contends that the redacted information does not fall within the definition of commercial-in-confidence in schedule 4 to the GIPA Act. The Applicant also submits that release of the redacted information would not give rise to a substantial commercial disadvantage on the part of the sawmill companies in relation to other (potential) contractors with Forests NSW.

86Further, the Applicant contends that the argument as to the likelihood of diminution in the competitive commercial value of the take or pay/contract termination provisions is particularly speculative and that release of this information would not have the effect of diminishing their competitive commercial value.

87The applicant concedes that the information found within the contracts may fairly be described as information that is relevant to the sawmill companies and the First Respondent's business, commercial and/or financial affairs. However, the Applicant submits that release of the information could not reasonably be expected to prejudice those affairs.

88The applicant submits that there are a number of significant public interest considerations in favour of releasing the redacted information. Those public interest considerations reflect the engagement of the community and their interest in the use of the public resource of NSW forests.

89The Applicant contends that there is public interest in increasing the financial accountability of Forests NSW; fostering competition; management of the Forest NSW hardwood estate; and in engaging with government about sustainability.

90The applicant submits that the whole of the TEPCO document ought to be provided. While cost information may not be material that specifically comprises an estimate of the likely future timber yields, in the sense of the amounts of timber to be produced, it is nevertheless part of a "report on" that subject, inextricably linked to the overall yields and the materials therefore fall within the intent of the Applicant's request.

91The applicant submits that, in the absence of any other basis for refusal, it would be in accordance with the object of the Act to allow access to government information proactively and withholding it only when there is an overriding public interest against disclosure, for the entire TEPCO document to be released.

Professor Walker's evidence

92The Applicant relies on the evidence of Professor Robert Walker. Professor Walker provided a statement concerning the commercial sensitivity of the redacted information and also attended the hearing, gave oral evidence and was cross-examined.

93He disputes much of the argument presented by the Respondents in regard to the consequences that they asserted would follow from release of the information. It is his opinion:

a. Regarding price, that the cost of certain inputs may assist prospective customers to understand why suppliers may seek to vary prices, but would not in itself adversely affect a supplier's negotiating position. That is, it would not affect the sawmill companies when seeking to negotiate prices for their finished products.

b. Regarding the allocation of timber, that it is highly likely that competitors would already have a good idea of the volume and mix of species available at different sites in NSW. This is consistent with the fact that volumes have been released by government agencies and Ministers from time to time. Professor Walker also points out that tenders by the First Respondent currently disclose information about volumes.

94In regard to the issue of asserted commercial-in-confidence provisions of the redacted information he referred to the definition of commercial-in-confidence in Schedule 4 to the GIPA Act which provides:

commercial-in-confidence provisions of a contract means any provisions of the contract that disclose:

(a) the contractor's financing arrangements, or

(b) the contractor's cost structure or profit margins, or

(c) the contractor's full base case financial model, or

(d) any intellectual property in which the contractor has an interest, or

(e) any matter the disclosure of which would place the contractor at a substantial commercial disadvantage in relation to other contractors or potential contractors, whether at present or in the future.

95In his opinion none of the types of redacted information falls within that definition.

96In his opinion the redacted information does not relate to the contractor's financing arrangements, or its cost structure or profit margins. He says that the base case financial model is commonly incorporated in a set of contracts and deeds for a public private partnership. In regard to intellectual property he says that the design of contracts for the harvesting and haulage of timber may be intellectual property of the First Respondent, not the counterparty, and in any event details of such contracts are already in the public domain.

97With respect to the issue of whether disclosure of any or all of the redacted information, would place any or all of the contractors at a substantial commercial disadvantage in relation to other contractors or potential contractors, whether at present or in the future, Professor Walker stated:

my assessment is that:

i. there may be some commercial disadvantage to those contractors who (for example) had been the beneficiary of 'sweetheart' deals in which the price was less than that charged for equivalent products to other participants in the timber industry, and less than that which might emerge in a free and open market, or which were the subject of generous conditions. The commercial disadvantage would arise if those contractors found themselves subject to competition when later seeking access to sources of supply when existing contracts expire. Alternatively, there may be adverse scrutiny of existing contracts when prices were subject to review;

ii. on the other hand, it is likely that existing operators already have a reasonable understanding of the volume of timber of different species in particular forestry management areas, and of the size of timber that could be harvested - if for no other reason than because of the movement of staff between firms (taking with them some knowledge of the operations of previous employers), or conversations with trucking contractors, and so forth. Similarly it is likely that information about the pricing of timber is also quickly disseminated within the industry;

iii. given that information about volume, price and the terms of some timber supply agreements has already been placed in the public domain, it is difficult to see how further disclosures could be construed as particularly 'commercial sensitive;

iv. on balance, it is difficult to conclude that any commercial disadvantage would be substantial, in the sense that it would lead those contractors to incur substantial economic loss as the result of disclosure;

v. rather, disclosure is likely to contribute to the establishment of a 'level playing field' for competing operators in future contract negotiations;

vi. there does not seem to be any basis for asserting that an objective of the 2009 GIPA Act was to protect firms that may have enjoyed economic benefits from favourable contracts (in the absence of open tenders) from disclosures that may give rise to critical scrutiny from other stakeholders.

98Professor Walker noted that Mr Taylor had adopted many of Mr. Davidson's assertions in his determination and Professor Walker disputed many of those assertions. In particular he commented on the following elements of Mr. Davidson's evidence:

- his claim that supply arrangements determine the product categories and market segments with which contractors operate, and the customers they choose to supply;

- his confusion of the concepts of 'price' and 'cost' (e.g. Mr. Davidson's assertion that 'the price of timber supplied to Boral represents a significant ... component of the price of finished timber products);

- his claim that disclosure of information regarding the price paid by Boral for timber would enable competitors to estimate Boral's cost structure, and allow them to more effectively compete;

- his claim that disclosure of the price of wood fibre would enable competitors to calculate pricing/cost structures and to identify and target the areas of most commercial benefit in which to compete; and to more effectively compete for customers' business.

