The Probe

*Pic: Resources Minister Paul Harriss in Sarawak while an MLC. Image, Sarawak Report, here

Background to the Ta Ann Quota buy back.

The Lower House of the Tasmanian Parliament has established a Select Committee to investigate a private transaction involving an agreement between a public company Gunns and two private individuals over the sale of the woodchip plant at Triabunna.

This political witch-hunt serves no purpose other than to provide grounds for the public to activate a similar probe into a far more important public interest matter relating to a private company – Ta Ann Tasmania (TAT) – and the granting of quotas by a Government Business Enterprise (GBE); a matter over which the Liberal Government has shown absolutely no interest or concern.

The Triabunna transaction believed to total some $10 million dollars pales into insignificance when compared with the Ta Ann Tasmania peeler billet compensation package. This was for excessive quotas of some $26 million paid under the Tasmanian Forest Agreement (TFA) by the then Sstate Government to a private company for their surrender.

The general public would have almost no interest in how individual Australians spend their money, but should have a very keen interest in knowing how much of their money from both the Tasmanian and Federal governments is, and was being spent. Perhaps one should say gifted by both their Governments and a GBE, Forestry Tasmania (FT) to a privately-owned company.

The sum involved now totals some $45 million dollars for which no full or transparent explanation has ever been given.

The power of a Parliamentary Select Committee to summons any person to attend and answer questions in the jurisdiction of Tasmania is not available to members of the public bent on a similar quest. The public does, however, have the name and shame power of the internet and a venue such as Tasmanian Times (TT) which gives we the people a sporting chance of investigating the matter in detail and calling our political masters to account.

The Proposal

The proposal I have in mind is to establish a Committee of Audit derived from TT contributing members who by writing and publishing on their area of interest will enable us – through the medium of TT – to conduct a review of the issues arising from the following:

• The role, if any, played by the Premier, the Treasurer and the Minister for Forests in the oversight of the GBE Forestry Tasmania.
• The relationship between Paul Harriss, now the Minister for Forests, in the establishment and creation of TAT.
• The ownership and acquisition of the Huon Valley site by TAT.
• The contracts to supply Peeler Billets from Forestry Tasmania to TAT and the part played by the then CEO Evan Rolley and then Premier Paul Lennon.
• The ownership and the management of the Ta Ann Peeler Billet Plant and the part played by Evan Rolley, then CEO of TAT, in the cancellation of the TAT contracts previously gifted.
• The potential to transfer TAT profits in Tasmania to Sarawak.
• Possible corruption over due process regarding substantial grants of public money to TAT.

TT has run a preliminary blog to canvas the depth of interest in this matter. This has involved the TT community to express various views so as to ascertain if such a project has a value. This has shown that the community is willing to engage and play a valued part in the discussion. ( Witch-Hunter Barnett uncovers a Phoenix … )

Process

As a first step I hereby submit a list of issues of substance that require further discussion, debate and explanation from the TT community. Discussion will be achieved by utilising the TT web site – thereby allowing the latest in social media inputs to galvanise and utilise community expertise and involvement.

This will be followed by the appointment of a voluntary Committee of Audit taken from those who have made a serious contribution to the subject using their particular area of expertise as expressed on TT. The task of the Committee would be to seek out an explanation from those public office holders charged with the responsibility of protecting the public interest for each of the decided questions.

The Editor of TT will have final authority regarding all published material on this topic.

The key part of the public process is to establish areas that are of serious public concern relating specifically to this matter. The readersof TT will search them out and then report with their evidence publiclally on TT so we can decide if there is a case to be answered. A Committee of Audit would then conduct a public probe using the evidence as published on TT. Those identified as key players will be asked to provide answers to the issues raised as per the precedent initiated in the Lower House of the Tasmanian Pparliament. Those who have done no wrong will have nothing to fear.

The final aim is to provide enough evidence to enable the establishment of a Royal Commission into the matter. With sufficient effort by concerned citizens the Parliament may be persuaded to establish a Royal Commission using our terms of reference. I suggest that this is much closer to the desires of the Tasmanian public than a Liberal government interfering with the lawful activities of private citizens and public companies as evidenced over Triabunna.

The Public and its representatives consulting to the Board of Forestry Tasmania.

