THE decision of former timber company Gunns to sell the Triabunna woodchip mill to environmentalists was a strategic move to obtain a social licence for the Tamar Valley pulp mill, a parliamentary inquiry has heard.
The committee – set up by Lyons Liberal MHA Guy Barnett to examine the circumstances of the mill’s closure, sale and dismantling by new owners, environmentalists Graeme Wood and Jan Cameron – heard from witnesses for the first time yesterday.
Forest Industries Association of Tasmania chief executive Terry Edwards, FIAT chairman Glenn Britton, and timber company owner Robert Torenius gave evidence that they believed Gunns boss Greg L’Estrange accepted a lesser offer and sold the mill out of the industry in order to pursue the pulp mill.
Mr Edwards said the human and industry cost of that decision were ‘‘enormous’’.
‘‘It is impossible to contemplate the hardship created in the state of Tasmania as a result of these decisions,’’ Mr Edwards said.
The committee heard earlier in the day from Ron O’Connor, co-owner of logging company Aprin, who said he had $10 million of private finance secured and a $6 million loan from the Department of Economic Development to buy the mill.
But Gunns subsequently accepted a $10 million offer from Mr Wood and Ms Cameron under the name of Triabunna Investments.
Mr Edwards told the committee he believed discussions took place between Gunns and environmentalists, and it was understood they would ‘‘go soft’’ on the pulp mill if their offer was accepted.
Mr Edwards said Triabunna Investments had promised to reopen the mill for five years, and industry had secured the outcomes they required.
‘‘We were conned,’’ Mr Edwards said.
‘‘We fell for it hook, line and sinker.’’
Mr Edwards said he did not know whether there was truth behind the allegations exposed in a national magazine that the mill had been deliberately destroyed.
‘‘I’m bitterly disappointed if that’s the case,’’ Mr Edwards said.
Due to the closure of the mill, timber residue can no longer be exported from the South of the state, which has already cost $11 million in transport subsidies.
Mr Edwards said when the subsidy finished, sawmills would shut and Ta Ann’s southern operation could be forced to close, unless a solution was found.
Former Triabunna Investments mill operator Alec Marr said in a submission to the inquiry that there was ‘‘nothing mysterious about the sale’’.
‘‘To my knowledge, the Gunns board approved the sale because Triabunna Investments made the best commercial offer – there was no doubt that Triabunna Investments could actually pay the amount of money offered in a timely fashion,’’ Mr Marr said.