99Professor Walker stated:

Boral is the dominant operator in the NSW timber industry, and is in a position to exercise considerable market power both in dealing with suppliers (notably Forests NSW), and with customers for its products. In that context, it is difficult to accept Mr. Davidson's claims that serious commercial damage might ensue if any of the remaining 150 companies in the hardwood industry were in an improved position to compete for supplies of timber.

100In regard to Mr Taylor's statement that he had received advice that the volume and species of wood supplied under the Agreements was pivotal to the business strategy of the third parties in that it determines the product categories and market segments they will operate in and customers they will supply, Professor Walker expressed the following opinion:

[I]n my opinion (from a business or commercial perspective) the substance of that advice is disingenuous, or at best, overstated. Supply arrangements may well be a factor taken into consideration in the formulation of a business strategy, but would not be the only or pivotal consideration, except in highly unusual circumstances (such as in the case of short-term shortages - an even then, would only apply to short-term strategies).

It is plainly an overstatement to suggest that the volume and supply of species of wood (one of several 'inputs' to a timber processing business) would determine the product categories and market segments in which a firm would operate i.e. that there is a causal relationship between the availability of supplies of timber, and a firm's business strategy. Business strategies necessarily have regard not only to what goods or services can be produced, but also to what can be sold. A firm can only sell a product at a nominated price if there is a demand for that product at that price.

101Professor Walker disputed the assertion that disclosure of this information would unfairly enable competitors to pre-empt strategic decisions and calculate pricing/cost structures by geographical location to identify and target the areas of most commercial benefit in which to compete. Professor Walker stated:

[I]t is hard to see how the kind of information that has been withheld (available volumes of different species of timber) would in itself enable any assessment to be made by competitors of 'pricing/cost structures'. Indeed, it seems highly likely that current or potential competitors, on the basis of their own experience (or other information in the public domain), would already have a good idea of the volume and mix of species available at different sites in NSW, and of the costs of harvesting and transporting logs from different locations. In any event, the register of Forests NSW tenders currently discloses information about volumes

... the key piece of information that would supposedly lead to the 'unfair' treatment of successful bidders for access to forestry resources would be disclosure of the price paid for those resources (and possibly any associated conditions which may relate to such matters as construction of access roads or site rehabilitation).

One interpretation of Mr. Taylor's observations is that they assume that disclosure of the details of awarded contracts would lead to more vigorous and informed competition from new entrants or from other firms currently engaged in the timber industry, and that this would be a bad thing. In particular, his suggestion that disclosures would lead competitors to 'target the areas of most commercial benefit in which to compete' seems ill considered: competitors in a free and open market will always seek to identify areas that may produce commercial benefits. Mr. Taylor's suggestion that this would be unwelcome could be construed as reflecting a wish to protect existing customers of Forests NSW from the threat of competition.

Such an interpretation must lead to the question, bad for whom? What may be bad for current customers of Forests NSW may be good for the public purse.

102In relation to 'take or pay' provisions Professor Walker expressed the view that any payments to be made for untaken timber in a given period in terms of a typical take or pay contract could give rise to a 'credit' towards payment of future timber deliveries, and would be treated for accounting purposes as a prepayment (an asset) rather than as an expense. He suggested that any effect on the overall cash flows and financial position of the Second and Third Respondents that might arise from release of the redacted information would be minimal.

103In contrast, Professor Walker expressed the view that there are a number of public policy reasons for disclosure of the contents of these commercial contracts:

i. since Forests NSW is selling publicly-owned natural resources to a private sector firm, it would be in the public interest for efforts to be made to secure an optimal economic return to taxpayers. Possibly Forests NSW makes such efforts. Possibly it has entered into generous arrangements with some contractors in an effort to foster or maintain employment in regional areas of the State. Whatever the history of past deals, disclosure of relevant contracts would ensure that Forests NSW was accountable to Parliament, stakeholders, and the wider community;

ii. the case for disclosure is particularly compelling if past tenders for the purchase of timber were not open tenders;

iii. the case for disclosure is also compelling given that there is a possibility that the manner in which Forests NSW reports on its financial performance may not properly reflect the full costs of maintaining forestry operations in NSW (since certain costs, such as fire protection, maintenance of access roads and bridges) may be incurred by other agencies or by local governments;

iv. Boral, as the dominant operator in the NSW timber industry, has considerable market power and near-monopoly status in certain markets. If (as suggested by Boral representatives) disclosure would foster competition, disclosure would be good public policy per se;

v. the harvesting of native forests (and plantations) can have serious detrimental effects on the natural environment. Disclosure of the particulars of contracts would ensure that stakeholders can subject such arrangements to critical scrutiny;

vi. reports from the NSW Auditor-General to the effect that Forests NSW has entered into long-term agreements to sell more timber than would be produced within that period suggest that there are risks associated with the maintenance of supply. In that context, the community risks incurring economic loss if existing arrangements are rolled over without being subjected to a careful and fair review of pricing arrangements. Again, enabling stakeholders to scrutinise existing contracts could assist this outcome.

Ms Flint's evidence

104With respect to the take or pay provisions, the Applicant relies on the evidence of Ms Carmel Flint, an environmental consultant, regarding the impact of releasing such provisions.

105Ms Flint's evidence is that she is aware of information, made available to the public, recording the total volume of timber supplied by the First Respondent to each industry participant; the volume of particular products supplied by the First Respondent to each industry participant; the volume of particular species supplied by the First Respondent to each industry participant; and the price paid for timber. She said that information of that kind has been made available to the public on a number of occasions, without any apparent detriment to the commercial outcomes of the timber companies involved.

106Ms Flint's evidence is that as part of a Freedom of Information request submitted by the National Parks Association in 2006 to Forests NSW, the National Parks Association received information on the total volume of quota timber supplied by Forests NSW to each industry participant, annually over a ten year period, without any apparent detrimental impact to those participants. She also stated that data was released under a Freedom of Information request about volumes of timber supplied by the First Respondent to other companies. She further stated that in 2006 the NSW Government made public details of the wood supply agreements, including term and volume, with Pauls Timbers at Baradine and Gunnedah.

