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ISF Press Release on Palco Bankruptcy
For Immediate Distribution
29 January 2007
Redway, CA – January 2007
Institute for Sustainable Forestry (ISF)
ISF’s Recent Study Shows the Long-Term Financial Advantages of Community Forestry on Maxxam’s Scotia Pacific properties: Despite up-front costs, ecologically-responsible management returns higher economic rewards than industrial forestry model over 60 year period.
Much of the current debate surrounding Pacific Lumber Company (PL) and Scotia Pacific’s (Scopac) recent bankruptcy filing is focused on the funds extracted from the company and environmental considerations in elements of its Headwaters deal. This debate is a losing strategy for Humboldt County.
PL management takes the position that approval of key THPs by the California State Water Board (SWB) will provide access to additional inventory that will enable PL to sustain its operations and retire the company’s debt. Yet increased harvest of standing inventory on the Scopac properties will do nothing to increase the future yields necessary to make payments 10 or 20 years from now. This strategy is unsustainable in both environmental and economic terms.
In their efforts to defend the terms of the Headwaters agreement and the SWB’s rulings on PL THP’s environmental groups like BACH, EPIC and HWC take the position that PL’s financial difficulties arise from its highly leveraged financial position and profit taking by PL’s parent company Maxxam.
Both sides in the current debate express a commitment to long-term financial and environmental sustainability. Neither side articulates an economically and ecologically viable strategy to create a profitable and sustainable financial structure for PL properties.
It’s time for efforts to resolve this dispute to focus on creating the financial mechanisms, policy instruments and ownership structures that will enable new owners and investors, committed to conservation values as well as long-term productivity, to make the necessary financial commitments.
ISF's “Limited Appraisal and Valuation of Scotia Pacific Timberland and Timber”
A recent study released by the non-profit Institute for Sustainable Forestry (ISF) makes it clear that neither the Community Forestry Model nor the Traditional Timber Management Model has the potential to retire PL’s current bonded debt over the next 30 years.
Figure 1: The difference in harvest revenues over time between traditional industrial forestry and the ecologically-responsible ‘community forestry’ model.
ISF’s appraisal values the Scopac properties three different ways: it evaluates comparable sales of similar timber properties and it compares discounted cash flows based on traditional timber management as well as environmentally friendly “community forestry” standards.
ISF’s evaluation demonstrates the long-term financial advantages of an ecologically-responsible “Community Forest Management Model.” Using the Maxxam’s Scotia Pacific properties as a case study, forestry consultants at BBW Associates found that this balanced, environmentally-sensitive approach to forestry would generate $1.1 billion more income than traditional industrial timber management over a 60-year period, but will also require significant up-front capital investment to ensure fiscal sustainability over the first 20 years.
Managing Scopac properties based on community forestry standards offers significant benefits in both economic and ecological terms:
- Increased late seral stage stand conditions from 12% to 54% of the overall acreage in the first 30 years, 100% in 60 years.
- $3 billion in long-term debt-free income over the second 30 years – double the long-term income and local economic impact of the Traditional Timber Management Model in the same period.
- Steady increases in forest inventories and productivity throughout 60+ years that will position Scopac properties to maximize their biological capacity to meet a significant proportion of California’s lumber needs on an economically and environmentally sustainable long-term basis.
- Steady increases in the provision of ecosystem services throughout 60+ years including carbon storage, water quality and in-stream and upslope wildlife habitat.
However, strategies aimed at that rebuilding an economically and ecologically viable operation will require a reduction in harvest volumes, and income, over the next two decades.
Now is the time for efforts to resolve these issues to focus on creating the financial mechanisms, policy instruments and ownership structures that will enable new owners and investors, committed to conservation values as well as long-term productivity, to make the necessary financial commitments.
For further information contact ISF at 707-923-7004 or at http://www.newforestry.org/
Prior to Maxxam's takeover Pacific Lumber selectively logged their cuts, allowing at least 50% of the trees (including keystone old growths) to remain standing. There were significantly fewer ecological disasters while PL was practicing selective logging. In addition, the selective cut method provides greater number of jobs over the years, while Maxxam's clearcut and run policy leaves fewer jobs remaining. Ecoactivist forest defenders have become the scapegoats for job loss, while the real culprit is Maxxam's overharvesting for short term profits (ie., Maxxam CEO Hurwitz pays off junk bond debts)..
