Outlawing eco-based secondary boycotts

A secondary boycott is an attempt to influence the actions of one business by exerting pressure on another related business through the market place. An example was when environmental groups pressured the ANZ Bank to withhold finance for a pulp mill proposed by one of its customers, Gunns Ltd, on the grounds that the development would allegedly have serious environmental impacts.

Under the Competition and Consumer Affairs Act 2010 (the Act) secondary boycotts of Australian companies aimed at restricting company trading are - with two exceptions – outlawed, and targetted companies can expect the ACCC and the courts to protect them. However, the Act currently allows secondary boycotts that are either designed to protect consumers, or are substantially related to environmental protection.

Last month, the new Federal Government signalled its intent to amend the Act to remove the exemption that allows secondary boycotts related to environmental protection. Companies that have been targetted by boycotts allowed under this exemption have long complained that the lack of accountability afforded by the Act has effectively given eNGOs a licence to unfairly denigrate them through sensationally false or misleading environmental claims.

The announcement of the proposed amendment of the Act was predicably decried by eNGOs for whom inciting market-place boycotts has latterly become a key weapon for disabling Australian resource use industries, particularly those involved in forestry. Greens political leaders, Christine Milne and Nick McKim, were also critical of the move labelling it as a draconian attack on the democratic right of free speech. However, it is pertinent to ask whether it is more appropriate to describe it as an attempt to restore the integrity of free speech?

Arguably, the Australian eNGOs most heavily involved in inciting secondary eco-boycotts are Greenpeace, the Wilderness Society, Markets for Change, and GetUp! The most active of these is Markets for Change (MFC) which was launched in 2010 under the direction of former Wilderness Society National Forests Campaigner, Tim Birch, and with four international Greenpeace operatives occupying positions on its Board.

With a budget of $1.7 million in its first year, MFC was sufficiently well-resourced to begin prosecuting an operational methodology modelled on overseas campaigns to boycott or discredit companies to achieve environmental agendas – a form of eco-activism that is often referred to as 'brandmailing' in the USA.

MFC describes itself as"a market-focussed eNGO with a mission to drive responsible industry practices through an informed public and market place" In order to achieve this it "investigates and exposes the companies and products driving environmental destruction, creating the impetus for retailers to adopt environmentally and socially responsible procurement policies….." This includes travelling overseas to give retailers first-hand perceptions of Australian resource use practices.

In a media release responding to the Government's intention to review the Act in relation to eco-based secondary boycotts, MFC's CEO, Peg Putt, dismissed the notion that her group does anything other than simply report the truth about the origins of Australian forest products and that this is sufficient for customers to demand better environmental credentials in the products they buy.

Ms Putt went on to cite two examples where MFC had driven positive market place change. One of these was where they "successfully established relationships in Japan and the UK with customer companies of Ta Ann Tasmania, and were able to give precise chain of custody advice about where the logs came from in the high conservation value forests of Tasmania. The customer companies had been misled into believing they were buying 'eco' wood from plantations."

Finally, Ms Putt strongly disagreed with the notion of making groups like MFC more accountable for the messages they spread in the marketplace: "Trying to gag us is swimming against the tide of public concern over the social and environmental characteristics of the product they buy and seeks to muzzle us in the same way as the Gunns 20 court case also sought, unsuccessfully, to muzzle forest campaigners."

Her reference to the Gunns 20 court case signifies an intention to follow the same pattern of saturating the media space with the notion that forcing eNGOs to be accountable is contradictory to the fundamental right of free speech. This worked well against Gunns because a large, and alledgedly bullying corporation is an easy target for the media; because Gunns' brief of evidence against the defendants was poorly conceived and executed; and because it was harder to link so many individual defendantsto the existence of a concerted and well organised campaign to trash a company's reputation.

In this case though, a quick glance at MFC's website is all that's needed to show it to be an entity specifically established to damage the reputation and restrict the trade of targetted companies unless they comply with their demands. Their website also contains various campaign reports that can be readily examined to gauge the veracity of the environmental claims being used to incite consumer boycotts.

Markets for Change have so far produced fivecampaign reports that are freely downloadable from their website. These include their initial report, 'Retailing the Forests' which was a general grab-bag of claims against a host of Australian timber and paper sector companies; as well as more focussed reports targetting specific companies such as Harvey Norman and Ta Ann Tasmania for supposedly driving 'forest destruction' by respectively selling furniture and making plywood derived from Australian native hardwoods.

