Image for What’s in the black box, Mr L’Estrange?


Finance journo Michael Pascoe wrote a couple of years ago “for longer than I can care to remember, I have had a bottle of GIO Anniversary port on offer for the first “independent expert” to publish a report that directly contradicts the hopes of any listed outfit that pays for said report. It’s a suitable prize for any demonstration of real independence, commemorating by implication the job done by the doyen of local “independent experts”, Grant Samuel, on AMP’s disastrous takeover of GIO”.

Michael wrote at a time when the truth about Great Southern’s appalling MIS schemes was surfacing.

“At the time of preparing the disclosure documents for each of these Projects, Great Southern had limited actual cost history available in order to estimate what the costs may be. Great Southern used the best information available at the time in order to provide an estimate of costs and these estimates were verified by an independent expert on an individual Project basis.

Ah, there’s the “independent” expert again. How reassuring”.

Independent experts were again summoned to convince investors to swap their woodlots and cattle for Great Southern shares.

“KPMG was paid a miserable $20,000 for each of those eight supplementary reports, for the privilege of being made to look somewhat less than perspicacious when Great Southern collapsed four months after they decided it “fair and reasonable” to swap into now-worthless shares.

KPMG was also paid $1 million for other services to Great Southern over the past two years though. That might ease any pain the firm might feel while just checking that their “independent expert” report did cross all legal Ts and dotted any possibly actionable Is, just in case some aggrieved investors start looking for someone to sue.”

So it came as less than a complete shock to read the latest independent expert’s glowing evaluation of Gunns’ pulp mill project.

If Mr L’Estrange is even remotely serious about seeking a social license for the mill and entering into full and frank discussion to achieve that end, he needs to disclose the precise assumptions made by his independent experts.

It is bordering on an insult to stand up on a soap box triumphantly declaring what paid consultants have determined from their black box when simultaneously refusing to divulge exactly what info was fed into the black box in the first instance.


Gunns’ independent experts provided a useful diagrammatical reminder that when the process from tree seedling to a paper product is dissected, the stage to woodchipping adds 40% of value, the pulping process a further 40% and paper production, a further 20%.

What this means is that the pulp mill will double the value adding that has so enriched the community from plantation woodchipping.

To all you sceptics just think of the glorious riches that E Nitens have and will shower upon this blessed isle. And then double it.

That’s how good the pulp mill will be.

Currently a tonne of green hardwood will produce half a tonne of dry woodchips worth $100. The grower gets $25, harvest and cartage contractors get $40, the chipper gets $20 and there’s $15 profit, which gets smaller every year because cost rise faster than commodity prices as a rule.

In the case of a non MIS grower, half of his $25 distribution is needed to provide a small rental return on the land and the other half reimburses him for growing costs. There’s no profit.

The numbers are worse for a MIS grower.

Yet the independent experts have told their black box that the grower will replant a second crop.

Most of the trees are owned by investors all over the continent yet the independent experts have in all likelihood assigned the benefit from harvest proceeds to Tasmania.

The situation has worsened of late. With Gunns taking over Great Southern’s MIS schemes, the majority of Gunns’ plantations are now on Canadian owned land. And Gunns has floated the idea to offload its plantation land as well which means even more of the value added by plantations is likely to end up in foreign hands.

Which begs the question, how can the independent experts accurately assess the benefits to Tasmania if the ownership structure of the industry is yet to be determined? Will a 100% locally owned industry produce any more benefits to Tasmania than an industry where land, trees and possibly a large chunk of the mill itself is owned and financed by persons outside Tasmania? Surely in the latter case some of the value added will flow outside Tasmania? What assumptions did the independent experts make?

To put it another way, will we be as well off if future returns are split between a few feudal serfs and an absentee Lord of the Manor, increasingly in the latter’s favour?

Anecdotally the benefits of the plantation industry have not been immediately obvious, so a promise from an independent expert to double the value added tends to fall on sceptical if not deaf ears.

But you just gotta love these experts. They might have failed to spot the GFC when it was two feet away, roaring towards them at a hundred miles per hour.

But they can tell you that the mill will generate extra State taxes of $597 million between now and 2030.

Most reassuring.


The week that saw Gunns’ independent experts deliver the goods with their hyped assessment of the pulp mill, National Foods announced plans for a restructure of their cheese making operations.

Prior to the announcement there was much nervousness. There was a possibility the Burnie plant would close. Instead plans were announced to spend $120 million upgrading the plant to produce 25,000 tonnes of cheese per year. That’s a lot of cheese. At $20 per kg that’s $500 million per annum. Over 20 years that’s…... golly…. that’s $10 billion. What was Gunns’ figure? $10 billion over the life of the project? Sure the latter was a discounted figure.

But with the help of independent experts, making undisclosed assumptions, future cheese prices for instance, and feeding them all into a black box, and using the baseline scenario that the Burnie plant was about to close, the announcement by National Foods could easily have been dressed up as say a $9.5 billion boost to the State producing at least 450 direct jobs and 3,500 indirect jobs, No problems.