What we don't want is for Maxxam to remain in Humboldt county for one more day, unless of course they're in court answering to the charges of fraudulent THPs as brought up by DA Paul Gallegos. Other than that Maxxam's ownership of Pacific Lumber is over, and their logging operations should cease and desist. Not one more penny of profits to Maxxam from their stolen goods..
What do we want in place of Maxxam's decades of destruction? Clearly not everyone wants the same thing, though here's a proposal based upon other forested regions of the Pac NW..
The Haida Gwaii nation of Canada has reclaimed their ancestral forest lands following decades of industrial timber harvet, plantation forests and other ecological disturbances. Today the Haida people are carefully practicing selective harvest methods. This is working with a corporation, though community forest approaches would be preferable in Humboldt. What people recognize in Haida is that the complexity of a forest ecosystem doesn't return overnight, though over decades there is a possiblity of witnessing biodiversity returns to the ecosystem..
entire articles on Haida Gwaii;
http://www.spruceroots.org/StoryCover.html
"On Haida Gwaii, as elsewhere, old growth forests are perceived as ‘decadent’ by a timber industry determined to liquidate these threatened ecosystems and replace them with managed tree farms, also contradictorily known as ‘working forest.’
The contradiction is that the forests were working fine before industry stepped in to manage one of the most biologically diverse areas in the world. In less than a century, mostly in the past 30 years, almost 60 percent of the old growth available to the logging industry on Haida Gwaii has been eliminated, and pressure is mounting to finish off the remainder.
Scientists and foresters can’t begin to pretend to understand the complexities of ecosystems which took centuries to establish themselves, and the full extent of the impact of industrial activity upon them may not be known for centuries to come. Our modus operandi as stewards of these magnificent landscapes has long been one of ‘log now, ask questions later.’
The consequences of this shortsighted approach are beginning to manifest themselves in alarming fashion. The list of species threatened with extinction grows longer each year as once-plentiful habitat is dramatically altered and grows scarce. Damage to rivers and creeks from industrial logging contributes to the decline of salmon, hampers stock restoration efforts, and undermines water quality for both humans and wildlife."
read on @;
http://www.spruceroots.org/Issues%202002/OldGrowth.html
In response to decades of destructive clearcutting in Canada, the Silva Forest Foundation recognized the importance of rural communites most directly effected by destructive corporate logging practices. This contrasts greatly with Maxxam corporation's CEO Hurwitz shouting out orders of "LOG MORE!" from high atop skyscrapers of Houston TX, far removed from flood damages of clearcutting..
"People in rural and First Nations communities are those most directly affected by resource extraction activities, yet often they have the least say in the decisions that are made. By developing their own information that reflects ecosystem-based principles and their unique vision, communities across Canada are taking control of what happens on the lands that surround and sustain them.
Since 1993, the Silva Forest Foundation has been working with communities in many parts of Canada to develop and implement ecosystem-based conservation plans that will protect the integrity of ecosystems, protect cultural activities, maintain strong communities, and develop diverse, community-based economies. Twelve communities have completed ecosystem-based plans with Silva.
While Silva can provide the technical and professional expertise to develop ecosystem-based plans, we rely on the First Nation and rural communities we work with to define and implement strategies for effectively using the information.
Silva encourages full participation of First Nations and local communities throughout the ecosystem-based planning process. Accommodation of First Nations aboriginal title and rights is a major factor in designing and implementing an ecosystem-based planning process. First Nation and rural community participants contribute important information that is included in the planning products."
read on @;
http://www.silvafor.org/ebp/community/index.htm
Within the region covered by Maxxam/PL logging, there are several sovereign indigenous nations, the Wiyot, Round Valley, and the Yurok/Hupa further to the north. Returning the land to the sovereign nations stolen by timber barons of previous decades would help correct the karmic imbalance that younger generations of European immigrants face today. We cannot reverse the genocidal acts of our ancestors, though we can apologize for their racist behavior and return to the indigenous peoples what was stolen. Reparations should not be pulled out of the throats of working class residents, the payment needs to come directly from the coffers of billionaire Maxxam CEO Charles Hurwitz, and other individuals who directly maximize their profits from clearcutting on stolen land..
Unlike PL under Maxxam, both the Yurok and Hupa nations have shown themselves to be responsible stewards of the land they live on. The Yurok and Hupa show that sustainable logging is possible, though following Maxxam's decades of clearcut destruction it doesn't seem like it could ever be. The way to prove this point is to permanently evict Maxxam/PL from Humboldt, reclaim their land for the communities and restore their damaged clearcuts..
