Sunday, June 19, 2011

BC's Forest Policy Trap

Policy traps occur where poor policies have become entrenched resulting in declines or economic loss, and the existing power structure or interests are resistant to change. Policy traps bring to mind some failed state run by corrupt government. Canada or British Columbia cannot be regarded as a failed state, but there has been little public discourse or vigilance about the management of our public forests. Any BC politician knows that any questions about the care and use of public forests can be assuaged by stating that every family knows that we have to cut down trees to maintain our prosperity.

The BC forest sector is showing evidence of economic decline. The coastal forest industry is a shadow of its former self and in the interior of the Province a massive mountain pine beetle epidemic has reduced timber supply. Forest dependent communities are suffering. Global economic conditions and the whims of nature are not entirely to blame.

Is the decline in the forest sector due in part to a policy trap? A central feature of a policy trap is a government and partners that are on the take, at the expense of the rest of society. The forest policy vision for public forests was two fold. The government as trustee would have as its main priority wise stewardship of the forest to ensure that forest communities and the forest economy is sustained in the long term. Public forest would provide an open market supply of timber to promote a competitive diversified wood utilization industry. BC Government administrations have completely failed on both aspects.

BC Government administrations have viewed the forest as a cash cow to be milked with its partners; an oligopoly of forest companies allocated timber under a non-market administered pricing system. BC Governments have taken considerable dollars out of the forest. Most of these dollars were put to beneficial purposes such as funding roads, education and health care. Governments did not put enough money back into the forest to ensure sustainability. Instead, governments tried to pass some of the responsibilities of forest management back to its forest industry partners. In turn it had to be lenient with its partners to ensure they had the surplus cash to undertake tree planting and other management. The amount of timber forest industry could harvest was well controlled, but there was considerable leniency on the areas of the forest that could be selected for harvest. The best most valuable forest was harvested first and the less desirable areas or species left for later. This improvident approach led to the decline of the forest industry on the coast. It also led to the decline in timber supply in the interior of BC by creating huge areas of old pine that became susceptible with age to mountain pine beetle attack.

The non market administrative pricing system for public timber made BC wood exports vulnerable to discriminatory export tariffs and taxes. These hurt forest industry, forest communities, the forest, and the income of BC families. The problem could be solved by moving to an open market system. Instead BC Government administrations and their forest industry partners have chosen to negotiate to minimise the impact rather than making changes to free us from this discriminatory tax burden. The interests of the few take precedence over the interests of the people, another indicator of a policy trap.

Change in policy traps usually takes the form of increased clamps on the trap or another cast of characters that take over at the top to reap the benefits. Poor policies continue. The paradigm for discussing change in BC forest policy goes under the heading of "Tenure reform". That involves changing or strengthening the rights to take timber from the public forest. Tenure in a public forest is an oxymoron. It entrenches private rights in a public forest and should be viewed as a step to enclosing the public forest into the private interest. The BC Government can look toward reduced dollars from the sale of public timber. Global pressures toward reducing corporate and progressive income taxes will see public expenditures being concentrated on health care, education and public infrastructure. The Ministry of Forests has already been downsized and there will be pressure for further reductions on forest stewardship expenditures. The BC Government's forest management partners, an oligopoly of forest companies is ready to exercise its own brand of chutzpa. Chutzpa has been described as "the boy that murders his parents and begs for mercy on the grounds of being an orphan". After stripping BC of its best timber under non competitive supply and pricing arrangements, they will claim economic distress. The knee-jerk solution will be tenure in the form of long term leases of public forest with the private sector making the forest management investments. While the forests of BC may remain public in name only, they will be well on the way to complete privatization.

The need for more expenditure on forest stewardship has surfaced in the media lately. Unfortunately the usual solution offered is to ask for a Royal Commission on BC's public forests. The naive assumption is that the Government will act in the best interests of the public. Given the existing policy trap, the government will act in the best interests of its forest management partners and come up with privatization solutions.

