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The Rise and Fall of Gunns Ltd
At its peak, Gunns Ltd had a market value of $1 billion, was listed on the ASX 200, and was the largest employer in the state of Tasmania as well as its largest private landowner. Most of its profits came from woodchipping, mainly from clear-felled old-growth forests. A pulp mill was central to its expansion plans. Its collapse in 2012 was a major national news story, as was the arrest of its CEO for insider trading. Quentin Beresford illuminates, for the first time, the dark corners of the Gunns empire. He shows it was built on close relationships with state and federal governments, political donations and use of the law to intimidate and silence its critics. Fearless and forensic in its analysis, the book shows that Tasmania’s decades-long quest to industrialize nature fails every time—but the collapse of Gunns is the most telling of them all.
- GenresNonfictionPolitics
336 pages, Paperback
First published February 1, 2015
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Displaying 1 - 9 of 9 reviews
February 5, 2017
I couldn't put this down. So much Tasmanian corrupt political insanity, refreshingly analysed by a sane voice.
February 25, 2015
‘In Tasmania, state-sponsored development became an ‘obsession’ and a ‘cargo cult.’
Gunns Ltd was once the largest employer in Tasmania. With a market value of $1 billion, and most of its profits coming from woodchipping, Gunns had expansion plans. Those plans required a pulp mill, which Gunns wanted to locate in the Tamar Valley – a tourist haven and home of many fine wineries. But the pulp mill did not proceed, Gunns collapsed in 2012, and CEO John Gay was arrested for insider trading. What went wrong?
To understand the rise and fall of Gunns, it’s necessary to understand the importance of economic development to Tasmanian politics. And to appreciate Tasmania’s unique position (in terms of representation) in the Australian Commonwealth. Federal elections can be won or lost in Tasmania.
‘Both of these strands of Tasmania –the remnant parochial, insular culture and its authoritarian politics – need to be understood and addressed for Tasmania to progress.’
Since the late nineteenth century, Tasmania has been searching for economic development. During my childhood in Tasmania, the Hydro-Electric Commission (the HEC) was focussed on damming almost every river on the island in the hope that cheap hydroelectricity would bring industry to the island.
But, by the 1970s things were starting to change. Increased environmental awareness was growing in Tasmania. Lake Pedder may have been flooded in 1972, but damming the Franklin River in the 1980s was a much more difficult proposition. And today, over thirty years later, there are many Tasmanians who believe that preventing the damming the Franklin was a tragedy.
This, then, is some of the background to the rise of Gunns. Many Tasmanians believe that increased industry is necessary for Tasmania to thrive. A number of those Tasmanians see the damming of rivers and the destruction of old growth forest as necessary sacrifices to progress. Within the Tasmanian community, it is an issue that polarises and divides communities and families.
By the way, the company Gunns was founded in 1875 by brothers John and Thomas Gunn as J&T Gunn. J&T Gunn was once a building business which built many notable buildings in northern Tasmania. One of my favourites is Launceston’s Customs House.
In this book, Quentin Beresford analyses the Gunns empire and its relationship with government. This is a case study in corruption and abuse of power, of ineffective governance and populist government. What has Tasmania (and the Commonwealth of Australia) learned from this experience? Could it happen again?
Jennifer Cameron-Smith
Gunns Ltd was once the largest employer in Tasmania. With a market value of $1 billion, and most of its profits coming from woodchipping, Gunns had expansion plans. Those plans required a pulp mill, which Gunns wanted to locate in the Tamar Valley – a tourist haven and home of many fine wineries. But the pulp mill did not proceed, Gunns collapsed in 2012, and CEO John Gay was arrested for insider trading. What went wrong?
To understand the rise and fall of Gunns, it’s necessary to understand the importance of economic development to Tasmanian politics. And to appreciate Tasmania’s unique position (in terms of representation) in the Australian Commonwealth. Federal elections can be won or lost in Tasmania.
‘Both of these strands of Tasmania –the remnant parochial, insular culture and its authoritarian politics – need to be understood and addressed for Tasmania to progress.’
