Loaded Gunns
Friday, March 4th, 2011
Gunns’ must really be loaded to commit $2.2 billion on a pulp mill in Tasmania’s Tamar Valley.
Not many companies have that sort of money and certainly not in cash-strapped Tasy. But with access to so much financial capital, why waste it on 20th Century logging? Tasmania has so much economic potential using 21st Century thinking and think what a smart $2.2 billion could otherwise benefit Tasmania’s future, without 19th Century exploitation?
The money to build such a pulp mill has to come from somewhere and it appears Gunns’ may have found a financial joint venture backer in Finnish pulp giant, UPM-Kymmene Oyj.
[Source: ‘Finnish firm UPM eyes stake in Gunns pulp mill‘, by journalist Matthew Denholm, The Australian, 20110209].Gunns tries to claim that it’s motive is all about forestry jobs for Tasmanians. But once UPM gets a foothold in Tasmania, check UPM’s record with jobs…
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“In September 2008 UPM announced another cost reduction program that includes layoffs thousands of employees, and its Kajaani paper mill and Tervasaari pulp mill will be closed altogether. These will be the largest layoffs ever in Finland.In March 2006 UPM announced a cost reduction program that includes layoffs approximately 3,600 employees, nearly 3,000 of those in Finland, and its Voikkaa paper mill in Kuusankoski was closed altogether. This was the largest single layoff ever in Finland. This is attributed[by whom?] to the worldwide overproduction of paper.
UPM announced the permanent closure of a large mill complex in Miramichi, New Brunswick on December 17 2007, citing economic pressures in the North American forest industry.” [Source: http://en.wikipedia.org/wiki/UPM_%28company%29 ]
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Greg L’Estrange, Gunns’ replacement CEO for John Gay since July 2009, seems to be tasked with getting the pulp mill up and running no matter what the cost, no matter what spin doctoring efforts are employed to secure government approval. Somehow his deal making has succeeded in government fast-tracking of the assessment process.
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On 25th November 2010, Gunns released a statement to the Australian Stock Exchange stating that the pulp mill project remained on track. This is Gunn’s ‘do-or-die‘ single corporate strategy. It has no plan B. . L’Estrange’s initial ploy was to remove the motive driving Gunns’ key enemies. Gunns’ declared a moratorium on native forest logging across Tasmania. It was clearly a bid to secure Forestry Standard Certification, to comply with new Japanese buyer benchmarks; rather than any noble recognition of native forest conservation values.
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Then L’Estrange concocted Gunn’s Forest Statement of Principles and armed with this did a secret forest peace deal late last year with local greenie groups. L’Estrange sold it as a new greener Gunns’ “working with environment groups to create a future without conflict.” Consistent with strategy, the ‘Tassie Talks’ deal it was all about quelling Tasmanian public dissent and he quickly branded the deal pivotal to the Tasmanian forest industry and ‘historic’. Be seen to be green! Whatever it takes! Except environmental groups deny they have given the green light to Gunns Tamar valley pulp mill by signing the deal. 
There’s that greenwashing term again – ‘sustainable‘. It’s become an abused and hollow marketing euphemism really about corporate ‘financial viability‘ in the exploitation of natural resources. Such corporations shy from using the term ‘triple bottom line’ any more, because it is harder to promote when one is only focused on the bottom line. And there’s fresh water demand of the mill and the marine effluent it will spew, which L’Estrange has tried to allay concerns claiming new pulp bleaching technology promises to reduced toxic outflow of chlorine dioxide by some 40%. Despite the promise of ‘stricter controls’ an expected 64,000 tonnes of effluent will still be released by the pulp mill into Bass Strait daily. And it won’t harm marine life?
‘At its annual general meeting in November, Gunns told shareholders that modelling work showed the mill would have no impact on marine ecosystems, but Environment Tasmania said it was still concerned about the effect of up to 51 gigalitres a year of industrial effluent being discharged into the sea.’
[Source: ‘Promise of greener hue to pulp mill at final hour‘, 20110304].
