RURAL jobs could be threatened by Australia's biggest mill losing environmental certification, according to the former Victorian Treasurer.

John Lenders has told Victorian Parliament that Japanese-owned Australian Paper, near Traralgon, is likely to lose "international environmental accreditation'' unless it moves away from native forest woodchip harvested by Victorian Government native forest logging agency VicForests.

AP employs more than 1000 locals and also makes products from plantation chips and recycled paper.

Mr Lenders said the potential loss of AP's Forest Stewardship Certification would be "one of the biggest threats to manufacturing in this particular area''.

Furthermore office supplies giant Officeworks has told The Weekly Times it intends to seek alternatives to Reflex copy paper, made from native forest woodchip by AP.

Some 600,000 cubic metres of native forest woodchips are currently supplied to AP by VicForests annually.

The Weekly Times understands another 900,000 cubic metres of the 1.8 million harvested annually is exported to Japan.