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Chapter Two - Earth Care Stream
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Permanent Forestry: Commercialising Earth Care Through Restoration Forestry

Tim Winton and Gary Cowan (Australia)

[Conference Day 2 @ 12:00 - Submitted Paper]

An alarming percentage of the planet's forests have been destroyed by human beings. This forest destruction has led to a great increase in material wealth in industrial society while drastically decreasing the ability of forest ecosystems to function in the biosphere.

It is time to start reversing this trend by bringing capital out of the existing economy and investing it in a sustainable economy based on permanent forests.

Since human beings are the only ones who can guard forests from their only major threat - other human beings - a 'permanent forestry' must be based on a symbiotic relationship between a human organisation and a forest. The human organisation, using appropriate legal and commercial strategies, secures initial investment resources, designs, establishes and maintains a fully functioning forest ecosystem on previously degraded land, and it ensures the forest's continued existence. The forest then provides yields which pay back the initial investment, support the continued existence of the human organisation, and form the basis of sustainable local livelihoods.

This paper gives an analysis of a proposed permanent forest, PermaForest Pty. Ltd., located in the humid sub-tropics on the east coast of Australia. A considerable portion of the paper is given over to examining the commercial, social and environmental context which makes a permanent forestry model relevant, in the belief that good design is only possible after a thorough understanding of the needs which necessitate that design. The specific techniques of reafforestation, sustainable forestry management, investment (including proposed legal and financial structures and projected returns) while outlined, are not given exhaustive treatment here. This analysis of permanent forestry is part of an on going project which will seek to demonstrate a model permanent forest and a method which any small group or community may use to create one.

Before giving some background on the context which defines permanent forestry, we will justify the creation of the term itself, and give a definition of exactly what we think it is. There are many forestry practices in use today, and as Michael Pilarski has pointed out in "Restoration Forestry", industrial forestry operations have recently adopted terms such as 'sustainable forestry' for less than sustainable practices. Pilarski's term, restoration forestry, allows for a distinction between an industrial forestry with the trappings of permanence and a new forestry which recognises all forest values equally, including their role as complete ecological systems providing critical biospheric functions. We believe that the concept of permanent forestry, although based on the principles of restoration forestry, is different enough to warrant a new name for a number of reasons: it is a specific method which is designed (1) to be highly commercial in nature (2) to create an explicit symbiotic relationship between a group of people and a restored forest, and (3) to be an easily replicable model of earth repair which is prolific by virtue of its ability to generate environmental health, material well being and enough surplus to spread these practices.

The term 'permanent forestry' as the subtitle of this paper suggests has at its core the intent to commercialise earth care. Commercial systems, regardless of how one considers them now, are capable of supporting enormous amounts of work. Great material surpluses have been built on a commerce of natural resource exploitation, typically because this was the easiest way to secure resources for trade and wealth building. It is our view that modified commercial systems, based on the ethic of earth care, have great power to restore naturally functioning ecosystems, replacing diminishing natural resources with resources from consciously designed and maintained ecologically restorative systems. Large scale, industrial forestry practices act to separate people from their resource base. This separation is perhaps the most costly of the diseconomies of large scale operations: it allows for the real costs of short term forest 'mining' to be passed on as environmental degradation, for which no one accepts direct responsibility. A human scale forestry based on an intimate relationship between a community dependent on a specific forest and a forest dependent on that community will ensure responsible management of the forest's resources. Permanent forestry is also a method of appropriate investment, establishment and management strategies which is designed to be easily replicated by any group of motivated people anywhere.

Based on the rationalisation stated above, we would like to offer an initial definition of permanent forestry as:

It is important to state that permanent forestry is not just an idea, it is a working model: this paper is part of the initial stages - that of idea formulation and communication of that idea - of an on going project by the authors. As an idea, permanent forestry has been stated in Permaculture a Designer's Manual by Mollison when he states: "Forests ... are another permanent agriculture." As a real possibility and a set of techniques and practises, the essence of permanent forestry has been well documented by Michael Pilarski in "Restoration Forestry." It is only as a synthesis of many ideas and proven practices into a working model which we hope will be a vigorous, replicable method of earth care, that we forward this paper.

Good design may be seen as a problem solving exercise, where the problem is the context and the solution is the design. The success of a design then depends on an understanding of the entire context. The context is composed of all the needs which must be filled by the design; in the case of permanent forestry the needs are for right livelihood, environmental restoration, ease of replication and financial, legal, and management systems which support these ends. Often permaculture systems are an excellent fit to parts of the context, for example a well designed market garden in response to the need for fresh local produce; but other parts of the context, such as the need for marketing of the produce or securing start up capital are not acknowledged in the design at all. In designing permanent forestry we have attempted to understand the entire context - social, ecological and commercial - to create a complete system. Permanent forestry is based on three main ideas: the need for commerciality, which is presented as the context of its origin; the need for a direct human/forest symbiosis, which is the practice of permanent forestry; and the need for ease of replication, which will constitute the conclusion of the paper.

