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.

It is unlikely that Gunns has pointed out their dependency on direct and indirect government subsidies because Gunns has neither reported on these in its Integrated Impact Statement and does not report the subsidies in their books. Given the scale of these subsidies, their potential loss to Gunns and forestry in Tasmania poses a significant risk to the future value of Södra’s investment as the global financial downturn forces governments to look for ways to cut back on expenditure.

The profitability of Gunns Ltd has long been artificially propped up with a wide range of taxpayer subsidies as listed in the Appendix below. A cash subset of forestry related subsidies have also been identified in an independent study by economist Graeme Wells.

The local community via its organisation TAP Into a Better Tasmania has estimated subsidies for Gunns and forestry in Tasmania and costs arising from the pulp mill project. These include losses to other businesses and the community of more than $3.1bn, one time diversion of taxpayer dollars of $399m (so far) and ongoing subsidies of $360m/year See Subsidies and the Appendix below for more detail.

The scale of many subsidies is not precisely known as there has been no socio-economic and environmental analysis of the pulp mill proposal or an analysis of cost side of a cost-benefit study. Neither has there been a risk assessment to Australian Treasury standards of the pulp mill project. Sweco Pic’s assessment of the project “does not include … noise emissions, impacts on surface or estuarine waters, effects on flora and fauna, transport implications and social and economic effects, and does not include construction impacts and does not include impacts from off-site infrastructure development such as raw water supply pipeline, effluent pipeline or quarry” (p12 Assessment of the Gunns Limited Bell Bay Pulp Mill Against the Environmental Emission Limit Guidelines, 25 June 2007)

There is considerable community disquiet about the assessment of the project with only 26% agreeing with the Government's fast-track process, 64% disagreeing and 10% unsure (8 August 2007 EMRS statewide poll. (See http://tapvision.info/node/413). Also, 26 of 27 opinion polls conducted from 2005 to the present show a majority of Tasmanians and Australians are opposed to a Gunns’ pulp mill in the Tamar Valley. Only one poll in George Town near the proposed pulp mill, showed majority support (53% to 47%) in February 2008.

Governments are coming under increasing pressure as a result of the global financial crisis to reign in spending, recoup costs and reduce subsidies in the face of backlash from voters who are increasingly angry with the loss of essential services. Some of these services include health, public housing, education services, disability services, road & rail funding, national parks and nature conservation.

The dependence on subsidies means that neither Gunns nor Södra can guarantee the future bottom line profitability of the proposed pulp mill. Professional business consultants have advised us that the most responsible decision for Södra is to wait until the scale and type of subsidies is clear and the risks clarified.

We welcome inquiries to provide further information about the financial risk to your bottom line from investing in Gunns’ planned pulp mill.

Yours faithfully

Tony Saddington

Spokesperson for TAP Into a Better Tasmania
Email mtdismal@bigpond.net.au
Web www.tapvision.info

Cc Evans & Peck, Sydney office
Fax: +612 9495 0520


Appendix

Whilst it has not been possible to produce precise figures for all subsidies to Gunns and the forestry industry, it is clear that the level is very high. The global financial downturn and a decline taxpayer in funded support poses a significant risk to Södra’s future bottom line.

Some opportunity costs and subsidies for forestry and the proposed pulp mill include:
1. Logging operations (research, building and maintaining roads, bridges). Greater than $65m/yr.
2. Resource use (free water use by plantations, transportation subsidies for heavy truck traffic). $176m/yr.
3. Provision of infrastructure (rail, pipelines highway upgrades). One time costs = $376m, annual cost = $19m/yr.
4. Pulp mill project promotion, planning and review. One time costs = $14m.
5. Direct government assistance to logging industry (plantation establishment schemes, favourable loan agreements, economically inefficient pricing policies, taxation policies and direct and indirect financial assistance) over past 10 years = $632.8m.  See Graeme Wells report at (http://tasmaniantimes.com/images/uploads/WELLS_ECONOMIC_REPORT.pdf)
6. Indirect costs (health impacts on communities, losses to 2600 tourism and related businesses in Launceston and the Tamar Valley, loss of agricultural land to plantations, losses to 77 fine food and winery related businesses in the Tamar Valley, risks to Bass Strait fishing industry). Largely unknown but exceeds $1.1bn/yr.
7. Carbon trading losses ($165m/year).
8. Electricity subsidies (to Gunns and major contract users in the wood processing sector). Unknown.

