DEFINING CONTRACTOR SUSTAINABILITY ]
No, Thatâ€™s The Other Guy:
Building Partnerships in the Forest Industry
Wuikinuxv Nation and the Johnson Creek Project
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SUMMER 2015 Volume 38 Number 2 www.tla.ca
Columns & Departments
32 Goliath? No, That’s the Other Guy: Building Partnerships in the Forest Industry
TLA Vision: Collaboration & Diversification Don Banasky
Executive Director’s Message
At the Table: Building Contractor Sustainability on the Coast David Elstone
10 Interior Logging Association’s Message
Relationship Building and Conference Success at the ILA Wayne Lintott
13 North West Loggers Association’s Message Finding a Common Voice and Supporting Our Members Bill Sauer
15 Market Report
Increasing Our Global Competitiveness: The Time Has Never Been Better David Elstone
17 Safety Report
Faller Certification: Does Certification Mean Qualification? Jim Girvan
18 Legal Report
Unresolved Aboriginal Title Claims: Risk Allocation and BCTS Jeff Waatainen and Jason Fisher
20 Business Matters
What Are Contractors Missing? And it Might Not Just Be a Better Rate James Byrne
Features 23 Defining Contractor Sustainability TLA Editorial
28 United Fronts and Big Machines: ILA 57th Conference and Trade Show Brenda Martin
38 The Costs of Injured Workers: Financial, Emotional and Long-Term Ian McNeill
44 Building Bridges: Wuikinuxv Nation and the Johnson Creek Project Hans Peter Meyer
48 Motivating Innovation: How New Zealand Has Improved Their Safety Record David Elstone
54 More Photos from the ILA’s 57th Conference and Trade Show Cover photo: Brenda Martin
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The Truck Loggers Association 2015 Executive & Directors
Interior Logging Association 2015-2016 Board of Directors
Chairman Reid Hedlund Don Banasky First Vice Chairman Randy Spence Jacqui Beban Graham Lasure Second Vice Chairman Len Gudeit Past Chairman Ed Smith David Elstone Directors Lee Callow Ted Beutler Guido Claudepierre Howie McKamey Dennis Cook Dave McNaught John Drayton Lukas Olsen Randy Durante Clint Parcher Matt Edmondson Mark Ponting Frank Etchart Mike Richardson Scott Horovatin Barry Simpson Jeff Kineshanko Doug Sladey Hedley Larsen Matt Wealick Bill McDonald Adam Wunderlich Tim Menning Associate Directors George Lambert Ron Volansky Tim Lloyd General Manager Wayne Lintott Brian Mulvihill Administration Nancy Hesketh Adam Pruss Carl Sweet Editorial Board Don Banasky Interior Logging Association Jacqui Beban 3204 - 39th Avenue James Byrne Vernon, BC V1T 3C8 Graham Lasure Tel: 250.503.2199 Fax: 250.503.2250 Wayne Lintott E-mail: firstname.lastname@example.org Brian Mulvihill Website: www.interiorlogging.org Bill Sauer
President Vice President Past President Executive Director Industrial Directors
CAMPBELL RIVER 207 - 1100 Island Highway, Campbell River, BC V9W 8C6 T: 250-287-0143 E: email@example.com
SUMMER 2015 / VOLUME 38 / NUMBER 2 Editor Brenda Martin Contributing Writers Don Banasky
Jacqui Beban James Byrne David Elstone Jason Fisher Jim Girvan
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Wayne Lintott Brenda Martin Hans Peter Meyer Ian McNeill Bill Sauer Jeff Waatainen
For editorial information, please contact the Truck Loggers Association: Tel: 604.684.4291 Email: firstname.lastname@example.org For advertising, please contact Advertising In Print: Tel: 604.681.1811 Email: email@example.com Truck LoggerBC magazine is published four times a year by the Truck Loggers Association, with content and support from the Interior Logging Association and the North West Loggers Association. Its editorial content seeks to reflect issues facing the industry and to provide readers with current information on B.C.’s forest industry. All rights reserved.
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Advertising In Print 200 - 896 Cambie Street, Vancouver, BC V6B 2P6 Tel: 604.681.1811. Fax: 604.681.0456 Publication Mailing Agreement No. 40010419. For subscriptions, contact firstname.lastname@example.org or 604.684.4291. Send change of address notices and covers of undeliverable copies to: The Truck Loggers Association Suite 725-815 West Hastings Street Vancouver, BC V6C 1B4 E-mail: email@example.com
Tel: 604.684.4291 Fax: 604.684.7134 Website: www.tla.ca
from the Editorial Board DESK...
elcome to the Summer 2015 edition of Truck LoggerBC magazine! As we move into what is predicted to be a hot and dry summer—there have already been shutdowns and work restrictions due to weather—this magazine will give an update on the other issues facing the forest industry in BC. The Safety Report looks at faller certification in BC and Alberta and whether fallers trained in Alberta are certified to fall in BC’s coastal forests. We also have two interesting features focusing on safety. “The Costs of Injured Workers: Financial, Emotional and LongTerm” looks at the forestry industry’s return to work statistics and what is being done to improve them. “Motivating Innovation: How New Zealand Has Improved Their Safety Record” investigates how changes to the safety requirements in New Zealand’s logging industry inspired innovation and technological advancements primarily around steep slope logging. The Legal Viewpoint looks at how the recent court decisions on First Nations rights and title will affect loggers who work on BC Timber Sales. And one of our feature articles completes our four-part series on successful First Nations/TLA member partnership. This article highlights the partnership between Wuikinuxv Nation and Capacity Forest Management on the midcoast and shows us what forestry post the Tsilhqot’in Decision might look like. To read all of our articles highlighting successful partnerships, go to our website at www.tla.ca/FirstNations.
The Business Matters article focuses on the importance of building respectful relationships between licensees and contractors. Building on that concept, we also elaborate more on contractor sustainability. First, we define what it is in “Defining Contractor Sustainability” on page 23. Further along in the magazine, we hear about contractor sustainability in action! In the article, “Goliath? No, That’s The Other Guy: Building Partnerships in the Forest Industry” licensee-contractor partnerships in BC are highlighted where mutual respect, long-term planning and appropriate risk sharing are addressed. In May, the TLA Board of Directors attended the 57th Annual ILA Conference and Trade Show in Vernon and really enjoyed it! It was a great opportunity to build relationships with the other logging associations and meet with Minister Thomson. Thank you to the ILA for their generous hospitality and excellent event and trade show. As always, we hope you enjoy our magazine and that you find it informative. If you have any feedback or comments, please contact Brenda Martin, Director of Communications, at 604.684.4291 ext. 2 or firstname.lastname@example.org
Jacqui Beban, Nootka Sound Timber Co. Ltd Editorial Board Chair
Summer 2015 Truck LoggerBC 5
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TLA President’s MESSAGE
TLA Vision: Collaboration & Diversification
art of writing a President’s Message is reflecting on our efforts since the last edition of the magazine. This is an enjoyable time to revisit the past few months and realize the progress we have made. The TLA is fast becoming known as a proactive force within the industry, our coastal communities and the media. Providing continuous member benefits and support through well-orchestrated plans drives our association and the many volunteers that help us every day. With this in mind, we have completed our strategic planning session and are finalizing our strategic plan. I would like to publically thank all those who attended and volunteered additional time away from their businesses for this process. A vision and clear direction is what will pave the way for success in our advocacy work. I recently attended the ILA 57th Annual Conference and Trade Show in Vernon. To show our support for the ILA, we held a TLA board meeting in conjunction with this event. It was a huge success with most of our board in attendance. After the TLA board meeting, the ILA and NWLA boards joined us for further discussion. This meeting was instigated by the executives of the three associations in an effort to build our voice when speaking to government, licensees and communities. This historic meeting dispelled some longstanding myths and presented a real opportunity for collaboration both during the convention and moving forward. All three associations attended a meeting with Minister Thomson during the convention and our common message was heard loud and clear. The Minister acknowledged that the joint meeting created a powerful, united front for the contracting community. We made it clear we are here to do business and provide realistic solutions with contractor sustainability at the core. Another area the TLA remains focused on is safety. Our Safety, Training and Industrial Relations (STIR) com-
mittee worked hand-in-hand with our Education committee to launch a new project in May. Until December 2015, up to 12 TLA member employees can apply to receive reimbursement for their Occupational First Aid Level Three registration fee and a bursary of $1,000 in additional financial support upon the successful completion of the course. This initiative is part of a results-based focus by Ted Beutler, Chair of STIR and Dave McNaught, Chair of Education and their committees. The project is designed to assist smaller contractors in our membership who may be looking to increase their level of professionalism and response time in the bush. Please contact Brenda Martin, Director of Communications, for details at email@example.com. It’s great to see our committees working together to create value for our membership and the industry as a whole. The TLA also continues to learn about First Nations’ evolving roles within the forest sector. There are a lot of questions and some uncertainty. However, our Aboriginal Affairs committee continues to ask questions and develop answers and, in this way, keep the TLA informed so we can help bridge the gap in knowledge and keep our members up-to-date. The Aboriginal Affairs committee has already developed a TLA position statement on the Tsilhqot’in Decision that we launched at our convention in January (www.tla.ca/tsilhqotin). They are now working on a guiding principles document around First Nations partnerships which will be released later this year. Building up to this document, we have been highlighting existing TLA/ First Nations partnerships in past issues of the magazine and there’s an article in this issue on page 44 highlighting another partnership on the mid-coast. To see all the articles in this series, visit www.tla.ca/FirstNations. As the marketplace changes to accommodate a broader spectrum of licensees such as First Nations, the way the coast
does business may change as well. This new era may swing some contractors away from the traditional clients we provide services to. Will this change log deliveries for the majors? Will there be better opportunities for contractor sustainability within these new relationships? One of our feature articles in this issue, “Goliath? No, That’s the Other Guy,” on page 32 definitely suggests there could be. With continued pressure on financing, our current inability to reinvest, an expiring softwood lumber agreement, poor market conditions, a forecasted hot summer and continual contractor dispersals, this may be a first step to a new successful supply chain where rents are shared and reinvestment is an option. Let’s remember, the TLA is a proactive association. Recently, several coastal communities have asked to join the TLA. This is exciting! They see the value of our voice and they understand that our members are the economic backbone of their communities. So it is more important than ever to ensure we get the industry on the right track. The TLA has solutions to ensure the supply chain remains intact. We can be objective in our approach and our phones are on always on. I look forward to working together with industry to build financially successful business relationships throughout the supply chain. Creating opportunity and value from our forests, maintaining and actually harvesting the AAC, investing in our communities through safe, well-paying jobs—this is what our province was built on. If you have questions about our plans moving forward, please take two minutes to call me or David Elstone, TLA Executive Director, to discuss. And, as always, take two extra steps and two extra seconds to ensure you and your co-workers go home safely each day. Don Banasky, President, TLA Tel: 250.668.7746 Email: firstname.lastname@example.org
Summer 2015 Truck LoggerBC 7
TLA Executive Director’s MESSAGE
At The Table: Building Contractor Sustainability on the Coast
