Politics of Forests: Northern Forest Industry Regimes in the

Age of GlobalisationBjørnar Sæther

Three topics

• Forest industry as motors of forest based internationalisation

• Image production as modifier of material production

• Changes in regional forest industry regimes

Three regions

• Canada (east and west)

• The Nordic countries (Finland, Sweden and Norway)

• Russia (east and west)

Developments among forest industrial companies

• Concentration and restructuring of the major companies in N-America and Europe

• M&A across the Atlantic

• European and N-American investment in Asia (S-Korea, China, Thailand)

Nordic forest industry

• Has established a dominat position within the European forest industry

• Has acquired production capacity in N-America ( Consolidated Paper, Blandin, Fletcher Paper)

• Has established production capacity in Asia (China, S-Korea, Thailand)

• Has increased its global influence

Why concentration?

• Increase shareholder value through higher and more stable profit across the business cycle

• Concentration increases market power vs. publishers (for printing paper)

• Flexibility and economies of scale

• Cost reduction i.e. transport

Forest regimes

• Regimes consist of actors that influence the development of the forest industrial sector; companies, suppliers, customers, authorities, finance and NGOs

Concentration vs. forest regimes

• How does these changes in the structure of the forest industry influence the forest industrial regimes?– Shareholders vs. other stakeholder groups like

labor– Homogenisation of the regional forest industrial

models ?

Shareholder value

• The influence of shareholder value as a management paradigm has been marked on both sides of the Atlantic

• Nordic producers have adjusted towards Anglo-American practices in dealing with shareholders and the financial community

• Increases in payment of dividend among Nordic producers

• Constant dividend when profit is low

• One shareholder class

• Reduced importance of supervisory boards

Labor-management

• Good relations between labor and management has been a source of competitveness to Nordic industry

• Labor representatives have seats on the board in Sweden and Norway

• Influence of shareholder value threatens these relations with focus on cost cutting

• Some reports of import of Nordic labor-management practices to British Columbia

• Global agreement between Norske Skog and International Federation of Chemical Workers which gives right to collective bargaining and minimum health and safety standards

Homogenisation

• A trend towards homogenisation between Canada and the Nordic countries in:

• Labor- management relations

• Influence of shareholder values

• Trend towards homogenisation is supported by debates on sustainable forestry practices

Diversity

• Regional material flows• Country specific political-institutional

structures• Forest ownership• Sunk costs• Differences in environmental concern• Competition between places for new

investment

Conclusion

• One or several forest-industrial regimes?– To early to declare the death of the Nordic

model– Still strong Soviet legacy in Russia– Canadian forest industry under pressure from

US and environmentalists