Pipeline risks - a plain English guide to Gunns’ offer to landowners relating to the pipeline

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.



Lawyers for Forests Inc v Federal Environment Minister & Gunns Ltd. Federal Court Proceeding VID 1112-07

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:

“would stifle the litigation and prevent an applicant ... from agitating a matter which it considers to involve questions of public importance and which seems, on the material currently before the Court, to be made bona fide and raises arguable questions of law.”

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.





Section 11 of the pulp mill act 2007 deliberately removes your rights to compensation. Demand that Bartlett repeal Section 11

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:

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.


Risk assessment of Gunns’ pulpmill, pipelines and chemical transport.

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.

Legal challenge over Section 11 of the Pulp Mill Assessment Act

Three Tamar Valley business owners and Environment Tasmania have recently launched a Supreme Court challenge to the Tasmanian Government’s approval of Gunns’ pulp mill.

Using the infamous Section 11 of the Pulp Mill Assessment Act, the government has refused repeated requests to provide reasons for its assessment and decision to approve the mill.

Analysis of the strategic environment surrounding the pulp mill approval process

An analysis of the strategic planning environment for the planned pulp mill was presented to TAP members in early May 2008. Presenter was Mike Bolan.

Its purpose was to inform planning and decisions about where to focus efforts.

Some slides from that presentation are shown below to give a whole of system perspective . It follows on from a workshop that identified the needs of community members of TAP who live in the affected area of the Tamar Valley and northern Tasmania.

Letter 14 TAP to ANZ re Chief Scientist's requirement for Gunns to monitor roadkill

Mr Gerard Brown
ANZ Group Headquarters
100 Queen St Melbourne Vic 3000

Dear Sir

We wish to draw attention to the impacts on threatened species from Gunns Ltd’s proposed Long Reach pulp mill in northern Tasmania and the role of ANZ as prospective principal banker.

We and the general public understand that the ANZ has serious obligations under the Equator Principles to examine the environmental aspects of the pulp mill project and the pipeline route.

Law and Justice Part Company – Tasmanian Pulp Mill Assessment Act 2007

Our state politicians have passed an anti-democratic law (Section 11, Pulp Mill Assessment Act) which says you are not entitled to appeal for compensation for damages caused by Gunns pulp mill to your business, property values or health.

Peter Henning writes about the “Limitation to rights of appeal” (Section 11) and how people are excluded from access to the court.

Tasmanian neo-liberalism – A new vision for terra nullius

....“If the law is unjust, then access to the law is not access to justice.”  (Julian Burnside 2006)

The Pulp Mill Assessment Act 2007 is an unjust law. It is a law which promotes dispossession.  It is a law which fosters a new form of political terra nullius in Tasmania. Section 11 of the Act is abhorrent in its meaning and intent.  Those who voted for it do not deserve to be, and cannot claim to be, representatives of the people.

The Pulp Mill Assessment Act 2007 should be repealed

By Peter Henning

Rudd and the pulp mill

.....If Rudd is sincere in his belief that in modern Australia the real battle of ideas is between free-market fundamentalism and the notion that individual wealth should be balanced by social responsibility, the pulp mill is a vital test....

Peter Henning

About the system which guarantees passively acquiescent voters

... Another indication is that Tasmanians in the 2007 federal election voted overwhelmingly for politicians who have no concern about any of the impacts of the pulp mill on them or future generations.  They voted for politicians who have ignored all independent expertise and advice, from economists to scientists, from doctors to former members of the sidelined state RPDC, and of course they voted for politicians who have ignored hundreds of public submissions.

Tasmania - a failed democracy?

Introductory address by Chair, Bob McMahon at the public meeting held in the Tailrace Centre, Launceston 29/4/08 and attended by 640 people.

DEMOCRACY is the worst form of government.

“Democracy is the worst form of government……” Winston Churchill said that. He then went on to say “..except for all those other forms that have been tried from time to time.”

Poll results on government spending priorities

20-28 March 2008 EMRS poll

1000 Tasmanian adults were interviewed by telephone. Of these, 500 were from the South, 280 from the North and North East and 220 from the North West and West Coast regions. (Please note that the original data for question 1 was incorrectly transcribed. The correct data showing the results  for question 1 are shown below. Our apologies for any confusion - an embarrassed Admin)

Question 1: of five areas (listed below) which is the most important for the government to spend money?


  •      Health Infrastructure and Services 69% (692)
  •      Education Infrastructure and Services 16% (162)
  •      Public Housing 8% (82)
  •      Water Reform 5% (53)
  •      Infrastructure specifically for the Pulp Mill 1% (11)

Question 2: of the 5 listed which is the least important for the Government to spend money? Results:

  • Infrastructure specifically for the Pulp Mill 79% (794)
  • Water Reform 11% (107)
  • Public Housing 8% (82)
  • Education Infrastructure and Services 1% (14)
  • Health Infrastructure and Services 0% (3)


Only 11 respondents (1%) found the “infrastructure specifically for the Pulp mill” to be the most important area for the government to spend money. 69% found “health infrastructure and services” to be the most important. “Infrastructure specifically for the Pulp mill” was seen as the least important area for the government to spend money by over three quarters of respondents (79%).


What is revealed in these poll results is a huge gap between what the people polled see as funding priorities and what the Premier of Tasmania and the State Government are doing and plan to do with public monies. The Premier and the State Government have allocated public money to expedite and promote the Gunns pulp mill and are "examining" building a $60 million pipeline from the Trevallyn Dam to Long Reach to supply water to the pulp mill. The State and Federal Governments are spending $70 million on improvements to the East Tamar Highway.

At a time when essential services such as health, education, public housing are being run down the Government is essentially misappropriating public money to build Gunns their pulp mill.

These poll results show how unpopular this policy is with the Tasmanian people. TAP spokesman Bob McMahon said the "the Labor Party must change direction and to survive it must cut the leader loose. You can have either a pulp mill or a health system. You can't have both."

Source www.tapvision.info

For the history of poll results about the pulp mill see opinion polls.

ANZ opinion poll result

7 April 2008 EMRS poll

A survey of 1000 householders was conducted by EMRS between the 20th and 28th March 2008. Of these, 500 were from the South, 280 from the North and North East and 220 from the North West and West Coast regions.

Question: are you in favour of or against the ANZ bank funding the pulp mill? Responses:

  • In Favour 29% (294)
  • Against 45% (451)
  • No Opinion 26% (255)

On a two answer preferred basis; in favour = 39%, against = 61%.

Source www.tapvision.info

  TAP media spokesman Bob McMahon said "the poll result means that Tasmanians have not only refused Mr Gay and mr Lennon a 'social permit' to build their mill but also the ANZ bank". "With such high lvels of community ill will towards this project, the ANZ must reasonably expect that many of these Australian might move their accounts from ANZ if the Bank funds the mill" he said. "It is therefore important that the people continue to tell the ANZ not to fund Gunns' pulp mill", he continued. Email ANZ CEO Mike Smith at gerard.brown@anz.com or pamela.tann@anz.com or phone ANZ head office on 03 9273 5168 or 03 9273 6141.