FRST 523 Log Exports Simulation FIRST NATIONS FORESTRY COUNCIL

Transcription

1 2012 FRST 523 Log Exports Simulation FIRST NATIONS FORESTRY COUNCIL Navi Saini and Aiden Wiechula November 14 th, 2012 Dr. George Hoberg

2 First Nations Forestry Council Tel: Marine Drive Fax: North Vancouver, BC V7P 3G2 November 14 th, 2012 To the Honourable Minister of Forests, Lands, and Natural Resource Operations Province of British Columbia Honorable Minister, We have the honour to present herewith, the First Nations Forestry Council s stance on raw log exports in the province of British Columbia. The report contains recommendations and alternatives that will enhance the social and economic well-being of First Nations groups across our province. We hope that these recommendations and alternatives will be considered by both yourself, and other stakeholders involved in this multistakeholder consultation. Respectfully submitted on behalf of the First Nations Forestry Council, Navi Saini (FIT) and Aiden Wiechula (FIT) Board of Directors First Nations Forestry Council

3 Our Background and Purpose: In 2005, the BC First Nations Leadership Council assembled a meeting of First Nations Chiefs in Prince George, to discuss the mountain pine beetle epidemic. This meeting eventually led to the establishment of the BC First Nations Forestry Council (FNFC) in Today, our council helps communities in managing the MPB epidemic, and works with governments and other parties to ensure that the needs, values and principles of First Nations are accommodated in forestry-related policies and programs. Furthermore, we promote forestry-related opportunities for First Nations, and serve as an advocate on behalf of First Nations groups across BC. We are governed by a board of directors that has representatives from the First Nations Summit, the Union of BC Indian Chiefs, and the BC Assembly of First Nations. Politically, we are accountable to the First Nations Leadership council, as well as the First Nations of BC (BC First Nations Forestry Council). This brief will place First Nations forestry operations within the current provincial context, and discuss problems associated with log export policies as they pertain to First Nations. We will then list some criteria for success, and provide a rationale for our initial recommendation on log exports: First Nations from either the coast or interior should have the right to choose to export their forest products either in raw or processed form. (Recent Policy Changes in BC)

4 We will conclude with an exploration of potential alternative approaches to log exports, and examine how their outcomes may differ from those in our initial recommendation. The Problems with Log Export Restrictions for First Nations Groups in British Columbia: Problem Statement: Due to a difficult timber profile, the precarious nature of most First Nations tenures, and ecological constraints, First Nations face huge challenges in trying to achieve economic self-sufficiency. Limited markets due to log export restrictions further constrain First Nations forestry operations. Although First Nations involvement in the BC forestry sector dates back to the establishment of the sector itself, only recently have individual bands and councils been involved in the ownership of tenure and harvesting rights. First Nations tenure holders are not immune to the poor state of the BC forest sector, and in fact, are placed in a fragile economic situation due to the nature of their tenure. The Forest Revitalization Act of 2003 set aside 8% of the AAC on an interim basis, in exchange for acknowledgement from First Nations that meaningful consultation and accommodation had been practiced in regard provincial forest policy. The tenures that resulted from this process are five year, non-replaceable, volume-based licences (The Forestry Revitalization Plan). By their nature, these tenures hold a great deal of uncertainty, and often pose near insurmountable challenges when it comes to procuring capital and developing long-term plans. (Dumont and