Even the solutions proposed by most critics will not get us out of the box. The Ministry of Forests or Forest Service was intended to be the independent professional management agency for public forests. This institution is almost one century old and has never been allowed or funded to fulfill its intended role. If an institution has failed in its primary purpose for 100 years, it is time to try something else. A central Crown Corporation to manage BC's public forest is another solution that surfaces. A Crown Corporation trying to manage 55 million hectares of forest is likely to become a centralized hierarchical bureaucratic boondoggle. It could also fall prey to privatization.

Devolved or local control and management of public forests is the most promising solution. Local forest management accountable to a locally elected board has many advantages over a centralized system. It institutes a good arrangement for local involvement and accountability, and knowledgeable local managers are better placed to ensure sustainability. Local forest trusts would involve relatively large areas of forest or landscapes and could include more than one community or rural area. They should be large enough to provide for profitable business operation that would cover the costs of sustainable management. The local forest trust would operate under trust documents or a charter that required sustainable forest management to the standards of the international Montreal Process. The local forest economy or business of the trust would include timber, non timber and nature based economic activities. There would be an open market for timber. First Nations could have local forest trusts. It would provide an innovative way of dealing with land claims, without alienating public forest land from institutions intended to ensure sustainability.

While the local forest trusts would have considerable freedom to manage the local forests,there remains the need for some central institution to audit the local trusts and provide collective extension services and aerial firefighting. There is also the need for some place of appeal for decisions made by local trusts. In a devolved system of local forest trusts this function is best handled by an assembly of delegates from local forest trusts. A British Columbia forest trust assembly could have an equal number of elected local board members and professional staff. Local Forest trusts would ratify any major new policies passed by the trust assembly.

Since BC forest policy is caught in a trap, forest dependent communities cannot expect that the BC Government will even consider devolution of forest management without being propelled by a popular movement with grass roots support. BC communities can expect government and forest corporations to vigorously oppose any alternative that will halt the gradual enclosure of public forest into the private interest. They will use fear tactics and claim that devolution will be bad for the economy and investment. The record of the BC Government and its corporate forest management partners with the existing system that restricted the development of a diversified wood products manufacturing industry,led to the decline of the coastal forest industry,and encouraged a mountain pine beetle feast of $100 Billion worth of timber is about as scary as it gets. Then there is our vulnerability to discriminatory export tariffs or taxes caused by the non market timber pricing that supports the oligarchy. The existing arrangements for forest management are an economic looser.

What are the economic benefits of local forest trusts? They provide a business like way of ensuring sustainable forest management. Expenditure on forest stewardship will not be impeded by central government but will be a normal cost of operating the forest trust. Local forest trusts can immediately step up to one of the key features of sustainable forest. The local forest economy can be augmented by income from non timber and nature based enterprises in the local forest. This is possible with local independent professional managers. An open market for the sale of timber will encourage a diversified value added wood products sector. Open markets will free us from vulnerability to export taxes or tariffs. In turn, there will be greater demand for higher quality wood. To supply this demand,forest stewardship will diversify from the present short rotation clear cutting mode of operation. The end result will be a more valuable and reliable supply of wood. A reliable supply of valuable timber is the factor that will attract investment. Devolved forest management in local forest trusts will provide clarity of forest ownership necessary for long term stability and management. The ownership and accountability will be rooted locally within institutions that will dissuade central politicians from and sudden or gradual attempts to privatize our land.

Enclosure or privatization of public or common land is not just a feature of European history. BC has in its history one of the most brazen or audacious examples of enclosure of public land. In the 1800's, Canada paid Dunsmuir, a Vancouver Island coal baron to construct the E&N railway. Against considerable public resistance, BC added a bonus of approximately 2 million acres on the east coast of Vancouver Island. This rip off happened because the robber barons convinced the populace that it would be good for the economy and dollars would trickle down. We hear the same story today.

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