Since the late nineteenth century, Tasmania has been searching for economic development. During my childhood in Tasmania, the Hydro-Electric Commission (the HEC) was focussed on damming almost every river on the island in the hope that cheap hydroelectricity would bring industry to the island.
But, by the 1970s things were starting to change. Increased environmental awareness was growing in Tasmania. Lake Pedder may have been flooded in 1972, but damming the Franklin River in the 1980s was a much more difficult proposition. And today, over thirty years later, there are many Tasmanians who believe that preventing the damming the Franklin was a tragedy.
This, then, is some of the background to the rise of Gunns. Many Tasmanians believe that increased industry is necessary for Tasmania to thrive. A number of those Tasmanians see the damming of rivers and the destruction of old growth forest as necessary sacrifices to progress. Within the Tasmanian community, it is an issue that polarises and divides communities and families.
By the way, the company Gunns was founded in 1875 by brothers John and Thomas Gunn as J&T Gunn. J&T Gunn was once a building business which built many notable buildings in northern Tasmania. One of my favourites is Launceston’s Customs House.
In this book, Quentin Beresford analyses the Gunns empire and its relationship with government. This is a case study in corruption and abuse of power, of ineffective governance and populist government. What has Tasmania (and the Commonwealth of Australia) learned from this experience? Could it happen again?
Jennifer Cameron-Smith
October 28, 2022
I recall a friend of mine writing an article about the potential impact of odours from a pulp mill on wine grape flavour in the Tamar Valley. I vaguely recall that it was related to some local political debate about a pulp mill and I can't recall whether he was pro or anti the pulp mill. I have a feeling he was claiming that there would be no impact on the grapes. Though having seen a lot of grapes written-off, in the year of our bushfires, due to "taint" I find it hard to believe that the wine grapes would not be also tainted by the pulp mill emissions. (I've passed Fuji city in Japan many times and sampled the air near their pulp mills.....it's really bad.).
Anyway, this book is not specifically about the proposed pulp mill...though it features very strongly in the story about the rise and fall of Gunns Ltd in Tasmania.
In many ways this is a story about corruption in government and the corrupting influence of big business in Tasmania. But it actually ranges wider than this.
Beresford digs deep to explain the driving paradigms in Tasmania; the idea that Tasmania needed to industrialise; it needed to harness its natural resources; Government needed to support business to get things done and to provide jobs. It probably even goes back to the very early days when "the only good tree was a dead tree"; the settler's battle against nature when survival was at stake. Beresford paints a picture of various State Premiers as strong men; riding rough-shod over opposition; goal driven...where the goal was industrialisation. A corollary of this was an unholy alliance between the State Electricity Commission initially with the flooding of Lake Pedder and then plans to flood the Franklin River (The latter were frustrated by the environmental movement essentially). But as the power of the State Electricity Commission waned, so grew the power of Forestry Tasmania and hand in glove with it grew the power of Gunns Ltd...and its driven CEO, John Gay.
It's a tale of people who only listened to like-minded people and who surrounded themselves with like-minded people. A total inability to see a contrary view. Not only that but positive steps were taken to denigrate and "take-down" decent people who happened to have opposing views. Greenies were the enemy and were dangerous. It was ok to use thuggish tactics against them plus law suits to shut them up etc.
It's also very much the story of John Gay; a man with incredible self belief, charismatic but ruthless at the same time.....willing to "do what it takes" to see his vision fulfilled. A risk taker who managed to build Gunns Ltd from a small timber business into a behemoth.....but whose lack of perspective and inability to see the world changing around him and adapt ultimately led to the demise of Gunns.
There was also a fundamental economic/ecological issue which would bring Gunns unstuck. That was that Gunns was exporting wood chips from native "old-growth" forests in Tasmania but also from their own plantations. They were getting access to the old growth forests at cheap or subsidised prices (courtesy of Forestry Tasmania) and their own forests were insufficient for them to sustain their business on their own.
governments in Australia (federal and state) could see that exporting chips was a fool's mission; they really needed to go downstream and make paper....that's where the real value add lay. Hence the pulp mill proposals. First Wesley Vale (which fell over) then the second proposal for a mill in the Tamar Valley. It was promoted as using Gunn's plantation timbers but the reality was that it would not be economic without continuing access (at subsidised prices) to native, old-growth forests. It just didn't add up economically...let alone deal with the objections of the environmental movements, the greens under Bob Brown, and local residents.
