The government is taking third party forest stewardship contracts seriously in the new Forest and Range Practices Act by allowing the transfer of free to grow obligations.
Transferring Silvicultural Obligations
For years the silvicultural industry has advocated long term forest stewardship contracts. Now the government is taking that idea seriously in the new Forest and Range Practices Act by allowing the transfer of free to grow obligations. Under this scheme a licensee could, for instance, transfer their silvicultural obligations to a silvicultural contractor. The licensee would pay for this transaction leaving the contractor with all the risks, obligations, liabilities, and profits of such a long term commitment. All this would be subject to the minister of forest’s approval.
One hindrance to the transfer is the problem of assurances to the Crown. Licensees have considerable sunk assets and a long term interest, in most cases, in keeping their access to publically owned wood. This acts as insurance against any breach of their silvicultural obligations. But a silvicultural contractor may not have the same attachment to the resource or the retrievable assets. In the latter case a failure would leave the Crown with all the costs.
The NDP, using the silviculture contractor as an example, raised this issue in the Legislature recently. Minister de Jong admitted the provision’s weakness and now government is looking for ideas from stakeholders. The WSCA, having only begun to concentrate its mind around the problem, has initially proposed that smaller operators receiving a transfer of obligations should contribute, based on the size of the transfer, to a fund. This accumulation would act as an insurance pool to be drawn on in the case of a failure. The WSCA conference will host a workshop on this topic.