Respecting First Nations' role in the forestry industry
Oct. 23, 2017 - The last decade in British Columbia has seen an incredible increase in the number of First Nations actively participating and engaging in the forest industry, not only as licensees but often as business owners and contractors.
Roll the clock back to the late 1990s, and the only licences First Nations were able to bid on were known as section 21 awards, awarded through a competitive bid process. This type of award did not guarantee a First Nation would obtain a licence, as they were often outbid by a third party.
This all changed in early 2000 when the newly elected Liberal government enacted Bill 28. The bill outlined a process where there was an opportunity for the direct purchase of approximately 20 per cent of the allowable annual cut from existing licensees.
Although Bill 28 did bring more First Nations into the industry, the formula for the awards were per capita based (29.9 cubic metres for each registered member based on the 2003 census). This resulted in a minimal licence award, which for many was not economical given their remote locations and high cost structure. In some of the areas where significant licensee undercut existed, the award was increased to 52 cubic metres per person. None of these licences were replaceable when they were first issued; they had a five-year term. This fact severely limited the ability to build a viable and sustainable business and for many who did not understand the industry, they created financial hardships.
First Nations have had to deal with numerous difficult situations over the past century. In the case of forestry, First Nations’ ability to adapt has led to licensees holding much higher timber volumes. This has been accomplished through many innovative ways, such as lobbying for existing undercut, which was created through major licensees taking downtime during tough economic times. Many First Nations have taken advantage of the woodlot and community forest programs, to add to their existing non-replaceable tenures. This approach increased their businesses chances significantly and provided increased control over parts of their traditional lands, as they were area-based licences.
Over the last five years the province has made the original Bill 28 tenures replaceable licences, allowing many First Nations to attract business partnerships with industry and sawmills that were short of tenure to supply their processing facilities. Some First Nations purchased licences outright from willing sellers; however, with diminishing timber supplies, especially in mountain pine beetle areas, tenure sales have dried up. In addition the revenue-sharing formula was changed from a per capita-based formula to activity based, (percentage of stumpage fees paid in the territory) prorated system, which was adjusted for overlapping or shared traditional territories.
Becoming a licensee has been a difficult learning curve for First Nations who often felt they had enough timber to purchase and finance expensive equipment. Few were familiar with the regulations around tenure ownership, engineering, cruising, road development and maintenance, silviculture liabilities, and health safety and compliance obligations. Again, persistence has paid off for many and those who were familiar with forestry and others who retained experienced management expertise have achieved success.
Looking into the future, it is obvious that First Nations will have a larger and more influential role to play in the forest industry as more court decisions and title cases are decided in their favour. Industry will have to adapt and think out of the box when it comes to creating positive respectful relationships, business arrangements and partnerships with First Nations. Those companies that have worked to create positive relationships are reaping the benefits and are achieving increased fibre flow to their facilities.
One thing history has proven is that First Nations are very adaptive to change, extremely patient, have close ties to the land and water and are finally seeing the respect that they have asked for time immemorial. Companies that embrace the importance of positive, respectful, First Nations relations, and make sincere efforts to create mutually beneficial agreements will experience increased business certainty, and a more positive interaction with the First Nations, regulators, employees and shareholders.
Corby Lamb is the president of Capacity Forest Management Ltd.
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