Clayoquot Sound was a historic green victory. But now the coalition that barred forestry from Canada’s last, best place has come unstuck. With natives logging for themselves, will things come to blows amid the old growth?

KONRAD YAKABUSKI reports for the Globe & Mail’s Report on Business Magazine. September 26, 2008 at 6:00 AM EDT. Click here to link to the original article.

Click here to read Ecotrust Canada President Ian Gill’s response to the article.

Download a printable PDF (4.2 MB) of the story by clicking here

By the time I catch up with Gary Johnsen, president of native-owned Iisaak Forest Resources Ltd., at a rustic-chic resto in Tofino called Shelter, the ancient Nuu-chah-nulth notion of hishuk ish ts’awalk—everything is one—seems lost in the bustle of Clayoquot Sound. The obvious disconnect is between Shelter’s lychee-martini-sipping tourists, the ones staying at the $800-a-pop lodges, and the impoverished First Nations residents of Opitsaht, whose weather-worn houses can be spotted across the passage from our swank restaurant. The wealth chasm has been growing in the half-decade or so since the global jet-set discovered Mini-Maui on the west coast of Vancouver Island.

But I am more interested in another division, between the tree huggers who put Clayoquot on the map 15 years ago and the natives who stood by them on the blockades. Back then, greens and natives united to protect Clayoquot—one of the world’s last great tracts of ancient temperate rain forest, with majestic, 1,000-year-old cedars—from the industrial logging that had turned much of the rest of Vancouver Island into a crazy quilt of shaved mountainsides and skinny, second-growth trees. Now, the First Nations and environmental NGOs have become entrenched, if reluctant, adversaries. I’ve come to find out why.

In the decade and a half since Clayoquot entered the national consciousness, the big lumber companies, Weyerhaeuser and Interfor, have packed up their chainsaws and left, tired of the hassle and unable to make a profit operating under the strict en vironmental rules imposed by a British Columbia government scientific panel in 1995, not to mention the spotlight effect of the area’s designation in 2000 as a UNESCO biosphere reserve.

Iisaak and another native-controlled logging company have taken their place. Bound by hishuk ish ts’awalk, the new enterprises aim to balance environmental stewardship with economic opportunities for the 2,500 people who constitute the five Nuu-chah-nulth tribes in and around Clayoquot. Should it succeed, Iisaak (pronounced E-sock) could just teach the Weyerhaeusers, Interfors, Canfors and others—the ones still operating in a boom-and-bust commodity business—that there is a better way to make a buck from Canada’s forests.

That is, if the environmentalists will even let it try. Iisaak’s founding nearly a decade ago was predicated on a written bargain between the First Nations and the environmental groups that turned B.C.’s 1993 War in the Woods into an international cause célèbre. The environmentalists promised to promote Iisaak and its products, while the company sought alternatives to harvesting in a series of untouched Clayoquot valleys that had thus far escaped the axe. In that agreement, the Nuu-chah-nulth use the term eehmiis—meaning very, very precious—to designate these intact areas. The environmentalists use the term "pristine." For a long time, while they stood together against industry, the enviros and the First Nations were able to set aside the fact that precious and pristine do not mean the same thing. Not any longer.

Logging in the virgin valleys is, Iisaak argues, the only way it can thrive. Hence the green-native pact started to come unstuck two years ago.

The Nuu-chah-nulth have, for years, been involved in treaty negotiations with the federal and B.C. governments. Control over their traditional territory in Clayoquot is on the table. In the meantime, land-use decisions in Clayoquot are made by a joint First Nations-provincial government body: the Clayoquot Sound Central Region Board. And, in 2006, that board earmarked the so-called pristines for logging.

