‘Forest Trust’

 

A Forest Enhancement and Watershed Restoration

Policy Recommendation

 

Prepared January 2000 for

the Honorable David Zirnhelt, Minister of Forests

 

by Dirk Brinkman

 

Contents

 

The Policy Gap................................................................................................ 1

Forest Trust Structure..................................................................................... 2

Forest Trust Function...................................................................................... 3

Limiting the Forest Trust Scope..................................................................... 5

Who Benefits?................................................................................................ 7

Appendix #1: Other Provincial Trust Funds................................................ 10

Appendix #2: On Selecting the Name “Forest Trust”................................. 12

Appendix #3: Other Uses of the Name “Forest Trust”............................... 13

 

 

Authorship

 

 

This policy proposal was developed by Dirk Brinkman on behalf of the Western Silviculture Contractors Association (WSCA), the association that has represented silviculture contractors for twenty years. The silviculture industry delivers forest policy and funding initiatives on the ground, and brings their experience of which policy option will be most effective and practical to the Forest Trust recommendation. The industry is thirty years old, involves 18,000 people seasonally, and has enjoyed high wages, labour peace and a relatively stable professional workforce. The Forest Trust policy recommendation has the endorsement and support of the WSCA. Tony Harrison and John Betts secured the support of WSCA Directors and Members and also consulted with many foresters.  Informally, the Forest Trust policy recommendation also received the support in principle of all forest industry representatives consulted.  This group  included a wide spectrum of professionals ranging from field silviculture foresters and FRBC administrators up to divisional foresters, chief foresters and presidents.

 

Dirk has developed a number of silviculture policy initiatives on behalf of the silviculture industry, including the basic silviculture regulations in 1987. He has been involved in numerous policy processes including four National Forest Accords and the National Forest Roundtable. In 1997-8 Dirk represented the silviculture industry in negotiating the Silviculture Collective Agreement between the IWA and New Forest Opportunities.

 

Dirk is president of Brinkman & Associates, one of BC’s largest and oldest silviculture companies. Brinkman & Associates provides forest renewal services, primarily to the forest industry and government, and has completed over 100 various FRBC funded projects over the past five years.

 

 


The Policy Gap table of contents

 


The policy challenge is to bridge the gap between the demand for high standards of sustainable forest management and the limited resource rent available from the harvest. This paper proposes that British Columbia bridge this gap with a Forest Trust mechanism which is arms length from government.  This mechanism requires a defined portion of stumpage for a forest area be placed into a Forest Trust to fund appropriate enhanced forestry and watershed restoration for which the licensees will be responsible.  Carefully designed, the Forest Trusts will drive optimum efficiency, innovation and flexibility in sustainable forest management. Properly implemented, the Forest Trusts will make industry accountable in a way that aligns forest enhancement and watershed restoration obligations with basic reforestation and the Forest Practices Code obligations.

 

Timber harvesting creates the need for forest management, renewal and restoration. Customers, critics and citizens demand a high standard of sustainable forest management for BC's unique ancient forests. BC’s export dependency makes it especially vulnerable to environmental criticism. Forest management funding is limited by the value of rents available from the harvest. During one of the most aggressive decades of economic growth the world has seen, BC´s export-dependant forest sector declined, losing over $1 billion in 1998. Ecological forest management is only sustainable if it is affordable and that must include being affordable during adverse times.

 

With its enormous ecosystem diversity, BC´s forests cannot be managed efficiently through the central bureaucracy we have today. A program which is planned and implemented by local licensees is required.  This is achieved most simply by making enhanced forestry and watershed restoration obligations a cost of access to the resource.  Fortunately, BC has a successful working policy mechanism in licensee’s obligations for ecologically sound basic reforestation, from which an effective legislative intervention can be adapted.

 

Basic reforestation was a massive experiment in the seventies and eighties while it was a government program, with lots of re-plants and failures. Since industry became accountable to reforest all areas logged after 1987, the number of free growing trees per dollar has increased by several times and BC's reforestation program has emerged as one of the largest and most successful ecological restoration programs in the world. This paper proposes that the legislation requiring harvesters to reforest to free-growing be extended to include the enhanced silviculture and watershed restoration required to steward the forest through its rotation.


