Forest Management Certification Assessment Report for: J.M.L. Heirs, LLC in Marquette, MI, USA

Transcription

1 Certified by: SmartWood Headquarters 65 Millet St. Suite 201 Richmond, VT USA Tel: Fax: Contact person: Jon Jickling Forest Management Certification Assessment Report for: J.M.L. Heirs, LLC in Marquette, MI, USA Audit Managed by: United States Regional Office 205 West Third Street, Suite B Northfield, MN Tel: Fax: Contact person: Kara Wires, Forestry Technical Coordinator kwires@ra.org Certificate code: SW-FM/CoC Auditors: Dan Pubanz Kevin Russell Audit Dates: June 10-12, 2008 Report Finalized: November 25, 2008 ACCREDITED FSC-ACC Forest Stewardship Council A.C. FM-02 June 2007 Operation Contact: Address: Art Abramson 210 N. Front St. Marquette, MI 49855

2 TABLE OF CONTENTS INTRODUCTION SCOPE OF THE CERTIFICATE SCOPE OF THE CERTIFICATE EXCLUSION OF AREAS FROM THE SCOPE OF CERTIFICATE ASSESSMENT PROCESS CERTIFICATION STANDARD USED ASSESSMENT TEAM AND QUALIFICATIONS REPORT PEER REVIEWERS ASSESSMENT SCHEDULE (INCLUDING PRE-ASSESSMENT AND STAKEHOLDER CONSULTATION) EVALUATION STRATEGY STAKEHOLDER CONSULTATION PROCESS ASSESSMENT FINDINGS AND OBSERVATIONS STAKEHOLDER COMMENTS RECEIVED MAIN STRENGTHS AND WEAKNESSES IDENTIFIED NON-CONFORMANCES AND CORRECTIVE ACTIONS OBSERVATIONS CERTIFICATION RECOMMENDATION CLIENT SPECIFIC BACKGROUND INFORMATION OWNERSHIP AND LAND TENURE DESCRIPTION LEGISLATIVE AND GOVERNMENT REGULATORY CONTEXT ENVIRONMENTAL CONTEXT SOCIOECONOMIC CONTEXT APPENDIX I: Public summary of the management plan APPENDIX II: FSC Reporting Form: Detailed FME information (Confidential) APPENDIX III: Certification standard conformance checklist (confidential) APPENDIX IV: Chain of Custody Standard Conformance Checklist (confidential) APPENDIX V: List of all visited sites (confidential) APPENDIX VI: Detailed list of stakeholders consulted (confidential) APPENDIX VII: Peer review addenda (confidential) SmartWood Program FM-02 14/6/07 Page 2 of 105

3 INTRODUCTION This report presents the findings of an independent certification assessment conducted by a team of specialists representing the SmartWood Program of the Rainforest Alliance The purpose of the assessment was to evaluate the ecological, economic and social performance of J.M.L Heirs, LLC (JML) forest management as defined by the Forest Stewardship Council. This report contains four main sections of information and findings and several appendixes. The whole report plus Appendix I will become public information about the forest management operation that may be distributed by SmartWood or the Forest Stewardship Council (FSC) to interested parties. The remainder of the appendices are confidential, to be reviewed only by authorized SmartWood and FSC staff and reviewers bound by confidentiality agreements. The purpose of the SmartWood program is to recognize conscientious land stewardship through independent evaluation and certification of forestry practices. Forestry operations that attain SmartWood certification may use the SmartWood and FSC labels for public marketing and advertising. Standard Conversions 1 acre = hectares 1 foot = Meters 1 mile = Kilometers 1 mbf = 5.1 m 3 1 cord = 2.55 m 3 1 Gallon (US) = Liters SmartWood Program FM-02 14/6/07 Page 3 of 105

4 1. SCOPE OF THE CERTIFICATE 1.1. Scope of the certificate The majority of the Michigan forest lands (66,253 acres) wholly owned by J.M.L. Heirs, LLC (JML or JML Heirs) are included in the assessment. Certain lands (7,627 acres) scheduled for sale or development has been excluded from the scope of the assessment (see Section 1.2). Additionally, JML Heirs is a co-owner with an undivided interest (JML Heirs owns 95.31% of the interest) on two land parcels with a single individual, which are also included under the certificate scope. These lands are located in Marenisco Township, Gogebic County, Michigan and total approximately 474 acres. All tracts within the scope of the certificate are under a single management system. These lands are located in Keweenaw, Houghton, Ontonagon, Gogebic, Baraga, Iron, and Marquette counties in Michigan s Upper Peninsula. J.M. Longyear, LLC, a wholly-owned subsidiary of JML Heirs, manages land owned by JML Heirs. The assessment covered J.M. Longyear, LLC policies and procedures used on lands included within the scope of the certificate, referred to collectively as JML or JML Heirs. J.M. Longyear. LLC itself does not own land or have processing facilities, although it does maintain a sawlog and veneer log yard (Peshekee yard, which is owned by JML Heirs) where logs are stored prior to sale. This yard is also included in the scope of the chain of custody under JML s certificate Exclusion of areas from the scope of certificate X Comments / Explanation for exclusion: Control measures Applicability of FSC partial certification and excision policy All forest land owned or managed by the FME is included in the scope of this evaluation. FME owns and/or has management involvement in other forest land/properties (forest management units) not being evaluated. Provide description of other forests below: Is any portion of the forest management unit (s) under evaluation for certification being excluded? If yes, complete all sections below. JML Heirs has excluded its Canadian ownership from this certificate since those lands would be audited under FSC-Canada Standards. JML Heirs has excluded 7,267 acres under their ownership from the scope of the assessment. These areas are being excluded because they are anticipated to have lower timber productivity, lower value timber, or a higher economic value for uses other than forestry (i.e., they will likely be sold for development). See CAR 01/08. JML forest management practices on excluded areas will be consistent with those on areas included under the certificate according to JML management planning documentation. JML must develop chain of custody protocols to maintain the non-fsc-certified identity of forest products from excluded areas. See CAR 06/08. Other Forest area Location Size (ac) SmartWood Program FM-02 14/6/07 Page 4 of 105

