Weyerhaeuser and the Community 1

Weyerhaeuser and the Community 1

Weyerhaeuser and the Community:

A Look at CSR Policies and the Indigenous First Nation People

Scott A. Shreffler

Ethics and Humanity

BU 761.601.55

Professor Crain

November 22, 2010

Weyerhaeuser and the Community

Corporations have manifested their commitment to the concept of corporate social responsibility (CSR) in a myriad of ways that range from mere rhetoric to verifiable processes and actions that reflect a culture and philosophy of responsibility that is ingrained in the corporate fabric. Corporations that exemplify CSR may still be beset by a displeased stakeholder advocating an alternative perspective, which underscores the reality that determining what actions are appropriate under the CSR umbrella is not always as certain as one might think. It can be argued that corporations should cease actions that appear to violate even one stakeholder despite the fact that all others benefit. This argument is predicated on the perspective that there should be unanimous stakeholder approval for corporation activities and the manner in which outcomes are derived. Alternatively, it can be contended that corporations continue with their pursuits as long as the majority of their stakeholders are satisfied, which is a perspective supported by the utilitarian argument as defined by Rachels (2010): “We should judge actions right or wrong depending on whether they cause more happiness or unhappiness” (pg. 107). The utilitarian argument thus suggests that since the majority benefits and is therefore happy, the actions are appropriate and should continue. Porter and Kramer (2006) provide yet another basis by which to judge if a corporation’s actions should be continued when they state, “The essential test that should guide CSR is not whether a cause is worthy but whether it presents an opportunity to create shared value – that is, a meaningful benefit for society that is also valuable to the business” (pg. 84). Weyerhaeuser Corporation’s business operations in Ontario Canada stand out as an exemplar of a corporation that has created meaningful benefit for society and business in a manner consistent with the highest standards of CSR and with the approval of a majority of its stakeholders, yet one stakeholder, the Grassy Narrows First Nation, remains unsatisfied and a strong opponent to the corporation.

Weyerhaeuser is one of the largest forest products companies in the world. Since its foundation in 1900 it has realized the link between success, social responsibility, and environmental relations. Jeffery Garten (2002) states, “CEO’s and their boards need a ‘true north’ – a clear sense of who they are, what their company stands for, and what obligations the company has, not only to shareholders but also to stakeholders around the world” (p. 4). Weyerhaeuser understands this principle. President and CEO Dan Fulton states their corporate philosophy, “Growing a tree is a long-term commitment. We understand that long-term success depends on our capacity to generate superior returns while protecting our land, nurturing our forest, supporting our communities, and empowering our employees to bring useful, innovative products to market” (Weyerhaeuser 2010).

The town of Kenora, Ontario is one location where Weyerhaeuser’s business operations have had a significant impact on the community. Kenora is a town of roughly 15,000 residents in which approximately 15% are of aboriginal decent. Kenora has suffered negative economic trends highlighted by a declining and aging population and the migration of youth out of the region (City of Kenora 2010). It was in this environment that Weyerhaeuser constructed a state of the art lumber mill in 2001 that directly and indirectly employs over 1,000 people with an economic impact exceeding $60 Million each year. Moreover, 20-25 percent of the mill workforce consists of people of aboriginal decent (Weyerhaeuser 2010). The high number of aboriginal workers is a direct result of Weyerhaeuser’s participation in a government program that helped applicants obtain the equivalent of a twelve grade education as well as training in first aid, computer skills, job search skills, and job readiness (Forestnet 2004).

Porter and Kramer (2006) define value chain social impacts as “those that are significantly affected by the company’s activities in the ordinary course of business” (p. 85). Weyerhaeuser’s value chain social impacts are numerous. For example, they have established contractual relationships for timber harvesting, forest silviculture, infrastructure development, and the supply of other goods and services. They have also instituted a formal policy for building relationships with Canada’s aboriginal people that include guidelines for community education, communication, employee assessment, training and development, and building business relationships (Weyerhaeuser 2010). The impact on the aboriginal community has been significant. Their median income has increased and the earning gap between aboriginal and non-aboriginal earners has closed to within a few percentage points (Statistics Canada 2006).

Despite the many success stories and apparent social progresses directly tied to Weyerhaeuser’s business policies, not all stakeholders are satisfied. The Grassy Narrows First Nation aboriginal group claim their homeland is being destroyed by Weyerhaeuser and it is operating against their will. Even in light of the prosperity brought to the majority of the region, the Grassy Narrows people want Weyerhaeuser to abandon a lumber source that supplies 40% of the timber needed to run the mill. The Grassy Narrows people claim the land under a traditional land use policy and say they use the land for their survival in the form of hunting, farming, gathering and medicine. In general, indigenous people in Canada have the lowest life expectancies, highest infant mortality rates, lower education and employment levels, and the highest incarceration rates (AlterNet 2008). Amartya Sen would argue that in order for a society to develop and improve, these “unfreedoms” (p. 1) must be removed. Nussbaum (2003) underscores that “Sen has insisted on the importance of capabilities, what people are actually able to do and to be” (p. 33). It would stand to reason that by opposing Weyerhaeuser and its willingness to engage in progressive ways, the Grassy Narrows people are voluntarily preventing their own advancement and not realizing their ultimate potential.

Weyerhaeuser’s compliance with the demands of this group would in turn do harm to the vast majority. Post, Preston and Sachs (2002) argue for a necessary redefinition of the corporation that involves stakeholders, not just shareholders. They also emphasize that “the interests of all stakeholders have intrinsic value and merit consideration (although not all of the desires of every group of stakeholders can or should be satisfied)” (pg. 29). This suggests that, when determining CSR policy, companies must seek to provide societal benefits to the majority of the stakeholders in order to achieve success but this does not rule the policy a failure if some disapprove, as evidenced by Weyerhaeuser’s operations in Kenora.

Weyerhaeuser and the Community 1

References

Bell, J. (2008), How an indigenous community defeated a logging giant, Alternet, Retrieved from http://www.alternet.org/story/89138

City of Kenora (2010). Industry. Retrieved from http://www.cityofkenora.ca/modules.php? name=Industry

Garten, J. (2002) Globalism without tears: A new social compact for CEO’s. Cambridge, MA: Harvard Business School Press.

Lammers, D. (2004). World class. ForestNet, Retrieved from http://www.forestnet.com/ archives/ Feb_03/engineered_wood.htm

Nussbaum, M. (2003). Capabilities as fundamental entitlements: Sen and social justice.

Feminist Economics, 9(2-3), 33-59.

Porter, M. and Kramer, M. (2006, December). Strategy and society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 78-92.

Post, J. E, Preston, L. E, & Sachs, S. (2002). Stakeholder management and organizational wealth: Redefining the Corporation. California: Stanford Business Books.

Rachels, J. (2010). The Elements of Moral Philosophy (6th ed.). New York, NY: McGraw Hill.

Sen, A (1999). Development as Freedom. New York, NY: Random House

Statistics Canada. (2006). 2006 Aboriginal population profile for Kenora. Retrieved from http://www.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=89-638-X&lang=eng

Weyerhaeuser. (2010). Sustainability, indigenous people. Retrieved from http://www. forestnet.com/archives/weyerhaeuser.com/Sustainability/Well-Being/IndigenousPeople/ GrassyNarrows