 

 


Forest Trust Structure       table of contents

 


Forest Trust Concept

This paper recommends that forest licensees each be made accountable for the direct delivery of enhanced forestry and watershed restoration on their license area. The responsibility of the TFL holder (or the local Board of Trustees for a TSA) will be to drive the annual strategic planning process to identify the prioritized treatment goals and execute the selected interventions.

 

Area Based Implementation

The challenge for enhanced forestry and watershed restoration is that these activities have to be prioritized from a forest-wide analysis, and selected within a forest area, and would not necessarily take place within the current harvest area of a quota licensee.

 

Implementation on TFL’s, which are area-based licenses, is simple. Implementation within TSA’s will require the cooperation of all the quota holders. The Innovative Forest Practices Act demonstrated that licensees, who compete for access to timber and in forest product markets, could cooperate at the level of forest management if there is a mutual incentive to do so.

 

If the province were to convert the quota licenses into area-based licenses, implementation may become simplified. However, if the present TSA structure is maintained, local Forest Trust Boards could be set up to represent each of the quota licensee’s within each TSA who would have to appoint one implementation forester to represent them. 

 


Drafting Legislation

The Forest Trust policy can be instituted with a minimum of new legislation. Either the existing Stand Management Fund or FRBC’s present fund could be held as the provincial Trust Fund from which the super-stumpage funds can be dispersed to local Forest Trusts.  The legislation would parallel the basic silviculture obligations in the Forest Practices Code (FPC) and be added to the obligations of the FPC. The original legislation for the Basic Silviculture obligations was drafted by the present Director of the FPC, who has a good understanding of how to adapt the language in the FPC related to Basic Silviculture obligations to the watershed restoration and enhanced forestry sections. The planning flexibility that is given to each licensee will shift that part of the FPC to being results-based.

 

Fund Independence

The fund will be independent and protected from government interference. The legislation which made Forest Renewal BC independent of government can be transferred to protect the provincial Forest Trust.

 

 


Forest Trust Function        table of contents

 


Funding

The Provincial Forest Trust that is responsible to distribute funds to each Licensee Forest Trust responsibilities can continue to be funded from the Super-Stumpage fees currently paid into FRBC. It is recommended that the current median stumpage rate of approximately $150 million per year is affordable by industry and that this rate should be the baseline. However, the algorithm used to calculate the stumpage should be more sensitive to current market price fluctuations. During good years additional funds may be collected to fund the forest management research required to properly direct this investment. With the efficiency gained from the accountability of the Forest Trust structure, long-term output goals can be met at much lower cost than under the current structure.

 

Strategic Planning

The Forest Trust legislation will require the TFL holder or local Forest Trust TSA group to use annual strategic planning to set priorities for the delivery of forest treatments to the limit of the funding. The presence of the licensee and government representatives in the planning process is essential. Operating from consensus in the approval of the annual goals will facilitate the problem of securing MOF & MELP approval.

 

The planning process will follow three stages:

 

Stage One: Equivalent to the level one Strategic Silviculture Plan, this process prioritizes the critical areas and interventions by securing consensus among the local experts. The Strategic Watershed Restoration Planning will use a similar process to prioritize treatments.

 

Stage Two: The resulting lift in AAC or other outputs are evaluated within the area's Growth and Yield and Watershed models.

 

Stage Three: The separate planning processes are integrated to ensure that there are no conflicts between the outputs of silviculture and watershed projects.

 

Planning is to be completed by annual deadlines so that implementation can be orderly, and capitalize on critical biological windows. The set of prioritized actions that emerge from the strategic planning process then become the obligation of the Trust area's licensee’s to deliver during the coming year.

 

Accountability to Forest Sector Interests

The licensee(s), in setting goals for the year is also responsible to take into consideration the local, regional, provincial and international forest sector interests. This commences by presenting a broad five-year plan's proposed output targets to a public review process to allow forest sector inputs, as an aspect of the five-year Forest Management Plan.  The five-year plans will be broad plans that focus on the outputs and leave considerable latitude for flexibility in treatments and implementation to be set by the annual strategic plans.

