e Lumber exports to Europe have plummeted since the discovery of a shipment contaminated with the insect larvae. European ban threatens lumber jobs by Phillip Leg; Assistant papeonch Director IWA-CANADA The on-going issue of green lum- ber shipments to Europe took a turn for the worst with the discov- ery of an infested shipment of lum- ber in late-June. The lumber, which was produced by a Maritime sawmill, had violated European environmental regulations, which are designed to control imported commodities that can carry insects harmful to European forests. With forest industry unemploy- ment close to 30%, the last thing woodworkers need is to lose an important market like Europe. According to industry estimates, the ban could hit a major portion of Canada’s lumber shipments to Europe and put at risk close to $700 million worth of lumber shipments from B.C. alone. At issue in the European Commu- nity (E.C.) regulation of green lum- ber is their concern about the pinewood nematode. This micro- scopic bug is indigenous to North American forests and the E.C. is concerned that without specific restrictions, green lumber from Canada could be contaminated with nematode larva which, once shipped to Europe, would devastate forests in that region. The contamination could occur if the manufacturing process does not eliminate the bark and bore holes from a piece of green lumber. It is this wainy portion of a green board that carries the nematode larva. The most effective way to deal with the European regulations is to kiln dry all lumber shipments. However, Canadian producers argue that kiln drying is not a viable answer for all their lumber shipments. As an interim measure, the Euro- peans had provided some exemp- tions for green lumber shipments from Canada. But the discovery of | the infested shipment in June has all but eliminated those exemp- tions. Starting in July, the European authorities have specified that all lumber products from Canada have to be either kiln dried or heat treat- ed (core of wood must be heated to 56°C). The only exception to this provision is western red cedar, which the Europeans recognize as not subject to pinewood nematode infestations. The impact of the European ban on green lumber has been very sig- nificant. B.C. mills, for example, which traditionally have supplied a large portion of the European mar- ket, have seen their shipment vol- umes drop from an average of 1.1 billion board feet prior to the ban to less than 500 million board feet cur- rently. Regaining lost markets in Europe will be an uphill battle. In the short term, Scandinavian producers have moved quickly to fill the void left by Canadian mills. Adding to their close proximity to the European market, the Scandinavian mills also benefit from a recent devaluation of their currencies relative to the European currencies. The 25 to 30% devaluation has provided a very immediate boost for Swedish and Finish lumber producers. Over the longer term, however, Canadian mills can regain the loss- es that they are currently seeing in Europe. But to achieve that will require a substantial commitment to kiln drying. The IWA has long argued that it makes more sense to dry and ship lumber to Europe than live with the uncertainties of exemption from established Euro- pean regulations. Value-added report draws mixed reviews from IWA In early June, a Committee of the British Columbia Legislature reported the results of a six-month study and public hearing process on the issue of value-added wood prod- ucts manufacturing in B.C. Because of the employment implications that surround any shift towards value- added, the Committee’s report has generated considerable debate with- in the B.C, forest sector. How the goals of the report, espe- cially those related to employment, are achieved and what that will mean in terms of policy change in B.C. are still unresolved questions. From an IWA perspective, unless the programs esta’ lished by the previous Socred government are completely overhauled, any of the recommended amendments outlined in the Committee’s report would not help achieve the stated goals. major Socred on val- ue-added, the Business For- i Enterprise Program (SBFEP) fee a iacaied ithe late 1980's. Rather than direct established oper- ators into higher value manufactur- ing activity, the SBFEP encouraged new pom panies to start up opera- tions in the industry. On the manufacturing side, many of these “new” operations were non- union, low-wage facilities. Even more troubling for the IWA was the possibility that the work done in these “new” operations could trans- late into less work in established, unionized mills. A similar pattern existed on the logging side of the industry because most of the harvest available under the SBFEP was the result of reduc- tions in the cutting rights of estab- lished licenses. In many instances, the impact of SBFEP meant that unionized company crews were being replaced by non-union, con- tractor crews. Unfortunately, the Committee’s report does very little to significant- Continued on page two ° The IWA says value added policies should be geared for high skills and high wages. LUMBERWORKER/NOVEMBER, 1993/3