Tassie Devil

Peter Henning

Well, the Chandler Corporation had only just put out a flyer saying it “is undertaking due diligence in regards to our proposed investment in Gunns Limited… , undertaking broad-based consultation”, when it decides to pull the plug.

The mainstream media has already concluded that Gunns’ truckloads of debt must have been the deciding factor, but that’s because they have no wit to “undertake broad-based consultation” themselves as a way to see what is actually happening in their own backyard.

It was only a day or two ago that the Mercury was lyrically waxing editorially about the pulp mill with its journalistic vision reduced to total myopia (TT here: Robert’s brave endorsement. Mercury’s bold backing).

Maybe they could take a look at the Chandler pro-forma which asked for “views on the proposed investment” in relation to “social value creation, including employment generation, and contribution to the economic vitality of Tasmania; environmental sustainability; corporate governance and business ethics; social license and broad-based community support, including alignment with national and state policies.”

It is a pro-forma which can be used entirely for spin of course, expediently as part of a public relations exercise.  But it can also serve as a basis for information as well.  Maybe the Mercury might like to consider that Chandler concluded that “social value creation”, “environmental sustainability”, “corporate governance” and “social licence” were not exactly well served by investing in Gunns’ pulp mill.

It’s well beyond time that the Mercury, and the rest of the weak Tasmanian print media, pulled the plugs out of their ears and eyes and had a look at Tasmania within a broader context instead of their focus on flat-earth insularity.

Perhaps they could start by having a look at the hundreds of thousands of words that have already been written about the pulp mill project covering all the topics they have consistently refused to write about for years.  Whole books of information could be thrown at them that they have ignored, and still ignore.

If they want something in hard print by way of introduction they could do worse than having a look at what Richard Flanagan wrote in The Monthly several years ago (TT: Gunns Out of Control), and what John Biggs has recently written in Tasmania Over Five Generations. (TT here)

But it’s not only the mainstream media which ought to take a look at what it actually means to be a “free” press, and it’s not just freedom to forelock tug to the short-term corporate interest.  The media is no worse than most of Tasmanian politicians, the navel-gazing TCCI and trade unions, all of whom are firmly rooted in the past.  The unions in particular are their own worst enemies, and have been now for a number of years. 

All of these people in public life, one way or another, ought to have a look at the Chandler pro-forma, not in the context of how they could employ it for their own self-interested short-term spin, but how it might assist them to get a better understanding of what plugs should be pulled, and what new plugs need to be made.  It might help them to take their narrow, parochial, dinosaur blinkers off and toss them in the garbage where they belong.  It just might.

So how about “social value creation”, and where is the best place to start?  The obvious place is with “integrated impact studies” which don’t ignore the minor detail of social costs in all its dimensions quite deliberately, as Gunns did.  It ignored everything that Eduardo Jaramillo said would be wrecked in the Tamar Valley and beyond, including agriculture of all kinds, people’s health, and their investments in small businesses and residences.

“Due diligence” in terms of “social value creation” doesn’t fit into pouring millions of litres of contaminated effluent into Bass Strait for generations, including dioxins.  Nor does it fit with ripping out of northern Tasmanian water supplies totally 29 or more gigalitres annually.  “Social value creation” also means taking seriously what health professionals have to say, and not to ignore the combined and unified voice of scores of them when they warned about the health risks associated with the Tamar Valley pulp mill. 

“Employment generation” ?  Goodness!  How many jobs are going to be trashed in the Tamar Valley when the 240 (or less) workers are sitting behind their computers in the pulp mill complex?  Actuary Naomi Edwards should have been on the radar of the “due diligence” team of the Tasmanian mainstream media years ago. 

And let’s not fail to take into account how many jobs have already been trashed by Gunns in buying up sawmill competition, closing them down and directing all their focus, in true Easter Island tradition, towards a woodchip-centred model for the future of Tasmanian “forestry”, which is totally and utterly the wrong model that should have been followed in the first place. 

