We Need More (not less) Wood Manufacturing in BC – Part 5
By Peter Ewart
Wednesday, May 05, 2010 03:45 AM
By Peter Ewart
What can be done when mills shut down in BC’s forest industry? According to some business analysts, many mills in the Interior could close over the next few years. Indeed, an atmosphere is being created that, like the bitter cold winds that blow down northern valleys in the Fall, these closures are inevitable.
But should we accept this? Should our generation of British Columbians let the forest industry slip away like chaff between our fingers, like sawdust in the wind? The international financiers who control much of the forest industry seem to think that a much reduced (and more concentrated) industry is just fine. If that means only a handful of “supermills” in the Interior, so be it, as long they have monopoly domination.
Forestry workers and forestry-based communities, on the other hand, have not been willing to give up the fight for a viable industry, one that maintains existing jobs and opens up the prospect for new ones by getting more value out of the wood. But the reality is that the deck is stacked against us. The legal and governmental processes that are in place stifle innovation and thwart alternatives to mill shutdowns.
Under current processes, one of the biggest indignities happens right when a company announces that a mill is to be closed. Workers are often the last to know and often the last to be consulted. And this is considered to be “normal” operating procedure.
There is a great irony here. The very ones who, through their labour and productivity, create the added value of an enterprise; the very ones who, through their skills and expertise solve a thousand problems every day in the production process; the very ones who literally run the operations and are most keenly interested in its survival – at a critical moment, all of these vital participants are sidelined, told to go home, and the gates slammed shut behind them.
What a loss of creative energy! Yet that is how the process works. It is set up to favour the multinationals and monopolies that open, close and move their operations around like pawns on a global chessboard. It is also set up to favor the financiers and vulture capitalists who scoop down on a mill that is in financial trouble, buy it up, and then scavenge the bones. In the end, sometimes all that is left for the community is an expensive environmental cleanup.
Many of these monopolists and financiers do not even live in British Columbia or Canada and have absolutely no commitment to the workers or communities, let alone the province or country. Some, as recent experience has shown, are even connected to organized crime. Yet, when a mill shuts down and the future of a community is hanging by a thread, it is these characters who get to decide its fate.
But there are alternatives to such tragedies. Why not have legal and governmental processes in place that favor workers and communities, rather than the vulture capitalists and international financiers? Why not harness the energy and creativity of these workers and communities? Why shouldn’t those who have the most commitment to the community, the region and the forest industry itself be the ones who make the decisions?
Here is how it could work. If a mill is to be shut down for whatever reason or a company goes bankrupt, provisions in commercial law and in timber licensing could be put in place that would give the employees of the mill the opportunity to decide a course of action for the future of the mill. In other words, if a company abdicates its responsibility to keep the mill running, decision-making about the mill and its timber license could devolve to the workers if they so desired it.
Putting their heads together, workers could then come up with an alternative to mill closure. One such alternative might be to set up the mill and the timber license as a non-profit cooperative enterprise run by the workers themselves. Successful models for such an arrangement already exist in other parts of Canada and other countries.
A portion of the stumpage revenue that normally goes to the provincial government could be used to set up a regional forestry fund – not dissimilar to the already existing Northern Development Initiative Trust - that could provide purchasing grants or loans, as well as seed money for such an enterprise.
Another alternative could be for the workers to decide to partner up with local business investors to take over the ownership of a particular mill. Again, there are already examples of such arrangements.
For instance, not too long ago, the multinational company that owned the Harmac pulp mill in Nanaimo went bankrupt. The mill was scheduled to be cut up with welding torches and shipped off to Asia as scrap. Instead, under a lot of pressure and very tight timelines, the workers were able to establish a coalition with managers and BC-based investors to take over ownership of the Harmac operations. Now that mill is a going concern and one of the more productive and profitable operations of its kind on the Coast. All of this has been accomplished amidst the most severe downturn in the history of the provincial forest industry.
Still another alternative could be for the workers to develop an arrangement with an international investor. Instead of having a gun to their head, which is usually the case these days when a mill is scooped up, the workers would be at the table from the onset to ensure that acceptable terms were negotiated for themselves and their communities.
Variations on all of the above arrangements could involve partnering with municipalities and community forests, as well as First Nations organizations. A resource team made up of industry personnel, as well as experts in novel forms of enterprise ownership, could be made available by government to advise workers and their community partners. Even a provincial marketing board could be set up that would function like the Canadian Wheat Board and that would market wood products at home and abroad for these new types of forestry enterprises.
Whichever course of action is decided upon – whether it has been tried already or something new - the point is that, when a mill is set to be closed, the workers get an opportunity to have the final say about its future.
With this kind of process in place, all of the creative energy of the workforce and the community can be channeled into making decisions and finding solutions, of turning a negative situation into a positive one. Anyone who has seen a workforce reeling from layoffs or a community devastated by mill closures can understand the importance of worker and community empowerment in such situations.
However, it is a fact that, today, the existing legal and governmental processes do not empower either workers or communities, but rather leave them at the mercy of financial interests that could care less about their livelihoods and futures. A recent example took place in Mackenzie, where laid-off workers put forward proposals to take over the operations of a closed down mill, but had the door slammed in their faces.
Of course, there are those who raise objections to such proposals. One objection is that mills that are shut down are unprofitable “white elephants” and can’t be saved. Aside from the fact that there are many examples of mills being turned around financially, it is also a fact that oftentimes profitable mills are closed down by international investors.
The problem is not that these mills are “unprofitable”, but rather that they aren’t profitable enough, i.e. the “return on investment” (ROI) is not high enough for these investors who, lacking any community responsibility, would rather put their money in some other country or get-rich financial scheme where the returns, like some Las Vegas casino, are supposedly greater. Yet what is so wrong with an enterprise that only returns a modest or average rate of profit? There is no reason why, in the hands of workers and community partners, it can’t be a sound and viable business venture.
Another objection is that workers are not “capable” of making decisions about a mill or running an enterprise themselves. One of the oldest and most prevalent prejudices in existence today is that against workers. Indeed, it is not dissimilar to the attitudes against slaves during the period of slavery. Unlike racism and sexism, it is not criticized by human rights codes. Nonetheless, it is still a prejudice that is rampant in corporate and government circles and a most harmful and irrational one at that.
Indeed, it is strange prejudice which holds that the very workers who we entrust to build and operate the most sophisticated technology, to operate our industries and infrastructure, to manufacture all our goods and provide all our services – in a word, to literally “run” our society – that somehow these same workers are incapable of running a mill or making sound decisions about its future.
Such an attitude belongs on the garbage heap. In the face of more mill closures and the further decimation of the forest industry in this province - which has served as the backbone of our economy for over a hundred years - we need fresh ideas and empowerment, not stale prejudice and paralysis.
Peter Ewart is a writer and community activist based in Prince George, British Columbia. He can be reached at: peter.ewart@shaw.ca
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Posted by: Eagleone on May 5 2010 3:52 PM
Two things come to mind.
1. Mondragon Cooperatives in Spain despite Franco fascism. It has grown to be a huge success. $4B comes to mind... I forget, annual sales or was it assets. Look it up for yourself http://www.mondragon-corporation.com/language/en-US/ENG/Economic-Data/Most-relevant-data.aspx $33B in assets. This happened while the Capitalist and the Communists were busy with cold war economies.
2. "“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”. - Benito Mussolini
Cooperatives are part of the solution.