It's the bottom line $$$$$$tupid!

November 30, 2008 is a key date for the status of both the $15m Sovereign Risk Agreement and the 20 year Wood Supply Agreement between the State Government, Forestry Tasmania and Gunns.

The Government has said it has drawn a "line in the sand" of no further assistance to Gunns past November 30.

However, as author Peter Henning pointed out "It is clear, of course, that the Bartlett government and the Hodgman opposition will ignore the interests of the people and communities of the Tamar Valley in whatever further legislative or regulatory action the Parliament takes on behalf of Gunns. That is a foregone conclusion, as has been consistently demonstrated in all their actions in relation to the pulp mill." See http://tasmaniantimes.com/index.php?/weblog/article/the-millstone/ for the full article.

The secret shadowy history of the Agreements below shows the rotten heart of “parliamentary democracy” in Tasmania.

Read more at Government Agreements Watch

Report on Gunns AGM 30 October 2008 by a TAP insider shareholder

Security for the annual general meeting was high. All meeting goers were vetted at the boom gate. Police were present with the paddy wagon and about 50 members of TAP greeted shareholders with a song as they passed through the gates.

The AGM was held in a room that had the heating turned up very high. No recording devices were allowed into the meeting so notes were scribbled down as the meeting progressed.  CEO John Gay took the floor and responded to most questions but did not answer many directly. In the call for apologies, Robin Gray volunteered 'Crikey' (to his own amusement).

Question re uncertainty over the project

'Main reason for the hold up is the opposition of people (whilst purposively looking at those in the room). It's not Gunns holding up the mill, it is anti-progress, anti-development people who are holding it up.  (And later in the meeting) 'There are not many protesters against Gunns'.

Questions re negotiations with partners
'Gunns has had positive discussions with joint venture partners.'   'Equity partners are pulp mill operators.'  'Joint venture partner will not take a majority interest, only 20 to 25%.'

Question re decline in shares coinciding with the pulp mill project

'Yes, the anti-pulp mill people have had an effect'.

Question - when will you abandon the mill?

Answer -'never' (to applause). 'We will keep the project on the books as long as it takes'. 'Gunns has confirmed with suppliers that the mill is a goer'. 'It is ready for construction as soon as finance is arranged'.

Question re fast tracking the mill

John Gay denied discussions with Premier Paul Lennon before pulling out from the Resource Planning and Development Commission.

Question re government permit approval process 

'Getting the modules signed off is no trouble'. 'The government has shown extreme generosity to Gunns. As shareholderes, you should be happy.'

Question re payments to Andritz (Finnish pulp machinery builder)  

'Some money has been paid for long lead items.' 'The contract can just sit there. No equipment has been built.' 'The mill size is locked in.'

Questions re plantations

'Gunns has more plantations in the North East than anywhere else in Tasmania.' 'Gunns is improving productivity whilst working in harmony with the environment.' Carlton Frame (sustainability manager) – 'one third of Tasmania's emissions are being absorbed by plantations. They are being managed in perpetuity, never going to cut them down. Gunns has a neutral or less than neutral carbon footprint. A pulp mill will make that even better.'

 Prepared shareholder questions

1) Gunns Manager of Sustainable Resources, Calton Frame said at a recent public meeting (Tail Race Centre) on the pulp mill that the company had completed a risk assessment study of the pulp mill.  There is no broad ranging risk assessment study published in Gunns' IIS.
  a). Has Gunns since carried out a broad ranging risk assessment of the proposal?
  b). If so, has it been done to Treasury standards?
  c).  Has it been made available to shareholders to assist with investment decisions?

Answer - no answer. Carlton Frame asked that it be taken on notice. No reply has been received.
 
2) In the current economic climate the pulp mill is completely unviable.  When will the Board members recognise the reality of this fact,  accept their responsibility both for the loss of company profits, and the drop in the share price, and step down from their position? 

Answer -  sidestepped
 
3) Currently, within a 5 km zone of the proposed pulp mill site, house and property sales have already collapsed, directly as a result of the pulp mill proposal, and local residents are already undertaking to protect themselves with a Class Action. This poses a serious risk both to Gunns' future, and its ability to attract financiers. What strategies do the Board have in place to counter this risk?