The Premier, the Treasurer and the Portfolio Minister for Forests are required to act on behalf of the people with final oversight over the GBE Forestry Tasmania. They function as the shareholders’ representative to be consulted by the board of that GBE. They must not act in the interests of their own person, party, electorate, or the Parliament and with this in mind they have two key roles:

– to prepare a Ministerial charter for the Governance of the GBE.
– to approve the corporate plan and various performance targets within it.

The Treasury Guidelines for the governance of a GBE are closely aligned with the requirements of the Corporations Act. The GBE Act imposes stringent accountability to individual directors and to the board of this GBE when it reports to the relevant Ministers.

The purpose of having a GBE is to allow it to independently manage its operational affairs and to maximise its commercial performance within the boundaries of strict accountability.
The board is responsible to the shareholder Minister(s) to achieve these objectives as specified in its ministerial charter and corporate plan.

The CEO and the management whilst responsible to the board for achieving the strategies, policies, programs and performance as determined by the board are required to act in good faith and for a proper and profitable purpose, exercising due care and diligence and thereby preventing the GBE from trading whilst insolvent. Hence the requirement for a Letter of Comfort from Minister Green as executed under Labour for some $115 million dollars – now all spent. New substantial funds have recently been supplied by the incoming Liberal government to the GBE FT under, I believe, secret commercial in confidence agreements.

Given Forestry Tasmania has been a GBE since it was established by the Rundle Government there exists a substantial history from which, ministerial charters, corporate plans and various performance standards have been set. These may be measured, the majority of which contain no information that may be exempt under the umbrella that protects the corrupt; namely exemption under commercial in confidence.

The examination of these should provide a trail of where and how the commercial performance of the corporate plan has or has not been observed or when the board has failed to meet the stated objectives. This then enables an assessment to be made of the management performance and the role played bythe people’s’ representative -, the shareholder ministers – so as to determine who is responsible for the existing condition of forestry in Tasmania and the quotas granted to Ta Ann.

The Ministers have an obligation to report to the public, the shareholders in FT, in a manner that clearly enables them as shareholders to form a view as to how the current state of affairs of a loss- making GBE Forestry Tasmania has been created.

The GBE, FT is required to obtain the approval of the Ministers as to their corporate plan and to be advised as the details of the Ministerial Charter. To do that they are obliged to present their plans and proposal for approval in such a way that the decision that the minister makes is based on a case that supports the decision or recommendation that the FT board wishes to implement.

The issue that then arises is how did the minister(s) exercise this responsibility, if at all, when subsequent decisions were required to recover from past failures so as to abide by the corporate plans and performance objectives as required to service their major customer TAT? In addition what steps did they then require of the board to correct any situation that prevented FT from maintaining a commercially viable business.

Can a proposal such as peeler billet quotas be submitted to the Minister in accordance with a corporate plan, a proposal that contains a known outcome that is not positive in financial terms? Has silence been used by default by those charged with ensuring that shareholder’s’ interests are protected if so why and for what reward?

The current structure of The GBE Forestry Tasmania involves:

• The portfolio and treasury ministers under the oversight of the Premier,

• The Board,

• The CEO,

• The Treasury.

This grouping in no way mirrors the checks and balances provided by shareholders in the private sector. The absence of a shareholders’ annual meeting, a lack of independent shareholder bodies such as a shareholders’ association or financial analysts reporting on behalf of significant shareholders make it impossible to call this GBE to account.

The issues that private shareholder groups, take up such as class actions to recover shareholder losses, auditors to attend annual meetings and answer questions, the number of directorships – some conflicting – as held by directors, no directorship for the CEO, performance hurdles for executive remuneration and most of all company performance cannot apply to a GBE such as Forestry Tasmania.

The aim of all these shareholder organisations is to improve both financial performance and corporate governance. None of the ministers involved since the creation of FT would appear to have undertaken any role on behalf of the public to achieve such aims, despite the lengthy justification contained in the Treasury Governance Guidelines as to the tougher requirements applying to the GBE environment.

In a recent NSW Supreme Court case seeking to overturn a decision by the NSW ICAC who had made findings against several directors for failing to exercise their powers in the best interests of the corporation for which they were directors. Judge McDougall made several interesting observations.

The Cascade investors argued that the Obeid link was immaterial because the government could only refuse to issue a mining lease on environmental grounds.

Justice McDougall dismissed this.

