Image for Buy-back of logging contracts has precedent in fishing buybacks. Class Action?

Consistent with Greens No Compensation Position

Kim Booth MP
Greens Forestry spokesperson

The Tasmanian Greens today said that the potential Crown buy-back of Gunns Ltd’s sawlog quota of the 300, 000 cubic metres per annum legislated obligation should be overseen by an independent Probity Auditor, and retired into conservation in accordance with the Statement of Principles.

Greens Forestry spokesperson Kim Booth MP said that there are precedents around the world for quota buy-backs for the purpose of conservation, such as fishing licence buy-backs, and that the purchase of an asset at an established commercial market price, is a legitimate buy-back process which does not equate compensation.

“The Greens stand by our position that Gunns Ltd should not be compensated for its decision to exit native forest logging, which is consistent with our position that any purchase by the Crown of any assets owned by Gunns must only occur at an established commercial market rate,” Mr Booth said.

“The Greens also believe an independent qualified Probity Auditor should recommend a proper negotiating process between the government and Gunns Ltd to determine a fair commercial value of current sawlog quota held by the company.”

“Purchasing an asset at an independently verified commercial value, and in this case for the purpose of being retired into conservation, is not compensation.  Paying more than the established commercial value would be compensation, which the Greens would not support.”

“In no way would the Greens countenance over-payment of any identified commercial value as that would constitute compensation, which the Greens will not support.

“Whether sawlog contracts are held by Gunns Ltd or a small family-owned business wanting to exit native forestry, these buy-back transactions should occur on a fair and commercial basis, to further the goals of the Statement of Principles. Are the Liberals seriously suggesting that assets owned by private individuals or companies should just be seized by the government?.”

“The Greens are also adamant that in accordance with the Statement of Principles any commercial quota buy-back is to be retired into conservation, and is not to be sold-on to other forestry operators.”

“Gunns should not receive compensation for giving up native forest logging however they, or any small family-run business, are entitled to sell off their assets, such as a disused truck, and if the Crown were to seek to buy that truck it would need to be at a verified commercial market value basis. Similarly, the company is entitled to offer for sale their contracted share of the Crown sawlog allocation.”

“Whatever value is placed on the contracts by the market, if any, that is the price that should be offered to Gunns or any other Crown sawlog contractor holder to retire that volume into conservation, in the same way that over-allocated fishing quotas around the world have been bought back by the governments involved and retired.”

“The Greens also believe that it is Gunns’ responsibility to pay out all employee entitlements to its workers, without receiving any financial assistance from either the Federal or State coffers to meet those contractual obligations.”

Mr Booth also reiterated the Greens’ total opposition to the Gunns’ polluting pulp mill proposal for the Tamar Valley, and said that any buy-back of sawlog quota contracts at a commercial rate will do little to assist the company get the pulp mill up, given Gunns’ inability to find a joint-venture partner for the last three years.

“A Probity Auditor overseen process to determine a fair commercial transaction for the quota, will be small drop in Gunns’ huge debt repayments, which will not assist any attempt to resurrect the flawed, controversial and polluting pulp mill proposal,” Mr Booth said.

Gunns Share Price, HERE

• Hakan Ekstrom, Wood Resources International LLC, Seattle, USA

Supply, demand, logistics and pricing of pulpwood and biomass will be the focus at the 5th International Woodfibre Resource and Trade Conference in Singapore

Global demand for wood fiber for both pulp manufacturing and renewable energy increased during 2010 and 2011.Worldwide trade of wood chips in 2010 was up 24 percent because of increased production of pulp and paper products worldwide; China showed the greatest growth in chip imports, with an increase over 400 percent in the past two years. Australia continues to be the major wood chip exporter, and shipped 11 percent more in 2010 than 2009.

Consumption and trade of biomass in the form of wood pellets has also gone up dramatically the past few years. In 2010, the estimated global consumption of wood pellets was 13 million tons, a doubling in four years.

These trends raise a number of questions about the future supply, trade and pricing of wood fiber:

How will demand for wood fiber for pulp manufacturing and energy generation develop in China and Japan?

What is the wood supply outlook in Australia, Southeast Asia, Latin America and Africa?

Which regions in the world have the most competitive wood fiber prices?

What are the latest developments in the supply/demand balance of woody biomass in Europe? 

Will newly established energy plantations meet increases in demand for energy wood fiber?

What new woodfiber supply projects globally have recently started up, or are planned?

These questions, among others, will be answered by industry experts at the upcoming 5th International Woodfibre Resource and Trade Conference, which will be held in Singapore on October 30 - November 2, 2011. The conference is organized by DANA Ltd., Pike y Compania, and Wood Resources International LLC. As of June 30th, delegates from 26 countries have registered to attend the conference.

As always, the focus of these International Pulpwood Conferences will be to not only to educate, but to provide unique networking opportunities between wood fiber suppliers, consumers, traders and shipping companies from around the world.

For registration and for more information about this exciting opportunity to meet with participants in the global forest industry and biomass sectors and to hear about the latest developments in international trade of wood fiber please visit the official website,

Track global pulpwood and sawlog prices - subscribe to the Wood Resource Quarterly - read by forest industry analysts in over 25 countries since 1988.

Download: International_Pulpwood_and_Biomass_Conference_Nov_2011.pdf

First published: Monday

• Forest contractors investigate class action

The Australian Forest Contractors Association says there is growing support for class action against Gunns and Forestry Tasmania over alleged contract breaches.

The Association’s Colin McCulloch says the organisation is investigating the option, with support from at least 12 individuals.

Mr McCulloch says many contractors are suffering due to the proposed closures of woodchip mills.

“The intensity of the news of Triabunna and obviously the issues that may well come out of that where people might have thought they had ongoing work well that’s not neccessarily the case,” he said.

“They’ve been told their contracts with Gunns have ceased and I guess that’s the final number of eight or ten that actually gives it some critical mass.”

Forest workers are rallying in Hobart today calling for immediate compensation for people who have to leave the industry.

The Prime Minister, Julia Gillard, says the Federal Government is committed to reaching a peace deal over native forest logging.

It is almost a month since the facilitator of the peace talks, Bill Kelty, handed the interim agreement to the State and Federal Governments.

Ms Gillard has told ABC Local Radio the Government was in regular contact with Mr Kelty.

Forest contractors investigate class action against Gunns, HERE