Stuwix Resources Ltd

Stuwix Resources Ltd. (Stuwix) is a forest company in the Merritt area that is jointly owned and operated by eight First Nation Bands in the Nlaka’pamux and Syilx territories (Cooks Ferry, Coldwater, Nooaitch, Shackan, Siska, Upper Similkameen, Lower Nicola, and Upper Nicola). The company was named in honour of their ancestors, the Stuwix people, who lived in the region hundreds of years ago.

The eight-Band partnership grew out of the Forestry Department of the Nicola Tribal Association. Through relationship building and innovation, the Bands acquired a renewable forest license in 2001, which led soon after to an Innovative Forest Practices Agreement (IFPA) with the Province. By 2004, Stuwix Resources held one of the largest timber licenses in the Merritt Timber Supply area, when Annual Allowable Cuts were increased to combat the Mountain Pine Beetle infestation.

“Our story is a little different,” said Lennard Joe, the current General Manager of Stuwix Resources Joint Ventures (SRJV). “There was no partner that came to us and said we want access to those resources. It was an internal group of community members that said we want access to these resources.”

Through SRJV, which Stuwix created to manage the license, the company has become a major employer in the southern Interior forest industry. Despite operating to standards of environmental sustainability that exceed the requirements of The Forestry Act, Stuwix is profitable and generating revenue for the Bands. In addition to providing employment for hundreds of Indigenous people in the Merritt area, Stuwix is also working with other First Nations to help them realize the full value of their forest licenses.

Background: Nicola-Similkameen Innovative Forestry Society

In the 1990s, the Nicola Tribal Association forestry department included seven Bands that worked in forestry in the Merritt Timber Supply Area (TSA). The Merritt TSA is a 1.1-million hectare area with 594,000 hectares of land available for timber harvesting (nearly 1.5 million acres). The Bands were primarily involved in small scale woodlots, which did not provide enough full-time work. Among the Bands, there was a growing desire for greater participation in the local forest industry.

In 1996, the BC Government introduced Innovative Forestry Practices Agreements (IFPAs). These agreements let forest license holders test leading edge forestry practices. The goal was to increase the sustainability and productivity of forests in order to provide licensees with environmentally sustainable increases to their Annual Allowable Cut. In the Merritt Timber Supply Area, five licensees were awarded IFPAs.

To manage the five IFPAs as one and ensure consistency across the Merritt TSA, the Province created the Nicola-Similkameen Innovative Forestry Society (NSIFS) in 1998. The Society included the Ministry of Forests and the five licensees with IFPAs. While the Nicola Tribal Association Bands and the Upper Similkameen Indian Band did not have forest licenses, and therefore weren’t eligible to have IFPAs, they were invited to be part of the Society because industry and government recognized that First Nations needed and deserved to play a bigger role in the local forest industry.

In 2000, the Province provided the Bands of the Nicola Tribal Association with an opportunity to harvest 40,000 cubic metres of wood in an area affected by the Tulameen Fire; a fire that had damaged over 9,000 hectares (22,000 acres) of forest near Princeton in 1998. The wood was already selected, and a sale was already arranged so all NTA had to do was log it.

After looking at the wood, the NTA declined the offer and proposed a different arrangement, which they felt would offer them a higher return. They said, “We’ll pick a different 40,000 cubic metres, we’ll lay it out and apply for the permits and we’ll sell it.” The Province agreed, and once the wood was sold, NTA had earned a profit of one million dollars, along with a great deal of respect from the BC Ministry of Forests and their partners in the NSFIS.

Creation of Stuwix Resources

Using $300,000 of that profit, the seven Bands of the Nicola Tribal Association and the Upper Similkameen Indian Band joined forces to form Stuwix Resources (then known as 9135 Investments Ltd. Each of the eight Bands also contributed $50,000 to start the company.

Meanwhile, the Bands and the Society continued to develop innovative forestry practices and in-depth timber supply analyses, showing that a significant increase (“uplift”) in the Annual Allowable Cut in the Merritt TSA would be sustainable and environmentally sound. The immediate goal for the Bands was to secure a renewable forest license, so they would be eligible for an IFPA. That would qualify them for a significant Annual Allowable Cut when the inevitable uplift was approved by the Province.

In 2001, Stuwix Resources became the first First Nation owned and managed company to hold a renewable forest license in BC, when a 950 cubic metre license was transferred to them from Ardew Wood Products. Ardew had a good relationship with the Bands and recognized their value as a partner, having worked together on cultural archeology issues and other projects. Once Stuwix Resources had its forest license, it received an Innovative Forestry Practices Agreement shortly after from the Province, making it the sixth licensee in the NSFIS.

According to Lennard Joe, the company likely would not have received an IFPA had the Bands not been partners. At the time, around the province there were several ongoing disagreements between BC First Nations, forest companies and the Province, both in the courts and on Crown land. In rare cases, Indigenous people temporarily logged on Crown land just to make their calls for greater participation in forestry heard.

The Province recognized that each of the eight Bands represented a separate First Nations government. Granting Stuwix Resources an IFPA was an easy way for the Ministry to satisfy the wishes of eight Bands at once.

The uplift

In early 2004, the Regional Manager of the Southern Interior Forest Region approved an application by the NSIFS to increase the current Annual Allowable Cut for its six IFPA holders by 330,700 cubic metres per year. The application documented innovative forestry practices that included improved vegetation inventory, site productivity, deer winter range, old growth, and riparian information. When the Merritt TSA area affected by the Mountain Pine Beetle quadrupled over the following 18 months, the Ministry approved an NSFIS application for an additional 500,000-cubic metre increase in the Annual Allowable Cut, to combat the infestation.

