News
Subsidising Gunns' destruction
By Chris Lang (January 2008):A recent article by Barnaby Drake in the World Rainforest Movement Bulletin outlines some of the subsidies that Gunns receives from the government.
One of these comes in the form of Managed Investment Services Companies. These companies invest in monoculture tree plantations and the government grants them tax-free status - on the grounds that the plantations are a carbon sink and carbon credits can be traded against continuing pollution. Apart from the sheer impossibility of proving that plantations are actually sinks (see, for example, Carbon Offsets and the Ghost of Frank Knight, in the Cornerhouse's 2006 report "Carbon Trading", page 160), the plantations will be cut down, chipped, converted to pulp, exported to Japan, China or wherever and converted to paper. Producing paper consumes huge amounts of energy. Globally, the pulp and paper industry is the fifth largest consumer of energy. Most paper ends up ultimately in landfills where it decomposes and produces methane - a far stronger greenhouse gas than carbon dioxide.
Forestry Tasmania and Gunns have signed a 20-year deal giving Gunns access to Tasmania's forests. The secretive deal guarantees wood to Gunns' proposed pulp mill at bargain prices. Even worse, the price is linked to the global price of pulp. If the price of pulp falls below US$500, Tasmanian tax payers will end up paying Gunns for destroying Tasmania's forests.
Barnaby Drake's article, "The many subsidies enjoyed by Gunns in Tasmania", is available here.
Gunns Investor Information Service is a blog set up by "independent Gunns investors who wanted to raise these serious issues at the 2007 AGM, but were prevented from doing so by John Gay, who cut the meeting short". The Gunns Investor Information Service provides information questioning the financial viability of Gunns' proposed pulp mill and concludes that "Gunns survival depends entirely on taxpayer subsidies".