Activists Cheer U.S. Decision to Annul Alaska Timber Deal

A last vestige of America’s campaign to rebuild and industrialize Japan after World War II has come to an abrupt end--by order of the U.S. Forest Service.

Environmentalists cheered the decision as long overdue and just in time to preserve sound stewardship of the largest public forest in the U.S. inventory, the 17-million-acre Tongass National Forest in southeast Alaska.

The Tongass is the centerpiece of what environmentalists call the last intact temperate rain forest in the world.

Last week, the Forest Service canceled the remaining 17 years on a 55-year, exclusive Tongass lumber contract that was one of the most unusual in the nation.

The contract was signed with Japanese investors 37 years ago, guaranteeing their company, Alaska Pulp Corp., wood from the Tongass forest through the year 2011. The idea stemmed from Gen. Douglas MacArthur’s program to help Japan after the war, and coincided with a desire in the U.S. Congress to create a year-round economy in the southern coastal region of Alaska.

As a condition of the contract, Alaska Pulp promised to build and maintain a wood pulp mill in Alaska. In return, it received up to 100 million board feet of timber each year without competitive bidding. So far, the company has cut 2.16 billion board feet.

Environmentalists long have complained that an exclusive contract for such vast amounts of timber, including rare and valued Sitka Spruce, no longer served America’s interests. They said it led to vast over-cutting and shorted U.S. taxpayers, who found themselves subsidizing the logging--at least during some years.

Then last September, Alaska Pulp shut its pulp mill and laid off many of the 400 employees, although it continued to use contract timber for its sawmill. The sawmill trims high-grade logs for shipment to Japan and the Far East.

The company said that increasing costs of pollution controls and a shrinking market made its pulp mill unprofitable. Alaska Pulp said it wanted to replace the operation with a modern plant to produce construction-grade fiberboard, all the while continuing to send trimmed logs from its sawmill to Asia. The fiberboard plant was to have employed 140 people.

Prompted by environmentalists, the Forest Service ruled that the company was in breach of the contract and nullified it. The Clinton Administration said Alaska Pulp now would have to bid competitively for the timber.

Alaska Pulp said it was “profoundly disappointed” and blamed the U.S. government for incrementally, year after year, changing the way the contract was administered, driving up costs until the pulp mill could not be sustained. Last year, the firm sued, complaining of government infringement on its contract rights. The case is pending.

John Hough, a director of the company, said its executives would meet this week to decide their next step.

“It is the position of the company that its operations were on a 100-year, sustainable harvest plan, and environmentalists who say differently are wrong,” Hough said. Alaska environmentalists believe the forest has been cut at twice the rate that is sustainable. And they said the contract cancellation means Tongass managers can better balance the conflicting needs of wildlife and fish habitat and timber harvesters.

“We’re not saying you shouldn’t cut trees on the Tongass. But you sure better cut them at a rate that everything else can live with,” said Allen E. Smith, chairman of the Alaska Rainforest Coalition and regional director of the Wilderness Society. He said the contract represented “the worst of the last century’s approach to logging.”

Environmentalists now have their sights on the only remaining contract of this kind--a 50-year deal signed in 1954 with the U.S.-owned Ketchikan Pulp Corp., also in the Tongass National Forest.

Eric Jorgensen, attorney for the Sierra Club Legal Defense Fund, said the Administration should evoke “severe environmental damage” as grounds for canceling the remaining years on Ketchikan’s contract.

But Alaska’s congressional delegation and state government support the contracts. And even opponents agreed there was no clear-cut contract breach that would give the Administration easy justification to act.