0936-C1
Forest Products Association of Canada *
Over the last decade, the Canadian forest industry has evolved towards a new industrial model that acknowledges the interconnectivity of environment, economy and society. The emerging model rests on two pillars, "Embracing Sustainability" and "New Partnerships with People and Communities" that support a pro-active, scientifically driven approach to sustainable management and a flexible, collaborative attitude to stakeholder relations. It is based on increasingly sophisticated strategies that recognize the global and local influences on resource management, community requirements and consumer behaviour. Gradual, voluntary adoption of this model is improving environmental stewardship, strengthening industry's commitment to the social needs of partner communities, protecting economic investment and future profitability and improving stakeholder relations in resource management.
The factors influencing this evolving industrial model are both global and uniquely Canadian. By voluntarily investing in cooperative research and policy development, by advocating and adopting international standards and certification, and by adopting a corporate social responsibility framework, the Canadian forest products industry is pushing itself and other stakeholders to build a future based on environmental, social and economic sustainability.
A global understanding of the link between sustainable life on Earth and healthy forests has evolved with stunning rapidity over the past decade. This new global consciousness has grown from the confluence of emerging scientific, social and communications technologies that are now shaping our worldview of the forest in the 21st century.
In Canada, our understanding of the relationships between forest economies, forest ecologies and broader social values has led to significant changes and improvements in forest management practices over the past decade. The Canada that was built on a vision of endless forest resources requiring little stewardship and yielding unlimited prosperity has changed.
Today, Canada's forest products producers are beginning an industrial revolution based on a new vision for its forests... one that is built on a solid understanding of the links between environment, economy and society, one that approaches forest management as a global, national and community responsibility. The corporate social responsibility model being created by the forest products industry is a pro-active framework that is both scientifically driven and collaborative in its relationships with stakeholders, communities and governments.
The Canadian forest products industry knows that sustainable stewardship is good business. Forest products companies have learned - in sometimes painful lessons - that partnerships work better than protests, that it has to grow a tree to harvest a tree, and that the community of consumers is global, informed, and watching. It also knows that only a modern, healthy, dynamic workplace can attract the skilled workforce required to be competitive internationally.
There can be little doubt that Canada's forest sector has been at the forefront of innovation. This paper touches on several key issues that this industry is addressing, with a focus on two areas; "Embracing Sustainability" and "New Partnerships with People and Communities". These two areas of innovation provide the evidence that fundamental changes in the knowledge base and expectations of consumers & citizens demand a new industrial model with profound implications for forest sector companies, governments and other stakeholders.
The evolution of Canada's forestry sector undoubtedly reflects changes that are driven by global factors, while others are closely tied to the unique Canadian situation. To consider how Canada's forestry sector is moving towards a new industrial model, it is helpful to capture some of the distinguishing features of the situation:
Canada's share of world pulp and paper exports is now about 32 percent, yet Canadian companies are relatively small on a global scale - Canada's largest forest products firm is one tenth the size of the world's largest firm.4
For over a century, Canada has thrived on the economic contributions of its forests. But competition has required the industry to move beyond the natural advantages offered by Canada's abundant resource base.
In a country where the forest resource base is largely publicly owned, in a climate of increasing government and citizen/consumer scrutiny, and at a time when global communications make international comparisons nearly instantaneous, an industrial model that meets these challenges head-on is imperative.
There is no single policy, program or initiative taken by the Canadian industry or by a Canadian government that decrees a new industrial model for Canada's forestry sector. However, armed with an important range of innovations - the National Forest Strategy and a clear focus on Embracing Sustainability and New Partnerships with People & Communities - a strong case can be made that both among individual companies and at the national level, Canada's forest products industry is well on its way towards a new industrial model.
Less than 4 percent of all Canadian forests have ever been converted to agriculture or urban development.5 Canada harvests less than one quarter of 1 percent of its forests annually, and an aggressive program of re-forestation ensures zero deforestation. Canada maintains the largest area of protected forest on the planet, more than Sweden, Finland, the UK, Germany and Russia combined. Indeed, added together, Canada's protected forests would completely cover Germany.