Then, in March of this year, Ma-Mook-Coulson, a joint venture between the same five First Nations that own Iisaak and non-native-owned Coulson Forest Products of Port Alberni, B.C., began building a logging road into the Hesquiat Point Creek watershed at Clayoquot’s northern edge—one of the pristines considered off limits by environmentalists. The threat of new blockades was temporarily lifted in late July, when the First Nations chiefs put their logging plans on hold and agreed to talk, inspired perhaps by Iisaak’s name. It is the Nuu-chah-nulth word for respect. As I watch Johnsen slice into Shelter’s grilled rib-eye, I wonder how long this tenuous détente can last. "Without a doubt, Iisaak cannot survive without ultimately getting access to some of the undeveloped watersheds," Johnsen says.

And as Iisaak goes, so goes the fate of the First Nations who own it: the Ahousaht, Tla-o-qui-aht, Toquaht, Ucluelet and Hesquiaht. Plagued by one of the world’s highest suicide rates—there were 98 attempts among the Ahousaht alone in 2005, roughly one for every 10 members—the First Nations of Clayoquot live in cramped, often mouldy homes. The materials used in the prefab houses provided by Ottawa are no match for the penetrating moisture of the rain forest, a bitter irony considering the cedar that grows locally has natural antifungal properties. Unemployment on the reserves hovers around 70%. On the site of the Tofino fish packing plant that once provided steady jobs for natives and non-natives alike before it was closed for the sake of efficiency, developers are putting up waterfront condos that sell for as much as $2.4 million. "Thirty years ago, about 450 people in Ahousaht were employed in the fishing industry. Now it’s dead," Johnsen says.

Iisaak stands out as a beacon of hope. In 2007, it provided jobs for 43 First Nations members, representing about half of total employment. Johnsen considers it a start. Besides, that’s 43 more than ever got jobs when MacMillan Bloedel (absorbed into Weyerhaeuser in 1999) owned Iisaak’s provincial tree farm licence in Clayoquot. In those days, MacBlo relied mostly on logging crews flown in from elsewhere in B.C. The Winnipeg-born Johnsen, 64, arrived himself in Clayoquot in 1976 as a MacBlo development engineer. He married into the 120-member Toquaht First Nation and never left. Though he is not a status Indian, his three kids are. They all work for local tribal councils. "My education and past experience have proven to be an asset to the Toquaht and to Iisaak," he says. "Basically, I’m working for the betterment of my family and the First Nations.’"

A taciturn man with a thick brush of wiry white hair, Johnsen can be disarming when he wants to be. "There are groups that have this idealistic view, that by preventing logging in Clayoquot Sound, they are saving the world," he scoffs as he takes a bite of his steak. Iisaak, he says, practises the "most environmentally sensitive logging in the world." It attempts to mimic nature—with its blowdowns and landslides—and uses "variable-retention" logging techniques that often leave behind almost as many trees as are taken out of a given area. The age and species mix of the trees left standing also reflects the pre-logging composition of the forest. As many as half of the trees taken are removed by helicopter, to avoid building the forest roads that can disturb animal habitat and cause erosion. It’s a much more expensive way to log than the clear-cutting methods that still dominate (albeit in smaller patches than before) industrial logging on the B.C. coast, whose steep slopes and rude terrain already make it one of the costliest places in the world to cut timber. Nor does Iisaak get a break from the province: It pays the same annual rent and stumpage fees as any forest operator in Clayoquot—in Iisaak’s case, about $2 million of its $12 million in revenue in 2007 went to the B.C. government.

Iisaak, however, aims to sell its logs for a premium in the growing market for environmentally procured wood products. The company’s operations have been certified by the Forest Stewardship Council (FSC), a global agency that audits forest practices for their sustainability on economic, environmental and social criteria. The market for FSC wood is an emerging one, tied to activist campaigns that attempt to embarrass major forest companies and their customers into switching to guilt-free product. Iisaak can only truly succeed if there is recognition that its logs are ecologically superior. It also needs to achieve economies of scale. That’s where entering the pristine watersheds comes in. As Johnsen explains it, there aren’t enough old-growth trees left in the areas already partially logged (during the MacBlo days) that fall within Iisaak’s 87,000-hectare provincial tree-farm licence (TFL) and the limits set by the province’s scientific panel. The second-growth trees—the ones planted after MacBlo first began clear-cutting in Clayoquot in the 1950s—won’t be mature enough to harvest for two or three more decades. Soon, Iisaak will need to start logging older trees in the pristine watersheds if it is to meet profitability targets and harvest the 110,000 cubic metres (m3) allowed annually under its TFL.

