maya three pages minimum x2

Employment Versus Environment: The Complexities of Managing the Interests of Northern Pulp’s Multiple

Stakeholders

Case

Author: Mairi McKinnon & Brad S. Long

Online Pub Date: January 15, 2020 | Original Pub. Date: 2020

Subject: Business Ethics, Corporate Social Responsibility

Level: | Type: Indirect case | Length: 6496

Copyright: © Mairi McKinnon and Brad S. Long 2020

Organization: Northern Pulp Nova Scotia Corporation| Paper Excellence Canada Holdings |

Organization size: Large

Region: Northern America | State:

Industry: Agriculture, forestry and fishing| Manufacture of paper and paper products| Remediation

activities and other waste management services

Originally Published in:

Publisher: SAGE Publications: SAGE Business Cases Originals

DOI: http://dx.doi.org/10.4135/9781529726541 | Online ISBN: 9781529726541

© Mairi McKinnon and Brad S. Long 2020

This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes. 2021 SAGE Publications Ltd. All Rights Reserved.

The case studies on SAGE Business Cases are designed and optimized for online learning. Please refer to the online version of this case to fully experience any video, data embeds, spreadsheets, slides, or other resources that may be included.

This content may only be distributed for use within Embry Riddle Aeronautical Univ. http://dx.doi.org/10.4135/9781529726541

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 2 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders

Abstract

Northern Pulp has been a major contributor to the economy in rural Nova Scotia since 1967. It has also been a significant environmental polluter. While local residents have compromised their health and environment for jobs and economic stability for 52 years, people are fed up with both Northern Pulp and the provincial government’s disregard for their wellbeing. This is particularly true of the Pictou Landing First Nation, on whose land Northern Pulp’s effluent treatment site is situated. In response to pressure from its citizens, the provincial government has passed the Boat Harbour Act, which legislates that Northern Pulp close its current effluent treatment site by January 31, 2020. As this date draws nearer, Northern Pulp must determine an ethical course of action that best balances the interests of its multiple stakeholder groups. What should Northern Pulp do?

Case Learning Outcomes

By the end of this case, students should be able to:

• engage with concepts that pertain to corporate social responsibility (CSR) discourse; • understand the complexity of multiple stakeholder interests, specifically how they overlap and

conflict; and • assume the position of an organisation mandated to implement a change, and determine a course of

action to fulfil ethical business practices.

Introduction

Since 1967, Northern Pulp has manufactured bleached kraft pulp, a strengthener used in tissues and paper. Northern Pulp is located in Pictou County, Nova Scotia, Canada, where spruce and fir trees are plentiful and offer longer and stronger fibre than trees native to other climatic regions (Beswick, 2018b). Due to the quality of this pulp, there is demand for Northern Pulp’s product both domestically and internationally (‘About the Project’, n.d.).

Effluent is a major waste product of the kraft pulp production process and determining how to treat this liquid waste is the most significant challenge currently facing Northern Pulp. Since the beginning of its operation, Northern Pulp’s effluent treatment facility (ETF) has involved effluent being discharged into Boat Harbour where it is aerated and released into the Northumberland Strait up to a month later (Palmeter, 2018). The Northumberland Strait is located in the southern area of the Gulf of St. Lawrence, which separates Nova Scotia from Prince Edward Island. Since Northern Pulp began operation in 1967, it has piped about 1.25 trillion litres of effluent into Boat Harbour, the equivalent of a pipeline one metre in diameter stretching to the moon and back twice (Baxter, 2018b).

Boat Harbour is located on the reserve of the Pictou Landing First Nation. Before Northern Pulp began piping effluent into Boat Harbour, it was a tidal estuary known as ‘A’Se’K’, the Mi’kmaq word for ‘the other room’ (Thomson, 2019). It was a place where people swam, fished, sought natural remedies, and ultimately established livelihoods (MacInnis, 2019a). Although Pictou Landing First Nation was promised that their tidal estuary would not be impacted by the arrival of Northern Pulp, after only a week of production, all of the fish in Boat Harbour were dead (Baxter, 2018a). Since then, Northern Pulp’s ETF in Boat Harbour has been named one of the worst instances of environmental racism in Canada (‘Nova Scotia Fishermen to Block Northern Pulp’, 2018).

In an effort to initiate reconciliation with the Pictou Landing First Nation, the provincial government of Nova

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 3 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders

Scotia legislated the Boat Harbour Act in 2015, which requires the closure of the ETF in Boat Harbour by 31 January 2020. In a search for alternatives, Northern Pulp has proposed a new plan for its effluent involving disposal directly into the Northumberland Strait. A multi-stakeholder analysis is required to determine whether or not it is ethical for Northern Pulp to proceed with this new ETF.

