ARTHUR RIVER VALLEY, TASMANIA — SEVEN men are using cables to lift 150-year-old eucalyptus trees off slopes too steep for conventional logging. When the men are done, they will set the debris on fire in a spectacular blaze that will replicate the natural process of a forest fire - necessary to regenerate the forest.But in July the harvesters stayed home to avoid a confrontation with environmentalists protesting clear-cutting on the steep slopes. "They are clear-cutting to provide copying paper," complains Geoff Law of the Australian Conservation Foundation, a protest organizer. Such confrontations are relatively common in Tasmania, an Australian island state where the controversy over land use has reached forest-fire proportions. Environmentalists are battling to prevent logging of old-growth forests. The five Green independent members of Parliament are threatening to force an election if the minority Labor government presents an agreement guaranteeing timber companies future supplies from state lands. At the same time, the industry is losing its patience. The timber companies are threatening to move future investments offshore, where they claim the environmental laws are more lax. Peter Wade, managing director of North Broken Hill Peko, which owns Associated Pulp and Paper Mills (APPM), Tasmania's largest timber company, says, "While we face procrastination and delay upon delay over the issue of resource security in Australia, the Indonesians are offering access to land and financial support to companies prepared to develop plantations and establish pulp mills. Not just plantations of native trees but Australian trees - eucalypts." It wasn't supposed to be this way. The Tasmanians went through a complex process of hearings and councils to develop policy on land use. "It is a world model," says David Llewellyn, the Tasmanian minister for forests. A group of union leaders, farmers, members of the forest industry, and representatives of the combined environmental groups formed the Forests and Forest Industry Council of Tasmania (FFIC). The working group set out to analyze key issues and direct policy. At the end of the process, the environmentalists withdrew from the FFIC. "The environmentalists said they did not want logging in any native forests areas," Mr. Llewellyn says. According to the environmentalists, a key stumbling block was the issue of logging in national estate areas, which have "aesthetic, scientific or ... other special value." The process has now been delayed. The FFIC hoped to introduce its final document at the beginning of July. Now, it will be delayed until at least the end of the year. Part of the process involves the federal government. In March, Prime Minister Bob Hawke promised resource-security legislation which would guarantee an agreed volume of timber from an identified area. The agreement would apply to any investment over $100 million. One reason for the legislation was to assure North Broken Hill Peko that it would have access to trees so it would spend A$1 billion (US$1.2 billion) on a new mill to make pulp, the raw material for paper. The prime minister hopes to have the final legislation ready by early November, when the state premiers meet with him. However, Robert Bain, executive director of the National Association of Forest Industries Ltd., says there is still considerable debate on at least two issues. The industry does not want to repeat environmental studies it has already carried out and it wants the resource agreement to cover smaller projects. Environmental groups say the debate should be about how much, if any, of the native forest on public land should be logged. More intense management of the forest requires more manpower and money. The industry says it needs a guarantee that it will have access to the forests. "Without a guarantee, the shareholders are reluctant to invest," says Andrew Warner, forest management superintendent for APPM in Burnie, on Tasmania's northern coast. Fourteen percent of public lands, or roughly 1.43 million acres, would be considered "deferred forest," which would be allocated to either wood production or conservation at a later time. The conservationists claim most of this could go into wood production. However, the industry maintains that because a lot of the deferred areas are already "recommended areas for protection," they will go into a logging-free reserve. And, 45 percent of public land would be placed in state reserves, completely off-limits to logging. (Some 14 percent of the land does not have the ability to be logged.) The conservationists, however, object to any resource-guarantee legislation. They would like to see Australia's production shift to plantation-grown trees. However, it takes 60 years for a tree to become a good saw log. None of the plantations are that old. "The older the tree gets the more stable the wood," says Peter Crossing, a management forester. In some forests, saw logs represent about 10 percent of the wood volume, while 90 percent are used to make pulp. The forest companies are quietly building up their plantation forests. APPM is now planting 3 million seedlings per year. On the one-hour drive from Burnie to the Arthur River Valley, there is mile after mile of regenerated forest. Some of the steep slopes that were clear-cut eight to 10 years ago are now covered with eucalyptuses. "When the film crews come out here they rarely mention the regenerated forest," says Mr. Crossing. They focus on the burnt-out ridges where the footage is more dramatic, he says. The ultimate goal is to cut down trees no faster than they grow, according to Crossing. In the case of saw logs, this means cutting trees every 60 to 80 years. In the case of plantations, it means cutting trees every 20 to 25 years. However, the tree farms will be planted at this rate only if APPM can build its proposed pulp mill to handle the new trees. In fact, there will be enough trees to support three new pulp mills, Llewellyn says. "But, right now we're having trouble getting one off the ground," he adds.