*President & Chief Executive Officer, Canadian Pulp and Paper Association, speaking in October, 1995 to The Fraser Institute, Vancouver, B.C.

I find it particularly stimulating to be here in British Columbia, because the B.C. pulp and paper industry has such importance and high profile. Some may consider this a dubious benefit. I, for one, welcome this visibility and high profile - if it also brings light to the debate on environmental and economic concerns.

This stand-off between environmental concerns and economic concerns is really at the heart of the challenge facing Canada's pulp and paper producers. Traditionally, environmentalists ask Canadians to choose the environment over the economy. Traditionally, the industry asks Canadians to choose the economy over the environment. In my opinion, this extreme polarization of viewpoints is as predictable as it is outdated.

This is 1995 not 1965. The pulp and paper industry has made major strides in harvesting, regeneration, mill technology, pollution control and public participation. We simply have a lot more to offer Canadians who value their environment and their economy.

The sad irony is we don't need this level of confrontation and infighting. The sad irony is that while we are bogged down in controversy, everyone loses out. The sad irony is that we have all the ingredients to put together a practical, competitive and sustainable pulp and paper industry. I say this in part because I view this industry from a unique perspective. As a business person coming into the industry just over a year ago, I don't take for granted its achievements or its limitations or indeed its press releases. In fact, I harboured a few preconceptions myself. But over the last 13 months, I have learned some basics about the industry which have surprised me. Let me share a few with you:

Recycling. One of the strongest misconceptions is that because we make paper, we don't want people to recycle. Nothing could be further from the truth. We are actually Canada's number one supporter of recycling - out of environmental interest and self interest.

Right now, more than 60 mills in Canada use recovered paper either entirely or partially and $1.5 billion has recently been invested in recycling and de-inking facilities. We used 4 million tonnes of recovered paper in 1994. To satisfy customer demand, we have actually become the largest importer of recovered paper in the world. Quite simply, we can use as much as we can get our hands on. So your blue boxes are the key to our industry.

The industry and the environment. Between 1989 and 1996, the industry will have invested $5.2 billion in pollution reduction measures - that's about 60 times what it cost to build GM Place. And our industry did this in the depths of a recession. In the process we have virtually eliminated dioxins and furans from mill effluent and revitalized rivers and streams like the Fraser River here in B.C.

The resource is being protected. Canada has 416 million hectares of forested land. Each year the Canadian forest products industry harvests one half of one percent of the commercially productive forest area. The balance (206 million hectares) is in a wilderness state and will probably remain so for as far as we can see into the future.

The resource is being renewed. For every hectare of timber cut, the industry regenerates as much or more _ and we've been doing it for decades. If the industry has made a mistake here, it's in allowing this work to go on largely unnoticed. Nevertheless, it is staggering.

I think these few examples demonstrate that the industry is not static and not stagnant. By the same token, if you were to say: 'we need to do more', I would be the first to agree. We have a ways to go in terms of solving all our problems. The question is - how do we get there?

The traditional route is through government regulation. Traditionally, regulation has impacted the industry in virtually every facet of operations from protection of forest land to management of forests and land use and of course the effluents from pulp and paper mills. Regulation can be both positive and negative.

Let me share some of my concerns. As a former senior government official, I know what can happen when regulation makes industry less competitive by putting most of the cost into administration instead of into achieving results. Regulations which micro manage problems but overlook the big picture can be particularly problematic.

One practical example is in the area of effluent regulation. I have spoken to mill operators who have proudly shown me new technologies for reducing effluent and then informed me that their efforts were being undermined by other industries, or indeed municipalities, upstream which continue to pollute. Where is the net benefit for the public? Surely, the objective of regulation in this case is to provide a net benefit to the end user of the river. And this is not what is happening. Maybe we should start to look at regulation from the point of view of the river or stream or ecosystem?

Another interesting example: recycling content legislation in some of the U.S. states means that Canadian suppliers are literally going to extraordinary lengths to meet requirements for recycled content. Since there is not enough recycled material in Canada, producers will import material by truck or rail from the U.S. to plants in places like Thunder By. Then the paper is processed and the finished product is shipped back South again. What is the net impact of that process on our environment? How much fossil fuel are we saving? How much are we burning?

Let me be clear. The industry is not now and never has been against regulation. There is a definite role for regulation which is: smart and motivating, nondiscriminatory and participative, practical and focused on results. However, I think there is an even greater potential for industry leadership and innovation. In many cases, the prevailing theory is that no alternative to regulation exists; that companies have to be dragged kicking and screaming to improve their environmental performance and that only regulation can do this. This again is outdated and because it is based on what I call traditional "either or" thinking: either the environment or the economy.