5 Canadian forest lands Ontario, Canada 27,550 acres Michigan forest lands excluded from scope of assessment Baraga County, MI Gogebic County, MI Iron County, MI Marquette County, MI Ontonagon County, MI ac ac ac. 4,859.3 ac. 1,711.2 ac. SmartWood Program FM-02 14/6/07 Page 5 of 105

6 2. ASSESSMENT PROCESS 2.1. Certification Standard Used The FSC Standard used for this assessment was: Revised Final Lake States-Central Hardwoods (USA) Regional Forest Stewardship Standard, Version LS V3.0, as revised February 10, This Standard is available at: Assessment team and qualifications Dan M. Pubanz, Lead Auditor, Forester: M.S. (1988) and B.S. (1985) in Forestry, University of Wisconsin-Madison. Practicing small-scale private land resource management throughout Wisconsin since Sixteen years of experience in public land management with responsibility for all pre-harvest activity on a 250,000-acre landbase in Wisconsin, which was FSC-certified for 10 years. Experienced in silviculture, private and public land management issues, FMP development, and forest management planning. Since 1999, extensive experience in FSC auditing of businesses, forest management organizations, and public lands in the Midwest and Northeast US; performed over 35 FSC audits or assessments, over 15 as Team Leader. Kevin R. Russell, Ph.D., CWB (Auditing role: Ecologist) TWS Certified Wildlife Biologist, Professor. Ph.D. in Forest Wildlife Management, Clemson University; MS in Zoology, Clemson University; and BS in Zoology, University of Idaho. Experience: Current position is Assistant Professor of Wildlife Ecology and Management, University of Wisconsin Stevens Point (5½years). Prior to this position he worked as a wildlife research biologist and manager for a major forest products company in the Pacific Northwest (4 years). Overall, 16 years experience as a wildlife researcher and manager. Dr. Russell has served as the wildlife ecologist/ecologist on seven SmartWood assessments in Lake States representing over 2 million acres and also has served as an FSC assessment peer reviewer Report peer reviewers Stephen C. Grado is a Society of American Foresters (SAF) Certified Forester/Forest Certification Auditor #1155 and Fellow, a Professor of Forestry, and the George L. Switzer Professor in the Department of Forestry at Mississippi State University. He received a Ph.D. in Forest Resources in 1992, a M.S. in Forest Resources and Operations Research in 1984, and a B.S. in Forest Science in 1979 at The Pennsylvania State University, State College, Pennsylvania. He also has a B.A. in Political Science from Villanova University near Philadelphia, Pennsylvania. Dr. Grado has served as a socio-economic assessor/auditor on 17 SmartWood pre-assessments and assessments, 3 USDA Forest Service Test Evaluations (one with SGS), and numerous annual field audits (one with SFI). In addition, he has served as an assessor/auditor for innumerable SmartWood chain-of-custody assessments/audits, and also served as a peer reviewer of FSC certification assessment reports Assessment schedule (including pre-assessment and stakeholder consultation) SmartWood Program FM-02 14/6/07 Page 6 of 105

7 Date Location /main sites Main activities October 23, 2007 JML office, Marquette, MI Pre-assessment: FSC certification requirements, Lake States Standard gap analysis of JML management systems, assessment preparation. June 10, 2008 June 11, 2008 June 12, 2008 Hotel conference room, Houghton, MI. Keweenaw and Baraga Counties. Marquette County Marquette, MI Marquette County. JML main office. Total number of person days used for the audit:8 = number of auditors participating 2 times total number of days spent for the audit Evaluation strategy Opening meeting. Finalization of sites to be visited. Review JML field performance. Review JML field performance. Meet stakeholders on Wilson Creek Truck Trail. Stakeholder consultation. Review JML field performance. Review GIS, forest inventory data systems, and documentation. Closing meeting. The field sites for this assessment included areas that had been harvested under JML s management and specific sites that would allow for evaluation of JML s conformance against the FSC Regional Standard. Sites sampled contained uneven-aged single tree selection and even-aged thinning harvests, areas across the geographic breadth of JML properties, clearcuts, riparian features and wetlands, active and closed harvest areas, areas of stakeholder concern, areas containing HCVFs, stream crossings, and road construction. Several JML sites not to be included within the scope of the certification were also reviewed to assess consistency of forest management on excluded parcels. The assessment team requested a listing of all planned, active, and closed harvest areas from 2004 to the present. The assessment team chose sites that would provide data on a variety of management aspects and that could be visited within the timeframe of the assessment. This resulted in 17 management sites totaling 1,843 acres. At each field site, the assessment team was provided with the written Stand Planning Worksheet or the Contract Checklist, pertinent permits and cutting notices, a forest operations map of the harvest area, Logging Contracts and Amendments, and Harvest Operations Inspection Checklists (if available). The JML Forest Lands Manager and the Forester(s) responsible for the harvest area were present at each site. JML staff were asked: to discuss the objectives for the site and the means used to accomplish them; how management of the site fit into the property management goals; and, how JML policies and procedures guided management actions. A large portion of each area was walked to view how the management activities were implemented, how wetlands and sensitive resources were protected, and how well the management activities conformed to the management plan goals. The assessment team was provided with copies of JML s 1997 Forest Management Plan and their draft revised Forest Management Plan (revision date April 30, 2008), stakeholder lists, and numerous other documents. These materials were supplied prior to, or during, the assessment. The assessment team also reviewed the forest inventory data and Geographic SmartWood Program FM-02 14/6/07 Page 7 of 105