107Ms Flint considers that it is unlikely that competitors would withhold orders for on-sell logs if they know about the take or pay obligations. She pointed out that the Applicant is not seeking access to a running log of volumes harvested by Boral, and nor is such information likely to be available to any customer under any circumstances. Unless a customer had access to such information, it would not be in a position to assess whether or not Boral was close to meeting the take or pay provisions.

108Ms Flint noted that native forest logging operations on state forests in NSW are running at a loss. In her opinion this fact substantially increases the public interest in access to detailed information on wood supply contracts and pricing. She says that the community has a direct financial interest in understanding why such an important public resource is not returning a profit.

109I note that some doubt was raised in regard to the accuracy Ms Flint's observation that there has been an apparent financial loss from native forest logging operations on public lands that are managed by the First Respondent; however the evidence was not conclusive. In her opinion it is important that the community can obtain detailed information on wood supply contracts and pricing to better understand why native forest operations are not profitable and what options are available to either reduce environmental impacts or improve profits.

110She says that the price being charged by the First Respondent for the publicly owned timber resource ought to be made available for this purpose. Ms Flint observes that pricing is highly likely to be one of the fundamental drivers of the financial loss. She noted that the setting of log prices occurs through administered processes as against market-based systems in NSW. There is some suggestion from a report by URS, to which Ms Flint refers, that this is not necessarily the best means of capturing a resource rent by the government on behalf of the community. She contends that the assessment of whether an appropriate resource rent is being obtained from the use of a public resource in all cases is a further matter that supports the release, in the public interest, of the contract price terms.

111Ms Flint also points out the level of subsidy to the timber industry and the apparent compensation risk that has been imposed on taxpayers, given the Auditor-General's advice that there is no allowance for a non-compensable reduction in commitment following a review of available timber resources and the ensuing litigation. The community ought to be able to assess the scale of risk and the opportunities for reduction of that risk and this can only come about if the contracts are released in full.

112Comments made in the Auditor-General's report are discussed below.

113The Applicant submitted that the adversarial nature of business would not be likely, and in the absence of that and specific information about how much timber a sawmill company was taking at any one time, it contends that the release of the redacted information could not prejudice the affairs of those companies.

114Ms Flint referred to the poor environmental record of the First Respondent and in particular to comments made in proceedings in the NSW Land and Environment Court. In the matter of Director-General, Department of Environment, Climate Change and Water v Forestry Commission of New South Wales [2011] NSWLEC 102, Justice Pepper stated at paragraph [103]:

"the Forestry Commission's conduct manifests a reckless attitude towards compliance with its environmental obligations"

115In the same judgement, at paragraph [100], Justice Pepper also stated in relation to the Forestry Commission that

"[I]n my view, the number of convictions suggests either a pattern of continuing disobedience in respect of environmental laws generally or, at the very least, a cavalier attitude to compliance with such laws"

116In Ms Flint's opinion, the poor environmental record of the First Respondent identified by Justice Pepper and revealed by community groups in recent years is the direct result of timber allocations that are set at unsustainable levels.

117Ms Flint referred to the case of Allen Taylor & Co Ltd & Anor v Forestry Commission of NSW & Anor (SCA, 291263 of 2010) ("the Boral Case"). In 2011 the North East Forest Alliance obtained the Supreme Court summons in the Boral Case. The summons refers to a Wood Supply Agreement between the plaintiffs and the defendants dated 26th August 2003. The summons included the following information in relation to the Agreement:

  • The term of the Agreement, including the start and end dates
  • The annual volume of timber required to be supplied under the Agreement to the plaintiffs by the defendants for each year from 2004 to 2010
  • The annual volume of timber supplied by the defendants to the plaintiffs for each year from 2004 to 2010.
  • The allowable level of substitution of small sawlogs for quota quality logs within the baseline allocation contained in the Agreement
  • The volume by major species requirements specified in the Agreement for Blackbutt, Spotted Gum and Brushbox
  • The volume of Blackbutt supplied for each year from 2005 to 2010
  • The volume of Spotted Gum supplied for each year from 2008-2010
  • The volume of Brushbox supplied for each year from 2005 to 2009
  • The average delivery charges (as $/m3) imposed on the plaintiff, by plant and price zone, for each year from 2004 to 2011.

118Ms Flint said that the Summons has been uploaded in full to the website of the North East Forest Alliance and has been publicly available there for several months without any apparent detriment to Boral.

119Ms Flint also referred to comments by Sir Laurence Street, in 2002, when appointed as the independent legal arbiter to rule on a disputed claim of privilege on documents related to the Mogo Charcoal Plant. One of the most important documents was the Timber Supply Agreement that had been signed by State Forests and Australian Silicon Operations Pty Ltd. Both State Forests and the company claimed privilege on the Agreement and sought to have it withheld from release. Sir Laurence Street considered the matter at length and reached the following finding:

"In the claim for privilege, State Forests describe the Agreement thus: The Agreement is for the regular supply of up to 200,000 tonnes of timber per year from State Forests' South Coast region. Subject to the ASO meeting their conditions precedent the Agreement will operate until 31 December 2020.

The claim for privilege quotes clause 47 (the confidentiality clause) and continues: It is submitted that the release for public inspection of the documents in respect of which privilege is claimed on the grounds of commercial in confidence will have serious adverse commercial implications for the State, State Forests and ASO including:

Disclosure to competitors of commercial sensitive matters such as the prices payable by ASO for raw materials used in the manufacture of silicon

Breach of contractual promises of confidentiality

Prejudice current and future contractual relationships between the Crown and the private sector

Cause loss of commercial advantage and competitiveness with the private sector.