This is where the erstwhile allies part ways. "We recognize the need to bring economic well-being to the First Nations," says Maryjka Mychajlowycz, principal campaigner for Friends of Clayoquot Sound in Tofino. "But we would hope they don’t turn into industrialists. It’s insane to be turning some of the most ecologically precious and endangered forests in the world into pulp and boards. As a society, we can do better than that." The temperate rain forest of Clayoquot, Mychajlowycz explains, is one of the last in the world with large tracts untouched by development. The massive coastal rainfall—measured in metres annually—means natural wildfires are virtually non-existent. That enables moss-covered western red cedars to grow for hundreds of years, to diametres of five or more metres. The dense canopy provided by the trees encourages the accumulation of thick shrubbery, lichen and ferns, concentrating the most organic matter per hectare found anywhere. "This forest is the greatest carbon store of any forest on the planet," declares Mychajlowycz.

Friends of Clayoquot is a force to be reckoned with. After all, it launched the War in the Woods, arguably the most successful environmental campaign in Canadian history. Along with Greenpeace, ForestEthics, Sierra Club B.C. and the Western Canada Wilderness Committee, it is now warning Iisaak and Ma-Mook-Coulson to stay out of the pristines. "We are committed to what we believe is the environmental bottom line—protecting these intact valleys," insists the Toronto-born Mychajlowycz, 56, who landed in Tofino 17 years ago after fighting to preserve the ancient pines of Ontario’s Temagami forest. "I was on a blockade within a week of arriving in 1991, at the Bulson [watershed]. That was the last time an intact valley was entered by an industrial logging company," she adds. "Basically, we chased out the companies. They didn’t want to operate here under the intense pressure."

At the height of industrial logging two decades ago, MacBlo and others were sucking a million cubic metres of wood out of Clayoquot annually. (An average telephone pole represents about one cubic metre.) It was a big business. Forestry in Clayoquot sustained about 2,500 jobs, but none went to natives. The hippies who had gravitated to Tofino in the ’70s (there was no paved road until then), along with the surf bums who first rode the waves off nearby Long Beach, were a natural constituency for environmental recruiters. So were the First Nations, who feared the resources on land they claim were being rapidly depleted without their consent, and without any benefits accruing to them.

In the early ’90s, the environmentalists’ tactics turned violent. Logging roads were routinely sabotaged. Trees were spiked, rendering them both commercially worthless and potentially deadly to loggers who took a chainsaw to them. After the only bridge into Bulson Creek was burned down in 1991—preventing MacMillan Bloedel from logging the area—the newly elected New Democratic government of Mike Harcourt promised a new forest policy for the region.

Harcourt’s April, 1993, solution aimed to satisfy two core NDP constituencies: anti-logging environmentalists and pro-logging unions, led by the International Woodworkers of America. Although billed as a compromise, the deal erred on the side of the unions, setting the annual allowable cut in Clayoquot at 600,000 cubic metres—more than MacBlo and others had actually been harvesting since they became the subject of protests. Indeed, the Harcourt plan left more than 60% of Clayoquot’s 265,000 hec tares open to industrial logging.

