Wildlife Tasmania

GUNNS’ PROPOSED PULP MILL

Update—February 2009

Gunns Limited (Gunns) is proposing to build a 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 project recently received federal government approvals for construction but not for operation. 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. The Wilderness Society is calling on the Australian Government to put in place measures to ensure that Gunns cannot begin construction of the pulp mill prior to these studies being completed.

There are currently seven major obstacles facing the pulp mill.

1.There is currently a challenge in the Tasmanian Supreme Court by Environment Tasmania and three Tamar Valley landowners.

2.A verdict is yet to be delivered in a Federal Court challenge by Lawyers for Forests.

3.Federal government approval to operate the pulp mill has not yet been granted. Gunns has been given until March 2011 to complete assessment work related to the impact effluent would have on the marine environment;

4.The West Tamar Council has refused to approve access to council land by Gunns for construction of its water pipeline.

5.Several Tamar Valley landowners are refusing to allow Gunns to build its pipelines across their land.

6.Gunns has been unable to raise the $2.2 billion required to build the pulp mill.

7.The project is opposed by the majority of Australians. This fact is consistently reflected through independent polling.

The Wilderness Society is not opposed to all pulp mills. The development of a pulp mill in an appropriate location, with 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 by The Wilderness Society.

The Wilderness Society, with the support of the community and other organisations, will continue to work to stop the mill. It will achieve this by:

harnessing and building community opposition to the project and working to ensure local, state and federal governments remove support for the project;

developing a network of ‘Super Activists’ to pressure Australia’s superannuation funds not to invest in environmentally destructive projects like Gunns’ pulp mill (see www.wilderness.org.au/superactivist ); and

working with international networks to inform banks and investors around the word of the environmental and social impacts of Gunns’ pulp mill and the financial risks associated with investing in the project.

Summary of Gunns’ proposed pulp mill

Gunns’ banker refuses to fund pulp mill

Gunns is yet to secure the AU$2.2 billion in funding required for the pulp mill. ANZ, Gunns’ banker for over 12 years, was asked to either provide the funds itself or to find a syndicate of banks to fund the pulp mill. However, after conducting an independent assessment of the project ANZ refused to fund the pulp mill.

All other major Australian banks, Westpac, Commonwealth Bank and the National Australia Bank have refused to fund the project.

No social license

The majority of Australians are opposed to the pulp mill. A recent poll showed that 61% of Australians strongly oppose Gunns’ pulp mill1.

Twenty-seven opinion polls measuring support for Gunns’ proposed pulp mill have been conducted between October 2005 and March 2008.2

Groups in Tasmania, Australia and internationally are working to stop construction of the pulp mill in order to protect Tasmania’s clean and green future.

Forest destruction

At full capacity, Gunns’ proposed pulp mill would consume 4.5 million tonnes of wood every year, 4 million tonnes for pulping and 0.5 million tonnes for burning to generate electricity in a wood fired power station3.

At start-up Gunns’ have indicated that 80% of this wood will be sourced from Tasmania’s native forests3.

Over 25 years, the pulp mill will lead to the destruction of at least 200,000 hectares of irreplaceable native forests.

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.

The IUCN, the expert international conservation body, says of Tasmania’s unprotected native forests that:

There is a clear body of evidence that there are areas which may have potential to demonstrate outstanding universal value which are outside the existing boundary of the (World Heritage Area);

It would be desirable that a moratorium on logging activity in areas of potential outstanding universal value be considered, as logging in these areas would foreclose the option of adding these areas to the (World Heritage Area).

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 hectare4.

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%5.

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.” 6 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.

Site selection

CSIRO pulp mill expert Dr Warwick Raverty, who was on the board of the government-accredited assessment of the pulp mill, has said that Gunns chose the ‘worst place possible’ in Tasmanian to build the pulp mill.7

The pulp mill site is approximately six kilometres away from the Bell Bay industrial zone but within two kilometres of local residents, vineyards and organic farms.

