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Wildlife firm to go public: Australian company solicits ecological investors (San Jose Mercury News) Posted at 12:56 a.m. PDT Saturday, May 6, 2000
Wildlife firm to go public
Australian company solicits ecological investors
BY KATHERINE ELLISON
Special to the Mercury News
[Fair Use: For Educational/Research Purposes Only]
ADELAIDE, Australia -- Among its most charismatic recent recruits, the global New Economy can soon claim platypuses, wombats, numbats and wallabies.
All of these native Australian mammals, at risk because of the steady loss of their habitat, are working assets of Earth Sanctuaries Ltd., which is taking a controversial new approach to environmental activism.
Monday, ESL, which has a market capitalization of $40.5 million, will be listed on the Australian Stock Exchange, making it the world's first conservation firm to go public, company officials say.
The venture, which makes money mostly from tourists attracted by access to rare animals at three Australian sanctuaries, is an extreme example of a trend intriguing environmentalists and investors around the world. Many believe calls to altruism have failed to reverse the rapid loss of species. It's time, they say, to focus on the bottom line.
``I see this as a beautiful alignment of incentives,'' said Stanford University researcher Gretchen Daily, an expert in market-based approaches to environmental dilemmas. ``People care first of all about themselves and their families, and it just hasn't worked to try to make them choose. Do you save to give your daughter a good education or help rescue a marsupial? This way you can do both.''
Yet some conservationists worry about the free-market philosophy of ESL's founder, former math professor John Wamsley.
``There will always be a tension between conservation and maximizing profits,'' noted Barry Spergel, conservation-finance director for the World Wildlife Fund in Washington. ``If the shareholders pressure him to make higher returns, will he compromise his values, by building mega-lodges or overstocking his reserves? Is he really conserving natural ecosystems or just creating large zoos?''
Wamsley, 61, a lifelong iconoclast with a 6-inch-long white beard, shrugs off complaints about his turn to the market. After all, he said, bake sales and charity can't provide the billions of dollars he needs for his grand, long-term goal of managing at least 1 percent of his country's territory -- about 30,000 square miles, the size of Maine.
``Idealism would argue against it, but idealism hasn't worked,'' he said recently. ``And I don't mind if you stand in front of a bulldozer in the name of idealism, but don't put the native animals there.''
A potoroo, a tiny kangaroo, hopped past his feet on the sunny terrace overlooking Warrawong Sanctuary, his 84-acre model wildlife reserve in the hills above the southern coastal town of Adelaide. Rainbow lorikeets sang nearby.
An island for 60 million years, Australia has an exotic selection of wildlife, including cuddly kangaroos of all sizes, shy koalas and furry duck-billed platypuses. But extensive land-clearing for farms has deprived many of these animals of the clean rivers and forests they need to survive. Foxes and cats, imported from other countries, have preyed on them, and rabbits compete for their food. The government lists 220 species of mammals as threatened with dying out.
Wamsley, who grew up in the ``bush,'' developed a lifelong attachment to the besieged fauna.
Fired from his university job soon after he brought his pet hairy-nosed wombat to algebra class, he began buying up degraded farmland, replanting native trees and transplanting wildlife in 1969. ESL, incorporated in 1988, controls 225,000 acres, or 351 square miles, of Australian land.
Animals bring tourism
Around the world, Wamsley noted, the opportunity for glimpses of exotic animals is a major driver of the multibillion-dollar tourism industry. Yet Australia's native fauna grow more rare each year with the destruction of their habitat. ``At this rate,'' Wamsley said, ``pretty soon my sanctuaries will be the only place you can go to see many native Australian species.''
By determined lobbying, Wamsley helped win a change last year in Australia's accounting standard, allowing him to count his rare animals as assets. His creatures are valued at $2.3 million.
ESL puts its animals to work for its 6,700 private shareholders by offering limited access to tourists, educational groups and wildlife photographers. On a recent visit, the Warrawong gift shop was doing a brisk trade in environmentally correct children's books and chocolate platypuses. ESL also is developing seven more sanctuaries around the country.
Wamsley concedes he has made a few strategic compromises at Warrawong, his smallest and most-visited reserve. Perhaps the most glaring of these is that the guides scatter ``snacks'' of oats so that the animals will come out for photos -- a no-no among strict conservationists who are concerned that makes the animals less likely to survive by their own wits.
He also has raised eyebrows among some mainstream conservationists in Australia by selling some of the animals he breeds to private collectors.
Yet Wamsley insists he puts the wildlife's welfare first. He sells only to people who can ensure the right habitat, he said. And he follows some strict rules on his own land. He won't house his platypuses in clear-water viewing tanks, for instance, as many zoos do, because that overstresses them, he said. And he never allows visitors to tour his reserves unescorted or wander off main paths.
The formula so far has worked well for ESL shareholders.
Barbara Harkness, a Web designer who lives near Warrawong, bought the stock at 60 cents a share six years ago, thinking of it more as a charitable donation than an investment. ``Our accountant called them my `feel-good shares' and said they wouldn't go anywhere,'' she said.
Since then, the stock's value has risen to $1.50. The accountant is now an investor.
ESL has issued 27 million shares, for a total of $18 million. Monday, those shares will be floated on the stock exchange.
According to its Web site, ESL anticipates that each of the next four Earth Sanctuaries it develops will have annual revenue of $6 million to $7.2 million and a profit of $1.2 million to $1.8 million per year.
Some financial experts warn not to expect quick riches from ESL's listing, however. A limited stock offering last month in Australia fell almost $2 million short of the announced $9 million goal.
Wamsley's environmental record is better. The tammar wallaby, for instance, is extinct in the wild on Australia's mainland, outside of the Warrawong sanctuary.
Wamsley said ESL reserves also host almost 20 percent of the world's population of numbats, a special testament to his skill at rebuilding habitats, as each of the squirrel-shaped creatures needs several thousand termites a day to survive, an almost impossible demand for zoos.
``He's doing the best job of anyone in Australia in terms of preserving native animals,'' said Carl Binning, an economist at the government-funded Commonwealth Science and Industrial Research Organization.
ESL's new fundraising scheme is not Wamsley's first brush with controversy. Ironically, he's probably more famous in Australia as a destroyer than a savior of animals.
That's because the first thing Wamsley does when he acquires land is fence it off and exterminate all the wild cats, foxes and rabbits. ``I've never shot anything, but I'm not opposed to using dogs,'' he said.
He sees the interlopers as the main threat to his country's biodiversity and bluntly defies their defenders. A few years ago he shocked Australian society by wearing a giant cat-skin hat to a black-tie awards ceremony in Adelaide. Pictures of him draped with the carcass landed on front pages throughout the country. Unrepentant, he told a TV interviewer: ``Do your bit for the environment. Go home and `hat' your cat tonight.''
``I got hundreds of death threats after that,'' Wamsley recalls. ``But I don't mind. I'd sell my soul to save a native species.''
Earth Sanctuaries Ltd. is athttp://www.esl.com.au .
Katherine Ellison is a John S. Knight journalism fellow at Stanford University.
-- Anonymous, May 06, 2000