s I approach my half year mark in the Executive Director seat, the aura of being the new guy has begun to fade. While the colourful history and stories of this Association and its members are varied and never ending, many of the challenges that I continue to hear from contractors are becoming all too familiar. I am growing to appreciate that the role of the TLA, and my position in particular, is to be a change agent on behalf of our members and perhaps the industry as a whole. And change is what I aim to achieve, starting with dispelling the many misconceptions that permeate the forest industry. For example, the notion that there is a never ending supply of contractors has likely led some major licensees to hold a false sense of security when negotiating with a lack of respect and pushing rates ever lower. Recent evidence of this concept failing came to light when West Fraser publicly advertised for contractors with steep slope experience to come to Quesnel. This suggests two things. First, those hoping a flood of BC Interior logging contractors will come to the coast as the Interior allowable annual cut (AAC) falls due to the mountain pine beetle are betting wrong. (A large contractor operating in the heart of the beetle belt, is going to auction as the magazine arrives in your mailbox.) Second, as the transition to steeper slope continues, those contractors with the requisite skills and capital are clearly less abundant. Another common argument used by the majors is that “the pie is only so big” implying markets are what they are and there is no ability to improve rates. Yet, early financial results for 2015 for some of the majors boasted double-digit margins. From the view of the contractor, the financial success begetting some of their customers has come largely at the expense of contractors barely breaking even or
8 Truck LoggerBC Summer 2015
worse. Obviously, contractors are not even eating from the same pie. Unfortunately, the Chinese market has gotten worse, but I am not convinced the full impact of that has been felt in the coastal logging sector. And as such, I have been hearing rumblings that the top officers of the majors want costs reduced as a way to preserve profitability in this worsening market. However, it is not only the major licensees that are guilty. As an outsider, I’m surprised that many in the contractor community accept a culture of failure. The asymmetry of massive financial risks that provide low returns to contractors is mind boggling. Yet, when a contractor fails, it is often just discounted as “that guy should have known better.” This culture needs to change. I said recently at a TLA industry networking event: hope and passion do not make for a good business plan. Contractors always need to know their markets, costs and abilities. And while it is easy for me to write, and as was opined in a letter to the editor by Dave Lewis in our last magazine, contractors need to say “no thanks” when it comes to offers of work which are uneconomical or the sharing of the risks are grossly lopsided. Yes, there always seems to be another low-ball operator willing to step up. But I find it hard to accept that this is the kind of supply chain licensees and their investors want. Managing new and unfamiliar faces all the time does not contribute to lower delivered log costs. As I interact within the industry, both sides tell me that contractors and licence holders need each other. Trees do not get cut and logs do not get delivered without loggers doing the work and without operating mills, there is no need for the logs. I also hear that the majors believe in having a healthy contractor community. Unfortunately, the follow through on demonstrating that value by walking their talk is
glaringly absent. Why else would they rely on the next lowest bid and having communities pay the bills when contractors go insolvent as a strategy to reduce log costs? Many a contractor has lamented that the old days of trust in a relationship where a contract was sealed with a handshake are long gone. At the same time, I have been told by the majors that trust needs to be re-established between us. I can honestly say that we (the contractors) have never left the conversation and are willing to provide solutions. This industry is ripe for technological advancements, which would likely add to safety and lower delivered log costs. But without progress on changing the relationship between the major licensees and contractors, this potential will continue to wither and investors will look elsewhere. The first step towards re-establishing trust is acknowledging that contractor sustainability is an issue facing the forest industry supply chain in this province. Ironically, while rates are perceived as the major concern, there are many areas where the relationship with contractors can be improved that will reduce costs, especially as we appear on the cusp of another belt-tightening cycle. Once a discussion on contractor sustainability begins in earnest, then the misconceptions outlined fall to the wayside and work can begin on bringing about a fair and respectful relationship. A lack of positive traction on this will be problematic. At the end of the day, success of the industry is a joint responsibility. Don’t be surprised to see contractors looking out for themselves, one way or another, with the TLA helping to lead the way. David Elstone, RPF, Executive Director, TLA Tel: 604.684.4291 ext. 1 Email: email@example.com
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Interior Logging Association’s MESSAGE
Relationship Building and Conference Success at the ILA
hairman Reid Hedlund, the ILA board of directors and the ILA staff would like to again thank all the trade companies and their employees for their continued support of our conference and trade show. A special thank you goes out to all the companies that co-sponsored our social events. For more details on the conference and trade show refer to Brenda Martin’s article, “United Fronts and Big Machines: ILA 57th Convention and Trade Show,” about the event on page 28.
Decision and acknowledged it is a complicated process that will take time to resolve. Looking forward, Minister Thomson encouraged the industry to continue to build its social license by promoting and explaining our industry to the communities we operate in and complimented the industry on our much improved safety record. He also talked about the serious investment government has made to ensure the labour supply going forward, particularly
Minister Thomson discussed contractor sustainability and committed to having it folded into the provincial government’s competitiveness strategy agenda. One of this convention’s successes was our interactions with Minister Thomson. We had an effective joint meeting where all three BC logging associations took part and spoke with a united voice to Minister Thomson. After the meeting, Minister Thomson gave an excellent speech at the soldout Minister’s Luncheon and touched on a number of issues important to BC’s contracting community. In his speech Minister Thomson thanked the TLA, ILA and NWLA for meeting with him together with a united voice on key issues and said he hoped these joint meetings would continue. He discussed contractor sustainability and committed to having it folded into the provincial government’s competitiveness strategy agenda since it’s a critical aspect of our industry’s competitiveness. He also acknowledged the issues around cab guards and WorkSafeBC that had recently come to light and assured the audience they will be addressed. He then went on to talk about the First Nations negotiations taking place post the Tsilhqot’in
10 Truck LoggerBC Summer 2015
focusing on skilled trades, and noted that this will benefit the industry in the long-term. Finally, Minister Thomson thanked Reid Hedlund, ILA Chairman, for his commitment to the industry and the good partnerships he’s built with government over the years. Moving on to the business of our conference, our 57th annual general meeting was held on May 8, 2015 and the following directors remain on the board for the 2015-2016 term. Directors for One-Year Terms: John Drayton, Kamloops Jeff Kineshanko, Lumby Dennis Cook, Princeton Reid Hedlund, Midway - Chairman Frank Etchart, Merritt Scott Horovatin, Kelowna Hedley Larsen, Vernon Matt Edmondson, Savona New Directors Nominated For One-Year Terms: Tim Menning, Williams Lake Guido Claudepierre, Kamloops
Directors for Two-Year Terms: Bill McDonald, Tappen Len Gudeit, Lumby – 2nd Vice Chairman Ed Smith, Westbank – Past Chairman Randy Spence, Vernon – 1st Vice Chairman Lee Callow, Lake Country Ron Volansky, Nakusp Randy Durante, Monte Creek Chairman Reid Hedlund, the Board of Directors and staff would like to thank Terry Brown and Burns Theissen, both of Kamloops, for their many years of service as ILA Directors. Terry became a director in 1992 and served as Chairman of the ILA Board from 1995-1997. Burns became a director in 1995. Terry’s knowledge covering the log harvesting industry and contractor concerns along with Burns knowledge and input on log truck transportation have been a great contribution to the Board and ILA membership over the years. As we move into the summer, the ILA in partnership with Thompson Rivers University, School of Trades and Technology has once again applied for government funding to train workers entering the forest harvesting industry. Our application covers funding for 16 heavy forestry equipment operators and eight log truck drivers. If we are successful with our application, we will post the required information on our website (www. interiorlogging.org) for those interested in applying for funding. If you wish more information please contact Wayne Lintott at 250.503.2199.
Summer 2015 Truck LoggerBC 11
12 Truck LoggerBC Summer 2015
North West Loggers Association’s MESSAGE
Finding a Common Voice and Supporting Our Members
had a great time at the 57th Annual ILA Conference & Trade Show— networking, attending seminars and walking around the massive inside and outside trade displays. This year, however, there was a single event that enhanced the strength of the harvest sector within the province. A joint meeting between all three logging associations within the province was held to discuss issues we had in common. Those issues were then presented to Minister Thomson, who met with the ILA and TLA Boards together, and later reiterated within his luncheon speech. Our list of asks showed the government that there are common issues affecting contractors across the province and that the three logging associations are willing to work together to find solutions to our problems. One of the announcements that Minister Thomson made at the conference was an additional $1 million of funding for the Forestry Service Providers Compensation Fund. As part of the Forestry Service Providers Protection Act, the fund was set up and $5 million of seed money was put into it by the provincial government. The purpose of the fund is to provide relief for
non-remuneration to contractors when the recipient of the services becomes insolvent. As noted in many previous articles in this magazine, the creation of the Forestry Service Providers Protection Act was the work of many years of lobbying by the associations to address the archaic Woodworker Lien Act. The fund has already made a significant and positive impact on maintaining contractors viability and therefore their ability to provide continuing employment in the local area. Recently, the fund was accessed by a Terrace contractor due to the insolvency of Greey Forest Products Ltd. Now a second contractor due money from Greey Forest Products is still awaiting resolution through the Fund. I received an email from one of the contractors and I quote, “Bill, just to let you know that we received funds from the FSPPA. It helped out our company immensely. Nice to see something you guys worked so hard to implement being used in a fashion it was meant for.” The dollar amounts awarded to date aren’t huge compared to the massive losses that occurred in the Terrace area during the demise of Repap and New Skeena. If the Act were in place back
Photo: TLA Staff
Left to right: David Elstone, TLA Executive Director; Bill Sauer, NWLA Manager; Reid Hedlund, ILA Chairman; Minister Steve Thomson, MFLNRO; Don Banasky, TLA President; Jacqui Beban, TLA Vice President; Eric Foster, MLA Vernon-Monashee; Wayne Lintott, ILA General Manager
then, the economic fallout would have been much different. Contractors would have been able to pay sub-contractors and suppliers such as tire and fuel companies. This would have let some sense of economic stability remain in the region. Once a replenishment formula to the fund has been established and enacted, contractors—not to mention their employees and surrounding communities—will have much more surety. We appreciate a government that takes action on our concerns. When speaking with the editor of the local Terrace newspaper, I mentioned to him that it had been a slow winter for the logging community there. The bottom had fallen out of the Chinese export market. With approximately six million cubic metres of logs and lumber already on the docks, China has reduced the price they are willing to pay for our product. Countries like Australia, New Zealand and Russia are able to ramp up their exports due to the shorter distances and lower transportation costs leaving Canada at a disadvantage. The old West Fraser sawmill that was purchased by a company with strong connections to China continues to operate. Recently, Rod Link, the editor of the Terrace Standard newspaper, stated that the boom Terrace experienced during the last year and a half has ebbed to a dull roar. Site clearing that involved the harvest community is complete and people are waiting for the next major, concrete announcement from the government regarding all of the LNG proposals. The harvesting convention season has wrapped up for another year. With the success of the joint association meeting at the ILA, talk was it would be useful to do the same at the next TLA convention in Vancouver. I feel this co-operation on common issues as one collective voice for the harvest sector in the province will produce dividends as we strive to better our industry.
