When the Examiner published the CEO’s comments (below), Gunn’s crossed into forbidden territory by linking corporate philanthropy to community opposition to its proposed pulp mill. Greg L’Estrange’s spray gives the appearance of a company that has taken the first steps down the slippery slope of engaging in the corporate blackmailing of its own community.

TASMANIAN timber company Gunn’s is reviewing its sponsorships as it comes to terms with the bitter fallout over its $2.2 billion pulp mill.
New chief executive Greg L’Estrange yesterday said that the tens of thousands of dollars donated to the community each year was not secure.
One event in jeopardy is the Launceston Cycling Classic, which Gunn’s stepped in to save in 2004 when council and government sponsorship was withdrawn.
“We haven’t finished our discussions but certainly you would say our appetite for some of these areas has diminished,” Mr L’Estrange said.
“Life is a two-way street.
“People keep wanting us to keep putting money back into the community but they need to want us as well.”
The company’s review comes after years of debate about the Bell Bay project.

      I cannot recall any Australian industry leader, as Gunns - making a public declaration with the sinister inferences that are contained in the lines above.
With these latest public comments Gunn’s has made the appalling mistake of connecting its philanthropy to the controversy surrounding the pulp mill.

For any reputable and savvy modern company this is a big no-no. 

Perhaps Mr L’Estrange was so stressed by the failure of the pulp mill proposal to gain finance that he has let slip one too many contradictory and loose statements? Who knows?

        Regardless of his motives or mindset, the fallout from this article will reverberate long into Mr L’Estrange’s tenure as CEO of Gunns. His comments may well come back to haunt the Gunns CEO as pulp mill opponents look for examples of why Gunns are not a fit company to operate one of the largest pulp and chemical mills in the world in a populated valley.

The following are few examples of the public’s response to Mr L’Estrange’s comments taken from the Examiner online

“”So now Gunns is resorting to blackmail is it? Threatening to withdraw sponsorships for local events and clubs unless the community rolls over””

“”some good old fashioned threats that have so endeared this company to the community over the years””

“”The only positive contribution Gunns has made to the community is to prove beyond doubt the need for the new Tasmanian Integrity Commission””.

“”If Gunns is seeking to withdraw its considerable public/ community sponsorship - its misses the tax benefits, further offends the community and remains deeply entrenched in its pathology of disconnectedness from the community””.

          This latest incident follows previous incidents where Gunns’ management has been implicated in some disturbing behaviour. Behaviour which has no doubt has contributed to accusations that the company has a darker side.

In November 2007 The Australian newspaper reported that City Mission CEO and Mayoral candidate Albert van Zetten said his decision to oppose the pulp mill earned him a phone call from Gunns board member Robin Gray.

Van Zetten alleged Gray had linked Gunns assistance in providing warehousing for City Mission to his opposition to the mill.

“He expressed disappointment that I voted against the pulp mill because Gunns had supported the City Mission,” he said.

Several former members of the RPDC had already spoken publicly of their grave concerns about the management culture at Gunns.

In April 2007 the Sydney Morning Herald also reported that Warwick Raverty had said a Gunns executive rang the CSIRO and tried to pressure it into silencing him. Gunns refused to comment about this incident but the CSIRO confirmed the company had expressed concerns.

Dr. Raverty one of the most respected scientists in the Australian Pulp and Paper sector was moved to say this about Gunns management culture.

“I say that as someone who saw Gunns’ inadequacies from the inside for all but the last month of the RPDC Assessment. Cowboys are exactly what I observed and it is that primarily that caused me to change my view from one of complete neutrality in February 2006 to the statement that I made on 14th March 2008, ‘With great reluctance, I have come to the view that Gunns are not a fit company to operate a Kraft pulp mill anywhere, let alone in the Tamar”.

Also attracting condemnation has been “Gunns 20” case, which in late 2004 saw Gunns slap what appeared to be a strategically timed writ on 20 Tasmanians alongside its announcement that it was submitting a proposal to Tasmania’s statutory planning body to build a pulp mill in Northern Tasmania.

Shareholder activist Stephen Mayne was scathing describing it as a waste of money.

Mayne argued “Well they’re spending millions of dollars in failed court action to shut up their critics”. It’s an example of poor corporate governance, that if you want to get on with your community and deal with people constructively, you don’t go suing the world. I think it’s been a waste of shareholder funds and it’s damaged the company’s reputation and just shows how bull-headed they are””.

LÉstrange’s comments have already bought further public outrage and the creation of another controversy. More concerning is that potential future recipients of sponsorship and philanthropy from Gunns may now consider accepting the companies’ financial support as an inducement or bribe to suppress negative views about the pulp mill or even to support the pulp mill.

Indeed, how will persons and organisations that are in receipt of Gunns’ sponsorship and corporate philanthropy feel after reading today’s Examiner piece?

Managers of such organisations have a duty of care to get the best outcomes for their members, clients and organisation. Corporate philanthropy is not easy to come by. Despite their opinions about the Gunns pulp mill, are these people and organisations going to be silenced?

Of course they are.

The organisations in question who read and consider Mr LEstrange’s comments might justifiably take the view that if they suppress negative views about the pulp mill, or even adopt a supportive position, it could mean the difference between maintaining and losing the financial support of Gunns.

Tasmania’s wealthiest company, Gunns, needs to understand that corporate philanthropy should not be used to suppress public outrage. Threatening to decrease or remove philanthropy in the midst of a controversy is not a sound strategy and will be taken by the public as blackmail: “back off, do as we say, or we’ll stop giving”.

This is a low point for Gunns ...

Communities have deep meanings for people. People long for their communities to retain the values that have sustained them. This is the ideal that people hold for communities and the basis for anger and resentment when those ideals are violated by companies. The contract – the psychological contract has been destroyed. (Edmund M. Burke)
The Examiners ‘report’ “Gunn’s sponsorships are not secure, says L’Estrange” (Here) which profiles Gunn’s CEO Greg LÉstrange is a telling and disturbing piece. For the company which shareholder activist Stephen Mayne once described as “Australia’s most ethically challenged” this article “outs” Gunns as a logging company with a problematic attitude and management culture.