Canadians are justifiably proud of this record, especially when Canada is also one of the world's largest producers of high-quality forest products.
This duality of significant conservation and high production is no accident. A key driver is Canada's complex legislative and policy framework, which places forest-related economic activity within the context of a publicly owned national resource. Ninety-four percent of Canada's forests are publicly owned, and Canada's forestry and forest conservation laws are among the toughest in the world.
It is also important to recognize that forest management is mainly within the provincial jurisdiction. In every Canadian jurisdiction, for instance, the law requires that harvested areas be promptly regenerated. An average of 650 million trees are planted every year. Provincial legislation provides for other key measures, such as strong protections for riparian buffers, sensitive wildlife habitats such as raptor nests and heron rookeries, and requirements for sustainable Annual Allowable Cuts (AACs). In addition, Canadian forest companies present their forest development plans for public review, and consult with a wide variety of land users, such as hunters, trappers, recreational users and other industries.
Canada's governments, researchers and industry have worked together and in cooperation with the world on a number of groundbreaking processes and policies to improve forest stewardship, including biodiversity. Examples include:
In 1992, the Canadian Forest Service launched the Model Forest Program, the world's largest study in sustainable forestry. Today there are 11 "learning forests" across the country where industry, environmental groups, communities, aboriginal peoples and governments work collaboratively on the 9.4 million hectares in the program. Today, Chile, Japan, Mexico, Russian and United States are implementing their own Model Forest programs, and Canada continues to share results of the program with the world.
In 1995, the Canadian Government first provided funding to the Sustainable Forest Management Network. Based at the University of Alberta, the SFM Network has over 55 partners including 23 Canadian Universities, 12 forestry companies, 5 provincial governments, 4 First Nations and 1 non-government organization. The Network provides internationally recognized interdisciplinary research to meet today's and future needs in sustainable forest management. To date, more than 200 graduate students have already completed their research, and over 100 researchers and 200 graduate students are currently involved in research projects.
In 1995, Canada played host to the United Nations sponsored Working Group on criteria and indicators for the conservation and sustainable management of temperate and boreal forests. The resulting Montreal Process led to a made-for-Canada set of more than 80 criteria and indicators that have been approved by the Canadian Council of Forest Ministers, and offers detailed guidance to the industry on the conservation of biodiversity, soil and water quality, eco-system health, contributions to global ecological cycles, and socio-economic values.
Actions by Canada's federal and provincial governments in pursuit of sustainable forestry practices are themselves a reflection of the rising expectations of consumer-citizens. Canada's policy and regulatory frameworks have a critical impact on the health of the industry and its capacity to adopt more sustainable practices.
In the fall of 2002, the OECD published one of a series of national reports considering regulatory systems and their impact on economic growth. The OECD found Canada's regulatory system is "one of the most transparent in the world", lauding the key role played by public consultations. One other significant characteristic of the Canadian system, according to the OECD study, was its leadership as an innovator in regulatory systems6.
Policy and regulatory frameworks such as these have worked well in providing the guidance and requirements for the Canadian industry to improve its sustainable forest management practices. Between 1988 and 1998, the Canadian industry's forest management expenditures nearly tripled, and over the last 10 years, cumulative spending on forest management totalled $24.3 billion.
According to a 1999 Statistics Canada study on technology adoption in Canadian manufacturing, the forest sector is one of the top five in terms of integrating high tech equipment into the work environment. The advanced technology purchases of the sector exceed those of the Canadian automotive, aerospace, metal, transport, and chemical sectors combined.7
While the Canadian forest products industry is mindful of the importance of the regulatory framework, and a determined contributor to its ongoing evolution, it continues to work with its government partners in pursuit of further improvement. The federal and provincial governments have overlapping areas of jurisdiction that frequently contribute to delays, uncertainty and unintended consequences. The Canadian industry continues to promote greater clarity in the delineation of federal and provincial roles, a streamlining of accounting and reporting requirements, and a move from the command and control approach to a results-based system.
While these policy and regulatory frameworks are important drivers for industrial investment in sustainable management practices, it is significant to note the industry's track record of voluntary commitment to sustainability.
The Canadian industry voluntarily invests both time and money in policy development and research.