Summer 2015 Truck LoggerBC 13
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Increasing Our Global Competitiveness: The Time Has Never Been Better
The current coastal BC narrative is about a region with a diverse and high quality timber base, relatively high delivered log costs and largely antiquated conversion facilities—a view which does not sing out to investors as a place to park their funds. And yet when one sees the timber of this region, you can almost taste the potential, and not just at sawmills, but throughout the entire supply chain. At a very general level, it seems the rest of the global industry has been moving forward, while the BC coast has little to report for change. Now is the time to rewrite this less than
attractive narrative with a new pitch that speaks to stakeholders, First Nations and investors alike. Both the logging and sawmilling sectors are ripe for technological advancements. In fact, the window of opportunity exists now since manufacturers have mended their balance sheets from the lows of the recession and the upside to the business cycle has yet to ramp up, at least from a US market perspective. Since the 2005 peak in North American markets, investment in the coastal sector has been less than that needed to maintain our competitive edge. Coastal sawmilling production has decreased by
40 per cent, from 2.5 billion board feet to 1.5 billion feet, on the heels of a number of sawmill closures and a reduction of overall operating rates. On the logging side, delivered log costs, although high, have been reduced over the last decade following a major coastal restructure that commenced in 2003. Today we have less contractors harvesting about the same volume of wood. Amongst many things, age demographics and diminishing contractor sustainability don’t favour increased investment. Using the addition of new sawmills as a bellwether of significant investment, consider the following. In a region widely known to have a shrinking timber supply, the BC Interior has seen both a number of new or major sawmill rebuilds as companies strive to utilize the increasingly challenging wood basket while staying profitable. Yes, some mills have closed in the Interior, but most closures are a result of impacts of the beetle. Another comparison is the US Pacific Northwest, which has seen a multidecade transition from smaller, higher costs sawmills to larger, more efficient sawmills. That trend continues today with Sierra Pacific building a new sawmill in northwest Washington this year. And this is a region with a significant log export program. One has to ask, “Why hasn’t investment occurred to the same degree on the BC coast, after all, the timber supply is green and productive?” One reason is the coast carries the stigma of being a region with high delivered log costs. And for good reason. The slopes are steep, the areas remote and using old equipment does not support increased productivity. Higher value markets of the
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Summer 2015 Truck LoggerBC 15
past that helped absorb these costs are no longer the size they once were. The softwood lumber agreement (and pending future machinations) is one barrier that discourages investment as well. However, northern Europe is, in many respects, comparable to the coast with very
lion board feet today, to over 3 billion in a peak market. There is a host of reasons for why the BC coast is different from the BC Interior, Pacific Northwest or European countries, but it is fair to ask why investment has been lagging here. It is clearly not because
Northern Europe is comparable to the coast with very high costs of logs. However, the European way has been to invest in technology to offset its high input costs. high costs of logs. However, the European way has been to invest in technology to offset its high input costs. Europe is a complicated region to analyze as each country is unique in its circumstances, but much of the region’s investment over the last decade has been to position European producers to capture that long pending upswing of a rebounding US market. It is forecast that when US lumber demand eventually returns, that European lumber producers will fill the supply gap, increasing shipments from well under half a bil-
of a lack of profitability as the major manufacturing companies operating here have seen significant returns over the past few years. But the time for squeezing that extra drop out of the supply chain needs to transition into one of investing in it. It should be noted that Western Forest Products, the largest coastal lumber producer has invested $94 million in approved projects over the last few years, including a $28 million modernization of its Duke Point mill this year. While it is a start, undoubtedly, more needs to be
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When there is an injury at work, an employer must file that information with WorkSafeBC within 3 days. Currently the forestry industry takes 21 days on average. Prompt claim filing means the best outcomes for the injured worker and the company, saving industry tens of millions of dollars in costs. Safety is good business.
Learn more at www.bcforestsafe.org 16 Truck LoggerBC Summer 2015
done. At the same time, many contractors would like to move forward with equipment updates of their own, but without a better prospects for their businesses, that investment will be kept to a minimum. The province’s Competitiveness Strategy intends to address many aspects of this article, including how to attract investment as well as looking at ways to fully utilize the potential of BC’s coastal forests. Hopefully, the results of this Strategy will help form a new coastal narrative, where the BC coastal industry will be able to outcompete European supply. The BC coastal industry should not be pitched simply as an opportunity to backfill a decline in the BC Interior supply given it is an apples to oranges comparison with species and products. Maybe it’s time to consider if those who control the resource are not willing to invest to use it, then let those who are motivated take over. Set a target to be more competitive on the global stage. After all, others like the Europeans want our market pie and they have are already started to shake the whipped cream.
Faller Certification : Does Certification Mean Qualification?
clarification of the roles and responsibilities around faller certification was sought with the support of WorkSafeBC. Deloitte a consulting, financial advisory and risk management firm was asked to provide an outside perspective on the program and the relationship between the various parties when it comes to faller certification and training. At the same time, Enform, the safety association for Canada’s upstream oil and gas industry based in Alberta, is the advocate and leading resource for the continuous improvement of that industry’s safety performance. According to their website; established by industry for industry, Enform helps companies achieve their safety goals by promoting shared safety practices and providing effective training, expert audit services and professional advice. Enform also provides a faller training program that includes faller certification that addresses timber types and applications common in the Alberta oil and gas industry, such as right of way and well site clearing. WorkSafeBC has acknowledged the applicability of the training and certification they provide is consistent with the BC Faller Training Standard and thus acceptable to the Board as per the Regulation. So the obvious question for TLA members is, “Does faller certification by Enform mean qualification to harvest BC timber types and does their certification meet the obligations under the regulations given that WorkSafeBC has acknowledged the applicability of the Enform faller certification in BC?” The simple answer is that it may not and is a reality that many employers may not fully understand.
he British Columbia Forest Safety Council (the Council) was created in September 2004 to promote forest safety. The initial focus and tasks of the Council were set out in the report of the Forest Safety Task Force, which created a comprehensive strategy to dramatically improve the safety record of the BC forest sector. The values, beliefs and commitments that form the basis of the Council and its work are set out in the Forest Safety Accord, whereby in the Commitment to Training and Supervision the accord says: We understand the importance of workers being fully prepared for the work they do and the provision of competent supervisors who will insist on and enforce safe work practices. All workers on the worksite must be competent and fully trained and certified for the work they are performing. A key training program developed by the Council allows for new entrants to be trained as tree fallers, one of the early areas of focus for the Council. The Councils’ new faller training includes a challenging and comprehensive 30 day program which involves classroom training, interactive exercises, reviews and evaluations and closely supervised field training involving all aspects of chainsaw operation, falling and bucking. After students successfully complete this portion of the training, they then complete up to 180 days of onthe-job training before applying for certification. With the 180 days of training under their belt, trainees can then challenge the certification exam which is administered by the Council. Upon successful completion of the exam, the Council then certifies them for the timber type(s) they are trained for and have experience in. Last year, in an effort to ensure continuous improvement of the faller certification program inclusive of training, supervision and instructors they administered, and to ensure that it was robust and enduring, a review of the program and a
The Council’s faller certification always stipulates that their program, “certifies them (the faller) for the timber type(s) they are trained for and have experience in”. This aspect of the program is consistent with Part 26.3 (1) of the WorkSafeBC Occupational Health and Safety Regulation where it states: (1) Every worker in a forestry operation must receive the training necessary to safely perform the worker’s duties. When an Enform trained faller is asked to work on the BC coast, for example, there is a real risk that they may not be trained or qualified on the bigger oldgrowth timber types here, despite being “certified as a faller”. In this situation, certification does not mean qualification. In the end and regardless of the certification a faller may have, it is the employers’ legal responsibility to ensure that the individual they hire to fall trees for them has the experience and the qualification to suit the timber types they are being asked to work in. If they do not and an incident occurs, then the employer will be held responsible for contravention of the WorkSafeBC regulation. The Deloitte report will address these issues and may help to strengthen the training and certification programs currently in place to ensure that employers are clear on their responsibilities so that workers are not placed into situations not consistent with their training. Its public release is expected later this year.