As for “employment generation” in building the mill, the word is well and truly out and about that it won’t create the thousands of jobs that the Gunns’ media stooges – both Murdoch and Fairfax – like to tug their collective forelocks about, but will merely drain the tradie workforce away from other sections of the construction industry.  Not to mention the matter of fly-in fly-out labour.  How many will that be, pray tell?

Surely it’s well beyond time that the media and politicians grow some backbone and ask these questions.

The next bit, “contributing to the economic vitality of Tasmania” is rather quaint in the context of what we know is happening in the big wide world.  In that context they might be interested to hear what Andrew Scobie, the former managing director of the TCCI – a businessman, would you believe! – said on ABC radio last Friday.  The point he really emphasised, on several occasions, was that Forestry Tasmania was a mechanism for the redistribution of public wealth to an industry which doesn’t have a future, that public funds are underwriting an unsustainable industry, an industry that doesn’t have a competitive position in the market.

If Tasmanian forestry is to have a future it is not in woodchipping and pulp production.  It is in high value-adding that does not involve the on-going transformation of the Tasmanian rural landscape into monocultural plantations, in water catchments, along waterways and in important food-producing regions of Tasmania.  It is not in clearfelling, firebombing and destroying soils, water supplies, air quality and wildlife habitat.  It is in a forestry industry which does exactly the opposite.  In that sense their “due diligence” would require them to spend a week or two with Frank Strie, and then spend six months absorbing the material he has at his fingertips.  He’ll be able to pass them on to a few other people who it is also essential that they speak with.  I’m sure he’ll mention Dr Alison Bleaney.

They can’t actually afford to ignore what Alison Bleaney has to say, but they all have done so, throughout the political system.  Instead they have attacked her, tried to marginalise her and ignored everything she has said, especially when the ABC ran a program with national coverage about her findings. This is all well known.  In a sense it is old news, but it is still with us, seeking to be addressed, and redressed as well. 

As for corporate governance, the Tasmanian mainstream media doesn’t believe that “freedom of the press” should extend into that domain at all.  But they do have an opportunity to do some “due diligence” on corporate governance.  All it would require is for them to gather together the material written by John Lawrence about the main players in Tasmanian “forestry”, including Gunns and Forestry Tasmania. 

As far as the “regulatory framework” and the Tasmanian legislature is concerned, that should really be the subject of an independent judicial investigation with the same powers as a fully-fledged commission of enquiry such as the Costigan Commission in another Australian State.  But it’s well and truly beyond the scope of the Tasmanian media to interpret their status as a “free press” in any serious sense of analysing the local political scene. 

The Mercury, the TCCI, the Labor-Liberal Party and others seek to perpetuate the most divisive issue in the long-running conflict about forestry misuse over the last thirty years, and arguably the most destructive thing that has occurred in Tasmanian history, (within Tasmania) since the Aborigines were driven from their lands in the first thirty years of the nineteenth century.

All of these people know that there can never be a social licence for raising Gunns’ mill from the dead.  They would already know that the current woodchipping industry is a curse and a rent-seekers drain on the public purse.  The fact is that “social value creation”, “environmental sustainability”, “corporate governance” and “social licence” cannot be achieved by building the pulp mill.

The continuing failure of the media, politicians, bureaucrats, union and business leaders and executives to take “due diligence” seriously will continue to promote community opposition to policies designed to benefit the very few, in exactly the same way as happened with the Pulp Mill Assessment Act of 2007 – where “due diligence” was exposed as a sham.

ABC Online

Tasmanian timber company Gunns says potential investor Richard Chandler Corporation has pulled out of its bid to buy a 40 per cent stake in the company.

The withdrawal was announced in a statement to the stock exchange this morning.

Gunns’ shareholders were due to vote next month on the Singapore-based company’s $150 million offer.

The deal was widely seen to be crucial for the company to shore up plans for its Tamar Valley pulp mill project.

Shadforths Investment Group’s Matthew Torenius says it is a major setback for Gunns.

