The industrial museum at Long Reach

MY MESSAGE is a simple one, in two parts. Firstly, it is about cause and effect in the forestry and wood industry of Tasmania. Gunns’ pulp mill is an effect of governance failure. We can’t forget that Gunns is doing what is largely sanctioned by public policy.

Secondly, from a regional development perspective — and this is a more abstract view — building this pulp mill will lock us into a future that may be at odds with our aspirations for our island state. We must, in my view, turn this around and the Gunns pulp mill proposal garnishes our collective dilemmas and anguish, energy and commitment.

I commend TRAC and Les for their endeavours on our behalf, but right now, all of us need to engage directly, which I guess some of us are here tonight. It is not any easy task to dissent against the status quo. History supports the view that being a dissenter in Tasmania is a challenge, that requires capacity, endurance and bravery.

Where to begin?

We must find a way to sustain a productive forest and wood industry sector in Tasmania — for the forests, the workers and communities who depend upon it for their well-being. I remain unconvinced that Gunns’ pulp mill option is the right one — except for Gunns’ shareholders — and they must be wondering given the current share price. Incidentally, notice the dramatic decline in the share price since the legal action against the brave dissenters.

From what we now know of the project design it should face a difficult approval set against even the draft IIS guidelines.

I also want to put my research interest in regional development at the forefront of my argument. I strongly believe that the decisions we make in the next 5 years about the future direction of forestry and agriculture for that matter, will be defining moments and if we get it wrong I’m not sure how we will recover and provide opportunities for existing operators and our young people who might want to enter those industries.

Industrial museum

Right now we need to move in a new direction and a 20th century industrial museum at Long Reach is not the solution.

But, to reiterate my cause and effect premise — the enemy is not Gunns — 70% of what they do in this state is fantastic: employment, community support and their diversity of product range. Unfortunately, 30% of their activities don’t make us proud of the Big Tasmanian. Gunns should be our champion, not the black sheep of the family.

The real enemy that needs to be dismantled are the governance arrangements in place that allow Gunns to propose what they have done on behalf of their shareholders. Those governance arrangements — shaped by the RFA, stamped and implemented by Forestry Tasmania (FT) — are our collective responsibility. We must value and protect our representative responsible government model, by challenging its responsiveness. We can’t pass the buck and we must highlight the causal things that need to be addressed. There are too many potential crisis points in our state’s political economy, that need an urgent response, despite the sense that the economy remains robust and the election war chest grows by the month.

Right now, if you want to see the future, look into the eyes of a veggie grower or a forestry contractor. At best their vision of the future is uncertain, at worse it’s despairing. It shouldn’t be so, it can’t be so. We need to change the causes so we can eliminate the effects that bewilder Tasmanians.

I recently put it quite starkly, to make a point and hopefully generate a debate.

Do we want Tasmania to be Australia’s Taiwan — a cheap labour, high volume, low cost productive unit with a Third World economy industrial structure aspiring to sustain a First World living standard — a cloud cuckoo land aspiration? Or do we want to be Australia’s Ireland — building on our existing comparative advantage, lifestyle, climate, natural environment, to capture and attract the drivers of the new knowledge economy — the creative professionals — who do and might want to call Tasmania home; as a place of innovation and creativity aimed at high quality/low volume authentic products, at a premium price, from the arts to the boiler makers?

Commodity based exporting is not where we want to be.

Gunns 20th century industrial museum proposal for Long Reach is the Taiwan option, that in my view may have a brief shelf life but will ultimately fall the way of the blacksmiths of the 19th century, both swamped by the competitive cost advantages of a Chile or Brazil and the industrial revolution respectively.

Take a risk

Worse still, if we build the 20th century industrial museum we will never know what the alternatives might be; what the opportunities for our young people might have been in producing something other than pulp from our wondrous forests. Calling pulp production value-adding is a bit like being excited by turning grass, via the cow, into milk. It value adds, but you can do much more.

At the very time when we need to be innovative, diversify our product, be competitive, think outside the square, take a risk, invest in new ideas, new people, and inspire our young people, our government at all levels, supports and proposes governance arrangements that are counter-intuitive to that very task — witness the RFA and the role of Forestry Tasmania. This is the root cause of my dilemmas and anguish over this project.

These governance structures cement complacency under the guise of resource security; enhance mediocrity in terms of productive innovation and capacity under the constraints of bureaucratic inertia; inhibit innovation and new ideas because it promotes profoundly uncompetitive market places; indeed in the case of Gunns, supports local market dominance, and simply doesn’t allow us to know anything about options in forestry that are not endorsed by Forestry Tasmania and Gunns.