The way that the various opposing forces interacted, their strength in diversity, the power that Geoffrey Cousins brought to the campaigns is an interesting story on its own. And Beresford wryly comments about the irony of the Forestry workers who loved their rural life style and the beauty of the bush and their access to clear rivers and clean air.....at the same time being violently anti "greenie" and being used as shock troops by the bosses at Gunns.
As one who has worked with the service industries I understand the community's disbelief in suggestions that Tasmania's future lay with tourism and high value-added products like art and craft. (And the pure environment and old growth forests were going to be the mainstay of these sort of industries). The person in the street, generally has totally warped ideas about the contribution that mining, agriculture, and manufacturing make to both employment and to GDP (It's 6%, 3% and 5% respectively for GDP......and 3%, 1% and 6% respectively for employment in Australia). Over 80% of GDP and employment comes from the services sectors. Certainly this message did not reach the forestry workers, or, indeed, the ordinary voter in Tasmania....let alone people like Paul Lennon (premier) and John Gay.
I think Beresford has done a fair and workman-like job of forensic sleuthing what was happening in Tasmania and why it was happening. In the light of what we've seen in the USA under Donald Trump, it's sobering to think about the dangers to the community of a paradigm that drives the players and which is used to justify undemocratic, corrupt, thuggish, behaviour....secrecy, poor governance, lack of transparency, lack of diversity in thinking and management. Especially so, when the underlying paradigm is later shown to be false.
A good book. I give it four stars.
Anyway, this book is not specifically about the proposed pulp mill...though it features very strongly in the story about the rise and fall of Gunns Ltd in Tasmania.
In many ways this is a story about corruption in government and the corrupting influence of big business in Tasmania. But it actually ranges wider than this.
Beresford digs deep to explain the driving paradigms in Tasmania; the idea that Tasmania needed to industrialise; it needed to harness its natural resources; Government needed to support business to get things done and to provide jobs. It probably even goes back to the very early days when "the only good tree was a dead tree"; the settler's battle against nature when survival was at stake. Beresford paints a picture of various State Premiers as strong men; riding rough-shod over opposition; goal driven...where the goal was industrialisation. A corollary of this was an unholy alliance between the State Electricity Commission initially with the flooding of Lake Pedder and then plans to flood the Franklin River (The latter were frustrated by the environmental movement essentially). But as the power of the State Electricity Commission waned, so grew the power of Forestry Tasmania and hand in glove with it grew the power of Gunns Ltd...and its driven CEO, John Gay.
It's a tale of people who only listened to like-minded people and who surrounded themselves with like-minded people. A total inability to see a contrary view. Not only that but positive steps were taken to denigrate and "take-down" decent people who happened to have opposing views. Greenies were the enemy and were dangerous. It was ok to use thuggish tactics against them plus law suits to shut them up etc.
It's also very much the story of John Gay; a man with incredible self belief, charismatic but ruthless at the same time.....willing to "do what it takes" to see his vision fulfilled. A risk taker who managed to build Gunns Ltd from a small timber business into a behemoth.....but whose lack of perspective and inability to see the world changing around him and adapt ultimately led to the demise of Gunns.
There was also a fundamental economic/ecological issue which would bring Gunns unstuck. That was that Gunns was exporting wood chips from native "old-growth" forests in Tasmania but also from their own plantations. They were getting access to the old growth forests at cheap or subsidised prices (courtesy of Forestry Tasmania) and their own forests were insufficient for them to sustain their business on their own.
governments in Australia (federal and state) could see that exporting chips was a fool's mission; they really needed to go downstream and make paper....that's where the real value add lay. Hence the pulp mill proposals. First Wesley Vale (which fell over) then the second proposal for a mill in the Tamar Valley. It was promoted as using Gunn's plantation timbers but the reality was that it would not be economic without continuing access (at subsidised prices) to native, old-growth forests. It just didn't add up economically...let alone deal with the objections of the environmental movements, the greens under Bob Brown, and local residents.
