typing is not activism….

environ mentalism, fresh articles, interviews & checkitouts from Sydney.

Pulp Mill Decision due, but big issues unresolved – updated

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Environment Minister Malcolm Turnbull will be handing down his decision in the matter of Gunns’ proposed pulp mill in Tasmania’s Tamar Valley this week.

Turnbull was applauded by Greens Senator Dr. Bob Brown when he retained Australia’s Chief Scientist Dr. Jim Peacock to conduct an independent review of Gunns’ submissions. The Department of Environment has already spent a week picking apart Peacock’s recommendations, probably seeking a politically expedient route to compliance.

The day that Turnbull received the report he declared on ABC’s Lateline that Peacock’s findings would soon be made publicly available along with Turnbull’s own response. Matthew Denholm points out in today’s Australian that this fiercely undercuts his initial insistence in late August that there would be opportunity for public consideration of the report and comment before the making of his final decision. Denholm quotes from the report filed by ABC journalist Felicity Ogilvie on August 30.

When the Chief Scientist gives us his report, we’ll publish it, and Gunns and everybody else will have an opportunity to comment on it, and then I would hope to be in a position to make a decision.

That position has since been ‘clarified’. Publication of the report for public consideration shall now follow the announcement of a final decision. Prior to any other media picking up on this ministerial backflip it was actually pointed out by Ogilvie reporting, again, on ABC national radio.

That was five weeks ago.

Today, Mr Turnbull’s changed his tune – he’s backtracked on the undertaking to let the public as well as the company see the Chief Scientist’s report before the decision’s made.

Mr Turnbull’s office calls this a ‘clarification’ of his comments.

Meanwhile, Gunns has been the only stakeholder to enjoy access to the contents of the report, via discussions with Turnbull’s Department of Environment. Funnily enough, Gunns CEO John Gay apparently denied Gunns having been privy to any such accomodation – the same day that Turnbull’s Department was admitting to it.

Many observers are expecting “conditional approval”, allowing construction to begin but requiring more effluent-related data before the mill begins operation in two years.

Prominent campaigner Geoffrey Cousins reportedly believes that Peacock has found “insufficient information” in the Gunns application. Cousins’ legal advice is that approval cannot be given without full awareness of impacts. As such, “conditionally approved” would be the legal equivalent of ‘half pregnant’ – a nonsense.

Turnbull will be fully aware that whatever his decision, it is likely to be met by a legal challenge be it from Gunns, Cousins, The Wilderness Society, or an industry front group such as Timber Communities Australia.

And Tasmanians fighting the project are finding unexpected allies, such as Wentworth-based investment banker Danielle Ecuyer.

Wentworth-based Ecuyer is President of the Women For Change Alliance (WFCA), an NGO pushing hard for durable climate change action.

While deforestation is a major driver of climate change, the proposed mill doesn’t just offend Ecuyer’s environ mentality: it offends her investment sense.

Globally, Ecuyer explains, there is a rapidly emerging push by large investment houses for greater investment transparency on two fronts – climate change and carbon. Major long term investors want to know about companies’ physical exposure to consequences of climate change, and their likely exposure to a cost of carbon.

As a potential creditor to Gunns, ANZ have committed to “closely examining the social, environmental and economic issues, and will review the project against the Equator Principles” that relate to environmentally responsible financing.

Conversely, Perpetual Investments – a major shareholder in Gunns – has refused Ecuyer’s request for a meeting. They replied by dismissing WFCA’s concerns about Gunns’ sustainability even though Ecuyer’s prospective analysis was co-signed by 150 investors and financial advisors.

Prior to spectacularly abandoning the original assessment process under Tasmania’s RPDC (Resource Planning and Development Commission), Gunns made two submissions on greenhouse impact. The first was extensively criticized by independent experts. The second, according to RPDC panelist Dr Warwick Raverty, took “no account of carbon dioxide emissions from harvesting of native forest, burning of remnant vegetation, or soil disturbance”.

Unfortunately, the greenhouse issue – particularly relevant to a project which may produce ten million tonnes of CO2 annually for at least the next thirty years – has since been avoided by both state and national assessment.

Scoopit!

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Written by typingisnotactivism

October 2, 2007 at 12:38 pm

2 Responses

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  1. It’s worth noting that it appears that the ANZ direction may have been a diversion from the real source of finance, being via Gunns chairman Robin Gray’s son Ben.

    Ben Gray is part of Texas Pacific Group and has access to over $5 billion in funds at his disposal.

    Of course, if that is the line of credit, then BG will ‘earn’ between 20 & 40 million in commission from the deal. Just enough to entirely save the Launceston General Hospital for a couple of years.

    t.i.n.a.: !!!!! holy crap !!!!!! I wonder if those funds come with any kind of proviso from the investors, like “not to be pissed up against a wall as part of a poorly disguised vendetta against public interest and common sense”? Probably a bit much to hope for, eh.

    Mike Bolan

    October 2, 2007 at 2:23 pm

  2. Very interesting. Private Equity was a route I was very concerned about prior to the market ‘risk’ correction, I’d be quite surprised if they thought they could make a quick buck out of Gunns and the pulp mill at this point in time. Would be a good player for a mezzanine tranche of $150 million standing between secured debt and equity as that wouldn’t involve betting the farm and often makes good returns. They’d also be very useful partners if Gunns went after Carter Holt Harvey or other purchase of an existing business (rather than greenfield project development)

    t.i.n.a. Would have been a great short sell at $11 though hey? 8D

    Alex Wadsley

    October 3, 2007 at 4:35 pm


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