Gunns could see compensation in Tasmanian forest peace deal topped at AU$23M, clawed back for AU$25M in disputed debt to Forestry Tasmania

LOS ANGELES , August 30, 2011 () – Australian timber company Gunns Ltd., believed to have asked for up to AU$106 million (US$113 million) in compensation for losses from the Tasmanian forest peace pact, could see that compensation capped at just AU$23 million and clawed back by Forestry Tasmania (FT), The Mercury reported Aug. 30.

The state-owned company says Gunns owes FT AU$25 million--a claim denied by Gunns.

Tasmanian Premier Lara Giddings said Tuesday that Gunns would not receive more than AU$23 million for ending logging of native forests and closing its Triabunna, Tasmania, woodchip mill, The Mercury reported.

Giddings quoted a legal opinion saying Launceston, Tasmania-based Gunns has residual rights over contracts for harvesting native forests and that compensation would provide the best settlement.

The Tasmanian state government has entered an auditor-approved process on a proposed settlement, including a proposal to resolve the debt claims between FT and Gunns, said Giddings, The Mercury reported.

Meanwhile, state parties have clashed over government plans to guarantee wood supply to Ta Ann Tasmania Pty. Ltd.'s wood mill in the Huon Valley. Tasmania wants to allocate specialty timber for furniture production and 265,000 m3 of peeler logs to Malaysia-based Ta Ann's rotary veneer mill, opened in 2007.

Greens leader Nick McKim said his party would not support the legislation to supply wood to Ta Ann, calling it “corporate welfare,” reported The Mercury.

The Forests Intergovernmental Agreement does not require the legislation, said McKim.

The primary source of this article is The Mercury, Hobart, Tasmania, Australia, on Aug. 30, 2011.

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