The power and the folly: Will Adani go down like Gunns?

By | | comments |
(Image by Stop Adani via Flickr, CC 2.0)

The Adani and Gunns parallels demonstrate Australian politicians are completely controlled by the power of vested corporate interests, writes Peter Henning.

IT IS INTERESTING to compare the proposed Adani coal mining project in the Rockhampton hinterland in Queensland with the Gunns pulp mill proposal in Tasmania a decade ago. This is because the comparison sheds light on the way that the political system operates in Australia. A system that subverts the public interest in transferring control of extensive land and water resources to powerful corporate profiteers and rent seekers at the expense of all other social, economic and environmental considerations.

The story of Gunns’ proposal to build one of the world’s largest pulp mills in Tasmania’s Tamar Valley was essentially based on the idea that large areas of Tasmania, extending from most of Tasmania’s drinking water catchments to prime agricultural land, would be pulpwood plantations in various stages of rotation, from planting to clear felling, for the rest of the 21st Century.  

On any economic, social and environmental analysis the idea made no sense, yet it gained the support of all political parties. Even the Greens only opposed the Tamar Valley site for political reasons, but were happy for it to be built elsewhere. 

From 2003 until 2017 – when the planning permits for the mill finally lapsed – all Tasmanian governments had given unequivocal support to the proposal, even after Gunns collapsed in 2012. In 2007, the Tasmanian Parliament was converted into a Gunns’ approval board, after Gunns withdrew from the regulatory assessment process because it had determined Gunns was "critically non-compliant" in addressing guideline requirements. 

The resulting legislation included provisions which prevented redress if the mill adversely affected people’s businesses, property values, health and welfare. It was established that the mill would use more water than that used by all users – residential and commercial – in the greater northern region of Tasmania, including Launceston and its rural hinterlands.

The issue dominated Tasmania, especially in the Tamar Valley and rural areas, where managed investment scheme (MIS) plantations undermined farming communities and inflicted massive damage on water catchments. One incident – the highly publicised destruction of oyster farms at St Helens’ Georges Bay in 2003, traced back to nitens plantations by scientific analyses undertaken by several Australian universities outside Tasmania and the National Institute of Water and Atmospheric Research in New Zealand – was scandalous, but was ultimately swept under the carpet and ignored by all those with vested interests in creating Plantation Isle for Gunns’ pulp mill.

In Queensland, until recently, the major parties have been equally gung-ho about the Adani Carmichael coal project, which would establish the largest-ever coal mine in Australia, ignoring all the economic, social and environmental costs. All local and regional issues, such as impacts on local communities, farmers, water supplies, the environment – including the Great Barrier Reef – have been largely ignored by the Labor, Liberal and National parties at all levels. Adani has been given unlimited access to groundwater by the Queensland Labor government until 2077, estimated to be 26 million litres every day, without independent or government monitoring, and without impact levels in relation to other users, such as farmers and graziers and others dependent on artesian water.

In December 2016, the Northern Australia Infrastructure Fund (NAIF) granted "conditional approval" for a $1 billion loan to Adani to build a rail link from its mining operations to the export terminal at Abbot Point. Since then, public opposition to the project has escalated and been a major factor in the decision of Australian banks not to fund the project.

Which brings us back to Gunns. At the height of the Tasmanian pulp mill controversy, huge pressure was brought to bear on Gunns’ main financier, ANZ Bank, which finally led them to decline lending for the mill — a decision followed by all other Australian banks, and then by international lenders as well. The pulp mill then foundered on its inability to obtain funding or an international joint venture partner.

It now appears that Adani will founder in similar fashion, because not only have Australian banks – and international sources too – but at long last it seems likely that a beleaguered Labor Party will step away as well. In the Queensland election last year, the promise of Premier Anastacia Palaszczuk to veto the NAIF loan to Adani helped her retain power. And just last week, the public backlash to the possibility that Aurizon could replace Adani in getting funds to build the railway, has now forced Aurizon to withdraw its NAIF funding application.

The sad and scary Adani-Gunns analogy demonstrates very clearly that the Australian political system has little capacity to look to the future, and is more intent on clinging to personal and partisan interests tied to corporate power and influence. A Tasmanian pulp mill could never have competed in the market with South America – to name just one region. Moreover, the whole proposal assumed the world would stay the same for generations into the future in its demand for pulpwood products — a bizarrely narrow view of how a viable forestry industry should be structured. It is even more bizarre that any Australian government or political party could so blatantly ignore the rapid worldwide transition to clean energy and still support Adani.

There is only one way to interpret why Malcolm Turnbull is reading from the Adani prompt sheet about the fantastic long-term future of coal, while the rest of the world has moved on and where the focus on post-fossil clean energy has already become the norm.  

It’s the same reason Tasmanian politicians grovelled to Gunns’ interests. Their decisions are not based on serving the public interest – and by extension have nothing to do with the national interest – but are completely controlled by the power of vested corporate interests.   

The Adani and Gunns projects are not presented here as unique indicators of the disastrous backward-looking mentality of Australian political leadership and how there is nothing innately progressive within the Australian political system.  They are just two high profile examples of how the political system is lacking in principled democratic leadership, how there is a complete disconnect between the principle of representative democracy and its practice at both federal and state level, and how Australian political parties are failing to serve the national interest.

Most interesting of all is how grass roots opposition – community based rather than aligned with political parties – have been crucial players influencing banks and private investors. It will be equally as fascinating to see how that dynamic – exemplified by community-based opposition to the pulp mill, which retained a distinctive voice separate to and different from the mainstream Lab-Lib-Greens – will continue to play out in the future.

Peter Henning is a Tasmanian historian who lived in the Tamar Valley in Tasmania during the pulp mill controversy.

Creative Commons Licence
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License

Monthly Donation


Single Donation


It adds up. Subscribe to IA from just $5.

Recent articles by Peter Henning
Australia rejects Trumpism in voting out Morrison Government

With the defeat of Scott Morrison, Australia has dodged the abyss of Trumpism.  
Morrison's hubris will be unchecked if Coalition prevail

If Scott Morrison and the Coalition win government, the state of our democracy will ...  
Morrison's cruelty must come to an end

Capturing and accurately articulating the oafish, offhand, casual brutality of the ...  
Join the conversation
comments powered by Disqus

Support IAIndependent Australia

Subscribe to IA and investigate Australia today.

Close Subscribe Donate