Lubicon Lake Indian Nation
Little Buffalo Lake, AB
3536 - 106 Street
Edmonton, AB T6J 1A4
October 18, 1991
On September 13th, during the recent Lubicon visit to Japan, the Lubicons learned that an Edmonton Telephones printing contractor named Ronald's Printing had placed a three million dollar paper order with Daishowa's U.S. subsidiary in Port Angles, Washington. Edmonton Telephones is a quasi-independent corporation owned by the City of Edmonton. The paper ordered by Ronald's Printing is required to print next year's Edmonton phone directories.
Chief Ominayak immediately faxed Edmonton Mayor Jan Reimer a letter asking the Mayor to "use the influence of your good office to encourage Edmonton Telephones to place (the three million dollar paper order) with some company not associated with Daishowa". The Mayor replied that there was little she could do about the contract to purchase paper from Daishowa's U.S. subsidiary, although, she said, "I personally have a lot of sympathy with the Lubicon Nation".
On September 23rd Daishowa's Canadian Vice President and General Manager Tom Hamaoka sent a widely distributed letter to Mayor Reimer aggressively "taking exception" to what he described as the Mayor's "publicly expressed misgivings about this sale from the perspective of (the Mayor's) personal support of the Lubicon Lake Band". "As the spokesperson for the City of Edmonton," Mr. Hamaoka said, "the negative message you are sending to the Daishowa Group of Companies is abundantly clear".
In his letter to the Mayor Mr. Hamaoka claimed that "Daishowa Canada has strived to become a good corporate citizen in your city and the Province". He claimed "All of our employees have been extremely conscientious with respect to the aboriginal and environmentally sensitive issues". "Furthermore", he said pointedly, "we have located our Alberta corporate office in Edmonton and have directly spent hundreds of millions of dollars in your city, both for construction and to support our ongoing operations".
In conclusion Mr. Hamaoka said "We had hoped that you, as Mayor, would embrace environmentally responsible forestry development and welcome the potential for the many economic opportunities it would bring to your city". "From your comments in the press", he said, "you apparently do not share this vision".
When Mr. Hamaoka released his September 23rd letter to Mayor Reimer it was generally thought that he'd over-reacted to her mild, diplomatic remarks. He's known to be receiving what's been described by Daishowa insiders as "thousands of letters" from around the world demanding that Daishowa stay out of the unceded Lubicon territory until there's a settlement of Lubicon land rights, and it was presumed that the resulting pressure was simply getting to him. In retrospect it now appears likely that Mr. Hamaoka's September 23rd letter was rather part of a carefully orchestrated effort designed to beat back growing criticism of Daishowa and effectively coerce support from the Edmonton business community for Daishowa's clear-cutting of unceded Lubicon lands.
At any rate Mayor Reimer wasn't prepared to let Mr. Hamaoka use her relatively innocuous remarks as a public launching pad for his implicit threat to take Daishowa's marbles and go home if people in Edmonton didn't become Daishowa cheerleaders. She told him so in a letter dated October 1.
"As Mayor of Edmonton", Mayor Reimer wrote Mr. Hamaoka, "I certainly appreciate the economic contribution that Daishowa has made to our City and there is no question that I support environmentally responsible forestry development". "However", she continued, "the economic benefits brought to northern Alberta does not mean an automatic blanket endorsement of all aspects of your operations".
Mayor Reimer noted Mr. Hamaoka's claim that employees of Daishowa "have been extremely conscientious with respect to the aboriginal and environmentally sensitive issues". "Yet", she pointed out, "evidence had been publicly presented that logging contractors for your company are clear-cutting tree stands on land claimed by the Lubicon Band".
Mayor Reimer offered that "A refusal by (Daishowa) to move onto land claimed by the Lubicons until the provincial and federal governments have fairly settled (Lubicon land rights) would have helped force a resolution of a long-standing injustice". Moreover, she said "The Lubicons have raised serious reservations about the impact of clear-cutting as a forest management technique; out of respect for their homeland, it would have conscientious to at least include them in deciding how to manage the forest areas for which they have a special concern".
Mayor Reimer said "In response to questions from the media and many Edmontonians, I made a public request for a fair and just settlement of the Lubicon land claim and environmentally responsible forest management so we can create a just and stable environment for the long-term development of all firms involved in forestry". "As long as these issues are not resolved", the Mayor said, "there will be unrest throughout the Province". The Mayor concluded "I regret that you cannot agree with this position; your letter did not provide any evidence or justification for another response, other than intimidation on economic grounds".
Mr. Hamaoka had sent noted copies of his September 23rd letter to lumber company owner and Chairman of the Edmonton Economic Development Authority Robert Rosen, to the Executive Director of the Edmonton Chamber of Commerce Fred Windwick and to all members of the Edmonton City Council. Of particular significance on the Edmonton City Council was Alderman Bruce Campbell, past Chairman of the Edmonton Chamber of Commerce and close associate of Robert Rosen.
