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Building a bridge with First Nation Groups

Rick Takagi (above, left), BC woodlands manager for Ainsworth Lumber, and Chief Bradley Jack of the Bridge River Indian Band.

There’s been increasing interest by BC forest companies in setting up joint/co-operative ventures with First Nations groups, and one company— Ainsworth Lumber— has been pro-active at setting up such ventures, including a well-established logging company with the Bridge River Indian Band.

By Paul MacDonald

ith the changes to BC forest management policies in recent years that have resulted in a large amount of timber rights being transferred to First Nations bands—and likely more to come in the future—interest has quickened in the forest industry about developing joint ventures.

A large BC-based forest company— Ainsworth Lumber—however, has been working with First Nations groups for many years. And the ventures have been, by and large, successful for both the Indian bands and Ainsworth.

One of the longest standing joint ventures is Bridge River Logging, Ainsworth’s largest logging contractor in the company’s Lillooet Forest Licence, in southwestern BC. The machinery line-up for Bridge River Logging includes high lead equipment, and its logging crew has both band members and non-band members.

Bridge River Logging helps to feed timber to Ainsworth’s veneer plant in Lillooet, which has a production capacity of 200,000 msf (3/8-inch) per year. More than 70 per cent of the veneer produced is consumed in the company’s Savona specialty plywood product line. The remaining product is sold to specialty plywood producers and laminated veneer lumber manufacturers.

While those involved with Bridge River Logging—both from the company side and the First Nations side—say that there is no one ideal model for a joint venture, the fact that Bridge River Logging has lasted 12 years attests to its good management and commitment on the part of the band and the company.

Chief Bradley Jack of the 400-member Bridge River Indian Band explains that when Bridge River Logging was set up, the band was looking to ramp up its involvement with the forest industry. They wanted to create further employment for band members.

The band had discussions with Kevin Ainsworth, the Ainsworth Lumber family member who was overseeing Lillooet operations at the time. “We were talking with Kevin about getting more involved. We consider ourselves a logging community and we want to continue that tradition. And although we have traditionally been loggers, we had been more skidder loggers, at least up until then,” says Jack.

“At the time, things were changing. The logging was being done in steeper ground and the equipment was going more towards towers and yarders—we wanted to upgrade our equipment and we were looking at how best to move forward into the future.”

The opportunity to establish Bridge River Logging was created when a long-time contractor, with high-lead equipment, decided to retire from the business. Bridge River Logging took over this business and much of the equipment.

That was a dozen years ago, and the company, like the forest industry, has had its ups and downs over that period. But it is working very successfully in the demanding geography and conditions around the Lillooet area.

Rick Takagi, BC woodlands manager for Ainsworth Lumber, who sits on the Bridge River management committee, says the joint venture delivers a number of benefits to the company. “Because we are partners with Bridge River, we deal with things outside of the typical contractor/company areas,” he says. “We have regular meetings and talk about how the business is going, how it can be improved, and the opportunities that exist out there. It’s a good, healthy business relationship.”

There’s a strong focus on operations and equipment at the Bridge River Logging meetings. “We’ll look at the repairs and maintenance on our equipment and how much production we are getting,” says Jack. “That all comes into play—we look at the wood we are working in, how much low bedding we are doing. We want to be as efficient as we can.”

While they still have some of the original equipment they started with—including a West Coast Falcon yarder and Barko 450 loader, which are pressed into service from time to time— they also have newer equipment, in the form of a Madill 120 yarder, Madill 2800 loader, a Cat 330 butt ‘n top loader and a Cat 518 line skidder. Takagi says that they try to be as versatile as possible with their equipment, giving them the flexibility to work in different kinds of terrain and wood.

While Bridge River Logging is the longest established First Nations joint venture that Ainsworth has, Takagi points out that the company has since established many other similar relationships, both in BC and Alberta. All of them allow the company to be a larger part of the communities they operate in, but he emphasizes that they are businesses, first and foremost.

