A detailed complaint about Gunns’ public marketing program to gain community support for the pulp mill in the Tamar Valley in Tasmania has been sent to the Australian Competition and Consumer Commission (ACCC).

Gunns’ marketing included a 15 page document distributed to the public as an insert in the daily print media (early in 2007) and an extensive advertising program in newspapers and on television during November 07, especially immediately preceding the federal election. A public meeting of 200 people held in Launceston in early November was so outraged by the contents of the material that they decided it was in the public interest to seek an investigation by the ACCC to determine whether Gunns had breached section 52 of the Commonwealth Trade Practices Act.

The detailed complaint, finalized on 13 December, with 114 signatories, is multi-faceted and is based on public claims made by Gunns in relation to issues which include wood supply for the mill, transport, water usage and power generation, economic matters, technology, impact of effluent, impact of atmospheric emissions, environmental monitoring and employment.

Under section 52 of the Trade Practices Act corporations are prohibited from conduct that is misleading or deceptive or is likely to mislead or deceive. The definition of misleading, in the ACCC descriptor, includes lying, leading someone to a false conclusion, creating a false impression, leaving out or hiding important information and making false claims about products and services. Laws which prohibit misleading conduct also apply to misleading advertising. Signatories to the document have made it available to be used by members of the public, in part or in whole, to support other complaints to the ACCC. Briefer and less extensive complaints can be made by using the proforma at the ACCC site, www.accc.gov.au.

Public letter to ACCC from Tasmanians Against the Pulp mill (TAP)

To: Australian Competition and Consumer Commission

GPO Box 1210 Hobart Tasmania 7001

A public meeting of 200 residents of northern Tasmania, held in Launceston, Tasmania, on November 8, 2007, resolved that a complaint be lodged with the Australian Competition and Consumer Commission about the public marketing undertaken by Gunns Limited to gain community support for and to promote the establishment of the “Bell Bay pulp mill” (Gunns’name for the project), at Longreach, in the Tamar Valley in northern Tasmania.

The basis of the complaint is that Gunns has made unsubstantiated claims that contravene section 52 of the Trade Practices Act, which prohibits “conduct that is misleading or deceptive or likely to mislead or deceive”; and which takes its definition of “misleading” from the ACCC’s descriptor, that misleading conduct “includes lying, leading someone to a wrong conclusion, creating a false impression, leaving out or hiding important information and making false claims about products or services”; and which notes that under “misleading advertising”, the ACCC’s definition states that “The laws that prohibit misleading conduct apply to misleading advertising through all kinds of media…”. (ACCC website www.accc.gov.au.).

The complaint is centred on contents in Gunns’ 15-page undated marketing document, entitled ‘The Facts”, and on contents in television and print media advertising entitled “The Inconvenient Truth”. Gunns distributed “The Facts” to the public in Tasmania as an insert in the daily print media earlier in 2007. Gunns used “The Inconvenient Truth” in an advertising campaign in the weeks just prior to the federal election on November 24 2007, and also distributed it as a printed booklet at Gunns annual general meeting in November 2007.

The extent, nature and breadth of the complaint in relation to a range of claims made by Gunns in their marketing material has meant that it has not been possible to present the complaint within the format provided on the ACCC website. Because the complaint is multi-faceted, not just related to a single issue, it is presented to the ACCC in document form, listing aspects of the complaint according to broad issues addressed by Gunns in their marketing material.

Specifically, the complaint rests on the following claims made by Gunns in “The Facts”, in relation to issues which include wood supply for the pulp mill, transport, water usage and power generation, economic issues, technology, impact of effluent, impact of atmospheric emissions, environmental monitoring and employment. The complaint is divided into nine separate areas, as follows:

1. Wood supply On page 2 of Gunns’ “The Facts” document, under the heading “wood supply”, the document states that the “project” will use “3.2 to four million green tonnes of woodchips”, and that this will be achieved by “diverting woodchips that are currently being exported, to the pulp mill…”. The document also states that “Gunns’existing woodchip facilities at Bell Bay are currently supplied… from Tasmania’s North-East Region”, and that 85% of projected future pulp mill requirements will come from that region. The claims are then made that this “involves no additional forest harvesting or intensification of forestry operations”. This claim is repeated under the heading “transport”, where it is stated that the project “involves no additional forest harvesting and no additional transport requirements within the State”.

