Image: J, Karl
The more you try to make sense of the expression of interest by the Richard Chandler group to place $150 million in Gunns, the less sense it seems to make. To be sure, from what we have been told about the proposed nature of the investment, Chandler has his exit strategies worked out, and he hasn’t invested anything yet.
But if the media reports are accurate, and Chandler’s spokesman Alan Kelly has actually said that they see the investment as a means to “catalyse” funding for the pulp mill, using the thoroughly discredited argument that it was going to “create 3,000 jobs” and add a “billion dollars to the Australian economy”, it’s little wonder that the mainstream commentary have been scratching around in speculative circles in a quandary, wondering aloud if it’s just the plantations Chandler is interested in, or the land.
On the face of it, Alan Kelly’s reported statement makes no sense at all – no good sense, that is – because everyone knows that building a pulp mill in the Tamar Valley or anywhere else in Tasmania, is economically unsustainable, even if all other essential services are stripped bare to subsidise it from public funds, because it will never compete with mills located in much more favourable conditions in the world. The issue of feedstock would seem an insurmountable problem as well. This is without even considering the massive local opposition Chandler will face, and the world-wide opprobrium that will very quickly become attached to his company.
Some commentators have speculated that Chandler might see “synergies” with his investments in Chinese forestry interests, such as Sino-Forests, but that certainly has its problems, as the Chinese are progressively becoming aware of the importance of marketing wood products which have been produced under internationally acceptable certification standards, specifiying the so-called “triple bottom line”, which is not the case for Gunns, which does not have FSC certification.
Currently, of course, it is still possible to export non-FSC woodchips and logs into China, which explains why Tasmanian deputy premier Bryan Green is there to clear the backlog of chips which continue to be produced from Tasmanian native forests. But that situation is rapidly changing, and anyway Chandler would face the same sort of world-wide condemnation if he pursued that strategy as if he tried to implement Gunns’ pulp mill.
On the other hand, of course, as Tony McCall pointed out on ABC radio last week, the use of the word “catalyse” cannot be just ignored in terms of understanding Chandler’s intentions. The issue then becomes the question “what next?”. We don’t know enough about Chandler’s modus operandi to make firm conclusions, as we did, for example, with John Gay. At this stage all we really know is what we can access on the web, and that has been well plundered during the last week, with the result that the mainstream media might just as well have reproduced Chandler’s own company advertising, because they all just reiterated what he says about himself. Time will tell as more information comes to light about Chandler. At the beginning of last week only the rich-list observers would have even heard of him, but now he’s in a fishbowl.
For the want of better knowledge, and just for the hell of it, “what next” could fit into, say, the model of Chandler’s Hong Kong real estate investments, where he got in at a time of political turmoil, and then got out, apparently with huge profits, when the political situation stabilised. In that case, it could be that Chandler sees an option of a massive profit on the back of “catalysing” funding for the mill, then cashing in on a much higher share price. Possible, and permissible under the terms of the PMAA, but who’d want to buy?
Alternatively, “what next” could fit into the model of Chandler’s longer-term Russian banking investments, but that wouldn’t seem to make good sense at all in the context of a dinosaur industry like pulp. The kindle is not just the tip of the iceberg, it’s just one tip of a few icebergs.
So why would Chandler want land for pulp? Again, no wonder the rumour mill is that Chandler’s not really interested in pulp at all. To take a cue from Singaporean investment in land, who would have heard of Singapore agri-business a few years ago? This is not confined to Singapore. China has bought up massive areas in African food-producing areas, and we know the same is happening in Australia. The Japanese are doing the same. This is not to conclude that Chandler has his eye on Tasmanian plantations for food production, but he might. We are already seeing some of Great Southern’s failed MIS plantations being bulldozed back into farmland. Then there’s the little matter of carbon storage, isn’t there?
Anything’s possible of course, even the notion that someone would invest $150 million in Gunns’ pulp mill. If that really is Chandler’s intention, he might as well send the $150 million to a Tasmanian clearfell site and firebomb it, because that will be the final result anyway, only more protracted, bitter and destructive to his own company’s interests and to the future of Tasmania.
One other aspect of this deserves attention at this early stage of Chandler’s potential involvement in Tasmania’s “forestry” mayhem. Yet again, it raises the question of the relevance of the Tasmanian government in all of this. Does it have any? Or is it simply irrelevant, an observer from the sidelines? It is reminiscent, in a way, of how David Bartlett’s “line in the sand” comment was rapidly retracted, when he was told that it was not his place to propose “lines in the sand” which might affect Gunns. It is also reminiscent of the Peter Cundall story of how Jim Bacon, on his deathbed, said that he didn’t have the power to deal with the forestry industry.
This is the context in which we should understand what premier Lara Giddings was saying when she said she was “thrilled” by the Chandler announcement. She didn’t say “we need to have a close look at this”, or “we need to do our own due diligence about Chandler before we can make any further comment”, or “we need to look at this and see how it fits within the current IGA process”. At least comments such as those would have conveyed a sense of functionality, however superficial, but the premier being “thrilled” conveyed the message of dutiful subservience to those holding the real reins of power. This is a continuation of the breakdown in standards of governance which has characterised Tasmania for years. It is a continuation of the shredding of the fabric of due process, which has marked everything the Tasmanian legislature has done in relation to the pulp mill since the early days of 2007 – but probably earlier. It is a continuation by other means, of the PMAA and its permits, and a continuation of the roundtable-statement of principles-IGA farce, all designed to serve one clear purpose, the establishment of the pulp mill.
There is another edge to this latest potential development. It is a different dimension of flying blind than we have had in the past. There has, of course, always been lack of transparency in the establishment of the pulp mill, going back at least to the events which shafted the RPDC planning and approval process, and then through the half-light of the roundtable process and the “wink-wink” from the ENGOs for the mill (to use Tony McCall’s words).
The difference with the Chandler intervention is that we don’t know what we’re dealing with, and we have a political system which doesn’t either, but which is now so dysfunctional and lacking in fibre that it no longer even bothers to find out what it is dealing with. Let’s be as emphatic as we can be about this. When we have the federal health minister, Tanya Plibersek, coming out in undisguised anger at the Tasmanian-Green government for the way that it has mishandled cuts to the health budget by slashing elective surgery, this suggests that the contempt federal Labor has for the Giddings government extends across the board, and includes more than just the health portfolio.
Tasmanians might be so inured to the madhouse of the Tasmanian political environment that they barely take notice of further reductions in political competence, but now is not the time for us to allow Giddings to be “thrilled”. It is time for the Chandler group to tell the people of Tasmania exactly what their intentions are if and when they decide to invest $150 million in Gunns. They need to state very clearly whether or not Alan Kelly has been reported accurately, whether or not their intention is to “catalyse” funding for the pulp mill, and how they will do that, and what that will mean for Tasmanian “forestry”, including the plantation estate.
In the meantime, it is well past time for the Labor-Green government to do some proper homework about Chandler, and try to determine how “thrilled” they really should be, and try to work out, for all our sakes, whether they have any relevance at all for any of us.