No record of an answer to this question in the notes.
 
4) Gunns recently failed to obtain council approval for its pulp mill pipeline   easements  in the West Tamar. As you are aware, if there is no water supply, then there is no mill. The company has staked its future on the pulp mill project; some commentators have described it as a "bet the company" scenario.
  a) How many properties are left to sign?
  b) Can the Board advise as to pipeline progress, and on how many kilometres of pipeline easement have been signed over from Trevallyn Dam to the mill site?

Answer - John Gay expressed surprise as to how well the negotiations were going. 'As a shareholder you should understand that this confidential'. 'There are always one or two who might cause problems'.
 
5) Gunns Ltd claims to be a proud Tasmanian company, but the withdrawal from the RPDC pulp mill approval process has resulted in both Tasmania and Gunns being criticised, and ridiculed, throughout Australia - and indeed the world.  Recent revelations in state parliamentary hearings suggest the company was clearly in no position to begin construction within the timeframes John Gay had indicated to the media at the time.
Given also that the head of the RPDC had already identified areas of 'critical non-compliance' within the IIS, was the decision to withdraw from the RPDC process due to an awareness that approval would not be received, rather than misleading and inaccurate timescale reasons?

Answer - none

Announcements by governments, independent bodies and Gunns are monitored here.

Wilkie - Parliamentary question on federal funding for Gunns

Gunns' Plans Revealed - FOI documents

FSC Assessment

Plantation Growers Update

Who is Timo Piilonen?

The Launceston City Council relationship with Gunns' proposed pulp mill

State government position on benchmarks for “significant progress”

State Government Sovereign Risk Agreement and Wood Supply Agreement with Gunns

Federal Government Environmental Impact Management Plan and Modules

Failures of Module C - Roadkill Survey Report by TAP Research

Is Gunns Ltd Reliable? has been updated (as of 8 October 2010) with a new category 'Economic Management' and 230 statements from ex CEO John Gay, present CEO G. L'Estrange, Gunns Ltd, and State and Federal governments relating to the planned pulp mill in the Tamar Valley. 

Pulp and paper expert Dr Warwick Raverty, reached the “sad conclusion that Gunns is not a fit and proper company to build a pulp mill anywhere” in Tasmania (14 March 2007). That conclusion is supported by the record of statements in Is Gunns Ltd Reliable?

Its purpose is to help potential investors assess Gunns' competence to build and operate one of the largest pulp mills in the southern hemisphere. It illustrates the political, economic and project risks for investors in Gunns' proposal.

The statements have been collated by TAP Research from media reports, documentaries and publications from 2004 to the present and are hyperlink referenced for easy checking. It will be updated periodically as new evidence emerges.

A company report listed on a Federal Government Web site this week revealed that construction was scheduled to start in February 2006 with a mill commissioned by mid- 2008. 17 December 2004 www.nafi.com.au

Gay expects approval in August and a likely start in September. It will take around two years to build. 19 May 2007 The Australian

This is why we say the government is undemocratic.  Inside it was mayhem.  I doubt the speaker even knew what he was going to do next, and whether it would work.  When they got the last of the public through the doors, they began closing them...

I was so proud of us today  (Saturday 23 August 2008).

The rally was a wonderful demonstration of many things... 

First, the staying power and strength of the movement against the pulp mill.

Please send your message to Mr Rudd to say no to the pulp mill and that you want to protect forests for our climate and future generations - not pulp them for short-term profit. Go to online petition

Together we've helped convince the ANZ bank to do the right thing and say NO to Gunns'pulp mill and now none of Australia's big four banks will touch it. And thanks to supporters like you we have been able to highlight the devastating impacts of the mill to such an extent that even the new Tasmanian Premier is listening.

Yet Prime Minister Rudd continues to voice his support for this shameful pulp mill. Right now I need your help to wake him up to the real cost of the pulp mill, the real cost of logging, and the real cost to our climate, communities and future generations.

