Image for Joker 3 Mill or what? A Battle of Ideas

In change management practice, it is useful to make sure that the key bases are covered when considering major change of any kind, and particularly when that change is not planned by the people who must actually engage in, or endure, the change.

We can use powerful ideas from organisational experience to work out how to divert the pulp mill proposal from its current tracks.

Readers should bear in mind that this is an overview, not a detailed treatment of the many issues involved.

In the case of the pulp mill, it is questionable whether committing to a low value global commodity is wise or even sustainable. In a world where resources are becoming scarcer and more valuable, wasteful practices that produce low value commodities like pulp and chips may no longer be profitable or viable.

Establishing the need for change

To establish a need for change we need to compare different ideas about the future of Tasmania.

Just as no responsible party would approve a building without a good idea of how it will look etc upon completion, so too we need to be able to compare different visions of a future Tasmania.

The pulp mill vision has been written by one industry with a vested interest. No alternatives have been promoted, nor have the limitations of the forest industry vision been made clear to people.

Governments have blindly chased one stakeholder’s use for our forests, water & land without looking at any alternatives, and without reviewing the futures created by such projects.

Instead Tasmanians were presented with a false choice of either a pulp mill or wood chips, in other words one type of ‘industrial forestry’ versus another, instead of asking whether ‘industrial forestry’ was relevant to the 21st century we just accepted that pulp is better than chips -  like a severe bone bruise is better than a fracture.

The forestry vision  
The vision for the pulp mill produces some unpleasant pictures for many people.

Northern Tasmanian roads heavy with log trucks, food producing lands overrun by plantations, rural Council rates increasing to compensate for low rates paid by plantation owners, degradation of our hospitals and schools as ‘industrial forestry’ demands ever more public subsidies, heavy property value losses in the Tamar valley due to foul odours and smelly fogs, major increases in asthma and similar ailments – these and more are the concealed potential components of forestry’s vision.

In addition forestry has concealed the sheer scale of clearing necessary to feed one of the world’s largest pulp mills from a small island like Tasmania.

Gunns intends to harvest up to 7 million tonnes of timber per year, for both the mill and as chip exports, for some years.

At a generous 200 tonnes production per hectare (tph) that requires 350 sq km per year of clear felling!

But many forests and plantations are going to produce as little as 60 tonnes per hectare pulling the average way down. At an average of 100 tph that’s 700 sq km to be clear felled each and every year which will require some 120,000 log truck loads per year operating over areas of 1,500 sq kms or more!

To deal with an uncertain future, the forestry vision is to lock in the methods and prices of the past and accelerate their conversion of trees into pulp/chips in order to make profits by increasing volumes – the only way that low value commodity businesses can.

Many people find this vision of our future horrendous and entirely incompatible with the varied, quick moving, smart businesses relevant to the 21st century, such as wilderness tourism, production of fine foods and wines. 

We need to consider the best uses for forests, water and land so that Tasmania can get the best value from its limited resources. This also means considering which industries are most likely to achieve the best outcomes for Tasmania – measured in jobs, income, resource use, sustainability etc.

A case for change

Background:
From the perspective of 21st century practice and resource shortages, the Tasmanian forestry industry relies too heavily on outmoded ideas. Part of the reason is that they have chosen to pursue the supply of low value/high volume commodities like wood chips & pulp rather than high value/low volume supplies.

By pursuing ‘industrial forestry’ Gunns has been able to disinvest in their own company by selling plant and mills and ‘outsourcing’ transport etc to small contractors. Their reliance on outsourcing and ‘industrial forestry’ appears to have left the company without any distinctive competence except tapping the public for money. The result is that their only substantive asset seems to be their plantations which require a significant investment before any asset value can be realised from them.

It appears that a stubborn pursuit of outmoded and wasteful practices will ultimately lead to corporate failure. They do not appear to be in a good negotiating position for $2 bn of finance.

Clear felling and burning whole forest ecologies are practices from a time when resources were plentiful and cheap, and no-one significant cared about the ecological damage created.

In a world working its way up to a population of 9 billion when no-one knows if the planet can sustain the current 6.8 billion, resources such as timber, water and land for food are going to be at a premium in value. The same can be said of our remaining forests as much of the planet will be pillaged to provide for the burgeoning population. Any forest remaining will be a rare jewel that is sought by many.

L o cking in a pulp mill for 20 years in such an environment is business suicide. 

Diverting resources to lower value uses

An insuperable difficulty with the mill proposal is that it forces significant changes in ownership of our resources and, because we live on an island with limited space, any extra resource moved to forestry must come from other people or groups who rely on those resources, such as farmers, tourism operators and country centres. The result is a major threat to other resource dependent industries with a commensurate penalty in the costs of jobs lost, lost income and social and business disruptions.

Of course, the forest industry may gain, but the costs of their success to nearly everyone else appear massively out of proportion and totally unsustainable.

The result is that the pulp mill proposal’s detriments more than outweigh the putative benefits, an outcome that was concealed by only studying the benefits of the mill and ignoring the impacts and risks.

As stated earlier, the pulp mill proposal appears to be a last gasp gamble by a few people in the forestry industry that hope to lock in resources such as water, land and trees for the next few decades so that they can profit from an increase in the price that they obtain for the resources that we must provide.

It’s an attempt to retain the benefits of 19th century practice in the 21st century by people who themselves cannot make that change

The trouble is that given the scale of the changes that we face with climate change, peak oil, population growth, food shortages and so on, there is no guarantee that a pulp mill will make any money at all because producing paper is one of the lowest value means of using our resources.

Single point sensitivity

Because Gunns is a monopoly, whatever Gunns does could have massive impacts on the rest of Tasmania.

The corollary is that for the mill project to be stopped, Gunns must participate in that action and be ready to enter the 21st century and use our resources carefully and responsibly.

As it stands the shareholders and the company are locked into a risky and outmoded proposal in an environment of rapid change resulting in a corporate gamble from which the company, and Tasmania, may not recover.

What is needed is a viable alternative that benefits both the forestry industry and the community.

We need renewal in forestry to replace repetition of past wasteful methods.

In that context it is effectively a battle of ideas between 19th century heavy industry approach to development and a 21st century value delivered approach.

Environmental arguments have failed to win the day.

Relying on environmental objections would place us in the same mental space as the forestry industry – repeating what hasn’t worked in the vain hope that it will somehow work next time around.

We need to focus on the socio-economic benefits of a renewed approach to our use of forests, land and water. We need to imagine a better Tasmania then let experts figure out how to produce it.

What we need is a practical vision of Tasmania’s future that can be realised without resorting to 19th century approaches.

A vision that can be delivered by retaining rare forests, by creating and supporting flexible industries that can respond to change and create rich and diverse jobs, by helping forestry to operate in new ways and by finding ways to protect contractors and others who have been persuaded to make mammoth investments in industrial forestry equipment.

We need a vision that is consistent with resource shortages, climate change, population shifts and food shortages.

These are not activities for the faint hearted or those who wish to comply with existing views.

These are activities that require open thinking, courage and communication, flexibility and energy.

Welcome to the challenge.

Watch this space.

Mike Bolan

http://www.abetteraustralia.com

Mike is a complex systems consultant, change facilitator and executive/management coach.

Note.  The author welcomes constructive criticism and new information that adds to our understanding of these matters.