8 Information System content for the JML property. Subsequent to the site visit, JML submitted additional management documents and data that were requested by the assessment team. List of management aspects reviewed by assessment team: Type of site Sites Sites Type of site visited visited Road construction 9 Bridges/stream crossing 5 Planned Harvest site 2 Wetland 5 Ongoing Harvest site 4 Steep slope/erosion 3 Completed logging 13 Riparian zone 6 Felling by harvester 13 Natural regeneration 16 Felling by forest worker 2 Special management area 2 Skidding/Forwarding 14 Selective felling 13 Clearfelling 4 Commercial thinning Stakeholder consultation process The purpose of the stakeholder consultation strategy for this assessment was threefold: 1) To ensure that the public is aware of and informed about the assessment process and its objectives; 2) To assist the field assessment team in identifying potential issues; and, 3) To provide diverse opportunities for the public to discuss and act upon the findings of the assessment. This process is not just stakeholder notification, but wherever possible, detailed and meaningful stakeholder interaction. The process of stakeholder interaction does not stop after the field visits, or for that matter, after even a certification decision is made. SmartWood welcomes, at any time, comments on certified operations and such comments often provide a basis for field assessment. In the case of JML, prior to the field assessment, a public stakeholder notice was developed, sent by SmartWood to a comprehensive list of national and regional stakeholders and posted on the SmartWood website on May 1, Through input from JML and outside stakeholders, a stakeholder list was developed to provide a basis for the assessors to select people for interviews (in person, by telephone, or through ). A summary by category of all stakeholders who received the notification is in the table below. No public meetings were held to gather stakeholder input. The assessment team met in the field with members of the Yellow Dog Watershed Preserve and with staff from The Nature Conservancy Staff (TNC) at their Marquette office. Additional phone interviews were completed following the field assessment. Stakeholder Type (NGO, government bodies, local inhabitant, contractor etc.) Stakeholders Notified (#) Stakeholders consulted directly or provided input (#) Government Agencies Environmental NGOs 61 6 Forest & Forest Product NGOs 25 0 Forest Industry 42 3 Academia 21 0 Other 12 0 SmartWood Program FM-02 14/6/07 Page 8 of 105

9 Local Business 18 0 Neighbors 4 0 Indigenous groups 2 0 Customers 55 0 Recreation organizations 7 1 Consultants 6 0 Contractors 41 1 SmartWood Program FM-02 14/6/07 Page 9 of 105

10 3. ASSESSMENT FINDINGS AND OBSERVATIONS 3.1. Stakeholder comments received The stakeholder consultation activities were organized to give participants the opportunity to provide comments according to general categories of interest based upon the assessment criteria. The table below summarizes the issues identified by the assessment team with a brief discussion of each based upon specific interview and/or public meeting comments. FSC Principle Stakeholder comment SmartWood response P1: FSC Commitment and Legal Compliance P2: Tenure & Use Rights & Responsibilities P3 Indigenous Peoples Rights None received. None received. None received. Several stakeholders stated that JML staff have always been cooperative with any watershed planning, inventory or monitoring work that involved their lands. They felt JML has been a great watershed stakeholder. Environmental NGOs reported positive working relationships with JML. None needed. None needed. None needed. SmartWood concurs. P4: Community Relations & Workers Rights JML has worked with local recreational group to schedule logging to minimize impact on trail use and work with groups to maintain the trails. JML has provided access to their forest lands for non-motorized use and work with groups to maintain trails. JML donated land for recreation use (warming lodge and maintenance facility). A watershed monitoring group would like to be apprised of planned harvest areas in order to address areas of water quality concern earlier in the planning process. An environmental NGO stated that JML is valued because of its stable, None needed. None needed. None needed. SmartWood considers this a useful tool for maintaining JML s high standards of water quality protection (OBS 02/08). SmartWood concurs. SmartWood Program FM-02 14/6/07 Page 10 of 105

11 P5: Benefits from the Forest P6: Environmental Impact long-term ownership. JML has invested in rehabilitating stands resulting from poor management in the early 1900s by conducting lower-value pulpwood thinnings. JML manages all size classes of trees and does not just harvest large sawtimber. Severe erosion and sedimentation is occurring on the Wilson Creek Truck Trail, which goes through JML property. JML typically does good work protecting water quality on harvest areas. An environmental NGO stated that on the rare occasion that their staff identified an erosion problem during the watershed inventory process, JML had always been very cooperative and quick to resolve the problem. An environmental NGO stated that based on their field observations JML consistently implements sustainable forestry practices. Stakeholder comments indicate that in general, JML s harvest strategies and prescriptions are considered to be sound and sustainable. However, some stakeholders expressed specific concern that JML s harvest of eastern hemlock will not result in the longterm maintenance of this species/cover type on JML lands. An environmental NGO stated JML is valued because of its focus on developing sawtimber trees rather than pulpwood. SmartWood concurs. SmartWood concurs. This has been an ongoing problem area for several years. This is a designated county road and Marquette County has jurisdiction over the road bed, which includes the areas eroding into a trout stream. JML has informed the County of this problem several times and encouraged the County to fix the problems. JML would agree to declassification of the road as a county road to reduce future damage to this sensitive area. JML has designed and built alternate road access in other areas to avoid using this area. Until Marquette County acts to remediate this area, JML s options are limited. SmartWood concurs. SmartWood concurs that JML s management practices are generally sound. JML s hemlock management practices in hemlock cover types should have little short-term impact on the hemlock resource, but JML has not fully assessed the cumulative effects of their management on the hemlock resource on JML lands and within the region (CAR 03/08). SmartWood concurs. SmartWood Program FM-02 14/6/07 Page 11 of 105