Background to the Mill

Ownership of the pulp mill in Pictou County has changed many times since Scott Paper began operations in 1967. After 30 years, Scott Paper sold the mill to Kimberley-Clark Corporation, and in 2004, Neenah Paper acquired the mill through a tax-free spin-off. Four years later, Neenah Paper paid Blue Wolf Capital Management LLC and its holding company, Atlas Holdings LLC, CAD 10.3 million to take over the mill and its liabilities (‘Neenah Paper Sale Finalized’, 2008). It was under Blue Wolf that the mill became known as ‘Northern Pulp’. Finally, in 2011, Paper Excellence Canada Holdings purchased Northern Pulp and currently owns the mill (‘About NPNS’, n.d.).

Regardless of the owner, Northern Pulp never lost its reputation as an environmental polluter. It has exceeded allowable particulate emissions, leaked untreated effluent, and contaminated soil with toxic heavy metals. Many blame the provincial government of Nova Scotia for its lax regulations and lack of enforcement. While Northern Pulp and the government have repeatedly insisted that the contaminants released from the mill do not cause health problems, there has been resistance from the provincial government to undergo an epidemiological health study. If the duty of government is to protect the interests of its citizens, why does it seem that the government of Nova Scotia has been promoting corporate interests at the expense of its people for over half a century? One answer is jobs. With 330 direct and 11,000 indirect employees, it is estimated that one in 12 jobs in Pictou County are tied to the mill (Henderson, 2018; ‘Northern Pulp Triples Workforce’, 2016). The economic impact of Northern Pulp cannot be overlooked, particularly in a rural part of the ‘have not’ province of Nova Scotia.

The establishment of the Boat Harbour Act in 2015 marked the first instance of government action against Northern Pulp. The question of whether or not Northern Pulp will be able to develop a new ETF to replace Boat Harbour by the January 2020 deadline has caused much anxiety in the area in and around Pictou County. With supporters and opponents each claiming significant stakes on either side of the issue, as the deadline draws nearer, tension in the area rises.

Stakeholders and Their Stakes Northern Pulp’s Owners

The current owner of Northern Pulp, Paper Excellence, is part of an Indonesian corporate empire controlled by the multi-billionaire Widjaja family (Beswick, 2018c).

The Widjaja family’s empire, Sinar Mas, has six business pillars, of which pulp and paper is one. Over the past decade, Paper Excellence has acquired numerous financially troubled pulp mills around the world, including six in Canada (Beswick, 2018a). The sheer size of Sinar Mas makes Northern Pulp’s profits relatively negligible from the perspective of the Indonesian owners. The majority of these profits are exported to Indonesia, while the pollution remains local in Pictou County (Pannozzo, 2017).

Despite Northern Pulp’s apparent lack of concern over environmental sustainability, supporters of the mill argue that Paper Excellence has proven its commitment to Nova Scotia through its investments towards mill upgrades. Since taking over Northern Pulp, Paper Excellence has invested CAD 200 million towards the continued success of the mill, more than any of the previous owners (MacInnis, 2018b). Much of Paper Excellence’s investments have gone towards equipment to decrease environmental contamination, including a new electrostatic precipitator and a forest research programme (Mellor, 2010). Because of these investments, some people believe that Paper Excellence should be warranted the opportunity to prove itself in Nova Scotia. However, others interpret these investments as minimal improvements that the company has made in order to satisfy environmental regulations.

Regardless of whether or not Paper Excellence should be given a chance to demonstrate its business

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 4 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders

potential in Nova Scotia, the company has stated that if the government does not provide it with an extension to the Boat Harbour Act, the mill will close permanently (Campbell, 2019).

Employees

Northern Pulp provides a unique employment opportunity for people in Pictou, Nova Scotia because of the salary, safety, and security that it offers its workers. Employees of Northern Pulp earn average salaries of CAD 84,000 per year, work in a facility that has been awarded the safest operation in its class by Pulp & Paper Canada magazine, and are members of the Communications, Energy and Paperworkers union (Beswick, 2019a; ‘Northern Pulp Mill Threatening Layoffs’, 2008; ‘Northern Pulp Tops Competition’, 2012).

While job security has always been a major component of employment at Northern Pulp, it is currently being threatened. If the provincial government does not provide Northern Pulp an extension beyond its January 2020 deadline and Northern Pulp shuts down its operation, hundreds of employees will be laid off. Some opponents of Northern Pulp argue that the laid-off employees could easily regain employment in the cleanup of Boat Harbour (Campbell, 2015). However, stress among employees is high due to the uncertainty of future job prospects.

Forestry Sector

Northern Pulp’s direct employees are not the only people at risk of job loss; the 11,000 people in the forestry sector who are indirectly employed by Northern Pulp could also lose their jobs if Northern Pulp shuts down (‘Northern Pulp Triples Workforce’, 2016). The ripple effect of unemployment that is expected to occur should Northern Pulp close results from the nature of the forestry industry in Nova Scotia (Beswick, 2019b). The forestry sector is made up of an intricate network of woodlot owners, sawmill owners, harvesters, truckers, and contractors, with Northern Pulp being the largest player. Northern Pulp is not only the largest supplier of logs to the province’s sawmills but also purchases 95% of all sawmill chips, a by-product whose purchase is essential to the financial viability of sawmills (‘Northern Pulp Committed to Sustaining’, 2017). Moreover, the 2014 Ivany Report identified forestry as the ‘backbone’ of Nova Scotia’s rural communities (Carroll, 2019).

