Media reports May 2009

22 May Every time I write that Gunns will not use old growth forests in its proposed pulp mill, but rather will initially use a combination of plantation timber and re-growth forests, I attract a volley of letters saying that I have been duped. If Gunns is telling deliberate lies then their managers and directors face heavy fines and perhaps jail because they are making their statements to the ASX. Maybe I am being duped, but I find it hard to believe that Gunns could fool the ASX, the state and federal governments and their shareholders and lenders. The Business Spectator

20 May About 20 timber workers held up banners protesting outside the ANZ bank, including Timber Community Australia and CFMEU members, Gunns employees and a former Gunns employee from Scottsdale. ANZ came under sustained pressure from GetUp and the Wilderness Society and members threatened to close ANZ accounts if it funded the pulp mill. The protest comes 12 months after the ANZ refused to fund the pulp mill because of the global financial crisis and because it feared reputational risk after the massive anti-mill campaign. Construction, Forestry, Mining and Energy Union secretary Scott MacLean said it appeared the ANZ did not support forest workers and communities.The bank said it was not able to comment because Gunns was a client. The Mercury

19 May Managed Investment Scheme company, Great Southern Ltd has gone into voluntary administration. The company manages 10,000ha of timber plantation in Northern Tasmania and employs eight staff and about 80 contractors. Gunns Plantations managing director Ian Blanden said there would be no negative impact on Gunns as a result of Great Southern's situation, which follows the administration of fellow MIS company Timbercorp less than a month ago. Gunns manages 100,000ha of plantation on behalf of MIS investors, out of a total of more than 200,000ha in the Gunns estate. The Examiner

16 May. Was the Meander Dam built for Gunns?

TAP Into a Better Tasmania spokesman Mr Tony Saddington said “The Water Minister David Llewellyn has a golden opportunity to put to rest the rumour that the Meander Dam was built for Gunns pulp mill”.

“Instead of claiming it's not true, Mr Llewellyn can squash the rumours once and for all by explaining how there was enough water available from existing supplies in Great Lake to release into the South Esk for Gunns mill during dry summers”, he said.

“TAP is looking forward to sound evidence from the Minister that there would be water available for all every summertime including Launceston’s drinking supplies, environmental flows in the Gorge, planned diversions to the midlands, and for farmers future irrigation needs," he said.

“The Minister must also tell us all how much Great Lake levels are expected to drop due to global warming and how much South Esk river levels will drop from Gunns plantations in the headwaters,” he continued.

Great Lake which supplies most of the water to the South Esk is near all time lows.

"If there will be enough summer flow in the South Esk without topping up from the Meander Dam over the next 30 years, then any rumour that it was built for Gunns is completely false," said Mr Saddington.

“Its over to the Minister to explain rather than blame”, he said.

15 May David Llewellyn, the Minister for Primary Industries and Water, said  that comments made by Kim Booth concerning the provision of water to the proposed Gunns pulp mill are completely and demonstrably false.

“The facts are that the price paid by farmers who bought water rights in the Meander Valley Irrigation Scheme is comprised of two components.

“The first component is a capital contribution towards the building of the dam - of $1100 per megalitre. All 24,000 megalitres available from the dam have been sold on this basis - raising a total of $26.4 million.

“This compares to the total cost of dam construction of around $38 million and the pipelines – which will cost a further $16 million. Farmers have therefore contributed around 50 percent of the total capital cost of the scheme.

“The second component of the price paid by farmers who bought water rights in the Meander Valley Irrigation Scheme is a variable charge of $35 per megalitre. This covers 100 percent of the operating costs of the scheme, including the electricity forgone by Hydro Tasmania.

“The price negotiated between Gunns and Hydro Tasmania, currently around $37 per megalitre, includes a variable component and a small contribution Gunns makes to the cost of maintaining Hydro Tasmania’s existing dam infrastructure at Trevallyn.

“Gunns’ price does not include a capital contribution of the nature required to support the Meander Dam because, unlike the farmers, Gunns is building and funding the infrastructure to extract the water and deliver it to the proposed mill without any subsidy from the Government.

