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Mar 16, 2010

Gay, Gunns and logging -- just what nobody wanted to talk about

Gunns chair John Gay is fighting back days out from an election. His bid to fend off concerns over corporate governance issues is a pivotal development in Tasmanian environmental politics, writes Bob Burton.


John Gay, the chairman of Australia’s largest wood-chipping company, has launched a desperate public rearguard campaign against demands by institutional investors that the three long-term Tasmanian directors of the company resign. The outcome of his bid to fend off concerns over corporate governance issues by attempting to rally parochial political support for the Tasmanian directors is likely to be a pivotal development in Tasmanian environmental politics.

Gunns business strategy is in tatters: it’s much touted proposal for a pulp mill can’t attract joint venture partners or funders, Japanese woodchip customers are insisting wood supplied to them be certified by the Forest Stewardship Council, the company’s woodchip mills have been subject to rolling shutdowns over recent months and the company has a reputation so toxic it makes tobacco companies look saintly.

Compounding this are the long-standing concerns about corporate governance. Last year Gay relinquished his dual role as CEO and company chairman and was left with management responsibility for the development of the pulp mill proposal. Since then, the pulp mill proposal has gone nowhere other than frequent announcements that finance and partners will be finalised soon.

In early December 2009, Gay sold off 3.4 million Gunns shares for an average price of just over 90 cents. Then in late February, Gay reported the company’s profit for the six months to December 31 was down 98%, triggering a share sell off by stunned investors. Where Gunns shares sold for just under $1 in mid-February, they are now trading around 57 cents. Not surprisingly, institutional investors are getting antsy.

Even if Gay and his fellow Tasmanian directors pull off a Houdini-style escape and survive in the short term, the writing is on the wall for Gay, former Tasmanian Premier Robin Gray and fellow Tasmanian director, Richard Millar.

In the middle stages of the Tasmanian election campaign, both the Labor and the Liberal parties locked themselves into supporting the New Forest Industry Plan, a logging industry policy wishlist featuring support for the pulp mill, wood-fired power stations and relaxed planning restrictions relating to forestry. The plan, put together by the Forests and Forest Industries Council (a government-funded advisory group that includes major timber industry companies and lobby groups) claims over 2,000 jobs can be created if only the industry’s preferred policy prescriptions are followed.

All that could be made redundant by a newly-constituted Gunns board which excluded the old environmental warriors of Gay and Gray. It is conceivable a new board could retreat from support for sourcing its timber from high-conservation forests or even native forests entirely and abandon the proposed pulp mill and associated wood-fired power station. It would also be under pressure to change its most controversial management practices such as aerial spraying and the poisoning of native wildlife.

It’s also more likely to drop the Triabunna 13 legal case against those involved in a December 2008 protest at the company’s Triabunna woodchip mill. After having retreated from the humiliating debacle of its Gunns 20 legal action, it’s likely a revitalised board would decide the last thing the company needs now is another expensive legal distraction from the numerous problems facing the company.

A new board is also likely to dramatically reshape Gunns position in Tasmanian political landscape. As an initial step to improving its reputation Gunns could well retreat from making donations to major political parties and opt for a more neutral position. It could also cut off funds for, or insist on major policy changes to, the lobby groups it is involved with. The Forest Industries Association of Tasmania (FIAT), of which Gunns is the dominant member, would be the first cab off the rank.

The combination of this would leave Forestry Tasmania (FT), the government’s own logging agency, with most to lose from a less confrontational approach over native forests logging, far more isolated in the political landscape. FT would suddenly see a dramatic slump in demand for timber from its native forests logging operations at the very time that either a minority Labor or Liberal government would be under pressure to increase the financial returns from the poorly-performing government business enterprise.

The last dominoes to fall would be Labor and Liberal parties, which could find themselves in the position of having advocated support for a set of logging industry policies that less than a month later were no longer the priorities of the largest player in the industry.

By going public in the last days of the election campaign in a bid to save himself, John Gay may just have shifted the focus back on to the very topics that the Labor and Liberal parties least want to talk about: Gay, Gunns, the pulp mill and the future of native forest logging.



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27 thoughts on “Gay, Gunns and logging — just what nobody wanted to talk about

  1. Frank Campbell

    The recently-pulped Peter Garrett backs Gunn’s mill- the single most destructive project in Tasmania, home of environmental vandalism. 80% of Tasmanian votes were never weaned off the great fantasy teat of industrialisation. So much hydro power, so little interest. A century of sucking on nothing, while Tasmania’s true assets were trashed. You know what they think in Taswegia? “Jeez, we wouldabeen the Ruhr of the South without those ratbag Greens” – the Miranda Devine theory of the world. Alas, the Greens have only chipped the concrete bunker of Tasmanian developmentalism. The inbred pathological clique that rules Tasmania lives on, snot hanging from its nose, pulling at Canberra’s pocket.