Securing Gunns’ shareholder backing, L’Etrange at Gunns’ recent annual general meeting, drew a line in the sand claiming the moratorium on native forest logging (the greenie forest deal) was now conditional on the Tamar Valley pulp mill going ahead. If the greenies want to keep Tasmania’s native forests, they must agree on the pulp mill proceeding. The ‘Tassie Talks’ deal was always a loaded gunn deal.
“We believe that the development of the Bell Bay Pulp Mill will be the centrepiece of this strategy for the modern industry in Tasmania.”
[Source: ‘Pulp mill key, says Gunns‘, by journalist Sue Neales, 20101125].
Of course it’s all rather reminiscent of Gunn’s heavy-handed power playing under John Gay. The Gunns’ Board hasing changed; only its front man. This latest greenwashing approach is one of image rebranding and loaded deals, all the while Gunns’ pulp mill strategy remains on track. L’Estrange plays good cop while the pulp mill unswervingly looms as Tasmania’s big bad cop.
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Tasmania’s natural heritage is Tasmania’s future… whether dead in a museum like its Thylacene or alive and precious…is ultimately an existence decision for local Tasmanians.
Tasmania’s unique Celery Top Pine
[Source: Veronica Tyquin, WARRA (long-term ecological research)
http://www.warra.com/warra/research_projects/research_project_WRA108.html]
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Update News Friday 20110311: ‘Contentious pulp mill wins federal approval’
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Yesterday L’Estrange must have earned his executive performance bonus following Labor’s federal Environment Minister, Tony Burke, announcing government approval for the pulp mill to proceed. L’Estrange’s comment was that the decision brought certainty for proposed investors in the pulp mill project, now estimated to cost $2.3 billion, pre-cost blowout, pre-government subsidies. (‘Contentious pulp mill wins federal approval’, SMH, 20110311)
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Upon gaining the final three environmental permits Gunns needs for the mill, Gunns shares rose 5.88% to close at $0.63. (Finnewsnetwork.com.au, 20110311). Certainly a ‘sustainable’ result for L’Estrange.
Gunn’s pulp mill will perpetuate 20th Century logging across Tasmania. It will continue to make Tasmanian rural communities dependent on one industry and vulnerable to the whims of one employer – Gunns.
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Gunns’ spin is that the mill will only use timber from plantations, capitalising on the fact that those plantations were planted as a result of clear felling destruction of Tasmania’s rare native forests. According to The Wilderness Society, Gunns’ wood supply deal with Forestry Tasmania commits it to supplying a million tonnes a year of native forest for the next twenty years. (‘Gunns’ proposed pulp mill, The Wilderness Society, 20110310)
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So Gunns’ ‘plantation only’ claim is false and misleading.
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The mill will spew odorous fumes downwind through the Tamar Valley forcing thousands of residents of this rural region to breathe polluted and toxic air and contaminate local horticultural producers such as vineyards. The mill is forecast to consume fresh water equivalent of the combined use of all water users across Northern Tasmania, according to The Wilderness Society there. (‘Gunns’ pulp mill impacts – Environment, heritage, economy and community threatened, The Wilderness Society, 20100530).
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Gunns’ mill is still set to spill 64,000 litres of toxic chlorine, dioxins and furans a day from its chemical pulping process into the Tamar River and downstream into Bass Strait. That it will obviously pollute the surrounding waters, kill marine wildlife, poison and permanently contaminate marine habitat, and destroy the local fishing industry; Burke has still managed to find a way to approve the bloody mill!
“I’m only doing what my requirements are under the Act. We’ve got some very specific requirements on environmental approvals. I’m delivering on that.” – Tony Burke. (‘Milne: Pulp mill approval a corrupt process’, ABC TV Lateline, 20110310)
Burke in the same week, managed to push through legislation to allow Sydney’s Barrangaroo development avoid the cost of a heavy metals clean up, while at the same time stuck to the letter of the law with his approval of Gunns’ pulp mill. Can there be no clearer display of pro-development bias? Laws for some!
