Tasmania's forestry debacle

Tasmania's so-called 'forest peace' process is drawing to a close after almost two-years of secretive talks between conservation groups (ENGOs) and timber industry representatives costing taxpayers upwards of $2.2 million.

As yet there is no final agreement despite the recent personal intervention of Federal Environment Minister, Tony Burke.Quite simply, it is very difficult (if not impossible) to reconcile conservation demands to reserve a further 570,000 ha of Tasmanian forest against the native hardwood industry's requirement to meet existing wood supply committments.

Regardless of the eventual outcome of this process, Tasmanian forestry has descended into a debacle given last week's admission by Gunns that its approved plantations-based Tamar Valley pulp mill is now unlikely to be built.

The prospect of transitioning to a plantations-based industry centred on the pulp mill essentially underpinned the 'forest peace' process whereby Tasmania's native hardwood sector would be largely sacrificed in return for an ENGO-sanctioned 'social licence' to build and operate the mill. However, the notion that native forest products have no future is far from unanimously supported within the native hardwood sector and indeed the wider Tasmanian community.

Now that the pulp mill is highly unlikely to eventuate, those who devised this strategy – most notably Gunns – can be seen to have voluntarily jeopardised the future of the state's native hardwood sector for an expanded plantations sector that is now unlikely to develop. Indeed, Gunns now seems to be battling for its very survival and, having closed or sold-off its export woodchipping infrastructure, has little current capability to earn income from its Tasmanian plantations.

The damage to Tasmania has now largely been done with thousands of rural jobs already lost or downsized. The state now has the country's highest unemployment rate; while the exodus of workers to the mainland has grown to equal record levels. Social service organisations have also noted the high costs to human health and relationships. In addition, rural land values have fallen by an estimated $2 billion given the uncertainty about whether an industry capable of utilising privately-owned native forests and plantations will exist into the future.

Given the central role of Gunns in what has transpired it has become commonplace for Greens politicians, and ENGOs and their supporters to absolve themselves of any responsibility by portraying this debacle as being of the forest industry's own making.

There is certainly plenty of truth in an appraisal of it as being precipated by the behavior of Gunns and exacerbated by a difficult business climate associated with the GFC, including a high Australian dollar. However, the realisation that other Australian states which largely produce the same native and plantation hardwood products for the same markets have not been nearly so badly affected, points to Tasmania and Gunns having been specifically impacted by another factor.

Putting aside the complication of the pulp mill proposal, the major differentiation between the damage to Tasmania's hardwood industry and its mainland state counterparts has been the systematic 'brand mailing' of Tasmania's major timber companies and their forestry practices by ENGOs operating both in the international marketplace and domestically amongst retailers, banks, shareholders and the broader investment community.

'Brand mailing' is a term coined in the USA to describe concerted ENGO campaigns to discredit companies in order to achieve specific environmental outcomes. The 'brand mailing' of Tasmanian forestry stretches back to 2007 and continued throughout the 'peace process' most notably with activists in international boardrooms, and a young woman perched atop a Tasmanian tree for the past 8-months connected to a worldwide audience via the internet. Actions such as these continue to grossly misrepresent Tasmanian forestry as being akin to Third World standard.

However, Tasmania's forests are not under any dire threat. Around two-thirds of their area on both public and private land is either already formally reserved or is otherwise not used for wood supply, including 80% of the 'old growth' forest. In addition, Tasmania's forestry planning and practices are widely acknowledged to be amongst the world's best, and there is an absence of the deforestation, illegal logging, and corruption which plagues many other countries which supply natural hardwood to the global market.

Central to the ENGO's 'brand mailing' campaigns has been their errant claim that Tasmanian native forestry is unsustainable simply because it isn't certified by the Forest Stewardship Council (the FSC). Concurrently they have trashed the reputation of the alternative Australian Forestry Standard (to which most of Tasmania's hardwood industry is certified) by misrepresenting it as 'industry standard' when in fact it was developed under the auspices of Standards Australia specifically for Australian conditions. By comparison, the FSC-certification scheme was developed by the global environmental movement and is a generic international standard with no local focus.

Nevertheless, these attacks have ultimately helped to create a market demand for FSC-certification that the Australian hardwood industry simply cannot meet because our ENGOs are themselves the gatekeepers of the FSC scheme in Australia and therefore control who can or can't be certified.

It is unclear whether customers, banks or shareholders lobbied by these 'brand mailing' campaigns actually believe ENGO's claims or simply make a pragmatic decision to cut ties with targetted companies to disassociate themselves from a controversy. Either way it is apparent that in this case, these campaigns have effectively sabotaged key markets for Tasmanian hardwood products.

Ultimately, this contributed to Gunns' loss of its traditional Japanese woodchip customers and substantially reduced the company's revenue by forcing it to sell into less lucrative markets. This, together with the Wilderness Society's efforts to poison Gunns' reputation amongst its bankers and largest shareholders, helped foster the climate that enabled self-styled 'corporate eco-warrior' Geoffrey Cousins to engineer a boardroom coup in May 2010. This claimed the scalps of two of Gunns' Tasmanian-based directors, including Chairman, John Gay, a 37-year industry veteran who was the company's public face.