    And what a relief to read about the real environment on Crikey, instead of endless, repetitive harangues about anthropogenic global warming.

  2. Bogdanovist

    Frank, there’s a point about Garrett and the mill that you’ve missed. The provisions that he insisted upon being met before final approval (which contrary to popular myth has not yet been given) are a major factor in Gunns failing to get finance for the project. They haven’t been able to convince anyone that these will be met.

    Garrett had no legal ability, even as minister, to flatly reject the proposal at the previous stage. Instead by tightening the environmental provisions on the mill he made it impractical for Gunns to get finance and hence final approval, which is about as much as he could have done.

    Other than that I agree that we all need to focus on the broader environment, not just AGW, although the only reason that this particular message is replayed endlessly is because there remains all too many like yourself who don’t want to listen, and the problems won’t go away just because you don’t want to believe they exist.

  3. Liz45

    I support Peter Cundall’s call(SMH, Good Weekend article – 82 and still fighting?) – that there should be a Royal Commission into the Pulp Mill debacle – in his view, it came about due to the alleged corrupt actions of previous Labor govts and upheld by both the present govt and opposition. I didn’t know the amount of timber required let alone the amount of clean water and the billions of s**t that would end up in the ocean each day? I also learned about the felling of native forests, how after the trees are chosen, fires destroy what remains, including all the birds and animals who are killed either immediately or due to lack of a place to live etc. I had no idea it was so ruthlessly horrific, although I’ve always been sickened by the scorched earth remains!

    How damned stupid is it, to support the science re global warming, while we continue to tear down native forests? I understand, that it takes 5 yrs for newly planted trees to make a positive difference to Co2 emissions!

  4. Tom McLoughlin

    One thing the mainstream need to consider of central concern. Every wet forest logged to dry schlerphyll regrowth is a wildfire simply delayed. It’s a recipe for disaster, even decades later.

    We need a law banning the logging of wet forest. And we need it fast. Like to see Opp Minister Greg Hunt demand the PM go into the parliament “right now” and address that.

  5. Jim Reiher

    A very good article thanks. Even left me feeling a little optomistic… first time in a long time. I do despair for the forests of Tassie and the bloody-mindedness of Liberal and Labor down there. But this article shows that all might not be lost. I hope you are right. Thanks.

  6. davidk

    Wood fired power station, how brilliant is that? Contribute to the problem and remove the solution all at the same time. Talk about killing two birds with the one stone. I propose we rename Tasmania The Rotten Apple Isle. The name of the worm is Gunns.

  7. Venise Alstergren

    It used to be the Hydro-Electric Commision that ruled the roost, now it is Gunns plus now the government has its very own Forestry Tasmania.

    I too read the article in Good Weekend and am delighted to find one Tasweigan who is prepared to stand up to the bastards.

    Paul Lennox was, after Joh Bjelke Petersen, the most venal and corrupt premier that Oz has ever produced, and much as I would like to believe in Bob Burton and his optimism, I can’t see it happening. Tasmania is a hick state full of red-necks. How does one change that?

    In Oz the real crooks are seldom brought to justice.

  8. Venise Alstergren

    PS: It is to be hoped the commentariat remembers the vital product those giant native trees and our unique wildlife are being slaughtered for.

    Lavatory paper.

    The wood is pulped by Gunns and sent to Japan. We buy it back as paper and turn it into lavatory paper. Which seems to reveal something about the Van Demonians, Tasweigans, whatever. From majesty to crap, in one round trip.

  9. Bogdanovist

    Venise, you have the subtlety of a drunken elephant and the rhetorical flourish of a cement truck.

    I’m not a Tasmanian, but I’d point out that it is the state which brought the Australian Greens to life, and still supports them far more strongly than in other states. I visit the fine place frequently and know many intelligent, artistic, creative and well educated people living there along with the red-necks that exist everywhere else as was.

    To disparage the entire place as ‘a hick state full of red-necks’ is ignorant, incorrect and unhelpful. Pretty much like most of your posts (I’ve been a long time reader, first time responder…).

  10. nicolino

    For too long the crooked major parties have been running Tasmania as a private fiefdom and now that the Greens are becoming a threat they are thrashing about trying to find some way Of dsicrediting them. The latest is that the Greens plan to legalise heroin use if they win.
    Good riddance to John Gay, Robin Gray and that waste of space, Paul Lennon.

