Tasmania to appoint probity auditor as part of process to reach commercial settlement with Gunns on ending company's involvement in state's native forests, allow assistance funds to go to affected forest workers

HOBART, Australia , August 18, 2011 (press release) – The Premier, Lara Giddings, today announced a transparent process aimed at achieving a commercial settlement with Gunns Limited to end its involvement in Tasmania’s native forests and to allow assistance funds to begin flowing to affected forest workers.

Ms Giddings said the process, which had been endorsed by Cabinet, included appointing an independent probity auditor.

“The appointment of a probity auditor will ensure the settlement process is handled transparently and in accordance with our legal obligations,” Ms Giddings said.

Any settlement amount will come from the Intergovernmental Agreement funding which has been provided for this purpose.

“I recognise that for many in the community there is little appetite for payments of any kind to be made to Gunns, especially amongst the workers affected by the company’s decision to exit native forest harvesting.

“I have sympathy for this view, however the Solicitor General has advised that the complex legal issues surrounding Gunns’ native forest contracts with Forestry Tasmania must be resolved in order to progress the Intergovernmental Agreement.

“Section 22 of that agreement requires that a process must be entered into before payments can begin flowing to contractors. This has now occurred.

“While the State Government has received legal opinion that Gunns has elected to terminate its contracts it is also apparent that, as a result, the company has certain residual legal rights.”

Ms Giddings said the appropriate course of action was to attempt to reach a commercial settlement with the company to extinguish those rights and end any commercial relationship between Gunns and Government.

Ms Giddings said the State Government hoped to resolve the issue as soon as possible.

“A key condition of any arrangement made with Gunns will be that no money will be transferred to the company until payments have begun flowing to affected contractors and forest workers.”

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