12 P7: Management Plan P8: Monitoring & Assessment P9: Maintenance of High Conservation Value Forest Some stakeholders stated that JML does not always adhere to the letter of the water quality BMPs, while others stated that JML is diligent in its attempts to employ BMPs and other measures to protect water quality on JML and adjacent lands. None received. None received. Stakeholders commented that JML has openly collaborated with state and regional experts to define and locate HCVFs on its properties, but JML needs to develop specific management prescriptions for their protection. JML works to adhere to the intent of Michigan BMPs for water quality. No systemic violations of the intent of the BMPs were discovered during the assessment. All JML sites visited during the assessment had functional water quality protections in place. None needed. None needed. P10 - Plantations None received. None needed Main strengths and weaknesses SmartWood concurs (CAR 07/08). Principle Strengths Weaknesses P1: FSC Commitment and Legal Compliance JML s Environmental Management System (EMS) contains a Laws and Regulations database listing all State of Michigan rules and regulations believed to be pertinent to JML s management. Developments regarding rules and regulations are closely monitored and the database is regularly updated. The forest management plan includes property that JML has decided not to include in the certification (CAR 01/08). P2: Tenure & Use Rights & Responsibilities P3 Indigenous Peoples Rights JML utilizes gates and barricades in sensitive areas to prevent forest damage. JML lands enrolled under the Michigan Commercial Forest Act (CFA) (~95% of JML lands) are required to be open to public access for all legal, non-motorized activity. All stakeholders providing input had high regard for JML s willingness to communicate and attempt to reach mutually satisfactory solutions. While Tribal customary use rights have not been found to occur on JML lands, JML did meet with the local tribes to provide them with maps of the JML properties, discuss JML management systems, and to determine whether there were Tribal concerns regarding any aspects of None. None. SmartWood Program FM-02 14/6/07 Page 12 of 105

13 P4: Community Relations & Workers Rights P5: Benefits from the Forest P6: Environmental Impact JML s management. JML produces a variety of harvest unit sizes to accommodate all sizes of logging contractors. JML works with local loggers, contractors, and forestry consultants. JML requires logging contractors to be SFI certified and compliant with OSHA safety standards. JML Heirs provide substantial financial contributions to local charities, educational institutions, and museums, as well as to other entities. Notably, over the past four years, JML has invested significant financial resources into upgrading public roads not under JML s jurisdiction in order to facilitate access to JML s lands and to ameliorate road structural deficiencies. Numerous stakeholders from a wide variety of backgrounds confirmed that JML has proactively worked with them when the situation required. Virtually all stakeholders reported that JML works with outside people and groups in a cooperative and honest manner, and is a good neighbor. Watershed groups providing input to the assessment have high regard for JML s willingness to work with them. JML has invested heavily in planning, GIS inventory systems, and water quality protection for the lands under their management. JML works to maximize the market value of harvested forest products by seeking out the most beneficial markets. Application of silviculture to achieve desired future conditions on JML lands contributes to diversity of forest species composition, age class, and structural attributes in the Upper Peninsula of Michigan. Strong adherence to BMPs regarding protection of soil and water resources, advance regeneration, and retention of residual trees during harvest None. None. Assessments of current ecological conditions do not address all required features (CAR 02/08). Comparison of current ecological conditions to both historical conditions and desired future conditions within a landscape context is not explicitly addressed (CAR 02/08). JML has not fully assessed the SmartWood Program FM-02 14/6/07 Page 13 of 105

14 P7: Management Plan P8: Monitoring & Assessment P9: Maintenance of High Conservation Value Forest P10 - Plantations Chain of custody operations. Potential short-term impacts and cumulative effects of environmental impacts are evaluated through both a company-wide EMS system as well as regular on-site reviews of active operations. JML proactively repairs and/or replaces culverts and other stream crossings that are causing erosion or fish passage problems. JML does not use chemicals on its lands. Planning documents contain clear economic, forest structure, and ecological protection goals, both short-term and long-term. JML has a fully functional GIS containing layers and linkages to a variety of management information exceeding those typically found in management operations. JML requires harvest contractors to maintain SFI State Implementation Committee qualification. JML has established an Environmental Management System to structure monitoring protocols for the operation. As an exemplary practice, JML maintains a database of all installed stream crossings within their GIS. These crossings are monitored on an annual basis, as well as after major storm events for erosion or other deterioration. In consultation with state and regional experts, JML has classified and mapped HCVFs and HCVF-like attributes on its lands. JML does not manage plantations as defined by FSC. JML has thorough procedures to monitor forest product transfers to end users. cumulative effects of its management practices within the hemlock cover type to ensure that they will not result in further loss of long-term ecological function of the hemlock cover type within the region of JML s ownership (CAR 03/08). JML does not have quantifiable data on age class structure or replacement tree quality stocking (CAR 04/08). Non-timber resources, including fish, wildlife, RT&E species/communities, soils, and water bodies are inadequately described in the management plan. JML planning documentation does not address several other Indicators under the Principle (CAR 02/08). There has not been a coordinated effort to quantitatively verify that current forest condition and structure are accurately described by the current inventory data (modeled on field data collected in 1993). JML does not have methods of monitoring changes in forest habitat elements over time (CAR 05/08). JML does not explicitly monitor standing timber quality, which is relevant in light of their harvest tree selection criteria and limited use of canopy gaps (CAR 04/08) JML has not developed management prescriptions or monitoring protocols to ensure the long-term protection or maintenance of HCVFs (CAR 07/08). None. JML written procedures do not contain measures to maintain the separate identity of FSC-certified and noncertified wood, to reliably identify FSCcertified wood at the forest gate (which SmartWood Program FM-02 14/6/07 Page 14 of 105

