From: Yassa, Sami

NRDC/Dogwood Alliance/Bowater, Inc.

Memorandum of Understanding

Summary Document

June 29, 2005

Bowater, the largest newsprint manufacturer in the South and the largest forestland owner on the Cumberland Plateau, has just announced that it will sign a Memorandum of Understanding with the Natural Resources Defense Council and the Dogwood Alliance committing to significant improvements in their forest management practices on all of their lands in the United States. Bowater owns approximately 380,000 acres of forestland in the southeastern United States, of which about 100,000 acres are native hardwood forests located on the Cumberland Plateau in Tennessee.

NRDC and Dogwood staff have been negotiating with the company for the past 15 months over ending the destructive practices of clearcutting and conversion, limiting chemical applications on company lands, and protecting ecologically significant areas such as intact valleys and watercourses (gulfs and coves) and ephemeral ponds. The commitments made by Bowater in this agreement are unprecedented in the South, establishing a model for other forest products companies in the region.

This memo provides an overview of the major features of the agreement and a summary of related campaign activities that NRDC is undertaking.

Background and Context

The southeastern United States hosts one of the most biologically diverse temperate forests in the world and faces unprecedented threats from the international pulp-and-paper industry. The region by itself produces more wood and paper products than any other country in the world -- producing almost one-fifth of the world's paper and hosting the densest concentrations of pulp/paper mills and chip mills anywhere on Earth.

To feed increasing demands, paper companies in the region are clearing and converting native hardwood forests to pine plantations on a massive scale and routinely applying chemicals in a widespread fashion, with little attention to protecting ecologically important areas. For example, in the southern Cumberland Plateau between 1981 and 2000, 14 percent of the native forest acreage was converted to single-species pine plantations. Bowater has historically been among the most aggressive companies carrying out these practices.

The NRDC/Dogwood/Bowater agreement establishes a new course for the company that rejects these trends and practices - ending clearcutting and conversion of hardwoods, rejecting fiber purchases from plantations that have been converted from native forests, limiting chemical use, and taking steps to protect ecologically significant forests. In this regard it is truly ground-breaking representing a critical stepping stone for future conservation efforts in this region and setting the stage for a broader shift in practices within the larger paper industry in the South. Below we summarize Bowater's commitments.

The NRDC/Dogwood/Bowater Agreement

Our agreement secures many dramatic improvements in the company's overall forest management operations, including commitments to:

NRDC and Dogwood Alliance will maintain an ongoing working relationship with Bowater and will review, on an annual basis, the progress they are making implementing the Memorandum of Understanding.

In sum, this agreement represents a real precedent. It provides NRDC, the Dogwood Alliance and other environmental groups with enormous new leverage in challenging those industrial landowners who insist on practicing non-sustainable forestry on private forest lands in the southeast and, indeed, throughout the United States.

Related Activities

This agreement also sets the stage for future markets campaigns and land acquisition strategies.

Land Acquisition Strategies:

For the past two years, NRDC has been working with our local partners led by the Dogwood Alliance as well as with scientists at the University of the South's Landscape Analysis Laboratory, the Conservation Biology Institute, and other private consulting firms, to help us locate highly threatened, ecologically significant forests in the southern United States that are in need of protection. As part of this work, we established the boundaries of what we refer to as “The Cumberland Plateau BioGem.” The Cumberland Plateau BioGem extends from northern Georgia and northeastern Alabama, north through Tennessee into southern Kentucky and southwestern Virginia. On the east it is bordered by The Great Smoky Mountain National Park, and below the Park it extends south into western North Carolina and northwestern South Carolina. This 19.3 million acre area includes not only the majority of the Cumberland Plateau, but also the valley and ridge region to its east, and large areas within the southern Appalachians and southern Blue Ridge Mountains as well.

NRDC is working with numerous organizations to identify the most effective strategic path we might take to secure from the federal and state governments as well as the private sector some of the funding needed to protect many outstanding and irreplaceable forest areas located within the Cumberland Plateau BioGem. Estimates of the funding we might need range into the hundreds of millions of dollars. Our ability to secure these funds is greatly enhanced by our cooperative agreement with one of the largest landowners in the state of Tennessee.

Markets Campaigns:

NRDC is currently involved in initiatives with several large corporate paper purchasers, working with each of these global corporations to help them examine the environmental attributes of the paper they are purchasing. We assist them with supply chain research to identify opportunities for ecologically improving their paper purchase and use, which include:

As the largest landowner on the Cumberland Plateau and as a global company fundamentally dependent on timber as a raw material, Bowater's joint announcement with NRDC and the Dogwood Alliance will signal to the world that more ecologically protective approaches to virgin timber-based paper production and the forest management practices related to it can be achieved.

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