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The pulp mill will chop down Tasmania's forests.
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last update: Feb 22, 2010
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printGunns pulp mill proposal Tasmania - Australia location
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Sign the action letter and stop Nordea from investing in Gunns pulp mill, Tasmania
![]() Silent protest against the proposal for the Gunns pulp mill.
sector
forestry, pulp and paper
description
Gunns Limited, an Australian logging giant, is planning to build a AUS$ 2.2 billion native forest based, chlorine-bleaching pulp mill in Tasmania, Australia. The pulp mill is currently one of the most controversial issues in Australia and is opposed by the majority of people. The pulp mill is opposed due to its social, environmental and economic impacts. Despite having been engaged as the lead arranger to secure finance and to fund the project Gunns own banker, the ANZ, in May 2007 announced that it would not be part of the project after conducting an independent assessment. current status (Nov 30, 2009)
At the AGM of November 2009, Gunns announced that Swedish pulp and paper company Södra is one of the potential pulp-mill investors the company is in talks with. Södra has set minimum benchmarks for any pulp mill development in Australia, saying it would need to be totally chlorine-free (TCF), 100% plantation-based and Forest Stewardship Council (FSC) certified. Gunns current proposal doesn't meet any of the preconditions set by Sodra. Gunns will have to undertake major reforms to meet the preconditions set by Södra, such as ending the logging of native forests and not using litigation against community members standing up for the protection of their environment. However, Gunns also indicated that they are in talks with other pulp and paper companies. Gunns has not received approval from the Australian Federal Government to operate the pulp mill. Gunns evidence to the Federal Government on the mills impact on the marine environment was rejected and they have been given until March 2011 to complete further research. However, Gunns has indicated it will begin construction of the project as soon as it secures finance for the project. Gunns has not yet completed critical scientific work on how the pulp mill pollution will impact on marine life and the fishing industry. brief history
Gunns stated in the beginning of 2009 (results for half year ended
31 December 2008, released February 2009) that they are in negotiations
with a number of parties that are interested in becoming a joint
venture partner in the proposed pulp mill. Gunns also stated that "the
primary source of funding for the development will be a project finance
debt facility which is being coordinated by a leading European bank."
Gunns chairman John Gay said the mill project was a ‘ready status' and
that construction would begin as soon as they achieved financial close.
The community in Australia and NGOs involved in the campaign are not opposed to all pulp mills. The development of a pulp mill of an appropriate size, to be 100% based on existing plantations, with appropriate non-chlorine-bleaching technology, in an appropriate location (adjacent to Gunns' Hampshire plantation estate), and assessed according to community standards and expectations would not be opposed. On the 15th of December 2004, just two days after launching a writ to sue 20 leading conservationists in Tasmania, Gunns launched its pulp-mill proposal. The fast-tracked assessment of Gunns' proposed pulp mill has been plagued by abuse of due process and special deals for Gunns. The corruption of the assessment process has resulted in a pulp mill proposal that received little independent scrutiny, no assessment of some of the project's most significant impacts and major public opposition. -readmore- Originally the pulp mill was to be assessed by Tasmania's independent planning authority, the Resource Planning and Development Commission (RPDC). The RPDC process was accredited and supported by both State and Federal governments, the proponent of the project, Gunns, and opponents of the project.