Until recently the pulp mill site was a nature conservation area. That status was removed by the state government to allow the project to proceed, despite Aboriginal artifacts and endangered species being present.

An alternative site exists at Hampshire in north-west Tasmania.

Aboriginal heritage and values

The Tasmanian Aboriginal Land and Sea Council (TALSC) and the Tasmanian Aboriginal Centre (TAC) officially oppose the proposed pulp mill because of its impacts on Aboriginal culture and heritage. These impacts to important heritage sites will occur at the both the proposed pulp-mill site on the Tamar River and in the forests that will be logged to feed the mill.

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.

Bad for Tasmanian economy

The Tasmanian Roundtable for Sustainable Industries (TRSI) found the pulp mill will cost 1220 jobs in tourism and the fishing industry while Gunns has indicated the pulp mill will only create 280 jobs8.

Dr Peter Brain from the National Institute of Economic and Industry Research (NIEIR) found the most likely impact of the mill on the Tasmanian economy over 20 years would be negative $0.3 billion, not the positive $3 billion claimed by Gunns. In a separate report, NIEIR found that “if anything goes wrong with the mill the maximum cumulative Tasmanian consumption loss is estimated at -$3 billion’9.

Naomi Edwards (retired actuary and former partner with Deloitte Touche Tohmatsu) found that Gunns' consultants Allens only addressed potential economic benefits but did not address potential economic costs; did not consider the broader economic implications of the pulp mill; and did not consider the opportunity cost implications of the pulp mill10.

The Federal Government Environmental Economics Unit found that “Gunns do not measure nor take account of such impacts that can not be immediately identified as potentially impacting on the total effect of the investment”11.

Dr Graeme Wells of Wells Economic Analysis found that the economic benefits of the pulp mill had been overstated and provided a critical analysis of information ignored by Gunns consultants (Allen Consulting Group) in their Economic Impact Assessment Report12.

Financial risks

Gunns’ share price has fallen by over 75% since 2004 when the pulp mill was first proposed. In the same period the projected cost of constructing the pulp mill has more than doubled from the original $1 billion estimate, to its current cost of over $2.2 billion.

Gunns has acknowledged that “although the prospect remains unlikely, there is sovereign risk that the long term supply contracts that Gunns has with government authorities for native regrown forest will be terminated or renegotiated on terms unfavourable to Gunns, or that changes in government policy may impede the operation of these contracts”13.

Financial analysts have questioned Gunns’ ability to be able to compete with lower cost pulp producers from South America and Asia into the Chinese market.

In a comprehensive assessment of the pulp mill’s financial competitiveness Naomi Edwards found that:

the cost of building the Bell Bay pulp mill is too high (AU$2.2 billion);

Bell Bay fibre costs will be US$227/t compared to US$103/t in Brazil;

input cost forecasts from Gunns are not credible;

government continues to subsidise mill but this may change in the future; and

comparisons with the Aracruz pulp mill in South America are flawed14.

Water

The pulp mill would consume 26–40 billion litres of water every year. This is equivalent to all three major cities in northern Tasmania combined.

Because Gunns has chosen a chlorine-bleaching process, the water cannot be recycled. If Gunns was to use the less polluting totally chlorine free (TCF) technology they could use up to 10 times less water15.

North-east Tasmania is affected by droughts and periodically faces water restrictions due to water shortages.

Ocean pollution

Gunns propose to build an elemental chlorine free (ECF) pulp mill. ECF pulp production results in the release of high levels of halogenated organic pollutants and chlorinated compounds into the environment16.

Each day the pulp mill will discharge 64,000 tonnes of effluent containing dioxins, furans and other persistent organic pollutants (POPs) —some of the deadliest substances known to science—into Bass Strait.

Bass Strait is a relatively stagnant body of water taking 160 days to flush, which means effluent will build up over time endangering marine life and fisheries.

The area Gunns intends to dump the effluent is highly bio-diverse and is home to bottle-nosed dolphins, Australian fur seals, fairy penguins and great white sharks.