Conservative estimates show that the pulp mill will increase the amount of emissions pouring into our atmosphere at a rate equivalent to an extra 2.3 million cars on our roads every year.

In addition to this, recent media has highlighted the new ANU findings that south-eastern Australian forests are some of the most carbon-dense in the world, and have the potential to sequester 25% of our annual emissions for the next 100 years. Logging the carbon-rich forests of Tasmania depletes the stored carbon bank, emitting massive amounts of greenhouse gas pollution.

It is outrageous, given the urgent threat of climate change, that the Rudd Government is even considering this carbon-polluting pulp mill. In fact, the climate change implications of the logging have totally escaped any assessment in Government approvals.

Gunns still has a number of condition modules that need to be submitted to the government for approval. One of those modules includes the impact of 64,000 tonnes of effluent containing some of the deadliest substances known to man that is to be flushed into the Bass Strait - every day! And while the approval deadline looms, unbelievably our government has indicated that they would be willing to consider an extension.

Enough is enough! Too many politicians have been dancing round this pulp mill already. Enough exceptions, excuses and fast-tracking of processes have already been made.

With your help, we can convince the government that no further special allowances should be made.

Thank you for the difference you are making.

Paul Oosting

Pulp Mill Campaigner, Wilderness Society

Recent research shows that the half-lives of many pesticides in Tasmania is more than double those listed on the material safety data sheets, due to the local cooler climate and soil characteristics. Letter from Dr Alsion Bleaney OBE and Philip J Tattersall .

This plain English guide to Gunns' contract offer was prepared by a Melbourne lawyer for landowners who have been made an offer by Gunns to purchase rights to install a pipeline across their land.

The bottom line is that it seems the landowner is being offered a short term, once off financial benefit, for long term financial detriment and long term inconvenience and risk.

Download this information as a pdf copy from below.

1. Summary of offer in the contract

(a) Gunns wants to build a pipeline from Lake Trevallyn to the site of the proposed pulp mill.

(b) The land on which the pipeline is proposed to be constructed includes private land.

(c) Gunns is offering to pay money to landowners in exchange for a right to construct the pipeline on their land. This right is called an “easement”. Easement is a legal term which means a right enjoyed by one person (Gunns) with regard to the land of another person (the landowner), which interferes with the normal rights of the landowner.

(d) An easement lasts forever. It is registered on the certificate of title of the property and so is on the public record. It is relevant to valuing the land on which the easement is granted. The right can only be taken away from Gunns if both Gunns and the landowner agree to terminate the easement or if a Court orders that the easement is terminated (for example, if there is no need for the pipeline anymore).

(e) Gunns is offering to pay the landowner for the grant of the easement. The purchase price is determined by a per hectare value of the land and increased by CPI as at the day that the payment of 80% of the purchase price is to be paid to the landowner.

(f) 80% of the purchase price is to be paid to the landowner 21 days after the later of:

i. Gunns’ Board approving the contract by 30 June 2009; or
ii. the completion of the final design of the pipeline infrastructure; or
iii. the completion of the survey plan of the “pipeline easement land”, which is the land in the map attached to the contract (it includes the part of the land that the pipeline is proposed to be constructed on or under, and land on either side of the pipeline. The easement is for the “pipeline easement land”).

(g) The rest of the purchase price (20%) is to be paid to the landowner after construction of the pipeline is completed and when the landowner agrees that there is no damage to the landowner’s land that Gunns needs to fix.

(h) When the 80% is payable, all documents required to register the easement on the certificate of title have to be sent from the landowner to Gunn’s solicitors, so they are armed with everything they need to register the easement on the title to the property.

(i) The Board approval condition referred to at 1(f)(i) above can be “waived”. This means that Gunns can decide that it is no longer a condition of the contract that the Board approve the contract by 30 June 2009. If that happens, payment of the 80% will be 21 days after 1(f)(ii) (completion of the design) or 1(f)(iii) (completion of the survey plan).