Although Northern Pulp plays a crucial role in the forestry industry in Nova Scotia, the company’s forestry practices are problematic. Northern Pulp owns 200,000 hectares of forestland in Nova Scotia and manages another 200,000 hectares of crown land (Mellor, 2010). Northern Pulp is, however, accused of not managing this land sustainably. Environmentalists and organisations such as the Ecology Action Centre have criticised Northern Pulp for its clearcutting and whole-tree harvesting methods (Delaney, 2010). In fact, it is the largest clearcutting company in the province (Mellor, 2010). Its goal is to maximise fibre growth, but it demonstrates a lack of regard for the health of Nova Scotia’s forestry ecosystem (Delaney, 2010).

Local Residents (Supporters)

Beyond its employees, Northern Pulp has generated positive effects for the Pictou County community at large. Local businesses in the area have reaped the benefits of a well-paid workforce. This impact is heightened during Northern Pulp’s annual maintenance shutdown during which time there is an influx of over 700 contract employees, who require accommodation and meals over a three-week period (‘Northern Pulp Shutdown’, 2015).

Northern Pulp also positively impacts local taxpayers. In 2018–19, Pictou County’s tax revenue budget was CAD 13.6 million, of which CAD 3.1 million was commercial tax (MacInnis, 2019c). Fortunately for the local population, Northern Pulp paid a significant portion of this, thereby reducing the tax rate for other local taxpayers.

Northern Pulp has demonstrated its commitment to the people of Pictou County through its generous donations to local causes. This includes a CAD 200,000 donation to the Pictou County Wellness Centre, CAD 14,937 to United Way, CAD 25,000 to the local fire department, and CAD 2,800 to the Hector Arena in Pictou (‘Northern Pulp Helps’, 2016; ‘Northern Pulp Pledges $200,000’, 2011; ‘Northern Pulp Supports United Way’, 2015; ‘Paper Excellence Donates’, 2019). Beyond monetary donations, Northern Pulp has also constructed

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 5 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders

roads and trail systems at its own expense, benefiting those members of the local population who enjoy outdoor recreational activities (Spicer, 2019).

Local Residents (Opponents)

Despite the benefits that Northern Pulp offers local residents, much of the Pictou County population argues that Northern Pulp causes more harm than good in the community. One of the major side effects of pulp production is the release of a sulphur-like smell into the atmosphere (Kelly, 2010). When the mill is in operation, this rotten egg-like smell spreads across Pictou County, making it an unpleasant place to live. When Northern Pulp initially arrived in Pictou County, this stench was often referred to as ‘the smell of money’; however, people are getting fed up with it (Baxter, 2018a).

The rotten egg-like smell produced by Northern Pulp is not limited to the noses of local residents. When tourists visit the area, they are often driven away by the stench. This does not bode well for the tourism industry in the area, which attempts to sell the brand of Nova Scotia as ‘Canada’s Ocean Playground’ (‘Northern Pulp Effluent Pipe Protest’, 2018). Rather than raving about the beautiful sandy beaches, warm swimmable water, and fresh, local seafood, tourists turn to TripAdvisor and warn prospective future tourists of the stench created by the mill (LeBlanc, 2014).

Sulphur is just one air contaminant released by Northern Pulp; the mill also emits particulate matter called PM 2.5. Unlike sulphur, the effects of PM 2.5 can be life threatening, and Northern Pulp consistently emits levels above the legal limit (‘Northern Pulp Mill’, 2014). In 2013, the World Health Organisation concluded that PM 2.5 is carcinogenic to humans and contributes to strokes, heart disease, lung cancer, and both chronic and acute respiratory disease (Green, 2014). Perhaps it is no coincidence that Nova Scotia has the highest cancer rate in Canada, and Pictou County has the highest rate of cancer in Nova Scotia (Green, 2014). However, it will likely never be known for sure because of resistance from the provincial government towards conducting an epidemiological study, despite local physicians urging it to do so since 1989 (Beswick, 2014b). When the famous environmental activist Erin Brockovich became aware of this situation in Pictou County, she created a Facebook post writing, ‘The massive international polluter, Northern Pulp, emits 63 per cent of all the PM 2.5 in Nova Scotia; more than every other company combined. They are No. 6 on the list of all of Canada’s top polluters, destroying the community’s quality of life significantly’ (Brannen, 2014).

There are also potential health implications associated with Northern Pulp’s proposed new ETF, which would pipe treated effluent directly into the Northumberland Strait. Part of this plan includes piping effluent directly over the Caribou well field, which is a major source of domestic drinking water for the residents of Pictou County (Goodwin, 2018). Having encountered multiple effluent leaks in the past, Northern Pulp would be risking the health of those that drink the water. Moreover, the effluent discharged into the Northumberland Strait would contain toxic chemicals, which have the potential to bioaccumulate in fish and other marine life and negatively impact the people who eat them (Dinshaw, 2018).

