“They don’t want to hear the truth,” says Greg L’Estrange, the former chief executive of failed Tasmanian forestry giant Gunns Ltd, of the state politicians now inquiring into the 2011 sale of Triabunna to conservationists Graeme Wood and Jan Cameron for $10 million.
Last month the lower house community development committee held two days of public hearings into the sale, in an inquiry prompted by this sensational article in The Monthly, which told how the mothballed mill was destroyed late last year in a clandestine operation by Alec Marr, the former Wilderness Society chief and long-time anti-Gunns campaigner who was hired by Wood and Cameron to run Triabunna and who rightly feared the election of a conservative government in Canberra would lead to moves to compulsorily acquire the mill and quickly reopen it.
The Monthly editor John van Tiggelen, who joined the vandalism in a bit of gonzo journalism, wrote how the operation “felt illegal” even if it actually wasn’t — Wood and Cameron owned the mill and were free to do whatever they wanted with it, and in fact they’d applied to Tasmania’s EPA to decommission the mill.
In the piece, Marr told van Tiggelen there had never been an intention to reopen the mill, despite what was said publicly and even though the contract of sale between Gunns and Triabunna Investments (the bid vehicle for Wood and Cameron) included a clause saying the mill would reopen if there was a viable proposal from the industry.
The whole piece was a red rag to Tasmania’s conservatives, who want to unravel the state’s forest peace deal, shrink the declared World Heritage Area, reopen the old-growth coupes for logging, buy back Triabunna and crank the whole industry back up, despite there being no market whatsoever for inferior woodchips from old-growth forest given the millions of tonnes of hardwood plantation due for harvest. Federal Employment Minister Eric Abetz wants to see the waste left over after paltry demand for sawn timber and plywood is satisfied — that is, 80-90% of the wood — burned as a source of renewable energy. So Tasmania’s psycho forest wars continue.
L’Estrange, who arguably did more than anyone to trigger the peace talks by pulling Gunns out of native forest in 2010, has made this submission to the inquiry, and says he insisted on the clause requiring the mill to reopen if it could be proved viable, and only accepted the Wood/Cameron bid after the failure of an agreed $16 million bid from a local forestry business Fibre Plus, run by Ron O’Connor.
L’Estrange says there is rewriting of history going on about the collapse of that bid, which O’Connor and Co had put none of their own money into, and was predicated on an in-principle state government grant of $6 million, in turn conditional on a $10 million loan from NAB. At 10 minutes to midnight, when NAB pulled funding for the deal — the bank was unwilling to risk brand damage — Fibre Plus was unable to complete, with the company’s lawyer telling Gunns the bid was “at an end”.
O’Connor’s own evidence to the committee confirms that NAB had pulled out, but he said that Gunns gave Fibre Plus an extension until July 15, and after a mad scramble an unidentified alternative financier was lined up for a $12 million loan.
O’Connor maintains the state grant was a foregone conclusion, and L’Estrange was motivated by a grudge against Forestry Tasmania. L’Estrange rejects this. He judged at the time — and still thinks — there was “zero chance” the then Labor-Greens cabinet would sign off on a $6 million grant to keep Triabunna open. He says there was no extension till mid-July. Gunns had no choice but to deal with underbidders Wood and Cameron, whose bid was unconditional and whose capacity to close was never in doubt.
“Of course we’re going to take $16 million over $10 million,” L’Estrange told Crikey. “But Fibre Plus couldn’t complete.”
L’Estrange reckons O’Connor dodged a bullet — if he’d bought Triabunna, he would be wearing the losses now. L’Estrange is yet to hear from the inquiry in response to his submission. Having worked in forestry for the best part of 30 years, he believes for ideological reasons the politicians simply “can’t get that the industry’s changed”.
“I am not discarding the native forest industry, but that if it is to survive it must change direction and find people that will invest significant amounts of money, possibly $1 billion in new facilities. As Mr O’Connor found with the NAB, the current conflict and economics do not attract debt or equity partners.”
Australian eucalypts are growing better in massive plantations overseas than they do here as a result of R&D that improved the genetic stock “exponentially”. The plantations are often right next to pulp mills, knocking out the seaborne trade. Nippon Paper has closed its woodchip mill at Eden, on the NSW south coast, and Boral has shut its plant at Newcastle. Japan’s pulp and paper industry has lost its competitive position, but “we keep backing the loser”, says L’Estrange.
Instead off dredging up old conflicts, L’Estrange asks: “Why can’t they just be honest with the community and move on?”
Worse, in trying to resurrect a dead industry from the grave at Triabunna, which will be unbankable and require massive subsidies, Tasmania will miss out on much more promising investment in tourism. Wood and Cameron have popular plans to spend millions reinventing the site as an arts and tourism destination called Spring Bay Mill. Despite holding two days of hearings in Triabunna this week, the committee members wouldn’t even meet with Wood to discuss those plans, The Mercury reported this week.