Complaint in relation to these claims is as follows: The claims are designed to create a public impression that the current forestry operations of Gunns in north-east Tasmania and the current transport operations to deliver wood to Gunns’ woodchip mills at Bell Bay will not be increased when the pulp mill is in operation, when in fact there will be an increase in both forestry operations and transport to Gunns’ mills at Bell Bay. Gunns’ own Integrated Impact Statement (IIS) projected targets for export volumes of pulp and woodchips of 6 million tonnes from a mill starting date of 2009 (and increasing to about 7 million tonnes by 2013), represent a 40% increase of Gunns’ woodchip exports of 3.5 million tonnes in 2006, from its mills at Triabunna, Burnie and Bell Bay. Given that in 2006 Gunns’ total woodchip export from three ports of 3.5 million tonnes is to be changed to from 3.2 to 4 million tonnes of pulp alone from Bell Bay when the pulp mill is operational, as well as a continuing woodchip export from the three ports, this in itself will require a significant increase in “additional transport requirements” to Bell Bay, amounting to at least the equal of the total current log truck movements for Gunns’ woodchip mills at its three ports.

It is totally misleading of Gunns to claim, in a marketing document deliberately designed to be distributed to the Tasmanian public as a source of accurate information, that the establishment of the pulp mill at Bell Bay, processing 3.2 to 4 million tonnes of wood, will not intensify forestry operations and generate a substantial increase in log truck movements, both because this tonnage represents a large increase of the current tonnage of woodchip supply to Bell Bay chip mills, and because the establishment of the pulp mill will increase the export volumes of pulp wood (chips and pulp) from the current 3.5 million tonnes (perhaps less than this in 2007) to 6 million tonnes, on Gunns’ own target estimates.

2. Water On page 3 of “The Facts” Gunns states that the “Bell Bay pulp mill will use up to 26 gigalitres of water annually – this represents approximately one per cent of the flows into Lake Trevallyn”.

Complaint in relation to this claim: The accuracy of the estimated upper limit of water usage by the mill has been challenged by independent analysis as an underestimation and may or may not be accurate, but the context in which the information is presented, as just 1% of “flows into” the source, is a very misleading context, especially when distributed as material to inform the public. It is deliberately misleading in its emphasis on “flows into” the source, which implies very minimal impact in overall use of water by the mill, thus obscuring the high volumes of water used annually, year after year. This emphasis also obscures and distorts seasonal variations of flow, and actual availability of water to all users, but the mill needs a continuous water supply.

The current use of water by all domestic and industrial activity in the northern area from the same source is about 29 gigalitres per annum, which represents not much more than 1% of flows into the source, but this figure has no bearing on water availability during an annual cycle of flood events and periods of dry weather. In early 2007 special remedial treatment was required because the flow into Lake Trevallyn from the South Esk River was so small. Water restrictions are often necessarily imposed on water users from Trevallyn Lake during periods of dry weather, irrespective of the fact that the region’s use of “flows into” the lake is just over 1%. Gunns’ emphasis of “flows into” the lake rather than “availability” of water is a deliberate and misleading distortion to convey a false sense of public security in the volumes that will be used by the mill, which will approximately double the current total use of water from the lake.

3. Economic impact On page 4 of “Facts” Gunns claims that “The project will add around $6.7 billion, or 2.5 per cent, to the Tasmanian economy”, and that “The project will generate in excess of $890 million in extra government revenue for social distribution in the community”. In “The inconvenient Truth” Gunns claims that “the pulp mill will provide an extra $1 billion in government taxes that can be used for essential community services”.

Complaint in relation these claims: These claims fail to meet Australian Treasury guidelines for economic appraisal, based on “net economic” analysis, and are therefore completely misleading and likely to deceive the public. According to a “message” from John Gay at the beginning of Gunns’ document, “Tasmanians have a right to know the truth”, but in order for that to be the case, it was necessary for Gunns to have made clear that their economic claims were based only on their assessment of economic benefits.

The claims omit to mention that that they do not take account of economic costs, including major subsidies from the Tasmanian government which could have been directed elsewhere, tax-payer funded infrastructure for the mill, and impacts on existing economic activities, and public resources, including land and water. Gunns’ failure to fully inform the public about the economic reality of the mill’s impact on Tasmania, by not producing a “net economic” analysis, which can only be done by a cost-benefit study, cannot be accepted as a legitimate attempt by Gunns to inform the public in the way that they claim their document is framed, to provide Tasmanians with the “truth” about the mill in relation to the Tasmanian economy.