The way that the various opposing forces interacted, their strength in diversity, the power that Geoffrey Cousins brought to the campaigns is an interesting story on its own. And Beresford wryly comments about the irony of the Forestry workers who loved their rural life style and the beauty of the bush and their access to clear rivers and clean air.....at the same time being violently anti "greenie" and being used as shock troops by the bosses at Gunns.
As one who has worked with the service industries I understand the community's disbelief in suggestions that Tasmania's future lay with tourism and high value-added products like art and craft. (And the pure environment and old growth forests were going to be the mainstay of these sort of industries). The person in the street, generally has totally warped ideas about the contribution that mining, agriculture, and manufacturing make to both employment and to GDP (It's 6%, 3% and 5% respectively for GDP......and 3%, 1% and 6% respectively for employment in Australia). Over 80% of GDP and employment comes from the services sectors. Certainly this message did not reach the forestry workers, or, indeed, the ordinary voter in Tasmania....let alone people like Paul Lennon (premier) and John Gay.
I think Beresford has done a fair and workman-like job of forensic sleuthing what was happening in Tasmania and why it was happening. In the light of what we've seen in the USA under Donald Trump, it's sobering to think about the dangers to the community of a paradigm that drives the players and which is used to justify undemocratic, corrupt, thuggish, behaviour....secrecy, poor governance, lack of transparency, lack of diversity in thinking and management. Especially so, when the underlying paradigm is later shown to be false.
A good book. I give it four stars.
January 26, 2021
This reads like a journalist wrote it - a little bit sloppy sometimes.
Quite confronting. I was faced with my current cynicism towards my own zeal in earlier life for the 'forest movement'. I found myself getting annoyed with Beresford for completely neglecting some of the development issues championed by his villains John Gay and Co. I found myself rooting for the bad guys, and urging them to get over themselves and negotiate more favourably with the environmentalists obstructing them and industrial development in the state as the chronicle of events unfolded. Australia - the 'lucky' country - better we might not rely upon luck though. Yes, we have all these natural resources, but rather than value adding to them, we export them raw, while countries with the culture and nous to take responsibility for the issues industrial value adding entails, export the finished product back to us for 100 times the cost.
As I read on, eager to see stories of my comrades in the 'movement', i gradually began to comprehend some of the points Beresford was trying to make.
1. profit motive can and on the face of it did, in this case, pervert democratic processes and corrupt politicians meant to represent the interests of their constituents.
2. Due to Globalism, we are often exporting not only raw materials, but environmental problems, and one day, our chickens will come home to roost.
These are the main take-homes I got from this book. Gay might have got his pulp mill if only he had been more committed to higher environmental standards and community consultation. Ultimately though, the economics of the thing seem to have fallen over because finite native forests were being industrially cut at unsustainable rates, and automation made a lie of 'jobs' in pro-forestry.
Heidi Douglas was a film-maker I met in 2002 who became one of the Gunns 20, hit with SLAPP lawsuits (Strategic Litigation Against Public Participation). I really tried sincerely and with all my being to contribute constructively to a sustainable environmental culture, in Tasmania and Victoria. Perhaps it is just my karma to feel I have failed so miserably.
My efforts were misguided and ineffective and I merited not a footnote in this archive, and I realise now, even all the passionate commitment of the main players - businessmen, lawyers and politicians like Gay and Bob Brown, was less effective in the deciding the fate of the pulp mill, than global economic forces, how much less significant was my contribution?
The artist works by locating the world within himself, and the work is about internal cause and effect.