“The prospect of a cornerstone was going to be a positive in terms of Gunns pushing forward with the pulp mill,” he said.

“This really does open the question now as to how Gunns is going to repay its debt and whether there are any other investors that may be willing to put up funds.”

Gunns’ shares have been placed in a trading halt for two days.

ABC Online here

Follow today’s Share Price here

• Felicity Ogilvie, Radio National, The World Today: Pulp mill deal falls through

ASHLEY HALL: A major investment that was hoped to save the Gunns pulp mill project in Tasmania has fallen through.

It was announced early last month that the New Zealand-born billionaire Richard Chandler would take a 40 per cent stake in the company and help to get the pulp mill built.

But Gunns told the stock exchange this morning that the investment won’t be proceeding.

Reporter Felicity Ogilvie joins me now from our studio in Hobart. And Felicity what exactly did Gunns tell the ASX?

FELICITY OGILVIE: Well Ashley, Gunns has requested a trading halt effective for the next two business days.

And Gunns says that they have been advised that the Richard Chandler Corporation does not intend to proceed with its participation in the proposed company equity raising as they outlined to the market on the 8th of February this year.

Gunns goes on to say that it is in discussions with equity investors in respect of the raising and that further information will be provided in respect of the recapitalisation when the discussions are concluded.

ASHLEY HALL: So is there any explanation about why Richard Chandler has changed his mind about investing that $150 million in the company?

FELICITY OGILVIE: No there has been no reason given at all, not by Gunns and neither by Richard Chandler himself or his corporation.

We have put in calls to Singapore where he’s based this morning and his PR representative says that they are not allowed, that they simply can’t give us a response yet today about the reason for why the corporation will no longer be investing in Gunns.

ASHLEY HALL: Well there’s been continued strong opposition to this project. Could that have had anything to do with it?

FELICITY OGILVIE: Well Ashley the Premier of Tasmania certainly thinks so. The Richard Chandler Corporation was doing due diligence about the investment and actually representatives visited Tasmania last month.

They met with the Premier and the Opposition who support the pulp mill. But they also met with community groups who oppose the mill and told them about the protests that have been going on since the mill was first brought to light.

And this is what the Premier Lara Giddings had to say about those meetings that the Chandler Corporation had with the environmental groups.

LARA GIDDING: I believe it certainly is concerning that it would seem as if some of the meetings that they have held with environmental groups in this state have had an impact on their thinking.

FELICITY OGILVIE: And the Tasmanian Green Senator Christine Milne also thinks that those meetings have had an impact on the company.

CHRISTINE MILNE: And they found that not only had this whole pulp mill project had a corrupted approval process but that the level of community opposition was enormous and that there was no social licence to operate.

Now if the Chandler Corporation is actually serious about transparency and ethical governance that would have been a major problem to them.

ASHLEY HALL: That is the Greens Senator Christine Milne.

And Felicity, is this the end then for the pulp mill project?

FELICITY OGILVIE: Well Ashley that’s a question that only time can answer. We do know that at the time that this Richard Chandler investment was announced that the head of Gunns Greg L’Estrange said that that investment was putting Gunns in the best position it had ever been in to get the finance it needs to build the $2.3 billion pulp mill, which if it is built will be Australia’s biggest pulp mill.

And it’s an investment that the state of Tasmania, that politicians, that the Labor and Liberal politicians in Tasmania say is desperately needed in the state at the moment.

And Gunns did plan to try with a rights issue to raise $130 million. That was their intention. And it seems that Gunns is going to go ahead with that.

So they say they are in discussions with equity investors. And for the past eight years the project has been mooted and especially for the past four Gunns has been talking about wanting a joint venture partner to invest, that the trees are there, people say it’s a good investment. It’s simply a question of can Gunns get the money it needs to get this pulp mill built?

ASHLEY HALL: It’s a long time coming. Felicity Ogilvie in Hobart, thank you very much.

