Wes Young Mill lumbers towards the Finnish
GUNNS Ltd appears to have cleared another hurdle in its bid to build a controversial $1.4 billion pulp mill in Northern Tasmania — by brokering a finance deal.
Finnish company Poyry Capital Ltd is believed to have clinched the lucrative contract after Gunns failed to secure an Australian based lender.
Environmental groups, such as the Wilderness Society, had previously claimed that ANZ was preparing to finance the project and had been waging a campaign to dissuade the bank from supporting it.
Poyry Capital is a member of the Jaako Poyry group, which already has the contract to supply pulping infrastructure for the project, and has a history of financing forestry projects such as pulp mills.
It’s unclear why ANZ did not become the lender, but industry speculation has centered on the bank’s recent signing of the Equator Principles, in the wake of rival Westpac’s advertising blitzkrieg claiming that Westpac was the only Australian bank to sign up to the environmental charter.
ANZ spokesperson Paul Edwards said that ‘it was inappropriate for the bank to comment on the merits’ of clients projects’ but stated that as far as he was aware Gunns hadn’t decided on a financier and no agreement had been struck with ANZ.
The Equator Principles is a binding agreement between more than 50 of the world’s biggest banks, which prohibits financing of environmentally questionable projects.
The Principles state that projects must be assessed independently, comply with the relevant laws of the host country, use the latest technology, and have a decommissioning strategy in place in addition to being environmentally sustainable.
Poyry Capital isn’t a signatory to the Principles.
A coalition of environmental groups are opposed to the project claiming that a wood supply agreement for the proposal signed between Gunns and former Deputy Premier Bryan Green would sound the death knell for several protected species.
The majority of the mill’s wood supply will be initially sourced from native forest in North-East Tasmania with a leaked Forestry Tasmania report stating that the Wedge-tailed eagle already faced a 62 per cent chance of a localised extinction due to a combination of ‘persecution’ and previous habitat destruction. The report went on to claim that the chance of extinction rose to between 75-97 per cent once planned logging operations were factored in.
While a finance deal would bring the proposal closer to reality it could still falter as a result of a recent Federal Court ruling.
The ‘Wielangta’ case was brought by Australian Greens Senator Bob Brown against Forestry Tasmania, (FT), on the grounds that FT was not adequately managing three protected species including the Wedge-tailed eagle as required under the National Environmental Protection and Biodiversity Conservation Act (Cth). Justice Shane Marshall found that logging operations in the Wielangta area were illegal based on a conflict between Commonwealth biodiversity legislation and Tasmania’s Regional Forest Agreement.
“I do not consider that the State has protected the eagle by applying relevant management prescriptions. Management prescriptions have helped to slow the eagle’s extinction but have not protected it in the sense of either maintaining existing numbers or restoring the species to pre-threatened levels.’’
“On the evidence before the court, given Forestry Tasmania’s satisfaction with current arrangements, I consider that protection by management prescriptions in the future is unlikely.’’
Forestry Tasmania is appealing the decision to the full bench of the Federal Court with FT chief, and former pulp mill taskforce head, Bob Gordon stating that ’the whole of Tasmania is Wedge-tailed eagle habitant.’ Mr Gordon also claimed that if the Wielangta precedent was applied to all forestry and farming operations than the result would be disastrous.
Wilderness Society spokesperson Vica Bailey said that the original Wielangta decision ‘was legally sound’ and should be upheld as the Commonwealth was bound by international treaties which ensure the protection of threatened species.
Whatever the outcome of the Wielangta appeal, Gunns proposal still has to clear several other hurdles before becoming a reality.
Wes Young has previously worked for the Tasmanian Parliamentary Greens on a brief contractual basis but has no affiliation to the Greens, environmental groups or any other political party.