 

Accountability for Results

Before funding is released, the licensee will have to demonstrate that the project is complete, and the quality is on track to meet the target output goals. If project outputs are not delivered, the licensee will be accountable to bring the project to the goal at their own cost. Cost recovery is only available from the fund at the budgeted amount or less. The licensees will pay the costs for all projects that do not meet these goals or output targets.

 

The licensee may choose to carry increased administration costs to support the involvement of local inexperienced contractors, but these extra administrative or operating costs are their own. That way, subsidized suppliers or poor performance will not compromise the cost or quality of outputs funded by the Forest Trust program. The licensee will also assume all related Forest Practice Code liabilities for all interventions at their cost.

 

Downstream Forest Trust Volume

The day an intervention that improves the flow of volume or value in a forest stand is complete, that same day, technically, an AAC adjustment can be made.  Practically, these adjustments will be made annually by the Provincial Foresters office. The increased timber volume generated by the enhanced forestry treatments will be split 75%/25% between the licensee AAC and volume for First Nation, Value added, Woodlot or Community forest licenses. The increased volume generated by the Forest Trust treatments allocated to the licensee could be marketed on BC’s open log markets. The increased wood value generated on open markets may support higher stumpage fees for future Forest Trust management obligations. Increased value can also be yielded from Age-Grading on the open market and premium pricing the ancient timber.

 

Volume & Value Trading

Forest Trusts will be able to trade up to 50% of their revenue to optimize volume lifts, and watershed benefits accruing to their Forest Trust. In the case that one forest area generates more revenue, and another has a greater opportunity for an AAC lift from an intervention, Forest Trusts can negotiate trades that split the AAC benefits. If quota licenses are converted to area based tenure, the Forest Trust program will provide a framework within which companies may choose to commit some additional funds.

 

CO2 Sink Sales

A unique obligation of the Forest Trust will be to market all CO2 sequestration benefits from all forest management activities within the forest area. Revenues from CO2 sequestration will be used to fund further Forest Trust activities. If a fund fails to sell the carbon sink value of the interventions, the licensees will be levied additional fees equivalent to the market price per ton of carbon at that time. Funds from CO2 sequestration must be used for the inventory and preservation of unique ecosystems, especially ancient forest ecosystems or habitat for rare Species.

 

NSR Elimination or Backlog Program

The backlog elimination program may become a treatment option for the Forest Trust, but not until the backlog stocking standards and the NSR net-down process has been reviewed and appropriately recalibrated by MOF.

 

Most backlog areas enjoy some stocking, but measured against the basic reforestation stocking standards, there is still over 3 million hectares of backlog in BC. BC basic reforestation stocking standards were put in place with the silviculture regulation in 1987 and still stand today.  These strict stocking standards which apply for harvest areas were diluted by MOF to make it easier to meet the obligation to reforest the backlog. To avoid conflicts of interest, the discretionary stocking standards cannot be set by the Forest Trusts.

 

When defining the Eliminate the Backlog program, MOF netted out ‘inaccessible’, ‘uneconomic’ and low and medium sites, among others. Since the greatest performance improvements in reforestation are just emerging or yet to come, MOF´s net down process has to be revisited before redefining the scope of the backlog reforestation options that may be included in the Forest Trust program.

 

Forest and Silviculture Industry Infra-structure

The forest industry currently has the infrastructure to deliver results. There are many experienced silviculture contractors as well as new contractors and workers brought by FRBC into the forests with preferred status, extensive training and subsidies.  Local First Nation’s people and others who really do want to get into silviculture will become competitive sooner when working in a competitive environment.

 

 


Limiting the Forest Trust Scope        table of contents

 


The scope of the Forest Trust agreement is limited to enhanced forestry and watershed restoration to ensure that these controversial responsibilities are kept simple and effective. Some of the activities FRBC funded which are not included are discussed below. Other services, such as economic development for value added, bailouts to mills in trouble, transition training and social assistance programs, are also excluded. These are not discussed further on the basis that it is self evident that these services are better delivered by the appropriate government Ministries, who often have shared federal/provincial funding and appropriate checks and balances in place.

