Rolling over Crown forests

By Briony Penn, March 2013

BC Liberals go ahead with another giveaway of publicly-owned land to corporations.

Three years ago, in a feature report entitled “The Big Burn,” Focus revealed the findings of a dozen retired forest service professionals about BC Liberal plans to privatize BC’s forests under pressure from what are called “distressed asset managers.” These are the mega-corporations like BAM (Brookfield Asset Management; now the top performing company in Canada) and TAM (Third Avenue Management) that buy up majority interests in distressed logging companies (including Canfor, Weyerhauser, Catalyst, Western Forest Products, TimberWest, Island Timberlands etc).

Through political pressure for deregulation (eg lobbying to get rid of riparian zone and watershed regulations), they manage to enhance their lands’ value. Then they strip off the timber and rationalize the lands into categories of real estate, bioenergy plantations, etc. Then they flip them. They’ve been incredibly successful in liquidating hundreds of thousands of hectares of heavily-subsidized private forests on Vancouver Island.

Now the BC Liberal government is amending the Forest Act  in ways that will help such companies gain more control over public forestlands.

Distressed asset companies have been lobbying behind the scenes for a decade for their ideal tenure reform: changing volume licences—where they just get the trees, to the more lucrative area licences—where they get everything, including the underlying land.

The aftermath of a tragic fire at a Burns Lake sawmill and the perceived need to leverage money for a new sawmill to restore jobs in a distressed community—with an election looming—was just the prompt the Liberals needed to introduce “area-based tree farm licences at the minister’s invitation.”

Of course this legislative change may also open up a Pandora’s box for the Liberals just before an election. In 1988, the Socreds tried sneaking in this form of privatization—which is called “rollover”—and failed.

Forest licences were originally set up with checks and balances to limit companies from creating excessive “shareholder value” and to ensure some benefits came back to the public—either in the form of royalties or leaving the forest standing to provide all the ecosystem services that we enjoy. In the last 10 years, however, regulations governing licence holders have been eroded to such an extent that those checks and balances just aren’t there anymore. 

With forest legislation and regulations gutted, licence holders don’t even have to provide management plans anymore. The natural next step for an aggressive, corporate-friendly government has now been taken: allowing companies to roll over their volume-based licences into area-based Tree Farm Licences. Many see this process as de facto privatization of public forests. Anthony Britneff, a retired government forester, says, “These tenures are like the granting of fiefdoms in which the company can strip and sell whatever they want without any requirement to invest in local infrastructure and to manufacture timber locally as a condition of holding tenure. There is no social contract in the public interest.”

A leaked Ministry of Forests, Lands and Natural Resource Operations document dated April 7, 2012 revealed the Liberals were considering tenure reform back then to address an apparent request from Hampton Affiliates, the American company that owns 89 percent of Babine Forest Products, for government assurance of an adequate, secure timber supply before it would rebuild the mill at Burns Lake. 

The memo suggests the annual allowable cut to feed the mill could be expanded far beyond what the region can sustain, leaving it decimated even by Ministry of Forests’ own internal accounts. The document also posits reducing the rules around old-growth timber, wildlife management and viewscapes. It notes that it may be necessary to suspend the chief forester’s authority to set the annual allowable cut and have those decisions made by the cabinet instead, without any public consultation. And it warns that such a dramatic policy change could trigger legal challenges.

Bob Simpson, independent MLA for Cariboo, first drew attention to the leaked document and correctly predicted new legislation would consist of “a few short paragraphs that will enable a designated politician to set the rules by which a private corporation can be given exclusive rights over areas of our public forests.” 

Hampton Affiliates has a history of acquiring distressed forestry assets, stripping the timber and later selling the sawmills and underlying land. Their website currently features three sawmill sites in Washington and Oregon, levelled and ready for sale. One wonders how many jobs disappeared with closure of the sawmills in Leavenworth, Fort Hill and Packwood. Hampton also has a relationship with Brookfield Asset Management, having sold 67,700 acres of North Cascade Tree Farm to them in 2008 after it was stripped. 

The details of Minister Thomson’s capitulation to Hampton’s demands are confusing. In a September 2012 letter to Hampton Affiliates, Thomson stated: “Based on the recommendations of the Timber Supply Committee regarding conversion of volume-based licenses to area-based licenses, we will bring legislation to the House at the next session.” And the Timber Supply Committee’s “approval” was front and centre again at the February 20 press release announcing the Forest Act amendments.

But the report of the bipartisan Timber Supply Committee, which is made up of sitting MLAs, didn’t make any such recommendations. Instead, it called for maintaining the past, cautious approach under the Forest Act, and if any conversions of tenure are to be made, the Committee suggested they should be towards more community-based tenures with public consultation. There’s also a discrepancy in timing. Thomson claims in the September letter to be listening to the Timber Supply Committee, but the leaked document from April suggests his mind was already made up a month before that committee was even struck.

But problems with the Liberals’ plan go deeper than the bad optics of misrepresenting the facts. No proper inventory of forest resources has been done in the last ten years in BC, so the Liberal government has no idea of the value of the forest being traded. As well, Thomson seems to be guaranteeing Hampton Affiliates—in addition to an increased annual allowable cut of saw logs—virtually every standing stick or shrub for their bioenergy plant. That kind of scorch-and-burn policy doesn’t leave any room for climate and biodiversity protection. And Thomson is offering this to a company that has a record of consolidating assets, dismantling sawmills and flogging the underlying land for higher earning ventures. Hampton will also be eligible for what such companies refer to as “entitlements in progress,” including potential compensation from First Nations’ claims, having say over other resource uses, and, of course, selling their TFL to whomever they want. 

The worst-case scenario sees Hampton getting its TFL, decimating the region in search of fibre, not finding enough, coming up against legal challenges from everyone, launching a few of its own by claiming the fibre supply was misrepresented to get them to invest in the mill, and then walking away with compensation from taxpayers. The public would be left with devastated lands and “For Sale” signs for the abandoned sawmill. 

There is also this precedent-setting issue: If one corporation gets a more secure forest tenure then what about all the others? And what expensive legal challenges will result  if British Columbians vote for a new government in May, one that wants to change course? 

Perhaps the most predictable aspect of the Hampton tenure question is that a debate over how Crown land is used was hijacked by the separate issue of how to get Burns Lake millworkers and others in the pine-beetle-impacted areas back to work. It’s a typical “shock doctrine” maneuver in which an important debate gets suppressed because of the urgent necessity of dealing with an emergency. Who wants to get between a man and the prospect of a return to his job?

But if we continue to carve up and lose our forests to short-term, private interests, our ability to fight climate change and keep functioning ecosystems that sustain life will be gone forever.

Briony Penn has been reporting on Crown land issues for many years; she believes a public forum on how we value our Crown lands is long overdue.See “The Big Burn” (August 2010) at http://www.focusonline.ca/?q=node/71.