The $276 million agreement that Prime Minister Julia Gillard and Tasmanian Premier Lara Giddings flaunted only a month ago as the ultimate peace deal to end the 40-year war in Tasmania’s forests is dead in the water.
It comes as no surprise to those who have sought to interpret the poorly-drafted provisions of both the intergovernmental agreement (IGA) signed by Gillard and Giddings and those of the agreement that preceded it, the so-called Statement of Principles.
The Statement of Principles was the product of those purporting to represent the Tasmanian forest industry and the conservation movement to achieve a peace, most recently under the guidance of former ACTU secretary Bill Kelty.
Both documents appear to have been the work of plant operators rather than draftspeople.
Grammar and proofing blunders aside, the giant flaw in both agreements has been the right of conservation groups to identify and nominate another half a million hectares of Crown land in Tasmania to be annexed into reserves, perhaps to the status of national parks or World Heritage, in order to neuter, by law, the timber industry in Tasmania and to pay alms to its victims.
Private foresters, who manage 26 per cent of the total forest cover, were excluded from the negotiations on the pretext that the talks did not involve forests on private land, yet clause 31 of the IGA specifically drags 885,000 ha of private forests into the equation.
Such a deal, whether concluded at NGO or government level, was never going to pass Tasmania’s Upper House, the Legislative Council. If it did come to pass, it would seal the fate of the Labor-Green governments in Canberra and Hobart as far as Tasmanian voters were concerned.
The premise for both the Statement of Principles and the IGA was that the major industrial player, Gunns, was getting out of native forest logging in favour of plantations in order to swing public and banker support behind its $2.5 billion pulp mill proposal at Long Reach on the Tamar River.
In effect, Gunns was about to place all its eggs in one basket, a world-scale pulp mill using only plantation timber.
Both agreements hinged on Gunns getting government compensation for its departure from public native forests, yet the mood in Tasmania has clearly been that Gunns should get nothing; its exit from native forests was being made on purely commercial grounds; it was immaterial that it had residual rights to use the public native forests.
If the Giddings Government had been responsible for giving Gunns one red cent from the overall $276 million compensation package for the IGA, it would have faced political and electoral oblivion.
We don’t know what Gunns was offered in the end. It is thought to have been $23 million, but on the proviso that it pay its debts to Forestry Tasmania, a disputed $25 million.
Yesterday the Tasmanian Government confirmed Gunns had rejected the offer, though Gunns, which has been in a trading halt on the stock exchange since August 8, said nothing.
Assuming that is right, it has the option to place those forest rights on the market. Since the IGA depends on those forests being protected, the keystone to the agreement is gone.
Added to Gunns’ problems is its lack of progress on a start of work on the pulp mill on the Tamar River. If director of the Environmental Protection Authority Alex Schaap determines that Gunns had not in fact started work substantially by August 31, despite a last-minute influx of earth-movers, then the permits for the mill will lapse and Gunns’ only recourse will be to the courts.
In the meantime, the queue grows of people waiting for Gunns to pay them what they say is owed, some small forest lease payments going back to June.
• Matthew Denholm, The Australian, Wednesday: Taxpayers to break Gunns logjam
FEDERAL taxpayers will pay millions of dollars more to timber company Gunns—and potentially see fewer forests protected—if the Gillard forest peace deal is to be rescued.
The $276 million, federal-state Tasmanian forest package will fall over unless the two governments can strike a new compensation deal with Gunns.
On Monday night, the company rejected as inadequate a government offer to buy out its rights over two-thirds of native forest logging in Tasmania.
Yesterday both governments confirmed the landmark forest deal—to protect 430,000ha of forests—would fail without Gunns.
The Australian has learnt that the offer to Gunns, thought to have been less than $15m, will be increased by using part of the $43m provided by the federal government.
Funds will be diverted to Gunns from $5m set aside for public relations under the deal.
As well, Premier Lara Giddings yesterday flagged diverting funds to Gunns from a $15m fund created to assist sawmillers to exit the industry.
That idea angered sawmillers and prompted concern from conservation groups, given that the closing of these mills is a means under the deal to protect a further 140,000ha of Tasmania’s native forests.
The federal government, the deal’s main funder, is more reluctant to raid the sawmillers’ fund, but Environment Minister Tony Burke would not rule it out yesterday.
He did not deny the $5m PR fund would be raided to top up the Gunns offer, but did assure sawmillers that sufficient cash would remain in their fund to assist those wishing to quit the industry.
Ms Giddings had previously insisted that neither component would be handed to Gunns but yesterday suggested both were now up for grabs.
“There is an envelope of $43m which can be used to help us settle the matters between Forestry Tasmania and Gunns,” she said.
Asked if it was fair to rob sawmillers of $15m to give to Gunns, Ms Giddings said: “You know what I’ve heard from the industry? That they don’t want any compensation packages because they don’t want people to leave.”
However, Tasmanian Sawmillers Association chairman Fred Ralph said it was “immoral” to make such a judgment before sawmillers had sufficient information to decide their future.