It was a non-starter from the outset. Celebrity environmentalist Robert Kennedy Jr., a lawyer for the New York-based Natural Resources Defence Council, intervened the day of Harcourt’s announcement, promising that conservationists and natives would "combine forces to overturn this decision." The Harcourt plan set the stage for a summer that B.C., and Canada, will never forget. By the time it was over, thousands of protesters had converged on Clayoquot to block companies’ access to logging sites. Leftist rockers Midnight Oil flew in from Down Under to give a free concert. (The group’s singer, Peter Garrett, is now Australia’s Environment Minister.) And though MacBlo kept getting court orders to remove protesters, new ones replaced them. More than 800, from "granolas" to grandmothers, were arrested.

It was only later, however, when it began losing contracts in Europe, that MacBlo conceded. Then, in 1995, a government-appointed scientific panel advised reducing the annual cut in Clayoquot to less than 200,000 m3, in accordance with some of the strictest environmental criteria ever conceived. The higher costs this implied, and the intense scrutiny to which they were subject, meant neither MacBlo nor Interfor harvested much wood in Clayoquot after that—barely 17,000 m3 was taken out in 1998. When U.S.-based Weyerhaeuser bought MacBlo in 1999, it struck a joint venture with the First Nations in Clayoquot to operate its tree farm licence there. The result was Iisaak. Weyerhaeuser initially owned a 49% stake in the company, but sold out to the Nuu-chah-nulth tribes in 2005. There was good reason for that: Iisaak and Weyerhaeuser had very different objectives. Weyerhaeuser focused only on profitability. After all, its shareholders demanded nothing less. Iisaak also wanted to make money, but it had broader social and environmental objectives as well.

Unfortunately, Iisaak was not doing a very good job of squaring that circle. It was in the red. It lacked a viable strategy for marketing its wood. For the most part, it was still selling raw logs into the market without earning a premium for its environmentally sensitive techniques. And when it did negotiate a premium, inexperience and weak management skills resulted in poor execution. Iisaak entered a contract with Star Wars creator George Lucas to log and have milled more than 100,000 board feet of FSC-certified western red cedar for the director’s Big Rock Ranch Studio in northern California. "Anything that could go wrong, did," Johnsen recalls. "Ultimately, the order was completed, but Iisaak lost a good deal of money."

Enter Ian Gill. The Australian-born environmentalist came by an abiding interest in all things Clayoquot when, as a CBC reporter in the late ’80s, he hid under a tarp on the back of a logging truck to "find the worst clear-cut I could." Covering the War in the Woods left Gill, whose nearly three decades in Canada have not dented his Aussie impertinence, disillusioned by the repeated failure to find long-term solutions to resource management conflicts in B.C. "I knew all the environmental groups in B.C., and I wouldn’t have gone to work for any of them. Everything was about points of divergence. No one was looking for points of convergence. I didn’t see the NGOs doing it. Industry was terrified. Government was completely inept," recalls Gill, now 53. "It seemed to me there was a space to find areas of intersection and expand on them."

That conviction led Gill, in 1994, to found Ecotrust Canada. With a mission to build what it calls the "conversation economy," the Vancouver-based non-profit has used donations from individuals, government and philanthropic organizations such as the Ford Foundation to provide loans and other management services to companies that take a triple-bottom-line approach to doing business, putting healthy finances on an equal footing with a healthy environment and healthy communities.

Ecotrust had been an early lender to Iisaak and had helped the company get FSC-certified. Gill admits he had a personal interest in seeing the company succeed. After all, the triple-bottom-line approach, at the core of sustainable development, is not awash in real-world examples. Most big corporations these days proclaim to care as much for the environment as for the balance sheet. But the evidence still demonstrates that boardroom decisions are overwhelmingly based on profitability objectives, and usually short-term ones at that. "We needed to prove our idea in the marketplace," Gill says.