Forestry Tasmania treats the resource as their own sandpit

How hard could it be for Forestry Tasmania?

The parliament grants them the great honour of watching over our public forests, managing the growing and harvesting and producing a return to the taxpayers for that privilege. And it should be a privilege. But they treat the resource as their own sandpit. And what is the outcome of that privilege? Well, financially in 2003-2004 we needed to sell over $175 million worth of resource before we made a cracker — because that is how big this bureaucracy is. But in that year the forest sales revenue was only $137 million and FT was forced to secure $25 million in loans in 2004. The Auditor General reported that FT’s financial return on equity was 2.6%. Returns to Government — us — was $8 million, a return to equity ration of 1%, the highest for the past four years.

Why aren’t we insisting on a review and evaluation of FT? They have simply lost their way. Something is deeply wrong at FT — they have a more favourable return on their tourist ventures than their forestry operations. Funny that!

People say to me, okay Tony, what are the answers, outside of the existing arrangements? I look them in the eye with profound regret and say, I don’t know. You know why this is deeply disturbing — well, it’s not because Dr Tony McCall with a research passion about regional Tasmania doesn’t know — it’s because none of us know! Why? Because the RFA and its offspring — the Tasmanian community forestry agreement — effectively negate our opportunity to explore possibilities. It simply precludes the very thing that drives innovation and creativity — access to the resource, a variety of investment ideas and support from government to do so.

Our collective shame is that we’ve never demanded the right as a community to explore the possibilities!

We don’t know what the answers are because so far we haven’t had the opportunity to explore the possibilities.

Why didn’t the Lennon Labor government ask for expressions of interests in value-adding to our wood products in Tasmania? Answer — they didn’t need to; it would be regarded as a naïve request because under the RFA the only possible proponent would be Gunns. Who else could possibly access the resource under the current contractual/access arrangements? If you are in the position of immense privilege — like Gunns — why would you want do anything other than build the cheapest and least challenging value-adding option, a 20th century industrial museum, using technology that is commercially viable , rather than state-of-the-art?

The RFA has stymied creativity and innovation; driven away potential investors; locked up resource and effectively created market dominance

If this natural resource depletion plant is built at Long Reach we will never know what any other investor would make of our forest resource and how it might be used. Have you noticed how few investors have turned up to invest in our wood products within the RFA, despite the promises?

The RFA has stymied creativity and innovation; driven away potential investors; locked up resource and effectively created market dominance; and made it easy for companies to create satisfactory returns for shareholders on the basis of minimum input, investment, risk or innovation and then in the case of Gunns to propose the least innovative and creative option — an industrial complex that are currently being built largely in what is disparagingly termed the Third World. This is the opposite of everything that was promised when the RFA was drawn up and approved. Go and ask a transport contractor or a forest worker what it’s like to work under the so-called certainty of resource security?

Name one bleached eucalypt kraft chlorine pulp mill that is currently proposed for OECD nations? Correct, only Gunns at Long Reach. Brazil is the preferred option — 7.5 year rotations for eucalypt — does wonders for soil nutrition — cheap labour, minimal environmental regulation, fantastic opportunities for dirt poor farmers to become dirt poor plantation owners.

To top it off, government now turns to our sawmillers, who should be the lifeblood of the industry and our rural communities and says, sorry we’ve ravaged the old-growth landscape to such an extent — through a woodchip driven policy — that we now ask you to retool at taxpayer expense because you need to access plantation regrowth which produces a second rate product.

What is going on here?

We’ll never know whether there might have been a consortium of investors out there with an eye on a Tasmanian high quality, brand name, a Tasmanian IKEA — using blackwood, myrtle and sassafras as its feedstock for something really authentic, a fantastic high quality, low volume brand Tasmania icon furniture and wood design product, sold to the world? Or a European investor keen on exporting into the European market a pulp derived from forests managed ecologically sustainably, via a boutique mill, less water resource, all plantation wood stock, no chlorine and a mechanical process, with a closed loop — a project to scale with Tasmania’s size and identity, an authentic product, badged as such, “Clean, Green and Clever!”

What John Howrd might have said to John Gay …

Let’s take the Tardis back in time. Let’s see what might have been.