15 is currently lacking for cordwood deliveries), or for including the FSC certification code on sales and shipping documentation (CAR 06/08) Identified non-conformances and corrective actions A non-conformance is a discrepancy or gap identified during the assessment between some aspect of the FME s management system and one or more of the requirements of the forest stewardship standard. Depending on the severity of the non-conformance the assessment team differentiates between major and minor non conformances. Major non-conformance results where there is a fundamental failure to achieve the objective of the relevant FSC criterion. A number of minor non-conformances against one requirement may be considered to have a cumulative effect, and therefore be considered a major nonconformance. Minor non-conformance is a temporary, unusual or non-systematic non-conformance, for which the effects are limited. Major non conformances must be corrected before the certificate can be issued. While minor nonconformances do not prohibit issuing the certificate, they must be addressed within the given timeframe to maintain the certificate. Each non-conformance is addressed by the audit team by issuing a corrective action request (CAR) CARs are requirements that candidate operations must agree to, and which must be addressed, within the given timeframe of a maximum of one year period. CAR 01/08 Nonconformance Major Minor Reference Standard & Criteria: 1.6.b The forest management plan includes property that JML has decided not to include in the certification. FSC partial certification policy requires that only separate forest management units (FMU) can be excluded from the certification. Corrective Action Request: JML shall remove all properties that are not included the certification from the management plan of the certified properties. Timeline for conformance: Prior to next annual audit Evidence to close CAR: Pending CAR Status: OPEN Follow-up Actions (if app.): CAR 02/08 Nonconformance Major Minor Reference Standard & Criteria: 6.1.a, 6.1.b, 7.1.b.1, 7.1.b.3, 7.1.b.5, 7.1.b.6 JML planning documentation does not address all of the Indicators in the Standard. Corrective Action Request: JML shall have a Board-approved management plan revision that includes: descriptions of forest successional pathways and natural disturbance regimes, assessments of common plants (non-timber) or animals, descriptions/assessments of major SmartWood Program FM-02 14/6/07 Page 15 of 105

16 water bodies, comparisons of current ecological conditions to historical conditions within the landscape context, descriptions of specific fish and wildlife resources or habitats that occur on JML lands, descriptions of local employment and economic stability issues, and landscapelevel considerations within the ownership and among adjacent lands. Timeline for conformance: Prior to next annual audit Evidence to close CAR: Pending CAR Status: OPEN Follow-up Actions (if app.): CAR 03/08 Nonconformance Major Minor Reference Standard & Criteria: 6.3.a.3 JML has not fully assessed the cumulative effects of its management practices within the hemlock cover type to ensure that they will not result in further loss of long-term ecological function of the hemlock cover type within the region of JML s ownership. Corrective Action Request: JML shall analyze and document the long-term cumulative effects of JML management practices on the hemlock resource (both in hemlock/hardwood stands and in hemlock stands) on JML lands and within the region of JML s ownership. JML shall be able to assure that cumulative effects from its management practices will not result in further loss of long-term ecological function of the hemlock cover type within the region of JML s ownership. Timeline for conformance: By the next annual audit Evidence to close CAR: Pending CAR Status: OPEN Follow-up Actions (if app.): None CAR 04/08 Nonconformance Major Minor Reference Standard & Criteria: 6.3.b.3, 8.2.a.1 JML has no quantifiable age class data to substantiate the claim that smaller diameter trees are typically trees of a younger age class. Field observations confirmed that canopy gaps are not a formal part of JML s hardwood silvicultural prescription. Stakeholder discussions with state and private silviculturists confirmed that canopy gaps were a formal part of silvilcultural prescriptions on state and private lands in the area of JML s lands. JML does not have quantifiable data on age class structure or replacement tree quality stocking that would justify this departure from accepted regional silvicultural practices. JML does not explicitly monitor standing timber quality, an important variable in monitoring and assessing both the long-term effects of silvicultural practices and economic performance in northern hardwoods. Corrective Action Request: JML shall develop and implement a plan to collect quantifiable data from their NH7-NH9 cover types to allow for a defensible analysis of age structure and tree quality. Tree quality ratings shall be developed for both current crop trees and potential future crop trees (i.e., younger replacement stock). This data shall be used to support or modify JML s northern hardwood silvicultural prescription with regard to harvest trees and canopy gaps, as well as to allow JML to monitor quality change in their standing timber over time. Timeline for conformance: Prior to next annual audit SmartWood Program FM-02 14/6/07 Page 16 of 105