The proposal for the new ETF is impacting the local residents in other significant ways as well. The controversy regarding whether or not the plan should move forward has ultimately divided the community of Pictou County and has created a level of tension that Premier Stephen McNeil fears could become violent (‘Premier Hopes’, 2019). The stance of the supporters is ‘No pipe = no mill’, while that of opponents is ‘No pulp waste in our water’ (Baxter, 2018a; ‘Boat Harbour Must Close’, 2018). There have been numerous community groups created to argue each side of the debate, including Facebook pages called ‘Clean up the Pictou County Pulp Mill’ with 6,021 members and ‘Support Northern Pulp Jobs and the Nova Scotia Economy’ with 1,061 members. While some people have taken to the Internet to voice their opinions, others have taken to the streets by organizing protests such as the #NoPipe land and sea rally, which over 1,000 opponents of the new ETF plan attended (‘Premier Hopes’, 2019). Tension in Pictou County has risen so high that local residents avoid discussing Northern Pulp in public, children are not allowed to talk about it in school, and people get harassed for wearing company clothes in town (Baxter, 2018a; Beswick, 2018c; Fleury, 2019). Northern Pulp has made Pictou County a toxic place to live, in both senses of the word.

Pictou Landing First Nation

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 6 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders

A particular group of local residents has been uniquely impacted by Northern Pulp. The Pictou Landing First Nation endured 52 years of effluent discharge into their former tidal estuary of Boat Harbour. They have also been deceived and exploited by both the mill owners and provincial government. Perhaps the most shocking instance of such abuse occurred when the chief of the Pictou Landing First Nation was deceived into giving Scott Paper permission to use Boat Harbour as an ETF. To convince the community that their tidal estuary would not be impacted by the proposed ETF, a provincial engineer took the band chief to what was purported to be a similar ETF in New Brunswick and drank a cup of the water. However, later investigations discovered that the ETF in New Brunswick was not operational and did not begin operation until two years later. The engineer had been drinking water from a spring-fed brook (Pannozzo, 2010). The lies did not stop there.

Despite the promise that the ETF at Boat Harbour would have no impact on Pictou Landing First Nation’s tidal estuary, one week after Scott Paper began discharging effluent into Boat Harbour, all of the fish were dead. This ecological disaster reduced the quality of life in Pictou Landing First Nation dramatically and the suicide rate increased substantially (Pannozzo, 2010). The way of life that the people of Pictou Landing First Nation had known for centuries had been recklessly destroyed.

In 1991, 1995, 1997, and 2008, the provincial government promised the Pictou Landing First Nation that it would shut down and clean up Boat Harbour (Beswick, 2014a). These dates came and went, as did unfulfilled promises. The people of Pictou Landing First Nation decided to take the fate of Boat Harbour into their own hands in June 2014 when 47 million litres of toxic effluent leaked from Northern Pulp’s pipes (Withers, 2017). The band responded by forming a blockade of the road leading to the site of the effluent leak and only dismantled it once the government agreed to permanently close Boat Harbour (MacInnis, 2019a). Finally, in 2015 all parties in the Nova Scotia legislature voted in favour of the Boat Harbour Act (‘Boat Harbour Must Close’, 2018). This provided Northern Pulp with the deadline of 31 January 2020 to close Boat Harbour, which marked an initial step towards remediation and reconciliation.

As the Boat Harbour deadline draws nearer, delays in the development and approval of an alternative ETF have caused Northern Pulp to request a one-year extension. If the provincial government extends the deadline, it will once again be siding with corporate interests rather than fulfilling its promise to the Pictou Landing First Nation. Premier Stephen McNeil has stated that he will not consider an extension; however, he has offloaded some of the pressure from his government by saying that an extension will be considered if the Pictou Landing First Nation unanimously agrees to it (Vibert, 2019). This does not seem likely, as Chief Andrea Paul has stated, ‘Our community has lived with polluted air and water, broken promises and broken pipes for over 50 years. Boat Harbour is closing on schedule and we expect nothing less’ (‘Boat Harbour Must Close’, 2018). With the unwavering Boat Harbour closure date looming, if Northern Pulp is unable to develop an alternative, acceptable ETF by January 2020, the mill may close permanently.

Fisheries

Northern Pulp’s current ETF proposal involves dumping up to 90 million litres of treated effluent per day directly into the Northumberland Strait (Tutton, 2018). This plan is strongly opposed by local fishermen because of the lucrative lobster, crab, and herring fisheries that exist in the area (Campbell, 2018). The lobster fishery in the Northumberland Strait is estimated to be worth CAD 1.2 billion a year and employs over 3,000 people (Baxter, 2018a; Henderson, 2018). The local fishermen understand the complexities of the Northumberland Strait’s ecosystem, and they predict that this project would be detrimental to aquatic life. The effluent would kill lobster larvae, and the mixture of fresh and salt water would create dead zones in the Strait (Collins, 2019; ‘Northern Pulp Committed’, 2017). There is also fear that the reputation of the Strait’s fisheries would be ruined if the public became aware that seafood was growing in the same waters as toxic effluent (Musick, 2018b).