Summer 2015 Truck LoggerBC 17
Jeff Waatainen and Jason Fisher
Unresolved Aboriginal Title Claims: Risk Allocation and BCTS “Business” is sometimes described as the art of turning uncertainty into opportunity. But two recent decisions of the BC Court of Appeal suggest that the risks of doing business in the BC Timber Sales (BCTS) program amid the uncertainty of unresolved Aboriginal title claims has started to become too much. In Moulton Contracting Ltd. v. British Columbia, a BCTS logger was unable to access the harvest site on account of a blockade that members of the Fort Nelson First Nation (FNFN) erected to reflect their dissatisfaction with consultation they received from BCTS. Moulton was therefore unable to complete the Timber Sale Licence (TSL) and initiated legal action against the Province and the FNFN.
he BC Supreme Court found that BCTS personnel knew that the FNFN members intended to “stop the logging” and failed to pass that information along to Moulton before it entered the TSL. The court held the Province liable to Moulton for breach of an implied term of the TSL whereby the Province represented to Moulton that it was unaware of any First Nations’ dissatisfaction with the Province’s consultation. The court also found the Province concurrently liable in negligence, and awarded approximately $1.75M in damages to Moulton against the Province on account of foregone business opportunities. The Court of Appeal overturned the lower court’s decision, ruling that BCTS had no legal obligation to inform Moulton of any First Nations dissatisfaction with the consultation process. The court further held that the exclusion of liability clauses in the TSL documentation (clauses included in virtually all TSLs) insulated the Province from any such claim. The court’s unambiguous message to BCTS loggers in relation to Aboriginal title claims was “buyer beware.” Saik’uz First Nation and Stellat’en First Nation v. Rio Tinto Alcan Inc concerned a lawsuit that the Saik’uz and Stellat’en First Nations (SSFN) commenced against the operator of a dam (Alcan). The SSFN claimed that the dam created a nuisance and interfered with rights associated with lands subject to their Aboriginal title claims. Since the claims were based upon unproven Aboriginal title, Alcan applied to court for summary dismissal of the claims. While the BC Supreme Court sided with Alcan, the Court of Appeal held that the SSFN could commence a civil action based upon Aboriginal title rights before it had
18 Truck LoggerBC Summer 2015
a lawfully established its Aboriginal title. SSFN could then prove its Aboriginal title as part of their case. So, with this decision in hand, First Nations who claim Aboriginal title may commence civil law suits based upon unproven Aboriginal title rights. In the case of a TSL, they could potentially use interim legal procedures such as injunctions to prevent logging from taking place. In effect, this decision may allow First Nations to use the courts to stop logging if they have the resources to do so: no blockade required. As the Supreme Court of Canada reminded us in last summer’s decision in Tsilhqot’in v. British Columbia, the Crown may only infringe upon Aboriginal title lands if the infringement is “justified” in accordance with a complicated legal test or, potentially, with the title holder’s consent. Getting to either of these two outcomes before a claim of Aboriginal title is lawfully resolved requires the resources necessary to undertake a strength-ofclaim analysis to assess the risk associated with a given claim to Aboriginal title, and to accommodate First Nations whose title claim is strong. BCTS has the resources necessary to assess strength-ofclaim and to provide accommodation where the logging opportunities it sells potentially interfere with Aboriginal title claims. Nevertheless, BCTS passes the risk associated with Aboriginal title claims onto the logger on an “as is, where is” basis. This philosophy is fine for those with the resources to play that game. But most BCTS loggers do not—at least, not in terms of Aboriginal title claims. One potential strategy for BCTS loggers is to enter joint venture or partnership arrangements with First Nations to pursue BCTS logging opportunities. But,
again, to effectively implement this strategy requires pre-existing relationships and resources. Instead, BCTS loggers are likely to become more and more dependent upon partnerships with major licensees who have a long-term presence in BCTS operating areas, the relationships, and the resources to better manage the uncertainty of Aboriginal title claims. Likely, the only way to avoid this dependence is either a speedy resolution of Aboriginal title claims, or for BCTS to issue harvesting rights with some form of warranty to protect BCTS loggers from the uncertainty of Aboriginal title claims. Neither seems likely. Until this situation changes, and in light of recent court decisions, the bonus bids BCTS receives should begin to decrease (if they haven’t already) as a result of increased risk and a smaller pool of bidders. This will result in lower BCTS revenues. More importantly, this may also begin to effect the stumpage received from major licensees due to the role that the BCTS bids play in the market pricing system used to determine stumpage rates. Perhaps once this uncertainty begins to affect Crown revenues, government will take steps to maintain the value of its BCTS harvesting opportunities. In the meanwhile, one would expect that if a BCTS logger is unable to perform its obligations due to Aboriginal title claims, BCTS would grant relief from deposit forfeiture. Jeff Waatainen is an associate with the Forestry Law Practice Group of DLA Piper (Canada) LLP (formerly Davis LLP), and has practiced law in the BC forest industry for nearly 20 years. Jason Fisher, RPF, is also an associate with the Forestry Law Practice Group of DLA Piper (Canada) LLP, and a former VP of a BC forest products company.
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Summer 2015 Truck LoggerBC 19
What are contractors missing? And it might not just be a better rate
ontractor/licensee relationships have been the basis for many a story the past year, or should I say decade? Much has been made about contractors and license holders not being able to work together and contractors raising the issue of unsustainable rates. This isn’t a new issue, but after years of continued pressure on the profitably of logging companies and associated mill input costs, contractors are at their financial limit to provide concessions and still operate with an adequate return to justify the investment financially and emotionally. The amazing part of the story line is that contractors need licensees and licensees need contractors. Each needs each other to survive. Remarkably, the success of the other is dependent on their own success. The irony of this story appears to be that
both sides appear to acknowledge it, but have limited success in implementing real solutions which would change the relationship. As a result, we get to read the same stories about contractor sustainability and ineffective rates. Is it simply all about the rate? In the last issue, we covered some of the key points of what makes for a good relationship. Almost felt a bit like Dr. Phil. All kidding aside, respect, communication, independence and trust are vital to making a business relationship work. Where these values have broken down, we see the relationship turn to an argument about getting a suitable rate. What is interesting is we are starting to see other relationships develop that are successful and we don’t hear anything about the
inability to find a suitable rate. Where groups are able to work together they appear to be able to identify common goals and objectives and work together to achieve them. Yes, it is spooky, but I just referenced working together; trust and respect. But these two relationship traits are key to move forward successfully. I’m happy to report there are real life examples of these partnerships in this issue of Truck LoggerBC. Turn to page 44 to read about an excellent working relationship between Capacity Forest Management and Wuikinuxv Nation. Then, on page 32, individuals contractors talk about the good working relationships they have with some of their customers in “Goliath? No, That’s The Other Guy: Building Partnerships in the Forest Industry.”
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20 Truck LoggerBC Summer 2015
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What is so special about these new relationships? It is not a single factor that you can identify in the relationship that will make things successful. The key is the combination of all four values working together. Where the two business parties are able to work together, one party can defer to the other to do what is best. They can operate independently. They can communicate issues for resolution. They can respect and
trust each other’s perspective. It will not result in one side always benefiting, but it should result in a scenario where both parties end up in a better position than when the enterprise began. If only one party is moving forward, then it can’t be be a long-term business relationship. As shown in the article, “Goliath? No, That’s The Other Guy: Building Partnerships in the Forest Industry” where these values are implemented in relationships and not just talked about, gains are made in efficiency, productivity and quality of the end product. The result is both sides of the business transaction benefiting together. Simply put, where two parties trust each other and respect the value that each brings to the table they can work independently in order to maximize the return for both and success can be obtained. Wow, one sentence that sums up exactly where the modern contractor wants to be.
Remarkably, it is not some utopian concept and is actually working in—of all places— British Columbia. Will it happen for all business scenarios? Not likely, but it would sure be great if all parties could learn a little from the models that are working. Final thoughts No customer/supplier business relationship will ever be perfect. Ultimately, the needs of both are not perfectly aligned. However, both parties need to understand that they can work together to reach a compromise and work towards ensuring they are both as successful as possible without destroying the other. Where one party is actually subsidizing the other party’s business, trust and respect are out the door and, quite possibly, will never be restored. James Byrne, MBA, CPA, CA is MNP’s Forestry Services Practice Leader for BC. Tel: 250.753.8251 Email: email@example.com
Summer 2015 Truck LoggerBC 21
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Defining Contractor Sustainability
hile the difficulty that some contactors have faced when trying to work with some licensees to achieve sustainable rates and working conditions has been highlighted over the past year, many have asked what exactly is “contractor sustainability”? According to Wikipedia: In ecology, sustainability is how biological systems remain diverse and productive. In more general terms, sustainability is the endurance of systems and processes. The most widely quoted definition of sustainability as a part of the concept of sustainable development, is that of the Brundtland Commission of the United Nations on March 20, 1987: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. When the TLA speaks of contractor sustainability, it is in reference to business conditions that will allow contractors to endure and be productive. And much like the Brundtland definition, there can be future generations of a company, like many TLA multigenerational member companies.
So what does it take to be sustainable? For contractors, it means a number of things have to be in place.
