Gunns Backs Down


The so-called Gunns 20 lawsuit dates back to December 2004 when Tasmanian forestry giant Gunns Ltd sued 20 environmentalists, including Bob Brown and the Wilderness Society. The case lasted more than five years, turned into three different cases and had 52 appearances in court. Pleadings ran to thousands of pages and millions of dollars worth of costs accrued. 

With one minor exception, however, the Gunns 20 lawsuit set no legal precedent.

In the course of arguments over the production of documents, the notion of "commercial-in-confidence" was probably extended to the operation of the non-commercial activities of community organisations but apart from that, the Gunns 20 case has had little legal significance. The truth is that for most defendants, it never got near a trial. There was no judgment of the facts of the case, the alleged wrong done to the company or the right to protest — issues which were at the heart of the lawsuit.

Two years after the case opened, Gunns dropped half their claims for damages, including all claims relating to the alleged unlawful lobbying of banks and the approach to Gunns’ Japanese customers in relation to the timber company’s logging of native forests. Greens MPs Bob Brown and Peg Putt and two other defendants exited the case at that time with their expenses paid by Gunns.

Four years on, in 2008, Gunns dropped the case against the Wilderness Society and its officers. They paid out over $300,000 in costs against the only defendant which had serious assets to claim against should Gunns ever have been successful. Along the way other individual defendants were dropped from the case, some giving undertakings not to engage in particular kinds of protest in the future.

Finally, last week, Gunns agreed to discontinue the case against the final four defendants, paying them $155,000 for their troubles. In all, the case probably cost Gunns over $4 million — and a lot of bad publicity. It was here that a key precedent was set: a political precedent.

Ever since two self-represented activists humiliated hamburger giant McDonald’s in England’s longest-running libel case in the 1990s, big companies with public images to protect have avoided suing their political opponents. To do so gives opponents notoriety, public sympathy, access to company documents and makes the company look like a bully. In short, it is very bad PR for companies who often spend millions of dollars building their corporate image and reputation.

Since McLibel, in Australia at least, those suing critics and community activists have largely been smaller companies, developers or individuals who did not have big public images. They tended to have all their financial investment concentrated in one project and were less sensitive to their broader public or market image.

The Gunns 20 case threatened to change all that. Had Gunns been successful, had environmentalists been silenced as a result of the lawsuit, then a clear message would have been sent to corporate Australia that the McLibel precedent was dead and that there was mileage to be made by issuing SLAPP suits (or Strategic Litigation Against Public Participation).

The reverse happened. While the Gunns 20 case did have an impact on environmentalists and their campaign during the five years it ran, protests in the Tasmanian forests continued nonetheless and a huge campaign against Gunns’ proposed pulp mill gained momentum. (The Gunns 20 case was launched in the same week as the proposal to build the pulp mill in the Tamar Valley.)

The whole case generated plenty of bad publicity for Gunns. it damaged their corporate reputation and worked to reignite the campaigning that had triggered the original suit. Forest conservation groups in Japan, Europe and America began protesting about Gunns’ logging practices and targeting Gunns’ customers in those countries, while the pulp mill itself became mired in controversy.

Gunns had little social licence left when the global financial crisis sabotaged early attempts to finance the biggest pulp mill in the southern hemisphere — even their bank, ANZ, agreed with critics of the pulp mill and declined to finance it. Gunns’ current preferred partner in the mill, the Swedish pulp and paper company Sodra Ltd, is putting conditions on its involvement which will require Gunns to pursue a new model of engagement with the community. It is unlikely that this new model includes suing environmentalists.

The pressure of bad publicity, the risk to the pulp mill project and a court case with little left in it over a protest which took place seven years ago all combined to force Gunns to pull out of the case on the eve of the trial. Gunns stated that this was a "commercial decision to avoid the need for a lengthy and expensive court case". But it was always going to be a lengthy and expensive court case. The fact that Gunns agreed to pay a substantial sum to the defendants to end the case shows the pressure the corporation was under. It was, as a judge described the dropping of claims earlier in the case, a capitulation.

Gunns are still suing 13 other activists in an unrelated case after a protest at Triabunna woodchip mill in December 2008, but, like the Gunns 20 case, it seems unlikely that this one will ever get to court. Rather than dragging out proceedings unnecessarily — only to make another "commercial decision" — Gunns should take another step toward rebuilding its corporate reputation and settle this case.

The Gunns 20 defendants met in Melbourne this week to celebrate the end of the case. While they have their own costs to count in terms of stress and lost time, as well as substantial personal financial costs, they can be proud that they have set a great precedent for the community’s right to free speech and political protest.

Anyone in corporate Australia should look to the Gunns case and know that taking political disagreements with members of the community into the court system can be disastrous. The Gunns 20 should loom alongside the McLibel case in the PR text books that advise companies it is better to engage with opponents than to try to destroy them.

Of course, while the Gunns precedent should loom large, there will always be a cowboy somewhere who thinks going to court to silence opponents is a good thing and for this reason we also need anti-SLAPP law reform. The Gunns case was pivotal to the passage of Australia’s first "anti-SLAPP" legislation in the ACT, but while the bill introduced by Greens MLA Deb Foskey was good, the government severely amended it and limited the usefulness of many provisions.

However, it is a start, and we need more and better legislation like it, just as we need activists like those who made up the Gunns 20 who will stand up to the big corporations and their legal teams.

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