17 Evidence to close CAR: CAR Status: Follow-up Actions (if app.): Pending OPEN CAR 05/08 Nonconformance Major Minor Reference Standard & Criteria: 8.2.b.1, 8.2.c.1 There has been little formal update of JML s forest inventory data that is based on quantifiable field data. There has not been a coordinated effort to quantitatively verify that current forest condition and structure are accurately described by the current inventory data (modeled on field data collected in 1993). JML does not have methods of monitoring changes in forest habitat elements over time. Corrective Action Request: JML shall develop and implement a plan to re-inventory the forest, especially those cover types that are being actively managed, through the collection of quantifiable field data. This re-inventory, in addition to verifying current forest condition and structure, shall incorporate data collection and procedures that will allow quantitative monitoring of changes in forest habitat elements over time. Timeline for conformance: Prior to next annual audit Evidence to close CAR: Pending CAR Status: OPEN Follow-up Actions (if app.): CAR 06/08 Reference Standard & Criteria: 8.3, CoC 2, 3, 4 Nonconformance JML written procedures do not contain measures to maintain the Major Minor separate identity of FSC-certified and non-certified wood, to reliably identify FSC-certified wood at the forest gate (which is currently lacking for cordwood deliveries), or for including the FSC certification code on sales and shipping documentation. Corrective Action Request: JML shall develop and implement procedures to maintain the separate identity of FSC-certified and non-certified wood, to reliably identify FSC-certified wood at each of the forest gates, and to include the FSC certification code on sales and shipping documentation. Timeline for conformance: Prior to next annual audit Evidence to close CAR: Pending CAR Status: OPEN Follow-up Actions (if app.): CAR 07/08 Nonconformance Major Minor Reference Standard & Criteria: 9.3.a-c, 9.4.b Although JML has classified and identified the locations of HCVF areas on its lands, JML has not developed either passive or active management goals or strategies for protecting and maintaining the HCVs. The management plan (including its public summary) does not include information regarding management of HCVFs to protect and maintain their status as HCVFs. JML has not developed an approach to consistently monitor identified HCVF areas on an annual basis for changes in HCVF attributes. SmartWood Program FM-02 14/6/07 Page 17 of 105

18 Corrective Action Request: JML shall develop and implement management guidelines to maintain and protect identified HCVF areas and attributes on its lands and include this in the management plan summary. JML shall develop a protocol to consistently monitor HCVF areas on an annual basis for changes in HCVF attributes. If changes are detected, they shall be documented and measures shall be designed to restore the HCVF. Timeline for conformance: Prior to next annual audit Evidence to close CAR: Pending CAR Status: OPEN Follow-up Actions (if app.): 3.4. Observations Observations are very minor problems or the early stages of a problem which does not of itself constitute a nonconformance, but which the auditor considers may lead to a future nonconformance if not addressed by the client. An observation may be a warning signal on a particular issue that, if not addressed, could turn into a CAR in the future (or a pre-condition or condition during a 5 year re-assessment). OBS 01/08 Reference Standard & Requirement: 1.1.b, 8.2.d.1 As an exemplary practice, JML maintains a database of all installed stream crossings within their GIS. These crossings are monitored on an annual basis, as well as after major storm events for erosion or other deterioration. Due to some erosion and sedimentation issues observed during the assessment on steep slopes and wetland crossings, all high-risk road areas could be identified and added to this database to ensure regular monitoring. In certain situations, JML will modify BMPs for water quality based on site-specific conditions (e.g., using narrower filter strips in areas of flat topography). While no systemic violations of the functional intent of the BMPs were discovered during the assessment, areas where JML utilized techniques other than BMP recommendations to protect water quality could also be added to the monitoring database. Observation: JML could add high-risk road areas and areas where BMPs were modified to the monitoring database within the GIS. OBS 02/08 Reference Standard & Requirement: 4.4.c While those watershed groups providing input to the assessment have high regard for JML s willingness to work with them, at least one group would like earlier notification of planned management activities to enable them to advise JML earlier in the harvest preparation process of areas known to the watershed group to be highly sensitive or of high concern. Observation: JML could provide formal watershed monitoring groups with earlier notice of planned JML management activities to enable them to provide JML with areas of concern during harvest preparation activities. OBS 03/08 Reference Standard & Requirement: 5.3.c Formally defining unacceptable tree damage (for instance in harvest contracts) could ensure that all parties remain focused on avoiding damage to higher-value trees in tree-length skidding operations. SmartWood Program FM-02 14/6/07 Page 18 of 105

19 Observation: JML could formally define unacceptable tree damage to ensure that all parties remain focused on avoiding damage to higher-value trees during tree-length skidding operations. OBS 04/08 Reference Standard & Requirement: 6.2.a Although JML queries the MNFI database prior to the initiation of management activities, the results of these queries currently are not documented unless there is an occurrence. Observation: JML could consider including the results of MNFI screenings for RT&E species and communities on harvest planning documents. OBS 05/08 Reference Standard & Requirement: 6.3.a.5, 6.3.c.1 Although field reviews indicated that retention of biological legacies, including live trees, snags, and downed wood live trees appeared to be adequate, JML has not adopted or developed guidelines or targets for these features. Observation: JML could consider adopting or developing specific guidelines for the retention of live trees, snags, and downed wood within even-aged and uneven-aged harvest units, as appropriate. These guidelines could be consistently referenced within stand and/or harvest planning worksheets. OBS 06/08 Reference Standard & Requirement: 6.9.d Invasive, exotic plant species have not been found on JML s forested lands. However, to date JML staff have not made efforts to investigate the potential presence of invasive exotic species in the surrounding region that could pose a future threat to native biological diversity on JML lands. Observation: JML could obtain information from credible sources on the current presence and spread of invasive plant species in the region, in order to proactively address the potential future spread of exotic species onto JML lands. OBS 07/08 Reference Standard & Requirement: 7.1.i.2 Harvest contract map do not usually show features such as wetlands, topographic lines, and other pertinent environmental information. Observation: JML could provide contractors with operational maps that provide greater detail on environmentally pertinent information such as locations of wetlands, ephemeral ponds, steep slopes, and forest cover types. OBS 08/08 Reference Standard & Requirement: CoC 7 JML has not developed a procedure for submitting materials related to FSC certification to SmartWood for review. JML has not produced such materials as of this date. Observation: JML could develop a system to ensure that all use of the FSC/SW trademarks, as well as public information related to certification is submitted to SmartWood for review and approval prior to use by JML Certification Recommendation SmartWood Program FM-02 14/6/07 Page 19 of 105