On October 4th Edmonton Chamber of Commerce Executive Director Windwick unabashedly echoed Mr. Hamaoka's September 23rd letter by publicly describing Daishowa as "a good corporate citizen that has pumped hundreds of millions of dollars into the Edmonton economy". Mr. Windwick said "It would be disturbing for (the Edmonton Chamber of Commerce) that we seem to have this confrontation going on when we desperately need jobs in this community". Mr. Windwick's comments were then publicly seconded by Mr. Rosen's top staff man, President of the Edmonton Economic Development Authority Douglas Clement, who proclaimed that criticizing Daishowa was "counterproductive to us making headway here".
Three days later, on October 7th, Edmonton Chamber of Commerce Chairman Robert Snyder -- Mr. Windwick's boss -- made his typically more subtle but no less pointed public contribution to what was by now a clearly orchestrated campaign to beat back criticism of Daishowa and coerce support for Daishowa's planned clear-cutting of unceded Lubicon territory. In his capacity as Senior Vice-President of the Nova Corporation -- a large Alberta-based petrochemical conglomerate with oil interests in the unceded Lubicon territory -- Mr. Snyder announced the transfer of 195 jobs from the City of Edmonton to the City of Calgary. Mr. Snyder didn't tie the transfer to the Lubicon issue and in fact publicly denied that the transfer was related to the Lubicon issue. However Mr. Snyder's message was as clear as the timing of his message -- at a time when Edmonton is losing jobs anyway people shouldn't be critical of Daishowa.
The next day, October 8th, a development-at-any-cost gang of Edmonton City Aldermen led by ex-Edmonton Chamber of Commerce Chairman Bruce Campbell passed a surprise motion criticizing the Mayor's expression of sympathy for the Lubicons and going on record as supporting northern development projects, including the pulp and paper industries, "for the positive contribution they make to Edmonton". Carried away with the spirit of the motion Alderman Ron Hayter enthusiastically declared in his best cheerleading fashion "I want the world to know that we are open for business".
Mayor Reimer responded to Mr. Campbell's surprise motion by pressing for an amendment linking proposed support for logging to recognition of Lubicon land rights. She said "We have a fundamental question of whether we want the life-blood of the Lubicon people on our hands for the sake of economic development".
The Mayor's proposed amendment was soundly defeated by the clearly well-prepared development-at-any-cost gang of Aldermen with only Alderman Brian Mason dissenting. Alderman Hayter argued strongly against the Mayor's proposed amendment saying that the most important thing was to dispel "a growing perception that this council is anti-business and anti-development". Alderman Brian Mason countered angrily that "The total destruction of (the Lubicon) way of life, without any legal agreement, without any surrender of the land, by these large foreign corporations is nothing less than rape".
On October 9th -- two weeks after Mr. Hamaoka's threatening letter to Mayor Reimer, one week after the public statements of support for Daishowa by the Executive Director of the Edmonton Chamber of Commerce and the President of the Edmonton Economic Development Authority, two days after the announcement that 195 jobs were being transferred to Calgary and one day after the City Council motion supporting Daishowa -- Mr. Hamaoka delivered what was billed as a major speech to the Edmonton Chamber of Commerce. Nobody who's been around the block without their mother would ever believe that such an obviously calculated escalation of events, leading inexorably to the Hamaoka speech and involving powerful men with common interests and known working relationships, could possibly have happened without considerable premeditation and planning.
Mr. Snyder opened the luncheon at which Mr. Hamaoka spoke by reading what he called a "Statement by the Edmonton Chamber of Commerce Regarding the Alberta Forest Products Industry". Mr. Snyder's statement established the positively cuddly context in which Mr. Hamaoka was to make his speech.
Mr. Snyder said "The growing forest products sector in Northern Alberta is of vital importance to the Edmonton business community". "Because the forest resources in our Province are located north and west of our city", Mr. Snyder said, "Edmonton is the logical, indeed strategic location to provide support to this important Alberta industry".
"Edmonton", Mr. Snyder said, "is the service and supply base for the Canadian Oil and Gas industry". He said "Many of the Edmonton region companies that provide machinery, equipment, pipe, valves and fittings, fabrication services, specialized services and contracting services to the oil and gas industry are ideally suited to supply the same or very similar goods and services to the forest products industry".
Mr. Snyder pointed out that "The conventional oil industry has been in decline for some time". "Its prospects in the near term", he noted, "given low oil and natural gas prices that we are currently seeing, are not good". He said "This has very direct implications for the service and supply infrastructure that is based in Edmonton". He said "It is very encouraging that new opportunities are opening up in the new forest products sector".
Mr. Snyder said "It is very important that Edmonton businesses participate fully in this growing (forest) industry sector". He said "The location of head offices, including the purchasing offices, of major pulp and paper companies in Edmonton, is key to facilitating participation of Edmonton business in the forestry industry". He said "We welcome the initiatives (such as Daishowa) that have placed several forest products company head offices and purchasing offices in Edmonton". (Mr. Snyder politely did not mention the messy complications of clear-cutting unceded Lubicon lands or Wood Buffalo National Park.)
