KARL STEVENS, Friday, August 21, 2009 http://west-tamar-talk.blogspot.com/
Tasmanian Liberal And Labor Sabotaged Finance For Gunns Pulp Mill
How Section 11 Breaches The Equator Banking Principles
In 2007 Gunns realised their proposed pulp mill was failing the Tasmanian environmental assessment in many areas.
In what may have been a state of panic, they withdrew the project from the legal process. Another assessment instantly materialised, thanks to premier Paul Lennon, who decides the project would be assessed by the Tasmanian Parliament.
Lawyers reputedly acting for Gunns, draft legislation in one frantic weekend that will give the project a red carpet ‘fast track assessment’.
All good for Gunns except their lawyers overreach their brief.
They include a clause more at home in a Stalinist dictatorship.
The infamous ‘section 11’ locks-out any legal action against the mill by any person for perpetuity.
Tasmania’s Labor and Liberal parties vote for it, with the bill rushed through both houses simultaneously. Nobody actually gets a chance to read the whole bill first.
With it all done and dusted, Gunns sets-off looking for $2 billion in finance.
They hit problems. Their own bank, who has signed the Equator Principles, along with another two of Australia’s four major banks, turns them down for finance.
The bank doesn’t reveal why. Two years later and it’s discovered that section 11 is a clear breach of at least two of international banking’s ‘Equator Principles’.
“Principle 5: Consultation and Disclosure”
“Principle 6: Grievance Mechanism”
Both these principles were subverted by the legislation passed by both houses of Tasmania’s parliament and endorsed by Gunns.
The ‘Equator Principles’ were designed to prevent banks profiting from destructive and unethical investments. This is exactly what they achieved in the case of Gunns proposed pulp mill.
