great southern trees 'at high risk of death'

Great Southern trees 'at high risk of death'

From the LAND by
06 Sep, 2013 07:35 AM
MATHEW DUNCKLEY

FAILED forestry company Great Southern became so desperate for land to satisfy its investors it planted trees in areas where they were almost certain to die.


Gavin Ellis, a former board member and head forester at the company before it went into administration in 2008, gave another day's damning ­evidence in at the Supreme Court of ­Victoria on Thursday as part of class action against the company and its directors over misleading claims.

Mr Ellis described an "arm wrestle" between the company's sales arm and his forestry team over whether acquisitions could be used to satisfy demand from investors or to top up struggling projects from previous years.

Part of the conflict was due to the fact that investors in each year's wood-lots would be secured, then land would need to be found; this placed great pressure on finding enough suitable land at the right price to provide the promised yield of 250 cubic metres of timber for every hectare of land over 10 years.

The court heard the company had considered a cap on investors to ease the pressure, The Australian Financial Review reports.

"We talked frequently about the pressure that results from accepting sales without boundaries and then the implications of that; and the overlay of that on forestry to try to acquire ­sufficient land in a range of regions and then plant the trees by that June 30 deadline," he said.

Mr Ellis was asked about an email from 2006 with senior executives at the company, which showed the ­company's chief operating officer Julian Dayman was pushing the forestry ­division to use marginal land to help meet the targets.

"I wasn't happy that we had classified something at high risk of death but then were prepared to put growers' wood-lots on what we had classified as a high risk of death," he said.

Asked about his views expressed in the email, Mr Ellis said: "That's me expressing a strong view of distaste of what we are planning to do."

In response, Mr Dayman suggested the pair stop emailing and "have a chat".

Mr Ellis has previously described repeatedly warning the company's then managing director John Young that the company's forests were failing to meet their productivity targets.

On Thursday Mr Ellis described telling Mr Young in April 2005 that he was concerned the sales team were unaware of this non-performance.

"I said that if the forestry guys are exposed to questions about the plantation performance, they will tell the truth. I told him that the forestry guys will stick to reality and we needed to deal with the disconnect between the reality that we knew in forestry and what the sales guys were talking about," he said.

Mr Ellis said Mr Young undertook to talk to the sales division

Acknowledgement to the "Duk".