Opposition to Northern Pulp’s ETF proposal has come in many forms, including a community group called Friends of the Northumberland Strait, an alliance among the Gulf Nova Scotia Fleet Planning Board, the Maritime Fishermen’s Union, the Prince Edward Island Fishermen’s Association, the New Brunswick Fisheries Association and Pictou Landing First Nation, ‘NO pulp waste in our water’ signs scattered around Nova Scotia, and a series of tweets from the Halifax-born movie star Ellen Page (Doucette, 2018; Macdonald, 2018a).

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 7 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders

Before Northern Pulp can move forward with its proposed ETF, it has to undergo an environmental assessment. The provincial government has decided to carry out a Class 1 environmental assessment, involving a 50-day review period and a 30-day period for public comment, rather than a more rigorous Class 2 assessment that could potentially take several months (Campbell, 2018). The Environment Department describes a Class 1 project as one that is ‘smaller in scale and may or may not cause significant environmental impacts or be of sufficient concern to the public’ (Gunn, 2018). Fishermen are furious with this decision and accuse the provincial government of experiencing a conflict of interest. By selecting the briefer Class 1 environmental assessment, the provincial government is providing Northern Pulp with a better chance of meeting its January 2020 deadline. Moreover, the provincial government will be involved in all financial aspects of this project (Collins, 2019). In response, local fishermen have called upon the federal government to review the plan. However, Prime Minister Justin Trudeau has stated that the project proposal should be left to provincial jurisdiction (MacInnis, 2019b; Neatby, 2018).

Due to a lack of trust that the government will act in their best interests, fishermen have taken the fate of their livelihoods into their own hands. On 22 October 2018, fishermen noticed a survey boat mapping a potential route for Northern Pulp’s new effluent pipe, and they forced it back to shore (Musick, 2018a). Since then, a total of five blockades have occurred involving over 20 fishing boats (Henderson, 2018). With all groups acting in their own best interest and mistrust mounting, tensions continue to rise.

Role of Provincial Government

The provincial government of Nova Scotia has always advocated for Northern Pulp because of its positive impact on the provincial economy. Northern Pulp directly contributes CAD 419 million to Nova Scotia’s gross domestic product and is the largest exporter at the Port of Halifax, shipping approximately 300 containers of pulp weekly (Beswick, 2019a; Macdonald, 2018b).

In order to persuade Scott Paper to expand into Nova Scotia in 1967, the provincial government offered a multitude of incentives, including loans, fresh-water guarantees, and land. As a result of decisions made by successive provincial governments, the taxpayers of Nova Scotia have become Northern Pulp’s banker, and the company has developed a ‘culture of entitlement’ (Gunning, 2015).

In 1995, government officials signed an indemnity agreement, which makes the province responsible for all costs and liabilities associated with shutting down or idling the Boat Harbour ETF (Henderson, 2019). Then, in 2002, Premier John Hamm extended the lease for Northern Pulp’s use of Boat Harbour until 2030 (Dinshaw, 2018). Coincidentally perhaps, John Hamm is now Chair of the Board of Northern Pulp. Because of these decisions, as well as the Boat Harbour Act’s 2020 deadline being 10 years premature of the lease agreement, Nova Scotia’s taxpayers are responsible, at least in part, for the costs associated with the following (Beswick, 2018a):

• Remediation of Boat Harbour; • Compensation for lost profits if Northern Pulp is unable to construct a new ETF before the January

2020 deadline; and • Design and construction of a new ETF.

The cost estimate for the remediation project alone in 2018 was CAD 217 million, a substantial increase from the CAD 52 million appraisal that was estimated in 2015 (Withers, 2019). The provincial government has irresponsibly put its people in a vulnerable position, making them liable to pay a colossal price tag in the near future.

The provincial government’s commitment to the financial success of Northern Pulp is demonstrated not solely by means of monetary contribution but also through its lack of regulations and consequences for the company. Perhaps the most laughable of all is the CAD 697.50 fine that the Environment Department issued Northern Pulp for exceeding particulate emission limits (Beswick, 2018b). Because the provincial government has sided with Northern Pulp for the past 50+ years, it begs the question of whether the government will continue to prioritise corporate interests to ensure that Northern Pulp does not permanently shut down in January 2020.

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 8 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders

The Deadline Looms

Northern Pulp is currently facing an existential crisis. While Bruce Chapman, the general manager of Northern Pulp, has stated, ‘Rumours that our mill is closing any time soon are simply not true. We’re committed to a long-term future here’ (Campbell, 2015). Paper Excellence Canada’s CEO, Brian Baarda, contradictorily announced, ‘If the government does not give us enough time to complete the new facility, we will have no choice but to permanently cease operations in Nova Scotia’ (Campbell, 2015). Northern Pulp has been aware of the January 2020 deadline since May 2015, plenty of time to develop a new ETF, according to the Pictou Landing First Nation’s engineering reports (Beswick, 2019c). However, Kathy Cloutier, the spokeswoman for Northern Pulp, has blamed the time-consuming industrial approval process for delaying the project (Gorman, 2015).