Since 1998, the Forest Products Association of Canada has been working with conservation and industry groups, such as the Sierra Club of Canada, Canadian Wildlife Federation, Canadian Nature Federation, and with the Mining Association of Canada to develop a cooperative framework for federal legislation on species at risk. They continue to support this long-term, collaborative effort to protect biodiversity.
The industry, together with government, co-operatively funds three research institutes for technological and environmental improvement. In particular, the Forest Engineering Research Institute of Canada (FERIC) focuses on silviculture, transportation, and forest harvesting practices and technologies.
Accountability, transparency and standardization are essential tools in the global search for sustainability, and third-party audited certification to internationally recognized standards is one of the best mechanisms to achieve them.
But as the national industry association, FPAC and its members are voluntarily setting the certification bar higher. In one of Canada's boldest industrial sustainability strategies, FPAC in 2002 committed all its members to third-party audited certification to internationally recognized sustainable forest management standards by 2006.8 It is worth noting that Canada is the only major forest nation whose national association (FPAC) has made 3rd party verification to a forest-specific standard a condition of association membership.
Interest Convergence = Sustainable Management
The evidence suggests that the evolution of sustainable forest management regulation and practices in Canada is driven by the shared values of both industry and government and their relationship with their respective "markets". Both parties need to sustain the long-term economic stability of the resource and both value the acceptance of the citizen-consumer. As a result, a largely cooperative relationship between government and industry is evident in many processes, and industry is providing strategic leadership in sustainability initiatives.
The change dynamic that has driven innovation and investment in new sustainability practices also impacts the forest products industry's external relationships.
The emerging understanding of the triangulation of interests between government, industry and citizen/consumer/community is changing decision-making processes. Governments make resource allocation and management decisions, mindful that they are accountable to an increasingly informed citizenry. Industry understands that those same citizens are also informed consumers. The citizen-consumer's ability to influence both market and political outcomes has increased enormously with the advent of more sophisticated global communications and more organized interest groups.
Citizens, consumers, workers, aboriginal people, industry and governments all share a need to manage the resource, the economy and the community for long-term stability. The shared values of sustainability are the change drivers that both increase conflict and offer a framework for resolution.
Canadian forest products producers are - of necessity - taking risks and experimenting with new accountability and public consultation models. The industry has rejected old confrontational models that led to historic battles such as the standoff in British Columbia's Clayoquot Sound in the early 1990s. There, forest companies, communities, government, aboriginals, environmental groups and citizens were pitted against each other in a dispute that led to Canada's largest-ever civil disobedience experience, in which over 800 people were arrested. That experience, among others, was a catalyst for all stakeholders to find better solutions. The recent joint solution achieved among industry, government, ENGOs and First Nations for the management and conservation of the BC mid-coast is an excellent example of this new approach. The process of healing those communities and finding new models to work together continues, having produced some positive outcomes in the forest products sector.
Over the past decade, the search for better models of sustainable management and public engagement has been articulated at the macro and micro levels across the country. Large scale strategies; such as the National Forest Strategy, and individual acts of trust and cooperation have led to a decade of creative mechanisms to "do better":
Public engagement in resource planning and management is now the norm in Canada. Across the country, forest products producers are now working closely with the public on nearly every aspect of resource management, with certification's requirement for public involvement and reporting spurring on this trend.
In the 11 Model Forests across the country, industry is committing time, expertise and resources to find collaborative models and new ideas for forest management. In these experiments, industry relinquishes its traditional roles and works cooperatively with government, communities, First Nations, researchers and environmental groups.