 

Administration

The licensee will be responsible for implementation of the enhancement and restoration programs at their own cost.  No administration cost compensation will be allowed out of the Trust Fund. This will motivate all participants to keep administration costs to a minimum and ensure that all Trust funds go into the forest.  This will be true for government too, MOF and MELP roles are a part of their ministry stewardship duties and will be carried at their own cost. These arrangements protect the core of the program from creeping increases in administration costs. (See the National Article on US State Forest Trusts).

 

Research and Development

The primary purpose of the fund is to do the forest management work that enhances and restores the forest. Some research and development will be required to best direct the investment, but the fund is not designed to fund forest research, which requires a separate independent funding mechanism. Research and development will have to be identified as directly contributing to improving the return on investment of treatments and interventions, and may have to be limited to a maximum of 10% of any areas program funding.

The federal-provincial Research and Development Investment Tax Credits (R&DITC) have been under-utilized by the forest sector and provide considerable potential to provide additional funding for R&D. Most of silviculture is experimental, and many treatments can qualify for R&DITC's if they are a cost to industry. The Trust Fund expenditures can be structured as industry expenditures, which, with proper data tracking will qualify the interventions as R&D and trigger ITC's. ITC's revenue from Forest Trust expenditures will be used to fund further related data collection and research designed to assist foresters and biologists in assessing where best to spend the money and which intervention is the optimum treatment.

 

Inventory

Inventory will not be funded by the Forest Trust. Data collection, storage and its public access is the responsibility of government and must be independent from industry to remove any perception of a conflict of interest. Funding for MOF & MELP's responsibility to obtain and maintain adequate inventories for their stewardship obligations should be funded from general stumpage, and from the data-use charges.

 

Basic Reforestation

Licensee’s basic reforestation obligations should not be included in the Forest Trust strategic planning process or otherwise tampered with at this time. This program is a great success, and is only 12 years old. Free growing obligations extend 12 to 20 years and consequently very few sites have been brought to free growing. At this early stage, reforestation is still undergoing major change and improvement. It would be premature to mix the basic reforestation program into the Trust Fund. It may become compromised by other priorities that will emerge in forest areas and eventually accumulate irreversible consequences.

 

The basic reforestation program is a model illustrating the potential of success for the Forest Trust. The silviculture industry has seen reforestation completely change in the twelve years since the Silviculture Regulation was imposed. While it was a government program, “Basic” reforestation was a massive experiment in the seventies and eighties with lots of re-plants and failures. Since it became an industry requirement on all logged areas in 1987, BC's reforestation program has become what may be the largest and most successful ecological restoration program in the world. On each micro-setting, mixed species that do not regenerate easily are planted to compliment species that regenerate naturally to create a mixed species stand that replicates the former forest stand. On areas logged, reforestation shortens the regeneration lag that would occur if we left the site to natural processes, thus ensuring the sustainability of harvest levels. In a review completed in 1997, 97.5% of all areas logged were on schedule to reach free growing. Forest companies use responsible contractors who pay their valued experienced workers well. Only the MOF program, which continues procurement through low bid auctions without valuing the quality of service, still result in criminal events like stashing. (Dec. 1999, Van Sun, MOF Contractor faces criminal charges and $75,000 fine for stashing.)

 


The real cost per hectare to get a site to free growing has been reduced annually over the past twelve years[1]. These cost savings result from government holding the basic reforestation obligations and standards steady.

 

Tree Improvement Program

The Forest Trust is for managing established forests, not for basic silviculture and will not to be used for the tree improvement program. Industry-wide cooperation in tree improvement programs was once the norm in developed countries. However, breakthroughs in forest renewal have surpassed tree improvement in giving a higher return on silviculture investment.