Despite Northern Pulp’s claim that the January 2020 deadline will not be met, the company has proceeded with the development of a replacement ETF. Based on recommendations from KSH Consulting, Northern Pulp has settled on an activated sludge treatment system, which will pipe treated effluent to an underwater site in the Northumberland Strait (‘Mill’s Future at Risk’, 2019). Many local residents, particularly the fishermen, fear that Northern Pulp is merely shifting the Boat Harbour contamination disaster to the Northumberland Strait. The community group Friends of the Northumberland Strait has additionally voiced deep concern that the new ETF will result in the release of effluent of worse quality due to the decreased holding time of effluent prior to discharge into the Northumberland Strait (Pannozzo, 2018).

There is another alternative, however, that would satisfy the desire of stakeholders to reduce environmental contamination. That alternative involves converting Northern Pulp into a closed-loop, zero-effluent mill. Research conducted by fishermen suggests that this alternative would be possible but extremely costly. However, Northern Pulp disagrees, saying that this alternative is not possible for bleached kraft pulp (‘New System Will Improve’, 2018). To completely explore its options, Northern Pulp considered the possibility of shifting production from bleached kraft pulp to unbleached kraft pulp, which can be produced using a closed- loop system. However, this option was quickly abandoned due to the lack of global demand for unbleached kraft pulp (MacInnis, 2018a).

The provincial government and Northern Pulp are at a momentous impasse. The provincial government is not budging on the deadline it promised the Pictou Landing First Nation, and Northern Pulp, unable to meet the deadline, has threatened permanent closure. What will happen on 31 January 2020 and what should Northern Pulp and/or the provincial government do to prepare for this pivotal date in Nova Scotia history?

Discussion Questions

• 1. Is there a socially responsible way forward for Northern Pulp? What actions would satisfy the moral obligations that arise from its societal relationships?

• 2. The stakeholder theory of CSR suggests that socially responsible action is that which best reconciles the interests of multiple stakeholders. Is that possible in this case, and if so, what could that look like?

• 3. How does the concept of corporate citizenship apply in this case?

• 4. Does Northern Pulp have a social licence to operate in Nova Scotia?

Further Reading Baxter, J. (2017). The mill: Fifty years of pulp and protest. Lawrencetown Beach, Canada: Pottersfield Press. Bernard, B. (2014, April 10). A‘se‘k – The other room (Boat Harbour) [Video file]. Retrieved from www.youtube.com/watch?v=6AdxIcF3LzI&t=1s.

References About NPNS. (n.d.). Retrieved from http://www.paperexcellence.com/northern-pulp About the project. (n.d.). Retrieved from http://www.paperexcellence.com/northern-pulp

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 9 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders

Baxter, J. (2018a, March 20). Battle for the Mill. Halifax Examiner. Retrieved from https://www.halifaxexaminer.ca/province-house/battle-for-the-mill Baxter, J. (2018b, November 3). Containing Northern Pulp’s mess. Halifax Examiner. Retrieved from https://www.halifaxexaminer.ca/environment/containing-northern-pulps-mess/ Beswick, A. (2014a, June 12). First Nation stands firm on effluent issue; Pictou Landing will only restore access to broken pipe with vow to fix Boat Harbour. The Chronicle Herald, A1. Beswick, A. (2014b, August 18). Northern Pulp link to respiratory illness reported in 1989 medical journal. The Chronicle Herald. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/ news·20140818·HHW·065 Beswick, A. (2018a, January 15). Northern Pulp’s new effluent treatment system: Who’s paying for it? The News, A1, A3. Beswick, A. (2018b, January 13). Pulp friction – A day in the life of those working in Northern Pulp’s Abercrombie Point operation. The News, A1, A4. Beswick, A. (2018c, November 29). Tensions continue to rise – Both sides struggle to control emotions in Northern Pulp pipe controversy. The News, A13. Beswick, A. (2019a, January 17). Northern Pulp, Part 1: Successive governments signed away Nova Scotia taxpayers. The Chronicle Herald. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/ news·20190117·HHW·011 Beswick, A. (2019b, January 16). Northern Pulp, Part 2: A frightened forestry industry is tied to mill’s fate. The Chronicle Herald. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/ news·20190116·HHW·153 Beswick, A. (2019c, January 17). On the hook – Successive governments hang cleanup bill on taxpayer. The Chronicle Herald, Provincial_A4. Boat Harbour must close on schedule, say united fishermen. (2018, November 21). The Advocate, 2. Brannen, J. (2014, September 4). Brockovich – Mill destroying ’quality of life’ – Famous consumer advocate posts slam on Facebook, Northern Pulp questions statistics. The News, 3, 5. Campbell, F. (2015, March 25). Northern Pulp denies closure rumour; Mill operators focusing on startup of precipitator to cut emissions, manager says. The Chronicle Herald, A6. Campbell, F. (2018, September 28). Ecojustice joins fight against Northern Pulp’s effluent plan. The News. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20180928·WEG·011 Campbell, F. (2019, April 4). Nova Scotia wants more information about Northern Pulp wastewater plan. The News, A1, A2. Carroll, S. (2019, May 14). Let’s tap into Mi’kmaw wisdom to break Boat Harbour impasse. The Chronicle Herald. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20190514·HHW·140 Collins, J. (2019, February 20). Extension of Boat Harbour is not the solution. The Advocate, 7. Delaney, G. (2010, March 5). $75 million loan to Northern Pulp slammed; Taxpayers’ money subsidizing bad forest practices, Ecology Action Centre says. The Chronicle Herald, A7. Dinshaw, F. (2018, April 15). Mill’s planned effluent pipe is ‘not going in’ to the Northumberland Strait – local fisherman. The News. Retrieved from http://www.ngnews.ca/news/local/effluent-pipe-is-not-going-in-- local-fisherman-202119/ Doucette, K. (2018, December 26). ‘No easy solution here’: Premier prepares for worst on controversial pulp mill. CBC News. Retrieved from https://www.cbc.ca/news/canada/nova-scotia/northern-pulp-2020-deadline- economy-premier-stephen-mcneil-1.4959271 Fleury, H. (2019, March 9). A kid’s-eye view of Boat Harbour. The Chronicle Herald. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20190309·HHW·081 Goodwin, S. (2018, November 7). Fishery protest waged over Strait pipe plans – Mayor Jim Ryan criticizes Northern Pulp’s lack of communication. The Advocate, 1, 3. Gorman, M. (2015, April 28). Northern Pulp unsure deadline can be met; Officials say timeline to close Boat Harbour may be too tight. The Chronicle Herald, A1. Green, J. (2014, August 30). A sequel to ‘the rest of the story’ on Northern Pulp. The News, 9. Gunn, A. (2018, November 30). Ottawa mulls federal assessment of Northern Pulp. The Chronicle Herald. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20181130·HHW·010 Gunning, D. (2015, November 25). Northern Pulp’s culture of entitlement. The News, 6. Henderson, J. (2018, December 19). Court grants injunction against fishermen blockading survey boats working for Northern Pulp Mill. Halifax Examiner. Retrieved from https://www.halifaxexaminer.ca/province- house/court-grants-injunction-against-fishermen-blockading-survey-boats-working-for-northern-pulp-mill/

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 10 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders

Henderson, J. (2019, February 10). John Hamm says he has no regrets about signing pulp mill lease. Halifax Examiner. Retrieved from https://www.halifaxexaminer.ca/province-house/john-hamm-says-he-has- no-regrets-about-signing-pulp-mill-lease/ Kelly, S. (2010, March 2). Province loans pulp mill $75M – Purchase from Neenah Paper will ensure a wood supply for the Northern Pulp Mill in Abercrombie. The News, 1. LeBlanc, M. (2014, July 2). Let’s have a conversation about Boat Harbour. The Advocate, 6. Macdonald, S. (2018a, March 28). No pipe in the strait: Fisheries groups and First Nations to Northern Pulp. The Chronicle Herald. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/ news·20180328·HHW·038 Macdonald, S. (2018b, January 25). PC leadership candidate wants pipeline in Strait – Lohr defends Northern Pulp, blasts P.E.I. premier for requesting more detailed environmental assessment. The News, A2. MacInnis, A. (2018a, February 27). Fishermen and Northern Pulp at an impasse. The News, A3. MacInnis, A. (2018b, July 19). Paper Excellence has no plans to pull out of Pictou County – Rumours unfounded, company says. The News, A3. MacInnis, A. (2019a, January 8). ‘Nothing lives in Boat Harbour’ – Pictou Landing First Nation Chief Andrea Paul seeks allies on Pictou County council. The News. Retrieved from https://www.ngnews.ca/news/local/ nothing-lives-in-boat-harbour-pictou-landing-first-nation-chief-andrea-paul-seeks-allies-on-pictou-county- council-273864/ MacInnis, A. (2019b, April 4). ‘There’s been serious engagement’. The News, A3. MacInnis, I. (2019c, March 14). Plan C for Northern Pulp: A community solution. The News, A7. Mellor, C. (2010, June 26). No pulp friction for researcher; Forestry expert says Northern Pulp’s $1 million funding of study won’t influence him. The Chronicle Herald, C1. Mill’s future at risk without extension, Northern Pulp warns. (2019, January 31). The News. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20190131·WEG·063 Musick, S. (2018a, October 23). ‘Everyone is not going to be as friendly as me’: Survey boat mapping Northern Pulp effluent pipe forced back to shore. The Chronicle Herald. Retrieved from https://nouveau- eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20181023·HHW·036 Musick, S. (2018b, July 5). Fishermen not willing to gamble on Northern Pulp effluent pipe. The Chronicle Herald. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20180705·HHW·052 Neatby, S. (2018, October 20). Northern Pulp pipeline could harm herring spawning beds, say P.E.I. fishermen. The News. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/ news·20181020·WEG·001 Neenah Paper sale finalized: New owners take over today. (2008, June 26). The News, 2. New System will improve Northern Pulp’s footprint. (2018, March 2). The News. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20180302·WEG·058 Northern Pulp committed to sustaining Nova Scotia’s valued forestlands. (2017, December 21). The News. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20171221·WEG·059 Northern Pulp effluent pipe protest draws huge crowds on land and sea in Pictou. (2018, July 6). CBC News. Retrieved from https://www.cbc.ca/news/canada/nova-scotia/northern-pulp-effluent-pipe-protest-1.4736367 Northern Pulp helps Hector arena in Pictou. (2016, October 17). The News. Retrieved from https://nouveau- eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20161017·WEG·112 Northern Pulp mill threatening layoffs, union says. (2008, July 16). CBC News. Retrieved from https://www.cbc.ca/news/canada/nova-scotia/northern-pulp-mill-threatening-layoffs-union-says-1.706510 Northern Pulp Mill: What’s in the smelly haze? (2014, July 31). CBC News. Retrieved from https://www.cbc.ca/ news/canada/nova-scotia/northern-pulp-mill-what-s-in-the-smelly-haze-1.2724460 Northern Pulp pledges $200,000 toward Wellness Centre. (2011, April 12). The News, 2. Northern Pulp shutdown scheduled to start May 30. (2015, May 6). The Advocate, 15. Northern Pulp supports United Way. (2015, April 10). The News. Retrieved from https://nouveau-eureka- cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20150410·WEG·076 Northern Pulp tops competition for safest mill in Canada. (2012, March 31). The News, 4. Northern Pulp triples workforce during shutdown. (2016, September 13). The Chronicle Herald, B5. Nova Scotia fishermen to block Northern Pulp boat from entering Northumberland Strait. (2018, November 5). The Globe and Mail. Retrieved from https://www.theglobeandmail.com/canada/article-nova-scotia-fishermen- to-block-northern-pulp-boat-from-entering/ Palmeter, P. (2018, July 4). Proposed Northern Pulp pipe route into ocean hits snag. CBC News. Retrieved from https://www.cbc.ca/news/canada/nova-scotia/proposed-northern-pulp-pipe-route-ocean-