Mr. Hamaoka responded to Mr. Snyder's warm introduction by saying "First of all I'd like to, on behalf of the (forest) industry, thank the Chamber for your endorsement this morning". "Also", he said, "I want to take this opportunity to thank the members of the City Council for their support of responsible economic development in this Province and their recognition that Daishowa is here not to be a mediator; we're here to do business".
Mr. Hamaoka said "What I would like to focus on here today is to describe Daishowa's scope of activities in North America and particularly in northern Alberta, to convey to you our impressions of your region as to its attractiveness from the standpoint of a foreign investor and to offer you our current thinking on the economic and growth prospects for the forest products industry in the Province". "And within this framework", he said, "I will mention in passing a few words on the issues involving our company that have recently received significant public attention". (True to his word, Mr. Hamaoka then proceeded to dazzle the Edmonton businessmen with visions of multi-million dollar Daishowa sugar plums while touching only so very lightly on what he discreetly called "the issues involving our company that have recently received significant public attention".)
Mr. Hamaoka said that Daishowa began 60 years ago as a family owned business in Japan with a capitalization of 100,000 yen. By 1990, he said, Daishowa was Japan's second largest pulp and paper company with a capitalization of over 11 billion yen.
Mr. Hamaoka said that "Daishowa's presence in Canada dates back to 1969 when together with Marubeni a joint venture was formed to establish Cariboo Pulp and Paper". He said that "Cariboo Pulp and Paper now produces 300,000 metric tonnes of softwood kraft pulp (per year)".
In 1981, Mr. Hamaoka said, Daishowa together with West Fraser Timber formed another joint venture called Quesnel River Pulp. He said that Quesnel River Pulp now produces 300,000 metric tonnes of chemi-thermomechanical pulp per year.
"Since northern Alberta contained about three quarters of the provincial forest resource base and some of its best growing sites" he said, "it seemed a logical area on which to focus our attention". "Moreover", he said, " because of Daishowa's previous experience with Asian and Australian hardwood pulps from species such as eucalyptus, the aspen resources of northern Alberta were of particular interest".
Mr. Hamaoka said that Daishowa's Peace River bleached kraft pulp mill represents a capital investment of 630 million dollars, including interest during construction, land, working capital, studies and start-up costs. He said that about $580 million of this amount was spent on construction services, material and equipment. He said "A good portion of this was spent in Alberta and locally".
Mr. Hamaoka said "Almost $330 million, or 57% of the construction budget, was spent in Alberta". "Due to its strategic location", he said echoing Mr. Snyder's introductory remarks, "about $234 million was spent in the Edmonton area".
"Today", Mr. Hamaoka said, "we have just over 300 employees on staff and an additional 30 who provide contract services". He said that about 50% of the work force (150 to 165 people) had been hired in the Peace River area and that about 65% has been hired from within Alberta. "In addition to jobs created at the mill itself", he said, "up to 350 jobs are provided by independent contractors in the woodlands, log and chip transportation including a logging contract owned by local aboriginal people". (It's interesting to note that Mr. Hamaoka here claims credit for employment provided by so-called "independent contractors" whom at other points he disclaims are part of the Daishowa operation.)
Mr. Hamaoka said "various housing initiatives taken by Daishowa represent a total financial commitment of 20 million dollars", including the purchase of mobile homes (presumably for non-local employees of Daishowa), investment in a townhouse development (presumably to provide housing for non-local members of the Daishowa work force), investment in a 20 unit apartment building in Peace River (presumably again to house non-local members of the Daishowa work force) and a housing guarantee program underwriting construction by private builders of about 80 owner-occupied (and presumably owner paid for) homes."
"Finally", Mr. Hamaoka said, Daishowa is involved with "the creation of a new subdivision in Peace River which can provide up to 200 serviced lots for sale to mill employees and others who wish to own their own homes". (Mr. Hamaoka did not spell out why a non-local work force of 150 to 165 people require "up to 200 serviced lots for home owners, plus housing guarantees for 80 "owner-occupied homes", plus a 20 unit apartment building, plus a townhouse development, plus mobile homes.)
Mr. Hamaoka said "We feel these (housing) initiatives largely met the goal of preventing any upsurges in the cost of local housing" (to the point where it almost sounds as though Daishowa is turning the town of Peace River into an old-fashioned company town with the residents not only being employees but also tenants and customers of Daishowa.)
"Also on the community front", Mr. Hamaoka said, "the addition of the pulp mill has had significant beneficial effects on the property tax base...(in the amount of)...about $3 million in property taxes (this year)". "Through a revenue sharing agreement with the town of Peace River", he said, "the Town of Grimshaw and other local communities receive a portion of the general municipal revenues collected".
Mr. Hamaoka said "The wood supply to the mill is secured under a Forestry Management Agreement (FMA) with the Province of Alberta". He said "Under the terms of the agreement, Daishowa has tenure for a minimum of 20 years over a Forest Management Area that covers (over) 40,000 square kilometres, or (over) 4 million hectares of land, to the northeast and northwest of the town of Peace River".
