Compo for Gunns if supply fails

This is another dodgy deal by the Tasmanian government. So if we vote this government out because we don't approve of the pulp mill, the next government will be forced to continue supplying timber to Gunns, even if most Tasmanians don't agree to it. How undemocratic.

The Australian - Matthew Denholm | May 06, 2008

TAXPAYERS will pay timber company Gunns up to $15 million if further forest protection affects the supply of wood to its proposed pulp mill.

The compensation is promised to Gunns in a 20-year deal signed four months ago but only made public late yesterday by the Tasmanian Government.

State Treasurer Michael Aird said the compensation, part of a "sovereign risk" agreement between Gunns and the state-owned Forestry Tasmania, was "accepted practice".

However, conservation groups said the deal was "dodgy" and would make it harder for federal and state governments to protect further forests as national parks or as carbon sinks.

Wilderness Society pulp mill spokesman Paul Oosting said: "This reeks of the continuation of dodgy deals that have gone on with the Government using taxpayers' money to try to get this project up.

"There is a huge groundswell of public support for further protection of Tasmania's public forests, and now the Lennon Government has ensured that, should that occur, millions of dollars of taxpayers' money will be going to Gunns."

Mr Aird said the agreement - providing for a maximum of $15 million over the 20-year life of the deal - was standard for investments "of the magnitude" of Gunns's $2billion pulp mill, proposed for Long Reach in the Tamar Valley, north of Launceston.

"It is highly unlikely that any compensation will be paid under the agreement," he said.