Updated and revised 26 May 2009, with new foul gas zone boundaries and downloadable pdf.

Fugitive odours from pulp mills

Advice from Dr Warwick Raverty

Dr Raverty is a retired pulp and paper expert and former Assessment Panellist for the Tasmanian Resource Planning and Development Commission which was charged with the responsibility of examining Gunns’ proposal for a kraft pulp mill at Long Reach, Tamar Valley, Tasmania. He provided the following advice to TAP on 10 May 09.

    --------------------------------

Fugitive odours (foul gas) from Gunns’ planned pulp mill will be detected in the air up to 55kms away eg Launceston, Deloraine, Longford and Bridport if it is built at Bell Bay. Foul gas causes nausea and headaches in most people exposed to it for long periods. It will impact on health, quality of life and businesses of everyone living within the 55km zone around Bell Bay.

All kraft pulp mills produce tens of tonnes of toxic gases per day that pulp mill managers refer to euphemistically as 'Non Condensable Gases', or NCG for short. In the same way that industry managers refer to 'outplacement' while workers call it ‘getting the sack’, pulp mill workers call NCG by its real name ‘foul gas’!

 The Hydro is asking for asking for public comment on water flows down the Gorge, Launceston.

This is a rare and important opportunity for you or your organisation to identify any issues of concern relating to water levels, water flows, demand on the water or any other associated environmental, social or cultural values or concerns.

For a backgrounder on water flows through the Gorge, please see the TAP report - Water audit of the South Esk Basin and an assessment of proposed pulp mill requirements.

Just fill in the short questionnaire (download the attachment below; Hydro - Cataract Gorge Environmental Flow Public Questionnaire) and return to Dr Caroline Whalley at Hydro Tasmania Consulting, 89 Cambridge Park Drive, Cambridge, Tasmania 7170 or email to caroline.whalley@hydro.com.au before 22 May 2009.

Friday 1st May 2009

TAP Into a Better Tasmania is concerned that the extreme claims by Gunns, CFMEU and Timber Communities Australia about the planned pulp mill are threatening thousands of existing Tasmanian jobs in fine food production, wineries, agriculture, tourism and fishing industries during impending hard times.

“The planned pulp mill will cost the State economy up to $2.1billion and 2088 jobs lost in tourism alone, according to the Business Round Table Report,” said TAP Into a Better Tasmania spokesman Tony Saddington.

Federal Court appeal launched

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. 

See the attachment  for notice of appeal.

In whose interest are the Government’s proposed new planning laws? Why are they being fast tracked?

 

To progress towards a better Tasmania, TAP into a Better Tasmania strongly recommends that the Local Government of Tasmania (LGAT) demand that the State Government’s planning review process be stopped to allow a full and proper input by the public and all Local Councils.

 TAP into a Better Tasmania (TAP) is angered and alarmed about the State Government's plan to introduce legislation that will see Council involvement, and public consultation, being removed from Tasmania's planning processes; to be replaced by an executive decision-making process authorised by the Government Minister of the day.
 
In democracies, governments are elected by the people. Good governments act in the best interests of the people, with full and open periods of public consultation. We believe good government should also include a recognition of the value local councils have for their communities, and an acknowledgment of the importance local councils have in the broader democratic electoral system.
 
In the context of the proposed changes to Tasmania's Planning System, we ask LGAT to demand a halt to the review process to allow full and proper discussion and input, and to convey the following concerns to State Government.
 
TAP into a Better Tasmania is a politically non-aligned community group of 3000 members, that has grown out of the State Government's determined attempt to fast-track Gunns Ltd's proposed Pulp Mill, and the subsequent erosion of Tasmania's democratic process.
 
