Server: Microsoft-IIS/2.0 Date: Thu, 20 Nov 1997 21:49:30 GMT Content-Type: text/html Accept-Ranges: bytes Last-Modified: Tue, 18 Nov 1997 23:35:04 GMT Content-Length: 39837 Weyerhaeuser

 

Industrial forestry: renewing the social contract

Remarks by Weyerhaeuser Canada President and Chief Executive Officer George H. Weyerhaeuser, Jr.
To: Fourth Global Conference on Paper and the Environment
Paris, France
June 10, 1996

Introduction:

I am pleased to be here to join with leaders of the pulp and paper industry from Europe and North America to talk about paper and the environment. With much debate swirling around the industry these days, I began to wonder when the act of cutting down a tree first became controversial. It seems like the debate has been going on forever.

Well, I can now report that it has, almost. According to historians, public expression of concern about the impact of tree cutting was first recorded about 4,700 years ago, in Mesopotamia. I found some comfort in the knowledge that the controversy has been going for centuries, likely ever since humans began using wood and wood fiber.

Still, so far as we know, Mesopotamia didn't have mass communications, CNN, talk shows or the Internet. There is no question that over the past 20 years, we've witnessed unprecedented concern, scrutiny and sometimes direct assaults-on industrial forestry.

Both in North America and abroad, advocacy groups have raised concerns about clearcutting and the need to preserve old growth. Major campaigns have been mounted to protect endangered-species habitat. Groups have promoted consumer boycotts of paper products. Too frequently, the forest industry is portrayed as a destructive despoiler of the environment.

In this atmosphere, we must ask: What will the future look like for industrial forestry? In brief, I would forecast a rough patch of road near term, but a more favorable outlook in the future.

If you look at demand for wood fiber, there is reason to be positive. There is a growing population and increasing global demand for fiber. Our products make a significant contribution to the quality of life. We are in a business manufacturing products that are renewable, recyclable and sustainable. In fact, paper and wood producers have the potential to be models of sustainability. But, of course, it is not quite that easy.

To achieve that future, we need to respond to genuine societal concern about the environmental impact of industrial forestry. These concerns have been expressed in varying degrees at both the ballot box of electoral politics and in the marketplace of consumer preference. Part of the solution, I believe, resides in a new "social contract" with the public for industrial forestry.

Exploring a social contract for industrial forestry

During my remarks this afternoon, I would like to explore with you what this social contract for industrial forestry is about; why we need it, and the benefits it can deliver.

Although I will elaborate in a few minutes about what a social contract involves, let me provide a shorthand version. It sum, it means that the public accepts tree harvesting and forest management as socially valuable, based on the utility of our products and overall benefits we create for people-be they customers, employees, communities or investors.

But we can take the social contract even further than that. It can help us defuse the controversy surrounding forestry and the use of paper products. It can help us turn down the volume of public debate and increase public support.

The pulp and paper industry can be recognized as responsible stewards of the forest and managers of the environment. We all want to work in a business that is respected by the public and valued by customers. We want employees to feel pride in the work they do and in the products we make. And we want a secure and prosperous future for our business enterprises. It will take more than just technology or capital to get there. It will take a renewed social contract for industrial forestry and better alignment with public values.

The idea of a social contract itself is hardly radical. We each live in countries and communities knit together by a complex web of social contracts. For example, if I see a "Metro" sign on the streets of Paris, I know I can walk down the stairs, purchase a ticket, and within a few minutes board a subway that will take me to another part of the city.

As businesspeople, citizens and individuals, we are party to scores of voluntary agreements, some written, most simply understood. When these agreements are in dispute, we have mechanisms like courts and governments to enforce them. When it comes to environmental issues, we face both conventional courts of law and the informal court of public opinion.

Let's look at the notion of a "social contract" as it relates to industrial forestry. It has many dimensions, but three important ones:

1. The social contract implies that our ability to manage forests and harvest timber-whether on private or public lands-depends of the consent of the public.

Dr. Clark Binkley, the respected dean of the Faculty of Forestry at the University of British Columbia, recently published a paper that observed: "cutting down a tree creates ethical obligations: an obligation to sustain the forest from which the tree was cut; an obligation to use the wood wisely and efficiently." Embracing these obligations and publicly articulating them, Dr. Binkley concluded, might help move us a step closer to greater public support for forestry.

2. The social contract reflects the acceptance of obligations between successive generations.

This captures the notion of what we now call "sustainability," defined in the Brundtland report as: "development that meets the needs of the present, without compromising the ability of future generations to meet their own needs."

3. The social contract, like any traditional contract, describes rights and benefits in return for obligations.

Contracts define accountability and increase certainty that all parties will perform to expectations.

