Community Service Obligation

What is a CSO?

The South Australian Government carries out activities for the benefit of its citizens in areas such as community safety and well being, protection of natural and cultural heritage and research for the improved efficiency and economic prosperity of industry. Government owned enterprises can be directed to undertake various activities for the greater good of our State, which are generally termed Community Service Obligations.

A Community Service Obligation (CSO) is a tool which Government’s can use to achieve certain policy objectives. Under the State Government’s Policy Guidelines for Public Non Financial Corporations;

“A Community Service Obligation arises when a government specifically requires a public enterprise to carry out activities relating to outputs or inputs which it would not elect to do on a commercial basis, and which the government does not require other businesses in the public or private sectors to generally undertake or which it would only do commercially at higher prices.” (GOSA 2004).

Rather than a moral obligation an agency or Government may have to service the public, a CSO is a legislative obligation to provide a service over and above that which the organisation would otherwise provide.

ForestrySA’s CSOs

ForestrySA is a public corporation, established under the South Australian Forestry Corporation Act 2000 (the Act) and is responsible to the Minister for Forests. The primary focus of ForestrySA is to manage plantation forests for the benefit of the people and the economy of the State.
The Charter of the South Australian Forestry Corporation (reviewed annually by the Treasurer and the Minister for Forests) sets out the strategic objectives, priorities and requirements of the Corporation. It mandates both the commercial and non-commercial operations that ForestrySA are required to undertake.

Non-commercial operations (the CSOs) identified in the Charter include: 

There is a cost incurred in achieving the non-commercial objectives, and in so doing the government enterprise may achieve a lower rate of return. However, in this instance a CSO payment for ForestrySA has been calculated to subsidise the costs involved in carrying out the required services.

PIRSA Forestry funds and manages the CSO activities that ForestrySA undertake.  ForestrySA reports regularly on achievement of the CSOs, and their annual reporting is available on their website.

GOSA (2004) Public Non Financial Corporations Ownership Framework Policy Guidelines, Government of South Australia.

SAFC (2010) Charter of the South Australian Forestry Corporation, South Australian Forestry Corporation.