 

Who Benefits?               table of contents

 

The government gets

*   A balanced effective solution to forest management

*   Increased transparency & accountability

*   Shift of accountability to where it belongs, to the harvester

*   Retain simply the obligation to monitor and enforce

*   Reduce jurisdictional conflicts (between Ministries & FRBC)

*   Forest management decisions decentralized to TFL/TSA level

*   Reduce bureaucracy and organizational dysfunction

*   Greater downstream value in the forests through more effective use of forest restoration and enhancement funds

*   Improved Forest Management cooperation between licensees across BC - as demonstrated by the Innovative Forest Practices Act

*   The participation of those who opted out of FRBC on their license area

 

Forest licensees get:

*   Creative input into direction of fund investment

*   Equitable distribution of fees & benefits

*   70-75% of volume gain from Forest Trust treatments

*   To satisfy First Nations, Communities, Value Added, & SBFEP’s demand for harvest volume from 25-30% of remaining volume gain

*   To benefit from innovation & quality

*   Results-based forest management

*   To choose their suppliers

*   To work with a simple delivery model

*   To trade investment and value between trusts

 

Communities get

*   Increased stability & employment from increased forest sustainability

*   Forest renewal practitioners coming to live near their long-term work

*   Downstream volume for community licenses

*   Increased activity for local service business

*   No distorted expectation of unsustainable handouts

 

Value Added & Small business get

*   Downstream volume (25%) for value added and small business licenses

*   Increased log volume available the open market


 

 

Labour gets

*   The policy the IWA’s forest economist Doug Smyth recommended in his Summer 1999 IWA forest policy paper

*   Increased volume and value flowing to increased permanent jobs

*   To propose the Silviculture Collective Agreement of New Forest Opportunities where licensees have agreed to work only with IWA members

*   Added members wherever the IWA collective Agreement requires the licensee to use only union contractors

*   A stable industry that may be more interested in being organized in future

 

C.R.E.W.S. (Canadian Reforestation & Ecological Workers Society) get

*   Greater stress on quality of service putting a premium on the skills of a professional silviculture worker

*   Increased employment for experienced silviculture practitioners

*   Employment for dedicated new silviculture trainees who want to become experienced silviculture practitioners

*   More stable multi-task employment opportunities

*   Work based training opportunities

*   A chance to diversify their skills & diversify body stress

 

Silviculture contractors get

*   The opportunity to integrate into communities

*   To employ their key people on a more regular basis

*   To innovate improved services, treatments and quality in exchange for security of contract

*   Longer-term work seasons, provided that the contractors are diversified

*   A business future because cost competitive treatments are sustainable

 

First Nations get

*   To continue increasing participation in silviculture and restoration

*   Spin off volume for local band forest licenses

*   Employment opportunities both in the trusts and from downstream volume

*   Healthier future forest licenses due to improved forest management

*   To build competitive forest management capacity

 

Environment Groups get

*   Affordable sustainable forest management

*   Effective watershed restoration decisions made at the TSA/TFL level

*   Funds for preservation from CO2 sequestration; e.g. for unique ecosystems, ancient forest ecosystems or habitat for rare Species

*   Open log markets creating higher timber value and increased rent potential for conservation, restoration and management

*   Funding for the inventory and preservation of unique ecosystems, ancient forests and endangered Species

 


 

 

The public gets

*   Less government intervention in the silviculture and restoration services market.

*   Downstream increase in forest volume and values.

*   Equitable distribution of benefits and accountability.

 

FRBC gets

*   To leave an effective legacy

 


Appendix #1: Other Provincial Trust Funds                table of contents

 


This Green Paper´s proposed Forest Trust is differentiated from the other provincial trust funds by the creative germination process of the legislated annual silviculture & watershed strategic planning process, the goal-focus of measurable prioritized treatments, and complete licensee accountability. This combination will allow BC to grow into the world leader in sustainable forest management.

 

Ontario and Alberta both have forest trust funds. Only Alberta has an intensive forestry trust fund.  This fund lacks the strategic planning infrastructure of BC´s proposed Forest Trust that is intended to give vitality and focus to the licensee stewardship accountability.

 

Ontario

The Ontario program includes two trust funds that were both set up by Howard Hampton, then OMNR Minister under the Rae government, as a part of the Crown Forests Sustainability Act. These are the Forest Renewal Trust Fund and the Forest Futures Trust Fund.  The trust funds were fully supported by the conservative government and have not been changed by them. These funds are paid into one trust fund to reduce administration costs.  The central trust fund disperses funds to each license based on its stumpage payments. The recently announced program Land’s For Life program includes a commitment to Intensive Silviculture which may also become a trust fund.

