THE ‘BIG LOG’ SCAM Northern B.C. mill finances operations with exports of large logs (continued from page one) operate in the export market without having fulfilled the obligation of its forest licence. Today, Wedeene operates, on an allowable cut of 125,000 cubic metres, a small sawmill at Butze Bay in the Prince Rupert Industrial Park which can only manufacture wood with a butt diameter of twenty-eight inches and under. The company continues, unhin- dered by the Socred government, to export all its high-grade wood with butt diameters over twenty-eight inches. “When you build a coastal sawmill you don’t build only a mill that can handle small logs,” says Surinder Malhotra, a Business Agent with Log- gers’ Local 1-71. “Wedeene’s intent has been to export the oversize logs.” The evidence to support this is clear. Since 1983, the Ministry of Forests has granted Wedeene the right to export millions of dollars worth of prime timber. And Wedeene has re- neged on the commitment within its forest licence to build a sawmill that can handle the whole profile of the timber on no less than three occasions. All of this from a company which is considered anti-union, has a history of environmental disruption, and had threatened not to build the mill unless guaranteed access to a large timber stand in an area being considered for an ecological reserve. Prince Rupert MLA Dan Miller questions the government’s handling of the entire Wedeene issue. “Should the Crown allow a private company to have access to our timber resource and sell that timber on the export market to raise capital to finance the construction of a process- ing facility?,” says Miller. “My view is that we shouldn't as a matter of public policy. It’s clear that’s what happened in this case.” “We are putting the cart before the horse,” say Phillip Legg, Assistant Research Director at IWA-CANADA. “Companies are being allowed access to the timber resource without ade- © Ex-Forests Minister Dave Parker sign- ed away an estimated $9 million of export timber to Wedeene in 1989. quate facilities in place to process that timber.” “In the Wedeene case, the govern- ment has granted a forest licence with- out rigorously enforcing all the terms and conditions of that licence,” adds Legg. 6/LUMBERWORKER/DECEMBER, 1989 © Wedeene River Contracting Ltd.'s mill in the Prince Rupert Industrial Park. The long awaited mill started production in March 1989, five years after receiving its forest licence. © Employees of Probyn Log Ltd., a New Westminster based log broker, eye a large spruce destined for export at Wedeene's dryland sort. When Wedeene was first given its licence in 1983, it put up a $50,000 performance bond on the construction of a mill to be built within three years that would manufacture 200,000 board feet per shift. In August of 1984, the company’s General Manager, John Laughland, came out with an announcement that the company could not finance the $38 million mill without access to wood from the nearby Khutzeymateen Valley, an area forty-five miles north- east of Prince Rupert which contains gigantic Sitka spruce groves. The acting Regional Manager in the Ministry of Forests (Smithers Region) V. M. Strain in January of 1984 wrote Wedeene saying their for- est licence didn’t pre-ordain any har- vesting rights in the Khutzeymateen. Wedeene ignored the Forest Service letter and made public statements that they needed the valuable wood anyway. Since 1978, the Khutzeymateen had been withdrawn from forest lands pro- duction in consideration of eco-reserve status. The valley is one of the last untouched wild grizzly bear sanctuar- ies on the north coast. Wedeene, without any processing capability whatsoever, was poised to liquidate the gigantic old growth stands for export purposes. The val- ley contains more than 1.5 million cubic metres of operable timber. In 1984 Wedeene said 150 mill jobs would be created and the work could begin that summer on a mill to be completed in 1986. Prince Rupert Mayor Peter Lester wrote the Deputy Minister of Forests in January of 1985 to express con- cerns that a mill should be built in the city. ° NDP Forest Critic Dan Miller . . . ques- tions government policy of providing log exports as a means of raising capital for Wedeene. In an announcement in the Prince Rupert Daily News on March 7, 1985, Laughland said by the fall of 1985 a two-shift mill, designed to process both poor and high quality sawlogs, would be cutting logs with a twenty to sixty-inch butt diameter. The sec- ond stage would soon follow that would upgrade the mill to process 92 million board feet per year out of logs with a six to sixty-inch diameter. _In an amendment to its forest licence dated on December 5, 1985 and signed by Ken Ingram, then Regional Manager of the Prince Rupert Forest Region, Wedeene agreed to diligently pursue the construction of its mill to utilize not less than 125,000 cubic metres of wood annually and prom- ised completion by the end of Octo- ber, 1986. Dan Miller questioned John Sav- age, then Acting Minister of Forests and Lands about the construction delays in March of 1987. Savage told the legislature that a processing facil- ity which must produce lumber and chips had to be operational by August, 1987 or their licence would be subject to cancellation. Another dead- line extension by the Socred govern- ment. The delays continued year after year as successive Orders-in-Council to export high grade timber out of the country were granted by the Minister of Forests. In June of 1986, three successive Orders-in-Council signed by then pre- mier Bill Bennett and Jack Heinrich, then Minister of Forests, were granted to Wedeene to export for a period of one year, all hemlock and balsam which couldn’t be processed in the vicinity in which it was logged or be “transported economically to a pro- cessing facility located elsewhere in the province.” Wedeene scored big on the blanket giveaway, while the government turned its back on the mill’s construc- tion. In May of this year Miller again took on the Ministry questioning then Forests Minister Dave Parker in the legislature as to why he had just granted Wedeene an export permit for more than 61,000 cubic metres of logs with butt diametes in excess of twenty- eight inches. The permit constitutes an estimat- ed $9 million giveaway to Wedeene. Parker responded that by selling those oversized logs, the operator would get a “cash flow” to provide for upgrading of his mill. Clearly the Minister was allowing Wedeene to finance its broken promises with high- grade log exports. POOR ENVIRONMENTAL TRACK RECORD Wedeene, owned and operated by Terrace businessman John Williams and his sons, has an unenviable track record in logging. After receiving their forest licence in 1983 the first thing the company did was approach the City of Prince Rupert to log within its watershed. The application was categorically rejected. In July of 1983, the company was working in Silver Creek, a small water- shed seven kilometres northwest of Prince Rupert, building roads in steep, unstable areas. Ignoring the advice of soil specialist Jim Schwab, Wedeene punched some right-of-way which eventually triggered an enor- mous slide which caused the torrent- ing of a gully into Silver Creek. (Continued on page 7)