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CORPORATE OUTLAW SEEKS 

 NEW SWEETHEART DEAL 



Since 1954, Ketchik'an Pulp Company (KPQ, a wholly-owned subsidiary of Louisiana Pacific 

 Corporation, has owned exclusive rights to log timber on a substantial portion of the southern 

 Tongass National Forest. In exchange for a guaranteed 50-year pulp timber supply at 

 noncompetitive rates, KPC agreed to build and operate a pulp mill in Ketchikan until the 

 contract expired by its terms in 2004. 



Currently, KPC is seeking Congressional support for what it calls a 15-year "extension" of its 

 monopolistic pulp contract. KPCs proposal, however, is not for an "extension" of its existing 

 contract but a request for Congressional approval of a new, monopoly contract. The standard 

 provision in Forest Service timber sale contracts permits an "extension" of that contract only if 

 "purchaser's operations to date have been in reasonable compliance with contract terras." KPCs 

 repeated violations of its pulp mill's air and water pollution discharge permits, which endanger 

 the health and safety of Ketchikan residents, disqualify it from obtaining a contract "extension." 



KPC claims it needs an "extension" so it can afford to spend the $150 million needed to install 

 pollution-prevention upgrades at its antiquated pulp mill. These upgrades are required under a 

 1995 criminal plea agreement between EPA and KPC, in which KPC pled guilty to violating its 

 water quality permit by intentionally dumping toxic sludge into marine waters adjacent to its 

 pulp mill. This criminal plea agreement is the most notorious example of KPCs chronic failure 

 to live up to its contractual promise to "conduct its operations under this contract and other 

 related business aaivities in compliance with Federal, State, and local statutes, standards, orders, 

 permits, or other regulations." 



Below are several examples of KPC holding local communities hostage by threatening mill 

 closures over the last 23 years. 



• In 1973, following the first attempts to implement basic environmental impact statement 

 requirements, C. L Cloudy of the Alaska Loggers Association warned that the requirements 

 would cause "complete [pulp] mill shutdowns" and "shutdowns of the remaining sawmills in 

 Southeast Alaska." (Ketchikan Daily News, April 19, 1973). 



• On May 4, 1976, the Ketchikan Daily News headline screamed "KPC says it will close July 

 1, 1977." But as the paper explained the next day, the announcement "wasn't news. It was 

 part of a publicity stunt." The paper criticized the pulp mill for issuing false alarms one 

 week before EPA pollution hearings and shortly before employee negotiations were due to 

 start. One editorial concluded "Ketchikan Pulp Co. is crying wolf and playing with the faith 

 of thousands of people. God help it." (Ketchikan Daily News, May 5, 1976. 



• During 1983 EPA hearings, officials from KPC said the cost of installing water pollution 

 control equipment would force them to shut down. KPC said it would "consider both legal 

 recourse and mill closure if the variance requests" were denied (Southeastern Log, December 

 1983). 



Southeast Alaska Conservation Counci 

 Senate Bill 1877 

 July 10, 1996 



AHarhmcnt 1 



