Senate Environment and Communications Legislation Committee, , 7:00:16 to 7:06:30
Debate over the CEFC's investment in the Tasmanian Natural Asset Trust for the acquisition of Rushy Lagoon and the conversion of agricultural land to forestry.
Topics: Forestry, Land management
Speakers: Speaker 27, Hon Sarah Henderson, Speaker 30, Unknown Speaker, Varun Ghosh
>> Thank you Senator Puk. U Senator
>> thank you. Look, I just wanted to ask um C EFC's um investment in equity uh in Tasmanian Natural Asset Trust. >> So that was approved on the 12th of August 2025 and this relates to the proposed acquisition of Rashi Lagoon. Uh, at the time you approved that investment, had had um DAV completed its plantation forestry agricultural impact assessment
>> on the 12th of August 20.
>> No, at the time you approve the investment.
>> Yes. So the time of investment approval was 12 August 25. I would have to take on notice the actual status of the particular completion o of what you that requirement that you've specified but it's not unusual for us to uh you know move a transaction through the investment process subject to the conclusion of uh legal and other requirements that we that we need.
So, so CF CFC has said that its investment was not conditional on FURB approval AQ registration plantation establishment uh or Commonwealth grant funding. Is that correct?
>> I might clarify that. Um so we weren't subject uh under Commonwealth uh grant funding that was ultimately received that was received after we had closed that transaction. the um in respect of FURB, it's not unusual for us to take an equity investment with an international party that requires FURB. However, the the project and our funding can't conclude until FURB gives its appropriate approval for the transaction. The parties won't come and I guess approach FURB unless they uh have certainty that they have a a real project there to proceed with. So,
>> sorry Mr. McCartney, I'm having trouble hearing. Just
>> I'll move a bit closer.
>> Yeah.
>> sorry. So the it's not unusual for us to invest commit to a project that requires furb approval as a conditions um precedent before we fund the project and finally commit you know contractually. So that project we had a commitment with a with the investment partners Gresham and Viva. They then went and sought their appropriate FURB approval and we all waited until FURB approval had occurred otherwise the the funding the project itself could not conclude.
>> So what material did you rely on to make the decision the investment decision that you did uh and to satisfy yourself about agricultural land use conversion the plantation establishment ACU participation and also FURB approval. I accept that it wasn't at that point granted, >> but you made an investment decision. What did you rely on to make that investment decision?
>> Uh we we do very detailed analysis of projects of that nature. So uh you know we did a detailed assessment of the manager, a detailed assessment of our investment partners. Um we looked at the project itself and what was involved in it and satisfied ourselves that there is in fact a viable project there that could be concluded and off the back of the ACUs. Now it's we have a number of projects where we've taken a future um assessment of what the ACU market will look like and we do that with the assistance of um renowned or you know wellqualified modelers and forecasters in those markets. So we looked at that in the same way we'd look at any other investment that we undertake. Now the project itself of course couldn't conclude until fur had given their their uh approval.
>> I mean this is a very controversial project which has caused enormous grief particularly in Tasmania. Uh your own investment paper says the social risk associated with converting agricultural land to plantation forestry was assessed as low. Um who made that assessment? >> This is this has been horrendous for the people of Tasmania. This is precious farmland that has been
>> Um thank you Senator. So look there is a paper that we will table. So you're probably aware that there is a Tasmanian government inquiry. We will be appearing at that inquiry at the appropriate time. We've made a submission that is public, but for the benefit of the Senate, we will uh table that today as well. You know, hard copies. I'd refer to that submission which I said is public that on the last page there is a copy of the Tasmanian government's assessment of that farming land as degraded. That was not our assessment. That's a Tasmanian government's assessment. So we when we looked at that we looked at what is the highest and best use of the land. This is detailed in our submission and found that for agricultural purposes as it was with the three daring operations one of which had ceased operations were not viable. In fact through the process we tried or our partners tried to acquire the land absent the daring operations and the deceased estate of the vendor who was an international investor um would not separate the daring operations and the reason we looked to or that our investor partners look to separate it was to make this an investment that's viable. What was found is the daring operations were that dilapidated that the capex cost to restore it and make them functional would never get wouldn't uh provide sufficient return for an investor. Post that we've tried to or our investment partners tried to sell the daring operations as it were to separate it from the land so they could continue and there's been no biders or buyers for that those daring operations in