5 Wright 2006) First Nations are mainly market loggers, meaning they are log producers but have no milling capacity. As new entrants to the market logging business, operators face the challenge of recovering start-up capital while simultaneously maintaining cash flow. Because the building of viable processing facilities would require additional capital and a far more solid foothold in the harvesting business, First Nations must turn to the international marketplace (via log exports) to obtain the best value per log. (Dumont and Wright 2006) Operational success for First Nations is further hampered by the fact that their licences are often situated in areas with a long history of logging. Repeated episodes of logging in these areas have led to stands that are predominately composed of low-value hemlock and balsam (hembal). Since the collapse of the Japanese hemlock lumber market in the mid 90 s, there has been little demand for hembal from BC mills (Dumont and Wright 2006). Without making hembal economical to harvest via wider market access, First Nations will continue to face economic uncertainty and unreliable job markets. As important as it is for First Nations to make a profit from the land, forestry-related opportunities also enable First Nations to regain control over landbases which fall within traditional territories. This power, which comes in the form of tenure, attracts many new entrants to the market logging business. Because First Nations have a strong personal connection to traditional territories, operators tend to favour newer and more sustainable forest management practices such as Ecosystem Based Management (EBM). However, the downside of EBM is that

6 it further tightens constraints on an already narrow harvesting base, which in turn, further increases high operating costs (Dumont and Wright 2006). It is clear, that in order to see successful operations, First Nations operators need every tool and resource available to them. Perhaps the most important of these resources is access to the international marketplace via log exports. For this reason, we believe that First Nations from either the coast or the interior should have the right to choose to export their forest products, in either raw or processed form. Current Treaty Status Two conflicting log export policy outcomes have resulted from recent treaty negotiations. The Nisga a Treaty was concluded in 1998 outside the auspices of the BC Treaty Commission. The treaty transferred 1,945 km 2 of land from the Crown to Nisga a authority (Grant Thornton Management Consultants). Despite being held under similar status as Indian Reserve lands (which fall under federal jurisdiction in terms of log exports), log exports from Nisga a territory are subject to traditional provincial restrictions and controls rather than federal regulations (Dumont and Wright 2006). The first treaty to be signed (but not ratified) under the guidance of the BC Treaty Commission was with the Lheidli T'enneh band near Prince George. Under this deal, there would be no restrictions on log exports, and any policies related to exports would be enacted by the Lheidli T enneh band itself (Dumont and Wright 2006).

7 Any reconsideration of log export policies will have to amend the inconsistency between these two treaties. We believe it would be best to follow the example of the provincially established BC Treaty Commission. Recommended Solution First Nations from either the coast or interior should have the right to choose to export their forest products either in raw or processed form. (Recent Policy Changes in BC) This proposed policy objective should be viewed within the broader context of First Nations communities regaining control over resources that fall within their traditional territories. Numerous court cases, starting with Calder v. British Columbia have confirmed unceded Aboriginal title over much of British Columbia. The ongoing treaty process is a reflection of the need to establish First Nations as self-governing entities in their right (Salomons 2009). As previously stated, there are currently signed treaties that give First Nations the exclusive right to design log export policies that fit their own needs. To reach an effective consensus on log exports, it would be wise to pre-empt future treaty settlements that use the Lheidli T ennah case as a precedent. Our recommended solution is aim at creating conditions for First Nations to achieve the goals of self-sufficiency, and economic and social well-being.

8 The criteria for success are: Increased First Nations employment in the forest sector Increased Band revenue generated by First Nations owned and operated corporations Increased success at meeting AAC cut control objectives Giving First Nations direct control over their log exports will allow them to better meet the challenge of creating profitable forestry ventures in the 21 st century. Greater market access will offer more opportunity to profitably sell timber products from marginal hembal stands. This will increase harvest levels, which will help achieve the criteria for success. Once established as profitable ventures, First Nations operators can begin securing a more assured supply of timber, which would have the ability to attract outside investment and generate value-added opportunities. Alternative 1: Continue to Implement Current Controls and Restrictions: Due to the complex nature and sensitivities surrounding log exports in our province, we understand that continuing to regulate log exports from the BC coast through existing restrictions and controls may be politically necessary, and vital to the economic and social well-being of our province as a whole. We sincerely appreciate the fair efforts made by the Crown to allow for exemptions and flexibility within current restrictions, such the ability to export logs should they be determined to