 

Forest Renewal Trust Fund

The Ontario Forest Renewal Trust Fund is equivalent to BC’s basic silviculture obligation, except the funds required to reach free growing are put into a trust fund based on an estimated cost per cubic meter.

 


Inspired in its inception in 1995, the promised stocking standards were not imposed with the reforestation obligation. Instead, in 1996 industry offered to negotiate these standards with OMNR. Unfortunately, these negotiations have managed to remain constantly deferred. As a consequence, reforestation quality standards and success varies considerably from company to company. Forest license audits have overlooked some neglect in reforestation obligations, on the condition that it was made up in the next five years. In the absence of rigorous stocking standards, there is some tendency to cut some corners. This problem was avoided in BC because the ecological classification of the province was complete in 1987 and correlated stocking standards could be set for each ecosystem.

 

Forest Futures Trust Fund

This fund is used for planting fires and pest areas. BC presently has no funding for reforesting fire areas and this is a problem that needs to be addressed.

 

Intensive Silviculture Program

Ontario’s new intensive silviculture programs are intended to off/set the effect of reduced AAC from set-asides of parks from the Lands For Life program. Ontario recently allocated $5 million dollars to this program, which is probably inadequate to off-set the volume removed from the cut (approximately 3-7%, depending on the license).

 


Alberta

The Forest Renewal Improvement Program (FRIP) was set up in the early nineties, but suffered from a lack of planning and accountability. The program was recently strengthened with the establishment of a Delegated Administrative Organization, a non-profit organization, the Forest Resources Improvement Association of Alberta (FRIAA), which was charged with the administration of FRIP. The association has broad goals and objectives, and licensees or quota holders have 36 months to prepare proposals for the stumpage they have contributed or it can be allocated to other projects.

 

The specific goals licensees have developed for each operating area differ depending on the local forest structure, the history, corporate disposition and where the greatest benefit from the fund may be derived. FRIP has not formalized a more rigorous strategic planning process and would benefit from one.


Accountability is embedded through having licensee planning and expenditures independently audited each year, currently by KPMG.

 

The environmental movement has not taken a great interest in FRIP. It enjoys the support of industry due to its flexibility and a very low administrative cost component.

 

FRIP permits expenditures for research and Alberta foresters feel it is essential to fund research so that key uncertainties can be eliminated before large amounts are invested in forest programs. Cooperation between licensees allows larger research studies and avoided duplication.

 

FRIP funding can also prioritize backlog planting and this has been an important part of the FRIP program. 



 

Appendix #2: On Selecting the Name “Forest Trust”         table of contents

 


The role of forest enhancement and watershed restoration is not renewal of the forest, but its maintenance through sustainable management, and as such the name Forest Renewal is not appropriate for these activities, and the name “Forest Trust,” which reflects the trust of this stewardship, is more appropriate.

 

Because the use of the name Forest Trust is associated with preservation, the name will invite some criticism from non-profit environmental and preservation trusts. However, this will create a welcome debate and give the government an opportunity to show case the ecological restoration program elements of the BC’s Forest Trust.

 

The name lies on the high road for meeting the challenge of environmental criticism. BC Forest Trusts can achieve the highest standards of sustainability and restoration of any forest trusts in the world.

 

Other Options

1. ‘Forest Renewal Trust’

‘Forest Renewal Trust’ fails to distance the new legislation far enough from Forest Renewal BC.  The name should also differentiate itself from Ontario’s Forest Renewal Trusts. These are, in practical terms, only concerned with reforestation obligations, not forest enhancement or watershed restoration. Ontario Forest Renewal Trust legislation was also NDP initiated by Howard Hampton, then the Minister of Natural Resources. The legislation enjoyed the support of all parties when it was passed—an unusual event in the tumultuous legislature of that day—and has not been altered by the conservatives.