Mr. Hamaoka said "About 2.5 million hectares of the Forest Management Area is dedicated to the Phase I requirements of the existing pulp mill". He said "The remaining 1.5 million hectares of land base would be dedicated to future expansions as and when these occur".
Mr. Hamaoka said "About 1.8 million cubic metres of roundwood equivalent (trees) are required annually to supply the mill". He said "This wood supply comes in the form of hardwood logs and chips and softwood chips". He said "The main sources of the hardwood are Daishowa's Forest Management Agreement Area and the softwood chips are obtained on contract from our company-owned sawmills at High Level, Red Earth and other independent sawmills nearby". (The High Level Mill (Canfor) is the one clear-cutting in Wood Buffalo National park; the Red Earth Mill (Brewster) is the one proposing to clear-cut the unceded Lubicon territory and the so-called "independent sawmills nearby" are companies such as Buchanan, Boucher and Bissell).
Mr. Hamaoka said "Daishowa's FMA and annual allowable cut is restricted primarily to hardwoods". He said "There are separate softwood quotas and permits held by other independent companies within our FMA (such as Buchanan, Boucher and Bissell)". He said "In the case of mixed stands of hardwood and softwood there is provision in the Forest Management Agreement for the softwoods that are cut by Daishowa to be directed to the sawmilling sector". He said "Similarly hardwoods cut in mixed stands (by the so-called independent companies) are directed to Daishowa".
Mr. Hamaoka said "The intent of these provisions (that Daishowa would provide the so-called independents with the softwood from mixed stands and the so-called independents would provide Daishowa with the hardwood) is of course to encourage better overall utilization of the forest resource". ("Better overall utilization of the forest resource" is Mr. Hamaoka's euphemistic way of referring to clear-cutting all of the trees.)
"With regard to the environmental status of the project", Mr. Hamaoka said, "the mill is designed to comply with the standards set out in the (Provincial) Licences to Operate". He claimed that "These standards are among the most stringent...in the world".
Mr. Hamaoka said that "A variety of components of the effluent are closely monitored including biochemical oxygen demand (BOD), total suspended solids (TSS) and absorbable organic halides (AOX)". He said "The waste water treatment system and the process controls are such that the mill is able to fully comply with all the environmental standards when it is operating under design conditions at full production levels. (Such carefully worded claims are currently being assessed by environmentalists to determine exactly what they really mean.)
Mr. Hamaoka said "Overall the mill's environmental record is a good one". He said "For the period July 1990 to August 1991 we have been operating well below the licensed limits for BOD, TSS and AOX". He said that "the average discharge of BOD in the first fourteen months of operation was 33% of the licensed limit of 5,500 kg. per day". He said "Comparable figures for TSS and AOX are 23% and 38% of the respective license limits of 14,500 kg. and 1,400 kg. per day". (The earlier reported license limit for TSS was "a daily average" of 20,900 kg. or over 20 metric tonnes per day.)
Mr. Hamaoka admitted that "during the initial start-up period last year there were some upsets in the production process and some start-up problems with our air pollution control equipment which caused us some difficulty". However, he claimed, "High levels of control efficiency were ultimately achieved once the mill entered a period of stable operations".
Mr. Hamaoka said "The mill also incorporates three advanced technologies that substantially reduced the amount of elemental chlorine used in the production process to virtually eliminate dioxins and furans". He said "Substitution of chlorine dioxide for elemental chlorine helps achieve this directly, while extended delignification and oxygen delignification remove the majority of the lignin from the wood prior to the bleaching stage and reduce the amount of bleaching required".
"As well as incorporating effective emissions controls at the mill", Mr. Hamaoka said, "we've also instituted a detailed monitoring program to ensure that the Peace River water quality, fisheries and downstream users are protected". "From all of the studies and surveys undertaken to-date", he claimed, "there has been a basic confirmation of the predictions we made in the EIA (Environmental Impact Assessment) reports of insignificant impacts on the water and air resources of the Peace River region". (These comments suggest that Daishowa monitors and reports on its own environmental impact, kinda like the fox guarding the chicken coop.)
"Unfortunately", Mr. Hamaoka said, "at this time there are still three pending legal cases concerning the Peace River Mill" -- one by environmentalists and aboriginal people on the grounds that the environmental impacts of the project were not subjected to the necessary Federal Environmental Assessment, another by environmentalists on the grounds that the Forest Management Agreement does not provide for sustained yield and that the Provincial Forestry Minister committed wood supplies prior to obtaining required government approvals, and a third also by environmentalists on the grounds that the Provincial Environment Minister made commitments before the necessary licences were issued. (The nature of the pending legal actions tells volumes about Daishowa's deal with the Canadian Federal and Alberta Provincial Governments.)
Mr. Hamaoka said "Daishowa is not a principal to any of these (legal) actions, but of course we are involved as an interested party". He said "Daishowa is confident that these actions will not materially affect the operations of the Peace River Mill, but the cost of participating in these actions is very high in monetary terms, in terms of time and the required public relations effort".