Wake-Up Call that Industry Transition is Needed

Kim Booth MP
Greens Forestry Spokesperson

The Tasmanian Greens said today’s announcement that the Richard Chandler Corporation had decided not to enter into its proposed deal with Gunns Limited was entirely predictable, and further proof that Gunns was a shell of a company with no business case.

Greens Forestry spokesperson Kim Booth MP said Chandler Corp had clearly come to the conclusion that there was no business case to justify the pulp mill project, nor the utilisation of Gunns’ timber assets, in any profitable way.

Mr Booth also said the Greens have consistently stated that investment by Chandler Corporation into alternative timber industry alternatives would have been welcome.
“Chandler Corporation has demonstrated that they are no fools,” Mr Booth said.

“They have done their due diligence and identified no value in Gunns, even at a rock-bottom offering price.”

“Chandler Corporation has given an objective critique of the company – that it is not worth buying to – confirming the community’s concerns that the pulp mill would never be financially viable and, if constructed, would become a permanent curse on the public purse.”

“The Greens would have welcomed Chandler Corporation buying into Gunns, provided that the pulp mill was not part of their agenda.”

“Lazy commentators and political opportunists will try to blame the Greens and the community that they represent, however Chandler Corporation made it clear from the outset that they had made no decision to proceed and were merely carrying out due diligence.”

“This is proof of what the Greens have always said, that the corruptly approved pulp mill would never achieve a social licence and that its business case did not stack up.”

“The question now for all parties is to identify opportunities to export Gunns’ plantation pulp-wood chips on a one-way journey, and to rehabilitate the farm lands back to growing food and to providing high-value, differentiated products.”

“The Greens are the only Party who have published a comprehensive Forest Transition Strategy, which demonstrates how we can grow jobs and put the industry onto a viable footing.”

Blaming Greens for Chandler Corp’s Commercial Decision is Convenient Fiction

Tim Morris MP
Greens Economic Development spokesperson

The Tasmanian Greens today expressed disappointment at the blatant political bias displayed by the seemingly a-political Tasmanian Chamber of Commerce and Industry and accused it of running a political line in response to Chandler Corp’s commercial decision not to invest in Gunns Ltd.

Economic Development spokesperson Tim Morris MP said the Greens worked constructively with the TCCI over the years and that this vitriolic politically-motivated attack is as disappointing as it is surprising.

“Tasmanian business leaders are no different from the wider community in sharing a range of views. That is why they need a professional and balanced stakeholder to represent them. The hysterical, politically-biased tirade unleashed by Mr Harper today is neither.”

“Mr Harper is well aware that the Greens and the TCCI are on the same page on a number of issues, including the need for tax reform, a broadened Freight Equalisation Scheme and fiscal responsibility exemplified by the last Budget – which the TCCI supported.” 

“In recent years, the Greens and the TCCI have worked increasingly closely. And, like the TCCI, the Greens believe businesses benefit from an even-handed, a-political approach.”
“There are many good reasons why Gunns’ proposed pulp mill remains critically non-compliant with Tasmanian people.”

“Chandler Corporation has not disclosed why it pulled out, be it lack of compliance, popular opposition or Gunns’ finances.”

“The TCCI’s credibility with the Tasmanian community hinges on Troy Harper being able to substantiate his claims.”

“The TCCI seems to have fallen victim to its own fictitious narrative on this and is crediting the Greens with far more influence than we really have. Labor and the Liberals have bent over backwards to get up this flawed project and it’s still not happening.”

“Of Tasmania’s MPs, 20 out of 25 support the pulp mill so how Mr Harper can blame five MPs, without a shred of evidence, does nothing for the TCCI’s credibility,” said Mr Morris.

• Lara Giddings, MP


Friday, 9 March 2012

Chandler Corporation decision disappointing

The Premier, Lara Giddings, said she was disappointed that the Richard Chandler Corporation had chosen to withdraw from its $150 million investment in Gunns Limited.
“This news will come as a bitter blow to all Tasmanians who want to see jobs created at a time of considerable uncertainty,” Ms Giddings said.