But then Burke’s bias is predicable, given he came to the portfolio from the other side of the fence, as Minister for Agriculture, Forestry and Fisheries; and his quick rise from the NSW right faction. (‘Gunns deal a shedding of responsibility, by Andrew Darby, The Age, 20110311)
According to federal Greens Senator Christine Milne responding on last night’s Lateline programme:
“There has never been a thorough and rigorous assessment (of the pulp mill) because Paul Lennon, former Premier of Tasmania together with John Gay, managed to pull it out of the proper assessment process (at State level), fast-track it through the Tasmanian Parliament…so what we have got here is a project that has been through a corrupt assessment process.”
Milne is factually correct. There was no rigorous assessment of the Bell Bay site. The Tasmanian assessment process was corrupt, the community was denied a say, the democratic process was abused. The mill has no social license to operate. It is illegitimate and Gunns’ development actions are one of a corporate and political bully imposing its selfish shortsighted greed on Tasmania and Tasmanians.
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Gunn’s Bell Bay pulp mill will not only degrade the region, but dominate the northern heart of Tasmania. On Google Earth it will show up like a festering sore poisoning a diminishing green forested Tasmania.
L’Estrange borrowed Labor’s classic dirty tactic of divide and conquer to stymie opposition and protests from Tasmanian conservation groups. His deal has seeded a split between conservationists and the Greens over the pulp mill. He has lured local conservationists to compromise with the offer to surrender Gunns’ contract rights to 220,000 cubic metres of native forest saw logs a year and to protect an extra 600,000ha of forests. Even Labor’s appointed negotiator Bill Kelty has been brought in to clench a forest peace deal with select conservationists. The Wilderness Society in Tasmania, together with Environment Tasmania and the Australian Conservation Foundation seem to be coming on board backing down on their opposition to the pulp mill. They are now at odds with the Tasmanian Greens who are a little more savvy about the hollow politics and promises.
“It looks as though somebody wants to save some high conservation value forests, but is sacrificing the Tamar Valley to get them”, says Tamar Valley resident and mill opponent Peter Cundall. (Greens v Greens on Gunns pulp mill, The Australian, 20110304)
Site of proposed Gunns’ pulp mill, Bell Bay, Tamar Valley
Photo: http://www.abc.net.au/news/stories/2011/03/10/3160890.htm
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The editor agrees with the following selected comments posted in The Australian to the article ‘Greens v Greens on Gunns pulp mill, 20110304:
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By James McMaugh’:
“The mill will never be built. The people are opposed and are right not to trust Gunns. There will be a huge outcry and mass protests blockading construction. I will travel to Tasmania and so will many others to make sure of this. The proposal is dead.
It’s about time politicians listened to the people and business should too. You cannot run roughshod over the will of the people and they don’t want this mill. Overwhelmingly they don’t. It will cost more jobs than it creates and destroy the river. No, no and no to this mill.”
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By ‘Chris B of Australia’:
“The only acceptable outcome is NO Pulp Mill at all in Tasmania. Gunns has no credibility and has proven time and again how they cannot be trusted by the community. I personally believe there is no place for a company like Gunns in Tasmania and they should make transition plans for their workforce to move to a sustainable industry.
The environmental groups willing to compromise the values and allow Gunns to sacrifice the Tamar Valley should be ashamed of themselves. Make no mistake, the pulp mill will completely and utterly degrade the environment of the Tamar Valley and Bass Strait, no matter which form it takes.”
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By ‘SW’:
“ Senator Milne speaks for me. Thank you, Christine, for maintaining the rage. It certainly hasn’t died down here in the Tamar Valley.”
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By ‘Robert of Adelaide’:
“ Same old argument of lack of development, growth, jobs, high crime etc. The same attitude is taken in the case of the Brazilian Rainforest as well. Where does it stop and what will we actually be left with in 100 years? Oh, that’s right, we won’t be here, so who cares… If people want employment, go to where the jobs are in the rest of the country and the world like everyone else is doing! And while you are working in places like Sydney, London, Beijing, Tokyo and Bangkok… reflect on how wonderful development has been for these these concrete infested cities! Then maybe we can appreciate what we have here.”
