A small First Nations-operated mill in the West Chilcotin claims the province and major forest companies have unfairly swooped in and secured timber supply in their territory, threatening job creation in a community with few economic options.
Gary Arnold, interim general manager at the Ulkatcho Indian Band?s West Chilcotin Forest Products near Anahim Lake, told Business in Vancouver his company is negotiating with the province for a long-term tenure licence that would secure timber supply near the mill and allow the company to get running again and employ more than 100 people.
But Arnold claims that a week after negotiations began, two major forestry companies began marking off sections of the forest near the mill to secure their own supply.
Central Cariboo-Chilcotin district manager for resource operations Mike Pedersen further confirmed that BC Timber Sales (BCTS), the provincially mandated body responsible for marketing Crown timber, is also marking off sections of the forest for its needs.
?We didn?t see this coming,? said Arnold. ?We didn?t think anybody would be so greedy as to take our livelihood [away].
?This may be a band-owned mill, but it has over 50% non-aboriginal workforce. It represents a vital link to this regional area.?
The process is known as ribboning, a reconnaissance effort in which forestry companies send their people into the bush to claim tree stands for future harvesting.
Companies can claim the areas without consulting with local user groups, Arnold said.
Pedersen said ribboning is perfectly legal. He added that companies such as West Fraser Timber (TSX:WFT) and Tolko Industries are moving their ribboning efforts into the West Chilcotin region because there are few viable tree stands left in timber supply areas to the east near Williams Lake.
He said the laws don?t provide West Chilcotin Forest Products with special rights to forested areas near the company?s mill, forcing it to compete for tenure with mills hundreds of kilometres away.
Pedersen also said there?s little he can do to come up with a solution, adding that the companies need to sit down and sort it out themselves.
?It?s a business-to-business relationship when the companies start working their way out there,? he said. ?I know the Anahim community isn?t used to seeing other companies out there, but there isn?t anything to prevent them from coming out there.?
West Fraser declined to comment on the situation, but Tolko said the availability of log supply close to its plants is very limited, forcing it to move west.
?Tolko regularly discusses – and is open to discussing – business-to-business relationships with companies who have complementary and shared interests,? said Tom Hoffman, Tolko?s Cariboo regional woodlands manager.
Arnold said the long-term timber supply licence is the cure to the mill?s economic ills, of which there are a few.
The mill is somewhat removed from major shipping routes, which means its faces higher transportation costs than its peers.
On top of that, the mill doesn?t have a drying kiln.
In the past, that?s meant the lumber has had to sit in the yard for six to eight months until it dries out enough to be shipped. That creates ?astronomical? inventory costs for the owners.
West Chilcotin also relies on expensive diesel power for its operations, which further jacks up the cost of producing lumber.
But Arnold said the company is negotiating with BC Hydro to build a small biomass power plant that would not only use wood waste to power the mill, and lower operating costs, but also provide renewable power to the local community.
If approved, the project would also include a kiln to dry wood faster at the mill and reduce inventory costs, said Arnold.
But an agreement with Hydro hinges on a long-term timber supply contract with the province.
?If we want to close this deal,? said Arnold, ?we need to get a statement from the Ministry of Forests [that says] it?s reasonable to assume we will end up with a certain amount of volume.?
Liberal MLA for Cariboo-Chilcotin Donna Barnett said despite the ribboning, she?s not aware that timber has been allocated to any company yet.
She added that competition for timber resources in her region has been going on for 20 years, but she?s hopeful that West Chilcotin will be up and running soon.
Meantime, the Ministry of Forests told BIV it?s working with licensees in the area ?to determine what steps they?re taking to ensure Ulkatcho?s interests are being considered.?
For Arnold, the interests of the Ulkatcho rest with the mill?s viability.
?This mill, this community, it needs it desperately. We?re 90% unemployed here.? ?