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 11 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders

problems-1.4733101 Pannozzo, L. (2010, March 10). Boat Harbour: Paradise lost for local Mi’kmaq. The Chronicle Herald, A13. Pannozzo, L. (2017, November 22). Dirty dealing part 1 – Northern Pulp Mill and the province are set to roll the dice with Boat Harbour’s replacement, but a cleaner alternative exists. Halifax Examiner. Retrieved from https://www.halifaxexaminer.ca/province-house/dirty-dealing/ Pannozzo, L. (2018, February 13). Dirty dealing part 2 – Wading through the quagmire of Northern Pulp’s fast-tracked environmental assessment. Halifax Examiner. Retrieved from https://www.halifaxexaminer.ca/ province-house/dirty-dealing-2/ Paper Excellence donates to Abercrombie Fire Department. (2019, May 1). The Advocate, 15. Premier hopes ‘cooler heads prevail’ as pulp mill works on assessment. (2019, January 10). CBC News. Retrieved from https://www.cbc.ca/news/canada/nova-scotia/stephen-mcneil-northern-pulp-environmental- assessment-1.4973906 Spicer, P. (2019, January 30). Give Northern Pulp a chance to succeed. The Advocate, 7. Thomson, A. (2019, May 23). Ottawa announces $100 M for Boat Harbour cleanup. CBC News. Retrieved from https://www.cbc.ca/news/canada/nova-scotia/boat-harbour-remediation-cleanup-project-1.5146340 Tutton, M. (2018, December 20). Northern Pulp granted injunction to end fishermen’s blockade. The News, A2. Vibert, J. (2019, April 1). Northern Pulp’s future is in McNeil’s hands. The Chronicle Herald. Retrieved from https://nouveau-eureka-cc.libproxy.stfx.ca/Link/stfxA2T_1/news·20190401·HHW·192 Withers, P. (2017, June 20). Officials with $133 M Boat Harbour cleanup get first look at contaminated sediment. CBC News. Retrieved from https://www.cbc.ca/news/canada/nova-scotia/boat-harbour-clean-up- estimated-133-million-1.2423846 Withers, P. (2019, January 16). Province says it’s not budging on Boat Harbour deadline. CBC News. Retrieved from https://www.cbc.ca/news/canada/nova-scotia/northern-pulp-boat-harbour-pictou- county-1.4981174 http://dx.doi.org/10.4135/9781529726541

SAGE © Mairi McKinnon and Brad S. Long 2020

SAGE Business Cases

Page 12 of 12 Employment Versus Environment: The Complexities of Managing the

Interests of Northern Pulp’s Multiple Stakeholders