Image for Forestry Roundtable – Working for the Man

“Ill fares the land, to hastening ills a prey, where wealth accumulates and men decay.” Oliver Goldsmith, 1770

The background to this goes back to 2009 when it became apparent that native forest woodchips and pulp were no longer an acceptable commodity in the international marketplace. 

Gunns’ institutional investors saw what was happening, and forced reform by having John Gay replaced as boss of the company in the early part of 2010. All stops were then pulled out to restructure the Tasmanian forestry industry to facilitate Gunns’ survival. Bartlett, with the support of McKim, installed a “roundtable” of industry stakeholders plus selected environmental NGOs (The Wilderness Society-Environment Tasmania and ACF), whose brief was to thrash out “Principles of Agreement” to meet the new strategic direction sought by Gunns.  In a nutshell, the aim was to transform the whole industry into a plantation-based enterprise to help Gunns get the finance it needed for the pulp mill. 

By the end of October 2010 the roundtable had agreed to meet Gunns’ main agenda, especially in providing a united voice for a plantation-based pulp mill.  The ENGOs fell over themselves in support, believing they would be able to claim to their inner-city support bases in Sydney and Melbourne that they had saved Tasmanian native forests from clear-felling for woodchips. On the other side, Gunns immediately claimed loudly that the ENGOs had at last provided the social licence, the community support they could now use in negotiating with prospective joint venture partners to build the mill in the Tamar Valley.

Since then, of course, Bartlett has gone – convinced by others that nobody convinced him that he had to go except himself, if you can work that out – and Giddings has come in, all sound bites blazing on her first day of office, smugly letting slip that “it hadn’t been ruled out”, that the bare cupboard of the Tasmanian treasury could go guarantor for a joint-venture partner for Gunns’ Tamar Valley pulp mill. 

If that wasn’t cute enough, it was followed a few weeks later by the interesting revelation that there was a time in the past (presumably “the line in the sand” moment) that the pulp mill was just “icing on the cake”, but now “it is the cake”.  Presumably she means “cake with icing”, but wait, there’s more.

Maybe the really juicy bits are yet to come, but the one about it being “appropriate” (was that the key word she used?) that the federal government go guarantor via the taxpayer-funded Export Finance and Insurance Corporation was the next tasty crumb to hit the public’s senses.

Then last week Sue Neales of the Mercury broke the news that Gunns had been meeting with guess who?  That’s right – the exact same Export and Finance Insurance Corporation.  And not to forget, they were also involved in talks with the Department of Agriculture, Fisheries and Forestry.  A couple of days later the Sydney Morning Herald let us all know that “the House of Representatives agriculture, resources, fisheries and forestry committee (chaired by Lyons MHR Dick Adams) will look into several key challenges facing the forestry industry in Australia and how to reduce the annual trade deficit in forest and wood products, which exceeds $2 billion”.

Wow, I bet Dick will have to think long and hard about that after speaking to all the boys at Gunns.  Which brings us to Julia Gillard’s interesting non-answer to Andrew Wilkie’s question about whether the federal government had ruled out funding the pulp mill, including through EFIC (TT HERE).  Her response was that there was “no application” for funds, but she then added the interesting information that the current “forest principles agreement” was “brokered by “community, union, industry and stakeholder groups”, which has been news indeed to the Tasmanian “community”.

But that’s the way it has been played all down the line, and that’s the way it was intended to be played since the roundtable was set up.  Tony Burke has said the same thing that Julia Gillard is now saying on more than one occasion.  Gunns and the federal government are chanting the same mantra, that the “social licence” has been delivered. 

That aside, the obviously startling reason why there has been no “application” is that the various federal officials working with Gunns have either decided to waive such niceties or reframe them to deflect questions like Wilkie’s.  The point is, that it’s all about considering the best way to make all of this work in the interests of Gunns, and their institutional investors.  We all know the great job that the institutional investors did in the early months of 2010 in getting rid of Gay, who was a thorn in the side of trade-off they thought would save their money – an exit from native forests in exchange for a gung-ho pulp mill. 

That’s still the way the institutional investors are thinking, just because there’s simply no other way.  No doubt they have their lobbyists working hard in Canberra to set a deal for a JVP – any JVP -  which might save their bacon.

If we are now looking at the possibility of Asian Pacific Resources International or Asia Pulp and Paper being the saviour for Gunns’ shareholders, there is no particular reason why they would be attracted, given the unsustainability of the project on every economic ground you’d care to mention, unless of course they knew the Australian taxpayer would subsidise the whole thing, at least until they had milked it dry for 20 years or so, and then let it fall over. 

Gunns’ own propaganda changes almost daily.  We’ve all lost count of the number of times they’ve had a JVP all sown up.  We’ve all lost count of the number of jobs they’ve shed in the last few years – certainly many more than the pulp mill will ever employ.  We’ve all lost count of how many different notions of “world’s best practice” they’ve come up with.  We’ve all lost count of their contradictory statements about FSC accreditation, about wanting a “social licence”, about…, well, you name it.

So things are really humming along quite nicely in the world of “commercial in confidence”, now involving a Kelty –Marr partnership. 
The Greens rhetoric is opposed to the mill, but that’s all it is.  Nothing more than rhetoric.  Lara Giddings has already called their bluff, stating unequivocally that the roundtable “agreement” should mean a trade-off getting the loggers out of HCV forests in return for a pulp mill in the Tamar Valley.

At a meeting in the West Tamar last Friday night, Tim Morris, Greens MHA for Lyons, said the Greens weren’t about “to put a gun to Lara’s head about the matter”, or words to that effect.  In a nutshell, the Tamar Valley pulp mill can go ahead in order to preserve the Labor-Green government.  The fact is, of course, that the Greens are thoroughly wedged.  If they pull the plug on the government, they know they’ll be slaughtered at the election.  If they don’t they will be in real trouble anyway if the mill gets off the ground.  You can almost smell them building their defences – “but Labor is better than the Liberals” – in the pleas and explanations for the sellout.

All we’re really waiting for now is whether a JVP, of whatever background, can be brought in – or already has – and what the trade-offs will be for the ENGOs and the Greens to agree to make Gunns’ institutional shareholders happy. That is, in addition to the massive subsidies that will need to be extracted from taxpayers to seal the deal and then pay for it more and more as demand for paper and pulp declines, and declines, and declines…

But then, by the time that happens, Tasmanians will be under much greater pressures to find ways and means to clean up the carnage created by Plantation Isle. 

You can bet on that. 

Karl, HERE