A16 - The Terrace Standard, Wednesday, March 27, 2002

Evergreen contractors say

NWBC

By JEFF NAGEL
IP NWBC Timber and
Pulp wants to eliminate
evergreen contractors, if
must offer some sort of
compensation, says one of
the affected firms.

Clear Creek Contract-
ing and Jasak ‘Logging
have had their contracts

terminated by NWBC pre-_

sident Dan Veniez..

Veniez has offered the
two terminated contractors
iwo-year contracts instead.

But that doesn’t recog-
nize the loss of Clear
Creek's main asset, says
controller Justin Rigsby.

He said Clear Creek
paid around $1 million for
its contract; which it
bought in 1992 from the
Munson family.

Rigsby said simply ler-
minating the contract
without’ compensation —
particularly when it could
be sold for $1 to $1.5 mil-
lion — is unreasonable.

“Our contract is worth
$1 million so we want to
be reimbursed for that be-
fore we would accept a
two-year deal,” he said.

Veniez has said he
would have terminated all
five evergreen contractors
here if he could because
their perpetual contracts
makes it more difficult to
negotiate competitive
rates than if logging goes
to open bidding.

Cutting two of the con-
tractors reduces the
amount of SCI’s cut done
by evergreens from 70 per
cent to around 50 per cent.

Rigsby understands the
desire for change.

And change is possible,
he said, but NWBC must
also put itself in its con-
tractors’ shoes,

NWBC needs Skeena
Cellulose’s forest licences
as an asset base to borrow
money to upgrade and
operate the mills.

In the same way, Rigs-
by said, evergreen con-
tractors need to borrow
large amounts of money
for equipment and use
their contracts ta secure fi-
nancing.

could

There are ways to re-
solve the dispute without
cash compensation, Rigs-
by said,

One is for all five ever-

green contractors to take-a
reduced cul, avoiding the

” elimination of two.

- Another more radical
option would be for Skec-

‘na Cellilose to: give’ tip’ a

portion of its forest hold-
ings and turn them over to

~ evergreen contractors, |

That would effectively
turn logging contractors

into independent licensees. —

But Rigsby says Veniez
so far resists that.

“He isn’t prepared to
give up any tenure,” Rigs-
by said.-He’s going lo use
the tenure’ to leverage the
financing he needs to re-

capitalize the pulp mill.

and the sawmills.”

“But that’s no different
than ts using our contracts
to purchase. more modern
equipment to do our job.”

Turning. some . tenure
over to contractors lo ex-
tinguish evergreen con-

tracts ‘would have other
advantages, he said. —

"If that woad “is ‘sold on”

the open market,-it would
increase the percentage of
competitively priced
wood, helping address
American demands for an
open market-in B.C. to
prove the industry isn’t
subsidized.

If -it was sold in some
local log yard, it could
‘also pul more wood in the
hands of small value-
added operators, Rigsby
said.

give up timber

He urged Veniez to re-
think the idea.

“E don’t think you’re
going to get the radical
changes if you're asking
everybody to change but
you're not going to change
yourself,” he added.

He said the plan would ,

depend on a contractor
proving its ability to man-
age a licence, and on it
receiving a licence with a
fair spectrum of timber,
not just pulp logs,

aan

Rigsby says he has re-
signed as chair of the
city’s forestry task force
because evergreen con-
tract terminations put him
in a conflict of interest,

“[ just didn’t think J
could look objectively at

certain scenarios,” he said.

Loggers wont owe
stumpage if sale made

SMALL BUSINESS log-
gers won't be left on the
hook fer stumpage pay-
ments that Skeena Cellu-
lose was supposed to cover
if the sale of the company
is approved.

In all. 23 contractors
owe $560,000 to the pro-
vince for stumpage.

That’s for timber they
logged and sold to Skeena
Cellulose.

The normal arrange-
ment was for SCI to pay
the stumpage on behalf of
the loggers.

But when the company
fell into creditor protection
last September much of
the wood had been deli-
vered to SCI and was trap-
ped by legal proceedings,
but the stumpage had not
yet been paid.

That left the loggers re-
sponsible for the stumpage.

Provincial revenue
ministry officials say those
loggers ‘will get 100~per
cent of the amounts they
claimed for stumpage. The
money will in turn be paid
to the province.

That means stumpage
payments haven't been
forgiven, officials stress,
but that the money to
cover them will come out
of the $6 million proceeds
of the sale to be split be-
tween the province and TD
bank.

The loggers get their
claims paid in full — unlike

other creditors who vote on
whether to take 10 or 12
cents on the dollar — be-
cause it was determined
Skeena Cellulose had a
trust relationship with
them.

But the stumpage deal
will fall through if other
unsecured creditors fail to
approve the sale April 2.

From front

£ I 1
Yes’ vote likely
Pulp workers last week debated whether to also regis-

ter an unsecured creditor claim for Skeena Cellulose
shares they say they’re owed — putting them in position

to wield more votes while they negotiate what conces- .

sions they’ ll grant NWBC.

The workers were to receive a 20 per cent stake in
the company in return for the 10 per cent wage rollback
that’s been in place since 1997.

Although the union voted not to pursue that as a-

group, the court ruled March 22 individual union mem-
bers can still stake claims over the shares — although

~ whether those claims will ‘be approved is another matter.

Because claims won't be approved or rejected by the
monitor until later this week, the exact total of unse-
cured claims aren’t yet known, nor the number of cents.
on the dollar the $2 million offer from NWBC will yield.

The Choice for the future of the
Northwest has never been clearer.

We can choose the path of meaningful change that will position
the New Skeena as a competitive force in this industry for years
to come, We can choose to build a New Skeena that is
financially strong, vibrant, adaptive and ready to compete. We
can choose to make the New Skeena an exciting workplace and
a hotbed of creative ideas where everyone’s contribution will be
expected, valued and rewarded.

Or we can choose a very different path — one that takes us right

back to the past,

Some say that the past must be the foundation for the future. We
say that's a recipe for getting us right back to where we are now
- bankrupt and in economic turmoil. That is nota road | am pre-
pared to take, and if is one that the Northwest does not deserve.

the past?

We need to wipe the slate clean. We need a fresh start.

This is a defining moment for the people and economy of the
Northwest, and for SCI: To change, lead and grow, or retreat to

NWBC Timber and Pulp has placed its bet squarely on the

people of the Northwest, market leadership, growth and
profitability, Now its time for you to make your decision.

In the meantime, please do not hesitate to call me at

604-688-2225, or email me at

dveniez@northwestbc.ca

| very much look forward to exchanging ideas with you. ;

Sincerely,
os 1)

Daniel D. Veniez *

President and Chief Executive Officer
NWBC Timber and Pulp Limited. ~~

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