Tuesday, June 3, 2008

Green Options - Victory for Greenies in Australia as $2.2 Billion Plant is Pulped

s part of Eco-Libris' ongoing content partnership with Green Options Media, we feature a post that was originally published by Ross Kendall on May 28 on EcoWordly. Today's post is about a battle over a pulp mill between a timber company and environmental groups in Australia due to a threat to some of oldest native forest ecosystems in Tasmania, Australia.

A planned rally against ANZ in Melbourne, Australia has been pulpedEnvironmentalists have claimed a victory in Australia where a major investment bank is said to be canceling its funding of a controversial pulp mill planned by the country's biggest harvester of old-growth forest timber.

Both the financial sector and the environmental movement were abuzz around Australia last week with the same piece of information. It looked very much like the Australia New Zealand bank (ANZ), one of the country's top four, had pulled out of its pledge to fund a controversial $2.2 billion pulp mill planned for the southern state of Tasmania.

But of course while the finance sector saw doom and gloom and proceeded to wipe 10 per cent of the share market value of the pulp mill's developer Gunns Ltd, the environmentalist were giddy with delight. If the rumor is true, and they certainly think it is, it could well be the final shot in a battle that has raged for years between Gunns and environmentalists.

Protest called off
Last week the environmental non-government organisation, the Wilderness Society, cancelled its plans for a major rally against the ANZ Bank over its involvement with funding for the pulp mill.

Wilderness Society spokesmen Mr Paul Oosting, congratulated the ANZ Bank for a socially and environmentally responsible decision to abandon the mill.

“Gunns’ pulp mill would see the destruction of high conservation value forests in Tasmania and the project does not have a social license. ANZ’s decision is in line with its new forest policy and with principles that set a high standard for corporate social responsibility.”

Is it too good to be true
After some initial certainty however, things do not seem so clear cut.

Australia's national broadcaster reported late last week that both the timber company, and the ANZ Bank were denying the speculation. The bank left the door opened when it claimed it was waiting for Gunns to clear more regulatory hurdles, before finalising its decision on funding.

So is all this just another story in a world were economic growth clashes with environmental concerns every day, not at all.

A historic battle
The issues of forest logging in Australia's smallest and southernmost state, Tasmania, has been the center of many political debates that have raged across the country, and arguably helped determine the outcome of recent federal elections.

In a nutshell Gunns is the monopoly timber operator in Tasmania were it affords good protection from the state government. Proponents saw it provides jobs and is the power house of the Tasmanian economy. The links between the state government and the company are strong and the 'revolving door' is in operation, state government politicians and employees frequently end up working for the company

Old growth for paper products
The problem for environmentalists is that Gunns chops down some of the oldest native forest ecosystems in the world to supply the paper pulp markets.

To add insult to this injury the company planned a huge "world class" pulp mill to help it add-value to its timber products and of course, provide more jobs and economic growth for the state.

But what a process pushing the mill has been. There have been endless committees, reports, consultations and regulatory hearings all they way to the country's highest government levels. All trying to determine just how much pollution the new plant would be allowed to create in pristine Tasmania.

But the arguments either way haven't changed anybody's mind, you were either for it or against it.

Determined despite the odds
Indeed all seemed lost for the environmentalist when even the prospect of a new federal government, which would include the former rock star with Midnight Oil, and one-time fervent environmentalist, Peter Garrett said they would support the new mill.

The last hope for the environmentalists was to target Gunn's financial backers. And in a testament to conviction it looks like they may well have pulled it off.

Not that environmentalists will be given the credit of course, they rarely are. One of Australia's leading financial commentators Alan Kohler, has said that considering all the turmoil in world markets it is very unlikely the financing will go through.

Everyone wins, but Gunns
This also means that the ANZ can save face and duck accusations that it was running scared of the reputational damage of being involved with the pulp mill. But somehow I don't think the environmentalist will mind this one little bit.

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