Instead the announcement was portrayed merely as a $120 million boost to Burnie.

I guess Nat Foods weren’t seeking a social license.


Fiona Breen demonstrated her strengths as a journo on Friday evening with some well researched questions to Greg L’Estrange and Bob Gordon. ( HERE and HERE

Poor old Greg is starting to look as cerebral as Brendan Fevola.

But Bobby took the cake.

Quizzed about a moratorium poor old Bobby looked slightly askance but stated that he thought it merely meant “a delay”.

Not a period of time during which a certain activity is not allowed. Just a delay.

You’d think Bob would have acquainted himself with the meaning of ‘moratorium’?

Little wonder progress is slow.

• What Nick McKim says about the moratorium ...

Nick McKim MP
Greens Leader

The Tasmanian Greens today said that the Forest Principles Agreement process provides an historic opportunity to protect high conservation value forests and to diversify and strengthen Tasmania’s economy.

Greens Leader Nick McKim MP said that the implementation of the promised full moratorium, would be the simplest way to reassure all interested parties that the spirit of the Forest Principles Statement is being respected, and encourage an end to the current forest vigils which seek to protect high conservation value forests.

Mr McKim also reiterated that the Greens, like other political parties, are not directly involved in the Kelty process as they are not signatories to the Forest Principles of Agreements.

“The good will and good faith demonstrated by the signatories to forge the Forest Principles statement last year, was also reflected by the commitment of many non-signatories to provide space for the agreement to be delivered, especially that of the moratorium,” Mr McKim said.

“The failure to deliver a full moratorium by the promised 15th of March date, understandably frustrates people who feel that their good will has been taken for granted.”

“Clearly forests activists are attempting to protect high conservation value forests in the absence of the full moratorium which should be offering real protection right now.”

“Obviously the Huon Valley Environment Centre, and Still Wild Still Threatened, are passionate about protecting Tasmania’s unique high conservation value forests, as are the Greens.  We wish them all the best in their peaceful efforts to save the forests.”

“Change is inevitable.  We still have an opportunity to influence how that change occurs and ensure it is a structured transition rather than one imposed by the vagaries of global markets,” Mr McKim said.

The Noosa Journal: Gunns’ boss loves Noosa
20 Mar 11 @ 11:13am by BROOKE HARGRAVES

HE’S one of the high-profile faces of the controversial Tasmanian pulp mill project. And when the pressure of Gunns Ltd managing director Greg L’Estrange’s job gets on top of him, he likes to return to his Doonan hideaway.

``I first lived in Noosa from 1990 to 1994,” Mr L’Estrange told The Journal this week.

``My wife and I built a property in Doonan in 2004.”

High-speed internet and frequent flyer programs allowed Mr L’Estrange to enjoy a better work-life balance before eventually moving to Tasmania in 2008.

He returns to Noosa often a place he and his family loves.

``The mix of the community and the things you can do in the area are great,” he said.

``It’s a great place to unwind.”

Full story HERE

Clive Stott:

Just look at this plannedburn smoke.

Meanwhile ...

Will Tobacco Donations Compromise Liberals’ Stand?
Paul ‘Basil’ O’Halloran MP
Greens Health spokesperson
Sunday, 20 March 2011

The Tasmanian Greens today welcomed Labor’s flagged moves to extend smoking bans, saying that this policy shift is long overdue and has been Greens’ policy for many years.

Greens Health spokesperson Paul ‘Basil’ O’Halloran MP said that the Greens would be looking at the proposed legislation closely to ensure it will deliver the intended public health outcomes, especially the protection of children from secondary smoke as well as from the socialising impact that exposure to cigarette smoking can result in.

Mr O’Halloran also called on the Liberals to indicate whether they support moves to extend smoking bans given that they are the only main political party which still accepts political donations from tobacco companies.

“The Greens welcome these long overdue moves to take seriously the impact that smoking in public places has to our children, other non-smokers, as well as the long term costs on our health system,” Mr O’Halloran said.

“This has long been our policy position so we support Labor’s moves in principle, but will still be putting the proposed legislation through a fine tooth comb to ensure that it does provide the best options and cover all necessary areas.”

“We welcome plans to provide police with greater powers to confiscate smoking products, and to ban smoking in outdoor areas including children’s playgrounds, and swimming pools.”

“The Greens have been calling for these extensions, particularly around children, as a crucial part of our preventative health campaign. This is the most effective way to improve the health and welfare of Tasmanians and help to reduce the impact of spiralling health costs on the Tasmanian budget.”

“We are particularly pleased that smoking around impressionable children will be further reduced.”

“We have the second highest number of smokers per capita in Australia and particularly high rates of smoking in children. We also have the highest rate of pregnant mothers smoking at 27%.”

Mr O’Halloran also said that while Labor’s announcement on these moves is pleasing, the silence from the Liberals on increasing smoking restrictions is concerning.