Through a share agreement with the other members of NSFIS, the application recommended that Stuwix Resources receive 50 percent of the Annual Allowable Cut increase and that First Nations people have increased employment opportunities as a result of the IFPA work of all members. As a result, Stuwix Resource now had an Annual Allowable Cut of more than 450,000 cubic meters, making it one of the biggest players in the Merritt TSA.

Stuwix Resources Joint Ventures

To manage its new license, Stuwix Resources created Stuwix Resources Joint Ventures (SRJV) in 2004. SRJV is responsible for the overall management of the licence, including planning, developing, marketing, timber-harvesting, road building and silviculture. The company’s Board of Directors is made up of one appointee from each Band, as is its management committee, which operates the joint venture.

As a fibre management and marketing company, SRJV has just seven employees and relies oncontractors to carry out most of its work. While outside contractors were used at first to provide forest management, financial and sales expertise, Stuwix focused on developing internal capacity and quickly acquired the skills and expertise to carry out that work themselves.

While the size of the eight Bands ranges from the 129 to 1,400 members, profits are shared equally by each of the eight shareholders. Where negotiations can be more challenging is in the division and assignment of millions of dollars worth of fee-for-service contracts to carry out work such as logging, hualing and silviculture. At SRJV, decisions about which Bands get which contracts are typically based on the size of the Band, its location and its capacity to carry out the required work.

“Effective communication was a challenge at first,” said Lennard Joe. “As a result, investment in people was key and we spent more money on people building than anything else in the beginning. We brought in consultants for staff training and to work with the Board and the Bands to have effective communication. They gave us the tools to increase the likelihood of messages getting across. You’ve got to build on the people and build on the grass roots.”

From the outset, a forest license was not seen as an asset that could be sold off but rather a tool that could be used to achieve a wide range of social and environment goals and build long-term capacity in the forest industry. Today, all aspects of forest management are managed by people within Stuwix.

Stuwix Resources also takes pride in employing First Nation workers and contractors and supporting the growth of First Nations companies in the Merritt area. In addition to being 100 per cent First Nations managed, Stuwix employs around 160 people through more than two dozen First Nations contractors in the following areas: timber marking, timber cruising, mapping-GIS, road construction, road maintenance, harvesting, log hauling, planting, silviculture surveys, archaeological assessments, site preparation, road rehabilitation, financial tracking and accounting.

Sustainable forestry

Traditional values play a key role in Stuwix’s operations. The company recognizes and encourages First Nation cultural values and practices as legitimate uses of the land, and incorporates First Nations activities in all its forest stewardship plans. Personnel at Stuwix always considers how operations might affect local flora, fauna and animal species, and they employ protective measures to deal with water management, protection of wildlife habitat and biological diversity, soil conservation and protection of ecological, geographical, historical and culturally special sites.

Lennard Joe says Stuwix’s local roots, and going above and beyond the Forestry Act through initiatives like doubling the buffer zones around riparian areas, is what elevates Stuwix above other forestry companies.

“We have a great corporate memory. We don’t take a broad brush approach to a new area. We have an intimate knowledge of every inch of our territory and traditional use and we apply that local knowledge to our practices. If things fail, we can’t pack up and move to Alberta. Our roots are deep and our decisions are long term decisions.”

Certification

Another cornerstone of Stuwix’s success has been developing high standards for how the company and its contractors operate.

“We wanted to build a really strong relationship with industry and with government,” says Joe. “So, we developed a SAFE Certification program under WorkSafe BC, and forced other companies to be SAFE certified under the BC Forest Safety Council. Many didn’t know how to do that, so we helped companies develop checklists and developed a safety manual.”

Stuwix is also SFI (Sustainable Forestry Initiative) Certified. Stuwix’s focus on sustainability and efficiency has seen it partner with FPInnovations’ BC First Nations Technical Support Program to explore the implementation of harvest planning software. The company also uses specialized Fibre Brokerage System software to store and track data for all the segments of forest licence management and integrate it with accounting software.

As Stuwix has progressed, the company has played an important role in establishing forestry best practices with organizations such as the Aboriginal Forest Industries Council, National Aboriginal Forestry Association, BC First Nations Forestry Council, Southern Interior Beetle Action Coalition and Omineca Beetle Action Coalition.

Sharing expertise

In addition to managing its own forest license, Stuwix manages forest licenses on behalf of other First Nations in BC. By managing all aspects of their tenures (resource planning, permitting, harvesting & road building supervision, silviculture and marketing the fibre), Stuwix is helping them realize the full value of their wood.

Since Stuwix started harvesting and forest management operations in June 2005, it has harvested 2.6 million cubic meters of timber and planted over eight million trees. Over that time, 65 per cent of its work has been carried out by First Nations contractors. Despite the difficulties experienced by the forest industry over the last couple of years, Stuwix has not shut down once. In fact, business is growing, new machinery is being acquired and employment opportunities are increasing.

In 1999, there were no First Nations logging or trucking contractors in the Merritt Timber Supply Area and only three First Nations forestry-related businesses in silviculture and forestry planning. Today, Stuwix Resources employs 160 people and manages between 600,000 cm3 and 800,000 cm3 of wood annually. It also has direct involvement with 15 to 20 million dollars of fiber flow and indirect involvement with another 20 to 30 million dollars in fiber flow.