  11. Liz45

    VENISE – I have much sympathy for your view of Tasmania – I remember the fight over the Franklin Dam – I could not understand what sort of madness was in operation – the answer of course is greed, power and money, and to hell with the rest. What a campaign that was. I can still remember the decision of the High Court – pure bloody joy!

    The “hick state full of rednecks” you refer to aren’t just found in Tasmania. Look at the forests on the far south coast of NSW? I saw it at Eden about 15 yrs ago, I hate to think what it looks like now – I found it really distressing – it just looked so bereft, it was like being hit – hard! My eldest son was with me, and we were both shocked – talk about the ‘scorched earth’ policy. I bought a Tshirt with all the towns on the south coast that have been vandalised by the timber industry – heaps of names, sadly!

    Isn’t Peter Cundall a darling? A man with an interesting past and heaps of guts! I’ll aspire to that when I’m 82 – get arrested for trying to save something from the greedy bastards! His wife was arrested too! Good on her!

    BOGDANOVIST – I think if you read Venise’s comment again, she didn’t refer to the “place” but the people! I agree! They’ll probably vote Liberal! I also agree with the comments re Paul Lennonox? Tasmania is a beautiful place. How long it stays that way is the question. Perhaps I should save up for a visit before Gunns stuffs it up for good! Gunns aren’t going to use positive practices via the environment, and what surprises me is why the Victorian govt so quiet? All that filth into Bass St each day? Are they mad? What damage is that going to do? And the effects on the wine industry, and tourism etc How can any sane govt allow such destruction?

    I know that VENISE is more than capable of standing up for herself, but I happen to agree with most of her points of view! Perhaps our perspective on life is from a different angle than yours!
    Let me guess? Another male who thinks it’s his job to use paternalism re women – a good ‘smack’ is what she needs? Bad girl! (sigh)

  12. Venise Alstergren

    BOGDANOVIST: I’m fully aware of the Greens starting in Tasmania. I even donated money towards Bob Brown’s ‘hanging onto his seat’. I’ve voted Greens-federally -ever since they started up.

    However, this does not alter the fact that Tasmania is a hick state. I’ll meet you in the middle, half full of red-necks.

    I speak with a bit of experience. My late husband was in the timber business and I got to hear quite a bit about Tasmanians.

    Therefore I am not ignorant, nor am I in-correct about the politics and business people of Tasmania.

    I neither retract my comment nor apologise for my syntax. If one red-neck was to read my comments and be brought to questioning their stance, I will have done my job.

    Meanwhile don’t forget to buy those rolls of lavatory paper. (Oh, is that the problem, me calling it lavatory paper? That’s what it is but a lot of Australians wince and prefer to call it toilet paper. As long as they know how it is produced.

    Any other tinsy wincy problems?

  13. Roxanna

    Don’t write us all off. We’re working bloody hard down here for the Greens. Don’t worry Venise, the rednecks down here wouldn’t even know what syntax is.

  14. Liz45

    NICOLINO – I’m about to hear about that(I’m listening to PM/ABC) – the attack on the Greens. Actually, I’m in favour of decriminalizing heroin, which is different to legalising it! The criminal element only helps the crims make profits – big ones. Remove that, and the emphasis can be placed on helping addicts get off the stuff! Apparently, there are many people in the community who hold down jobs while having a heroin habit – they’re probably the richer people in the community who live on the north shore(sydney) for example. In short, a different type of addict, who’s left alone!

    The whole drug nonsense is just that. Over 80% of people in NSW jails either have a drug or alcohol problem or a mental illness or all three- it’s a cheap way of taking care of the mentally ill! Many of these people are in jail for non-violent crimes – possession, non payment of fines etc! Crimes that the well off would get their kids off with a warning or???

    I suggest that people put cia+drugs into their search engine, and the same for Afghanistan and they may be surprised, shocked even! I was – at first!

  15. Frank Campbell

    Bog: Venise is righ. Sure, the Greens manage 20%, but many are mainlanders and in any case they haven’t beaten the LibLab octopus, merely nagged at it and forced the occasional concession. Laudable, but it merely underlines the resilience of the beast. It’s hard to get a grip on because it’s covered in snot. Of course rednecks exist everywhere, but in Taz they provide the bulk support which keeps the grubby middle-class cliques in power. Everything is relative in Tasmania, still.

  16. Liz45

    ROXANNA – Good for you! I’m a Greens voter too – in NSW! I’m hoping that next March there’ll be more Greens people in both Houses! The same in the Federal election whenever that is! Fingers crossed!