This area also supports a third of Tasmania’s lucrative fishing industry which would be threatened by toxic emissions.

Dr Andrew Wadsley of Curtin University analysis of the potential for chemical contamination from Gunns’ pulp mill showed that17:

in the case of dioxin contamination the likely impact on the Tasmanian coastal and Commonwealth marine environments will be sufficient to pose a risk to marine life, to commercial and recreational fisheries, and to human health.

the average dioxin concentration in these fish will be 13,200 pg/kg, more than twice the Australian action limit of 6,000 pg/kg.

The Herzfeld report by a leading CSIRO oceanographer and member of the federal government’s Independent Expert Group into the impact of Gunns’ pulp mill on the marine environment found that:

This creates the possibility for high concentrations (of effluent) to be carried significant distances from the source, and will certainly reach Commonwealth waters (and the coast) under conducive forcing conditions.

Based on criteria prescribed in the State Pulp Mill Permits (2007), maximum effluent concentration for Chlorate (the most prescriptive constituent in terms of mixing zone extent) and target dilutions prescribed by GHD, the modelling indicates that during the periods simulated the effluent dispersion would be in breach of the State permit conditions on an almost daily basis. There is every reason to expect that the mechanisms responsible for these exceedances would apply in other periods.18 (emphasis added)

Fast-track assessment ignored major impacts

On March 9th 2007, the Resource Planning and Development Commission (RPDC) wanted to send a letter to Gunns informing it that its pulp mill proposal remained deficient and "critically non-compliant." The Tasmanian Government instructed the RPDC not to send the letter.

On March 14th 2007, Gunns pulled out of the independent RPDC assessment into the social, environmental and economic impacts of the pulp mill proposal. For a summary of Gunns pulling out of the assessment see ‘Pulping the mill’ in the Mercury19.

Subsequent fast-track assessments ruled out independent scrutiny and ignored the major impacts of the proposal such as impacts on human health, local businesses, climate change, Tasmania’s native forests and the economy.

The National Toxics Network reviewed the assessment carried out by Sweco Pic as part of the Tasmanian State government assessment and found20:

“The SWECO PIC assessment is necessarily inadequate and superficial due to scope and terms of reference established by the Tasmanian Government. This is not an environmental impact assessment but appears to be a political process designed to deliver a pre-determined outcome – which is the approval of the Gunns Limited’s Bell Bay Pulp Mill. An approvals process which has at stake 50 years of pollution of the Tamar Valley Airshed and Bass Strait must be transparent, accountable and open to consideration of the best available science.

…….

In order to better inform the Tasmanian people and their Parliamentarians about the impacts of the Gunns’ pulp mill before a final decision is taken, NTN has prepared an assessment of the Gunns’ pulp mill against key emission requirements using the same format as the SWECO report. Our independent analysis using the available literature demonstrates that the pulp mill is only compliant with 28% of the requirements not 92% as claimed by SWECO. The selective use of literature by SWECO and the assumption that Gunns’ claims are all correct at face value are major flaws in the SWECO report.”

Human and Legal Rights Removed

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

(1) Subject to subsection (2) and notwithstanding the provisions of any other Act –(a) a person is not entitled to appeal to a body or other person, court or tribunal; or (b) no order or review may be made under the Judicial Review Act 2000; or (c) no declaratory judgment may be given; or

(d) no other action or proceeding may be brought – in respect of any action, decision, process, matter or thing arising out of or relating to this Act.

(2) Subsection (1) does not prevent a review of any action, decision, process, matter or thing which has involved or has been affected by criminal conduct.

(3) No review under subsection (2) operates to delay the issue of the Pulp Mill Permit or any action authorized by that permit. 21

Human health at risk, Australian Medical Association opposed

The Tamar Valley has an inversion layer for a large part of the year which traps air pollution and odour in the valley. This has lead to major health problems from existing sources of air pollution. The Tamar Valley is recognised as having some of the lowest standards of air quality in Australia.

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’22.