He got his chance when, in late 2006, a then-foundering Iisaak turned to Ecotrust, awarding it a 20-month management contract to turn the company around. The task of revising Iisaak’s business strategy fell to Mike Vitt, who was Ecotrust’s forestry manager. Vitt had spent almost a decade working for Weyerhaeuser, mostly in Alberta, Oklahoma and Arkansas. "It was pure production-line forestry," says Vitt, 37, of the company’s southern U.S. operations. Weyerhaeuser could harvest yellow pines for two-by-fours a few decades after planting, compared to the 50 to 80 years needed to grow a Douglas fir to maturity on the B.C. coast. For decades, the abundance of B.C.’s old-growth forest enabled coastal companies to more or less compete, though it meant riding cyclical waves of feast and famine, depending on lumber prices and the exchange rate.

But a late-’90s trip to South America left Vitt convinced that the jig would soon be up for B.C. forestry. Vitt saw forest plantations in Brazil that were churning out radiata pines on a 16-year rotation. "They were just growing the snot out of the southern U.S., and the southern U.S. was growing the snot out of Canada," Vitt recalls. "So, I thought, why would you ever want to be in the commodity game in Canada? The southern U.S. will always beat you. They can just do it so much cheaper. And now, Brazil is beating them." What’s more, the Americans and Brazilians are employing plantations, where trees are similar in size, age and species. Plantation forestry is not particularly environmentally benign, since such monoculture inhibits biodiversity. But it sure is efficient, especially compared to logging variable-sized trees on mountainsides.

Vitt knows that Iisaak must build consumer awareness of its superior environmental practices and establish a supply chain for the FSC-certified logs in order to cover logging costs that can surpass $150 per m3, many times the level borne by plantation operators in the southern U.S. Iisaak obtained a premium of as much as $20 per m3 on some cedar logs sold to FSC-certified sawmills in 2007. Along with favourable terms on Douglas fir and hemlock, the premium helped the company return to profitability. But restrictions on log exports from Crown lands mean that Iisaak must sell virtually all of its harvest within Canada, where there are a limited number of FSC mills. So, for now, most of its logs are still sold through brokers, where everything gets priced in the same way. Ultimately, the aim is to have local First Nations-owned sawmills that could provide more jobs for natives, processing Iisaak’s logs into finished wood products. But that’s only possible if Iisaak becomes healthy enough to reinvest its profits in such ventures. Gill worries the NGOs won’t let it get to that point. "There are some people, well, they don’t want you to cut a bloody stick."

As Gill and I take a helicopter ride over the mountains rising between Warn Bay and Gunner Inlet, we inspect a few tracts of land that have recently been logged by Iisaak. They’re tiny compared to the swaths of rectangular clear-cuts that I’d noticed on my earlier plane ride up Vancouver Island.

Clear-cutting’s most deleterious effect is increasing erosion, which Iisaak takes pains to avoid. "We’re doing 30% to 40% retention," explains logging contractor Mike Richardson, referring to the proportion of trees left standing. In other areas, where slopes are steeper, Iisaak leaves more than two-thirds of the trees in place. Iisaak does no high-grading, a controversial practice that involves harvesting only the most valuable trees. "And what we leave behind is representative of the composition of the forest before we started. By leaving so much timber, the water doesn’t run off so quickly," says Richardson. Natural debris that lies on the forest floor soaks up rainfall that eventually seeps deep into the soil to replenish aquifers. Iisaak harvests high up the slope to preserve riparian zones—the buffers along streams needed to prevent excessive runoff of soil nutrients. There are no roads into the area that Richardson shows us. The logs have been taken out by helicopter and dropped onto a barge in the bay. Richardson assures me that a kayaker looking up the mountainside from the water below would see no evidence of logging.

When we touch down back in Tofino, Gill seems at once wistful and triumphant. As it happens, this is the day Ecotrust’s contract with Iisaak expires. The Nuu-chah-nulth chiefs, he’s just learned, have opted not to renew it. They’ve decided to run Iisaak on their own from now on under Johnsen’s leadership. Gill would have liked more time to execute Vitt’s business plan. Still, he is satisfied he’s proved his point. "We’ve managed to show in the past 20 months that you can have a viable, eco-sensitive First Nations-owned forest company that creates value and employs people locally. You can do that." And then, this: "We want to continue to help Iisaak. We just hope we can help them with all the noise. And believe me, it’s going to get very noisy."

