Hodgman: Stand up and be counted. Judith King’s Citizen’s Report

Premier Lara Giddings, Deputy Brian Green in the background

What a tangled Web we Weave….

I have looked at the transcript of Greg L’Estrange’s (GL’s) evidence on 3/6/2011 as quoted on Tas Times June 20 2011: HERE: …these explosive revelations.

Greg L’Estrange states that Gunns’ debt to Forestry Tasmania is $15 million, with $9.8 million in dispute over take-or-pay for 2008 – 2009 of which he feels $2.2 million is payable, and I quote:

“HOUSE OF ASSEMBLY SELECT COMMITTEE ON SCOTTSDALE SAWMILLS, LAUNCESTON 3/6/11 (L’ESTRANGE)
CHAIR – Would you like to answer that question that Ms White asked with regard to the debt?
Mr L’ESTRANGE – The reconciliation goes roughly to $15 million, of which $9.8 million is a take-or-pay claim for 2008-09.
CHAIR – Is that for the pulpwood supply agreement?
Mr L’ESTRANGE – Yes. In the absence of any other processes, our view is that it is $2.2 million.
Ms WHITE – That’s a big discrepancy.
CHAIR – Sorry, is it $15 million overall?
Mr L’ESTRANGE – Yes, overall, including the current month’s.
CHAIR – So your total in terms and outside terms is $15 million –
Mr L’ESTRANGE – Yes.
CHAIR – and of that, $9.8 million is a take-or-pay claim?
Mr L’ESTRANGE – Correct.
CHAIR – You were saying that $2.2 million is what you feel is the figure, but is that overall or just of the $9.8 million?
Mr L’ESTRANGE – Of the $9.8 million it should be, in our view, $2.2 million.
Mr GUTWEIN – And that’s in dispute at the moment with FT?
Mr L’ESTRANGE – Yes”.

(The rest of the explosive revelations, HERE)

On the other side of the fence, in a letter some two months later from Forestry Tasmania’s CEO Bob Gordon, to Premier Lara Giddings and her Deputy Bryan Green, Gordon makes no mention of 2008-2009. It would appear that contracts 917 and 918 were costing Gunns $9.8 million for 2008-2009 (statement by GL above), $9.88 million for 2009 – 2010 and $7.61 million 2010-2011 take-or-pay.

Gunns needed out … Native Forest timber was unsaleable without F.S.C. certification; further Gunns considered contracts 917 and 918 void as they had been surrendered so they were not paying and not taking the contracted timber … hence the dispute. No wonder, with the debt piling up (in the eyes of FT). But Gunns was definite that they had surrendered 917 and 918 and had no further liability under the contracts. (Explosive letter confirms Gunns voluntarily gave up contracts, rights)

Gordon saw it this way, as posted on TT by John Lawrence (HERE: How Labor pinched IGA funds for Forestry Tasmania):

Gunns current account with Forestry Tasmania can be summarised as follows:
• Sawlog and pulpwood supply (Contract 917 & 918) $6.512M
• 2009/10 take or pay (Contract 917) $9.881M
• 2010/11 take or pay (Contract 917) $7.614M
• Plantation services and other sundry services $1.974M
• Southwood sawmill – sawlog supply (Contract 704) $0.768M
• Southwood sawmill – electricity and site services $0.081M
• Total $26,830M

Greg L’Estrange never expected to see his in-camera transcript on Tasmanian Times.

If he did not lie to the House of Assembly Committee then only $2.2 million in real money was required to satisfy the $9.8 million take-or-pay contracts 917 and 918 in 2008-2009 to FT, a sum that should have been settled by the Courts. Presumably, as he had cancelled the contracts by 2009-2010 and 2010-2011, he saw no reason to pay.

If the dispute had gone to court a ruling over the enforceability of Contracts 917 and 918 would have been made, as well as the size of the payment by Gunns to FT.

The Court Case may well, I suggest, have gone in favour of Gunns, as indicated by Greg L’Estrange before the Committee (for the two contracts believed to have been originally gifted to Gunns by FT had, as Greg L’Estrange has stated, been surrendered).

Giddings and Green would then have been in charge of a bankrupt GBE namely, FT, and Gunns would, as suggested by Bob Gordon, been unable to pay their debts … and gone into Liquidation.

Hence Giddings’ arms-length determinations which have been withheld from the public; resulting in a possible theft of IGA money to save both FT and Gunns.