...In my view, the considerations in favour of disclosure convincingly outweigh the claim for privilege. The description of the magnitude in quantity and in time of the Agreement by State Forests that I have quoted above is eloquent of its importance to the public interest. Principles of transparency and accountability plainly outweigh the commercial in confidence considerations and the admittedly prospectively serious implications put forward by State Forests and ASO when considering a contract for a sale by the State of this magnitude. The administration of the timber resources of the State involves political, ecological and economic considerations of significant public interest and, I repeat, the magnitude of this transaction is such as to expose it to a clearly recognisable obligation of disclosure. The claim for privilege is denied."

120Ms Flint said that the magnitude of the timber supply agreements that are being sought in this instance are in some cases individually, and in all cases, collectively, far greater than those that were released in 2002. She is of the opinion that there is a significant basis for disclosure, particularly given the increasingly severe ecological impacts of the logging contracted for by those agreements and the very poor economic outcomes resulting from such logging.

121She says that the public would be able to use the redacted information to participate in Government policy development on forest management in NSW. This is important information that enables the public to participate on equal terms with company interests when debating the costs and benefits of forest policy in NSW. The public could use this information to develop alternatives for future management of the forests, to assess more sustainable and profitable options for forest management, and to better cost those options. It would enable the public to make a more informed assessment of the legal and financial impediments to better forest management in NSW.

122She said that in the short-term, it would enable the public to provide detailed input into such processes as the reviews of Forest Agreements, Regional Forest Agreements and Integrated Forestry Operations Approvals in NSW.

Mr Milledge's evidence

123The Applicant relies on the evidence of Mr David Milledge, a wildlife ecologist whose primary research focus in NSW has been on the forests of the North Coast. Mr Milledge gave evidence with respect to the ecological values of New South Wales' public hardwood forests, as managed by the First Respondent and on the effects of current management practices on these values. As part of the brief provided to him by the Applicant, two questions were posed.

i) what is the ecological value of the public hardwood forest estate, as managed by the First Respondent, in NSW?

ii) is the management of these public forests occurring in a manner that protects these values?, and if not, what are the main reasons for this?

124Mr Milledge's evidence is that the hardwood forest estate in NSW has exceptionally high ecological values. It provides important habitat for endemic species, sensitive species and species that are otherwise in decline and preserving old-growth stands, which comprises indicators of national significance for the assessment of natural areas for listing on the Register of the National Estate. The hardwood estate supports an exceptionally rich and diverse range of plants and animals and provides core habitat for many of the continent's major flora and fauna groups. A high number of forest-dependent species occurring in these forests are listed as threatened under State and Commonwealth legislation. The hardwood forests are of national significance in providing food resources for certain bird species and major importance to other migratory bird species and fruit-bats.

125Mr Milledge's evidence is that the use of the hardwood forest estate involves a balance between timber production and other purposes including the provision of ecosystem services and wildlife conservation. He stated that recent independent audits of logging operations in various State hardwood forests in North East NSW indicate that current management of public hardwood timber production forests, in this area at least, is not being undertaken in a manner that protects their ecological values. The audits indicate that the ecologically sustainable forest management principles had been comprehensively ignored.

126Mr Milledge stated that the manner in which prescriptions for protection of habitat attributes of the forests had been abandoned included logging of stands of trees that should have been protected, failures to properly mark up trees to be retained prior to logging, damaging snig track construction and failures to protect exclusion zones. He stated that

It appeared that application of these prescriptions had been abandoned because management intent was on maximum economic utilisation of the available timber resource.

127Mr Milledge identified impacts of this approach that he considered to have significantly affected the forest structure and regeneration potential of the hardwood stands and that in his opinion regeneration would be retarded and harvesting would be unlikely to be economic in the area for many decades.

The NSW Auditor-General's Report

128The Applicant relies on an April 2009 report of the NSW Auditor-General titled "Sustaining Native Forest Operations Forests NSW". Specifically, I have been referred to comments made in that report which the Applicant contends raises concerns about the First Respondent's management of a publicly owned asset. The executive summary of the Auditor-General's report states:

... Forests NSW faces difficulties managing supply especially for large, high quality sawlogs.

This is due in part to the actions of Government in negotiating a new wood supply agreement for the north coast in 2003 and the loss of forest estate.

In this new agreement, the Government waived its rights to reduce commitments without compensating industry for any loss. This removed Forests NSW's ability to better manage supply risks by adjusting commitments. In addition, timber volumes were more or less maintained despite the loss of forest estate to national park and reserves.

To meet wood supply commitments, the native forest managed by Forests NSW on the north coast is being cut faster than it is growing back. This is especially the case for the blackbutt species. This does not mean that the forest will not regrow but there will be a reduction in yield in the future.

After the current agreements cease, Forests NSW plans to fill the shortfall on the north coast with plantation hardwood. However, we found it is currently sourcing significantly more from plantations than anticipated to meet its commitments, which may place this strategy at risk.

Forests NSW continue to look for new sources of hardwood timber to meet existing commitments including private property and leasehold land. As timber haulage distances increase and yields decrease, the overall cost of production will rise. These additional costs will have to be borne by both Forest NSW and the industry.

Given that native forest operations ran at loss of $14.4 million in 2007-08, this raises concerns about how much worse this financial burden may get.

Consideration

129The Tribunal's function on review under section 63 of the Administrative Decisions Tribunal Act 1997 is to make the correct and preferable decisions having regard to the material before it before it, and any applicable written or unwritten law. It is well established that in considering an application for review the Tribunal is not constrained to have regard only to the material that was before the agency, but may have regard to any relevant material before it at the time of the review: Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 46 FLR 409.

130In this case the Tribunal was provided with unredacted copies of the Agreements of the TEFA document. Each of the parties and the Information Commissioner has made submissions with respect to the issues to be determined. I have also been provided a copy of a letter to the First Respondent from Toomey Pegg, lawyers acting for Grants Holdings Co Pty Limited. That letter, dated 2 March 2012, is in the form of submissions with respect to its objection to access being given to the Western Region Wood Supply Agreement between Grants Holdings Co Pty Limited, Forests NSW and the State of New South.