“The comparison of the two prices in the manner suggested by Mr Booth is therefore completely spurious. State Government media release

14 May Farmers are upset they have to pay a lot more for water than Gunns for its planned pulp mill. About half the water in the Meander Dam is released for environmental flows and once it has travelled downstream it is available for Gunns' pulp mill. While farmers have to pay $1100 per megalitre, Gunns will only pay $24 for the same amount. When farmers questioned the price difference, they were told the water has finished its environmental flow requirements by the time it reaches the Trevallyn Dam. "The Meander Dam sat on the table for 40 years, 50 years," farmer Neil Graham said. "When the pulp mill was mooted, the dam was built." Greens MHA Kim Booth said "The whole Meander Dam process was a carefully constructed strategy to provide surety of water, plus all the infrastructure for free for Gunns' pulp mill," he said. ABC

13 May Prominent businessman Geoffrey Cousins says he is considering seeking funds to mount a legal challenge against Gunns Ltd's controversial $2.2 billion project planned for the Tamar Valley. This follows a legal opinion from University of Tasmania constitutional law expert Michael Stokes who said the state permit was illegal. Mr Cousins said a legal challenge would occur if a second opinion backed Mr Stokes' view. Gunns says it is not taking the issue seriously. The Mercury

12 May Tasmanian Premier David Bartlett has told Gunns to build its $2.2 billion Bell Bay pulp mill without delay - scoffing at a legal opinion that casts doubt on the validity of the project's approval. University of Tasmania law lecturer Michael Stokes says the parliamentary approval was questionable because an independent expert report by Sweco Pic was incomplete. Mr Stokes said that he had spent 15 months investigating various legal aspects of the approval, which was rushed through by former Premier Paul Lennon after Gunns withdrew from the independent Resource Planning and Development Commission assessment. The Examiner

11 May The Tasmanian Greens say that a legal bombshell has been dropped on Gunns' pulp mill. The constitutional law expert from the University of Tasmania says the Tasmanian approval of the mill is invalid. Michael Stokes says the state's pulp mill permit is flawed because the consultant hired to assess the mill didn't complete the job. The Government says the permit it's given to Gunns is legal. But the Greens are calling for the Solicitor-General to investigate. ABC World Today

11 May State approval for Gunns Tasmanian pulp mill is invalid and wide open to legal challenge, according to an analysis to be published by a leading administrative law expert. Michael Stokes, University of Tasmania senior law lecturer. The flaw was a "time bomb" for the $2 billion bleached eucalypt mill, proposed for the Tamar Valley north of Launceston, providing solid grounds for a legal challenge. Mr Stokes's analysis concludes that the assessment of the project by consultants under former premier Paul Lennon's fast-track process failed to comply with Mr Lennon's own fast-track legislation. Mr Stokes said the problem could not be easily overcome.  A Gunns spokesman rejected Mr Stokes's legal analysis as "ridiculous". The Australian

8 May The world's newspapers and banks are the new battlegrounds in Gunns' struggle to build its proposed pulp mill. The CFMEU has launched a campaign to help secure the necessary funding for the $2 billion project."We'll be contacting international banks and we'll be speaking to our brothers and sisters in Europe to get the contacts that we need and make sure that our information gets to the people it needs to get to to make an impact on the financial institutions in Europe and North America," Mr O'Connor said. Wilderness Society pulp mill campaigner Paul Oosting said the CFMEU campaign only served to highlight the financial risk of the project. The Mercury

7 May The Construction Forestry Mining and Energy Union has accused the environmental movement of attempting to blackmail banks to deny finance to the proposed $2.2billion Gunns pulp mill project in Tasmania. The union has revealed it will harness union membership on boards of superannuation funds across the nation, and the globe, to counter the campaign and help Gunns raise finance for the project. The Australian

4 May In December 2008 Tasmanian Times reported on the Race to the Bottom for MIS Companies. “(They) are continuing their inexorable journeys towards a catastrophe. Not all will survive intact……..Great Southern Plantations (GSL) seems to be at the head of the peloton at this stage…….Joining GSL in the race to the bottom has been Timbercorp”. Gunns too were selling assets to pay off debt. What’s the current situation? Timbercorp reached the bottom first, appointing voluntary administrators on 23rd April 2009. Tasmanian Times

4 May The woodchips that will come onto the market in the next few years from Timbercorp and Great Southern woodlots will be at the behest of administrators and managers trying to wind up the MIS structures. This will help suppress Gunns’ woodchip price already under stress from the effects of the current global crisis which has seen all commodities suffer price falls. Most commodities are in excess supply now so the rapid rise in price in the future is unlikely. Tasmanian Times

1 May Lawyers for Forests Inc have commenced a new proceeding against the Minister for Environment and Gunns Limited. LFF has filed a notice of appeal in the Federal Court against a decision that was made last month (9 April 2009). In April, a Judge rejected a challenge to the Minster’s decision to approve the construction and operation of Gunns’ pulp mill. The case will be heard by 3 judges of the Federal Court. If LFF succeeds in the appeal, the Minister’s decision to approve the mill will be overturned. The date of the hearing is not yet known. Lawyers for Forests Inc