OREGON STATE UNIVERSITY

OLD ANTITRUST LAWS MAY IMPEDE MODERN FOREST MANAGEMENT

11/24/2004

CORVALLIS - Federal antitrust legislation that was passed more than a century ago to ensure fair trade and competition among large corporations now stands as an impediment to modern ecosystem management - a concept considered critical for effective environmental protection.

It is becoming difficult to balance laws that forbid companies from sharing information and collaborating with each other, and innovative land management systems that almost require such close cooperation, forestry researchers from Oregon State University conclude in a new report.

The problem is real and immediate, the OSU experts say in a study to be published next month in a professional journal, Conservation Biology. But new legislation or collection of information by impartial "third parties" may provide some mechanisms to deal with the issue.

"Ecosystem management has received much attention over the past decade and has been put forth as the management scheme for much of the public land in the United States," said Jonathan Thompson, a researcher in the Department of Forest Resources at OSU.

"Planning efforts are expanding and often include private and industrial forest landowners, raising the potential for antitrust law violations."

The problem has its roots, the study finds, in such laws as the Sherman Antitrust Act - passed by Congress in 1890 largely to help prevent monopolies, price fixing and other activities among large steel, oil or tobacco companies. That and other antitrust legislation has been fairly effective during the 1900s, including some enforcement actions against Pacific Northwest forest products companies from the 1940s to 1960s. As a result, sensitivity to these laws is quite high in many firms, the researchers say.

But the era of ecosystem management places new demands upon many lands that cut across public and private ownership, large geographic distances and many different management schemes.

"By definition, ecosystem management considers ecological processes on large spatial scales," Thompson said, "It recognizes ecological rather than sociopolitical boundaries, and enlists the cooperation of all the landowners within the scope of the plan, both public and private."

Management of this type holds the best promise of achieving many timber, wildlife and ecological goals with different lands, while protecting watersheds, soils, endangered species, fisheries, and diverse plant and animal communities. But it's complex and requires many people to work together.

About 90 percent of all threatened or endangered species spend at least part of their time on private lands, and 40 percent are found only on private lands, the OSU researchers note in their study. Some of these species may cross literally hundreds of administrative boundaries during their lives.

Private forest and industrial land owners are often willing to cooperate on these goals, the OSU researchers said, and ecosystem management could benefit from their cooperation - whether to wait a few years before harvesting timber, space out the disturbances on a certain watershed or take other actions that are environmentally necessary. But two or more companies sharing information about their market activities or timber sales plans can be a violation of federal law.

"Even if the intent of collaboration is environmental protection and not increased profits, it could still be illegal," the OSU researchers said in their report. "Antitrust courts do not consider the intentions of firms that agree to allocate the market among themselves.

Therefore, many common features of ecosystem management that, in effect, systematically reduce output, could make firms vulnerable to antitrust attack."

However, there are some possible remedies, the report suggests.

One approach would be new government regulations, often at the state level. A state may pass a statute designed to advance a social policy and that law can be entitled to respect by a federal antitrust court, the researchers say. If a new law clearly articulates a policy that replaces competition with regulation and the activity is actively supervised, it should survive a court test.

However, states may be reluctant to pass laws such as this that would allow resource managers to address both economic and environmental goals, Thompson said, putting a large amount of regulatory power in a few hands.

Alternatively, obtaining data about company activities by impartial third parties may provide another solution. This has already been done occasionally in academic studies and may provide some useful information. But data of this type may not be site-specific enough to accomplish some environmental goals, and in practice has rarely formed the basis for landscape level planning over multiple land ownerships.

"Forest industry lands are crucial to the success of regional scale ecosystem management," Thompson said. "Yet the industry is bound by the law and a commitment to confidentiality. In these facts lies the dilemma we have to address."