“It would be a matter of grave concern and a shattering of faith in the process,” Mr Ralph said.
Mr Burke said the deal was alive but needed Gunns’s agreement.
• Alison Andrews, The Examiner: Pollies to get Gunns briefing
TIMBER company Gunns will brief Tasmanian politicians on the state of the company and its pulp mill project at a special meeting in 10 days.
Windermere MLC Ivan Dean yesterday confirmed that he had asked for the meeting and Gunns had agreed.
It will be held at the company’s Lindsay Street headquarters.
Most MLCs have already received their invitation from former Murchison MLC Tony Fletcher acting on Gunns’ behalf.
Mr Dean said that he had asked for the meeting because of the community debate over Gunns’ $2.3 billion proposed Bell Bay pulp mill and its involvement in the forest agreement.
“There is a need to have a frank and honest meeting and debate of the issues,” he said.
He said that businesses in the community were hurting while the negotiations over Gunns’ possible payout for exiting native forest harvesting continued.
Contractors supplying Gunns’ Bell Bay softwood sawmill face an uncertain future with timber supplies still cut yesterday to the mill.
It is understood that Timberlands has cut supply to the mill for the third month running because Gunns has not paid its bill.
Sources said last night that the former Forest Enterprises Australia mill had run out of timber yesterday and contractors had already laid off casual staff because there was no work.
Launceston financial analyst Tony Gray said that he could not reason why Gunns hadn’t resumed share trading.
• Dinah Arndt, The Examiner: Gunns could receive $43m
THE federal government is banking on the state government reaching a payout deal with Gunns Ltd after the first undisclosed offer was rejected.
More money is on the table after Premier Lara Giddings yesterday backed away from capping the commercial settlement at $23 million under the $276 million forestry intergovernmental agreement.
She now says another offer can be made using $43 million, despite the agreement specifying $15 million of that is for sawmillers exiting native forests and $5 million is to inform and consult with affected communities.
“There is an envelope of $43 million which can be used to help us settle the matters between Forestry Tasmania and Gunns,” she said.
Forestry Tasmania claims Gunns owes it $25 million, which the company has disputed, and that is part of the negotiations.
Federal Environment Minister Tony Burke said he was confident the state would reach a commercial settlement with Gunns.
“In the middle of negotiations you’re going to get moments when people push their case pretty hard, but if this whole process was going to fall apart it would have happened more than a year ago,” he said.
“This is simply the next hurdle. I’m very confident that we’ll get a good outcome on this and keep moving ahead.”
He ruled out the Commonwealth contributing more money.
“Everyone is very clear that the money that’s been provided is enough to deliver the intergovernmental agreement and all the elements of it.”
Gunns remains silent on the issue.
• Jenny Webber: Activists halt logging in Tasmania’s promised reserve area
7 September 2011
Activists halt logging in Tasmania’s promised reserve area
Conservationists from the Huon Valley Environment Centre have today set up a protest in forest where logging has commenced in the last week, despite the promise from the State and Federal Government that they would be put in to informal reserves.
In the Arve valley, nine conservationists have halted logging, one person is in a tree sit.
“In the Arve Valley, logging has very recently commenced in AR002B.
This area of forest is high altitude alpine rainforest, with rich stands of pandani pines, mountain peppers and sassafras and myrtle forest that is steep down to the headwaters of the Arve river,” Jenny Weber said.
“Tasmania’s promised informal reserves will see the same fate as the failed moratorium, as clearfelled wastelands. Huon Valley Environment Centre is calling for the immediate end to logging in all forests inside the 572 000ha nominated for urgent protection, while Forestry Tasmania continues unabated with it’s destructive practices of wildlife habitat destruction, at the behest of the State and Federal Governments,” Huon Valley Environment Centre’s Jenny Weber said.
“In the last week we have found new logging in two locations, in the Picton Valley and in the Arve Valley, both areas are contiguous with the Hartz mountains, and the Tasmanian World Heritage Area. Logging in these two coupes should have been prevented by a moratorium six months ago. Since the Intergovernmental Agreement was signed on 7 August 2011, we are witnessing new logging one month later, and Forestry Tasmania is continuing to schedule logging in forests that should be protected,” Jenny Weber said.
“We are outraged that ancient forests, that were intact ecosystems just last week are being logged inside the 430 000ha of promised reserve area. Loss of these wild forests is the legacy of Julia Gillard and Lara Giddings,” Jenny Weber said.
“In the Picton Valley, logging has very recently commenced in PC015B, where a new logging road has been built throughout the duration of a promised moratorium. Huon Valley Environment Centre has on a number of occasions conducted peaceful protests in these forests calling for their immediate protection. They are old growth forests with a rainforest understorey, being destroyed by five logging machines right now,” Jenny Weber said.
“This is a disgraceful act on the part of Forestry Tasmania and the Government that is meant to be monitoring their activity, logging in these areas had not commenced when Giddings and Gillard promised the immediate protection of these forests within the ENGO nominated 430 000ha, and they will be gone before the promise is realised. Unless the loggers are moved on immediately,” Jenny Weber said.