Some of TAP's concerns relating to this legislation include: 

1. Inadequate time for public comment

Despite the significant changes that are being proposed less than three weeks has been allowed for public comment, one of which includes the Easter public holiday. Media attention has been minimal, possibly because media releases relating to the proposal have been few. This lack of public awareness about the proposed Planning System changes has resulted in very restricted opportunities for debate or comment in newspapers or the electronic media by either planning experts, or the public. This is both unjust and unfair considering the enormous impact this legislation will have on every Tasmanian. TAP believes more time must be made available for comment.

2. Minister’s new executive powers are excessive

TAP has grave concerns about any Minister having the power to ‘call in’ a project without a due and proper process that includes public consultation, and consideration for everyone in the community who may potentially be negatively affected by a development project.

3. High cost of secrecy

We question why there is no requirement for the Minister to make public any decisions that are made in relation to significant developments, and particularly Projects of Regional Significance.  Transparency and its benefit, a social licence to proceed with the project, is lost under the new proposal.

4. Restricted rights of appeal

The severely limited opportunities for individuals to appeal planning decisions that may have adverse effects on them is undemocratic. Appeals may only be pursued through the Supreme Court on matters of law, and costs are prohibitive for the average citizen.

5. Coercion of local planning regulations

Under the proposed legislation the Minister can override existing local council planning laws, enabling a project to proceed even if council planners have deemed a project unsuitable. Local councils should not be forced to modify their own planning laws to comply with a potentially controversial, secretly assessed Government-backed development.

6. Restricted focus on economic benefits contravenes best practice planning

A comprehensive analysis of the pros and cons of economic, social and environmental aspects of any proposed development is essential for good planning eg. the Equator Principles governing assessment by banks of project financing.

The proposed Planning System changes appear to focus on those projects the Government considers to be ‘economically beneficial’. An example of this flawed model is Gunns Ltd’s proposed Pulp Mill, a project that ignored social and environmental aspects, and failed to consider potential negative outcomes when it concluded the mill would deliver economic benefits for the region. [The detailed and independently prepared report for Tasmanian Round Table for Sustainable Industries Project, www.lec.org.au contradicted this view. Their report concluded the Pulp Mill would deliver an overall negative benefit to the Tamar Valley].

Assessments of Projects of Regional Significance must incorporate the social, environmental, and economic factors involved, as well as thoroughly considering the potentially negative outcomes likely to result from any proposed development.
 
TAP strongly opposes any decision that is based solely on potentially positive benefits.

7. Perception of bias

The Minister can ‘call in’ a project if he/she believes there is bias on the part of Council. There may in fact be good reason for taking a view on a project eg. problems involving pollution, adverse health effects, or social acceptability. Such a view can be seen as ‘biased’ from the Minister’s limited perspective.

8. Political donations

There does not appear to be any provision for questioning the Minister’s own bias. For example, the new planning proposal allows for a Minister to ‘call in’ a project if the proponent has previously donated, or is likely to substantially donate to election campaigns. Any review of the Planning System must ensure there is no potential for Ministerial bias to occur.

Conclusion

We question the purpose of attempting to introduce sweeping changes to Tasmania's Planning System in a secretive manner and without proper public input. In whose interest is it? The State Government, the proponent, local councils or the community?

We demand further time be granted for every Local Council to examine these changes properly, and the implications they will have for their own municipalities, and for proper public consultation and discussion to take place.

TAP strongly opposes any legislation that is perceived to undermine civil liberties. We are an active, politically aware organisation that has organised rallies in Hobart and Launceston to demonstrate our concerns over the flawed pulp mill and pipeline planning approvals procedure. Heightened community awareness and continuing community opposition has seen more than 21000 voters pledge not to vote for any candidate in federal, state or local council elections who supports the pulp mill.

We have already lobbied politicians and political parties on all levels of Government. We will do so again with this odious piece of proposed legislation.

Recommendation

To move towards a better Tasmania, TAP strongly recommends that LGAT demand that the planning review process be stopped to allow a full and proper input by the public and all councils.