2. Future Forest Trust Fund

The Rae government also passed the legislation adding Ontario’s “Future Forest Trust Funds”, which are for special events like fire and pest damage, not intensive forestry or restoration.  This fund concept would be a benefit in BC also, as there is no funding for fire regeneration. 

 

3. Forest Care Trusts

“Forest Care Trusts” is a name that would be associated with the Alberta Forest Products Association Forestcare (Trademarked) Code of Practices certification and marketing program.

 

4. Forest Resource Improvement Program (FRIP)

This name is already in use in Alberta. The results orientation and planning freedom of these funds is much envied by the BC industry.


 

 

Appendix # 3: Other Uses of the Name “Forest Trust”              table of contents

 


‘Forest trusts’ throughout the world are all set up as non-profit trust funds. They have been set up both privately, and by governments. Whether they are private charitable trusts or trust that are formed or held by government bodies, they are busy with preservation, restoration and education of forest ecosystem values and sustainability.

 

American Forest Trusts

The US is Canada’s largest customer, and policy change in BC can influence the course of negotiations to prevent tariffs, quotas or countervailing duties. Consequently, forest trusts from the US are discussed first.

 

State Forest Trusts are funded through fees from the harvest of forests under US State control. The harvest or sales of products (including non-wood vegetative matter) is governed by state law to ensure the highest economic benefits go to the state. Industry understands the trust payments as a cost of logging. Reforestation, forest management, habitat restoration and enhancement is funded from these trusts.

 

Recent criticism of these funds sounds very much like criticism of FRBC[2]. The Forest Trust proposal in BC is designed to avoid these criticisms through

*   the strategic planning process,

*   goal setting and

*   accountability by industry

*   and industry trustee’s watchdogs monitoring MOF/MELP admin.

 

Other US Trusts

Blanton Forest Trust, the largest ancient forest in the state of Kentucky, which has less than 1.2 percent of its original undisturbed forest left.

 

Forest Management Trust. Based in Florida, a non profit association that funds projects which enhance sustainability for local involvement in working forest areas which are already managed according to FSC on this assumption that only a tiny percentage of forest land area will ever be preserved.

 

The Environmental Resources Trust (ERT) is a private non-profit organization.

ERT helps to create markets for environmental resources regionally, nationally, and globally through value-added and environmentally beneficial transactions.  ERT believes that a sustainable future can be reached if businesses are economically rewarded for making sound environmental decisions and consumers are able to choose environmentally superior goods and services in the marketplace.

 

Scottish Forest Trusts

The Carrifran Wildwood Trust seeks to recreate the original wildwood diversity that existed on the Scottish hills 6000 years ago. They were trying to raise L350, 000 or L500 per hectare. It is associated with the older, more well known John Muir Trust.

 

Borders Forest Trust: a community based education and restoration society that restores, plants, surveys and protects forest and wildwood areas.

 

John Muir Trust

Aims of the Trust  [From the Memorandum of Association of the John Muir Trust]

3.1 The Trust's object is to conserve and protect wild places with their indigenous animals, plants and soils for the benefit of present and future generations, and in particular

3.1.1 to conserve wild places and their landscapes, both for their own sake and for the sustenance and inspiration they give to humanity;

3.1.2 to protect existing wild places so as to conserve their natural processes, and their indigenous animals, plants and soils;


3.1.3 to renew wild places, where they have been damaged, by encouraging natural processes;

3.1.4 to work with local communities and to encourage them to live in harmony with wild places;

3.1.5 to promote an awareness and understanding of wild places for their own sake and for their value to the benefit of humanity;

3.1.6 to stimulate public support to help protect wild places;

3.1.7 to encourage voluntary participation in the conservation and renewal of wild places.

 

Australian Trusts

National Heritage Trust; a $1.25 billion fund for the restoration of Australia. ‘Helping communities help Australia.´

 

Asian Forest Trusts

The Asian Geographic Trust was established on 21 Nov 1997 at New Delhi, for the advancement and diffusion of geographic knowledge. Its main objectives include: protecting and fostering a love for our environment and natural heritage; encouraging

the spirit of adventure and discovery and spreading the knowledge of Asia to Asians and the world.