The idea that a senior public servant and a minister of the crown must shut their eyes even to clear evidence of corruption would come as a surprise to many citizens of this state.There is a clear public interest in ensuring that rights to exploit what otherwise was public property are not given as a result of or consequential upon, corrupt dealings.

One of the lessons from this case involving the granting of coal mining licenses is that Ministers, Directors and their advisers should assume every decision will be detailed in a newspaper, the ICAC or a court and as a result they must act accordingly.

It is clear in the case of Forestry Tasmania that it has been engaged in non-commercial activities to the extent that it has reported losses amounting to a staggering $214 million in the plast 3 years. Where in the succession of corporate plans is a business case to both repay these debts and or produce a commercial return and what part complicit or otherwise have the public’s representatives played in this debacle?

Have the losses incurred been quantified and allocated; if so what part relates to the contracts entered into with TAT, orchestrated by the then FT CEO Rolley and overseen and approved by the relevant ministers?

A public challenge to the legality of the Memorandum of Understanding between Ta Ann and Forestry Tasmania dated 18 Dec 2005 and the Contract by FT to supply peeler billets to TAT dated 16 Jan 2006.

These two matters should be discussed in terms of the TFA payment of $26 million to Ta Ann so as to establish:

• What went wrong?

• How did it go wrong?

• What were the key decisions that led to the payment of $26 million?

• Who was responsible for the critical decision and when?

• Can they be held to account?

Any reader may contribute original material under any one of these draft headings that may help with the prosecution of this investigation. Additional headings will be considered.

1) Timelines, A history regarding the corruption of due process as applied to the logging industry in Tasmania with specific reference to Ta Ann.

2) Ta Ann Tasmania (TAT).

3) A recent history of Sarawak and of the Chief Minister and his Family who have investments in over 400 companies in 25 countries worth a minimum of $5 billion. Sarawak is believed to be one of the most corrupt states in Asia. The wealth of the Taib/Sepawi families, principal owners of TAT, and their property portfolios in Canada, London and around the world acquired at the expense of their own indigenous people has never been properly accounted for. A British Prime Minister described the destruction of the Sarawak rain forest as ….probably the biggest environmental crime of our times.

4) Why did Ta Ann choose Tasmania to pioneer Eucalypt peelers and what part did Paul Harriss, Paul Lennon and Erich Abetz play in the decision. How much in money and gifts have been made by Ta Ann and its associates since the inception of the Tasmanian investment?

See: Underbelly: Paul Harriss; A Step Too Far?

5) The part played in setting up the TAT business in 2005/6 by the following: Premier Lennon, Forestry Tasmania, its then then CEO Rolley and Tasmanian Senator and later federal Minister of Forests Erich Abetz, Legislative Council member and now State Minister of Forests Paul Harriss and the former Minister of Forests for Tasmania, Bryan Green.

6) With whose input and approval was the Memorandum of Understanding (MOU) created between FT and TAT before its signing on 18 Dec 2005.

7) The Wood Supply Agreement for unspecified volumes of peeler billets is dated 16 Jan 2006; it was legally valid to 2022 but extended to 2027, by whom, why and was a kickback involved?

8) The Greens’ application over a blocked FOI to the Ombudsman over documents refused release, included parts of the key document, the MOU. Those parts refused release were according to FT unique in its terms and special ancillary arrangements, this being given as the reason for non-disclosure. The Ombudsman notes that claiming exemption under Competitive disadvantage is unique to Tasmania.

9) The size of the initial Federal/State Grants to set up TAT in Tasmania;, who arranged them and why were they required and did anybody personally benefit? Why was this setup gift required to establish a TAT factory in Tasmania when TAT had been given :certainty of quotas, certainty of supply gifted at no cost to TAT, a low price for the delivered billets, a lengthy contract, a massive over- cutting quota allowing a buyback resulting in a free gift of $26 million under the TFA.

10) A favoured rate for electricity supply which is rarely paid without complaint .

11) The number Tasmanians as a % of the workforce as employed by TAT?

12) The number of Malaysians employed on visas?

13) Location of Factories North and South; why only South completed to capacity; was this allowed under MOU? North only completed with further $7.6 million gifted outside the TFA .

14) Size of Contributions in kind by State Government, Electricity, Roads, Site Preparation Grants, in lieu money from the public purse.

15) Huon Council: approvals, planning permission and staff involved for approvals regarding the factory site in the Huon Valley.