I ask, in exchange for not making waves, did Greg L’Estrange claim a share of the IGA money so as to save Gunns (by then a delisted company from the Liquidator) thereby making an about-face over debts to FT in order to gain a much-needed capital injection?

What a tangled web we weave when Giddings and Green pay with public money, $23 million to buy existing rights that Gunns considered extinguished by surrender and $11.5 million to Forestry Tasmania to pay Gunns debts, a debt Greg L’Estrange considered to be less than $7.4 million dollars. ($15 million less $9.8 million + $2.2 million)

It behoves the Liberal Party the Party of Opposition to call a Royal Commission into this particular transaction and Forestry in this State.

Hodgman stand up and be counted.

John Lawrence, earlier on Tasmanian Times:
• Barbara Etter: We need you
• How Labor pinched IGA funds for Forestry Tasmania

• Judith King, Citizen Reporter:

GUNNS AGM

A Tasmanian contingent went to Melbourne for the Gunns AGM. TWS was well represented by its 3 Tas senior staff Vica Bayley, Liz Johnstone and Ruth Groom.

Lucy Landon Lane went to represent Pulp The Mill and Judith King went to represent Friends of the Tamar Valley. Kathy Petrovsky and Karl Stevens were also there from Tasmania and there may have been others whose names I don’t know so apologies and no offence intended.

We were joined by street protestors with banners from TWS Tas & Vic and Greens Vic and had messages of support from the Occupy Melbourne team who were occupied with protests elsewhere. Before departure LLL and I had mentioned Occupy Melbourne in our correspondence and the Victorian police and security response was an indication that they knew we were coming. The Vic police were professional and cooperative and the burly security guards were wary and ready for action. The first floor of Sofitel had security guards every 50 metres and the only meeting was the Gunns AGM so I assume they were there for us. What’s more, Sofitel closed off lift access to Level 1 so we guessed it was to stop people storming in [which they had no intention of doing].

For the non-Victorians, Sofitel is located in the Paris end of Collins Street near Parliament. There is a large opulent atrium with massive Xmas decorations and it is a morning hub for Melbournites. There is a large exposure to the city workers so great success there.

Our protestors set up banners on footpath outside Sofitel with OK from police. The community interest was massive with people eagerly volunteering support and some passer-by chanted “No Pulp Mill’. Gunns would have hated it.

ABC had allocated its crew to our protest even though there were several other protests happening elsewhere. ABC had a fully equipped van (with satelite dish on top) out the front for nearly 3 hours to cover the event. It was extraordinary!

The folk in Melbourne are becoming way more active than when we lived there. We were able to ensure national coverage by ABC plus had interviews with Herald-Sun which is nationally syndicated, plus the Australian and the Age which is also nationally syndicated.

The learning so far is that we need to engage with at least Melbourne and Sydney in the anti-mill and Tas forest strategy as there is strong interstate support for our cause.

As the lifts were blocked we walked the stairs up to the Arthur Streeton auditorium at Sofitel passed the security guards for the Gunns AGM. The meeting had just started and fortunately there was a completely empty row right in the middle in front of the Board. There were 8 of us for the AGM so we lined up across the empty row and you could see L’Estrange and Newman visibly slump and L’Es dropped his mouth open. Quite a satisfying response…for us, not them.

Newman spoke first to the Gunns script then L’Estrange to his script and it was the same old guff we have heard for the last 7 years. Their notes are available on the Gunns website for your info. The mill is now valued at $3billion but Gunns hasn’t adjusted all its figures and they didn’t add up. Stephen Mayne from Crikey was onto it like a seagull with a hot chip. Once he got the microphone it became the Stephen Mayne show. He likes the sound of his own voice, you can see he enjoys making the Board members squirm and he likes asking difficult questions.

Gunns lost control of its AGM at that point and their slide downhill continued for 2.5 hours. [Previous AGM’s have been less than one hour]. Mayne asked on several occasions for Gunns to address its insolvency which they would not address but became obviously more uncomfortable each time it was asked. Another question was duration of each Board member’s relationship with Gunns. Newman indicated 20 years and Mayne pounced saying that was when Gay was CEO and Board Chairman he influenced company culture and he is now charged with insider trading. Who else knew that reports had been withheld and will there be others charged. This time there was an audible gasp…from the audience…

L’Estrange became emotional when he spoke of how hard Gunns workers had tried in the past 12 months. Victoria has a Mr Whippy icecream van and Tas has a Mr Weepy from Gunns. Chris Newman patted him on the shoulder for support but it didn’t work with the audience.