Gunns themselves do not have a social license to operate. In 2007 Gunns were awarded ‘Wooden Spoon' award by Corporate Monitor due in part to their very poor standards of governance. Corporate Monitor pointed to the following negative features of Gunns, lack of Board independence. Only one of the six non-executive directors is fully independent; Mr John Gay is a substantial shareholder, managing director and chairman; three of the non-executive directors have been on the board in excess of 10 years, contrary to ASX best practice guidelines; non-executive director Richard Millar, who joined the Board in 2007 owns a company that has dealings with Gunns. However, the two major reasons why Gunns do not have a social license to operate in Tasmania are Gunns continued destruction of high-conservation-value and oldgrowth forests and the totally unsustainable and inappropriate nature of their proposed pulp mill. companies involved
Gunns Ltd. is the proponent of the pulp mill. Leighton Holdings is the 'preferred' company for doing the construction work. Andritz is a major partner in the project. Their involvement includes:
dodgy aspects
social impact
No social acceptance Impact on Human Health The Australian Medical Association (AMA) Tasmanian branch says the pulp mill ‘could cause an increase in the already existing morbidity and mortality from atmospheric pollutants'. Site selection
Economic impact
environment
Forest destruction Clearfell logging is carried out in Tasmania. Areas that have been logged are then burnt in high-intensity fires to remove wood waste. After logging has occurred on private land native wildlife is poisoned with 1080 to stop them feeding on the regrowing seedlings. Many endangered species will be driven closer to extinction by the pulp mill such as the Tasmanian devil, the giant freshwater lobster, the Tasmanian wedge-tailed eagle and the spotted-tail quoll. -readmore- The IUCN, the expert international conservation body, says of Tasmania's unprotected native forests that:
The 21-country strong World Heritage Committee recently resolved that the Federal Government should "consider, at its own discretion, extension of the (World Heritage Area) to include appropriate areas of tall eucalypt forest, having regard to the advice of IUCN". There has been NO assessment by either the state or federal government of the impact Gunns' proposed pulp mill would have on Tasmania's forests. Despite claims by Gunns that it will not use oldgrowth logs in the pulp mill, there are no impediments to this in either the state or federal government approvals, in legislation, or in the wood supply deal with Forestry Tasmania. Climate Change Research by the Australian National University has shown that Tasmania's native forests are some of the richest stores of greenhouse gases on the planet. Tasmania's forests can contain up to 1200 tonnes of carbon per hectare. Highly conservative estimates show that native forest logging to supply the pulp mill will cause emissions of 10 Mt CO2 per annum, equivalent to increasing Australia's total greenhouse gas emission by 2% (The Green Institue, www.greeninstitute.com.au). Scientific evidence shows that native forests are carbon sinks which continue to sequester carbon for up to 800 years. Research published in Nature "old-growth forests accumulate carbon for centuries and contain large quantities of it. We expect, however, that much of this carbon, even soil carbon, will move back to the atmosphere if these forests are disturbed." Scientific evidence is now clear: native forests should not be disturbed by logging due to the huge amount of carbon they store and the ongoing role they play in sequestering carbon. Pollution The pulp mill would consume 26 billion litres (Gl) of water annually, which cannot be recycled, due to the chlorine bleaching process to be used by the mill. The mill would heavily pollute the air in the nearby urban area. The Australian Medical Association has warned that the mill’s emissions will cause increased deaths in the already polluted Tamar Valley. human rights
Following Gunns' abandonment of the independent assessment fast-track approval legislation was forced through parliament by former Tasmanian Premier Paul Lennon. That legislation contained section 11 which removes people's fundamental rights. It reads Section 11. Limitation of rights of appeal:
Aboriginal heritage and values The Tasmanian Aboriginal community also opposes the mill because of the impacts of the mill's effluent on the marine environment around the Bass Strait islands officially recognised as Aboriginal land. This includes toxic impacts on species traditionally hunted on and around the islands. Along with many other Tasmanians, Aboriginal Tasmanians condemn the atrocious community consultation and lack of proper assessment of the proposed pulp mill and its impacts. other issues The entire assessment and licensing process has been plagued by factual misrepresentations by Gunns and undue pressure from the Tasmanian government to 'fast-track' the project's approval. The state legislation enabling the fast-tracking of the permit for the Gunns pulp mill includes a Section 11 preventing any person from challenging the legality of the permit in the courts, which is claimed to be legally invalid and without parallel in modern democratic legislation (The Australian, 16 August 2008). financial institutions involved
banks
ANZ
- profile
Macquarie bank
Nordea
- profile
export credit agencies
Finnvera
Previously, ANZ was expected to be the lead arranger of funding for the mill project. However, after conducting their own independent review of the pulp mill proposal and following public protests against the mill, ANZ decided to discontinue its involvement with Gunns. applicable policies
Equator Principles should apply to this project.
According to Gunns' banker, ANZ, the Equator Principles (EPs) should apply to this project. Although the bank has not publicly issued an opinion on the project's compliance with the EPs, ANZ's decision to stay out of the pulp mill project is in line with its commitment not to finance projects which do not satisfy the EPs. what must happen
After ANZ's pull-out, any other banks invited to become lead arrangers should either avoid commitment to begin with, or should develop an exit strategy to withdraw from the project. |
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