Commerce is simply exchange or trade, and it is the key to successful systems. It can be positive, life affirming and incredibly productive, but to see past the inefficient and destructive commercial systems which dominate human society at present, it is necessary to look to nature. Ecologies may be seen as a complex web of energy exchanges dependent on a balance of cooperative and competitive interaction. If ecologies are in balance and there is a good interaction between cooperation which fosters efficiency and competition which keeps the system vigorous and dynamic, resources cycle freely in the system and there is a place of productivity, complexity and life. If they are out of balance or if parts of the cycle are omitted the system is destructive, polluted, and life destroying. The human system of commerce, the economy, is in fact an ecology for we are not outside nature; and it too can be restored to become a healthy part of the total ecology of the planet. Commerce must be seen to be just as 'natural' as gardening: to exclude commerce and the financial, legal, and managerial strategies which accompany it as 'unnatural' is to view only a limited context and to design only a limited solution.

Permaculture philosophy states that everything must be seen as a resource. As destructive as our current economic system is, its capacity to support enormous amounts of work must be seen as a resource: we believe that the driving forces behind commerce can be channelled through good design into earth repair. Such is the power of design. It is not a very large step from designing more productive and restorative agricultures, to designing more productive and restorative systems of commerce to accompany them. The existing commercial systems, despite all the dogma about competition in business, foster a great deal of cooperation; it is the ability of the different specialists to cooperate in trade which increases productivity in all systems - ecologies and economies. This is the extraordinary power of commerce. If one thinks about it carefully the various financial, legal and managerial structures are designed to foster honesty, collaboration, inventiveness, efficiency, thrift and optimism - cooperative behaviour - and competition. Although dishonesty and destructive business practices make the head lines, they are only a small fraction of all the honest, cooperative transactions which get taken for granted. Getting rid of business is not the answer. As Paul Hawken has made clear we must retrofit commerce if humanity is to survive into the future, "because no other institution in the modern world is powerful enough to foster the necessary changes.".

If a functional economy can be as life affirming as a functional ecology, why is our current economic system so dysfunctional? And, how do we fix it? The current economy is dysfunctional because the basic pattern is wrong; changing the pattern to an ethical one is the way to fix it. This idea is at the heart of permaculture. The pattern of existing commerce is a system of production and exchange which destroys living systems and invests surpluses in enlarging this destructive system. The ethical pattern is a system of production and exchange which restores living systems and invests surpluses in enlarging that system. Just as in nature, where one species is selected to inhabit an ecological niche over another because it is more efficient at using the resources available in that niche, ethical businesses must be more efficient than industrial businesses in order to inhabit their market niches. By operating ethically, by selecting the best elements of commerce and through good design, restorative businesses will be more efficient and productive than industrial businesses, and they will inhabit there market niches. They will have to - nothing else has been able to stop destructive commercial practices.

Diagram 1

It is realistic to think that ethical commerce can out compete industrial commerce. The premise here is that industrial commerce is not changing voluntarily and that it is in fact incapable of this change: if it were capable it would have changed by now. The planetary ecology has changed and information about this has changed society. People are becoming more informed as to the true 'costs' of existing production and exchange. Growing sections of society no longer wish to invest their resources in destructive industries and destructive commerce. The strategy at the core of permanent forestry is to design a restorative commercial venture which will attract resources from existing financial markets (refer diagram 1). This does two things: it removes resources from a destructive economy, and it puts them to work repairing the damage which was done in their initial creation. It is quite conceivable that money which was made by destroying a forest could be invested in permanent forestry to restore a forest. The commercialisation of earth care is a means of completing the cycle of resource flow in the economy back to the environment. This is the definition of ethical behaviour: the return of surplus resources to earth care and people care. Commerce and the production of surplus or profit then takes on a whole new meaning: profit is not ugly or destructive - it is life affirming, and the ability to generate it ethically becomes critically important.

The great irony of commercial earth repair is that, certainly in the case of permanent forestry, it is far more profitable to restore the environment than it ever was to destroy it. Sustainable systems which yield in perpetuity will alway be more profitable, in the long term, than systems which are destroyed after a limited number of harvests. Critically, they can also be more profitable in the short term. Natural resources are in short supply due to over harvesting, making products from reconstructed systems competitive in dollar terms. More and more people are demanding ethically produced products, and designed systems out yield natural systems in terms of human useable resources. For instance, the World Watch Institute has stated that, "establishing ... plantations on just 5 percent of the area of tropical rainforest already cleared could provide almost twice as much wood as is currently harvested from all tropical forests." Not only does good design make physical systems more productive, it can make business organisations more productive by using an ethical pattern in there construction. Operating in an ethically based business provides the desire and commitment to cooperate efficiently towards a common vision which is the hallmark of elite business organisations.

