Environmentalists are crying out for federal government intervention and regulation on environmental policies nationwide following the government’s payout deal struck with Tasmania’s lumber industry over the weekend.

On Sunday Prime Minister Julia Gillard announced that the government would inject $274 million into disassembling Tasmania’s forestry industry — kicking loggers out of at least 430,000 hectares of Tasmanian old-growth forests. Meanwhile, more than 100 protesters gathered at Victoria’s logging coupe in Sylvia Creek on the same day.

State-owned company VicForests recently rejected the Department of Sustainability and Environment’s reportage that old-growth forests exist in the logging area of Sylvia Creek.

“It is now up to the federal government to gain control across areas where extinction is high, conduct a review and then consider a new approach,” Victorian environmental activist Sarah Rees told Crikey.

The Commonwealth delegated power to state governments to reconcile clashes between conservation and commercial interests in the 1998 Regional Forestry Agreements (RFAs) Bill. The Bill is renewed every 20 years in order to ensure industry security but also means that conservation policies quickly become dated.

“The RFAs provided a way for the Commonwealth to extract itself from a difficult policy area,” Griffith University’s Head of Politics, Robyn Hollander, wrote in a 2004 essay. “One problem lies in the conceptualisation of the regions. While it may have been politically astute, it was environmentally flawed because it was determined by state boundaries rather than ecological criteria.”

Questions have started to emerge around the government’s rationale in prioritising intervention in Tasmanian forests over old-growth trees on the mainland. The Toolangi community near Sylvia Creek and its local government have banded together to protect the patch of green or “hole in the donut” that miraculously survived the 2009 Black Saturday fires.

Environment Minister Tony Burke told Crikey the Tasmanian agreement “was a process led by the community. It was not an intervention by governments”.

NSW environmentalists campaigning to protect the south-eastern forests near Eden were disheartened by the prospect of an intervention by the current federal government after experiencing 14 years of Labor government in state power.

“We always assume that someone else would do better handling environmental issues than the state government. But we’ve had a Labor government running the wood chipping industry for a number of years because of the union influence,” said Harriet Swift from the South East Forests Conservation Council. “Frankly, it’s hard to see a Labor government doing a lot differently.”

For more than three decades, environmentalists have campaigned against the Harris Daishowa woodchip mill near Eden, with more than 1000 people arrested for protesting against the mill’s licence renewal as early as 1989.

“In theory, the RFAs were a great idea and great ways for the government to engage in the community,” environmental lawyer Andrew McIntosh told Crikey. “[But] the Commonwealth first needs to listen to the communities and then secondly make sure it enforces conditions of the RFAs.”

McIntosh says the government’s payout scheme could be attributed to the ill-fated logging industry’s market challenges and international competition, along with the political risks of losing seats.

Conservationists have also queried state governments’ handling of information concerning forests in their jurisdiction due to conflicting interests. In Western Australia, an audit conducted by the Environmental Protection Authority last year expressed concerns about logging:

“The EPA has serious doubts that continued logging in the low rainfall zone and adjoining medium rainfall zone in the eastern portion of the forest would be capable of meeting Ecologically Sustainable Forest Management objectives.”

Perhaps the Tasmanian outcome will repeat itself at a national scale without the green lobby. Harvesting has already plummeted from 151,000 hectares in 2001 to 74,000 hectares last year, according to a report that will be released later this year.

For years, the national forestry union has been pushing for the federal government to create schemes to ensure security in the sector. In 2008 it urged the federal government to draw up a comprehensive national plan for the soft timber industry following the closure of mills in Dartmoor, Victoria, and Scottsdale, Tasmania.

“We have been calling for federal government involvement in discussions to put the industry in the country in a more sustainable fitting,” said a Coal, Forestry, Mining and Energy Union spokesperson.

Australia’s carbon tax introduction might also change the future of the logging industry’s course as Australia’s forests contain more carbon than any other forest in the world, according to the Green Carbon Report.

“The Commonwealth might actually get sucked into this overnight over the coming years because there’s a lot of carbon credits on the line. Everybody knows it,” McIntosh said.