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Demise of Earth Sanctuaries

I was deeply saddened, though not surprised, by news this week of an offer for all of the outstanding shares in ESL Holdings Ltd by the property development group Prudentia Investments Pty Ltd. Directors of ESL recommend that its shareholders accept this offer. The future of the few remaining biodiversity conservation sanctuaries in the ESL stable seems very uncertain.

The former Earth Sanctuaries Ltd was set up by John Wamsley to provide a private sector vehicle for the conservation of biodiversity, specifically mammals, in Australia. As the current Chairman K.P. Lynch says in his letter to shareholders ‘…our experience has shown that the ESL model, while successful in a conservation sense, is not commercially viable’.

I agree with this. Many of the outputs provided by ESL – in particular biodiversity benefits – were public goods and standard economic theory suggests that private agents will undersupply resources to support provision of such goods. This is particularly problematic if the public sector provides access to substitutable biodiversity resources via national parks and reserves at close to zero cost. Moreover, such parks and reserves receive subsidised infrastructure provision and have most of their operating costs met from the public purse.

The market for viewing our rare flora and fauna is a narrow one and there is simply not a sufficiently ‘level playing field’ for ESL operations to survive. A final difficulty in promoting private conservation efforts in Australia stems from the prohibition on the sale of captive bred native species.

Does it matter if ESL collapses given that public parks and reserves survive? I think it does because individuals like Wamsley were innovative in terms of developing captive breeding and feral proofing programs – ESL bred the first platypuses in captivity and achieved a number of outcomes with respect to feral-proofing that were more innovative that public management schemes.

Given the success that Wamsley and his group enjoyed it is difficult for me to understand why greater public sector support was not forthcoming. Wamsley has not been associated with ESL since it was delisted but I salute him as its prime mover and as a man of vision who had the guts to have a go at something intrinsically very difficult. Those of us who are interested in conserving Australia’s biodiversity have learnt something from this experience.

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