May 18, 2010 - National Post -  Forestry industry, environmentalists ready to call truce - Tim Shufelt

TORONTO - The battle between forestry companies protecting their timber supply and environmentalists trying to save the trees has been too fierce to hide in the shade of Canada's vast boreal forest.

But after decades of fighting, the bitter foes have agreed to bury the hatchet.

At the heart of the agreement is an enormous swath of boreal forest spanning about 70 million hectares, an area almost twice the size of Germany.

Some of the country's biggest forestry companies will agree to freeze logging on parts of the northern forest. In return, environmental groups will pull marketing campaigns denouncing logging practices and will even go so far as to give the companies a green endorsement.

"It's safe to say this is the biggest conservation story of the year. It's also the biggest forestry story of the year," said Nicole Rycroft, executive director of Canopy, an NGO dedicated to improving the environmental practices of paper and wood companies, and part of the coalition scheduled to announce the historic agreement in Toronto on Tuesday.

The deal marks the end to a public relations war over the impact of forestry on the environment, one that has stained the reputation of Canada's forest products and pulp-and-paper leaders, said Richard Kelertas, an analyst with Dundee Securities.

"It was pretty damaging when the industry fought back and they were viewed as bullies," Mr. Kelertas said. "You'd get photographs of clear cuts, but there were maybe only one or two sites like that."

On the other side of the fight, environmental groups waged campaigns denouncing the operations of specific companies as unsustainable and irresponsible.

Greenpeace has accused Montreal-based newsprint company AbitibiBowater Inc. of leading the destruction of intact boreal forests in Ontario and Quebec.

The boreal is the northern treed region that adjoins the tundra along the Arctic tree line, and its southern reaches are particularly valuable ecologically, providing habitat for threatened wildlife and removing carbon dioxide from the atmosphere.

Most of Canada's boreal forest is publicly owned and managed, but about half has been allocated or licensed to logging companies.

Within those allocations, companies like AbitibiBowater led destructive logging practices through areas of dwindling intact forests, defined as those greater than 5,000 hectares, which have no roads and have not been logged or developed, Greenpeace charged.  

Over the years, Greenpeace has pressured forestry companies to focus only on areas that were already fragmented. Without divulging specifics of the new deal, a spokesman from the group called it "globally significant."

While details of the agreement have been scant, the industry side of the negotiations have been led by the Forest Products Association of Canada, which represents some of the giants of Canadian forestry, including AbitibiBowater, Canfor Corp. and Weyerhaeuser Co.

"Essentially, it has no choice, but it's co-operating," Mr. Kelertas said. "The environmental groups get what they want for now and the industry looks like good citizens."

However, industry watchers will be closely looking at the extent of the sacrifice made by the forestry industry, which is limping out of the recession and the devastating effects of the U.S. housing meltdown.

"The question is: Are they limited in terms of the volume they can take under their specific agreement?," Mr. Kelertas said.

And he said companies will enjoy an immediate credibility boost with the ecological stamp of approval. But he doubts that whatever concessions the industry is willing to make will actually satisfy environmentalists over the long term.

"You could essentially say their influence and their ability to access cheap wood is a thing of the past, and eventually it will get to the point where there won't be much left for these companies to access."

However, those involved in the negotiations say the deal is not designed to put the brakes on the industry.

"I would not characterize tomorrow's event as being anything along those lines in terms of curtailment," Ms. Rycroft said. "It's really about competitiveness and sustainability."

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