Almost 80 percent of Canada's aboriginal people live in forested regions. By engaging them in forest management and production, the industry has gained new insights into traditional uses, and the cultural and spiritual values of the resource base. Incorporating this knowledge into formal forest management plans is now standard practice in Canada.9
Many forest companies are exploring new economic relationships with aboriginal people in an effort to build community trust and stability through economic capacity building. Over 50 new business partnerships worth hundreds of millions of dollars have been established between Aboriginal Canadians and forest companies in the past five years. Many of these projects are linked to the Canadian government's First Nations Forestry Program, which has trained approximately 4,000 First Nations workers since 1996.10
FPAC members have committed to being a "world leader in environmentally sustainable manufacturing and forestry practices", and a "model of social and corporate responsibility" . This is linked to a policy of public disclosure and public consultation in the belief that good information will lead to better decision-making. The association tracks its member companies' environmental performance to measure the industry's collective progress. For years, Forest Products Association of Canada (FPAC) member companies have voluntarily opened their doors to the public to invite scrutiny of their mills and forest operations in over 115 different public tours across the country. This Open Doors Outreach Program is matched by an industry-produced web site that offers virtual tours and educational products. In addition, 70 percent of member companies offer public environmental reports, and 20 percent have citizen advisory panels.
The practice of openness and respectful engagement between industry, government, aboriginal peoples, citizens, communities and interest groups is challenging, but it is yielding positive results for all groups. The positive outcomes for industry ensure that it is more than just a willing partner in the exercise, but also an advocate for change.
The Canadian forest products industry is demonstrating increasing acceptance of new definitions of corporate social responsibility (CSR), and making the strategic link between sustainability, stakeholder engagement and market acceptance. The evolving paradigm moves forest companies along the CSR continuum:
Recognizing the potential for conflict over resource management issues, industry and stakeholders have led the way in investing into promising experiments in decision-making. A case in point is the process underway in British Columbia's north and central coast, where previously improbable alliances between forest companies, First Nations, government and environmental groups have resulted in reduced conflict and multilateral decision-making.
All parties recognized a new model was imperative because:
Overall recognition of this dynamic is leading to an ongoing dialogue between industry, communities, First Nations, government and environmental groups. Indeed, while significant challenges remain, this more collaborative model holds promise for the future: the expectation is that there will no longer be a winner and loser in a battle to control development, but that a balance will be struck that meets some - if not all - of each party's interests.
There are new standards of behaviour for industry, ENGOs and governments. The struggle of the Canadian forestry sector to adapt to the changing marketplace and public expectations has certainly not been without casualties, false starts and costly confrontations. However, the case can be made that over the past decade the Canadian industry has made a major start towards building a more dynamic and stable base for future growth.
Ten years ago a headline involving the Canadian forestry sector was almost invariably triggered by an environmental confrontation. Today's headlines are far more likely to cast the Canadian forestry sector in a more positive light, as an innovator in environmental stewardship or industrial relations.
The Canadian forest products industry's new industrial model is not merely a command-driven response to regulatory frameworks, but incorporates a sophisticated understanding of the global, national and local interests linking economic, environmental and social issues.
The Forest Products Association of Canada (FPAC) was formed in 2001 and builds on nearly a century of Canadian experience in the pulp and paper products industry. The association represents 30 of the country's largest forest products producers, and its members have responsibility for over 75 percent of the working forests in Canada. The association, and its member companies, take that responsibility seriously and have embraced a perspective that puts environmental stewardship at the heart of its management practices. The prosperity of the industry is directly linked to the health of the planet, and it is learning to walk new paths toward sustainability.
* 410 - 99 Bank Street, Ottawa, Ontario, Canada, K1P 6B9
Telephone: 613-563-1441
Facsimile: 613-563-4720
E-mail: [email protected]
Web: www.fpac.ca
1 Canadian Forest Service, 2002; Canada's Forest Biodiversity - A decade of progress in sustainable management
2 PriceWaterhouseCoopers State of the Industry 2002
3 PriceWaterhouseCoopers The Forest Industry in Canada 2001
4 PriceWaterhouseCoopers Global Forest & Paper Industry Survey 2002
5 Natural Resources Canada Criteria and Indicators 2000 status report
6 OECD Reviews of Regulatory Reform, Regulatory Reform in Canada, September 2002, Sue Holmes, Rex Deighton-Smith et al.
7 Statistics Canada
8 FPAC Press Release, January 28, 2002
9 Canadian Forest Service, 2002; Canada's Forest Biodiversity - A decade of progress in sustainable management
10 Canadian Forest Service: 2000-2001, The State of Canada's Forests - Sustainable forestry: a reality in Canada
11 Coady, Linda, 2002. Corporate Social Responsibility.