Then there was the discussion about Plan A pulp mill and what was Plan B if no pulp mill???. The institutional shareholders ran this with relish and at 11.45am Chris Newman Board Chairman stated ‘There is no Plan B. We are focussed totally on developing the pulp mill”. Stephen Mayne piped up about insolvency yet again and still no answers were forthcoming.

L”Estrange said there is no plan B as they are not going to fail. Newman said L’Estrange’s contract extended to July 2012 to complete that ‘phase’ of mill strategy. Interestingly Timo Pilonnen, Pulp Mill Manager, was not there. Given it is Gunns only business one wonders at his absence.

The questions regarding debt and ability to pay were as interesting. L’Es indicated they could not pay debt in new year and were meeting with a ‘banking syndicate’ to refinance their debt [important point for the ANZ meeting later in the afternoon]

There was discussion about debt/equity partners and JVP’s. L’Es clumsily said twice that it was difficult due to Eurozone issues. Each time he said it, Newman smiled so it seemed like a planted piece of information. Stephen Mayne asked if no JVP or debt/equity partner are Gunns planning to go it alone again and the audience laughed at Gunns Board.

Someone asked where Gunns new office would be located and they answered that is not being made public. Some hoon asked did they have a phone number and chuckled to herself…

The meeting concluded with Gunns looking dishevelled and disorganised. The last word to the audience was from Tamar Valley residents stating we will never allow a mill to be built in Tamar Valley so shareholders need to invest elsewhere or lose their money!

ANZ Meeting 2.30pm

At ANZ office 833 Collins St Docklands. Lucy Landon-Lane-Pulp The Mill, Ruth Groom TWS Campaign Coordinator, Vica Bayley Tas Manager TWS, Liz Johnstone TWS Senior Campaign Manager Tasmania, Warwick Raverty pulp mill expert and former member RPDC assessing Gunns pulp mill project in Tasmania and Judith King Friends of the Tamar Valley met with Shane Lucas ANZ Head of Sustainable Development, Group Corporate Affairs and Andrew ? who works with Lucas.

The ANZ meeting was just as, if not more, interesting than the Gunns AGM. Each of our groups raised our concerns about ANZ remaining involved with Gunns. We raised the Equator Principles which ANZ refer to 45 times on the ANZ website. Fiscal responsibility breaches with the exBoard Chairman/CEO charged with insider trading rubbed them a little, we hinted at protests and got a strong response so we need to ramp up Australia wide protests to out the ANZ in its ongoing support of Gunns who are so clearly in breach of Equator Principleshttp://www.anz.com/auxiliary/search/Default.asp?qu=equator+principles&btnSiteSearch. Also attached above are the Equator Principles in more detail fyi.

The ANZ staff reaction to Gunns statement about a banking syndicate was interesting. They seemed surprised and responded that they were one of Gunns banks so that is what ‘banking syndicate’ means.

Shane Lucas was saying how Gunns has done the right thing going to plantations only and changing their mill design and indicated the ENGO’s and the Tas Community now the supported Gunns mill project. Vica replied that while the protection of native forests was welcome the Gunns Proposed Tamar Valley pulp mill is OPPOSED by the ENGO’s and speaking for TWS WILL CONTINUE TO BE OPPOSED as there has been inadequate assessment and it is in the wrong location. We all said there was majority opposition across the State to the mill project and it would have a flow on effect to ANZ if they continue supporting Gunns.

Then Warwick Raverty spoke about his role as a pulp mill expert, his role on the RPDC and why Gunns must never build a mill in the Tamar Valley. Warwick is a treasure and it is hard to find words to thank this man for staying the course with the Tasmanian community in their struggle against Gunns. Warwick’s words were hard hitting and Shane Lucas was left in no doubt that the ANZ is associated with a loser project. Warwick told ANZ that he believes the modified pulp mill proposal is worse than the original one. The main reason for this is that he said all the changes that Gunns keeps adding by osmosis, have never been assessed by EPA or Federal Government.

It was apparent to me that Shane Lucas has the job to spin the ANZ Bank as a good guy and part of his role is to assess what opposition/resistance/reputational damage ANZ will encounter.

As Gunns loans fall due in Jan/Feb 2012 we, the community need to target ANZ in the strongest and most public ways possible to pressure the ANZ withdrawal of Gunns support.

Download, All about the Equator Principles, with my highlights:
2011_11_22_gunns_AGM_241111_draft.doc
Or,
Read HERE