131Grants Holdings Co Pty Limited is not a party to these proceedings and I do not propose to give weight to those submissions. I note however, that the content of those submissions appears to have been addressed in the submissions by the Respondents.

132The Tribunal's task is to determine whether there is an overriding public interest against disclosure of the information in the Agreements in accordance with the Act, paying due regard to the principles in section 15 of the GIPA Act. This requires that the public interest consideration both in favour and against disclosure be identified, so that the question of whether, on balance, the public interest considerations against disclosure outweigh those in favour of disclosure can be determined. Unless there is an overriding public interest against disclosure the presumption in favour of disclosure applies.

Public interest considerations in favour of disclosure

133Public interest considerations in favour of disclosure are set out in section 12. The section makes it clear that those considerations are not limited. In my opinion there are a series of public interest considerations in favour of disclosure of the Agreements. In addition to the general public interest in favour of disclosure of government information the Applicant's evidence identifies a number of considerations.

134In general terms most of the considerations can be described falling within the section 12 considerations that:

  • disclosure of the information could reasonably be expected to promote open discussion of public affairs, enhance Government accountability or contribute to positive and informed debate on issues of public importance;
  • Disclosure of the information could reasonably be expected to inform the public about the operations of agencies and, in particular, their policies and practices for dealing with members of the public, and
  • Disclosure of the information could reasonably be expected to ensure effective oversight of the expenditure of public funds.

135Under cross-examination Professor Walker was argumentative and reluctant to concede all but the most obvious matters. For the most part I nevertheless found his opinions to be soundly based.

136Professor Walker identified a number of public policy reasons for disclosure of the contents of Agreements. Those considerations are directed towards ensuring that the First Respondent is accountable to Parliament, stakeholders, and the wider community in relation to a publicly owned natural resource. He suggests that the manner in which the First Respondent reports on its financial performance may not properly reflect the full costs of maintaining forestry operations in NSW. I agree that the possibility that disclosure of the redacted information may assist in promoting open discussion on that issue is a consideration in favour of disclosure.

137I agree that the possibility that disclosure of the redacted information may result in critical scrutiny of the issue of the effect that the harvesting of native forests and plantations can have on the natural environment is a consideration in favour of disclosure.

138I agree that the possibility that disclosure of the redacted information may result in critical scrutiny of the issues highlighted by the NSW Auditor-General's report is a consideration in favour of disclosure.

139I agree that the possibility that disclosure of the redacted information may result in critical scrutiny of the issues highlighted by Justice Pepper in the Land and Environment Court matter is a consideration in favour of disclosure.

140I agree that the possibility that disclosure of the redacted information may result in a better community understanding as to whether or not an important public resource is returning a profit is a consideration in favour of disclosure.

141I agree with Ms Flint that the possibility that the public would be able to use this information to participate in Government policy development on forest management in NSW is a consideration in favour of disclosure.

142I do not agree that the issues raised in regard to the need for a level playing field and to promote competition are considerations in favour of disclosure. Nor do I consider that the relative size of the Second and Third Respondents and their competitors is a consideration in favour of disclosure.

Public interest considerations against disclosure

143The public interest considerations against disclosure are limited to those set out in the Table to section 14 of the GIPA Act. It is common ground that the Respondents bear the onus of justifying the decision to refuse access to the redacted information, and they also have the burden of establishing that the public interest considerations against disclosure apply. They also bear the burden of establishing that, on balance, they outweigh the public interest considerations in favour of disclosure. Consistent with the principles set out in R v Australian Broadcasting Tribunal; ex parte Hardiman (1980) 144 CLR 13, the Respondent's role was limited and the Second and Third Respondents accepted the major role in regard to these issues.

144The Respondents contend that the considerations against disclosure are found in clause 4 of the table to section 14. It is my understanding that none of the Respondents rely on clauses 4(a) or (e). Accordingly, the asserted considerations are those in clauses 4(b), (c) and (d).

145It must be shown that disclosure of the redacted information could reasonably be expected to have one or more of the effects set out in those sub-clauses.

Could reasonably be expected

146The meaning of the expression 'could reasonably be expected' was considered in the matter of Hurst. Judicial Member Molony stated at paragraphs [56] - [57]

"56 Mention must be made of the requirement, common to all the public interest considerations against disclosure in the Table to s 14, that disclosure "could reasonably be expected to" have the nominated effect. The words "could reasonably be expected to" have been the subject of considerable judicial consideration with respect to their use in the Freedom of Information Act 1989 and the Freedom of Information Act 1982 (Cth). They are to be given their ordinary meaning: Attorney-General's Department v Cockcroft (1986) 10 FCR 180. In that case, Bowen CJ and Beaumont J explained, at 190, that the words -

"... require a judgment to be made by the decision-maker as to whether it is reasonable, as distinct from something that is irrational, absurd or ridiculous, to expect that those who would otherwise supply information of the prescribed kind to the agency would decline to do so if the document in question were disclosed under the Act. It is undesirable to attempt any paraphrase of these words. In particular it is undesirable to consider the operation of the provision in terms of probabilities or possibilities or the like."

57 Hayne J pointed out in McKinnon v Secretary, Department of Treasury [2006] HCA 45 that , at [61] -

"... when their Honours said, as they did, that the words required a "judgment to be made by the decision-maker as to whether it is reasonable, as distinct from something that is irrational, absurd or ridiculous," to expect certain consequences, they are not to be understood as having used the latter expression as a paraphrase of the former. Rather, they are to be understood, and have since been understood, as doing no more than drawing an emphatic comparison. To do more would have been, as their Honours correctly said, "to place an unwarranted gloss upon the relatively plain words of the Act". And the same approach should be taken to the expression "reasonable grounds" when it is used in s 58(5) of the Act."

See also XZ v Commissioner of Police, NSW Police Force [2009] NSWADTAP 2."