Cousins was largely inspired to act by deceitful ENGO campaigns which misrepresented Gunns' proposed pulp mill as a grave threat to Tasmania's 'old growth' forests and iconic endangered species, such as the Wedge-tailed Eagle. In reality, the pulp mill was planned as a facility that would initially draw its resource from a mix of native regrowth and plantations before fully transitioning to plantation wood within five-years.

Arguably, if John Gay had remained as Gunns' Chairman, it is unlikely that the company would have acted knowingly in ways which would severely damage the rest of the native hardwood sector, but the revamped Gunns board and its new Managing Director, Greg L'Estrange – a noted 'change agent' with no special affinity for timber industries – clearly had no such compunction.

Soon after his appointment, L'Estrange announced that Gunns would relinquish their forest harvesting rights and close their native hardwood division to concentrate on plantation-grown products. Concurrently he, in conjunction with a prominent ENGO activist, effectively initiated the so-called 'forest peace' process ultimately aimed at facilitating the construction of the company's proposed pulp mill. As by far the largest and most dominant player in Tasmania's native hardwood industry, Gunns' self-serving behaviour dragged the rest of sector unwillingly into a process which threatened their future.

Before long, Gunns had closed their woodchip export facilities to the remaining native hardwood players. Then, in June 2011, in what appeared to be a deliberately provocative indignity, they sold their Triabunna woodchip mill and port facility to a pair of mega-wealthy 'green' entrepreneurs despite their purchase offer being 40% lower than a competing timber industry consortium.

Unsurprisingly, under their 'management' the Triabunna woodchip facility has remained closed ever since. This has severely hampered the remaining timber industry in Tasmania's southern forests by deliberately denying it access to its traditional market outlet for forest and sawmill residue. As these residues can no longer earn an income the economic viability of the industry has been badly damaged.

This problem could have been addressed by developing a market for woody residues as a source of renewable biomass energy – a proposal that Forestry Tasmania was already working towards. However, on two seperate occassions the Australian Greens have stymied attempts to include the use of biomasss from native forest harvesting and sawmill residues in Federal renewable energy legislation. Clearly, their ideological determination to ultimately end native forest wood production exceeds their committment to the improved environmental outcomes that could be achieved through increased generation of renewable energy.

Further to this, the two-year delay associated with the 'forest peace' process has created market-place uncertainty and prevented the industry from exploring and developing relationship-based market opportunities. This situation has also restricted access to capital markets thereby preventing investments in new approaches, new technologies and new markets and products. In effect, this has meant that the industry has gone backwards whilst waiting for an outcome.

The spin attached to the 'forest peace' process is that if it results in an agreement being reached, it will 'secure the future for Tasmania's forest industry'. At best this will be a significantly attentuated future based on a substantially reduced resource base. Also, given that this future can only be secured by the industry agreeing to relinquish most of it's legally enshrined harvesting rights in return for an ENGO promise to stop sabotaging its markets, it smacks of extortion.

To this can be added blackmail, given the Federal Government's determination to force a resolution by making hundreds of millions of dollars in industry compensation and regional development grants contingent on the industry agreeing to effectively sign away much of its future to facilitate new national parks. The Federal Government's involvement in what should be a state responsibility has been troubling, but seems to be linked to an agreement that Julia Gillard made with then Greens Leader Bob Brown in 2010 to garner the support she needed to become Prime Minister.

Regardless of its final outcome, this so-called 'forest peace' process has effectively resulted in the Australian and Tasmanian Governments out-sourcing forest policy to ideologically-driven career activists who know what they don't like, but not much else; who are ideologically representative of only a minority of the population; and who have no compunction in deceitfully disseminating misinformation to get their way.

The concern for other Australian primary industries should be that it could easily happen to them. Already in Tasmania the focus of the ENGOs is turning to commercial fishing, mining and aquaculture, while the use of pesticides in agriculture and plantation forestry continues to be a target.

Recently, the Executive Director of the Tasmanian Minerals Council opined that at least one ENGO encouraged by the success of tactics used against the state's forest industry, had signalled its intention to attack the banks, shareholders and markets of a mining company which had nominated several projects for assessment in Tasmania's north west. Last week a poorly informed article published on the widely-read political and current affairs website, the Asian Correspondent, about the supposed threats of mining in north western Tasmania's Takine region, arguably signified the start of the process of misinformation.

It is hard to combat such tactics. However, a good start would be for the Federal and State Governments to resist rather than reward Greens and ENGO attempts to manipulate resource use policies through campaigns of misinformation against already well-regulated Australian rural industries. This is probably unlikely at present given that the Australian and Tasmanian Governments are reliant on symbiotic relationships with Greens politicians.

However, it is clear that unless ENGOs using misinformation and deceit are brought to account, Australia's primary resource use industries will be required to overcome unwarranted and ever greater hurdles to survive, which is hardly in the national interest. The current state of Tasmania stands as a salutory lesson as to what this can look like.