[Congressional Record Volume 140, Number 40 (Thursday, April 14, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: April 14, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
TERMINATION OF THE ALASKA PULP CO. CONTRACT
Mr. STEVENS. Mr. President, it is with deep regret that I announce to
the Senate that the U.S. Forest Service has terminated the long-term
contract with the Alaska Pulp Co. I am told that today the contracting
officer, the regional forester of the Tongass Forest, has notified the
Alaska Pulp Co. [APC] that the Government is terminating the APC
contract because of the 1993 shutdown of the mill in Sitka.
I think that this is a very difficult decision for Alaska. We have
tried to meet with the administration to discuss this. The contract to
provide timber for the Sitka pulp mill was the first investment entered
into by the nation of Japan following World War II. It was a 50-year
contract that had 17 years left to run. The impact of the economy was
such that the mill was shut down in order to consider a new system, a
pressed-wood system which would be more environmentally sound and
employ about two-thirds to three-fourths of the employees that are
currently there in the mill.
The long-term contract gives permission for APC to close down the
mill temporarily. As a matter of fact, it specifically provides that
the contract may be extended for the period that it is closed down for
economic reasons.
We have been received courteously by the Secretary of Agriculture,
the Assistant Secretary of Agriculture, and the regional forester in
our protest against this action.
I deeply regret the impact this action will have on southeastern
Alaska in general, and the community of Sitka in particular. As a
lawyer, I informed the Secretary of Agriculture that I do not believe
that they are on sound ground. Unquestionably, the matter now will go
to the court to determine the damages for the cancellation of the 17
years remaining on the long-term contract.
Clearly, the Forest Service has not carefully considered the matter
of breach. The Sitka mill has been receiving timber and cutting timber
in their sawmill ever since the time that the matter of a cancellation
of this contract was first raised by the Forest Service.
I would challenge anyone to read the contract and find any ground for
the cancellation of the contract because the mill was shut down for
economic reasons in order to pursue a different process to preserve the
jobs that were brought about by the investment of Japanese nationalists
in our State.
It is a matter that was not anticipated by us. I think it is a
reaction to extreme environmental interests. I predict now that we will
have a very difficult time in the Tongass Forest in trying to maintain
a job base utilizing the forest resources that are there.
The Tongass Forest was created at a time when people believed that
having a sizable amount of timber in Federal ownership would create a
yardstick whereby the Government could measure the performance of the
private timber industry in the United States. The theory was that under
Government management, under Federal management, with scientific
management concepts, with the concepts of sustained yields, that the
Federal forest system would be a way to measure the capabilities of the
private forest system in our country, and would provide alternative
sources of supply in the event that some of the forest products, or
many of the forest products of our country, came under a monopoly
ownership.
Unfortunately, over the years Congress has restricted more and more
of the timber that was available for harvest to sustain the basic
processing industry of southeastern Alaska, and the consequences of
that restriction have been that now only 10 percent of this forest is
available for harvest, and under a 100-plus-year timeframe. In other
words, the cutting cycle is more than 100 years for 10 percent of the
forest.
This action today I think is a contract termination action in name
only. It is an announcement that this administration no longer will
countenance the harvest of timber from the Federal forests in order to
carry out long-term commitments for the sale of timber that is
necessary to support the substantial investments necessary to bring
about modernization of the industry, and particularly modernization for
processes that are pollution-free, and are such that they would be
producing products that have a greater economic viability on the world
scene.
Again, Mr. President, I regret the action of the administration that
was announced today in Juneau, canceling the balance of the 50-year
contract with those members of the Japanese nation that invested in a
long-term program in my State.
I ask unanimous consent that this news service report from the Forest
Service be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Department of Agriculture,
Forest Servcie--Alaska Region,
Juneau, AK, April 14, 1994.
U.S. Forest Service Terminates Long-Term Contract With Alaska Pulp
Juneau, Alaska--In a letter to the Alaska Pulp Corporation
(APC) today, Contracting Officer Michael A. Barton, Regional
Forester of the U.S. Forest Service, notified the corporation
that the 50-year timber sale contract between the government
and APC was being terminated as a result of APC's 1993 mill
shutdown in Sitka.
The decision to terminate comes six months after the
corporation's closing of the Sitka pulp mill and followed
numerous discussions between APC and the Forest Service
concerning contract obligations. The termination means that
the Forest Service will offer no more timber under the APC
long-term contract.
The Wrangell mill currently has a five month operating
supply of wood. The Forest Service will continue to work with
APC to supply wood for its Wrangell mill. However, the
company would have to bid on short term timber sales as part
of the Tongass independent sales program or obtain wood for
its mills from other purchasers.
Barton expressed concern over the disruption caused by
APC's September 30, 1993 closing of the pulp mill. ``We
deeply regret APC's closure of the mill and the loss of jobs
to not only the Sitka area, but the potential effects
throughout Southeast Alaska. We are willing to explore with
earnest the economic viability of any facilities with APC or
any other interest using the Forest Service authority to
prepare a ten-year timber sale package for advertisement and
bidding. We remain committed to helping communities through
collaborative planning to develop year-round industries in
the Southeast using existing authorities and the forest
resources.''
In his April 14 letter, Barton said APC had not
demonstrated sufficient cause to show why the contract should
not be terminated. The Contract requires continued year-round
operation of the pulp mill. Barton concluded that lack of
present commitment to reopen the existing or converted mill
facility and other factors warranted contract termination.
The contract with APC is one of two long-term timber sale
contracts awarded in the 1950's to utilize low-grade wood
from the Tongass National Forest and help establish an
employment base in Southeast Alaska. The APC contract would
have expired in 2011. The other contract is with Ketchikan
Pulp Company and is not affected by this decision.
Mr. STEVENS. I yield the floor.
Mr. McCAIN addressed the Chair.
The PRESIDING OFFICER (Ms. Moseley-Braun). The Senator from Arizona
is recognized.
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