New twists in Tasmania’s forest industry crisis

In a new twist to Tasmania’s forest industry crisis, two wealthy environmentalists, Graeme Woods and Jan Cameron, have bought the Triabunna woodchip mill from notorious woodchipping company Gunns Ltd.

Gunns had almost stitched up a deal with a pro-logging company called Fibre Plus (owned by Aprin) but this fell through due to problems obtaining finance.

Alec Marr, the ex-head of The Wilderness Society who was ousted in 2009 after an internal split, has been appointed mill manager by the Triabunna’s new owners. Marr has been tasked with holding talks with stakeholders to reopen the woodchip mill.

The sale of the mill has been highly controversial because the state government had agreed to provide a taxpayer-funded loan to Aprin. State-owned Forestry Tasmania had entered into an agreement to supply it with wood and to share the “profits”.

Edward Murrow wrote on Tasmanian Times on June 29 that Aprin’s “four subsidiary companies were established on June 9, 2011 and were each valued at $24 with $1 shares”.

He said: “The government is considering providing millions of dollars to a 10-day-old company valued at $24.”

The government refused to disclose the amount it had agreed to lend to the company to buy the mill, or to explain if Forestry Tasmania would share in any potential losses.

The Greens were put under pressure by many of its members to break their coalition with Labor if the government lent money to the company to support woodchipping operations, while at the same cutting funding to public services.

Greens MP Kim Booth vocally opposed the loan deal and said that he would move a no-confidence motion in the government if money changed hands.

No other Greens MP spoke in favour of Booth’s plan to move a no-confidence motion. However, the Greens were saved from this difficult situation with the announcement that Gunns had decided to sell its mill to Cameron and Woods.

Woods gave the Greens more than $1.5 million in political donations last year, sparking allegations that the Greens had a conflict of interest in opposing the sale to Woods’ competitive bidder, Aprin.

However, they were primarily opposing the government loan and the ongoing logging of native forests.

The mill sits on a beautiful part of Tasmania’s east coast, near Maria Island.

Many forest industry players are nervous about the future of logging in southern Tasmania. Woods and Cameron have been upfront about their plan to eventually transform the mill site into a deep-water port and eco-tourism resort.

But they have promised to lease the mill to a woodchip exporting business to keep it running in the short-term, consistent with the Forest Statement of Principles agreement.

Labor Premier Lara Giddings told ABC local radio on July 14: “We certainly don’t welcome this development at all” and “the government’s preference was to support Aprin”.

She said: “You do have to ask the question in relation to this deal, in the sense of an analogy, of why do vegetarians want to buy an abattoir?

“The reality here is we have two people, Jan Cameron and Graeme Wood, who do not support a native forest industry, buying a key piece of infrastructure that is vital for the survival of the native forest industry in the south of the state.”

She said she planned to meet with the new owners to try to secure the ongoing operation of the mill for as long as possible and to “continue our role in working with the commonwealth government to bring the [Forest] Statement of Principles to light through proper funding of them”.

The mill has been shut since the start of April. Aprin said it had trouble securing finance because banks were not interested in investing in native forest logging infrastructure.



Gunns CEO Greg L’Estrange said Gunns needed to exit native forest logging operations to win over potential joint venture partners for its unpopular pulp mill in the Tamar Valley near Launceston.

He has also said that the Japanese markets do not want to buy timber from non-Forest Stewardship Council Certified operations. It is doubtful how commercially viable the Triabunna mill will be.

There is also confusion about what it means for the mill buyers to say that they will operate the mill consistent with the Forest Statement of Principles.

Depending on who you ask, the statement of principles was meant to deal with the ongoing collapse of the native forest industry and to help companies and workers either exit the industry or transition into plantation operations.

However, little progress has been made on turning the forest “agreement” into action.

Environmentalists and the timber industry groups involved cannot agree on the amount of native forest that should be protected or if the Tamar Valley pulp mill should be allowed to proceed.

ABC Online said on June 28 that almost $1 million of government funds have been spent on Tasmania’s forest peace talks so far.

The revised agreement was released the week before but had still not been signed by the parties. Timber Communities Australia Tasmanian manager Barry Chipman said on June 29 it had decided not to sign on to the current agreement. The Wilderness Society suspended its involvement in the talks in May.

It seems there is in-principle agreement for companies such as Gunns to be granted compensation for handing in their logging permits. But it is not clear the broader community will support this.

Gunns is selling off as many assets as it can to raise money for the Tamar Valley pulp mill. If it is handed millions of dollars in compensation, this may help it to start building the widely unpopular project.

Many people question why Gunns should qualify for compensation when it is exiting an enterprise of its own will, for market reasons, not because the government is forcing them to stop logging native forests.

Gunns signed a 20-year Long Term Pulpwood Supply Agreement for the Bell Bay pulp mill in 2007. It has been revealed that this contract includes a take-or-pay provision that specifies Gunns needs to pay if it takes less than 85% of the contracted 1.5 million tonnes of pulpwood a year until 2027 — whether it takes delivery or not.

The Bell Bay mill, if it is built, must now use only plantation timber.

Gunns and Forestry Tasmania are in serious financial difficulty.

The Hobart Mercury revealed on June 30 that ANZ bank came to Gunns’ rescue by giving it access to credit — “a working capital facility with a ‘maximum prospective liability’ of up to $200 million”.

Gunns was struggling to repay $55 million of debt and interest repayments due that day.

ABC news said Gunns has also entered into a contract with the gardening and hardware giant Bunnings to sell its headquarters and timber processing yard in Launceston.

The July 7 Examiner said Gunns was planning to start earthworks on the pulp mill site at Bell Bay in late July or early August, however anti-pulp mill activists are dubious about this. The state permit requires the company to make a substantial start on the mill by the end of August.

Forestry Tasmania is predicting a $6 million loss for past financial year, following an $8 million deficit for the year before.

Booth, who is the Greens forestry spokesperson, said on July 7 that no more public money should be used to bail out the “rogue agency” without parliament debating it first. He said Forestry Tasmania was “a drain upon the public purse”.

The July 13 Mercury said: “Forestry Tasmania was disappointed that biomass from native forests products would not qualify for renewable energy certificates under the planned carbon tax.”

But forest activists in Tasmania celebrated the decision to exclude power from burning native forests from the scheme.

Conservation group Still Wild Still Threatened expressed outrage on July 13 over Forestry Tasmania’s release of the first installment of its three-year wood harvesting plan.

The plan includes new roading into iconic high conservation areas including the Upper Florentine and Styx valleys despite these areas being earmarked for National Park protection under the new agreement.

There is still much to be resolved when it comes to sorting out the conflict over Tasmania’s native forests.

State and federal governments could put an end to the confusion by legislating to protect native forests and funding socially useful jobs in alternative industries in those communities for affected workers.

But a plan like that, which benefits ordinary people instead of big company shareholders, doesn’t seem to be on the agenda.