I get an idea of what Gill means a couple of nights later at the Vancouver Public Library. Greenpeace, ForestEthics and the Western Canada Wilderness Committee have organized a public meeting on the renewed threat to Clayoquot Sound. "When we first called this meeting, we envisioned it as a call to action," Greenpeace’s Stephanie Goodwin tells the 150 or so gathered in the library’s basement; the last-minute agreement by the Nuu-chah-nulth chiefs to hold off logging Clayoquot’s pristine watersheds has given both sides "a little breathing space" to talk.

It will be a challenging discussion. While the First Nations insist that Iisaak’s viability ultimately depends on harvesting in the undeveloped watersheds, they know that a failure to win the NGOs’ seal of approval—or, at the very least, their grudging acceptance—could have devastating consequences. ForestEthics successfully pressured U.S. retailer Limited Brands—with a damaging, full-page ad in The New York Times denouncing "Victoria’s dirty secret"—to stop printing its catalogues on paper supplied by B.C.-based West Fraser Timber. The group argued that timber harvested to supply West Fraser’s Hinton, Alberta, mill was destroying woodland caribou habitat. Greenpeace has waged campaigns here and in Europe against Montreal-based AbitibiBowater, the world’s biggest newsprint producer, in an attempt to force it to seek FSC certification for its forest practices in Ontario and Quebec. The NGO’s efforts have cost Abitibi business. A similar campaign against tiny Iisaak would be a death knell. Environmental pressure politics may have created the idea for Iisaak; the market for its products works at the whim of those same politics.

Goodwin cedes the floor to Valerie Langer, a familiar face within the B.C. environmental movement who works for ForestEthics. "This is the most famous forest in Canada. It is the iconic forest of Canada," she says of Clayoquot. "Like the Sistine Chapel, it is a place that brings people hope." There aren’t many tracts of untouched forest left in the world, Langer explains, going on to outline the symbiotic relationship between land and sea, between fish and forest. Clayoquot is not the oldest forest in the world. At less than 10,000 years old, it’s one of the youngest. Some tropical forests are a million years old and, hence, harbour more species than Clayoquot. The latter is still evolving. "What industrial logging does is truncate the possibility of more diversity," Langer says. A slide showing the mass arrest of protesters on Aug. 9, 1993, reminds the new generation of activists present—and a few members of the old one, too—of their duty. "Only 20% of the world’s original forest exists and we are living with it," Langer declares finally. "We are its stewards."

I’ve not, at this meeting, heard a word about variable-retention logging. Had I no prior knowledge of Iisaak’s operations, I would leave with the impression that their methods are no better than MacBlo’s were. But maybe that’s what the NGOs want me to think. For them, preserving the ancient trees of Clayoquot is a mission that supercedes inconvenient truths. Fifteen years ago, the Nuu-chah-nulth made common cause to save the forest their people had lived with for thousands of years before James Cook laid eyes on Vancouver Island and the 40-metre-high cedars that the natives harvested to build their ingenious dugout canoes.

That was then. The Nuu-chah-nulth now have a degree of control over the resources on their traditional territory and, with it, hope of easing their communities out of decades of poverty and despair. They promise to manage the forest in keeping with their sacred notion of hishuk ish ts’awalk—the interconnectedness of all things—and the triple-bottom line. Could they possibly be worse at it than the big players? More than 75 million m3 of timber is harvested every year in B.C. The First Nations of Clayoquot Sound want only to cut about 0.2% of that. And, just maybe, show the rest of the Canadian forest industry—the poorest financial performer in the sector globally for about as long as anyone can remember—how to get real value out of trees. But as I walk out of the library into a warm Vancouver drizzle, I’m not sure they’ll ever get the chance.