“In Lillooet, the community has a strong First Nations component and we want to be part of that, and we feel that Bridge River Logging is a good way to do that. But we also want the company to be successful—we did not set up Bridge River Logging just for the sake of being involved with the First Nations. It’s a business and it needs to be viable, and the partners need to get something out of it.”

With many contract logging operations, the decisions are made quickly and easily—by the owner, who is usually one individual. With Bridge River, the decisions are still made quickly, but on a more collaborative basis. The board meets on a monthly basis, discussing financials and any issues coming up “We have a supervisor who looks after Bridge River Logging in terms of the day-to-day issues,” says Takagi. “And he can quickly get hold of Brad or myself to talk about issues they are having on the ground.”

The question arises whether the two partners ever reach a point where they can’t agree on a business issue or decision, because they represent different interests. “It hasn’t happened yet,” says Takagi. “The hardest part can be that you’re wearing two hats—I’m wearing a Bridge River Logging hat and an Ainsworth hat, and Brad is wearing a Bridge River Logging hat and a Bridge River Indian Band hat. But you have to do that and do it successfully.”

Jack adds that he usually has no problem with this since, as band chief, “I’m wearing a number of hats with the different issues we have to deal with for the band.”

These days, Bridge River Logging, like all of the industry, is struggling due to the industry downturn. Added to that, a local sawmill they have been supplying, Lytton Lumber, has shut down. They’re looking at their equipment mix, and are trying to crystal ball where they are going to be working in the future.

The mountain pine beetle invasion can make that difficult. “We try not to move the logging around too much, but the beetle is all spread around our areas, and we are tying to manage it—it’s tough to do,” says Jack.

“We’re looking at whether we have the right number of pieces of equipment and if we have the right equipment,” he adds. “The equipment we have now has been suitable for what we have done in the past, but the forest is changing with the mountain pine beetle. We need to look at the areas we are going to be logging in the future. The big question coming up for us is what the future is going to look like.”

Originally, Bridge River Logging was set up to log exclusively on Ainsworth’s licence in the area, but it is now doing work on private land and working outside the region. Over the last several years, with the harvest in the Lillooet Timber Supply Area on a gradual decline, they have been working on BC Timber Sales and private land.

A Cat loader (left) working at a Bridge River Logging operation. The mountain pine beetle is having an impact on the company’s logging operations, and they are reviewing whether they have the right number of pieces of equipment— and if they have the right equipment— going forward.

Added to a lack of customers for sawlogs, the area has traditionally had to deal with high stumpage rates—though they are working to address that with the provincial government.

The owners of Bridge River Logging have been discussing ramping things up, possibly getting involved with tenure ownership. “That would involve more risk, but there could also be more reward,” says Jack.

Just as they have to stay flexible with their logging operations, it’s also good to stay flexible with the overall company, says Jack. “We don’t want the business in a box and say we can’t go outside of that box.”

In summary, things are in flux right now for Bridge River Logging—and it has plenty of company in that situation in BC. In spite of the industry uncertainty, however, forest companies and First Nations bands are still working to plan for the future, and some of that may include further joint ventures.

While Bridge River Logging has worked for both Ainsworth and the Bridge River band, the two partners caution that there is no one-size-fits-all business model for this type of venture. “It’s not cookie cutter,” says Takagi. “You wouldn’t want to take what we have here and apply to every First Nations community out there. What we have here works well, but it may not work someplace else.

“Brad’s focus is on seeing Bridge River Logging grow, but other joint ventures may have a different focus—it all depends on the community and the direction they want to go. Ainsworth is involved with a number of joint ventures and they are all different.”

Sometimes their relationship with the First Nations band involves an agreement or protocol, rather than a joint venture. In some situations, Ainsworth has provided capital up front to get a logging operation started or leased out the equipment. Ainsworth has also provided training for harvesting practices and safe work practices. But both Takagi and Jack agree that central to any kind of co-operative venture must be trust—something that is wellestablished at Bridge River Logging.