16) Paul Harriss: Discuss the lie that he visited Sarawak to “Check out Ta Ann’s impact on orangutan habitat”. Discuss the declared payments by Ta Ann to Harriss, when did his connection with Ta Ann begin and why was his puff written on Legislative Council notepaper for the Ta Ann Annual Report.

17) Australian dollar effect on price of Billets and profitability of TAT.

18) Why TAT pricing structure is exempt FOI as no competitors can compete now that the federal/state contribution to TAT exceeds $50 million.

19) Under the Peeler Billet Supply Contract at what price and for what grade of Peeler Billet will FT break even?

20) Terms of Peeler billet sale, fee structures, discounts, price/fee review mechanisms should be public knowledge.

21) As the price of Peeler billets is tied to the Pulp price and the mechanism is undisclosed, is there a floor price; if so what is it?

22) Can supplied peeler billets be rejected at the factory gate, if so by whom, who pays for the rejected billets and what is done with them?

23) How many metric tTonnes are rejected per annum?

24) Are the log delivery trucks subsidised if so; by whom, if so how much, is it calculated by weight, per trip or the number of billets?

25) Quotas … how established by FT in 2005 when in competition with Gunns. Did this promote a conflict of interest over available timber and result in the overcutting of the resource?

26) Rolley’s position as CEO at FT at the time the quotas were gifted to Ta Ann? Why did he resign and move to Lennon’s office as Secretary of the Department of Premier and Cabinet? Did this position give him the access to the position of influence within the Government prior to his transition to CEO of TAT.

27) Source of billets in MOU: plantation, regrowth, old growth.

28) FT sells 300,000 tonnes of billets to TAT with a stumpage return of approx $35; the exact figure is commercial in confidence, Why?

29) PEFC, FSC and requirements of TAT to move toFSC certification … The $7 million supplied under the TFA to facilitate FSC accreditation; is this a form of indirect subsidy to TAT?

30) Plywood supplied to Olympic Games and to the floor’s to for Containers.

31) Demonstrations at Huon factory, police reaction and future Anti protestor laws as per bikies in Queensland.

32) TFA and resulting payments to TAT of $26 million. The TAT Annual Report indicates how the money was received and Australian tax alleviated by slick accountancy practice.

33) Part played in protecting the sums to be paid to TAT under the TFA from any amendments in the TLC; particularly as this relates to Harriss and his input as the Chair of the investigating committee into the TFA by the Legislative Council.

34) Cancellation of Quotas. Article: Ta Ann – The Supreme Beggar, Tasfintalk, 28 July 2013 “Ta Ann the supreme beggar”, Tasfintalk, 28 July 2013 and TT, 27 07 2013.

35) Why was a grant of $7 million made by Rudd outside the TFA to set up TAT plant at Smithton?.

36) Return to the taxpayer in Wages from TAT per annum. In TAT annual report 2010 it employed 133 people, turned over $37 million, total assets $82 million; . gross profit a negative $5 million; overall loss $11 million. The use of 457 visas shows that some 34 of these workers were Malaysian.

37) TAT and the possibility of Transfer Pricing. Have they or are they being investigated by the ATO and why would they set up a loss- making business in a Tasmania to make one annual profit since inception;, existing mainly on handouts from the Australian public purse.

38) State Budget forward estimates seem to allow for a subsidy to FT to keep it solvent of $25 million per annum now and into the future to cover operating losses; what is the business case for this?.

39) Total sum paid out by the Australian Taxpayer to date to keep FT afloat exceeds one billion dollars over less than 15 years … and still rising.

40) Losses by FT in the pastlast 3 years of $214 million, despite payments by state government of $115 million.The total loss in three years for this GBE, funded by Tasmanian taxpayers now seems to total $329 million.

41) Is it becomes possible to refer to the Tasmanian Integrity Commission the legality of Minister for Forests Harriss’ new anti-protesteor legislation and how close to this legislation is TAT?

42) Discuss the Tasmanian Courts and legal profession who protect forestry and government as evidenced by John Gay’s $50,000 fine and ongoing external proceedings to recover more than $1 million from Gay.

43) A suggested course of action is to contest the legality of the MOU as struck between two business enterprises; one the property of the people of Tasmania the other the rightful property of the people of Sarawak.

44) Judge Robert McDougal ruling in the NSW Supreme Court on Thursday 24 July in the matter of Kinghorn and ICAC. Investigate if the results can be of use in Tasmania?