Gunns, forestry, and the flawed notion of 'social licence'

Last week's announcement that Tasmanian timber company, Gunns, had entered into voluntary administration has predictably spawned an array of 'dance-on-the-grave' post-mortems from its long-standing critics. These include high profile opponents such as novellist, Richard Flanagan; wealthy Sydney businessman turned activist, Geoffrey Cousins; and former Labor opposition leader turned media commentator, Mark Latham.

Flanagan's earlier writings on Gunns and its proposed pulp mill had caused some to observe that it affirmed his status as a fiction writer. His short essay published last week on Hobart-based web blog, the Tasmanian Times, somewhat reinforces this perception. In particular, a colourful first paragraph in which he accuses Gunns of corporate hubris which enabled them to "..... corrupt the polity, cow the media, poison public life and seek to persecute those who disagree with you. You can rape the land, exterminate protected species, exploit your workers and you can even poison your neighbours"

Cousins, by his own admission, initially came to the fight against Gunns and its pulpmill at the behest of Bob Brown and Wilderness Society activists who imbued him with highly emotive, wildly exaggerated and inaccurate perceptions of the reality. The first paragraph of his opinion piece published in Melbourne's The Age last week, suggests that these still inform his description of Gunns as "....the timber company that once bestrode the forests and valleys of Tasmania like a brooding behemoth, ........" Later, he described the company's relationship with the State Government as"the acid rain that fell on the forests and wilderness areas and even the cities of Tasmania for decades, and blighted its landscape and divided its communities".

Latham visited Tasmania as leader of the Federal Opposition in March 2004 and last week in the Australian Financial Review he recounted his dealings with Gunns and its supporters during that visit. He clearly has bitter memories of a time of which it has often been said that he bungled his party's electoral chances with an ill-advised play for mainland 'green'votes by virtually offering the Tasmanian timber industry its own financially-compensated death warrant, which they understandably refused to sign. His memory of Gunns and their 'pro-forestry' supporters is of them being akin to a 'cult' that was "determined to destroy the environmental movement through the manipulation of public policy".

History is generally written by the winners. So, badly skewed opinions such as these, together with articles written by professional journalists who tend to write about Tasmanian forestry from the eco-activist perspective, are likely to ensure that this episode will be remembered in a vacuum free from some inconvenient truths.

Such truths include the reality that two-thirds of Tasmania's public and private forests are in fact reserved or otherwise not accessible to the timber industry – which invalidates the more outrageous environmental claims made against Gunns. As well as that the entrenched opposition to Tasmanian forestry has been far more 'cultish', unprincipled and uncompromising in its determination to destroy the state's timber industry, and so is much more responsible for what has happened to Tasmania than what Latham describes as the 'pro-forestry' supporters.

Unfortunately, most of the media commentary and analysis about the fall of Gunns has simply ignored the central role of eco-activists in destroying the company's traditional markets, eroding its relationships with banks and shareholders, and destroying its public reputation with adverse publicity. This ultimately weakened the company's capability to deal with the adverse business climate arising from the Global Financial Crisis.

Despite this reality, a common theme of the skewed commentary emanating from its critics is that Gunns is responsible for its own downfall primarily because it lacked a 'social licence'.

According to Cousins, Gunns' proposed Tamar Valley pulp mill "sank the company" by exposing its propensity to "ignore community interests, contrary voices, environmental issues and proper governance" which inevitably "will cause pain and suffering to your shareholders, employees and, probably, creditors". Flanagan agrees that the demise of Gunns was rooted in its determination to pursue the pulp mill at all costs, and he hopes that the company's subsequent demise will teach "Australian corporations ..... (to) ignore public sentiment at their peril."

The Australian's Tasmanian correspondent, Matthew Denholm, made the same point more succintly when he wrote last week that Gunns had embarked on a 'pulp mill or bust' strategy, but had failed to secure the 'social licence' needed to make it work. According to him, this failure to gain community support was due to the company siting the pulp mill in a highly contentious location, and its behaviour in cajoling the state government to 'fast-track' the mill's approval by "side-stepping the normal planning process".

Unfortunately, in the absence of any widely publicised contrary arguments this has become part of the folklore about Tasmanian forestry with Gunns playing the part of 'rogue corporation' – in the parlance of Richard Flanagan.

In reality, the potential alternative pulp mill site at Hampshire was assesed and found to be not as viable for a host of reasons; while the supposition that it would be less contentious is highly unlikely given that it is almost adjacent to the fabled Tarkine 'wilderness' and can be seen from the World Heritage-listed Cradle Mountain. In addition, the claim that the mill's approval was 'fast tracked'  must be considered in the context of a state approvals process which took three years, and was made lengthier than required by the relevant state legislation by extra optional steps inserted by the independent assessment body.