State Agency Finds Maxxam/Pacific Lumber To Blame for Financial Woes

State Agency Finds Maxxam/Pacific Lumber To Blame for Financial Woes

May 5, 2005

For more information, please contact: Cynthia Elkins, EPIC, 707-923-2931

A state agency’s extensive analysis of Maxxam/Pacific Lumber’s finances was made public today, in which the State Water Resources Control Board (State Board) concludes that the company’s predicament “is the result of the risky business model that Maxxam has chosen to follow.”

The analysis comes after a series of vicious attacks by Maxxam/PL on the North Coast Regional Water Quality Control Board (Regional Board), in which it asserted that the Regional Board is the cause of the company’s desperate fiscal situation. Since January 2005, Maxxam/PL has cut jobs for over 60 workers and announced it will soon close its lumber mill in Fortuna, which will result in dozens of additional layoffs. In the press and a “White Paper” sent to the State Board in April 2005, the company blamed these problems on the Regional Water Quality Control Board.

However, the State Board finds that Maxxam/PL’s “financial difficulties are the result of deliberate business decisions, and not the result of any regulatory decisions.”

The Regional and State Boards recently took actions to restrict logging on approximately 200 acres of land in the Freshwater Creek and Elk River watersheds, which represents less than 1 percent of the company’s land holdings. In February 2005, EPIC and other organizations appealed the Regional Board’s determination to allow this logging to proceed, overriding its Executive Officer’s decision.

“Maxxam/PL continues to log at a breakneck speed across 215,000 acres of land, taking much more than our forests can sustain. These scorched-earth management policies are responsible for any and all fiscal problems confronting the company today, not regulations affecting a minute amount of its land,” Cynthia Elkins, spokesperson for the Environmental Protection Information Center (EPIC), said.

The State Board also found that Maxxam/PL logged over half of its entire timber inventory between 1987 to 1997, the “equivalent to a 20-year harvest cycle,” and that the logging rate allowed under the 1998 Headwaters Forest Deal “would deplete the [company’s] 3.2 billion board feet [in timber] inventory in less than 18 years.”