Reveal commercial-in-confidence provisions of a government contract

147It is not in dispute that the Agreements are government contracts. In order to establish that this consideration applies it is necessary for the Respondents to establish that the information redacted from the Agreements comprises commercial-in-confidence provisions.

148Professor Walker has asserted that this is not the case.

149The Second and Third Respondents contend that the cost of timber is a significant component of the price of the finished timber products produced by the Second and Third Respondents. As a result, disclosure of those clauses of the Agreements relating to resource price would allow the cost structures of the Second and Third Respondents to be estimated with some accuracy. Moreover, the clauses relating to resource price would disclose the Second and Third Respondents' profit margin on unprocessed timber that they 'on-sell'. Accordingly, it is argued, disclosure of contractual clauses relating to resource price would tend to disclose the Second and Third Respondents' costs structures and profit margins. They contend that these clauses are therefore commercial-in-confidence clauses.

150In contrast, the Applicant submits that, factually, none of the types of redacted information comprise provisions of the contract that fall within the definition of commercial-in-confidence. It relies on the evidence of Professor Walker in support of that submission. He says that the redacted information does not relate to the contractor's financing arrangements, or its cost structure or profit margins.

151I agree with Professor Walker in this regard. In my view, the redacted information contains only elements of the relevant factors referred to sub-clauses (a) to (d) of the definition. I do not accept that release of that information of itself would disclose the Second and Third Respondents' financing arrangements, cost structure, profit margins or full base case financial model. At most it would disclose an element of those items. Without further information, a competitor would be unable to make more than an estimate of the relevant factors.

152The Second and Third Respondents contend that disclosure of clauses relating to resource price, resource allocation/description, the term of the Agreements and take-or-pay arrangements would place the Second and Third Respondents at a substantial disadvantage in relation to other contractors or potential contractors.

153They submitted that it is not necessary for them to establish that they will suffer prejudice as a matter of certainty. Rather it is sufficient that there is a reasonable risk of such prejudice occurring: Watt v Forests NSW.

154It is submitted that disclosure of information relating to resource price will have the effect of allowing the Second and Third Respondents' competitors to estimate their cost structure, giving their competitors an advantage in the market for timber sales. They contend that this prejudice is particularly acute in the case of the Pulplog Agreement. The Second Respondent's existing woodchip business is focused on a single export customer. As a result, the Second Respondent's woodchip business is particularly vulnerable to the disclosure of the information sought.

155It is also argued that disclosure of resource price would prejudice Boral's negotiating position with its customers because customers would be informed of the amount of a major input cost. In the case of the on-selling of unprocessed timber, customers would be informed of the 'cost price' of the product thereby significantly advantaging customers in price negotiations.

156The Second and Third Respondents also contend that they would suffer a significant commercial disadvantage if their competitors or customers became aware of the information in the Agreements regarding resource allocation/description. This is because their competitors would be in a position to predict their strategic decisions and their customers would be advantaged in price negotiations.

157In regard to the take-or-pay provisions, the Second and Third Respondents also contend that if the detail of these provisions were exposed there is a risk that competitors of the Second and Third Respondents could engage in tactical behaviour calculated to cause financial loss to the Second and Third Respondents. That is, the competitors could withhold orders for unprocessed 'on-sell' logs in the hope that the Second and Third Respondents would reduce their purchase of timber and consequently incur a penalty.

158I accept that there is a risk that the Second and Third Respondents could be placed at a commercial disadvantage in relation to other contractors or potential contractors if the redacted material is disclosed. However, in my view there is considerable doubt in regard to the extent of that risk. While I am not satisfied that the release would certainly result in a commercial disadvantage, or that if it did result in a commercial disadvantage that it would be a substantial disadvantage, I accept that there is a possibility that both might occur. In the circumstances I therefore accept that this is a consideration against disclosure.

Diminish the competitive commercial value of any information to any person

159In order to establish that this consideration applies it is necessary for the Respondents to establish that the information redacted from the Agreements has a competitive commercial value and that if so, it would be diminished if the information were disclosed. These are questions of fact.

160The Applicant submits that the use of the descriptor "competitive" appears to imply that the information would need to provide the person with a competitive edge. I agree with that submission.

161The redacted information in this case will have a 'commercial value' if it is valuable for the purposes of carrying on the business of the Second and Third Respondents: Cannon and Australian Quality Egg Farms Limited.

162In addition, there must be some uniqueness attaching to the information that justifies treating it as exclusive, secret or confidential: Media Research Group Pty Ltd v Department of Premier and Cabinet [2011] NSWADTAP 7 at [48].

163The Second and Third Respondents contend that the information in each of the Agreements as to resource price, resource allocation/description, take-or-pay arrangements and the term of the Agreement is unique and specific to their circumstances. It is also valuable to the operation of their business. This position is consistent with the decision in Watt v Forests NSW at [109] where I held that the current royalty rate for timber supplied by Forests NSW would be valuable commercial information.

164For the reasons set out above, the Second and Third Respondents say that they would be significantly prejudiced if customers and/or competitors came into possession of the information.

165The Second and Third Respondents also contend that the presence of confidentiality clauses suggests that the parties attach commercial value to that right. This in turn gives rise to the inference that the information contained in the contract, which is protected by the right of confidentiality, is itself of commercial value.

166From the perspective of the Second and Third Respondents, the commercial value of the information is tied to the fact that their competitors and customers are not aware of the information. They submit that there can be no doubt that public disclosure of the information would diminish (and probably destroy) the commercial value of the redacted information.

167The Applicant submits that information that has already been released into the public arena has lost any competitive commercial value that it might once have had. It says that this relates to the information released through the Boral Case and other information about volumes of timber referred to in prior media releases.

168The Second and Third Respondents have provided a schedule in relation to the extent of that released material from the Boral Case involves material in this matter. That schedule indicates a concession by the Respondents in relation to only minor parts of the Agreements. Nevertheless, it follows that the conceded content should be released.