(j) Gunns has to complete the design and the survey plan within 4 months of the Board approval of the contract, or within 4 months of the waiver of the condition of Board approval of the contract. This suggests that, at the latest, Gunns’ Board approves or waives the condition for Board approval on about 30 June 2009, the survey plan and design are completed in 4 months after that (end October 2009) and the 80% is paid 21 days after that  (end November 2009).

2. Implications of the offer

(a) Gunns will be interfering with the rights of the landowner.

(b) An easement lasts forever.

(c) This type of easement is likely to decrease the value of the whole of the landowners’ land, not just that part of the land where the pipeline would be constructed. This will be relevant if the landowner or the landowners heirs want to sell the land. Also, it might affect any existing mortgage on the land. A loan from a bank secured by a mortgage over the land may end up being more than the value of the land itself.

(d) There is no ongoing fee in consideration for the right, even though the right continues forever. There is just the once off payment in 2 parts (80% and 20%).

(e) There is no certainty as to when the 80% will be payable.

(f) There is less certainty as to when the 20% will be paid.

(g) The contract does not say when the pipeline construction will commence, by what date it has to commence or by what date it has to be completed, which creates uncertainty.

(h) Before the landowner receives any money and before there is any certainty that the landowner will ever receive any money at all, the landowner has to allow Gunns’ access to the land to prepare the design and the survey plan any time that Gunns wants access.

(i) Gunns can change boundaries of where the pipeline will run through the landowner’s land at any time that it wants to without the consent of the landowner.

(j) The landowner has no say as to who completes the design or the survey plan and the landowner has to accept the design and the survey plan even if the landowner doesn’t agree with it.

(k) Gunns can cut down, clear or remove anything which it thinks interferes with the pipeline on the landowner’s land without the consent of the landowner, even if the landowner thinks that something doesn’t interfere with the pipeline.

(l) Gunns can put whatever signs it wants on the landowner’s land where the pipeline would be constructed, even if the landowner doesn’t agree to the signage.

(m) Gunns can put a gate on any fence on the land where the pipeline would be constructed, even if the landowner doesn’t agree that the gate should be located there. There is no obligation for Gunns to pay for or maintain any fencing.

(n) Gunns can access the landowner’s land on and around where the pipeline would be constructed, whenever it wants to and stay there for as long as it wants, even if the landowner doesn’t want them to.

(o) Gunns can put any vehicles, materials or equipment on the landowner’s land on and around where the pipeline would be constructed, even if the landowner doesn’t want them to.

(p) Gunns can access any other part of the landowner’s entire land at any time that it wants to without the consent of the landowner.

(q) Gunns only has to minimise the impact that Gunns and the pipeline will have on the rest of the landowner’s land, so it is expected that there will be negative impact on the rest of the landowner’s land.

(r) Gunns is only required to fix any damage to the landowner’s land as best as it reasonably and possibly can, so there is no requirement to fully fix any damage.

(s) Gunns does not have to bury the pipeline. The pipeline can run above ground, further decreasing the value of the landowner’s land.

(t) The landowner cannot do anything to its land where the pipeline will run, nor around it, without the consent of Gunns.

(u) The landowner is being offered a short term, once off financial benefit, for long term financial detriment and long term inconvenience.

Document status

This document is only a summary and does not contain all of the terms that are contained in the contract or in the annexures to the contract. This document does not constitute legal advice and is a guide only. The author is not responsible for any loss or damage arising from reliance on the content of this document. Landowners should seek their own independent legal advice.

This summary was released on 16 June 2008 by Lawyers for Forests as general information for the public. It does not constitute legal opinion or a view as to the merits of the case. The trial started on 18 June before Justice Tracey in the Federal Court in Melbourne. For further information, go to www.lawyersforforest.asn.au

Case Summary
On 4 October 2007, the then Federal Environment Minister, Malcolm Turnbull, approved the construction and operation of Gunns’ pulp mill in the Tamar Valley, Tasmania, under the Environment Protection and Biodiversity Conservation Act 1999 (“the Act”). The decision imposed 48 conditions on the approval of the mill.

