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Loggers' Sneak Play

January 26, 2005

Two questions: Why did Pacific Lumber Co. sign on to a deal with California six years ago if it was not going to be able to honor the agreement? And is it too late to get our $480 million back?

For that money, the state bought 7,000 acres of old-growth redwoods in the Headwaters area of Humboldt County, along with the logging company's agreement to follow strict conservation rules on 200,000 acres it kept. Now the company is demanding to log beyond what the deal allows in flood-prone watersheds. Pacific Lumber warns that if not given its way it will go bankrupt, laying off hundreds and, it says, leaving all environmental agreements dead. "We are running out of logs," one company exec said. That does happen when logging isn't accompanied by a good land-management plan. If there had been a plan, it would have forecast this problem. Which makes the company either incompetent or dissembling in accepting the half-billion-dollar handout.

Pacific Lumber has a history of hardball tactics, and the state will have to hang tough. California didn't pay all that money for a kiss-off six years later. Last May, Pacific Lumber's chief scientist said the company signed the 1999 agreement only because it retained the option to ease restrictions if research showed no environmental harm would result. That implies the company was looking at loosening the rules from the start.

Pacific Lumber says its latest research shows it could indeed do more logging closer to streams without environmental damage. State scientists should take a magnifying glass to that study. The company faces a $250-million lawsuit from the Humboldt County district attorney, alleging that during Headwaters negotiations, Pacific Lumber submitted false information about the danger of landslides near streams as a result of its logging. (The company bankrolled an unsuccessful recall campaign against the district attorney.)

The first thing the state must do is figure out its legal position. Bankruptcy doesn't necessarily mean that anyone taking control of Pacific Lumber's holdings is exempt from the agreements.

The future of logging in the region is uncertain in any case. Cheap lumber from Russia presents formidable competition to the U.S. timber industry. The northern coastal economy is increasingly driven by tourism, not logging.

Something to watch: The undersecretary of the state Environmental Protection Agency, James Branham, is a former Pacific Lumber executive who, in a previous post in state government, helped broker the Headwaters deal. Californians may get to see up close how well or ill the revolving door of public service/private industry serves the public's purposes.

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