    Best wishes!

  17. Venise Alstergren

    LIZ: thanks! As you will have read; I served it straight back to him.

    Tasmanians are beyond belief. They live in a staggeringly beautiful island yet their apathy allows the Franklin, Lake Pedder, and now Gunns to flatten old growth forests and poison their wildlife.

    As I said before, Paul Lennon was one of the most corrupt state premiers since Joh Bjelke-Petersen, with Bob Askin NSW and Henry Bolte VIC and the current VIC premier, John Brumby running in tandem for third place. Why indeed does John Brumby not speak up about the shit that will be floating into Bass Strait? Unless the long arm, facing backwards with palm uppermost, of Gunns reaches Victoria.

    Yes, Eden was ill-named indeed. I’ll never forget all the elderly men sitting around with their cods hanging out of their shorts. Harris-Daishowa (I think that’s the name, but I too am going back about fifteen years) just levelled the place.

    We flew in by light plane and the devastation was awesome.

  18. Frank Campbell

    Tazmanian syntax? Something to do with the price of booze.

  19. Robon

    Venise and others on the Gunns attack, I am not in any position to argue about your comments about forestry issues, but the comments about loads of shit going into Bass Strait really are grossly exaggerated. I am close enough from a neutral point of view to have looked into that. So let’s not throw the baby out with the bathwater. The levels of contaminants in the effluent would be (if it did happen – which is unlikely) very low in line with best practice in new Scandinavian mills, if you can believe the Finnish mill engineers who have third-party data to support this. For example, dioxins 30 times under the safe level for drinking water.

    But on the other points, you may well be right. There’s no doubt, Gunns have been their own worst enemies for a long time.

  20. Venise Alstergren

    ROXANNA: You’ve made me laugh out loud! Keep on with the good work.



  21. Venise Alstergren

    ROBON: “Gunns have been their own worst enemies…”

    Not while I’m around they aren’t.

  22. Venise Alstergren

    NICOLINO: If anyone in Oz did have any brains they would legalise drugs. This would remove the mystique, but far more importantly it would cut out the middleman, the crooks and lice which feed off this dreadful trade.

    But politics and brains appear to be mutually exclusive commodities.

    Gotta go and get an early night.

  23. Liz45

    ROBON – “I am not in any position to argue about your comments about forestry issues, but the comments about loads of shit going into Bass Strait really are grossly exaggerated. I am close enough from a neutral point of view to have looked into that.”

    Did you read that again before you clicked ‘post comment’? You don’t know enough about forestry issues but know about what’s going to go into Bass Strait? Are you serious? Where have you been? If you believe anything that comes out of the mouths of the pro-pulp mill, then you’re really gullible. I’ll take the word of Peter Cundall and others anytime – thank you! There’s a good article in the SMH Good Weekend where he explains exactly what’s going to go into Bass Strait – if you’re silly enough to drink it, good for you! Why would you believe a company or a govt, where the company was allowed to write the legislation, and then added bits as they went along, which included conning the people and lying when needed?

    So where did you look? In a different place than Peter Cundall no doubt! He’s followed this from the beginning and got himself arrested(and his wife too) for his trouble – his local member put the police onto them – they weren’t obstructing anything – they made sure of it! He’s a man of integrity! Those in favour of the mill are traitors/terrorists? They don’t give a s**t about Tasmania, Australia or anything except money, power and greed!

    By the way, who said any levels of dioxin were safe? Gee, do you still believe in the tooth fairy too? sigh!

  24. filip


    We are working on a sustainable Island here. Check out, tasteofthenorthwest.com.au and come and enjoy. Eventually logging will go and food tourism will flourish. Tasmania is made for it. 1,000,000 tourists can’t be wrong.

  25. Roxanna

    Hope you’re letterboxing up there Filip!

  26. Frank Campbell

    ” A million tourists can’t be wrong”. No, but they can be turned off. I went to Taz a dozen times in the 90s. Haven’t been back since. Look at the St Helen’s scandal- a local GP and a couple of mainland scientists have spent years proving plantation runoff is toxic. Ignored / vilified by locals and the snot-octopus which runs the fiefdom. A pathological mix of kinship, feud, bureaucracy, unions and backwardness, staring malevolently from under its beanie. All subsidised by Canberra, which is not even sure where it is.

  27. Venise Alstergren

    FILIP: for every million tourists multiply by a hundred to see the amount of money the destroyers have to buy off the state government. Still, I wish you and your fellow activists every piece of good luck that is going.

    But, look after yourselves. Look what they tried to do to Bob Brown.


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