20 Based on a thorough review of FME performance in the field, consultation with stakeholders, analysis of management documentation or other audit evidence the SmartWood assessment team recommends the following: Certification requirements met, certificate should be issued with minor CARs Certification requirements not met, major CARs must be met prior to certificate issuance. FME has demonstrated that their described system of management is being implemented consistently over the whole forest areas covered by the scope of the evaluation Comments: None FME s management system, if implemented as described and with minor CARs addressed, is capable of ensuring that all the requirements of the certification standards are met across the scope of the certificate. Comments: None Issues identified as controversial or hard to evaluate. Comments: None Certificate type recommended: Yes No Yes No Yes No Forest management and Chain of custody Forest management only (no CoC) In order to maintain certification, the FME will be audited annually on-site and required to remain in conformance with the FSC principles and criteria as further defined by regional guidelines developed by SmartWood or the FSC. The FME will also be required to fulfill the corrective actions as described below. Experts from SmartWood will review continued forest management performance and conformance with the corrective action requests described in this report, annually during scheduled and/or random audits. SmartWood Program FM-02 14/6/07 Page 20 of 105

21 4. CLIENT SPECIFIC BACKGROUND INFORMATION 4.1. Ownership and land tenure description J.M. Longyear, a wholly-owned subsidiary of J.M.L. Heirs, LLC, manages land owned by J.M.L. Heirs LLC, in the central and western portion of Michigan's Upper Peninsula, and the westcentral portion of Ontario, Canada. JML s principal business is growing and harvesting forest products. As part of its operations, JML also purchases and operates forest stumpage, and purchases and markets veneer, sawlogs and pulpwood from other forest land owners in Michigan. JML Heirs is a private company whose owners consist primarily of the descendants of J.M. Longyear, who obtained interests in land, timber, and minerals in the Upper Peninsula of Michigan in the late 1800s. Two shareholders of JML Heirs are non-descendants (Mary Longyear Trust FBO Mary Baker Eddy Christian Science Fund and Marquette County Historical Society). JML Heirs, in addition to owning lands and JML, also owns two other legal entities (and their lands) included in the assessment: Longyear Realty Corp., Carroll Paul Forest. These three entities (JML, Longyear Realty Corp., Carroll Paul Forest), while under the same owners, exist as separate legal entities. At the time of the assessment, 11,878 acres were owned under JML Heirs, 58,402 acres were under Longyear Realty Corp., and 3,239 acres were under Carroll Paul Forest. Additionally, JML Heirs owns land in Canada (27,550 acres under the name JM Longyear International, L.P.), which is not included under this assessment. J.M. Longyear, LLC manages all lands under the same forest management plan and administrative policies. In 2002, JML adopted a strategy to significantly improve the overall quality and value of the Longyear Forest. An analysis of the forest ownership revealed that a significant portion of the existing Longyear Forest consisted of non-productive lands, or low value forest types, with little likelihood of improving in the future. It was also determined that while these lands had little or no value to JML as commercial forest lands, there was significant acreage with features which could create value as recreational, residential or development lands. A plan was implemented to market and sell these lands and to apply the full value of land sale proceeds to acquire new forest lands of much higher value as commercial forest land. The strategy focuses on acquiring primarily northern hardwoods on medium to high productivity sites, within JML's operational territory. At the time of the assessment this repositioning strategy has been partially implemented, and the remaining lands designated as potential for future sale are not included in the certification. However, they are being managed consistent with the forest management plan for the certified property Legislative and government regulatory context JML lands are privately owned and subject to all local, state, and federal laws and regulations applicable to private lands in Michigan. Michigan does not have Forest Practices Laws as stand alone legislation regarding forestry practices. Michigan has a Right to Forest Act (Act 676 of 2002), which permits forestry operations that are in conformance with generally accepted management practices. SmartWood Program FM-02 14/6/07 Page 21 of 105