I love trees and forests. Who doesn't? But I love having a job, having somewhere to live, having food on the table, and I accept the critics of greenies, who point out green politics often condemns indigenous australians to a 'pure' primitive role; green politics obstructs pathways towards business and work. This is not a fully worked out political critique, but I have a strong sense of its truth, and willingness to explore it more to defend this position. Don't get me wrong - greedy businessmen trampling on the heads of tree huggers and poisoning our waterways and soil, must be stopped - but ecological politics is complex - as complex as the ecosystem, and human beings are often simple - far too simple to be self critical when it comes to their own interests. This is a double edged sword.
I am so happy to see the preservation of Tasmania's brand as clean, environmental, and outdoorsy. I've been for two multi-day hikes in recent years and want to return for a third soon.
Quite confronting. I was faced with my current cynicism towards my own zeal in earlier life for the 'forest movement'. I found myself getting annoyed with Beresford for completely neglecting some of the development issues championed by his villains John Gay and Co. I found myself rooting for the bad guys, and urging them to get over themselves and negotiate more favourably with the environmentalists obstructing them and industrial development in the state as the chronicle of events unfolded. Australia - the 'lucky' country - better we might not rely upon luck though. Yes, we have all these natural resources, but rather than value adding to them, we export them raw, while countries with the culture and nous to take responsibility for the issues industrial value adding entails, export the finished product back to us for 100 times the cost.
As I read on, eager to see stories of my comrades in the 'movement', i gradually began to comprehend some of the points Beresford was trying to make.
1. profit motive can and on the face of it did, in this case, pervert democratic processes and corrupt politicians meant to represent the interests of their constituents.
2. Due to Globalism, we are often exporting not only raw materials, but environmental problems, and one day, our chickens will come home to roost.
These are the main take-homes I got from this book. Gay might have got his pulp mill if only he had been more committed to higher environmental standards and community consultation. Ultimately though, the economics of the thing seem to have fallen over because finite native forests were being industrially cut at unsustainable rates, and automation made a lie of 'jobs' in pro-forestry.
Heidi Douglas was a film-maker I met in 2002 who became one of the Gunns 20, hit with SLAPP lawsuits (Strategic Litigation Against Public Participation). I really tried sincerely and with all my being to contribute constructively to a sustainable environmental culture, in Tasmania and Victoria. Perhaps it is just my karma to feel I have failed so miserably.
My efforts were misguided and ineffective and I merited not a footnote in this archive, and I realise now, even all the passionate commitment of the main players - businessmen, lawyers and politicians like Gay and Bob Brown, was less effective in the deciding the fate of the pulp mill, than global economic forces, how much less significant was my contribution?
The artist works by locating the world within himself, and the work is about internal cause and effect.
I love trees and forests. Who doesn't? But I love having a job, having somewhere to live, having food on the table, and I accept the critics of greenies, who point out green politics often condemns indigenous australians to a 'pure' primitive role; green politics obstructs pathways towards business and work. This is not a fully worked out political critique, but I have a strong sense of its truth, and willingness to explore it more to defend this position. Don't get me wrong - greedy businessmen trampling on the heads of tree huggers and poisoning our waterways and soil, must be stopped - but ecological politics is complex - as complex as the ecosystem, and human beings are often simple - far too simple to be self critical when it comes to their own interests. This is a double edged sword.
I am so happy to see the preservation of Tasmania's brand as clean, environmental, and outdoorsy. I've been for two multi-day hikes in recent years and want to return for a third soon.
October 14, 2018
Amazing read.
A must read for Australians.
The insidious nature of corruption displayed from beginning to end in a naive and backward Australian State.
For me this book shows clearly that businesses with tunnel vision on profits cause nothing but problems for everyone and how even in this case if they just looked around the world for the worlds best practices and innovations everyone would have been far better off.
A must read for Australians.
The insidious nature of corruption displayed from beginning to end in a naive and backward Australian State.
For me this book shows clearly that businesses with tunnel vision on profits cause nothing but problems for everyone and how even in this case if they just looked around the world for the worlds best practices and innovations everyone would have been far better off.
September 15, 2019
As a Tasmanian who previously felt well informed about some of the issues raised in this book, I found this to be a compelling and eye opening read! Would recommend to anyone interested in conservation in TAS but also in our political history more broadly.
September 28, 2017
This is a must read.
