The Damage Done By Gunns


This week ex-chairman of Gunns Ltd John Gay received a $50,000 slap across the knuckles for one of Australia’s most blatant insider trading cases.

John Gay’s inner circle inundated the court with good character references. But as one person whose life has been torn apart by Gay’s leadership of logging giant Gunns Ltd, I wonder what would have happened had the submission of character references been opened up to the wider community?

People from all walks of life shared their disgust over logging practices with me when I went to Tasmania to make a documentary in 2001. There was widespread anger about the loss of ancient forests with townies and country folk alike pointing the finger at a government and logging industry with hands in each other’s pockets. The big name in logging in Tasmania was Gunns Ltd; a once small family timber company that, under Gay’s helm, had expanded into mass export of native forest woodchips to Japanese paper mills.

In 2004 I was shocked when a $6.4 million writ landed on my desk. Gunns was suing me and 19 other critics in a test economic tort of “conspiracy to harm business”. Many of the people I had filmed were also named, from concerned residents, to activists who locked themselves onto machinery to stop logging, to political leaders. How Gunns had chosen who to sue among its many thousands of critics still remains largely a mystery to me, but over time it became apparent that I was being sued because I am a filmmaker.

Gunns’ claims against us were so circuitous and disorganised that the judge threw the writ out three times. Gunns served new versions of the writ and kept us in court for five years. Widely known as the “Gunns20” court case, it sent waves of fear across Tasmania. Community members and journalists alike were afraid to criticise Gunns, lest they too be sued. Gunns dropped the case the day before trial was to begin, but the price for the defendants had been high.

Surveillance, massive legal bills, the threat of bankruptcy and vicious attacks from pro-logging community members led to stress, fatigue, depression, post traumatic stress disorder and worse. Each defendant dealt with the experience differently; each defendant had different things at stake. Some were penniless activists, others influential community members with homes, businesses and families to support.

Meanwhile John Gay’s Gunns was tearing apart other sectors of the community with their controversial pulp mill proposal. Whilst some community members hoped this new development would lead to higher employment rates, others who lived close to the proposed mill site in the rolling hills of the Tamar Valley felt the death of their own clean green businesses approaching. They halted further business expansion and those that could took their business elsewhere. Those who couldn’t lived with uncertainty for many years.

The biggest losers from the Gunns debacle were the logging contractors who had bought into the industry. They were left servicing massive debts as the demand for woodchips from ancient forests fell through the floor. After rejecting Mark Latham’s $800 million dollar forest industry exit strategy, unionists soon saw the writing on the wall and began talks with environmentalists to try to reform the dying industry. But it was too late. Despite efforts by concerned shareholders, who rolled Gay and his board colleague, ex-premier Robin Gray, Gunns’ new CEO Greg L'EStrange couldn’t miraculously create the social licence the company needed to secure a pulp mill investor.

Gunns fell into receivership last year and dragged down with it the forest contractors who had put their necks on the line to keep the industry alive. Gunns is in debt to the tune of around $3 billion to banks and shareholders, some of whom are considering a class action against the company.

Across all levels of community, Gay’s leadership of Gunns bit hard into peoples lives. According to media reports he avoided a loss of almost $800,000 through insider trading. So, should a few dozen character references sent to the judge by close colleagues have whitewashed over Gay’s failings as a business leader? The message many heard was loud and clear – he was untouchable, and the Launceston old boys club still reaches into high places. Time will tell whether Gay and Grey will continue to avoid paying the price for the damage they’ve caused to the environment, people’s health and livelihoods.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.