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Socio-economic evaluation of forestry development opportunities for Wik people on Cape York Peninsula

Wik, Wik-Way and Kugu people (Wik people) in Aurukun Shire on Cape York Peninsula (CYP) are among the most socio-economically disadvantaged groups in Australia. While Wik people are presently reliant on government work for welfare programs for income, elders have a vision of economic independence and self-reliance. The large area of native Darwin stringybark (Eucalyptus tetrodonta) forest on traditional Wik land is a potential engine for economic development, which could provide meaningful employment, and contribute to other Wik socio-economic objectives, including facilitating population decentralisation and consolidation of cultural obligations to manage country through provision of on country employment, reducing welfare dependency and expenditure on timber purchases from outside CYP, and increasing income and skill levels in the community. A large proportion of the higher-quality timber resource on traditional Wik land is situated on bauxite mining leases and the current practice is to clear, windrow and burn this timber prior to commencement of mining. A Wik native forest timber industry could make use of this wasted high-quality timber resource. The objectives of this thesis were to: determine the property rights of Wik people to the timber resource on their traditional land; assess whether forestry operations in Darwin stringybark forests in the study area are likely to be financially viable; and generate a suite of optimal timber utilisation strategies for Wik people, subject to cultural, ecological and economic constraints. This required economic research in the areas of indigenous property rights, private and social costs and benefits of forestry, timber markets, and evaluation and application of economic analysis techniques for appraisal of forestry development opportunities. A social cost-benefit analysis of the privately optimal timber utilisation policies has also been performed to support the decision-making of government policy-makers. This research project was a demanding and complex undertaking, not least because the research was being performed in a unique and diverse indigenous cultural environment where there is a need to respect cultural and research ethics protocols, where formal participatory research methods are inappropriate and where gatekeepers are particularly zealous about protecting Wik people from outsiders. In addition, the property rights of Wik people to timber resources had never previously been analysed methodically, timber inventory and timber market information was lacking for CYP, and there are difficulties in transferring parameter estimates from the industrial hardwood timber industry of Australia to culturally appropriate indigenous operations on CYP. A critical research step was to develop a rapport with Wik people and gain an insight into their forestry objectives, through a number of visits to Aurukun Shire and informal discussions with elders on country. The property rights of Wik people to timber resources have been assessed by reviewing Federal and State Government legislation, court rulings, regional development policies and the Queensland Code of Practice for Native Forest Timber Production on State-owned lands. A timber inventory was conducted over 580,000 ha of Darwin stringybark forest, individual-tree volume and taper models were developed, and a geographical information system was used in estimation of harvestable timber volume and its spatial distribution. To facilitate information transfer to Wik people, expertise was gained in the use of forest visualisation software to pictorially display timber inventory data. A review of literature and discussions with experts identified technically feasible timber processing opportunities for CYP timbers. An informal telephone and in-person survey of 46 businesses, local councils and government agencies in north and south Queensland and the Northern Territory provided market information about CYP timbers. Concepts of a culturally appropriate working week and culturally appropriate rate of production were developed to assist the estimation of cost structures for a Wik timber industry, based on cost estimates for non-indigenous Australian hardwood forestry enterprises that had been obtained from discussion with forestry experts and grey literature. Generation and evaluation of a suite of privately optimal timber utilisation strategies for Wik people has been supported by the development of a mixed-integer goal programming (GP) model using the GAMS software package. The social analysis of the privately optimal strategies has been performed by adjusting private net present values (NPV) estimated by the GP model with shadow prices and transfer payments. In particular, a carbon model has been developed to estimate the value of carbon emitted by the Wik timber industry. The GP model analysis suggests that a Wik timber industry can generate a positive financial NPV if seed funding of at least $0.5 M is available. In general, privately optimal forestry strategies for Wik people generated by the GP model utilise relatively low-technology equipment, including portable sawmills and air-drying sheds, and produce undressed timber products such as structural timber. This contrasts strongly with Wik visions of an industry selling mostly unprocessed logs or woodchips and non-indigenous representatives of Wik people favouring the manufacture of high-value strip-flooring and furniture. The social analysis of privately optimal timber utilisation strategies reveals that social NPVs are much higher than financial NPVs, even when accounting for the costs of ecosystem services foregone by logging native forest. The establishment of a culturally appropriate Wik timber industry can be expected to generate net social benefits for Australia.