169The term "Disclose" is defined in schedule 4 of the GIPA Act:

disclose information includes make information available and release or provide access to information.

170The term "Reveal" is defined in clause 1 of Schedule 4 of the GIPA Act:

reveal information means to disclose information that has not already been publicly disclosed (otherwise than by unlawful disclosure).

171There is some overlap between these definitions, in that the definition of "reveal" uses the word "disclose", which itself is not exhaustively defined.

172In R v Ritson; R v Stacey (2010) NSWDC 160 at [51] - [58] the Court adopted the meaning of "disclosure" for the purposes of the Privacy and Person Information Protection Act 1998 stated by Latham CJ of the High Court in Foster v Federal Commissioner of Taxation (1951) 82 CLR 606 at 614-615:

... it is not possible, according to the ordinary use of language, to 'disclose' to a person a fact of which he is, to the knowledge of the person making a statement as to the fact, already aware.

173In Richards v Commissioner, Department of Community Services (2011) NSWADT 98 [40] the Tribunal decided that the issue to be considered regarding whether release of information is likely to 'reveal' information, is whether the 'information' had been publicly disclosed.

174I agree with the view that if the information contained in a record has been disclosed, it cannot be "revealed" by giving access under the GIPA Act.

175With respect to the term of the Agreements, the Applicant submits that there is sufficient material already in the public arena that there would be no need to pay for that sort of information. . It submits that while the exact dates might not be known in all cases, estimates can easily be obtained regarding the likely timeframes for the contracts with the First Respondent. It submits that the suggestion that disclosure of the term would diminish its commercial value cannot be maintained.

176As to price, the Applicant relies on Professor Walker's observation that the cost of inputs may assist prospective customers to understand why suppliers seek to vary prices, but would not in itself adversely affect a supplier's negotiating position. Accordingly, the Applicant submits that the release of the information would not result in a diminution in its value.

177With respect to the volume and species, the Applicant submits that the information about Boral has effectively been placed on the public record through the Boral Case proceedings. To the extent that Mr Davidson's arguments purport to be reflective of the general sawmill company position, the Applicant relies on Professor Walker's to the effect that the volume and species of timber would generally be only one of several inputs into a timber processing business and therefore does not have the level of significance indicated. Further, Professor Walker also suggests that the volume and mix of species from different sites in NSW would generally be known within the industry such that this information would not be needed from other contractors in order to establish the areas that may produce commercial benefits. Accordingly, the Applicant submits that there is a mere concern about, or worry of a possibility of damage to any competitive commercial value rather than any real independent evidence.

178The Applicant submits that the evidence regarding the likelihood of diminution in the competitive commercial value of the take or pay/contract termination provisions is particularly speculative. It submits that there is no likelihood of the events suggested by Mr Davidson from occurring in fact. It submits that, in the absence of the running log of volumes, there would be little competitive value in a contractor having the take or pay provisions of another contractor. Accordingly, it is submitted that release of this information would not have the effect of diminishing their competitive commercial value.

179I accept that there is a degree of commercial value in some aspects of the redacted information. To the extent that the information in the Agreements is unique and specific to the Second and Third Respondents' circumstances, it is valuable to the operation of their business. I also accept that to the extent that the information has not been released there is some risk that the value would be diminished if the redacted material were disclosed. However, in my view there is also considerable doubt in regard to the extent of that risk. While I am not satisfied that the release would certainly result in a diminution of the value, I accept that there is a possibility that it might occur. In the circumstances I therefore accept that this is a consideration against disclosure.

Prejudice any person's legitimate business, commercial, professional or financial interests

180It is not in dispute that the redacted information concerns the Second and Third Respondents' business, commercial or financial interests.

181In order to satisfy the other element of this consideration, it is necessary for the Respondents to establish that those interests will suffer prejudice if the information redacted from the Agreements were disclosed. This is a question of fact.

182The Second and Third Respondents contend that in the circumstances of this case, there is no relevant distinction between their business, commercial or financial interests.

183They say that it is not necessary for them to establish that they will suffer prejudice as a matter of certainty. Rather it is sufficient that there is a reasonable risk of such prejudice occurring: Watt v Forests NSW at [120]-[125].

184They submit that the prejudice which disclosure is likely to cause is that referred to above.

185Disclosure would allow the customers and competitors of the Second and Third Respondents to obtain information beyond that which they would usually be aware of in ordinary competitive market conditions. For example, they contend that purchasers of unprocessed timber would essentially be able to find out the cost price paid for the product by the Second Respondent.

186They submit that disclosure would subject persons who contract with the First Respondent to prejudice that they would not suffer if the Agreements had been entered into with a private sector competitor of the First Respondent. They contend that the GIPA Act incorporates and promotes the principles of competitive neutrality whereby a state entity should not be disadvantaged in comparison with its private sector competitors. In considering the commercial prejudice created by disclosure, it is therefore legitimate for the Tribunal to consider whether disclosure would create an additional burden to the purchasers of timber from the First Respondent, which would not be faced by persons who contracted with private sector timber suppliers.

187The Second and Third Respondents further contend that the commercial prejudice they suffer is no less significant because they are part of a large corporate group.

188The word "prejudice" has been found in cases decided under Freedom of Information legislation to have its ordinary meaning: "to cause detriment or disadvantage": Re: Maher and the Attorney General's Department (No 2) (1986) 4 AAR 266 or to "impede or derogate from": Sobh v Victoria Police (1994) 1 VR 41. In SOBH v Police Force of Victoria [1994] 1 VR 41, at 55, Nathan J stated:

Prejudice is not a term of legal art. It means to impede or derogate from. Its content is governed by the matters which may be impeded or derogated from, which in this case is the administration of the law.

189I accept that this adequately summarises the decisions on the meaning of 'prejudice' under Freedom of Information legislation. In my view it is equally applicable in the context of the GIPA Act.

190The Applicant submits that release of the information could not reasonably be expected to prejudice the Second and Third Respondents' business, commercial or financial interests.