22 Michigan has several state statutes affecting forest management, with most found in the Natural Resources and Environmental Protection Act (NREPA), 1994 PA 451 as amended. When constructing a new or upgrading an existing stream crossing, there are three specific statutes that always apply: Part 31, Water Resources Protection; Part 91, Soil Erosion and Sedimentation Control; and Part 301, Inland Lakes and Streams. In certain cases, Part 303, Wetlands Protection and Part 305, Natural Rivers, may also apply, if a stream crossing occurs in a wetland environment or on a stream within the watershed boundary of a legally designated Natural River system. Part 91, Soil Erosion and Sedimentation Control (SESC) has the primary intent of protecting the waters of the State from the deposition of sediment. Construction, fill or alteration of a floodplain of a river, stream, or drain which has a drainage area greater than or equal to 2 square miles, requires a State floodplain permit under Part 31, Water Resources Protection, of the NREPA. Michigan s Natural Resources and Environmental Protection Act, within NREPA, protects cultural and archaeological resources. Endangered Species Protection, Part 365 of the NREPA, protects threatened and endangered species. Numerous state and federal regulations address spills of hazardous materials. Major pieces of relevant federal legislation include the Endangered Species Act of 1973 as amended in 1978, National Historic Preservation Act of 1966 as amended through 1992, Archaeological Resource Protection Act (ARPA) of 1979, and Clean Water Act of 1972 as amended through 2002 (in particular Section 404). Michigan s forestry best management practices (BMPs) for water quality were developed in response to Section 208 of the 1972 Clean Water Act and Section 319 of the 1987 Water Quality Act. Michigan BMPs for water quality are voluntary on private lands. With the exception of approximately 5% of the acreage under JML management, all JML lands are enrolled in the Michigan Commercial Forest Act (CFA) program, under Part 511 Commercial Forests of the NREPA. Properties eligible for this program must have a management plan, be managed in accordance with the plan, be devoted to commercial forest management, and be open to public access for all legal, non-motorized activities. The CFA program requires State notification prior to timber harvest or other extractive activity (e.g., gravel removal) Environmental Context The western Upper Peninsula of Michigan includes the most intact and productive remaining fragment of the northern hardwood-hemlock-white pine forest ecosystem in the Great Lakes region. The eastern hemlock cover type is particularly important for a wide range of wildlife species, including as winter cover for white-tailed deer and as year-round habitats for American marten. JML lands currently contain forest cover types that are predominantly multi-aged as a result of stand history. Northern hardwoods, hemlock, swamp conifer, and oak occur on 77% of JML lands and these are managed primarily using uneven-aged systems. The intent is to develop a more balanced stand structure containing primarily northern hardwood species. Aspen and upland conifer occur on 10% of JML lands and these are managed using even-aged systems. Even-aged rotation lengths are typical of those in use throughout the Lake States (50-80 years). JML lands are located within several miles of Lake Superior, the largest (by surface area) freshwater lake in the World. Some regionally significant river systems, supporting trout and salmon fisheries, have significant portions of their watersheds located on and adjacent to JML lands. These river systems include the Yellow Dog River and the Salmon Trout River in the SmartWood Program FM-02 14/6/07 Page 22 of 105

23 Huron Mountains of Marquette County, the latter of which is home to the endangered migratory "coaster" brook trout. Game species that thrive in early-successional and edge habitats, including eastern wild turkey, ruffed grouse, and white-tailed deer are locally abundant. There are seven federally-threatened or endangered species in the Upper Peninsula of Michigan that potentially could be affected by forest management: Canada lynx, Kirtland s warbler, Hine s emerald dragonfly, Hart s-tongue fern, Lakeside daisy, Michigan monkey-flower, and dwarf lake iris. Although the Great Lakes Distinct Population Segment (DPS) of gray (timber) wolves was delisted, forests of Michigan s Upper Peninsula are thought to provide important dispersal corridors between Minnesota, Wisconsin, and Michigan. The region also provides nesting habitat for bald eagles, which although removed from the federal ESA in 2007, remain protected by the U.S. Bald and Golden Eagle Protection Act. State-listed and special concern species in the region include osprey, redshouldered hawks, northern goshawks, and common loons. The Michigan Natural Features Inventory (MNFI), a cooperative effort between Michigan State University Extension and the Michigan Department of Natural Resources, has documented the presence of several other rare or sensitive species, communities, and natural features within the region, including occurrences on and adjacent to JML lands Socioeconomic Context (excerpts from: Social and Economic Assessment for Michigan s State Forests, 2005) The region in which JML s lands are located is designated the Western Upper Peninsula (WUP) of Michigan. In recent decades, population growth in this area has been relatively stagnant. The WUP contained 2.4% of the entire state s population in The WUP has experienced a population decline; there were 15,000 fewer people in 2000 than in Baraga, Keweenaw, and Ontonagon (counties in which JML owns land) have fewer than 10 persons per square mile, although the WUP averages 22 people per square mile overall. For the WUP, the total nonwhite percentage of population was 4.8% in Native Americans are the largest component of the non-white population (1.8% of total population). Reserve lands located in the vicinity of JML lands are found in Baraga and Ontonagon counties (Lake Superior Band of Chippewa Indians (L Anse and Ontonagon Reservations)) and Gogebic County (Lac Vieux Desert Band of Lake Superior Chippewa). The WUP has the lowest median household income and largest percentage of households with annual incomes less than $10,000 and $25,000 in the state of Michigan. The local government sector was the largest employer in the WUP. Health Care and Social Assistance was the largest industrial sector in the WUP followed closely by Retail Trade and Manufacturing. Forest-related economic activities of primary interest include timber harvesting, wood products manufacturing, recreation and tourism, and minerals extraction. Forestry and logging generated $21.4 million in wages in 2005 in the WUP and 174 businesses were categorized into this sector. Combined with large, recent sales of commercial forest program lands in the UP, the trends in the logging sector (older firm owners and expectations of leaving the industry) may reduce the vitality of the logging sector and the firms that rely on timber supplies. Mining operations are few in the WUP, but a controversial large new nickel and copper mine in the UP near Marquette is being proposed. SmartWood Program FM-02 14/6/07 Page 23 of 105