Impacts of plantations for the proposed pulp mill

The expanding area of plantations intended to feed the proposed pulp mill, is already having a major impact on the state.

Water

Mr Bill Kelty

He’s done it again.

This time in broad daylight.

Under the gaze of thousands of Gunns’ watchers, CEO Greg L'Estrange has once again manufactured a few book entries to help Gunns achieve a modicum of profit and loss respectability.

That boy certainly has chutzpah.

He didn’t quite make a profit, but an EBIT of $5 million loss for the first half of the 2010/11 year took a bit of work.

This is a briefing paper on the current debate over the future of Tasmanian forestry and Gunns’ planned pulp mill prepared by TAP Into A Better Tasmania, November 2010. A pdf is available for downloading from below.

For further information please contact media spokesman Robert McMahon on 0448 547 290 or email bob@orielstudio.com.au

Introduction

A stalled proposal for a world scale pulp mill, the slow motion collapse of the forest industry, the astonishing alignment of environmental groups behind industry for a plantation-based pulp mill and the prospect of big money changing hands marks an extraordinary period in a small island’s history.

So how did all this happen? It’s time to examine the causes in detail because to misdiagnose the causes invites the wrong solution. One solution being proposed, for example, involves ‘compensating’ the forest industry to the tune of over a billion dollars. But that in turn carries its own serious consequences eg. lack of funding for public hospitals.

The interpretation of the causes presented here provides a big picture perspective from a hitherto ignored community view, the one that the special interest groups involved don’t want to hear.

So how did we arrive at the point where the aims of some environment groups now mesh with industry, where conservationists signed up to support a plantation industry and a pulp mill in Tasmania, and the community was sidelined?

The story started decades ago.

By John Lawrence

First published 07.10.10 on Tasmanian Times

The forest industry’s slow motion train wreck continues its inexorable journey.

There are many, on both sides of the forest debate who appear to accept the urban myth that had it not been for the actions of high profile activists, Gunns’ former CEO would still be ensconced in Lindsay St Launceston.

A quick glance at the ASX announcement on 16th August 2010 outlining Gunns’ achievements in the financial year 2010 reveal that Gunns’ old business plan was a failure. The company’s old model was described as being “a conglomerate of long life low yielding assets…..(consisting of) many businesses….. excessive levels of encumbered assets .....excessive debt levels to earnings,..... (where) potential investors do not understand the business.”

It took the new Board less than 3 months to clearfell the legacy of Miranda Devine’s Working Class Hero (Devine retribution ... John Gay: working class hero and The Devine lie.)

The CEO’s demise and the uncertain state of his former bailiwick are due to its flawed business model, not the actions of one or two of its opponents.

There’s a real danger that erroneous reasons for the predicament facing the forest industry will lead to erroneous recommendations for a way forward.

Whatever the outcome of the Roundtable the next step will require heaps of money. From taxpayers probably. So an understanding of the current situation from a $ viewpoint must surely be close to the top of the list of current priorities.

The expanding area of plantations intended to feed the proposed pulp mill, is already having a major impact on the state.

Water

Plantations lock in water shortages. Over 40 of Tasmania’s 48 water catchments are affected by thirsty plantation trees drawing water out of the ground and lowering the water table. Consumption of water by expanding plantations in the headwaters affects everyone downstream. When plantations exceed 8% of the catchment area, river flow audits show declining water levels particularly during dry summer months as evaporation rates increase (D. Leaman).

Plantations compete for water with irrigators, farmers, domestic consumers and the environmental flows needed to sustain river health. Changes in land use to plantations lock in patterns of water consumption for decades, at a time of declining rainfall from climate disruption. Tax subsidised plantations are taking water that could be used to make Tasmania the food bowl of Australia.

Here is the online copy of the first edition [Summer 09/2010] of TAP's newspaper. You can download a pdf of the four A3 sized pages at the bottom and print off copies.

Its purpose is to detail in newspaper format how the proposed pulp mill, the fourth-largest kraft pulp mill in the world, threatens the health, jobs, lifestyle and investments of the community.

“Federal Minister for Agriculture, Fisheries and Forestry Tony Burke is looking very foolish today having relied on partial and biased advice from Gunns and the CFMEU to endorse Gunns’ planned pulp mill,” said TAP Into a Better Tasmania spokesman, Bob McMahon.

“Tony Burke should know better than to rely on those with a conflict of interest for advice to get behind a project that has failed to analyse the risks and failed to make a proper business case,” Mr McMahon said.

12 July 2009
CEO Mr Leif Brodon
Södra, Skogsudden, 351 89 Växjö
Fax: 0470-891 85
Email info@sodra.com

Re: Significant risk to Södra’s bottom line from investing in Gunns’ planned pulp mill, Tamar Valley, Tasmania.

Dear Mr Brodon,
We write to point out a significant and undisclosed risk to Södra’s bottom line should the company decide to invest in Gunns’ pulp mill planned for the Tamar Valley, Tasmania.

Despite being an environmental disaster, the Gunns pulp mill was at least supposed to make lots of money for Tasmania. But it turns out it won't even do that.

With Gunns putting themselves under the financial spotlight by potentially misleading the Australian Stock Exchange, now is a good time to have another look at the economics of the proposed pulp mill.