Independent studies (one by economists commissioned by the Tasmanian Roundtable for Sustainable Industries and one by Naomi Edwards) based on an assessment of costs, benefits and risks, found that the costs of the project would be greater than the benefits, in terms of revenue generated, jobs created and industries adversely affected. See the Tasmanian Round Table for Sustainable Industries Project, a 55 page study conducted by Tasmanian based Wells Economic Analysis and Melbourne based Economist@Large. See www.lec.org.au/TRSIReport2(Aug07).pdf. Naomi Edwards, “Too much risk for the reward-an analysis of the pulp mill returns to the people of Tasmania”, Sept 2006. See at www.twff.com.au/nerpdc2006.pdf. The information Gunns provided to the public about the mill’s relationship to the Tasmanian economy over the period of the life of the mill is profoundly and seriously misleading.

4. “Green” power from burning On page 5 of “Facts” Gunns states that “The Bell Bay pulp mill will set a new global benchmark in environmental standards”, and that “Wood residue from the chipping operation and additional forest wood waste will be used to produce green power…”, and that the mill will have “surplus green power for sale”. In “The Inconvenient Truth” Gunns repeats the claim that the pulp mill will produce “green energy”.

Complaint in relation to these claims: These statements all contain unsubstantiated environmental claims. Gunns’ unequivocal claim to “a new global benchmark in environmental standards” have been contested by independent professional experts and should not be asserted in a document for public distribution without substantiation. For example Dr J. Mondon (marine toxicologist, Deakin University) See The Age, 5/10/07, p.7 The Age. See also Tom Baxter, (University of Tasmania), Tasmanian Times. Gunns’ claims that the mill will produce “green power” or “green energy” are a misuse of the term “green”, in this case to convey the impression that the production of electricity from the burning of 500,000 tonnes of green wood annually at the mill site, will be environmentally clean.

5. Effluent treatment On page 6 of “Facts” Gunns states that “effluent treatment at the Bell Bay pulp mill will be state-of-the-art and the equal or better than that of any other pulp mill in the world”, and that “The effluent is so clean it could be discharged into the Tamar River”. In “The Inconvenient Truth” Gunns states that one grain of rice is equivalent to the total amount of dioxins released by the pulp mill in a year, and that a child’s marble is equivalent to the total amount of dioxins released over the life of the mill.

Complaint in relation to these claims: These statements are in direct contradiction with independent scientific advice that conditions imposed on the mill by the Federal Government under the EPBC Act (in October 2007), in accordance with Gunns’ own recommendations, allow dioxin levels in the effluent to be three times less stringent than levels achieved by mills in Sweden, Canada and Maryvale in Victoria. Gunns itself suggested that dioxin levels in marine effluent from their mill would be well above levels achieved by comparable mills overseas, quite contrary to their public claim to world’s best practice.

Scientific advice has warned that under the current allowable level of dioxins in the effluent, safe levels for the consumption of fish would be exceeded. For example, Dr Andrew Wadsley (Curtin University), Dr Stuart Godfrey (former CSIRO chief scientist). See The Australian, 29/10/07. See also EPBC submission by Godfrey, Raverty and Wadsley at www.cleantamar.com.au , and Dr Francisco Neira (Tas Aquaculture and Fisheries Institute), The Australian 17/9/07. In these contexts, it is highly irresponsible for Gunns to claim the effluent as “clean”. The claim to equal or better world’s best practice in relation to effluent amounts to misleading information, which fails to specify, in the public interest, the risks of the effluent, the less rigorous standards sought and the local poor dispersion conditions in Bass Strait.

It is also highly misleading for Gunns to refer to the size of dioxins in emissions by using the imagery of rice grains and marbles. This is a clear attempt to obscure the danger of dioxins, to obscure the nature of bio-accumulation of dioxins and of their threats to health and life when they enter the food chain.

6. Atmospheric emissions On pages 7 and 8 of “The Facts” Gunns makes a range of claims in relation to atmospheric emissions, including that oxides of nitrogen and sulphur would “have an insignificant impact on the Tamar valley airshed”, that these emissions “will be pushed into the upper atmosphere as they exit the stack”, and that “there will be a reduction of more than 1.3 million tonnes per annum in carbon dioxide equivalent emissions into the atmosphere as a result of the pulp mill operating at Bell Bay”.

Complaint in relation to these claims: These are all demonstrably deceptive and misleading environmental claims. Gunns failed to meet Tasmanian RPDC guidelines for emissions of nitrogen oxides, failed to meet RPDC guidelines for sulphur compounds at ground level, failed to meet international standards for its main chimney, and failed to address concerns of the AMA about particle pollution. Gunns avoided the issue of having to address these issues by withdrawing from the RPDC process.