“We know that the Liberals where the only party to accept political donations from big tobacco leading into the last election and the Greens call on the Liberal Health spokesperson, Jeremy Rockliff, to declare where he stands on this crackdown on smoking, and more broadly where he stands on accepting large contributions from tobacco companies,” Mr O’Halloran said.

Monday 21 March 2011

Media Release

A strong show of support for Tasmania’s peaceful forest movement

“In Tasmania’s far south, thirty five conservationists have set up a forest protest in the Peak Rivulet area. Two conservationists are in two tree sits, that are located at two separate sites, blocking a major logging road that would access three ancient forests currently being logged,” Huon Valley Environment Centre’s spokesperson Jenny Weber said.

“Now the State Government has shown an unwillingness to implement an urgent moratorium on all high conservation value forests, we are taking proactive steps to ensure these forests are not lost.  Huon Valley Environment Centre is comitted to putting a spotlight on the State Government’s failure to protect ancient forests,” Jenny Weber said.

“These forests located below Adamson’s Peak, are tall eucalypt forests in the Peak Rivulet area, one of the largest intact tracts of unlogged and unroaded ancient wilderness forests in the Huon district,” Jenny Weber said.

“The current logging operations being halted by conservationists today cover 190 hectares, a very large tract of forest that is being destroyed for ongoing wood chipping by Gunns Ltd, and very likely veneer for the Malaysian logging giant, Ta Ann. It is these companies that the State Government is choosing to protect their interests rather than the globally unique forests and wildlife habitat they are destroying,” Jenny Weber said.

Media Release: Logging and burning continues in high conservation value forests. 

Yesterday Still Wild Still Threatened documented high intensity burns in coupes in the Styx and Tyenna valleys, including coupe TN034B.

“TN034B is in the heart of the high conservation value forests which should have been in moratorium.” Said Miranda Gibson, Still Wild Still Threatened.

“SWST released footage in December 2010 of a giant Eucalypt being felled in TN034B, with a banner reading “the clock is ticking.” Today conservationists have returned to this coupe, still smouldering from yesterday’s burn, to once again highlight the fact that the clock is ticking for Tasmania’s ancient forests and now time has run out.

The moratorium deadline is a week overdue, and we are still seeing forests being felled and burnt everyday, this is completely unacceptable.” Said Ms Gibson.

“This is a further act of bad faith and shows a lack of commitment to implementing a moratorium.  Forest which could have been protected as a natural carbon storage in national parks and world heritage areas are instead going up in smoke, contributing to climate change.

High intensity burns result in eucalypt dominated regeneration. These areas of the Styx and Tyenna valleys were once mixed eucalypt forest with a rainforest understorey, and these burns will create regeneration that does not reflect the natural values and ecology of the area prior to logging.” Said Ms Gibson.

TFGA backs Leg Council Inquiry into native forests’ deal

Dated: 21 March 2011

Tasmanian farm foresters, excluded from the forestry settlement talks between industry and conservationists, today threw their support behind a Legislative Council inquiry into the proposed lock-up of Tasmania’s native forests, saying the public was being blinkered to its wider impacts.

“At first glance people might believe that because the secret talks focused on native forests on public land, private foresters would not be affected so we were out of sight, out of mind,” Tasmanian Farmers and Graziers Association chief executive Jan Davis said today.

“But, of course, that is far too simplistic and far from the truth.

“The sawlog industry that derives from native forests on privately-owned land is inter-dependent with that from public native forests. The two create a critical mass for the industry as a whole. Plus, plantations will now be restricted to private land.

“The ramifications for farmers who also manage forests are considerable and they should have been included in the forest talks,” Ms Davis said.
More than 26 per cent of Tasmania’s forest cover is privately-owned native forest; 885,000 ha is on land that is also farmed; more than four per cent is in plantation forests on private land.

“We are major contributors to the state’s forestry conservation effort and its wood products and timber output. Farmers have as much at stake as the big timber companies,” Ms Davis said.

Independent Member for the Western Tiers in the Legislative Council Greg Hall is chairing a Government Administration Committee inquiry, established last week as a result of the widespread community concern over the transition out of managing and harvesting public native forests.

“The process so far has been secretive and exclusive rather than open and transparent,” Ms Davis said. “This is the community’s chance to have their input. We congratulate Mr Hall on his initiative in having the inquiry established,” she said.

The inquiry will begin taking evidence in early April.

Media Release

21 March 2011

Two Conservationists Arrested in Tasmania’s forests

“Two conservationists have been arrested this evening in Tasmania’s far south, after spending twelve hours perched in tree sits.  The tree sits made up two blockades that were situated on the Peak Rivulet rd, and prevented logging in three high conservation value forests today,”
Huon Valley Environment Centre’s Jenny Weber said.

“A large tract of unlogged and unroaded forest was defended today by thirty five campaigners.  Huon Valley Environment Centre is committed to an ongoing campaign to stand up for the rapidly vanishing ancient forests in southern Tasmania. There is an urgent need to protect these endangered species habitats and valuable wild forests,” Jenny Weber said.

First published: 2011-03-21 03:07 AM