needed in order to ensure continuation of operations when mechanical failures inevitably occur. Along with the logging
A fundamental tenet of managerial economics is “do what you do best.” Micro-management or heavy oversight diminishes efficiencies. First and foremost, a good crew of workers who have the training that allows them to work safely. Without training in the latest technology, systems for ensuring safe work practices and experience in the challenges facing coastal logging, productivity falls and costs rise, not to mention the increased risk of injury. Attracting and maintaining a well-trained crew is an investment in human resources and requires capacity to compete against other, often more attractive, industries like oil and gas. Almost as important as human assets, is the capital invested in iron. Reliable equipment is essential to provide the services contractors have agreed to when entering into logging or road building contracts. Many times, spare parts and even spare or back up equipment is
equipment itself, support staff, mechanics, service vehicles, communications equipment, trucks and boats, ambulances and fire suppression equipment round out the core equipment complement. And, of course, access to financing from a lending institution sufficient to allow the company to carry inventory, to make payroll and to invest in new equipment, recruitment and training to meet contract demands is critical. Without financial support from a lender, you cannot operate in this business for long. To sustain these elements, a contractor needs reasonably certain cash flow. That can come from a steady flow of work that allows them to keep the crew busy on a reasonably year-round basis. A steady flow of work also allows for the cash flow that facilitates payment of em-
Summer 2015 Truck LoggerBC 23
Photo: TLA Staff
ployee benefits, office support staff and overhead during active operations and during periods of downtime. How that cash flow is generated varies, ranging from reliance on a few large contracts to being a market logger, taking work as it comes. However, as with any business, the greater the certainty and flexibility a contractor can obtain, the better they can deliver on the service they provide,
in terms of efficiency and costs to their customers. Independence is a key aspect as well. A fundamental tenet of managerial economics is “do what you do best.” Micro-management or heavy oversight diminishes efficiencies. In many respects it comes down to planning by the contractor, as well as their customer. Upfront investment by a customer can
bring about lower delivered log costs at the backend. What is the cost-benefit of engineering when it comes to cutblock deflection and road design? At the heart of many contractor disputes with the companies they work for, is that the rates for the work they are hired to do are not sufficient to cover all of the costs and obligations that they are undertaking as described above. This conflict has to be balanced, however, with the reality that delivered log costs are challenging the profitability of many solid wood operations. Too often offered rates consider only core equipment costs (which themselves are generally another point of contention in the rate discussion) and individual machine productivities. But what about all the other items that are beyond core equipment and the productivity considerations listed above. Rates have to provide a sufficient level of revenue within the company to: • Garner support from financial institutions challenged with lending to companies who cannot cover costs in an industry that is generally out of favour with mainstream lenders, • Allow for support services like fuel
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• Generate income for the business— the ultimate focal point of contractors and their customers alike. Simply put, a sustainable contractor is one that meets their contract obligations, retains a crew, pays their bills, ensures the workers come home safely every day and, in the end, has something to sell or pass along to the next generation. Like Wikipedia says, they are able to endure. It is a tricky balancing act for all parties to have rates sufficient to ensure sustainability of the contractors, whilst keeping overall delivered log costs down so that the industry remains competitive. But long-term cost management does not come from constant grinding of rates across a weakened supply chain, but through fostering of innovation and investment. It seems that this would be a scenario where license holders and contractors would fit hand in glove and work together. Unfortunately across BC this is not the case with some contractors and the license holders they work for. As was noted by Aaron Sinclair of PNL Consulting, who spoke at the TLA convention in 2015, rate determination methodologies often do not align with actual operational
trucks, ambulances, spare parts and equipment, all of which costs money but are rarely considered in rate negotiations, • Allow for timely replacement of equipment on a generally five year schedule, • Invest in innovation and new equipment to meet the challenges of today’s changing working forest land base, • Cover costs involved in the retention of workers during periods of down time, • Fund training and certification of new recruits in order to avoid injury, • Cover the costs of safety compliance and attendance at the ever increasing number of safety related meetings, • Cover the cost of the support staff needed to ensure smooth and efficient operations, • Allow for ongoing maintenance of equipment, • Demonstrate investment potential when it comes to the buy-out of the existing owners by motivated new entrants, and at the end of the list,
requirements since the validation of sustainability is missing from most rate determination methodologies. Rates themselves are not always the issue on the contractor side. It is what the contractor has left at the end of the
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season that matters since a capital intensive business like logging needs more return to service their shorter asset re-
structured to allow cost reductions and/ or increased productivity that would allow contractors to work within their
Should we ignore the risks of rising delivered cost? No, without competitively priced logs, the entire industry is at risk. plenishment cycles. Unfortunately, the licensees are always concerned about money going out the door in rates. These two issues are not mutually exclusive. Some rates that were being paid to some Interior contractors were providing a mere 1 per cent more return on the capital employed than a risk free GIC. This kind of return was clearly not sustainable nor acceptable given the investment and the risk involved in logging. As a result of Aaron’s work with contractors, maybe the tide is turning for some. What is also a common theme seen with coastal contractors, is that the relationship between contractors and licensees tends to fall apart when there is a lack of credible data available to support the nature of the work conditions and rates being contemplated in the negotiations. Market rates or the current industry standard rate rarely equates to a sustainable rate. And that is why there are so many disputes, insolvencies and resultant auctions across the province. So what is needed in order to bridge the gap between market rates and sustainable rates? Some suggest an unbiased data set of actual contractor costs and productivities that could support improved rate negotiation success and allow contractors to become sustainable without necessarily increasing delivered log costs. Data can take the emotion out of negotiations, allowing the counterparties to get down to business. Such a data set does not just appear out of thin air, but requires commitment. With this in place, the process of negotiating rates perhaps moves towards working together on the conditions that allow for the rates being proposed to work, one where both parties’ objectives can be met and one where we are not just fighting over lowering of rates to unsustainable levels. Are rate improvements alone the solution to contractor sustainability? The answer is a big NO since there are many ways that operations could be
rates. The question the industry as a whole should be addressing is how to fix things, so the current rates work (or dare it be said, be lower)? Often times the higher rates being asked for are
simply to pay for doing the work wrong, implying that weak planning drives up costs, or to another extent, the lack of sharing the risk in innovation, means technological investments lag. Should we ignore the risks of rising delivered cost? No is the answer again, since without competitively priced logs, the entire industry is at risk. Can contractor-licensee relationships improve? Yes, but only if all the issues including contractor sustainability, delivered log costs and working conditions are considered.
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United Fronts and Big Machines: ILA 57th Conference and Trade Show
By Brenda Martin
The ILA’s 57th Annual Conference and Trade Show was a success again this year. The conference theme “Putting the Membership First” was well received and attendance was high.
n the Thursday, the Interior Logging Association (ILA) was pleased to host a Truck Loggers Association (TLA) board meeting. This meant TLA board members had a chance to enjoy the ILA conference and, even more importantly, the two boards had a chance to meet and talk about the challenges facing their members—something that hadn’t happened in a while. As they expected, the two groups, along with Bill Sauer from the North West Loggers Association, found they had issues in
28 Truck LoggerBC Summer 2015
common and could present a united front for forest contractors in BC on several topics.
which gave everyone a chance to mingle and talk to people they hadn’t seen in a while. This was also the first opportunity
Minister Thomson discussed contractor sustainability and committed to having it folded into the provincial government’s competitiveness strategy agenda. The convention officially kicked-off on Thursday evening—after all the board meetings—with the Meet & Greet event
to check out the impressive silent auction which had a wide selection of items— from a paddle board and truck tires to
luggage and camping chairs, all donated in support of various educational charities the ILA supports. Friday morning brought the opening of the indoor and outdoor trade show exhibits at Kal Tire Place. It was a show to behold as anyone who was there would tell you. With 44 inside booths and 90 outside displays, forestry was looking good in Vernon! Waratah also hosted a logger sports show on site which drew crowds and inspired some of the younger visitors. “I’d like to thank all the people who took time away from the businesses and families to set-up and run the trade show,” said Wayne Lintott, ILA General Manager. “It was especially great to see the outdoor show again displaying all the heavy equipment.” The first session of the day, Steep Slope Logging Updates, attracted a crowd and the speakers addressed some of the technical safety details around steep slope logging, what is and isn’t acceptable in BC and where things are going in the future around this topic. If you want to find out more about these presentations, contact the speakers directly: Gerard Messier at the BC Forest Safety Council (email@example.com) or Bjarne Nielsen at WorkSafeBC (bjarne. firstname.lastname@example.org). The Minister’s Luncheon was a sell out! Minister Thomson gave an excellent speech and touched on a number of issues important to BC’s contracting community. First, he thanked the TLA, ILA and NWLA for meeting with him together with a united voice on key issues and he hoped these joint meetings would continue. He discussed contractor sustainability and committed to having it folded into the provincial government’s competitiveness strategy agenda since it’s a critical aspect of our industry’s competitiveness. He also acknowledged the issues around cab guards and WorkSafeBC that had recently come to light and assured the audience they will be addressed. He then went on to talk about the First Nations negotiations taking place post the Tsilhqot’in decision and acknowledged it is a complicated process that will take time to resolve. Looking forward, Minister Thomson encouraged the industry to continue to build its social license by promoting and explaining our industry to the communities we operate in and complimented the industry on our much improved safety
Left to right: Wayne Lintott, ILA General Manager; Steve Thomson, Minister of Forests, Lands and Natural Resource Operations; Reid Hedlund, ILA Chairman; and Akbal Mund, Mayor of Vernon.
The meals at the ILA Conference and Trade Show were delicious and very well attended!
The ILA board were please to see so many companies set-up outside displays this year.
Summer 2015 Truck LoggerBC 29
The loggers sport events hosted by Waratah were a huge crowd-pleaser. record. He also noted that the government has made a serious investment to ensure the labour supply going forward, particularly focusing on skilled trades, and noted that this will benefit the industry in the long-term. Minister Thomson thanked Reid Hedlund, ILA Chairman,
30 Truck LoggerBC Summer 2015
for his commitment to the industry and the good partnerships he’s built with government over the years. In the first seminar after the Minister’s Luncheon, Philip Jones spoke—in a tongue-in-cheek tone—about how difficult fitting a heart attack into your busy
schedule can be. Having led an otherwise healthy and balanced lifestyle, Jones suffered a heart attack at age 60. With the benefit of hindsight, Jones spoke to the realities of what a heart attack can do to your schedule (or as he pointed out, end the need for scheduling) and how healthy life choices and stress reduction can either help you avoid a heart attack or, in Jones’ case, survive one and live to talk about it. “Make one healthy choice today,” Jones advised. “Don’t let your personal health management drift by assuming that potential symptoms may just go away. Complacency can be a killer.” Good advice for us all! Later that afternoon, Rob Moonen from the BC Forest Safety Council provided a Safe Companies Update in response to industry feedback. For more information about the changes being made to Safe Companies, contact Rob Moonen at BC Forest Safety Council (email@example.com). Friday night the Western Night Dinner & Dance kicked off at 6:00 pm. The food was delicious and there was heaps of it! Lee Dinwoodie & Band outdid themselves again and there was lots of dancing all night long. The silent auction also closed that night as well raising $13,235 of which $3,100 was donated to Canadian Women in Timber to support their forestry education program. Saturday dawned hot and sunny and the trade show ran all day attracting the public and engaging people in conversation about the forest industry. The final seminar speaker was John Stulen, Executive Director of the Forest Industry Contractor’s Association in New Zealand. He spoke about workplace safety law reform in New Zealand. To find out more about his talk, read the feature article on page 48 which reviews what Stulen talked about and how it could affect BC’s forest industry. Overall, the ILA conference and trade show was a rousing success. “I’d like to thank Nancy Hesketh for all her hard work in planning this event and the ILA Board for their support,” said Lintott. “And I’d like to thank everyone who attended and helped make our 57th conference and trade show such a success!”
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Summer 2015 Truck LoggerBC 31
Goliath? No, That’s The Other Guy: Building Partnerships in the Forest Industry
hile the difficulty that contactors have faced in working with some major license holders to achieve sustainable rates and working conditions has been highlighted over the past year, it is important to recognize that one size does not fit all when it comes to contractor relationships on the coast and across BC. Some contractors we have highlighted, like Bruce Jackson in the Interior, lamented the difficulty in working for unsustainable rates with little opportunity if any to negotiate terms (see “Exiting the Industry,” Winter 2014), while others have been forced into costly mediation and arbitration over rates and conditions. Some contractors, however, have better relationships with those they work for and have managed to sustain their businesses while looking forward to growth. Howie McKamey, Goat Lake Forest Products Group One such contractor is industry veteran Howie McKamey. McKamey partnered with Rory Maitland in 1985 and formed Goat Lake Forest Products Group. The company currently does contract logging and road building for a number of companies and understands what it takes to make it work. “For a licensee-contractor relationship to be meaningful to both parties, there has to be a willingness to share in both the good times and tough times. There has to be a willingness to share ideas and adjust operations when markets are poor,” said McKamey. What does McKamey mean by this? “The licensee has to be prepared to say, ‘This is a good block or these markets are decent so we can share in the opportunity and pay better rates,’” said McKamey. “Then, when markets turn or wood profile
32 Truck LoggerBC Summer 2015
is poor, both the contractor and licensee have to either share in the pain or put their heads together, adjust the plan and make it work.” “We have very good relationships that work this way—Sliammon First Nation is one of them. We consult, we share ideas, we improvise and we come up with plans that work for both of us,” said McKamey. “It took us a few years to build trust with the band to the point where they understood we wanted them to be successful as much as we did. When they started getting decent returns for their wood, the relationship transformed into a real partnership, something we have since formalized.”