A social contract does not mean greater and unjustified intrusion by government into the marketplace. As we will discuss in a few moments, the success of a new social contract will very much depend on the workings of an innovative, dynamic market system.

That explains what a social contract is. But why do we need it?

All of the elements described above-public consent, sustainability, rights in exchange for obligations-speak to the notion of stewardship. Indeed, it is precisely on the question of stewardship that the assault on industrial forestry is based. It is this ground that industry must now strive to regain.

When I started working for the company about 20 years ago, the prevailing social contract was a much simpler arrangement. Forest companies harvested trees and replanted seedlings, manufactured a host of useful products, and provided well-paying employment opportunities. Resource scarcity and environmental impacts were not yet a practical daily concern for forest companies.

Today, public-opinion research tells us that public misgiving about the impact of commercial forestry is widespread. There is a new awareness of the finite nature of Earth's resources and concern about overharvesting and wasteful consumption. Public anxiety is heightened by mounting population pressures, incidents of environmental degradation, and ominous predictions about global warming and climate change.

As well, commercial forestry now faces an experienced, well-financed, permanent opposition. Environmental activism is international and institutionalized. Advocacy groups are active on a wide range of interests and issues.

In the forest sector, this has included campaigns targeting everything from mill effluents to harvesting practices. These groups are media-savvy, with an enviable talent for generating news coverage. Many are active around the globe, using computer networks to share information and implement coordinated strategies.

Environmental groups raise many questions about industrial forestry-with the public, regulators, customers, consumers, even investors. We are sometimes reluctant to concede how much positive change has occurred in forest practices as a direct result of activism by environmentalists. Their efforts have helped us become a better industry.

But all of this debate has raised doubt in the public mind about the long-term future of the forest industry. To restore public confidence, it is not reasonable to tell people that attacks on industrial forestry are wrong-headed or scientifically unfounded. Indeed, some of their assertions have turned out to be true. So today, we need to listen, learn and match industry performance with public expectations to demonstrate the compatibility of industrial forestry with responsible stewardship.

How can we do a better job connecting with a wide, diverse public that includes everyone from employees to local communities to overseas customers, consumers and legislators thousands of kilometers away?

Consider the new global connections implicit in freer world trade. Factor in the expansion of personal interaction and individual choice becoming possible through the Internet. With so many boundaries disappearing, how can we possibly forge a new social contract around industrial forestry that embraces all producers, manufacturers, customers, consumers and stakeholders around the world?

I see a solution to this dilemma in the workings of the free market. In fact, against the backdrop of the challenge we face, the importance of the free market to the new social contract for industrial forestry becomes apparent and -- dare I say -- natural.

Adam Smith's metaphor of the "invisible hand" to describe the workings of the free market system offers insight into environmentalism as well as into economics. In showing that the economy functions organically-like an ecosystem-Smith described how the connection of millions of voluntary choices created something much greater than the sum of its parts.

Consider the pencil-a remnant of low technology in the digital age. Yet understanding the pencil is a simple way to understand the cooperative functioning of the market.

Where did the wood come from? The metal rim? The rubber? The paint? The lead? Just reflect for a moment how much voluntary human interaction was essential to make the pencil available-affordable and within easy purchasing distance anywhere in the world. That is the "invisible hand" of the free market. Literally millions of tiny miracles of competition and cooperation that together form a free-market system-one that mimics in some ways Mother Nature's own intricate ecosystem.

Apply that same insight to a more complex end product ...say a monthly magazine for readers in Western Europe. How is it created? Trees are harvested in Canada using North American and Scandinavian technology. The logs are manufactured into lumber using Canadian technology. Chip byproducts are converted to kraft pulp using resource inputs from around Canada and technology drawn from around the world.

The market pulp arrives in Germany and is converted to lightweight coated paper using Scandinavian technology. The paper is printed on a high-speed press-likely German in origin. Articles printed on the pages reflect the intellectual capital of writers and graphic designers from a dozen or more countries. The publication includes advertising for perhaps 100 different products and businesses. The result, a monthly magazine is-just like the pencil-the product of countless contracts and transactions of cooperation and competition. The product of a free market.

Forging a viable social contract

Once the democratic aspect of the free market is understood-we vote with our purchasing decisions as well as with ballots-then forging a viable social contract that has room for industrial forestry will make sense to the public.

Once human economic activity is recognized as natural -and not intrinsically hostile to nature-there is a basis for a meeting of the minds. There can be a healthy interrelationship between good business and sustainable development. The social contract can be global, and it can cross generations.

