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Garrett holds fire on Gunns pulp mill decisio -

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SCOTT BEVAN, PRESENTER: It was billed as D-day for Tasmania's pulp mill.

The Federal Environment Minister, Peter Garrett was expected to end years of division in Tasmania
by either approving or rejecting Gunn's plans for the country's largest pulp mill.

In the end, the Minister hedged his bets. He refused Gunns the final green light, demanding further
pollution studies in Bass Strait. But he did open the way for construction to start at the site,
while the research is done.

The Federal Opposition and green groups say it's approval by stealth.

In a moment I'll be speaking with Peter Garrett, but first this report from Danielle Parry.

DANIELLE PARRY, REPORTER: It's a project that's divided the Apple Isle, a $2-billion pulp mill on
the banks of the Tamar River, next door to Gunns' woodchip mill in the state's north.

For some Tasmanians it represents an economic lifeline, but others fear an environmental disaster.

PETER CUNDALL, ENVIRONMENTALIST: I'm against this rotten, dirty, stinking pulp mill. It's going to
ruin Tasmania.

PRO-MILL ACTIVIST: Thousands of working-class families are reliant on this project proceeding
without further delays.

DANIELLE PARRY: Today, the Federal Government had a bet each way, giving the green light to
construction, but asking for more studies on the surrounding marine environment.

PETER GARRETT, ENVIRONMENT MINISTER: I will not be approving the three modules dealing with the
operation of the mill and the impact of the mill effluent on the Commonwealth marine environment.

PAUL OOSTING, THE WILDERNESS SOCIETY: The Minister has made it clear that Gunns can begin
construction of the pulp mill, even though they have not met the full Federal Government approval.

JOHN GAY; GUNNS LTD: All the environmental modules for Tasmania have been approved, which really
gives the mill approval for Tasmania.

ROBERT EASTMENT, PULP & PAPER ANALYST: The community does need closure. They've been, it has been
divisive, it has been divisive pretty well from the start.

PAUL LENNON, TASMANIAN PREMIER: I table a copy of Gunns' project overview.

DANIELLE PARRY: It's a latest turn in a long and rocky road for Gunns, whose plans were first
floated in the Tasmanian Parliament in 2004.

PAUL LENNON: And I really do hope that we're going to have a much more mature debate. The
technology available for pulp mills today is far superior to that which was available 15 years ago.

DANIELLE PARRY: An expert panel was charged with assessing the project for the Tasmanian planning
commission, but it was slow going. Too slow for Gunns, who withdrew in March, 2007.

JOHN GAY: It's a sad day for Gunns, sad day for Tasmania and it's a sad day for all the forestry
workers in Tasmania.

DANIELLE PARRY: Determined not to lose the project, the Tasmanian Government rushed through
emergency legislation, fast-tracking an assessment process to be carried out by hand-picked private
consultants.

PAUL LENNON (2007): We couldn't sit by and let the opportunities presented for Tasmania by the pulp
mill slip through our fingers.

DANIELLE PARRY: The process infuriated environmentalists and some local residents. In August 2007,
the Tasmanian Parliament gave the project the go ahead and in its dying days, so did the Howard
Government.

JOHN HOWARD, FORMER PRIME MINISTER (2007): We have taken the right decision on the merits. The
cowardly thing to have done would have been to put it off.

DANIELLE PARRY: The new Labor Government had until today to approve the company's Environmental
Impact Management Plan. The Minister has ticked off on the mill's construction but refused to
approve three impacts, dealing with the impacts on the marine environment.

PETER GARRETT: I've determined that it would be entirely inappropriate to give a final approval to
the still incomplete modules of the Gunns' Environmental Impact Management Plan at this time.

PAUL OOSTING: He had all the information necessary today to stop Gunns' proposed pulp mill and put
an end to it for once and for all. But instead he's giving Gunns another two-year extension.

JULIAN AMOS, FOREST INDUSTRIES ASSOCIATION: It is disappointing to note there has been this
decision to retain conditions on these three modules, because that will occasion more doubt and
more uncertainty and more delay.

DANIELLE PARRY: Gunns has until 2011 to complete its studies into how effluent discharged from the
mill will affect Bass Strait.

But the company isn't worried about the delay. On the contrary, it's hoping to start building its
mill while the ocean research is done.

JOHN GAY: That doesn't stop the building. If we can get financial close during this very difficult
time, we will be able to move forward.

DANIELLE PARRY: But Gunns lost its main financial backer ANZ last year, and construction is
dependent on finance. That could be harder to secure without final environmental approval. But
analysts are confident the company will get over the line.

ROBERT EASTMENT: They are still talking to potential joint venture partners. But I think Gunns will
be frustrated by the intended or the announced delay, but I do expect Gunns to continue with the
proposed mill.

DANIELLE PARRY: That's the last thing environmentalists wanted to hear.

PAUL OOSTING: The bulldozers could be rolling in the Tamar Valley any day now, despite Gunns not
having the full Federal Government approval. Peter Garrett has not acted decisively and has
subsequently put the Tasmanian people and the Tasmanian environment at risk.

SCOTT BEVAN: Danielle Parry with that report.