Photo: Courtesy of Helifor
McKamey used this example of how this partnership functions. “Recently, a large block we were to log this summer was determined to be marginal due to slumping markets. But rather than just drop rates or cancel the project, together we walked the block and adjusted the layout, improvised and made it work for the both of us. The key to this relationship is that both parties understand how important it is to have both of us succeed. It is the type of relationship where the licensee puts a value on quality work, input from the contractor and the need for a timely delivery of logs.” Then, McKamey has relationships that are not relationships at all. “It is always
Summer 2015 Truck LoggerBC 33
an ‘us against them’ discussion with no mutual benefit. I can honestly say that there is little incentive to improvise or exchange ideas to improve efficiencies and work within the rates needed in these relationships only to have the licensee reap the benefit and lower the rate at the next contract negotiation,” said McKamey. “Looking forward—as I said in the contractor panel at the last TLA convention—we plan to transition our business to customers who want to work with us as partners.” Ted Beutler, Aggressive Timber Falling Ted Beutler began his career in 1986 doing cedar salvage in the Squamish area and within two years formed his first company; Aggressive Cedar Products. In 1990, he shifted gears and formed his current company, Aggressive Timber Falling (ATF). ATF has multiple structured divisions of professional hand fallers, which serve forestry operations throughout BC, primarily in heli-logging, right-of-way clearing, and he also operates in Alberta. Needless to say, Beutler has worked for a cross-section of prime contractors and
license holders across the coast keeping his 60-man crew busy. Beutler attributes his 25 years of operational success to his highly skilled and loyal team, long-term alliances and honorable business relationships. Today, Beutler works primarily as a sub-contractor to a large prime contractor in a relationship that has evolved over 20 years. “We have the same mindset in that we both have to be successful if either one of us is to be successful. We both need continuity of work in order to operate,” said Beutler. “ATF provides a consistent, skilled workforce to meet their labour needs and they provide the volume and the logistical support we need. Together we can take on the work we both need to sustain our companies and service our customers. We treat each other with respect. This compares to some I have worked with who treat contractor health with indifference.” Graham Lasure, W.D. Moore Logging & Topknot Timber Graham Lasure started in the bush in 1977 as a chokerman. Since then he worked his way through all logging jobs and took over management of W.D.
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Issues do come up. But since both companies are relatively small, they are able to deal with them quickly and one-onone, so as not to jeopardize the program. Dave McNaught, Seaspray Log Scaling Dave McNaught has operated Seaspray Log Scaling for over 28 years in Nanaimo and like other contractors, has worked for many tenure holders across the coast over the years from Haida Gwaii to the Cowichan Valley. McNaught is always on the lookout for new recruits to his 20-person crew of scalers. “With the demographic we all face, we need to constantly recruit to address our future needs.” He utilizes a pre-screening process to find suitable candidates as potential scalers. “We take them out on the job at a local dryland sort and try them out for a few days working with our most experienced crew. You can tell right away their attitude and aptitude for the job.” Where a candidate is identified, they are encouraged to take the scalers course offered by North Island College (that is supported by the TLA) to get their license and then Seaspray can put them
to work in a training role. This is where the positive relationship Seaspray shares with its clients really pays off for everyone involved. “A scaling trainee is typically added to the normal crew and they learn over time. As a contractor, we can’t afford to pay for training, but our clients recognize the need for this mentorship and have consistently helped out financially. In the end, we maintain production at the rates we are paid and the industry gets new trained recruits. It is good for everyone,” says McNaught. “I recognized that not all licensees are the same,” said David Elstone, TLA Executive Director. “It would be unfair for us to paint them all with the same brush, especially since many are our TLA members. While some license holders work to squeeze every last cent out of the contractor citing ‘industry standard’ or ‘fair market’ rate, in meeting with member licensees over the past five months I learned that many recognized the value of contractor sustainability. It is not just lip-service—they walk their talk.”
Dave Martin, A&A Trading Dave Martin is the Vice-President of A&A Trading. His firm manages over 800,000 cubic metres of timber annually via their tenure holdings, rental of quota, through tenure management agreements with a cross-section of smaller tenure holders and, of course, with timber sales. Martin is quick to note that like the contractors, not all licensees operate the same way, but they all have the same sustainability challenges. From Martin’s perspective, “working cooperatively with contractors is a key to our business. All of us working together with a long-term ‘team’ focus will also ensure the sustainability of the industry.” A&A sees planning and engineering as the key to ensuring conditions are optimal for contractors they hire. They go to great lengths to ensure boundaries, roads and access are all in place and that it works when the contractor comes in to log. “There is a noticeable shortage of engineers today and it is challenging our business and our relationships with contractors. We all have to plan better and even when we do, thing like markets, stumpage and social
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pressures can challenge us and our contractors. Two-way communication ensures we work through the issues that come up,” said Martin. Not all trees are created equal when it comes to hiring contractors, which presents another challenge for A&A. On the BC coast, there is a wide range of tree values, sizes and volumes per hectare and the costs to get them to market on a sustainable basis for both parties, varies. This inevitably challenges negotiations when per cubic metre rates are entertained. When it comes to negotiating, some contractors, like Sladey Timber, prefer an annual rate while others like to negotiate rates on a block-by-block basis. “In Sladey’s case, however, we negotiate a lot of detail up front and once we come to terms on rates and conditions, we are done and it works for both of us over the year,” said Martin. In the end, Martin admits: “We are not perfect. The costs of managing the resource are extreme and the regulatory environment we work in makes perfect project execution in an imperfect environment very challenging. When we are trying to address delivered log costs,
working together with contractors to ensure the regulatory requirements of logging operations are consistently fulfilled helps us tremendously.” Clint Parcher, Coastland Wood Industries Clint Parcher is the Vice-President of Fibre Supply for Coastland Wood Industries Ltd. based in Nanaimo. Coastland is one of the largest veneer and core producers in North America with a consumption of 850,000 cubic metres annually. Parcher is responsible for handling over 2.8 million cubic metres of logs through three custom sort and mill yards. Needless to say, Parcher deals with many contractors in securing fibre for his mill. “We work with two or three very competitive contractors who have logged with us for many years in the BC Timber Sales program,” said Parcher. “I cannot ever remember having to negotiate a rate with our contractors. We both look at the sale and when the contractor gives us a price they know they have to be competitive to get the job and that we have to be competitive to get the sale. It works both ways.”
Parcher continues, “When we do get a sale, we then work with the contractor to schedule harvest and delivery since we know they have other clients as well they must work around. For them, timber sales are filling gaps in their annual program while for us, any one timber sale only provides a portion of our annual log demand. So flexibility from both of us ensures it actually works for both of us.” “By working with the contractor before we bid to iron out rates and delivery schedules, it allows the contractor to optimize their crews and equipment over the year and in doing so, we can be sure they will be there to work for us. It is a good relationship,” notes Parcher. Forest products production on the BC coast is a competitive global business and all stakeholders need to work together to ensure each other’s sustainability. Negotiation and recognition of each party’s issues can and does ensure sustainability in many cases. Industry standard rates, arbitration and rate models that are onesided are not the answer. The examples above are clear evidence of that.
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THE COSTS OF INJURED WORKERS: FINANCIAL, EMOTIONAL AND LONG-TERM By Ian MacNeill
his is not going to come as a surprise to anyone in forestry paying the bills, but the industry pays some of the highest rates in the province to insure its workers against injury. In an effort to help drive these rates down, WorkSafeBC created a dedicated forestry claims office in Nanaimo in the belief that better claims management and
an emphasis on getting employees back to work as soon as possible could lead to significant cost savings. In addition to helping WorkSafeBC staff develop expertise in dealing with forestry-related claims, the move would make it easier to track and measure results. One of the first things they discovered was that Form 7 submission in forestry was av-
TLA President, Don Banasky, tours WorkSafeBC office staff through logging sites near Nanaimo. 38 Truck LoggerBC Summer 2015
eraging 21 days, fully three times longer than the provincial average for all industries combined (keeping in mind that the law requires the form to be submitted in three days). The TLA and the BC Forest Safety Council got involved and together with WorkSafeBC they kicked off an educational campaign last year designed to
Photo: TLA Staff
help employers and employees alike understand the costs and consequences of poor injury management and what could be done to improve outcomes and save money. In order to help WorkSafeBC better understand the situation, the TLA took the Nanaimo office staff to two logging sites to see what logging looks like in action. The result? Progress is being made, said Jim McCaskill, WorkSafeBC’s
Regional Director for Vancouver Island, but there’s still work to do. “The overarching messages we need to get across to industry are about the importance of early accident reporting, the need for injured workers to obtain access to early and substantive medical care, and the importance of an early and safe return to work,” said Jim McCaskill. All the research indicates that this “early
Summer 2015 Truck LoggerBC 39
Chart: BC Forest Safety Council
and safe return to work” trumps waiting, sometimes indefinitely, for a “full recovery.” According to the Canadian Medical Association, prolonged absence from one’s normal roles—and that includes the workplace—is in fact “…detrimental to a person’s mental, physical and social wellbeing. Physicians should therefore encourage a patient’s return to function and work as soon as possible after an illness
or injury, provided that return to work does not endanger the patient, his or her co-workers or society.” Obviously there are going to be cases where an injured worker cannot return immediately to the job he or she had before, but that shouldn’t preclude employers from finding something useful around the lot for them to do. “Workers may not be fully recovered, but in many
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cases they can recover enough to return to do some kind of work,” said McCaskill. “This is where employers need to be imaginative and create modified work opportunities because all the data tells us that people who recover at work are much more likely to stay at work than people who stay off for longer periods of time, and the longer people stay off the harder it is to get back to work at all.” And then there are the financial penalties of long layoffs. “If WorkSafeBC has to pay benefits during time off, and then perhaps incur costs for retraining, all those calculated costs are then reflected in the rates everyone pay,” said Rob Moonen, Director, SAFE Companies of the BC Forest Safety Council. And as anyone who’s paying them already knows, forestry rates are already some of the highest in the province. And of course it gets worse for the individual employers involved, in many expensive ways. “It will impact your experience rating with WorkSafeBC, and then your base rate will have another provision built on top of that to reflect that experience,” said Moonen. By way of illustration, consider the following example based on a company
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WorkSafeBC office staff see firsthand why there are so many slips-and-trips injuries in the forest industry. Summer 2015 Truck LoggerBC 41