Diagram 2

The methods used to create permanent forests will be as varied as the trees themselves, but in the modern world of global commerce it is unlikely that any will survive without appropriate legal, financial and management structures to support the establishment and maintenance of the forest. To illustrate a method which we think will be successful, and which may be modified to suit other conditions, we will outline the creation of a proposed permanent forest by the authors, PermaForest Pty. Ltd., located in the humid sub-tropics on the east coast of Australia.

The first step is to gather a small group of people (in our case two) who are committed to establishing a permanent forest. The group must learn how local forest ecosystems function and how to establish them economically. Members of the group must be recognised as having competent business skills in both the reafforestation and forestry industries or they must enter into business in a related field which will allow them to gain the necessary skills. Not much is possible until this stage has been reached, but there are many people in most bioregions who if they joined together would have these prerequisites, either immediately or in a short time. It is possible in the future that education could be provided by those who have established permanent forests. At this stage the group needs to incorporate into some form of legal body for the purposes of conducting business. We think that the easiest and most flexible body is a private limited liability trader; we have called ours PermaForest Pty Ltd (refer diagram 2).

PermaForest Pty. Ltd. cost less than $1000 to set up and it allows us to do business under various trading arms, it can hold assets, employ us and provide limited liability. It is also flexible enough to take in investment funds from investors providing we do not solicit these funds from the public at large. As part of the legal structure it is also advantageous to have a non-trading, discretionary trust attached to the Pty. Ltd. This entity holds all debt-free assets, and does good work with surplus resources. The assets are given (tax free) to the trust by the Pty. Ltd. and then the trust leases these assets back to the Pty. Ltd. so it may use them in the course of business. This arrangement allows any profits to be used tax free, by the trust, to set up other permanent forests.

Restoration Forestry Conventional Forestry
  • Habitat
  • Healthy gene pool
  • Improved soil health
  • Improved ecosystem
  • Infinite dividends
  • Depleted soil health
  • Weak gene pool
  • Poor growth
  • Devastated ecosystem
  • One or two dividends

Diagram 3

At this stage it should be mentioned that it is not necessary for PermaForest to own the land on which it establishes the forest; it is only necessary that PermaForest be able to lease the land perpetually and to hold a forestry right on any trees it plants on the land. In the case of PermaForest, the land will be leased from a third party in perpetuity and then one hundred acres of local provenance, naturally occurring, mixed eucalyptus forest will be established. Investors will buy a 'forestry right', which is a standard well recognised legal arrangement, entitling them to the proceeds from any harvested timber. PermaForest will receive income for establishing the forest, for maintaining the forest, and through returns from all other forest yields such as, education, tourism, fungi, cut flowers, medicinal plants, seeds as well as many others. PermaForest may also accept investment in return for shares in the company. This would allow for the development of infrastructure to secure income from other forest yields such as education and tourism. Each permanent forest should be treated as capital, which only provides dividends or yields at a rate which does not diminish the capital. Just one yield of the forest, wood, is all that is necessary to remunerate investors at a competitive rate. But, unlike conventional reforestation investment schemes, PermaForest continues to provide dividends indefinitely into the future! (refer diagram 3).

One of the great drawbacks, as seen by investors who would like a short term return, is that PermaForest will not harvest all the timber as soon as it is mature. To do this is to have forest management dictated by economic concerns. Restoration forestry practices recognise that forests yield at their own rate, and that through careful observation greater yields can be produced over time, while maintaining a standing, ecologically functional forest, than if the whole forest is harvested at once. PermaForest has designed a financial system which suits investors who would like a short term return on their investment, while letting the forest dictate the rate of harvest. PermaForest will have the standing timber in the forest independently valued periodically as a percentage of its value at maturity (if a tree is worth $100 in 20 years then at year 5 it will be valued at 5/20ths or 1/4 that value, equalling $25). Should any investor want to receive a full return on their investment at any time, they are free to sell their forestry right on the open market at the assessed value. PermaForest will also undertake to arrange a guarantee from an ethical fund, allowing PermaForest to purchase the forestry right of any investor at any time after year ten should they need to liquidate. The ethical funds guarantor acts as a bank lending funds on the value of the forestry right until PermaForest on sells the right to another investor. This system makes it possible for investors to receive a return in the short term, without the need to 'liquidate' the forest in the process.