It ignores the fact that there are powerful economic imperatives found in environmental improvements. Perhaps the simplest one is found in responsible forest management. It goes like this: If we're out of trees, we're out of business.

Canada's forests not only maintain our largest industries, they also are a recreational resource worth billions. Photo, ES&E - T. Davey

I agree that some of the forestry methods can and should be improved to better reflect changes in social values but we also have thousands of employees in this province alone whose job it is to regenerate our forests through land management plans. These plans are extensive, detailed and long-term, some 25, 50 and even 80 years out. Name another industry that takes strategic planning that seriously!

The other most powerful motivating force for change is the customer. 80% of what we produce is sold to nearly 100 countries around the world. Customer preferences don't give us a choice. We have to reduce pollution, increase recycling, improve productivity and manage forests carefully.

That process in turn is leading Canada's pulp and paper industry to go beyond mere compliance and seek out innovation. That surprises some people. It shouldn't. This is not altruism. It is self-interest but it does generate clear benefits, cost-effective technologies and measurable results.

Let me give you three examples which we are currently working on:

1. Closed loop technology. This was once thought impossible but is now well within the realm of possibility. And what is closed loop technology? It's a "no-escape" concept. It means gradually making the pulp mill into a self-contained operation, reusing water over and over instead of expelling it, eliminating effluent, with zero or near-zero impact on the environment.

Right now there are still some major research hurdles to overcome before the system becomes practical for all types of operations. But the industry is working steadily toward this objective and there are two mechanical pulp mills in Canada which are operating under the concept of a closed loop mill. One is here in B.C. (Louisiana Pacific).

En route to closed loop technology, the industry is also benefitting by drastically reducing use of chlorine, using less water and energy and reducing effluent.

As an illustration, since 1988:

• use of elemental chlorine is down 92%
• organochlorines are down 75%
• dioxins and furans are down 99%.

You might say to these statistics (as I once did): so what? Well, for example, it means that exactly 72 days ago, the Government of Canada announced that levels of dioxin had decreased to the point where the B.C. coastal fishing areas will reopen for shellfish harvesting. In many areas of the B.C. coast, consumption advisories have been lifted or revised.

2. An environmental management program. A second area where we're moving beyond compliance is an environmental management program designed to continually improve the industry's environmental performance. Although industry would be the main player, we would rely on an outside independent advisory group to begin work on a framework and policy.

It is intended to cover manufacturing, recycling and the health of workers. The program will be designed around detailed codes of practice for our operations and will show through regular, public reports how the industry does - or does not - measure up.

Our commitment is a serious one. Our members are prepared to stake their reputations on the results. In fact, compliance with this program will be a requirement for membership within CPPA.

3. A set of industry-wide standards for sustainable forest practices. This is particularly pertinent to the debates going on in British Columbia. In the case of Clayoquot Sound for example, the recommendations of the Clayoquot Sound Scientific panel relate very specifically to the Clayoquot site and its particular ecosystem and forest type. Some people have suggested, that you simple take those findings and apply them to every other ecosystem or forest site across Canada. This is simply not the case. It's like saying: "all forests look alike". This is a form of ecochauvinism.

Those 120 recommendations apply to Clayoquot for Clayoquot factors like: size of roads, permits, harvesting levels, silviculture, watersheds, soil protection, and so on.

The smart way to bring the same level of environmental responsibility to other forests is to step back and look at the big picture. That means designing environmental protection from the perspective of the end user - in this case the forest.

To do that you must use applicable standards for sustainable forest management which takes into account different species, different soil types and different regions of Canada. When I talk about standards here I mean CSA-approved standards ready as early as 1996.

We are all familiar with CSA standards. They provide an assurance of safety when you buy an electrical appliance. In our case, we want those standards to bring the same sense of confidence and assurance to our customers.

It will indicate that a producer has used sustainable means of identifying, harvesting and protecting the soil and ecosystem. For consumers, those standards will tell you and me and every one of our customers around the world that our products come from forests which are being managed sustainably. And we would like to see this concept adopted internationally through the International Organization for Standardization (ISO).

These are just three examples of how to apply continuous improvement to the environmental performance of the pulp and paper industry. The key element in each of these initiatives is public participation and consultation. We need help and that means cooperation with stakeholders, government and environmentalists as well as public discussion, public participation and public input.