“Despite today’s decision by the Chandler Corporation, I remain hopeful that the pulp mill project will be realised, bringing with it the promise of 3000 jobs in the construction phase alone.”

Ms Giddings said the State Government had met with representatives of the Richard Chandler Corporation twice in recent weeks, expressing support for Gunns and the pulp mill project.

“Will Hodgman and I have both met with representatives of the corporation, sending a strong message that the majority of the Tasmanian Parliament supports the pulp mill project.”

Ms Giddings said she would be extremely disappointed if the orchestrated and well-funded campaigns of conservation groups had led to the Chandler Corporation’s decision.

“We know that from the time this potential investment was first announced, the Chandler Corporation has been fiercely lobbied by conservation groups not to invest in Gunns.

“These anti-development campaigns are not unique to Tasmania and they should be a concern for the national business community.

“Millionaires like Graeme Wood are already rallying the troops to take on the mining industry in Western Australia and Queensland.

“I agree with the TCCI that we need business leaders to stand together against these campaigns and continue to invest in job-creating industries.

“We need to ensure that the voice of the majority is not crowded out by that of a noisy minority.

“Now, more than ever, we need to focus on jobs, particularly in world’s best practice, sustainable and value-added projects like the Gunns pulp mill.

“The Liberal Opposition will attempt to make much of the fact that Nick McKim also met with representatives of the Chandler Corporation.

“Let me make it absolutely clear that I do not share the Greens’ views on the pulp mill or on forestry generally.

“He and his party have had long-held views against the pulp mill that predate the Tasmanian minority government and, in that respect, it makes little difference where he sits in Parliament, his influence would be exactly the same.

“What is far more important is the fact is that 80 per cent of the Tasmanian Parliament supports a pulp mill.”

Blockers of Transition Put Future at Risk

Kim Booth MP
Greens Forestry spokesperson

The Tasmanian Greens today said that Tasmania was being held back by a few industry vested interests who had yet to kick the out-dated cargo-cult habit, and who were actively undermining the state’s move towards a forestry industry transition.

Greens Forestry spokesperson Kim Booth MP said that Chandler Corporation’s decision to not sink their money into Gunns Ltd was a loud wake-up call that the state urgently needs to get on with its forestry transition to provide the markets with the products they want.

“Those frothing at the mouth and looking for convenient scapegoats are not only in denial but are doing Tasmania a grave disservice.  They are putting at risk getting our forestry industry onto a viable footing by their pathological denial that change is happening,” Mr Booth said.

“The Greens are the only Party who have produced a detailed Forest Transition Strategy.  This document shows how Tasmania could have more jobs for less logs, with 542 new timber industry jobs as well as an additional 175 new Tourism industry jobs.” [1]

“The Greens’ Strategy identified opportunities for two sawmills, retooling an expansion of existing sawmills, and community-based specialty timber sawmills and training centres, among other seed funding to develop incentives for processing infrastructure to create sawn timber, veneer, particle board and engineered products.”

“Far from trying to ‘shut-down’ the industry, this plan is one suggestion on how to grow the industry, consistent with community expectations and market demand.  Whether the Greens’ initiatives are adopted or not, this is the direction Tasmania must start moving towards, and quickly.”

“The pulp mill is dead and buried. Long live secure timber jobs generated by a viable high-value low-volume downstream processing industry.”

“If only those trying to keep Tasmania trapped in a cargo-cult mentality will let go, and get on board with getting the necessary forest industry transition underway.”

“Chandler Corporation joining the list of financial entities who have looked at Gunns Ltd and decided to keep walking is a loud wake-up all which must be heard.”

“ANZ Bank, and Sodra previously decided against sinking money into this dud project, and this will keep happening each time a potential investor conducts its due diligence, because the markets want a different product.”

“Change is here.  The high Australian dollar is expected to remain so for at least the next decade, and if Tasmania keeps getting held back by those wanting to stick with the out-dated cargo-cult bulk commodities are actually the ones responsible for denying us future timber jobs and a viable industry.”

