The demise of Gunns, Tasmania's biggest paper and pulp mill, has been greeted as a triumph of environmentalists over business. The saga encompasses much more than that. It poses some deep questions about ownership and accountability in Australia's financial system which are yet to be answered persuasively.
One of the intriguing aspects of the campaign against Gunns is that it was not just waged against the managers of the company and the board. Pressure was also brought to bear on the fund managers who were investing superannuants' money to fund the company. The tactic is unusual. There have been some instances when lobbyists have targeted the funds industry — the failed campaign to stop Campbell Soup from taking over Arnotts in 1997 was one instance — but for the most part it is rare.
This is surprising, because when managers and directors of public companies say they are 'answerable to shareholders' they usually mean they are answerable to the fund managers who invest on superannuants' behalf. Australia's superannuation savings are about $1.4 trillion, more than the value of the Australian stock market. This means that the largest blocks of capital are in the hands of those who administer the superannuation funds.
Speaking on ABC Radio, Alec Marr, general manager of Triabunna Investments, which owns Tasmania's largest pulp mill, and former executive director of the Wilderness Society, was scathing of the investment community.
The bulk of this money came from people's superannuation funds handed over by imbeciles in the investment community. I say that calculatedly because I and others sat down in front of the CEOs and argued with their fund managers that they should not pour hundreds of millions of dollars of other people's money into this company, and they did it anyway. And despite repeated massive losses they just kept pouring money in. It was just crazy.
The fund managers to which Marr refers could no doubt defend their decisions by saying that it is impossible to predict the future with total certainty. They would have a point — it is easy to highlight failure after the fact. But Marr is drawing attention to a vexed issue in Australia's financial structures. The workers literally own much of Australia's industry base. Trouble is, they have