Jasmin Sydee and Sharon Beder

Earth Sanctuaries Limited (ESL), a business publicly listed on the Australian Stock Exchange from 2000-2005, was the darling of economic rationalists and their conservative think tanks. It was frequently cited by free-market champions in their arguments for private conservation and market-based solutions to environmental problems.

ESL attempted to prove the superiority of private conservation efforts over government efforts, and the compatibility of the profit motive with environmental protection. It advocated the use of private property as a way to achieve conservation objectives. Its program involved acquiring land, feral proofing it, and then reintroducing native and especially endangered species. The vision of the company was to establish privately-owned sanctuaries representing examples of each of Australia's key ecosystem types and in doing so protect and rehabilitate all 100 endangered mammal species of Australia.

ESL's first sanctuary, Warrawong, was opened to the public in 1985. Several other sanctuaries followed in the 1990s across New South Wales, South Australia and Victoria. It made money from a variety of sources including ecotourism (admission fees, guided tours etc); food and beverage sales; overnight accommodation; gift shop sales; native plant nursery sales; weddings and functions; conferences; education programs; as well as filming and photography.

Other activities included consulting services (such as fence building, feral eradication, native animal treatment, woodlot development, as well as conceptual planning and feasibility studies for other organisations); contract services in building; contract management, e.g. to government National Parks; captive animal sales (not endangered species); wildlife sales (reintroduction back to the wild); as well as donations.

ESL was recognised with many awards and honours. It was awarded runner-up for Ecotourism in the 1997 Condes Nast Travelers Choice Awards (USA), and was in the top 50 (the only Australian destination) for the Travel Holiday Insider Award for 'Best Kept International Secret' in the same year. In 1998 it was labelled Australia's most ethical investment by Choice Magazine. In 2001 its company structure was presented to an OECD/World Bank workshop 'as the international model for biodiversity conservation in the private sector'.

Corporate managerialism

The private market strategies engaged by ESL clearly fit within an ecological modernist discourse where environmentalism is a viewed as a form of managerialism that privileges experts and business interests in environmental decision making. In this view the environment has to be managed rather than conserved or saved. Management is best undertaken by corporate managers who supposedly have the knowledge and resources to provide a stewardship role on behalf of corporate stakeholders.

Such an approach assumes that all that is required to protect the environment is good management by private owners. The strategies of ESL explicitly and implicitly deflected attention away from the deeper structural issues about the relationships between social systems, economics, culture and ecology that other conservationists, academics, and activists have been attempting to bring to conservation politics. ESL maintained instead that not only is capitalism an environmentally sustainable system, but that it in fact offers the key to preserving biodiversity.

ESL claimed to have facilitated the removal of six species of mammal from the endangered species list by enabling these species to thrive in the feral-free environments of its sanctuaries. But is a piece of 'feral free Australia' all that wildlife need for their protection and conservation? And what about biodiversity in general?

By focusing entirely on their successes with mammal rehabilitation through feral eradication, ESL sidelined structural and political factors that also contribute to the destruction of wildlife and ecosystems. Feral animals certainly pose an immediate threat to native animals but ferals cannot and should not be seen as the only broad danger facing native animals and ecosystems.

For example, in Australia there are constant conflicts over the conservation value of forests. These include the East Gippsland forests of Victoria and the Tasmanian old growth forests. Marsupials such as quolls, koalas and possums are arguably placed under threat by so-called 'sustainable' forestry, as are the unique forest ecosystems themselves. Forestry, mining, farming, fisheries and coastal development are all examples of economic activities that are destroying wildlife and damaging ecosystems, particularly where vegetation is removed or toxins are introduced.

By privileging 'cute and cuddly' mammal species as the object of conservation, ESL avoided the problems associated with determining the conservation status of less media-friendly species, such as plants, amphibians or insects, for example. The conservation status of these species is often determined in the context of the development imperatives that are weighted against them, and public apathy.

Although the private ownership of native flora and fauna may or may not be ethically problematic in and of itself, there are important equity questions that arise from private ownership of endangered species or remnant ecosystems. If endangered species or remnant ecosystems are held in private hands, there is the possibility of effective private control over some species once considered to be a nation's common heritage. A program of private conservation, as opposed to government conservation, could see open communal access to wilderness areas dwindle with entry prices to private conservation sanctuaries subject to market forces.

By bringing conservation into the private sphere of property rights and purchasing power, conservation is removed by degrees from the public realm of political debate. By placing endangered species on the stock exchange, ESL is rendering the value of nature as comparable with other commodities with dollar values, and inadvertently curtailing the way people express their ethical and political concerns into an expression of the amount of money they are willing to spend on shares or a holiday outing.

Commercial imperatives

A major problem with market-based solutions is that commercial imperatives take precedence over environmental ones leading to compromises that impact on the areas being protected. When the company was publicly listed on the Australian Stock Exchange in 2000 it was a momentous occasion for ESL as it represented a test of the organisation's philosophy: that the free-market held a place for conservation as business.

However ESL's need to maintain share value and commercial viability subsequently forced it to sell off many of its protected areas, clearly demonstrating the way environmental priorities can be compromised by the vagaries of the market and the needs of private concerns to earn an income.

Ten parks were sold and ESL underwent a dramatic corporate restructuring to cut overhead costs and become more financially viable. Fortunately for the wildlife living within the sanctuaries, at least some of ESL's assets were sold to fellow conservationists. The Australian Wildlife Conservancy bought four of the ESL sanctuaries. ESL stated that it placed a great deal of importance and responsibility on finding appropriate buyers for their sanctuaries. But there is no guarantee within the model of market-based conservation to ensure that this will always be the case.

Environmental protection is supposed to be protection in perpetuity and the need to sell off sanctuaries at the first sign of financial crisis is clear evidence of the failure of ESL to combine business with conservation. If sanctuaries can be sold, their future is tenuous and the market cannot guarantee protection. Endangered animals and ecosystem remnants are too precious to be left to the prerogatives of the market.

In the market, a decline in company financial value appears to indicate a decline in the importance of conserving species such as bilbies, numbats, and woylies. For example, although the company continued to be rich in assets (i.e. its mammal populations were increasing) it was relatively cash poor, providing little to return to shareholders. That is, whilst the overall value of the company kept increasing, the actual cash inflow to the Sanctuaries from tourists didn't match the huge daily upkeep expenses of running the Sanctuaries, and consequently the sanctuaries were running at a loss. As a result the company became a financial risk to its shareholders and its share value plummeted. Without the ability to pay their shareholders dividends on the asset value of the properties the company was forced to liquidate its assets (that is, sell off its sanctuaries).

In an admission of failure in their 2003 Annual Report, Kevin Lynch, Chairman of the Board for ESL stated that: "If the Australian public is not prepared to visit our properties in sufficient numbers to make the sanctuaries commercially viable, the whole future of the company as a listed sanctuary developer, in its present form, will need to be reviewed and changed."

In the end, ESL's market-based conservation model failed the test of long-term sustainability. In 2006, ESL's remaining assets were taken over by Prudentia Investments, a Melbourne-based property development group.

A longer, referenced version of this article appeared in Capitalism Nature Socialism in March 2006. It can be downloaded at <http://homepage.mac.com/herinst/sbeder/home.html>. A fuller analysis of market-based environmental instruments can be found in Sharon Beder's book 'Environmental Principles and Policies' (UNSW Press, 2006).