LFF is concerned about the significant impact that the mill will have on the environment, including on the marine environment, native forests and the species that rely on those habitats. LFF is also concerned to ensure that the decision to approve the mill complies with the law.

LFF is challenging the Minister’s decision on 9 grounds, many of which relate to the Minister approving the mill without knowing its environmental impacts. The conditions attached to the decision require further scientific testing to determine the impact of the mill’s toxic effluent (dioxins and furans - which are the most toxic known to science). LFF believes that this testing should have been part of the assessment before the approval decision was made.

The conditions allow the mill to produce a volume of toxic effluent that is simply that set by Gunns, which is absent any proper scientific measurement.

There have been previous proceedings brought by The Wilderness Society and The Investors for the Future of Tasmania relating to the Minister’s earlier decision about the assessment process for the mill. The case brought by LFF is the only case challenging the approval decision.

If the LFF challenge is successful, the approval decision will be set aside. Gunns’ pulp mill would not have Federal government approval and Minister Garrett would need to consider and decide the issue again.

After LFF launched its case in December last year, Gunns Ltd applied for an order that LFF pay “security for costs” (estimated to be in the order of $100,000) before the case be allowed to proceed. If Gunns had been successful in that application, LFF would have been forced to discontinue the case as it did not have the money. On 30 April 2008, Justice Marshall ruled against Gunns, deciding that, in the circumstances, to make the order for security for costs:

This was a welcome precedent for public interest cases, and for access to justice. Gunns was ordered to pay LFF’s costs for that hearing.

Gunns and the Minister also sought to prevent LFF from introducing expert evidence from Professor Andrew Wadsley. On 4 June 2008, Justice Tracey ruled against introducing evidence by affidavit, allowing instead some of the evidence to be put by way of submissions from LFF, avoiding the need for Professor Wadsley to attend Court to give evidence.

Summary of Grounds
Lawyers for Forests is seeking judicial review of the Federal Environment Minister’s decision to approve Gunns’ Tamar Valley pulp mill. The judicial review process challenges the way the Minister made the decision to approve the pulp mill. It does not review the merits of the decision. It reviews whether or not the decision was made lawfully on the following grounds:

1. The Act does not allow the Minister to impose the conditions that he did, as the conditions create a scheme that is outside that allowed by the Act.

2. The Minister did not take account of the “precautionary principle” in that he used lack of scientific certainty as a reason for postponing a measure to prevent degradation of the environment when there are threats of serious or irreversible environmental damage.

3. The Minister did not have enough information to make an informed decision as to whether to approve the mill, when the Act requires that he have enough information.

4. The Minister did not seek further information before making his decision, when the Act requires that he seek further information before making the decision.

5. The Minister made the decision before assessing all of the relevant impacts in circumstances where information about those impacts was available, which is inconsistent with the Act.

6. The Minister improperly exercised his powers under the Act because no reasonable person could have made the decision that was made by the Minister in the circumstances in which he made it.

7. The Minister improperly exercised his powers under the Act because the result of the decision was uncertain.

8. There was no evidence before the Minister to justify using a Canadian guideline to set maximum limits for the concentration of toxic chemicals in sediments (Condition 42).

9. The imposition of Condition 42 setting a maximum limit for toxic chemicals in ocean sediments based on a Canadian freshwater guideline was irrational.

Did you know that the State Government passed a law in 2007 that removes your right to appeal for compensation for any harm caused by Gunns’ planned pulp mill?

Section 11 of the Pulp Mill Assessment Act (PMAA) 2007
Section 11 says no one is entitled to appeal for compensation from damages to their business, property values or health caused by Gunns’ planned pulp mill.

In passing the PMAA, Parliament has used its power to weaken the democratic rights of Tasmanians.

The legislation deliberately and thoroughly removes any opportunity for people to seek redress through the courts if they are adversely affected in any way.

Section 11 headed ‘Limitation to rights of appeal’, declares that:
‘a person is not entitled to appeal to a body or other person, court or tribunal; or no order or review may be made under the Judicial Review Act 2000; or no declaratory judgment may be given; or no other action or proceeding may be brought – in respect of any action, decision, process, matter or thing arising out of or relating to any assessment or approval of the project under this Act.’

