Greens, lawmakers want Headwaters forest protections maintained

Greens, lawmakers want Headwaters forest protections maintained

TERENCE CHEA
Associated Press
SAN FRANCISCO - Pacific Lumber Co. blamed excessive logging restrictions from the historic Headwaters deal for its financial woes when it declared bankruptcy last week. But the timber company will run into fierce resistance if it tries to back out of the agreement, which protects thousands of acres of redwood forests.

The Scotia-based company has not said how it will try to resolve its financial problems, but any attempts to weaken protections for the 200,000 acres of forests it owns in Humboldt County will be opposed by environmentalists as well as state and federal lawmakers.

"We're going to be working against that," said Mark Lovelace, who heads the Humboldt Watershed Council. "It will meet resistance from taxpayers in the state of California and the United States."

Pacific Lumber, a subsidiary of Houston-based Maxxam Corp., filed for Chapter 11 bankruptcy protection in Corpus Christi, Texas, on Friday because it couldn't make a $27 million interest payment to bondholders. The company cited "regulatory limitations on timber harvest" related to the 1999 Headwaters agreement.

In that deal, the state and federal government agreed to pay Pacific Lumber $480 million for a 7,500-acre redwood preserve containing some of the world's oldest and tallest trees. The company also agreed to a habitat conservation plan that limited logging near streams and in a dozen ancient groves in the 200,000 acres it kept.

But the company claims the state has since enacted logging regulations that violate the Headwaters agreement. In December, it filed suit in Fresno County Superior Court, alleging the state has breached the agreement and hurt the company's ability to survive economically.

"We lived up to our end of the historic Headwaters agreement and the state did not," said company spokeswoman Andrea Arnot.

Pacific Lumber was working on a plan to emerge from bankruptcy that would "strengthen and preserve our business so we can meet our financial obligations," but could not offer details yet, Arnot said. She added that the company would continue normal operations and there were no immediate plans to reduce its work force.

Observers believe the company will seek to loosen or invalidate logging restrictions imposed by the Headwaters agreement and accompanying habitat conservation plan.

But any such move would be fought by environmentalists and lawmakers.

"They need to follow through on their commitments," said Paul Mason, a lobbyist with the San Francisco-based Sierra Club. "Their financial situation is of their own making."

Sen. Dianne Feinstein, D-Calif., who brokered the agreement with Maxxam, said she believes Pacific Lumber must meet the obligations of the habitat conservation plan whether or not the company is in bankruptcy.

Senate President Don Perata, D-Oakland, on Wednesday sent a letter to Resources Secretary Mike Chrisman expressing concern that Pacific Lumber may attempt to "extinguish the logging restrictions" required by the Headwaters agreement.

Perata asked the administration to maintain forest protections during the bankruptcy proceedings, and even if the timberlands are transferred to Pacific Lumber's creditors or sold to other parties.