In the United States and Canada where Weyerhaeuser is managing forestland, it takes anywhere from 35 to over 100 years between replanting and harvesting a new stand of trees. Market conditions a generation or a lifetime into the future are not only hard to predict-they are impossible to predict. But the importance of forests to the planet, and to meeting human needs, is not in question. The need to continuously renew the forest is a given.

That takes us back to industrial forestry. The notion of stewardship is very much a part of our social contract. The concept of forest stewardship in Weyerhaeuser is fundamental to our ethics and values, and it shapes how we operate our businesses.
In North America, Weyerhaeuser is one of a small number of "multi-generational" forest companies. The company celebrates its 100 th anniversary in the year 2000. I am the fifth generation of my family who has enjoyed the privilege of sharing in the company's management and growth. Along the way, the company has been recognized for pioneering efforts in what is now called sustainable forestry.

My great-great grandfather, Frederick Weyerhaeuser, one of the founders of the company, had a view of managing the forests that encompassed future generations. On the company's founding in 1900, he is reported to have said: "this is not for us, nor for our children, but for our grandchildren."

Still today, our commitment to forest renewal and to research is deep and long-standing. While it supports what I am referring to today as our "social contract," I would make the case that it also reflects a sound, long-term business strategy. Good business judgment equates to honoring the social contract, and vice versa.

In the early 1940s, the company pioneered the American Tree Farm system of sustained-yield forest management. On some of our private land, we are now harvesting our third forest crop.

Our commitment to significant investment into forestry research also began nearly 50 years ago. It initially focused on regeneration of native species, soil productivity, optimizing timber yield per hectare, seedling nurseries, and tree improvement.

In the mid 1960s, we were "early adopters" of then-emerging computer technology to model and implement High Yield Forestry to maximize long-term forest productivity on our private lands. During the same period, we were among the first companies to bring scientists and technicians specializing in wildlife and fisheries biology and, later, aquatic ecology, forest hydrology and environmental forestry-into our forest-management process.

Today, our scientists and forest managers continue to pioneer new dimensions of resource management, including watershed analyses and habitat conservation planning started in the US Pacific Northwest and now being introduced elsewhere.

We are applying geographic information systems (GIS)-satellite technology and computer modeling-to modifying the aesthetics of forest harvesting and management in many operating areas.

We also engage in cooperative research with universities and public agencies. And we have been project partners and financial supporters of a number of environmental organizations.

All of these activities speak to stewardship as a key element in the social contract for industrial forestry as practiced by Weyerhaeuser. The social contract is not words so much as it is action and performance.

What must the practitioners of industrial forestry do today to renew the social contract?

We must start by continuing to meet human needs for wood and fiber. This also involves meeting community needs for sustainable jobs. Tomorrow morning, Weyerhaeuser's technical director, Dean Decrease, will describe how we integrate the needs of key stakeholders to optimize our production processes using our "minimum-impact manufacturing" (MIM) strategy.

Industry must demonstrate its commitment to stewardship by considering the other users and interests -whether we operate on tree farms on private land or on public forestland.

We must bring to industrial forestry a commitment to reinvest in the land-to pass to future generations a forest as productive and "green" today as it was when we became its stewards.

We must be willing to embrace voluntary self-regulation in managing the environmental impacts of our activities. We can show commitment to the public interest by being proactive-not simply complying with the regulatory "stick" of government.

As an industry, we must publicly support defined forestry principles that focus not only on wood production, but also accommodate other values, including soil, water, fish and wildlife habitat, culturally unique areas, and plant and species diversity. Within some reasonable standard, we must accommodate less tangible considerations, such as biodiversity goals.

In regions of Canada where we operate, we are beginning to work more closely with Aboriginal peoples, who have inhabited some of these areas for 4,000 years or more. We are learning from them about forest values implicit in their culture, tradition and experience.

Finally, in all of these areas, we must demonstrate a commitment to continuous improvement in our environmental and our economic performance. We recognize the need to act on ever-better information, not on narrow ideology or simplistic, short-term interest.

The role of government

As custodians of the public interest, governments also have a role in the new social contract.

Governments must protect a defined land base for intensive commercial forestry. In the case of Weyerhaeuser, this will involve private lands in the United States and public forestland in Canada zoned specifically for more intensive industrial forestry where timber production is the primary use. Secure, long-term access to timber is essential to adequate reinvestment.

Commercial forestry makes a major contribution to Canada's economy. Because so much original forest remains in Canada, it has a unique opportunity for a policy of wise set-asides to reflect representative ecosystems. If decision making is based on reliable science and common sense, Canada's role as a major producer of forest products for the world need not be compromised.