Section 11 prevents legal redress for harm to any:

• person if their health, or the health of their children, is affected by emissions that can be traced back to the mill.
• business enterprise eg. farming, fishing, tourism and service industries, if that business is jeopardised or destroyed due to adverse impacts from the mill.
• resident or land owner for loss of value or damage to property, if land and property near or perceived to be near the pulp mill, loses value due to its location.
• farmer for damage to farmlands used for the pipelines including leakage or rupture, lost income, or weed and pest infestation from poor hygiene by construction and inspection crews.

What Premier Bartlett must do
Premier Bartlett must show his concern for equal treatment of all Tasmanians and repeal section 11 of the PMAA.

Why you should ask the Premier to act
To protect yourself, your property, your children and your business from harm from the planned pulp mill.

Why act now?

• Because the new premier said he wants to be kind and clever and to connect with the people.
• Because Section 11 fails his new ‘public interest’ test.
• Because the pulp mill is not yet built; it will be too late when it is built.

What you can do
Phone to make an appointment to see Premier Bartlett; write a letter, fax or email today.
Email: david.bartlett@parliament.tas.gov.au
Phone: (03) 6233 8807
Fax:     (03) 6233 8013
Mail:   Level 11, 15 Murray St, Hobart, 7000

Send a copy to:

• Deputy Premier Lara Giddings lara.giddings@parliament.tas.gov.au
• Min. for Economic Development Paula Wriedt paula.wriedt@parliament.tas.gov.au
• Min for the Environment Michelle O’Byrne michelle.o’byrne@parliament.tas.gov.au

Did you know?

• The social and economic costs of the mill have not been assessed.
• There is no requirement to eliminate foul smells. See Emission Limit Guidelines Vol 2 D5.15.
• The mill requires conversion of even more land from food production to trees.
• The mill will receive government subsidies of around $1million/day.
• The availability of sufficient water during dry summers for the mill and other users has not been assessed.

The planned pulp mill is:

• yet to  receive all federal permits.
• yet to acquire land for its pipelines.
• still subject to a court case.
• yet to be approved for finance.
• yet to be signed off by Gunns’ Board.

Get involved

• Ask your friends and neighbours what they think. Encourage them to voice concerns.
• Come to TAP public meetings.
• Make an online donation to TAP.
• Contact the   Federal Minister for the Environment about permit conditions.

Gunns have not provided a risk assessment in their Integrated Impact Assessment of hazardous chemical transport, of the pulp mill generally* or of pipelines carrying water and waste. UK regulations now requires a risk assessment for the transport of all hazardous chemicals. The cost of not doing a risk assessment could be very significant. A range of risks must be considered in building and operating pipelines such as those listed below.

Summary of general pipeline construction and operation risks 
1. The accuracy and completeness of knowledge of the pipeline area is critical for measuring risk eg. ground stability and sources of pollution hazards that might affect the operation of the pipeline.
2. Route of the pipeline influences the degree of risk eg densely populated areas present greater risk.
3. Bridges, tunnels, and crossing existing supply pipes or roads, rivers railways etc constitute a significant liability risk. Risks increase when large rivers have to be crossed.
4. Hazards for pipes at sea are greater than on land. The distance of a pipeline from coast, beaches, tourist centres etc and sea currents and wind directions is required to assess the risk of environmental impairment. It is important to know if offshore pipes are to be laid on the seabed or buried as ship’s anchors or nets quite often damage pipelines.
5. Floods following heavy rainfall are a much feared threat in pipeline construction with open trenches. Frequent flooding occurs in pipeline trenches around the world.
6. Pumping and compressor stations present a greater risk of fire and explosion than does the pipe.
7. Some other risks that are normally covered by insurance include negligence by personnel, lightning, pipe fracture, leakage, theft, riot and civil commotion etc.

* A risk study in Gunns’ IIS of chlorine dioxide manufactured on site reports that the hazard stops at the pulp mill boundary fence.

Information sourced from various documents written as guidelines for risk assessors.