An examination of MFC's 40-page 'Retailing the Forests' report found that it made some outlandish claims such as that "logging is still permitted in 76 per cent of Australia's native forests." This figure has been taken out of context from the Australia's State of the Forests Report 2008 where it is heavily qualified by an accompanying statement that "In practice, much of the available area currently contributes little to timber supply because it comprises leasehold land predominantly used for grazing, does not contain marketable species, is too far from markets, or is not operationally feasible."

However, MFC neglected to include this qualification so as to create a fear that all forested land outside of formal nature conservation reserves or some other Crown Land categories will be logged, when in reality most is not suitable or operationally harvestable. Indeed, only around 5% of Australia's public and private native forests are used for timber production, although admittedly few outside the forestry sector could be expected to know this.

"Retailing the Forests" is in large part a photo essay containing in roughly equal measure photos of just logged and burnt forest coupes up against photos of pristine old forest. There is simply no acknowledgement either in its pictures or words that harvested forests actually regrow and have been doing so since Europeans first began producing timber on a significant scale around 150 years ago.

Accordingly, the report continually refers to timber production as 'forest destruction' despite the reality that almost all areas being harvested in Australia today are forests which have regrown from earlier logging or severe bushfires. Following on from this, Australia's forests are variously described as being 'in crisis', undergoing an 'environmental tragedy', and 'facing serious threats' supposedly due to ongoing wood production. In reality, there is simply no justification for such descriptions being attributed to such a proportionally small-scale and renewable activity.

Apart from its highly contentious tugging at the emotional heartstrings, the "Retailing the Forests" report also makes a host of serious factual errors, including:

• Wrongly asserting that Australia has sufficient plantations to supply all its timber and wood product requirements without having to log native forests.
• Falsely claiming that retailers and consumers have a choice between furniture made from Australian native hardwood and plantation-grown hardwood of the same species, with equivalent quality and price, when they clearly do not.
• Grossly overstating the harvestable forest area by 200% in Tasmania, 400% in Victoria, and up to 500% in NSW.
• Wrongly inferring that logging is akin to the extinction of flora and fauna when there are no documented cases of this in Australia where biodiversity has primarily been damaged by habitat loss for settlement and agricultural development, feral carnivores, and changed fire regimes.
• Falsely claiming that timber harvesting in public State forests is exempt from Commonwealth threatened species legislation despite the legislation itself explaining that appropriate approval has already been effectively achieved through the conduct of the Regional Forest Agreement process.
• Referring to Victoria's Central Highlands' mountain ash forests as "threatened" despite them still occupying over 95 per cent of their original extent with about two-thirds residing in water catchments and conservation reserves that will not be used for wood production.
• Implying that all logging is clearfelling, thereby obscuring the fact that substantial volumes of native forest wood products are derived from low intensity selective harvesting systems.

Most of these errors have been repeated in subsequent Markets for Change reports. Assuming this to be representative of what MFC is telling domestic and international wood retailers and consumers than there is little doubt that the market is being grossly misled and the trade of Australian wood producers is being unfairly damaged.

Overseas experience suggests that any success attributed to eco-based market boycotts is not necessarily achieved because targetted companies believe the claims of environmental destruction being levelled at them, but primarily because they simply want to avoid involvement in public controversy where their reputation may be damaged.

In Australia, this was reflected in evidence provided under oath to the Tasmanian Legislative Council Inquiry into the forest industry, when former national director of the Wilderness Society, Professor Jonathon West, recounted a recent conservation with a current leader of Tasmania's environment movement. In this conservation, the current environmental leader described the primary role of anti-logging protests as being to create evidence of controversy that can then be presented to potential purchasers of Tasmanian forest products. He added that as most of these customers haven't the inclination or means to fully research the issues to establish the veracity of the controversy or the claims that it's based upon, they are easily convinced to buy similar products from non-controversial sources.

This exemplifies how Ta Ann Tasmania lost its lucrative contract to supply plywood for building sporting venues at the London Olympics. The UK plywood customer who had contracted Ta Ann to supply the plywood was targetted by both MFC and Greenpeace UK who threatened to undermine the company's reputation and damage its markets unless it recinded its contract and bought plywood from another source. Back in Tasmania, the loss of orders associated with this and a simultaneous Japanese boycott, led to Ta Ann having to shed 40 jobs.

This exemplifies the socio-economic damage that can be done by secondary boycotts based on flimsy or false environmental claims, and underscores the importance of making those who are responsible for them accountable for their actions. All Australians stand to benefit if a simple amendment of the Competition and Consumer Affairs Act 2010 can restore integrity to the public discourse over resource use and stop the needless trashing of our own primary industries on spurious environmental grounds.