Review of the Freedom of Information Act 1991 – Call for Feedback

Comment is invited from members of the Tasmanian Community on the Directions Paper: Strengthening trust in Government… everyone’s right to know.
The purpose of this paper is to promote discussion in the community about the right to know and about a new direction for sharing information with the Tasmanian Community.

Operation Smokewatch is about the community recording incidents of fires and smoke around Tasmania. The information from members of the public will be used by the community group "Operation Smokewatch"  to lobby the government to protect human health.

Smoke smell and visibility are good indicators of very small smoke particles (PM 2.5). These particles are small enough to penetrate far into the lungs and cause significant harm to your health.

Keep a watch for smoke particularly in Autumn and Spring. If you see or smell smoke or see a fire, record your observations of smoke events using the following pattern:

1. Date
2. Area/city/town/suburb
3. Time of smoke smell - in morning (SM), afternoon (SA), evening (SE) or night (SN).
4. Health effects observed
5. Fires known via observation (O) or websites (W)
6. Nature of fire if known eg forestry, parks etc

Example 1 (actual incident)

1. 23 March 2009
2. Newstead Launceston
3. SE
4. Headaches
5. Observation
6. Nature - unknown

Example 2 (actual incident)

1. 28 March 2009
2. Patersonia
3. SM, SE, SN
4. Headaches outside, loss of voice by neighbour with lung condition
5. Observation
6. Nature - smoke from 3 fires at Burnie (listed on FIAT website)

Don't forget to log in to www.tapvision.info so you can upload your observations. Click on "add new comment".

Petition for prohibiting aerial spraying (closed)

Take the intiative to protect human health and add your name to the petition for prohibiting aerial spraying .

Petition to the Tasmanian State Government to take action to immediately prohibit the aerial spraying of Herbicides/Pesticides/Fungicides over our water catchments.

We the undersigned Citizens of Tasmania believe that aerial spraying of toxic chemicals is totally unacceptable.  Problems with spray drift resulting from aerially applied chemicals cannot be overcome according to the APVMA who are the authority that regulates the usage of pesticides within Australia.

In order to protect the health and wellbeing of all Tasmanians, including future generations as well as the environment, we demand that aerial spraying cease immediately.

Closes 24 March 2010.

Download the spray petition from below to print hard copies.

Petition to the Rudd Labor Government (closed)

This is an independent Tasmanian community initiative for everyone left at risk by the Gunns pulp mill approvals process.

What is the petition about?

The Petition of the undersigned Citizens of Australia declares that, in relation to the Tamar pulp mill assessment; the risks and costs of the proposal to agriculture, tourism and recreation; the total subsidies that will be required; and the investments, health and safety of the citizens in the region; all were ignored in the truncated process.

Your petitioners were effectively unrepresented by their elected ‘representatives’.

Your petitioners want a return to;

• the protection of transparent due process;
• public & industry participation and protection in planning and;
• equal treatment for all;

and therefore request that the Senate act to delay any pulp mill until a complete and independent study of the risks and costs to other industries and communities has been conducted including the likely total costs of all subsidies and cost relief (to Australian risk assessment or federal Treasury standards); the results made public and properly debated.

Due date

The closing date has been extended to Monday 30 August, 2008. Please return completed petitions to ‘Petitions’, 150 Frankford Rd. Exeter TAS 7275.

Phone 0400 478 034 for more information. Also see www.abetteraustralia.com for more information about the community’s grievances.

The petition numbers are continuing to build. Thank you for your valuable support.

Health Alert:  is our water safe?  is our air safe? is a presentation and public discussion forum.

Why?
Because our laws are lax and the government is failing to protect our catchments.
You and your family are being exposed to toxic chemicals.
Children are especially vulnerable to toxic chemicals with lifelong impacts.
Non Skin Cancer rates in Tasmania have risen 30% in the last 25 years.

