Forest peace hangs on Gunns settlement

ABC News (Australian Broadcasting Corporation) 
August 18, 2011

Tasmania's Premier has revealed the $276 million forest peace deal will not proceed if a commercial settlement with timber company Gunns over its contract rights can not be reached.

Lara Giddings says her legal advice is Gunns has a legal right to settlement money despite the company voluntarily handing back its native forest contracts.

The Premier says an agreement is needed to extinguish Gunns' right to renegotiate contracts and clear the way for the forest peace deal.

"And that's the element that the government is very keen to resolve," she said.

Commonwealth assistance to forest contractors will not flow until the matter is sorted.

"That's the issue that is really at the heart of this," she said.

Ms Giddings says she knows a decision to compensate will be unpopular but the Government is legally bound to do so.

"I'm very aware that the broader community are feeling quite angry at the moment of the behaviour of Gunns in recent times and the impact that they have had on decisions like Triabunna and in fact many people have come up to me and said they don't want to see one single dollar go to Gunns as a result.

"There is an absolute interest in this issue."

The money will come from a $23 million federal funding pool.

An independent probity auditor will be appointed by the end of the day to oversee the process and an agreement is expected in weeks.

The Opposition's Jeremy Rockliff is not convinced.

"This Government and this Premier have bowed to Greens pressure all the way through this whole forestry saga," he said.

"It's another example of the Premier and this Government outsourcing their responsibility."