2015 (No. 2) _______________ PARLIAMENT OF TASMANIA _______________ HOUSE OF ASSEMBLY STANDING COMMITTEE ON COMMUNITY DEVELOPMENT Inquiry into the Triabunna Woodchip Mill and Future Development Opportunities for the Triabunna Region ______________ MEMBERS OF THE COMMITTEE Mr Barnett (Chair) Mr Jaensch Ms O’Connor Mr Shelton Ms White Table of Contents Recommendations .............................................................................................................. 1 1 Appointment, terms of reference and conduct of the inquiry ............................2 2 Summary of Findings and Recommendations ..................................................... 5 3 Chronology - triabunna Woodchip Mill ................................................................ 10 4 Circumstances leading to The Closure and Sale of the Mill by Gunns Limited .. 15 The viability of the native forest industry and the market demand for Tasmanian woodchip products ...................................................................... 15 Gunns’ financial position as a motivator to sell the Triabunna Woodchip Mill .................................................................................................................. 20 5 The sale of the mill to Triabunna Investments .................................................... 25 The sale process .............................................................................................. 25 Impact of Gunns’ Business relationship with Forestry Tasmania on the sale process. .......................................................................................................... 29 Other factors influencing the sale to Triabunna Investments .................... 33 Conditions of sale........................................................................................... 39 Compensation payment made to Gunns Limited ........................................ 45 6 The operation and dismantling of the Mill under Triabunna Investments ....... 59 Expressions of interest to operate the Mill .................................................. 59 The dismantling of the Mill ............................................................................. 71 Provisions of the Intergovernmental Agreement regarding the reopening of the Mill ....................................................................................................... 82 The issue of the Triabunna Wharf ................................................................. 92 7 The Impact of the Closure of the Mill on the Industry and Triabunna Community .......................................................................................................... 105 Impact of the closure of the mill on the forestry industry ......................... 105 The need for a long-term southern port option ......................................... 109 Alternate residue solutions .......................................................................... 114 Impact of the closure of the Mill on the Triabunna Community ................. 117 8 Future Development Opportunities for Triabunna and the Surrounding Area ...................................................................................................................... 126 Development proposal for the old mill site ................................................ 126 Community attitude to the development proposal .................................... 131 Other development opportunities for Triabunna and surrounding regions ........................................................................................................................ 136 9 Conclusion ........................................................................................................... 154 Dissenting Statement of Ms Rebecca White MP, Labor Member for Lyons .............. 156 Dissenting Statement of Ms Cassy O’Connor MP, Tasmanian Greens’ Member for Denison ............................................................................................................................ 158 Appendices ...................................................................................................................... 166 RECOMMENDATIONS Recommendation 1: That, the Government maintain public ownership of the Triabunna wharf and investigate possible future uses. Recommendation 2: That, the Government investigate the option of a medium to long term location for a state of the art wood residue and multi-use export facility in the south with a specific focus within the Triabunna region. Recommendation 3: That, the Government continues to support the Forest Residues Solution Study and investigate other avenues where it can provide assistance in the development of alternate residue solutions. Recommendation 4: That, the Government provide such assistance and facilitation as is reasonable and appropriate in the circumstances to progress the development of the Spring Bay Mill. Recommendation 5: That, the State Government lobby the Australian Government to seek funding support for development projects in Triabunna and surrounding regions including the Solis Development and the Swan River Irrigation Scheme. Recommendation 6: That, the State Government support the establishment of the Orford/Triabunna region as the gateway from the south to the East Coast and the Great Eastern Drive, and that appropriate marketing, branding and other initiatives be undertaken to promote the area as a significant tourist destination. Recommendation 7: That, the State Government establish a working group to investigate and develop a range of East Coast renewal initiatives. Recommendation 8: That, the State Government facilitate networking and partnering forums for regional areas, communities and potential investors to encourage investment in those regions. 1 1 APPOINTMENT, TERMS OF REFERENCE AND CONDUCT OF THE INQUIRY 1.1 The Standing Committee on Community Development was established by resolution of the House of Assembly on 26 June 2014 to inquire into and report upon any issues and legislative proposals arising within the scope of the Committee as follows: (i) Aboriginal affairs; (ii) arts; (iii) corrections; (iv) health; (v) human services; (vi) justice; (vii) police and emergency management; (viii) racing; (ix) sport and recreation; and (x) women. 1.2 The Committee resolved at its meeting of 16 July 2014 to inquire into the Triabunna woodchip mill and future development opportunities for the Triabunna community and surrounding regions with the following Terms of Reference: (a) The circumstances surrounding the closure, sale and ultimate dismantling of the Triabunna woodchip mill; (b) Identify development and other opportunities for the Triabunna Community and the surrounding regions; and (c) Matters related and incidental thereto. 1.3 The Committee resolved to invite, by way of advertisement on the Parliament of Tasmania website and in the three major Tasmanian newspapers and community papers around the Triabunna region, interested persons and organisations to make a submission to the Committee in relation to the Terms of Reference. In addition to such general invitation, the Committee directly invited a number of persons and organisations to provide the Committee with any information they deemed to be relevant to the inquiry. 1.4 Early in the inquiry Graeme Wood questioned the authority of the Committee to undertake the inquiry and was obtaining legal advice on action he could take to stop the Committee. However, as confirmed by the Clerk of the House, the Committee is able to initiate its own inquiries and its proceedings, including whether or not an inquiry is being properly conducted, is subject only to the supervision 2 of the House itself, which has not found any issue with the Committee’s inquiry. 1.5 The Committee received 32 submissions and held 6 public hearings, including one in Triabunna, with 34 witnesses. In addition, the Committee received a large volume of documents from a number of Government agencies including the Department of Premier and Cabinet, the Department of Treasury and Finance, and Tasports in relation to: the sale, closure and dismantlement of the Triabunna Woodchip Mill formerly owned by Gunns Limited; the payment of any sums of money by the Crown in Right of the State of Tasmania to Gunns Limited or Forestry Tasmania in regards Gunns exit of native forest logging; the negotiation of the payments and the probity audit conducted in relation to the payments; the negotiation, preparation or signing of any Deed or Deeds between The Crown, Gunns Limited and Forestry Tasmania; and the Triabunna port and related infrastructure. 1.6 The Committee also requested documents from Triabunna Investments in relation to the purchase and operation of the Mill. However, despite both co-owners giving permission for the documents to be released in November 2014, and three separate follow-up requests being made to Murdoch-Clarke lawyers who were acting for Graeme Wood, the documents have not been forthcoming. This has to some degree impeded the work of the Committee and created delays in the production of the Committee’s final report. 1.7 It is also noted that Graeme Wood gave evidence to the Committee on 25 November after four separate requests to appear were made. This delay in hearing from a key witness also resulted in delays in the Committee finalising its findings and recommendations. 1.8 It is further noted that while Graeme Wood gave evidence as part of the inquiry, other key players in the purchase and operation of the