More than 120 scientists who tried to prevent federal Government approval of the pulp mill’s site in the Tamar valley pending further detailed independent scientific assessment of environmental issues, identified air pollution from the mill as one of their concerns, especially in a local airshed characterized by a well-known inversion layer that can trap air pollution for days at a time. These scientists, who include atmospheric experts, have challenged Gunns’ unsubstantiated assertion that emissions will escape into the upper atmosphere. To the contrary, they have expressed concerns that emissions will be trapped in the valley’s airshed. See, for example, article by Glenn Cordingly, The Australian, 17/9/07.

Gunns’ claim that the mill will reduce greenhouse emissions is blatantly dishonest. The company will be increasing woodchipping operations from current levels of 3.5 million tonnes per annum to 6.8 million tonnes per annum when the pulp mill is operational, according to their own Integrated Impact Statement. This increase in itself will significantly increase greenhouse emissions. The greenhouse impact of the mill has not been examined, and the approval processes for the mill did not address greenhouse impacts. Independent assessment suggests significant greenhouse emissions from the mill, in the order of several million tonnes of carbon dioxide per annum. See Matthew Denholm, The Australian, 7/9/07.

It is tendentiously misleading for Gunns to state, in support of their claim, that shipping to transport pulp rather than woodchips will result in less emissions, because there will not be a decrease in export volumes or of shipping when the pulp is exported. To the contrary, pulp will be exported in addition to current levels of woodchips.

It is also tendentiously misleading to state, without substantiation, that the mill’s power plant, burning 500,000 tonnes of wood per annum to generate electricity, will contribute to lessening greenhouse emissions. This power plant will contribute to greenhouse gas emissions and to atmospheric pollution. Gunns’ also makes another associated unsubstantiated environmental claim in stating that the greenhouse gas impact from their forestry operations will be “neutral”, because “forestry operations that supply the mill are sustainable”. The clear-felling forestry operations conducted by Gunns in native forests, which will be increased to supply the mill, are not greenhouse “neutral”. To the contrary, they are precisely the kind of forestry clearing operations that have been condemned internationally as major contributors to greenhouse gas emissions wherever they occur.

Gunns’ additional assertion that the forestry operations that will supply the pulp mill are sustainable, has also been challenged by independent forestry experts and cannot be accepted as a reliable claim, either in terms of wood supply, or on the basis of any environmental terms. See, for example, Dr Chris Beadle, “Chasing an elusive harvest”, Canberra Times, 31/8/07

7. Best technology On page 8 of “The Facts” Gunns claims that “the proposed mill truly represents best available technology that would be accepted by any other country in the world”.

Complaint in relation to this claim: World’s best technology for pulp mills, in relation to environmental controls and safety, are non-chlorinated mills. Gunns’ mill is a chlorinated mill. Chlorinated mills are much less safe environmentally and pose much higher risks to human health. Gunns’ mill does not represent the best available technology, but is a less expensive option that a non-chlorinated mill.

8. Environmental monitoring On page 9 of “The Facts” Gunns claims that “extensive environmental monitoring has been undertaken in the planning for the Bell Bay pulp mill and this program will continue”.

Complaint in relation to this claim: Gunns has comprehensively failed to undertake one of the most important and essential environmental monitoring and planning tasks in the Tamar valley. It has failed to undertake any baseline studies in any wildlife or in any food industry within the airshed of the mill or within the marine environment. No agricultural or fishing enterprise, industry or product has been scientifically studied to provide ongoing data which could be used to monitor the environmental impact of the mill on marine life or on agricultural produce, whether it be in the impact of effluent into the marine environment or in atmospheric emissions on agriculture.

9. Employment On page 9 of “Facts” Gunns claims that the mill would “increase the number of Tasmanians employed by an average of 1620 (excluding those involved in the construction of the mill) each year for more than 30 years”. In “The Inconvenient Truth” the claim that the mill will provide new employment opportunities for this many Tasmanians” is made in reference to a photograph of hundreds of people in a stadium.

Complaint in relation to this claim: Independent economic analysis conducted for the Tasmanian Roundtable of Sustainable Industries has estimated that more jobs will be lost in industries adversely affected by the pulp mill development than will be created. See www.lec.org.au/TRSIReport2(Aug07).pdf p.4 at www.lec.org.au Gunns has deliberately mislead the Tasmanian public in claiming net employment increases due to the establishment of the pulp mill, because they have refused to take into consideration the potential economic costs of the mill to other industries, including fishing, farming and tourism.

Conclusion: We, the undersigned residents of northern Tasmania, request that the ACCC investigate, in the public interest, the claims made by Gunns in their marketing material, in relation to all aspects of the complaint outlined above. Yours sincerely, (Other signatories attached)