Next Mr. Hamaoka turned to what he called Daishowa's "sawmilling operations in Alberta" -- the Canfor mill in High Level and the Brewster mill in Red Earth. (The High Level mill is the one responsible for the clear-cutting of Wood Buffalo National Park and Brewster is the one proposing to clear-cut unceded Lubicon territory.)
Mr. Hamaoka said "Daishowa acquired the High Level Forest Products sawmill in April of 1990 for a capital investment of about 60 million dollars". He said it "produces 240 million board feet of lumber per year and employs about 250 workers". "Traditionally", he said, the lumber from this mill "has been shipped to North American markets...(but)...with recent new capital investments, some production is now being channelled to the overseas markets".
"In addition to lumber", Mr. Hamaoka said, "High Level produces 160,000 bone-dry tonnes of residual softwood chips that are transported to the Peace River mill". He said "These softwood chips are an important component of the wood supply in the pulp mill and their security of supply was one of the prime reasons for the purchase of the High Level sawmill".
Mr. Hamaoka said "A portion of logs (for the High Level mill) is obtained from Canadian Forest Products (Canfor) who have the logging rights to harvest timber in Timber Berth 408 in Wood Buffalo National Park". He said "Those rights...are subject to current negotiations between Canfor, Parks Canada and Daishowa with the objective of terminating logging in the Park in return for fair compensation". (Mr. Hamaoka did not mention that Daishowa also owns Canfor.)
Mr. Hamaoka said "Daishowa acquired the Brewster Construction Sawmill in Red Earth in October of 1989 for a capital investment of about 10 million dollars". He said that the Brewster Sawmill "produces an average of 50 million board feet annually...(and employs)...between 60 and 100 workers including those engaged in logging". "Prior to (Brewster being acquired by Daishowa)," he said, "there was no available market for the mill's production of residual softwood chips". "Now", he said, "both the hardwood and softwood chips are recognized as a valuable component of (pulp) production...(with)...the prime customer (being) our Peace River Pulp Mill".
"To supply the (Peace River) pulp mill with quality woodchips", Mr. Hamaoka said, "we invested in two new debarking lines and a residual chipper (for the Brewster Sawmill)". "Also", he said, "a whole logchipper was installed to allow Brewster Construction to serve as a satellite chipping plant for our operations".
"All of this adds up", Mr. Hamaoka said, "to a sizeable impact on the economy of northern Alberta (to say nothing about a sizable impact upon the Lubicons and upon Wood Buffalo National Park)". He said "The projected operating expenditures of these three facilities in 1991 will be about $191 million". He said "Wood supply costs alone account for $74 million or about 39% of the total operating budget". He said "We can also see these operating expenses involve a high degree of local content -- about 60% of the budget will be spent locally and a further 30% being spent in the rest of Alberta".
"If we add in the woodlands activities that support the pulp mill and the sawmill operations", Mr. Hamaoka said, "the economic impact of the northern Alberta operations even becomes more significant". He said "We estimate that about 1,400 jobs in northern Alberta -- in the woodlands, manufacturing, transportation and marketing -- are directly attributable to Daishowa's investment in the region". He said "The annual payroll generated is in the order of $65 million". "So", he said, "I think you will see the extent of the commitment we have and will continue to make to the economic development of this region".
Mr. Hamaoka said that he then wanted to "just spend a few moments to talk about what the investment climate (in Alberta)". He said "Many Albertans have expressed legitimate concerns about the consequences of rapid diversification in the forest industry". He said "Some have been openly hostile to Japanese investment and some claim that foreign companies will steal the resources and disregard their environmental responsiblilties".
Mr. Hamaoka said "I cannot accept the notion that foreign owned companies should be regulated differently just because they're foreign". He said "Daishowa has accepted its obligation to obey the laws of Canada and Alberta, however they may be defined, and we have met and will meet those obligations". "Incidentally", he said, "it's our experience that air and water quality standards and forest management obligations in Alberta generally speaking are as rigorous or are more rigorous than other jurisdictions...including Japan".
Mr. Hamaoka said that he'd also like to say "that investors need some degree of stability so that they may design and build their products within well-defined parameters and with proven technology". He said "In our case some conditions were abruptedly changed midway through construction, and this required unforeseen expenditures of millions of dollars for what we consider are changes of questionalble significance". At the same time, he said, "The Alberta Government is to be complimented for recognizing that investor confidence in the Province would significantly be undermined unless a better defined project approval process were instituted...(and has instituted)...initiatives which address some of the problems we had to face with changing goalposts".
"Finally", Mr. Hamaoka said, "the Canadian and the Provincial Governments simply must face up to their responsibilities across Canada to settle Native land claims". He said "It's totally unacceptable to subject business -- foreign or domestic or innocent third parties -- to hostile threats and potential violent actions associated with unresolved land claims".
