The state government announced a five-year extension of North Coast Wood Supply Agreements last week.

Minister Dugald Saunders said all agreements due to end next year had been renewed in order to provide "certainty" for the industry to "invest in their businesses".

The agreements cover the area spanning from the Mid North Coast to the Queensland border, and include state forests in Dorrigo, Wauchope, Kempsey, Grafton, Coffs Harbour, Taree, Wingham, Gloucester, Glenn Innes and Casino.

Mr Saunders confirmed the main terms were unchanged, meaning Forestry Corporation would continue to supply existing quantities and species to timber companies in exchange for payment.

"Things are done in a very friendly way as far as the environment is concerned, there's no wholesale logging going on in state forests, there's selective harvesting of suitable trees in suitable areas," he said.

"Timber and forestry are the ultimate renewable. When you selectively harvest a tree, another tree grows near where that tree was."

"I don't see that there would be a problem after 2028 or into the future as we continue to respectfully manage this most renewable of all resources."

A 'reckless' decision:

Despite assurances, some critics argue the agreements are economically and environmentally untenable and leave taxpayers exposed to financial risk.

According to original contracts, State Forests are liable for “Any failure to make timber available or to supply or deliver timber” unless a force majeure or ‘Act of god’ event occurs, such as a natural disaster.

If the state failed to deliver the agreed allocations, the contracting company would be able to claim back expenses incurred as a direct result.

Chief executive of the Nature Conservation Council of New South Wales Chris Gambian (Above) said this meant the NSW Government was exposed to “Enormous financial liability” given the depletion of forests during the Black Summer Bushfires.

"If there's still a chance, we need to cancel these agreements because in the long run NSW simply cannot afford to continue to log its state forests in this way," Mr Gambian said.

Mr Saunders insisted there was no risk to taxpayers, because the timber promised could be supplied.

“The only way there would not be enough timber to supply is if there was a fire that literally destroyed massive areas of state forest," he said.

"There’s no other reason timber would not be able to be supplied and that’s already been assessed by Forestry Corporation.”

Dailan Pugh from the North East Forest Alliance said those assessments were not adequate and did not consider the Natural Resources Commission's findings that native forests were at risk of "serious and irreversible harm … from the cumulative impacts of fire and harvesting".

"We thought they would at least reduce the amount of timber volumes, because they know the trees aren't there and yet they've just rolled the contracts over to continue logging at pre-fire levels," Mr Pugh said.

"We're in a dire situation that we need to start addressing right now, not wait another five years."

"We're putting millions of dollars into maintaining this industry but we can make more money out of forests through carbon sequestration and storage, tourism and increasing water yields as older forests get more water into dams and urban water supplies."

However,  Mr Saunders said selective harvesting had a greater beneficial impact.

"When you thin trees out it creates more ability for the forest to regenerate. The younger trees sequester far more carbon than the older trees do," he said.

In a statement, a spokesperson from Forestry Corporation of NSW said "wood supply agreements are set at a responsible level that is sustainable over the long term". 

"Timber supply is forecast over a 100-year period and reviewed regularly to ensure we continue growing and re-growing timber in an environmentally responsible manner," they said. 

Story By | Alexandra Jones & Madeleine Cross