191Again, the Applicant submits that to the extent that information is already in the public arena, and is the sort of information placed in the public arena by the government, it is unlikely to be the sort of information that would prejudice legitimate business, commercial or financial interests. The Applicant relies on the evidence of Professor Walker in the following way:

a. Regarding price, that the cost of certain inputs may assist prospective customers to understand why suppliers may seek to vary prices, but would not in itself adversely affect a supplier's negotiating position. That is, it would not affect the sawmill companies when seeking to negotiate prices for their finished products.

b. Regarding the allocation of timber, Professor Walker is of the opinion that it is highly likely that competitors would already have a good idea of the volume and mix of species available at different sites in NSW. This is consistent with the fact that volumes have been released by government agencies and Ministers from time to time. Professor Walker also points out that tenders by the First Respondent currently disclose information about volumes.

192With respect to the take or pay provisions, the Applicant relies on the critique of Ms Flint regarding the impact of releasing such provisions. It is submitted that the adversarial nature of business suggested by Mr Davidson would not, in fact be likely, and in the absence of that and specific information about how much timber a sawmill company was taking at any one time, which would not be generally available information, the release of this information could not prejudice the affairs of those companies.

193With regard to the term of contracts, the Applicant notes that the prejudice suggested by Mr Davidson is very specific to the Pulpwood supply contract. Nevertheless, the general information about terms of contract, and the fact that they follow on from the signing of the Regional Forest Agreements would allow competitors to estimate when to time negotiations regarding new contracts (if that did happen to be part of their strategy), whether or not the exact date were known. In that regard, the Applicant submits that there is no more than a mere concern about or worry of prejudice to Boral's affairs. The Applicant submits that there would not be a reasonable likelihood of prejudice to the affairs of sawmill companies by release of the terms of agreement.

194The Applicant further submits that any prejudice to the First Respondent's affairs is not evident in the circumstances. In all the circumstances of this case, the Applicant submits that any prejudice to the First Respondent is speculative.

195I accept that the redacted material concerns the Second and Third Respondents' business, commercial or financial interests. I also accept that there is some risk that those interests might be prejudiced if the information has not been released already were disclosed. However, in my view there is also considerable doubt in regard to the extent of that risk. While I am not satisfied that the release would certainly result in prejudice to the Second and Third Respondents' business, commercial or financial interests, I accept that there is a possibility that it might occur. In the circumstances I therefore accept that this is a consideration against disclosure.

Balancing the public interest considerations

196I have found that there are public interest considerations both in favour of disclosure and against disclosure. The public interest considerations against disclosure are to be weighed against the public interest considerations in favour of disclosure.

197I consider that there is a strong public interest consideration favouring disclosure of the redacted information in order to increasing the financial accountability of the First Respondent. I agree with the Applicant that there is a clear public interest in an agency that is dealing with public assets being accountable for the manner in which it contracts to sell those assets. This interest is strengthened by the fact that the Agreements were entered under a system that did not involve an open tender.

198I also consider that there is a strong public interest consideration favouring disclosure of the redacted information in order to further public policy development around the management of the publicly owned hardwood forest estate in NSW.

199I also consider that there is a strong public interest consideration favouring disclosure of the redacted information in order to encourage community engagement with government about sustainability.

200I consider that there is a public interest consideration against disclosure of the redacted information because there is some risk that the Second and Third Respondents could be placed at a commercial disadvantage in relation to other contractors or potential contractors if the redacted material is disclosed.

201I consider that there is a public interest consideration against disclosure of the redacted information because there is some risk that the commercial value of some aspects of the redacted information could be diminished if the redacted material were disclosed.

202I consider that there is a public interest consideration against disclosure of the redacted information because there is some risk that the Second and Third Respondents' business, commercial or financial interests might be prejudiced if the information has not been released already were disclosed.

203As I have indicated above, it is my view that there is considerable doubt in regard to the extent of those risks.

204In my view, the public interest considerations in favour of disclosure outweigh those against disclosure.

205It follows, in my view, that the determination should be set aside insofar as it relates to the Agreements. In its place the decision should be made that the redacted information in the Agreements is to be released to the Applicant. That information should be released within 30 days of the publication of this decision.

The TEPCO document

206The Applicant submits that the whole of the TEPCO document ought to be released. It argues that while cost information may not be material that specifically comprises an estimate of the likely future timber yields, in the sense of the amounts of timber to be produced, it is nevertheless part of a "report on" that subject, inextricably linked to the overall yields and the materials therefore fall within the intent of the Applicant's request.

207In the absence of any other basis for refusal, the Applicant submits that it would be in accordance with the object of the GIPA Act to allow access to government information proactively and withholding it only when there is an overriding public interest against disclosure, for the entire TEPCO document to be released.

208In contrast, the First Respondent contends that the redacted information does not fall within the scope of the Applicant's request.

209The Oxford English dictionary provides several definitions of the word 'on'. For the purposes of these proceedings the most applicable definition is:

In a state of knowledge or awareness regarding something.

210Other related meanings:

.... having (the thing mentioned) as a topic; about

...

having (the thing mentioned) as a basis

...

having (the thing mentioned) as a target, aim, or focus

...

211I have considered both the Applicant's request and the entire TEPCO document. I agree with the First Respondent's position. In my view, the redacted material is not a report or documents 'on the estimation of the likely future timber yields'. It therefore falls outside the scope of the Applicant's request.

212Accordingly, that aspect of the determination should be affirmed.

213I note however, that there is no apparent basis on which I could conclude that the First Respondent could not nevertheless release the entire TEPCO document.

Orders

1. The decision under review is set aside insofar as it relates to the Agreements that are the subject of this application. In its place the decision is made that the redacted information in the Agreements is to be released to the Applicant within 30 days of the publication of this decision.

2. The decision under review is affirmed insofar as it relates to the TEPCO document.

 

 

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DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Decision last updated: 20 September 2012