Mr. Hamaoka said "I would have to confess to you that the unsettled Lubicon land claim is very frustrating for us all -- for the Lubicons, Daishowa and many others". "Rightly or wrongly", he said, "I've taken the position that responding aggressively or trying to engage in a public debate through the media is not a way to solve this serious problem". "Our actions", he said, "have demonstrated and will continue to demonstrate sensitivity to the frustrations of the Lubicon people".
Lastly Mr. Hamaoka made some concluding remarks about what he called "the outlook for the forest products sector" generally and "for Daishowa's own operations".
Mr. Hamaoka said that the price of pulp has "come down about 290 U.S. dollars a ton since the peak reached in 1989 and early 1990 (of about $800 per ton)". He said "slower growth in world demand brought about by the recession and major recent capacity expansions in countries such as Finland, Spain, the United States and Chile, as well as in Canada and particularly in Alberta, have created a situation in which Canada's pulp mills have been operating at a rate just under 85% so far in 1991". He said "In these circumstances pulp prices are unlikely to rebound to any significant degree over the next 12-18 months".
"At the same time", Mr. Hamaoka said, "we expect some higher cost producers (who have to pay more than 28 cents per cubic metre for their hardwood) will further curtail production in the months ahead". He said "Recent price declines for bleached kraft hardwood pulp have not been as severe as for softwood". He said "We expect hardwood pulps to continue to increase their market share at the expense of softwood kraft pulps".
"So", Mr. Hamaoka said, "the market situation is very tough and we do not see light until the bottom of this current down cycle is reached sometime in late 1992". He said "Prices will likely show some further weakness in the next several months". "However", he said, "as markets firm up in late 1992 some moderate prices increases can be expected...(but)...prices are unlikely to approach the highs of the late 1980s for some time to come".
Regarding Daishowa's own operations, Mr. Hamaoka said "The downward pressure on pulp in the past year is causing many of the large companies to take a very serious look at profitability of their operations and at various strategies to rationalize these operations". He said "Daishowa is no exception to this". He said "Our parent company is now considering a number of financial restructuring initiatives in order to improve its competitive position".
Mr. Hamaoka said "I want to take this opportunity to emphasize that this financial restructuring does not in any way signal a weakening of our commitment to be an active participant in the sustained long-term development of the forest industry in Alberta". "On the contrary", he said, "I believe it will improve our ability to both weather the present down-cycle and begin planning for further investments in Alberta". He said "These future plans include the potential expansion of the Peace River Mill, and modernization and upgrading of our sawmill facilities -- provided the economic, social and environmental conditions are favourable at the time". (Multi-million expansion creating lots of money-making opportunities for Edmonton businessmen -- provided the "economic, social and environmental conditions are favourable" -- was of course both the theme and the bottom line of Mr. Hamaoka's speech.)
Mr. Hamaoka said "I don't believe it would be an exaggeration to say that the development of the Peace River Pulp Mill has been one of the most significant investments made to diversify the economy of northwestern Alberta". He said "By pioneering the utilization of previously uneconomic hardwood forests the mill is providing a new source of economic development and stability". He said "The manpower requirements of the mill have created significant new employment opportunities among the local labour force". He said "Local communities in the area have benefitted and continue to benefit from our residential housing initiatives, from increased population and the enhanced industrial property tax base". "As a state of the art facility", he said, the mill is able to generate these various socio-economic benefits while adhering to some of the most rigorous environmental standards in Canada".
"In closing", Mr. Hamaoka said, "I hope I've managed to get across Daishowa's fundamental optimism about the long-term prospects for the forest industry in Alberta". He said "We've come a long way in five years and I think the next five years are going to be just as demanding". "Despite the difficult current market conditions", he concluded, "Daishowa is committed in Alberta over the very long haul".
Following his speech Mr. Hamaoka answered questions from reporters. He denied reports from Japan that Daishowa was selling the Peace River mill to Marubeni. He said "Daishowa-Marubeni, which is a joint venture between Daishowa and Marubeni Corporation of Japan, has indicated an interest in working with us in Alberta". "However", he said, "there have been no formal negotiations, the price hasn't even been mentioned yet to-date".
Regarding Daishowa's logging plans for the coming winter, Mr. Hamaoka said "We are currently in the process of finalizing our harvesting plans for this winter and they are subject to approval by the Provincial Government". He said "What I'm prepared to say at this time is that it is our desire to confine the Peace River operations to the west side of the Peace River, and our Brewster Construction operations will also demonstrate a sensitivity to this particular situation".
Asked by reporters "How long would you be willing to sit back and go slow on this", Mr. Hamaoka said "I think what we're going on at the present time is on a winter-to-winter basis". "But notwithstanding that statement", he said, "we cannot continue to accommodate, for example, the current situation forever".
Asked about his exchange with Mayor Reimer, Mr. Hamaoka declined comment saying "any more dialogue would just escalate the matter".
Reminded that he'd already in effect continued the dialogue with the opening remarks of his speech when he'd thanked City Council for their support, Mr. Hamaoka said "The stand (taken by City Council) was to support a responsible, sustained forestry development". He said "That's what I thanked them for".