Heading north on the 101 to the Humboldt/Del Norte border one can witness a restoration work in progress at the Yurok Redwood Experimental Forest near the town of Klamath. In addition to a redwood ecosystem, the Yurok village also is a cultural resource..
" The tribe is racing to rescue a historic building in Klamath before the North Coast weather ruins it. The tribe hopes to halt the rot and disrepair of the Yurok Redwood Experimental Forest Ranger Station and open it to the public. The building shelters a program to restore the Yurok language, spoken fluently by only about 30 tribal elders. Documents, photos and maps are kept in the building and the tribal culture department, which protects historic resources, also has an office there. "Over the past 10 years we have collected everything written or taped on Yurok culture and history, said culture department director Thomas Gates. The building was constructed in 1941 by the Civilian Conservation Corps and the Works Progress Administration. The ranger station once housed U.S. Forest Service staff overseeing what is now the Yurok Redwood Experimental Forest. Restoration should cost about $500,000. The tribe wants half from the Park Service Save America's Treasures Fund. It also requested help from the state Department of Parks and Recreation, which has some $8 million available for historic preservation."
entire article @;
http://www.indiancountry.com/content.cfm?id=1013
Closer to home the Sunnybrae community forest offers a shining example of what true forest stewardship could mean for the ecosystem and human community..
"When the city buys the forest, said Andre, this nails-and-hacksaw lawlessness will be nixed. But old logging roads will be shaped into horse, bike and foot trails. And, the forest will be logged -- slowly, taking out the smaller trees, leaving the big ones to grow. The idea, said Andre, is for Sunny Brae Forest to become more like the Arcata Community Forest. In fact, the two forests may someday be connected, if the city can buy the land between them."
read on @;
http://www.northcoastjournal.com/083106/shortstories0831.html
On the other side of the coastal range over the 299 is the Weaverville Community Forest. Think of this concept for Fortuna, Scotia, Garberville and other forest land reclaimed from Maxxam/PL..
"Welcome to the Weaverville Community Forest website. The "Weaverville 1000", as it has been called, is the culmination of citizens' continuing efforts to protect their viewshed on the southwest side of town. What started as a protest against a proposed land exchange between BLM and a private timber company has evolved into a proposed Stewardship Contract between the RCD and BLM. This significant development has allowed the community to reiterate its desires for the community forest, has provided a local entity (the RCD) to provide a bridge between the community and the BLM, and lets revenue generated from forest health activities be used for other forest projects. Stewardship contracting has the potential to realize community goals and actions, while retaining the land in BLM stewardship."
read on @;
http://www.tcrcd.net/w-ville_forest/wcf_index.htm
These are all possibilites of what could replace the devastation caused by Maxxam's unwanted presence in Humboldt. Whatever combo of options the people choose, it will certainly be a better option for the region than Maxxam's presence in Humboldt. Good riddance to bad rubbish, let's complete the process and send Hurwitz to prison along with his S&L insider trading white collar criminal cohorts Boesky, Milkin, etc..
"Texas corporate raider Charles Hurwitz, with the help of junk-bond broker and convicted felon Michael Milken, looted and crashed a Savings and Loan, United Savings Association of Texas (USAT), costing U.S. taxpayers a staggering $1.6 billion!
With looted money funneled from the S & L, Hurwitz engaged in a hostile takeover of the Pacific Lumber Company, commenced rabid clearcutting, and tripled the rate of logging of the world's largest stands of privately held ancient redwood forests, including Headwaters Forest, a precious, sacred and irreplaceable international treasure of the ages.
Hurwitz simultaneously raided Pacific Lumber's worker pension fund, removing $55 million from the retired loggers and millworkers' nest egg, and began raping the company, selling off much of it's other liquitable assets for the quick cash he needed to make his pressing junk bond payments.
Hurwitz had previously looted the Simplicity Pattern worker pension fund in 1982, reducing worker benefits by nearly $4000 per year.
Hurwitz has entered into out-of-court settlements for insurance fraud, securities violations and a land swindleof his own company's shareholders! Hurwitz has lost seven environmental lawsuits over his incessant, illegal logging in these ancient redwood forests of Northern California."
read on @;
http://www.jailhurwitz.com/index.htm
Maxxam OUT of Humboldt!!
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