Speakers include:

• Prof. Tyrone Hayes- Integrative Biology, University of California
• Jo Immig - National Toxics Network, National Coordinator
• Anthony Amis - Friends of the Earth, water and pesticides campaigner

Where:  at the Tailrace Convention Centre, West Tamar Highway, Riverside, Launceston.

When: 7pm Thursday 26 March 2009.

Don't miss it.

Reproduced from Tasmanian Times

“Freedom is actually the reason that men live together in political organizations at all.  Without it, political life as such would be meaningless. The raison d’etre of politics is freedom, and its field of experience is action.” (Hannah Arendt)

LAST WEEK I attempted to put a case for the need to reshape Tasmania’s political landscape and to refashion the direction Tasmania is going: Tasmania: Time for a New Way

I suggested that 2009 presents an opportunity for the development of a coalition of political forces which understands the vital importance of the interconnections between the social-environmental-economic.

The response to what I wrote indicates that it is clear that there are multiple voices within Tasmania’s diverse communities who recognize the importance and the urgency of a new political direction.

 
Reproduced from Tasmanian Times

WE TASMANIANS are on the horns of a dilemma, a dilemma worsening by the day and recognized by many, but needed to be understood more widely and more quickly.

There is a clear and massive disjuncture between the whole focus and direction of Tasmanian Labor-Liberal accord policy, and local, national and global realities and imperatives.

The dilemma is profound, and cannot be resolved by the current level of political debate in Tasmania.  The reasons for this are so plain that it almost embarrassing to state them.  Outside Tasmania, in Australia and in the wider world, things are changing rapidly, more rapidly than has occurred before in living memory – at least the living memory of post-1945 generations of Australians (excluding the experiences of those who have already lived through their own hells on earth, in failed states elsewhere in the world).

It is blindingly obvious that the raft of problems confronting us now, and which will continue to do so in the near future and in the longer term, are being ignored at the State political level.  There is a kind of Mameluke-like disaster unfolding in Tasmania.

On behalf of all Tasmanians, three courageous people - an organic walnut farmer, a winemaker, and remedial massage therapist along with Environment Tasmania -  have gone to the Supreme Court to challenge the government's decisions to refuse to give reasons for its decisions in relation to the pulp mill assessment and approval.

Now is an absolutely critical time to help them with your donation to challenge the Tasmanian Government's assessment of Gunns' pulp mill and save the Tamar Valley, Tasmania's forests and our natural environment .

With Gunns granted partial federal government approval for the mill and continuing to talk to potential pulp mill investors, the three courageous Tasmanians need your help with the crucial legal challenge.

You can become a leader in stopping Gunns Pulp Mill by donating to the legal challenge fund and passing on this message to your friend's and supporters of Tasmania natural environment and vibrant, wine, agriculture and tourism industries.

In the first legal challenge to the Tasmanian Government's assessment of Gunns' pulp mill, three Tamar Valley business owners and Environment Tasmania have launched a Supreme Court challenge to the Tasmanian Government's approval of Gunns' pulp mill in the Tamar Valley. The court case is currently due to be heard in the first week of April 2009, and they need your help and donations to fund this legal challenge. To read more about this important legal challenge, go to www.et.org.au/node/10

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.

As the global financial crisis begins to bite in what commentators are quaintly calling the "real" economy, any big project that promises to create jobs might, on the face of it, be a shoo-in. But it's not hard to see why the majority of Tasmanians oppose Gunns' pulp mill when it offers only illusory new jobs to Tasmanians while jeopardising our $3 billion tourism industry and our priceless environment.

If anything, it is at difficult times like these that we most need to do proper cost-benefit analyses of any proposals. Instead of simply promoting the supposed benefits of a project, as Gunns is doing, we need to weigh those benefits against not only the direct costs we will incur by going ahead but also the lost opportunity costs — what else could we be doing that would be more beneficial to more people?

Read the full story at The New Matilda

Peter Cundall and Buck Emberg in conversation with Henry Reynolds How will we meet the 21st century challenges of global warming and the crisis of capitalism? History is a great teacher. Join in a conversation on sustainable living that draws on experience in three continents of the Great Depression.