Asked why he just didn't make a simple commitment not to buy any wood fibre from contractors working in the unceded Lubicon territory, Mr. Hamaoka said:
"That's a question that's been asked, and I'm glad you asked it because it's continually asked over and over again. Within our FMA we do, as Daishowa, have legal commitments to the Province in terms of logging. We have legal commitments to other independent loggers in the area. The Alberta Forest Service has issued permits, etc. And there's private land holders within the area that supply. There's also a more broader social and economic impact on the communities surrounding the Peace River. You can't just look at the Lubicon situation in total isolation. You have to look at the big picture and not just the small picture."
Not surprisingly reporters listening to Mr. Hamaoka's speech and answers to reporters' questions came away with several different story leads. Some thought the most important thing about his remarks was his clear call for the Federal and Provincial Governments to "face up to their responsibilities across Canada to settle Native land claims". Others rightly thought that Mr. Hamaoka was saying to Edmonton businessmen "If you like the colour of Daishowa's money, it's long past time you stood up and were counted". Still others interpreted Mr. Hamaoka's artful remarks on Daishowa's winter logging plans to mean "neither Daishowa nor its affiliates will operate on lands involved in the Lubicons' land claim dispute -- at least this winter". One business columnist accepted Mr. Hamaoka's line that Daishowa was just an innocent third party being used by the Lubicons to focus attention on their plight -- rather than, as is actually the case, an extremely ominous and menacing force literally threatening to administer the coup de grace to the already badly damaged Lubicon society.
One thing which became clear very fast, however, was that the transparent effort to manipulate people into supporting the dubious proposition of development-at-any-cost had back-fired badly. The Mayor stood her ground and was being cheered as a hero at public appearances. Calls to the Mayor's office and to a Citizens Action Centre set up to give people an opportunity to record their views were overwhelmingly in favour of the Mayor's position. Business columnists sympathetic to Daishowa openly admitted that the people who'd organized the development-at-any-cost campaign were taking an awful beating. Alderman Campbell whined that people who agreed with him weren't sufficiently "dedicated" to make their views publicly known. And Daishowa cheerleader Hayter started publicly claiming that the orchestrated resolution censoring the Mayor had nothing to do with the Lubicon issue but had somehow been twisted by the wily Mayor to make the development-at-any-cost gang of City Alderman look bad. Alderman Hayter said lamely "As individual members of Council we may be sympathetic to the plight of the Lubicon Indian Band, and most of us are, but...we must operate within our jurisdiction...and not get...involved in issues beyond our jurisdiction".
Mr. Hamaoka delivered his speech to the Edmonton Chamber of Commerce on a Wednesday. Two days later a chastised Mr. Hamaoka told Edmonton reporter Erin Ellis that "Daishowa intends to keep loggers from Brewster Construction out of the territory claimed by the Lubicon Lake Indian Nation". However, Mr. Hamaoka said, he "couldn't officially commit himself to that promise until the Alberta Forest Service approves" Daishowa's proposed logging plan for the coming winter. Mr. Hamaoka said that he expects approval of Daishowa's proposed logging plan "by the end of November".
Mr. Hamaoka told Ms. Ellis that "This winter Daishowa will only use wood taken from the west side of the Peace River, across from land claimed by the Lubicons". He said he "couldn't say what the company will do after a bridge to the east side of the river is completed in 1992". He said Daishowa "will make decisions about logging in the disputed area on a winter-to-winter basis, hoping the (Lubicon) land claim is finally resolved".
Mr. Hamaoka's October 11th remarks to Erin Ellis are the most definitive and hopeful since the March 7, 1988 agreement between the Lubicons and Daishowa which provided that Daishowa would stay out of the unceded Lubicon territory until there was a settlement of Lubicon land rights and an harvesting agreement made with the Lubicon people taking into account Lubicon wildlife and environmental concerns.
However it should be pointed out that even if one takes Mr. Hamaoka at face value, which has proven unwise in the past, Daishowa's proposed logging plan for the winter of 1991-92 has yet to be approved by the Alberta Forest Service. Last fall Mr. Hamaoka also claimed to have made proposals to the Alberta Forest Service which would have kept Daishowa-related companies out of the unceded Lubicon territory -- proposals which were then supposedly rejected by the Alberta Forest Service resulting in two Daishowa-related companies entering and logging the unceded Lubicon territory until one of them was raided and torched.
Neither should people forget what happened to the March 7th agreement after the pressure was off. Daishowa officials, including Mr. Hamaoka, claimed variously that their subsidiary and subcontractors weren't covered by the agreement, that the terms of the agreement were satisfied by the totally unrelated Grimshaw Agreement, that the agreement only provided there'd be no logging in "new areas, that the agreement only covered the proposed reserve area and finally that there wasn't and never had been any agreement.
It is therefore absolutely essential that the pressure be kept on this time until there is a clear, firm and public commitment by Daishowa to stay the hell out of the entire unceded Lubicon territory pending a settlement of Lubicon land rights and negotiation of a harvesting agreement with the Lubicon people taking into account Lubicon wildlife and environmental concerns.