Mr Booth also pointed out that despite reports linking Chandlers decision with the company’s meetings with the Greens, that both the Premier and Liberal Leader Will Hodgman also had met with the company, as disclosed in the Premier’s media statement of yesterday.

“Surely if the decision was solely about the pulp mill project these meetings with the Premier and Mr Hodgman would have confirmed for Chandler Corp that 20 of the 25 MPs in the State Parliament still do support that dodgy project.  So those with a vested interest should stop treating the public like fools, there was clearly more to this Corporation’s decision,” Mr Booth concluded.

Link: Forest Transition Strategy: More Jobs-Less Logs; prepared with the assistance of Associate Professor Graeme Wells, 2010.

Photo by Ula Majewski

• Jenny Weber, Ula Majewski: Giant Pinocchio & the Ta Ann Truth Trailer visit Salamanca Market, Tasmania

Today, Giant Pinocchio and the Ta Ann Truth Trailer visited Salamanca Market, Hobart, accompanied by campaigners from the Huon Valley Environment Centre and The Last Stand.

The trailer provided crucial information to the public about Ta Ann’s role in driving forest destruction in Tasmania, and functioned as a mobile cyber action station where market-goers could email Ta Ann’s Japanese corporate customers to express their concerns. The trailer was decorated with free balloons, printed with the slogan ‘Ta Ann: full of hot air’.

‘The Ta Ann Truth Trailer has received an overwhelmingly positive response from community members who were thirsty for more information about Ta Ann’s role in Tasmanian forest destruction, and who were keen to add their voice to the campaign’ said Jenny Weber, Campaign Coordinator of the Huon Valley Environment Centre. 

‘Tassie locals and tourists from across the globe have made it very clear today that the destruction of our world-class forests, currently being driven by Ta Ann, is absolutely disgraceful. The community wants to see an end to the eco-lies being told to Japanese companies and for Tasmania to move into the 21st century and stop trashing our spectacular forests’ said Ula Majewski, Campaign Manager for The Last Stand.


Nick McKim MP
Greens Leader

The Tasmanian Greens today said that they made no apology for confirming their opposition to the Tamar Valley Pulp Mill to the Richard Chandler Corporation when they met recently.

Greens Leader Nick McKim said that if any political parties are to blame for the Richard Chandler Corporation deciding not to invest in Gunns, it was the Labor and Liberal parties.

Mr McKim said that Labor and Liberal parties had colluded with Gunns, conspiring to rip the pulp mill planning application out of the state’s planning system and instead ram it through a fast track parliamentary approval process, which is a major factor in the project’s lack of a social licence.

“You reap what you sow,” said Mr McKim.

“If Lara Giddings and Will Hodgman are looking for a scapegoat to blame, they should find the closest mirror and take a long hard look at themselves and their parties.”

“The Richard Chandler Corporation says it was concerned about governance issues surrounding the pulp mill.”

“Remember, the head of Tasmania’s then peak planning body, the Resource Planning and Development Commission (RPDC), Julian Green, resigned citing political interference in the pulp mill assessment process.”

“Mr Green accused the then Labor government of having “undermined the objectivity” of the RPDC process and said he feared the process would be seen by the public to be contaminated unless the activities of the Government’s pulp mill task force were “reined in”.”

“This was followed by the head of the pulp mill assessment panel, Justice Christopher Wright, who said he felt “heavied” by the-then Labor premier, Paul Lennon.”

“The political interference in this project by the Labor and Liberal parties has been a governance disaster from the start.”

“Gunns’ pulp mill was never going to be economic saviour that Labor and the Liberals pretended it would be.

In fact, it would destroy local businesses and economies in the Tamar Valley and damage Tasmania’s lucrative clean green clever brand.”

“Richard Chandler’s decision not to invest in the pulp mill will be good for Tasmania’s economy, which will be based on global niche markets and our island’s strong and world-renowned brand,” added Mr McKim.