with an assessable annual payroll of $1,000,000. If an employee was injured in 2011 and racked up $60,000 in claim costs before returning to work nine months later in the same calendar year their employer’s total assessment costs for 2013-2015 would be $284,100. However, if that same worker was only off for one month before returning to at least some kind of work the total assessment would drop to $213,300, a difference of more than $70,000. To put that in perspective, the company would need to harvest an additional 35,400 cubic metres of wood to cover the difference (based on a $2.00 per cubic metre profit). And those are just the direct WorkSafeBC assessment costs; they do not include indirect penalties such as lost productivity, training and replacement. So, has the pilot project made a difference? Yes, said Lauri Inrig, a Client Service Manager in the Nanaimo office. Form 7 submission rates have dropped from 21 to 12 days and although that’s a lot better it’s still not good enough because no action can be taken on a claim until the form is filed. “We really have to engage the industry employer group to understand that in order to impact the
42 Truck LoggerBC Summer 2015
costs to their businesses in a positive way they are going to have to take control and be creative when it comes to finding opportunities to re-engage workers as early as possible,” said Inrig. WorkSafeBC understands that many forest companies are
Managing Partner Adam Wunderlich, and the payoffs have been enormous. Not just in terms of getting people back to work, but in terms of saving money. “We have a significant discount with WorkSafeBC that’s a direct result of the pro-
We have to be very creative sometimes but we strongly believe that getting back to work is better than sitting at home on the couch feeling frustrated. very small—many TLA member companies have five employees or less. However, she adds that one solution might be for the industry as a whole needs to work out some kind of work-sharing plan between employers based on the incentive that idle workers and long layoffs anywhere drive up costs everywhere. “Many of the smaller operators don’t realize how the way they operate affects the entire industry,” she said. So while some companies may not be getting it at all, and others are getting it a bit but not enough, some are getting it in a very big way. Fall River Logging in Courtenay has had an aggressive returnto-work policy in place for 10 years said
cesses we have in place for getting people back to work,” he said. These processes include working with a third party provider—in this case Global TotalCare— that specializes in injury management. “If an injury occurs we call Global TotalCare before the ambulance even gets to the hospital,” said Wunderlich. “They liaise with the employee and WorkSafeBC to ensure they are getting prompt treatment. If an MRI is needed we pay for it up front and get it done in a couple of days where it might take six weeks through traditional channels.” Once the worker is on the road to recovery the focus shifts to finding something for them to do. “We have to be very creative some-
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Maximize Payload In order to help WorkSafeBC office staff better understand forestry, the TLA took them to two logging sites to see logging in action. times but we strongly believe that getting back to work is better than sitting at home on the couch feeling frustrated.” Job options have included such things as light administrative duty in the office, reviewing safety procedures, conducting productivity studies, taking additional training, delivering parts if driving is an option—all at the same pay rate employees were receiving when injured, which may seem expensive, but it’s a pittance to what it would cost the company if the employee was not working at all. “If they were home getting lost time benefits it costs me three to five times what WCB pays them for the day in increased premiums,” said Wunderlich. When asked what advice he has for other employers going forward Wunderlich said, “Spend some time to understand the costs to your business. Adopt a solid return to work program and reach out to a company like Global TotalCare; they can help you understand how to make it happen.” Brad Bowler says Global TotalCare Inc. works with many various sized logging companies in western Canada, managing medical care, liaising with WorkSafeBC, handling the paperwork and dealing with appeals. “We deal with this kind of thing every day,” he says. “Your average operator is challenged by the issues surrounding injury management and feels that it takes away from the harvesting process—
and if they do embrace the concept, they often don’t have the connections and resources that are available to us in the medical community throughout western Canada to expedite the necessary procedures.” He adds that Global TotalCare doesn’t just work with companies after workers get hurt; they help change the culture within the organization. As a result, “the cost of having injury claims are drastically reduced.” “Smaller companies may not have the overhead needed to contract out their WorkSafeBC claims management, but all companies no matter how small can work to improve the culture and realize savings,” said Laurie Inrig. If there’s a bottom-line calculation to be made here it is that employers and employees alike need to understand that the annual premiums they pay to insure their operations are really just a down payment when it comes to covering the costs associated with injured workers. In addition to developing ever safer work environments and focusing on injury prevention, the industry needs to understand the cost implications of injury and work toward getting injured workers back in the saddle as soon as possible—it’s good for one and its good for all.
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Building Bridges: Wuikinuxv Nation and the Johnson Creek Project
By Hans Peter Meyer
e’re in the dining room on the Interfor barge camp at Johnson Creek, south of Rivers Inlet on BC’s midcoast. Ted Walkus is showing us pictures of the Chinook that return to the Whonnock River each year—seventy and eighty pound monsters. We’re impressed. These Whonnock tyee mean more than just a healthy return on a salmon stream to Walkus. The Hereditary Chief of his family in the Wuikinuxv Nation, Walkus is proud of the work being done at the Whonnock hatchery. The monster fish are emblematic of a rebirth for his community, because the health of the Wuikinuxv Nation is intimately tied to the natural resources of their territory. That’s one of the reasons Walkus is so
44 Truck LoggerBC Summer 2015
positive about what’s happening with the current project on Johnson Creek. It represents a new way of doing business with the forest industry. Walkus says the project, managed by Corby Lamb and Capacity Forest Management, is respectful of Wuikinuxv Nation claims and values. At the same time, it’s meeting the financial bottom line for the parties in the joint venture—the Wuikinuxv Nation, Interfor and the TLA contractors who are engineering, road building and logging the project. Lamb has been managing Kvamua Enterprises, the forestry arm of the Wuikinuxv Nation Economic Development Corporation (WEDCO) for about 14 years. Before that he’d established a
reputation for establishing positive relations with First Nations on Haida Gwaii and the mid-coast in various roles with Western Forest Products. Today his company, Capacity Forest Management, works exclusively with First Nations clients, with a roster of 15 clients and 45 licences on the coast and in the Interior. History The road to today’s positive joint venture experience wasn’t a smooth one. Walkus relates how the reserve he lives on was logged off for spruce to feed the airplane industry in WWII. That decision was made by the Indian Agent. Years of log dumps and flat raft booming in salmon rivers followed. “This had a
All Photos: Hans Peter Meyer
negative impact on our community,” he says. Then, in 1995, Johnson Creek was the site of an environmental blockade by Forest Action Network. When First Nations were allocated access to timber through Bill 28 things began to change. But that change wasn’t without hiccups. The learning curve associated with getting involved in forestry was steep. After going through four CEOs, by 2011 Kvamua was in financial difficulty. Capacity has a history of turning difficult situations around. Supported by a new CEO and board, they were able to successfully negotiate a collaborative business-to-business arrangement with Interfor that meets the needs of
both Kvamua and Interfor. Ironside Contracting and Storey Creek Trading, which also has 14 years of experience with Kvamua, were brought on board to create the basis for what is now a successful project start up. Tim Walley from Storey Creek says the current Johnson Creek project works “because there’s a willingness from all parties to make it work.” Lamb notes another important difference: “This version is a little different from other joint ventures, because now WEDCO and Kvamua control the joint venture.” That’s critical to Ted Walkus. “It’s important that we have some say with what happens in our territory.”
Community The primary value of this project for Walkus is its value to his community. Creating jobs in a region where there are few opportunities is critical. Opening up opportunities for Wuikinuxv youth to be engaged in higher level understanding about managing resources is fundamental. As is getting a return for forest industrial activity. Walkus credits Lamb personally with playing an important role. Not only on the business side, but in helping the community become positively involved in the industry and get past previous bad industry experiences. Rhiannon Poupard, Manager of First Nations & Forestry Partnerships with Interfor echoes this
Summer 2015 Truck LoggerBC 45
This First Nations partnership means economic stability for these men’s communities too which are far from Rivers Inlet. when she says that Capacity’s “expertise is valuable to have at the table.” Stability It wasn’t that long ago that the forest industry felt exposed by unresolved issues related to First Nations’ land claims. Then, for a while, uncertainty around these issues appeared to be lessening. For its part, industry was looking to a range of different partnerships as a way to provide a degree of much-needed stability, something that Truck LoggerBC magazine has been documenting over the past several issues. The recent Tsilhqot’in Decision was a significant development regarding land claims. Although the decision has stirred new feelings of uncertainty, the collaborative atmosphere remains strong in Johnson Creek.
achieved. “The world did change [with the Tsilhqot’in Decision]. But we were already working towards the world that the decision describes.” “All the Central Coast Nations have been operating like the decision was already in place,” Lamb says. “The decision just confirms their position.” He agrees with Poupard, when she says that industry and First Nations have been working along the lines defined by the Tsilhqot’in Decision for the past five years. “The Decision has added strength to what we are doing.” As the dust settles after the Tsilhqot’in Decision, joint ventures like the Johnson Creek project are being seen as the way to create stability. Lamb is blunt in his assessment: “You’re not going to work on the mid-coast without First
We decided with all parties, if we can’t do it right, let’s not do it. We want this to be an example of what a First Nations joint venture could look like. That was our motivation. Poupard notes the Tsilhqot’in Decision is a game-changer. “It’s certainly highlighted the need for government to approach reconciliation in a more meaningful manner than what has been achieved to date.” She believes industry has an important role to play in working with both First Nations and the government on the path to reconciliation and points to the Johnson Creek project as an example of how this can be
46 Truck LoggerBC Summer 2015
Nations partnerships.” The project is helping to provide a secure log supply for Interfor, a company that operates two sawmills on the BC coast. Logs from Johnson Creek will supply the company’s Hammond cedar mill. “All of our tenures for our Canadian operations are within the traditional territories of First Nations,” says Poupard. “Recognition of aboriginal rights, including title and respect for interests
Truck Loggers & First Nations The TLA’s Aboriginal Affairs committee asks questions and develops answers to keep the TLA informed on First Nations forestry issues so we can keep our members informed and up-to-date. The Aboriginal Affairs committee already developed a TLA position statement on the Tsilhqot’in Decision that we launched at our convention in January (www.tla.ca/tsilhqotin). They are now working on a guiding principles document around First Nations partnerships which will be released later this year. Building up to this guiding principles document, we have been highlighting existing TLA/ First Nations partnerships in past issues of the magazine and there’s an article in this issue on page 44 highlighting another partnership on the mid-coast. To see all the articles in this series, visit www.tla.ca/FirstNations. within these territories is integral to how we conduct our business.” She underlines the importance of developing good working relations with First Nations. “Their success is our success.” “It’s about stability, secure access to timber,” says Lamb. Ironside Contracting’s Gord Thompson concurs. “For us, it’s about job security. We’ve worked on a lot of First Nations partnerships that have been very successful for everyone involved. The licensee gets a portion of the wood, the First Nations get enough margin to make it profitable and they get some employment. And we get the work.” First Nations work accounted for approximately 40 per cent of Ironside’s work in 2014. Thompson estimates that will grow to about 50 per cent in 2015. “These are pretty big projects that we’re involved in. As far as more opportunities with other First Nations, absolutely there’s room to expand.” Challenges While the challenges that were daunting seven to 10 years ago have been overcome, Lamb says a number of challenges remain. One is bureaucracy, due to the multiple levels of government and departments involved. Another is small volumes. “None of these bands have enough volume to have a sustainable forest operation.”