Transcripts are available upon request of the City Council debate over Alderman Campbell's motion in support of Daishowa, Mr. Hamaoka's speech to the Edmonton Chamber of Commerce and Mr. Hamaoka's October 9th press scrum.
Also available upon request are related correspondence and media reports attached to the mail-out.
Attachment #1: September 13, 1991, Edmonton Journal article "U.S. firm beats MacBlo bid to supply paper for Ed Tel phone book"
Attachment #2: September 13, 1991, letter from Action Canada Network to Mayor Reimer and City Council
Attachment #3: September 14, 1991, letter from Chief Ominayak to Mayor Reimer
Attachment #4: Transcript of September 15, 1991, CBC Radio report
Attachment #5: September 15, 1991, Edmonton Sun article "Lubicon targeting Daishowa clients"
Attachment #6: September 16, 1991, Edmonton Journal article "Lubicons urge city to boycott Daishowa"
Attachment #7: September 17, 1991, Edmonton Journal article "Ed Tel-Daishowa newsprint deal hard to change, Reimer says"
Attachment #8: Transcript of September 17, 1991, CBC Radio report (6:30 A.M.)
Attachment #9: Transcript of September 17, 1991, CBC Radio report (7:30 A.M.)
Attachment #10: September 17, 1991, letter from NDP Environment Critic John McInnis to Mayor Reimer
Attachment #11: Transcript of September 17, 1991, CBC Radio report (5:30 P.M.)
Attachment #12: September 23, 1991, letter from Daishowa V-P Tom Hamaoka to Mayor Reimer
Attachment #13: September 24, 1991, letter from the Mennonite Central Committee to Mayor Reimer
Attachment #14: September 24, 1991, Edmonton Journal article "Reimer blasted by Daishowa for sympathizing with Lubicons"
Attachment #15: October 01, 1991, letter from Mayor Reimer to Tom Hamaoka
Attachment #16: Transcript of October 03, 1991, CBC Radio report
Attachment #17: Transcript of October 04, 1991, CBC Radio report
Attachment #18: October 04, 1991, Edmonton Journal article "Mayor blasts pulp firm tactics"
Attachment #19: October 05, 1991, Edmonton Journal article "Businessmen take dim view of Reimer-Daishowa tussle"
Attachment #20: October 05, 1991, Rod Zeigler column "Mayor's comments cut deep"
Attachment #21: October 08, 1991, Edmonton Journal article "Nova sending 195 city jobs to Calgary"
Attachment #22: Transcript of October 08, 1991, CBC Radio report
Attachment #23: Transcript of October 08, 1991, CFRN TV report
Attachment #24: October 09, 1991, Edmonton Journal article "Reimer roasted for pulp stand"
Attachment #25: October 09, 1991, Edmonton Sun article "Reimer gets 'spanking'"
Attachment #26: October 09, 1991, Edmonton Journal article "Timing of transfers fishy, lawyer charges"
Attachment #27: Transcript of October 09, 1991, CBC Radio report
Attachment #28: Transcript of October 09, 1991, CFRN TV report
Attachment #29: Transcript of October 09, 1991, CBC TV report
Attachment #30: Transcript of October 09, 1991, ITV report
Attachment #31: October 10, 1991, news release from NDP Environment Critic John McInnis
Attachment #32: October 10, 1991, Edmonton Sun article "Lubicon stand wins backers"
Attachment #33: October 10, 1991, Edmonton Journal article "Mayor gets support for views on Lubicons"
Attachment #34: October 10, 1991, Rod Ziegler column "Daishowa doesn't deserve to be goat in Lubicon land dispute"
Attachment #35: October 10, 1991, Neil Waugh column "Mayor winning war of words"
Attachment #36: October 10, 1991, Edmonton Journal article "Province urged to resolve native land claims"
Attachment #37: October 11, 1991, letter from NDP MP Ross Harvey to the Edmonton Journal
Attachment #38: October 11, 1991, Edmonton Sun article "Calls log Lubicon support"
Attachment #39: October 11, 1991, Edmonton Journal article "NDPers rallying to Reimer's aid, aldermen say"
Attachment #40: October 11, 1991, Edmonton Journal editorial "Misrepresenting Reimer"
Attachment #41: October 12, 1991, Rod Ziegler column "Reimer's critics divert attention from the issues"
Attachment #42: October 12, 1991, Edmonton Journal article "Daishowa flap refuses to die"
Attachment #43: October 13, 1991, Neil Waugh column "Nova's big job move not good for Reimer"
Attachment #44: October 13, 1991, Edmonton Journal article "Daishowa plans not to log land claimed by Lubicons"
Attachment #45: October 13, 1991, Edmonton Examiner article "Daishowa under the spotlight"
Attachment #46: October 17, 1991, letter from Johann Luxen to the Edmonton Journal
Attachment #47: October 17, 1991, letter from Earle Hawkesworth to the Edmonton Sun