The Guardian 4 June, 2008
Gunns loses funding but battles on
Peter Mac
Last week the then Tasmanian Premier Paul Lennon, renowned as one of the most arrogant politicians in Australia, resigned his position two days before the ANZ Bank announced it was not going to contribute funding for construction of the infamous Gunns timber pulp mill.
Construction of the massive mill would ruin the magnificent Tamar Valley and inflict destructive pollution on nearby waterways. The proposal aroused widespread condemnation within Tasmania and in the other states. Gunns is also in trouble over its use of highly toxic herbicides within its plantations in the Macquarie River catchments.
A recent opinion poll in Tasmania showed that the public popularity of Lennon, one of the most ardent supporters of the pulp mill proposal, had recently fallen to 17 percent.
This has been attributed in large part to Lennon’s association with a string of scandals involving the ALP in Tasmania. In July 2006 his Deputy Premier Bryan Green was accused of having granted two former ALP ministers a $2 million monopoly on builder accreditation. Last month the replacement deputy, Steve Kons, was exposed by the Greens for having blocked a judicial appointment which presumably didn’t suit the government. (The Greens retrieved and reassembled incriminating documents which had been dumped in a garbage bin after having been shredded in Kon’s office.)
Lennon’s fall from public favour was undoubtedly influenced by these scandals, but it’s also certain that the main factor was the huge controversy over the pulp mill proposal.
Lennon exhibited stubbornness to the point of stupidity in his support for the proposal. When the company seemed to be about to relinquish the pulp mill proposal early last year he negotiated on their behalf, and was accused by the chairman of an independent statutory assessment panel of trying to forcibly conclude the panel’s deliberations prior to its members reaching a properly-considered conclusion.
Lennon has now paid the price for his dogged commitment to the company’s interests.
New broom, old bristles
The new Premier, David Bartlett, who is said to be far more street-smart in terms of presentation and public relations than Lennon was, has announced that he intends to establish an ethics committee, and that he wants Tasmania to be "clever, kind and connected." He has also indicated a stringent procedure to establish the level of benefit for the public (the "public interest test") for major new industrial developments such as the pulp mill.
However, he has also stated, "I want to attract new industries and continue the transformation of our traditional industries of mining, forestry and agriculture." The Tasmanian Greens have claimed that the new public interest test will simply be a differently worded version of the old procedures. They have pointed out that despite Bartlett’s new requirements, the Cabinet is still considering using public money to fund construction of the mill’s massive new water supply pipeline.
Greens leader Peg Putt commented that "…the new Premier is only referring to the same old test routinely used by the Cabinet under Mr Lennon, which has already delivered for Gunns and is nothing new. If a claimed community benefit can be successfully argued to a Cabinet stacked with pulp mill supporters, then funding could be back on."
Finding the funding
As a member of the financial syndicate which is providing funding for construction of the mill, the ANZ Bank had promised to provide 10 percent of the necessary $2 billion funding package. Gunns is said to have already spent $58.3 million in capital expenditure.
Further funding for construction of the mill is now being sought overseas, which indicates that none of the other Australian banking institutions are willing to be associated with the pulp mill proposal. Overseas financial institutions are less likely to be influenced by domestic policy considerations, so if it gets the stamp of approval from the new Bartlett government the project could still go ahead, with predictable devastating impacts on the Tamar Valley environment.
This course of events would place a strong burden on the Rudd government to intervene. However, since they have already buckled and given the project a qualified approval, with final approval due in the December quarter, the chances of them putting the skids under the project are not good.
Unless there is a full-blown inner-party rebellion within the ALP, it looks as though the Gunns pulp mill battle will still rage on, with the concerned public and the smaller parties such as The Greens and others, pitted against the main political establishment, represented by the ALP governments in Tasmania and Canberra.