Take yourselves back to October 2004 and Prime Minister Howard is in the Albert Hall surrounded by forests workers. He goes up to John Gay and says:

‘John, love your work. Love your work in innovation, love the vineyards and the wine, get really pumped over the veneer! Here’s an extra $5million to continue down that innovative path to develop more new products, more new opportunities, driven by creativity and new skills.’

‘John, my government wants you and Gunns to inspire young Tasmanians, and we fully support your aspirations to make Tasmanians proud, but John, that 20th industrial museum is not the go. We want you to aim higher, lift the bar, and drive a new innovative century for Tasmanians and Australia!’

Sadly, that wasn’t to be. Nor will the Lennon Labor government — back to the present — initiate an independent feasibility study to challenge the status quo and lift our understanding of what the possibilities might be for our forestry industry. It’s not interested, its done its deals, probably on the back of our futures; it is a shameful abrogation of responsibility.

After all, government can always say no; but they need to know what the possibilities might be. The public forests and the people who own them have that right to know and the young people who might want to walk in them, gaze at them and work in them, need to know what the possibilities might be so they can inform their own decision-making.

If this mill proceeds, as a young Tasmanian, I’d feel I’d been let down, handed a mediocre set of cards, trapped in a time warp, told that if I want to aspire to something really valuable, really innovative, really creative, a job that challenges my skills and something that can make me proud then I better head elsewhere — what a lost opportunity.

What was required here was not a private company undertaking its own feasibility study, treating a public resource like private property, but a government funded independent feasibility study that established economic cost parameters for access to the feedstock that were open and transparent and not hidden away behind the curtain of the ubiquitous ‘commercial-in-confidence’.

We needed a public tender process, so we could ‘live the dream’ of possibilities, and judge the merits of a range of proposals that would add value to our wood resource. Once that was established and Gunns won the tender it would have done so under policy parameters that are clear, transparent and ostensibly in the public interest.

What are we to make of Gunns decision-making: What is going on? What are we to make of the myriad of claims by the company and government and the infamous bus: TCF? No old growth? No public forests; World’s best practice? World’s Greenest Mill? Water from Pipers River? Submitting plan changes at the last minute in relation to IIS? The legal action? Computer images of proposals before the IIS Guidelines are determined; massive changes to original project dimensions? John Gay wanted Tasmanians to be proud of this project …

He’ got a lot of work to do.

Conspiracy theories

If you believe in conspiracy theories then you might venture down the path that suggests Gunns are setting this whole project up for a foreign takeover bid by driving the share price to rock bottom through their ineptitude?

How can the RPDC contemplate anything other than a complete revision of their guidelines? Surely, the Commonwealth will insist on nothing less? Where was the section in the draft IIS guidelines that could encompass the socio-economic and environmental impact of a water transfer of the magnitude proposed. Maybe I missed it?! In the meantime, Gunns’ consultants are out there preparing responses to an IIS that has yet to be finalised.

In August 2005, our last resort is our creative imagination, our energy and commitment and our ability to argue the case before the RPDC. But they too have an obligation.

Under the legislative mandate handed to it by the parliament the RPDC is not only the guardian of what constitutes sustainable development as the underpinning principle of this legislative approvals regime. In my view, the RPDC has a significant obligation to present a report into this project’s sustainability that clearly argues the case for supporting or rejecting the proposal. Nothing less will suffice in fulfilling its role in this Project of State Significance process.

The reason this is necessary is because the RPDC cannot be seen to be endorsing a project as sustainable simply because the proponent’s response to the IIS is rendered to be an intelligible collection of data and information that neatly responds to the criteria that constitutes the guidelines for the IIS.

There must be an argument mounted by the Commission, not the proponent, that demonstrates that as a whole this project — in the Commission’s view — meets the objectives of the resource management and planning system of Tasmania under the State Policies and Projects Act 1993 (Tas). The challenge for the RPDC is to convince the Tasmanian public that this project can demonstrate that it complies with the following outcomes:

(a) sustaining the potential of natural and physical resources to meet the foreseeable needs of future generations; and
(b) safeguarding the life-long supporting capacity of air, water, soil and ecosystems; and
(c) avoiding, remedying or mitigating any adverse effects of activities on the environment.

Finally, the RDPC must engage with us directly, by taking their assessment process to the public halls where they must hear our arguments and where most importantly we hear them demonstrate that they are indeed, the guardians of Tasmania’s sustainable development future.

We must remain vigilant.

A shorter version of this article was presented by Dr Tony McCall to a meeting this week of the Tamar Residents Action Committee:
http://www.tamar-trac.com/