9 be surplus to domestic market requirements (Recent Policy Changes in BC). The Order-In- Council passed in 2002 by the Liberals, which allowed for an additional 2.7 million cubic metres of logs to be exported annually, and the second Order-In-Council in 2005 that increased log export volumes to a total of 4.7 million cubic metres further illustrate the flexibility surrounding log exports in our province (Dumont and Wright 2006). However, maintaining current restrictions (i.e. keeping the status quo) will only continue to hamper the social and economic well-being of First Nations families and communities across the province. Furthermore, maintaining current regulations fails to meet our criteria for success. Increased First Nations employment in the forest sector: Current export restrictions hinder job creation, as they discourage many First Nations from starting new operations because more often than not, domestic log prices are not enough to offset operational costs. Increased Band revenue generated by First Nations owned and operated corporations: Because First Nations are mainly market loggers, they must turn to the international marketplace via log exports to obtain the best value per log, and maximize revenue. Increased success at meeting AAC cut control objectives: Current export restrictions, in conjunction with high harvesting costs in low value stands, make it difficult to meet cut control obligations. For these reasons, we do not believe that current export restrictions are the best alternative, as they are not in the best interest of First Nations groups across our province.

10 Alternative 2: Ban Log Exports A complete ban on raw logs has been proposed and agitated by various civil society groups in recent years. Some examples include the BC Federation of Labour, Western Canadian Wilderness Committee, and some municipal politicians (PEJ Events 2006). There is also widespread belief among the BC public that log exports are bad for the economy; one poll found 72% of British Columbian felt this way (BC Federation of Labour 2006). Widespread reaction against log exports in understandable in the context of the massive traumatic industry restructuring and consolidation that occurred in the wake of the Forest Revitalization Act of The loss of appurtenancy clauses in tenures and the government`s decision to allow Weyerhauser to separate their private lands from TFL 43 undoubtedly lead to job losses on Vancouver Island in the face of a massive uplift in log exports (BC Federation of Labour 2006). While the First Nations Forestry Council believes that log export should left to individual First Nations (many of which are exporting logs now) it should be clear that there is a widespread feeling among First Nation members that having logs processed domestically will create the most benefit for their communities (250 News 2008). However, at the current time, a ban on log exports would both violate First Nations sovereignty and fail to meet the FNFC criteria for success when it comes to assessing forestry policy. Increased First Nations employment in the forest sector: A ban on raw log exports would dramatically reduce the market available for high cost, low value stands where First Nations commonly operate. Reduced cut levels would lead to decreased First Nations harvesting positions.

11 Increased Band revenue generated by First Nation owned and operated corporations: lower revenue due to decreased harvest levels while severely limit the ability to invest in new equipment and value added technology. Increased success at meeting AAC cut control objectives: a ban on raw log exports could render a very high percentage of coastal hembal stands inoperable, which would dramatically impact First Nations ability to meet cut control obligations. This may ultimately lead to a loss of tenure. For these reasons, we strongly recommend that a ban of First Nation log exports should not be considered, and that full sovereignty in this area be recognized by the province of BC. *Total word count, excluding the cover letter is 1,995 words.

12 Works Cited: BC Federation of Labour Log Export Crisis in BC: A Time to Act. Accessed Nov.11 th, BC First Nations Forestry Council. Accessed Nov.12 th, 2012 Dumont, Bill and Wright, Don Generating More Wealth From British Columbia s Timber: A Review of British Columbia s Log Export Policies. Grant Thorton Management Consultants. Financial and Economic Analysis of Treaty Settlements in British Columbia. Accessed Nov. 11 th, PEJ Events Rally in Victoria to Ban Raw Log Exports Accessed Nov.11 th, Recent Policy Changes in BC and Implications to First Nations. Accessed Nov.11 th,2012. Salomons, Tanisha Calder Case. Accessed Nov.11 th, The Forestry Revitalization Plan. Accessed Nov. 11 th, News Raw Log Exports. Accessed Nov.11 th,2012.