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‘Green movement outguns Gunns’ [20110311]
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…’Gunns had gone so far as to sue an elected politician, the Greens leader, Bob Brown.
“When I got the writ,” says Brown, “I knew better than to call the lawyers. The first thing I did was to call a press conference. Within 24 hours we had a candlelight vigil for democracy, in Hobart. It was like the Prague Spring.”
Ultimately, Gunns underestimated its opposition and its decision to sue backfired spectacularly.
Far from being cowed by the suit, Marr and his colleagues ramped up an environmental campaign the likes of which had not been seen in this country – targeting the Gunns bankers and shareholders, Japanese customers and European partners – which ultimately brought the company to its knees, decimating its market value and ousting its divisive chairman, Gay.
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..It was left to the new chief executive, Greg L’Estrange, to concede defeat last September, and promise that Gunns would get out of native forest logging altogether. Despite this week’s federal approval of the mill, and the talks over a Tassie forests peace deal, Gunns is by no means out of the woods. A long, painful process of rebuilding trust with former enemies is only beginning.
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Gunns was once a corporate powerhouse. A series of acquisitions in 2000-01 turned it into Australia’s largest export woodchipper, and No. 1 target for the environment movement.
..’A bulked-up Gunns put the pedal to the metal. This was logging on an industrial scale. Between 2000 and 2006, working with Forestry Tasmania, Gunns clear-felled 110,966 hectares of native forest, 90 per cent of the timber being used for woodchipping and 58% of the land making way for timber plantations.
“Gunns got unlimited amounts of other people’s money and went on a clearing binge,” says Marr.
The forest was clear-felled and waste burnt off using napalm-like incendiaries. Gunns used 1080 poison bait to protect seedlings, inflicting gruesome death on untold native animals and risking the health of forest workers.
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Whether from strength or desperation, Gunns launched its ill-fated suit. The company’s shares hit their all-time peak a month later, at $4.38, and began to slide downwards. The story of the Gunns 20 suit, which dragged on until last year and was ultimately settled at a cost to the company of $2.8 million – including $1.3 million paid to the Wilderness Society – has been well told. Perhaps less well understood is the international backlash the case triggered.
The decision in 2008 by the new ANZ chief, Mike Smith, to refuse finance for the pulp mill, quickly followed by the other big banks, was unprecedented in this country and followed a strong online petition campaign by the Wilderness Society and the online activist group GetUp!After a decade’s lobbying, Japanese paper-makers decided in February last year not to accept Gunns wood unless it was Forest Stewardship Council- controlled.
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Shares in Gunns are off their lows but the company’s future remains uncertain. Bob Brown says if Gunns ”doesn’t survive – and I hope it does – it will be nobody’s fault except the board’s”.
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[Source: ‘Green movement outguns Gunns, by Paddy Manning, Sydney Morning Herald, News Review, p 6, http://www.watoday.com.au/national/green-movement-outguns-gunns-20110311-1br8m.html].
References
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[1] ‘Contentious pulp mill wins federal approval’, by Andrew Darby and Dylan Welch, 20110311, Sydney Morning Herald, http://www.smh.com.au/environment/contentious-pulp-mill-wins-federal-approval-20110310-1bpt4.html]
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[2] ‘Gunns’ proposed pulp mill’, The Wilderness Society, 20110310, http://www.wilderness.org.au/campaigns/gunns-pulp-mill
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[3] Greens v Greens on Gunns pulp mill, by Matthew Denholm and Matthew Franklin, The Australian, 20110304, http://www.theaustralian.com.au/national-affairs/greens-v-greens-on-gunns-pulp-mill/story-fn59niix-1226015622300
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[4] http://www.finnewsnetwork.com.au/archives/finance_news_network17216.html
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[5] Photo: http://www.abc.net.au/news/stories/2011/03/10/3160890.htm
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[6] http://www.watoday.com.au/national/green-movement-outguns-gunns-20110311-1br8m.html
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