Like industry, governments must also strive to be innovative. Both elected representatives and regulatory agencies must accept the onus to use sound science as the basis for regulation and to demonstrate the benefit achieved. Traditional command-and-control regulation should be replaced with incentive-based standards and defined resource targets. That way, companies are free to be innovative in determining how environmental goals are best achieved. The focus shifts from enforcement to results. Environmental leadership can be rewarded.

Although many governments are burdened with deficits and accumulated debt, they must resist the temptation to impose taxes that deny business a fair return on investment. Just as industry has a responsibility not to degrade the health of the environment and to respect the rights of future generations, governments have an obligation not to degrade the health of the economy by imposing unsustainable levels of regulation and taxation.

Governments have a related obligation not to reduce our ability to meet the challenge of intense global competition, so long as companies meet environmental performance goals.

Achieving these goals underscores the need for a global consensus about forestry standards. Ideally, we should strive for international agreements to set a fair, level playing field for all participants. An international certification process for industrial forestry standards could be a God-send or it could be an unmitigated disaster-depending on its content. But with a shrinking globe, with economic, trade and information boundaries fading way, I am convinced that we must take the high ground by working toward an international consensus on standards that make sense. The less-attractive options are to wait for others to define standards for us or to deal with different standards in multiple jurisdictions.

The ISO approach to defining international standards makes a lot of sense to us. ISO was created in 1947 to establish consistent standards that would allow trade barriers to be removed, creating more opportunities for free trade.

The new ISO 14001 guidelines, which define broad environmental management standards for manufacturing industries, are a case in point. We believe an ISO approach could also help us define, implement and certify international standards for sustainable forestry practices.

What will a new social contract ask of environmentalists?

In part, it asks green activists to build bridges and seek common ground with the other side-the same demand it makes of industry. I see this as a highly inclusive process, embracing most green activist groups.

To negotiate this contract, however, we need to marginalize the extreme elements on both sides. Environmental "fundamentalists" who perceive humans as somehow hostile to nature and outside the ecosystem want to eliminate industrial forestry and consumption of paper products. They hold little sway with the public. Likewise, companies who behave irresponsibly toward nature are held in low esteem.

Instead, sincere environmentalists are beginning to work with industry in defining shared, reasonable goals and pragmatic solutions. We have worked hard in recent years to reach out and to build bridges to these stakeholders, both in Europe and in North America.

In sum, the new social contract needed to make sustainable commercial forestry secure has room neither for environmental fundamentalists, nor for irresponsible corporations, nor for runaway government regulation.

Today, the notion of sustainable environment means a fundamentally changed operating climate for industrial forestry. We must find new ways to deal with business impacts internal and external to the marketplace. I am convinced that we can not only sustain the forest, but we can use our intelligence and apply continuous learning to build forest wealth over time.

As in nature, the free market sees and blends competition and cooperation. Both companies and species have become extinct as a result of factors completely beyond and outside the purview of human control or influence. Change is a constant.

In the media age, public scrutiny of industrial forestry is a fact of life. If our forest practices are responsible, if industry performs to defined standards, if our processes are open, then public support can be increased. Most citizens are not extremists and will welcome a sincere, positive initiative from industry to secure sustainable environmental quality and a prosperous forest sector.

Maintaining access to timber and fiber-whether on public or private land-depends on a renewed social contract that will restore public acceptance and appreciation for industrial forestry and the products made from it.

Continuous improvement and stewardship

That new social contract has many aspects, but none more important than stewardship. It includes continuous improvement in how we do business and better understanding of the environmental impacts of our business. And it requires renewed public trust in our ability to understand and effectively manage the impacts of industrial forestry.

If we can effectively articulate the dimensions of that new social contract, we shall not only find our own "green" niche in the global economy. We will also achieve prosperity and profitability by manufacturing products needed by people. At the same time, we will continue to make a positive contribution to the planet's conservation as the home for both humans and countless other species.

As business leaders in the pulp and paper industry, we must take the initiative on many fronts: with our peers, with government, with the public and the media, with communities, with consumers, with investors, and with potential environmental partners. We must seek, as the final, binding seal of our new social contract, an ethic of openness, honesty, fairness and balance in public dialogue around forestry issues.

In many respects, we have been continuously renegotiating and rewriting the social contract around forestry for decades-even centuries. As history shows, probably for as long as people have been cutting down trees.

Wood fiber has been used over millennia to meet fundamental human needs. With reason as our guide and hopefulness our companion, I believe we can seek a renewed and just social contract for industrial forestry. And we can achieve a sustainable supply of fiber and a secure and prosperous future for pulp and paper business enterprises.

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