 

This is not an exhaustive review of the use of Forest Trusts world wide, but it provides a clear indication that the name “Forest Trust” and its related concepts would be in good company.



[1] KPMG´s Cost of Harvesting Report in 1997 indicated that the cost of reforestation increased from 1992 $2.41/cu m to 1996 $4.11/ cu m.  This reflected the fact that the annual addition of harvest areas for which there were 12 to 20 years of annual treatment obligations were coming on-stream faster than free growing areas were being released. The net cost per cubic meter for all areas harvested that have not reached free growing will continue to increase until the rate of free growing release equals or is greater than the rate of harvest, probably about 2004.  However, the net cost per hectare for getting a plantation to free-growing within the deadline will continue to be reduced by accountable and  innovative silviculture foresters and contractors.

 

[2] THE ASSOCIATED PRESS; WASHINGTON – 1999´Forest Service Trust Funds May Be In for Overhaul´

 “Critics call them the Swiss bank accounts of the Forest Service – funds containing $400 million that the agency spends each year with no oversight from Congress or the public.

The money comes from four dedicated trust funds set up by Congress decades ago to pay for maintaining roads, planting trees and removing dead timber and brush in national forests. They're different from most Forest Service accounts because the money is automatically collected at field offices each year, mainly from timber companies who log federal land, and then spent without annual approval from Congress.

 Critics say that while much of the money has been appropriately spent, forest managers have used tens of millions of dollars from the funds to pay for overhead costs such as administrative salaries, office supplies and travel budgets.

"The taxpayers are just basically getting ripped off," said John Bowman of the watchdog group. Taxpayers for Common Sense. "There is misuse and mismanagement."

Members of Congress from both political parties criticize the Forest Service for poor accounting of  its trust-fund spending.

"We're concerned about it," said Rep. Ralph Regula, R-Ohio, who chairs the interior

subcommittee of the House Appropriations Committee. "They've been scooping off a pretty large number from the top . . . for administration."

The General Accounting Office (GAO), Congress' investigative arm, found last year that from  1993 to 1997, Forest Service use of the funds for overhead costs increased from 16 percent to 27 percent of the total.

So the Forest Service is taking corrective action. Officials are implementing better accounting procedures and trying to reduce the amount of trust-fund money spent on overhead.   Agency officials are also considering a more drastic step. They may ask Congress to end the  accounts' trust-fund status and make them part of its regular annual budget appropriation.  That would allow Congress to examine the programs yearly and decide whether to fund them.  "We don't need to hide what we do," said Chris Wood, a top aide to Forest Service head Mike Dombeck. "We think we can make a case for the activities listed in those funds."  Still, Wood cautioned that the agency may opt for more internal reforms. Forest Service officials worry that the programs -- considered essential -- might be scrapped if funding decisions are left to Congress.

Here's a rundown on the trust funds and their 1998 funding:

*   Replanting fund, $190 million, set up in 1930 to pay for replanting trees in areas that have been logged.

*   Timber-salvage-sale fund, $151 million, begun in 1976 to pay for removal of dead, insect-infested and diseased trees

*   Brush-disposal fund, $23 million, started in 1916 to pay for the disposal of brush and  other  debris from logged areas

*   Roads and trails fund, $50 million, set up in 1913 to help pay for maintenance of roads and trails.

This account gets money not just from timber receipts, but from 10 percent of all revenue generated by national forests, including hiking fees and campground revenues.

Environmentalists cheer the possibility of an end to the accounts' trust-fund status.

Since three of the four funds are financed by logging receipts, they argue the system provides a  "perverse incentive" for forest managers to log more.

"Paying for fish and wildlife programs from logging money is like selling cigarettes to pay for  lung-cancer research," said Amelia Jenkins of Forest Service Employees for Environmental Ethics in Washington, D.C..

The four funds make up more than 10 percent of the Forest Service's annual spending, about $3.4 billion this year, and have been an island of stability in an era of declining funding for the agency. Congress, worried that the Forest Service was using too much of the trust fund money for overhead, passed appropriations bill language last year that caps use of the funds for overhead at 20 percent. The language also requires the Forest Service to report projected overhead costs for each trust fund.”