Ted Walkus believes the critical part of what’s happening in Johnson Creek isn’t just the financial bottom line, it’s the future. Then there’s training. “Our primary function is to create wealth for the First Nations leadership, to create other assets in the community,” Lamb says. “Training is part of that. But we don’t get any training funding.” That means all training is part of project costs. Thompson also says that the nonrenewable licenses are a downside with First Nations partnerships. “You’ve made a big investment to be up the coast. You ramp up, train and hire people. If the work doesn’t continue, you’ve got to move people. And that’s expensive.” Capacity’s logging supervisor Marcel Rivard sums up the challenges by point-
ing to the quality of people involved. “If anyone says it’s easy, it isn’t. You’ve got to have the right group of people. There must be mutual trust, respect and compatible interests amongst the stakeholders to even start a conversation.” “One of my Western supervisors once said to me, ‘You must have a cast iron gut for risk’,” says Lamb. “It helps to have others with you. Like Storey Creek. They were the first to believe in these partnerships. We work with other companies as well now, but they were the first and they continue to broker the major portion of First Nation volume we manage.”
Looking Forward A decade ago unsettled land claims issues, and changes wrought by Bill 28, created uncertainty for everyone involved in BC’s coastal forest industry. We’re beginning to see a more mature situation. Leadership in First Nations, in major licensees like Interfor, and in TLA member companies like Storey Creek Trading and Capacity Forest Management is demonstrating that trustbuilding has taken place. Even with the game-changing Tsilhqot’in Decision there’s evidence that there’s money to be made in First Nations forestry partnerships. This money is helping to grow local economies in remote coastal communities. It’s sustaining contractors and their families elsewhere on the coast. It’s supplying logs to BC sawmills. It’s also showing how conflict and fear can be transcended—when the right bunch of people get together with a common purpose and lots of mutual respect. Ted Walkus is philosophical about what the current partnerships with the forest industry mean for his community. “We’ve been here for 10,000 years. We know how to survive here.” The critical part of what’s happening in Johnson Creek isn’t just the financial bottom line, it’s the future. “In the summer we’ve got 30 to 40 kids running around the community,” Walkus says, “reconnecting with their traditional territory. These kids could potentially be working here. That’s why we’re doing this. For our kids, for our grandkids.” In the meantime, TLA members like Capacity Forest Management, Storey Creek Trading, Ironside Contracting, and RSD Road Building are finding that First Nations partnerships are also part of their business sustainability, which means economic stability for their communities far from Rivers Inlet.
Summer 2015 Truck LoggerBC 47
Motivating Innovation: How New Zealand Has Improved their Safety Record
By David Elstone
This completed New Zealand cutblock’s steepest slope was 120 per cent.
t the recent Interior Logging Association (ILA) convention and trade show, John Stulen, the Executive Director of the Forest Industry Contractors Association (FICA) in New Zealand spoke about workplace safety law reform in his country. In many respects, the process underway in New Zealand mirrors that of the BC forest industry in 2003 when public concerns over industry fatalities sparked action. Through 2012 and 2013, growing demand for New Zealand logs sharply increased harvesting activity that resulted in many “forest farm producers” to enter the logging business. Unfortunately, this led to a significant spike in injuries and fatalities as increased numbers of workers, not necessarily trained in forest operations, took to the saws. From Stulen’s perspective, “the cache of being
48 Truck LoggerBC Summer 2015
a professional logger was lost as a result of the bad safety record. In 2012/13, fatalities in farm forestry accounted for 50 per cent of all forestry workplace fatalities in New Zealand despite that source of logs being 20 per cent of the annual production. Different from BC, however, New Zealand undertook a pan-industry review of safety processes across all industries, the forest industry being just one of many at the same time. “This overall review allowed for a clearer focus on forestry relative to all other industries which was helpful,” said Stulen. September of 2013 saw the start of an independent joint review of forest safety that was shared between FICA and the forest land owners. At the time, the forest industry was considered the most dangerous sector to work in in New
Zealand with an injury rate that was unjustifiably higher than the overall rate for all sectors. The review process concluded in October of 2014 with 11 recommendations, and now the difficult task of implementing recommendations is underway. As indicated by Stulen, “There was significant contractor support for the review as they did not feel the industry was as bad as it was portrayed. That said, contractor and worker focus on safe practices was important to those who made logging and trucking a career. Key industry statistics, much like in BC, were fatalities in the falling and breaking out (hooktending) phases of logging. Underlying issues identified through the review included the lack of a safety culture, perpetuated by a “cando” attitude among forest workers that
Photo: George Lambert, T-Mar Industries
led to a risk tolerant workforce, gaps in standards, inadequate training and supervision and, surprisingly, a low level of worker participation in safety. And like in BC, the review has led to a new framework for worker participation in safety, the development of safety standards and an industry led certification scheme. “Workers all have a ‘cando’ attitude, but we now have to make it a ‘can-do-safely’ culture going forward,” said Stulen. On the government side, a new Health and Safety Reform Bill (the Reform Bill) was introduced to engrain the recommendations of the review into law. In addition, many changes were made to WorkSafe New Zealand to allow for more inspectors and safety support personnel. A new Crown agency was also established to drive improvement in the
safety performance of the industry as a whole. Industry has developed the Forest Industry Safety Council which mirrors the BC Forest Safety Council (BCFSC) in many ways. This was no surprise to many as the BCFSC has become the global standard for forest industry safety—something the New Zealanders have been following for some time. In addition, Stulen was particularly proud of the new website, www.safetree.nz. Its development involved collaboration between the industry, WorkSafe NZ and the forest owners. It has been designed to provide forestry workers with how-to resources on doing jobs safely and features workers talking to workers. Every forest worker in BC should visit the site and watch the introductory video as the New Zealand messages apply equally to BC’s industry.
The overarching message on the website is that safety is everyone’s responsibility, something that has become engrained in New Zealand law. There is now a clear connection between the forest owners, management and workers, to on the ground safety. The Reform Bill imposed new duties on all persons conducting a business or undertaking throughout the supply chain, new responsibilities for officers and an expanded definition of workers to include both employees and contractors helps clarify health and safety obligations. In essence, “the owners (investors) and company executives from the Chairman of the Board and the CEO on down, would be held equally responsible in the event of a fatality”, noted Stulen. When the new law is finalized in early 2016 it is expected to result in
Summer 2015 Truck LoggerBC 49
real change. Since the review, Stulen noted, “over 50 new steep slope harvesters were purchased by New Zealand companies where 2-3 per year had been the norm. At the same time, a significant review of contractor contracts with owners has begun as it is now recognized that contractors were being pushed contractually to produce wood at the expense of safety. With responsibility now being shared across the supply chain, this is now changing. When asked how the changing focus on safety has affected logging innovation, Stulen was quick to note that “there is a new focus on getting people off the hill and into machines. Eliminate or isolate is the new mantra when it comes to logging. We are still in early days, but many people are working on equipment design changes and innovation aimed squarely at worker safety.” George Lambert of T-Mar Industries in Campbell River saw this first hand when he visited New Zealand earlier this year. “When I watched how the con-
tractors were logging on the steep New Zealand slopes, I saw the future for BC,” explains Lambert. “With the pressure to eliminate or isolate people from harm’s way following the forestry safety review, people started thinking differently about machines and logging methods.” Lambert saw an example of this change on the ground. “I observed movement away from using chokers and a ground crew to support a yarder towards much more use of grapples. This change, how-
Over 50 new steep slope harvesters were purchased by New Zealand companies since the review, where 2-3 per year had been the norm. ever, did create some problems with visibility of logs in the New Zealand settings, so the solution was to develop a camera system.” A more significant development was the adoption of winch or tether assisted mechanical falling and log bunching. “Using these new innovations, I wit-
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nessed mechanical falling taking place on 100 per cent slopes,” said Lambert. “The immediate benefit is, of course, improved safety by putting the faller in a protective cab. The secondary benefit is that mechanical falling and bunching of logs greatly improves yarder productivity and allows the contractor more flexibility in how they log a setting.” Although this system has been used for a decade in some locations, it has not been widely applied until the increased
application across New Zealand. Several different versions of winch assist equipment are currently being developed, tested and implemented. While no clear favourite has emerged yet, each region appears to have its most popular configuration. Some winches are mounted on bulldozers, some on excavators and some on the falling machines themselves. “I believe this equipment can and will have an application in BC, even though our terrain and ground conditions are quite different,” said Lambert. There are several hurdles to overcome in developing this type of system such as terrain, ground conditions (including rock), controllability of the machine and, of course, who is going to pay for the research and testing required to develop the additional equipment. Will logging rates be impacted by all of this is yet another unanswered question. However, Lambert sees these changes as the way of the future: “I believe this is going to change the way we work on steep slopes as fundamentally as the development of the hoe chucker and the grapple yarder.” As a leader in steep slope logging machine development here in BC, T-Mar has also seen a significant increase in requests to develop new steep slope logging technology for applications south of the border as well. While there is no specific safety review driving the United States need for innovation, Tyson Lambert of T-Mar has been told that the disparity in worker compensation rates between workers on the hill and workers protected in a machine in places like Washington and Oregon is also driving the need to eliminate or isolate like in
Photo: George Lambert, T-Mar Industries
Here a machine is harvesting a New Zealand cutblock with a steepest slope of 110 per cent. New Zealand. “As quickly as we figure out a system that addresses the needs, orders for machine development have followed,” said Tyson Lambert. These innovations may inevitably support improvements in the BC industry as well. We all have a goal of improving our safety record. That is not ever in question. It took a significant law reform in New Zealand to move the process along. With the subsequent development of innovative logging techniques and steep slope equipment going on there, BC may be the eventual beneficiary. Who can and who should pay for the research and who will ultimately benefit as a result is still unclear. But if worker safety is the ultimate outcome, we all have a stake in the game. New Zealand’s story highlights that the goal posts are shifting. Where we once believed that safety measures detracted from productivity, safety is now inspiring innovations that address both safety and production together.
Summer 2015 Truck LoggerBC 51
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