May 5, 2021
The Rise and Fall of Gunns Limited by Quentin Beresford is a very disturbing read as it will cause you to question the very basics of our democratic system, that corruption could exist in the small state of Tasmania shows that the ordinary people of the world need to be on their guard, need to ensure that mechanisms of transparency are installed and monitored diligently.
This was one of the hardest reviews I’ve ever had to write mainly because it stirred up a lot of emotions that I thought I had left behind. Like a lot of Tasmanians, I lived through the turmoil of the forestry industry and the proposed pulp mill fight. I invested money in Southern Holdings, a plantation company which Gunns would later acquire. Luckily, I didn’t invest a lot of money and was able to get around half my investment back before they went into receivership.
John Gay grew up in the timber industry and became General Manager of Gunns in 1986. Gay had his mind firmly set on a license for wood chipping and this was granted in 1994. And so, began the long fight between governments, the people and the conservation movement.
Gunns expansion continued with huge profits being made from the clear felling of forests. Gay began donating huge amounts of money to political parties in an effort to pave the way for his proposed new pulp mill.
Gunns tried to stifle opposition to their cause by taking twenty of their high-profile opponents to court for defamation. These cases went nowhere, except to make a lot of money for the lawyers. Gunns’ costs and payouts exceeded six million, money they could ill afford to pay.
Eventually Gunns, or more to the point, Gay, over-reached himself politically and financially. Gay sold some of his shares when he detected the slide and was duly charged with insider trading. He pleaded guilty and was a given a trivial fifty thousand-dollar fine. History will not be kind to him or the successive state Premiers who lied to the Tasmanian people as they went to bed with the corporate powers.
Every Tasmanian should read this book and I would even go as far as to make it compulsory reading for every student in Tasmania and Australia. Furthermore, I would now question the very need for a state government in Tasmania for a mere five hundred thousand people.
This was one of the hardest reviews I’ve ever had to write mainly because it stirred up a lot of emotions that I thought I had left behind. Like a lot of Tasmanians, I lived through the turmoil of the forestry industry and the proposed pulp mill fight. I invested money in Southern Holdings, a plantation company which Gunns would later acquire. Luckily, I didn’t invest a lot of money and was able to get around half my investment back before they went into receivership.
John Gay grew up in the timber industry and became General Manager of Gunns in 1986. Gay had his mind firmly set on a license for wood chipping and this was granted in 1994. And so, began the long fight between governments, the people and the conservation movement.
Gunns expansion continued with huge profits being made from the clear felling of forests. Gay began donating huge amounts of money to political parties in an effort to pave the way for his proposed new pulp mill.
Gunns tried to stifle opposition to their cause by taking twenty of their high-profile opponents to court for defamation. These cases went nowhere, except to make a lot of money for the lawyers. Gunns’ costs and payouts exceeded six million, money they could ill afford to pay.
Eventually Gunns, or more to the point, Gay, over-reached himself politically and financially. Gay sold some of his shares when he detected the slide and was duly charged with insider trading. He pleaded guilty and was a given a trivial fifty thousand-dollar fine. History will not be kind to him or the successive state Premiers who lied to the Tasmanian people as they went to bed with the corporate powers.
Every Tasmanian should read this book and I would even go as far as to make it compulsory reading for every student in Tasmania and Australia. Furthermore, I would now question the very need for a state government in Tasmania for a mere five hundred thousand people.
December 8, 2015
Wow, this book was really eye-opening. It's alarming to see how much influence a few people wielded in Tasmania. Gunns had so much power over the state government that the government was willing to completely ignore the people it governed, and circumvent its own processes and laws. The book illustrates clearly the events and leadership issues that led to Gunns' collapse. Why a highly entrenched board of "yes men" was allowed to lead such a huge company for over a decade is baffling. Their inability to create or adapt to new ideas (or to make rational decisions) was stunning. I can't believe the government's refusal to look beyond forestry for the future of their state economy, especially when forestry was actually a net loss both financially and environmentally, and I'm concerned that this mindset still exists today.
Displaying 1 - 9 of 9 reviews