All of the strategies in this paper are dependent on permanent forestry being a good financial investment in the strict commercial sense. In order for it to work it has to pass the scrutiny of investors' accountants and funds managers, who will insist on competitive returns relative to conventional investments. Permanent forestry does offer competitive dollar returns over conventional time periods. This is not difficult to prove, but it is project specific, complicated and time consuming and for the sake of brevity, we will not deal with it here.

The financial and legal strategies outlined above are also dependent on the correct design, establishment and management of the forest. Forest design is a fascinating subject, but it too is largely site specific and it will not be dealt with here either. We believe that it is also a more well known subject than the one we have chosen as the focus of this paper - the creation of systems which support the continued existence of designed forests. Establishment is the most critical phase of the project: once eucalyptus trees are established in a natural forest configuration - typically after one year - they are a very low maintenance proposition until maturity. However if there is a point where a forest is likely to fail it will be in the establishment phase, and if there are limitations imposed on growth, they too are most likely to occur at the time of planting. The techniques for establishing eucalyptus plantations and forests, in the humid sub tropics on the east coast of Australia, are well known, as are the growth rates, quality and value of the timber. These techniques include proper site and species selection, weed control, deep ripping, proper micro-site cultivation and selection, correct timing of planting, quality tree stock and control of grazing animals. Having the skill and experience in dealing with these factors gives a very high percentage survival at establishment and healthy trees.

As the forest matures and begins to yield wood and other products there is an opportunity to value add locally through milling, craft and carpentry. Opportunities for education, tourism, marketing, bee keeping, seed collecting and almost limitless other livelihoods will arise as the forest matures and expands in size. The management of the permanent forest's resources must also be based on an ethic of earth care. As long as all the people in permanent forestry understand this need for ethical behaviour - the forest certainly understands this need - then management of resources will follow as a self evident pattern. Organisational decisions regarding the efficient use of resources will be centred on a principle of ethics, not on a principle of material wealth accumulation. Critical, practical day to day management decisions will still need to be made, but providing the managers are sufficiently skilled in permanent forestry, these decisions will be evident. They will be guided by a principle; and as Stephen Covey has outlined in his book, "The Seven Habits of Highly Effective People," already a management classic, "Principles are guidelines for human conduct that are proven to have enduring, permanent value. They're fundamental. They are essentially unarguable because they are self evident." This ethic does not exclude the right for one to do the best they can for themselves and their families. There is an incredible stress associated with not being able to secure the resources one needs to live, but once that level has been attained, there must be a method by which physical, information, and monetary surpluses can be cycled through the system. Surplus resources can be used to establish more forest each growing season, to foster the development of a community which strengthens the permanent forest and to create another independent permanent forest in another region.

Replication of any permanent forest may take place very early in its development as the critical resource needed is information. Provided a permanent forest has set up as a functional system (secured investment and established a healthy, productive forest) this information is a surplus which must be passed to another group. This, in a sense, must be its primary goal. Replication is the key - one permanent forest is not enough. Timber plantations have become a large, global industry as natural forests have declined, but they are largely an extension of damaging industrial forestry practices. Timber plantations are exactly that-timber - not a functional forest ecology, and as a consequence they are in all likelihood just one more rotation before that part of the earth they are grown on is incapable of supporting a forest at all. Permanent forestry offers an alternative which is competitive enough to displace the timber plantation industry market niche by market niche, to bring those degraded areas of the planet which are capable of supporting productive forests under ethical control. And it is a strategy which industrial systems cannot resist or deny, because it appeals to all the sensibilities which justify industrial practices.

Most of the emphasis of this paper has been focused on commerce, legal and financial strategies because it is our belief that in permaculture we need to become better at securing the resources which will allow us to do good work and to sustain ourselves. We have learned the hard way, as many others have too, that to have great ideas and good intentions, but no resources is a frustrating and ultimately unproductive situation. So, we have concentrated on strategies which allow a small number of committed people to pull initial resources from existing sources to establish productive, ecologically sound systems. It may be the only effective strategy to bring enough natural resources under ethical control. At the very least it is a proactive strategy for those of us who feel powerless to influence the corporate and government systems which do control planetary resources. Humanity has come to a critical point in its evolution; we must make a fundamental change in the way we behave, or we shall destroy ourselves. It is our sincere belief that the commercialisation of earth care through permanent forestry will prove to be a powerful method for making that change.

Tim Winton and Gary Cowan currently operate Wollumbin Reafforestation, based out of Tyalgum, NSW, Australia. Further information regarding PermaForest Pty. Ltd may be obtained by contacting them at: PO Box 1377 Murwillumbah, NSW 2484. Phone: (066) 793 271, fax (066) 793 033, email: garco@coolgold.com.au.


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