STRIKE SPECIAL
Page 2
September 9, 1388
Tribal structure, self-governing powers sometimes confusing
Many outsiders looking in on
the Warm Springs reservation
are sometimes confused by the
organization that they see. They
are used to dealing with state
and local governments, corpo
rations and businesses In their
own communities. Indian tribes
are unique organizations and
the Warm Springs tribe is no
exception. Outsiders should not
feel alone as tribal members,
too, are sometimes confused by
the organization and do not fully
understand the origin of the
governmental structure and how
it got to where it is today. Hope
fully, the following will clarify
the whys and hows of the Con
federated Tribes of Warm
Springs as we know them today.
The Confederated Tribes of
the Warm Springs Reservation
of Oregon is a confederation of
three Indian tribes; the Warm
Springs, Wascos and the Pai
utes. In 1855 the United States
signed a treaty with the tribes
and bands that make up the
present Wasco and Warm
Springs tribes. That treaty es
tablished the present-day reser
vation and contained, among
other provisions, a guarantee
that the reservation would be
maintained for the exclusive use
of the tribes.
Members of the Paiute tribe
arrived on the reservation some
20 years later at the conclusion
of the Snake Indian wars.
In 1934, Congress passed the
Indian Reorganization Act,
which was a major milestone in
federal Indian law. Underlying
the Act was Congress' belief
that Indian tribes were best able
to govern their reservations and
provide for their own futures.
The historic federal paternalism
that had been the foundation of
earlier policy was clearly a
failure.
Tribe, In 1938, took
advantage of IRA and
became self-governing
In 1938 the Warm Springs
tribe chose to take advantage of
the provisions of the Indian i
Reorganization Act and adopted
a constitution and by-laws
formally organizing their tribal
government. These documents,
approved by the Secretary of
the Interior, joined the three
tribes into a confederation and
provided that the tribe would be
governed by a Tribal Council.
This Council was composed of
eight elected members and three
lifetime chiefs, one from each
tribe. The Tribal Council was
given broad powers of gover
nance over all affairs on the
reservation. The people also
retained a referendum process
by which the people could have
a direct voice in government
affairs.
In addition to the constitution
and by-laws, the Confederated
Tribes also obtained a federal
corporate charter. The charter
was designed to allow the tribes
to not only carry out govern
mental functions such as police
and fire, but to also manage
their resources in a business
like manner and to conduct bus
iness with private, state and
federal businesses and entities
outside reservation boundaries.
The reservation was Isolated
before World War II.
Progress changed that.
Before World War II. reserva
tion life was very isolated. That
isolation was reduced after the
war with the construction of
U.S. Highway 26 through the
reservation and with the first
commercial sales of timber.
During the 1950s, the Pelton
project was licensed and began
construction and operation. The
Tribes also received compensa
tion from the inundation of their
traditional fishing grounds at
Celilo Falls and used this
money to begin investing in their
future. Those funds were used
to purchase the original property
for Kah-Nee-Ta and to begin its
development as well as eventu
ally figuring into the purchase
of the mill in 1967.
After the adoption of the con
stitution and by-laws the tribal
organization began to develop
and grow. Resources were very
limited in those early days and
Tribal Council conducted their
work with the assistance of the
numerous committees they had
appointed. The committee sys
tem is still in existance today.
However, as activity on the
reservation grew it was neces
sary to begin forming a more
sophisticated organization to
deal with existing tribal resour
ces. Full time tribal employees
were hired to provide govern
mental services. These employ
ees were generally administered
by the General Manager or
SecretaryTreasurer of the tribe.
The tribe also had to examine
ways in which it could manage
its resources in a business-like
manner. This was done through
the establishment of an enter
prise system. The tribe's corpo
rate charter was amended to
permit the establishment of var
ious enterprises to be operated
under a plan of operation
adopted by the Tribal Council.
Enterprises generally have a
board of directors that are re
sponsible for administering the
enterprise and reporting to and
carry out the orders of Tribal
Council. Generally, the tribes
have tried to appoint a mixture
of Indians and non-Indians to
these boards. Non-Indians have
been particularly helpful in pro
viding expertise that may not
presently be available within the
tribes themselves.
WSFPI Is not the only tribal
enterprise set up under the
corporate charter system.
The tribes depend upon the
profits from these enterprises to
fund the operation of tribal
government. Under the consti
tution there is limited taxing
authority and thus revenue from
operating enterprises is critical
to the existence of the tribal
government.
Warm Springs Forest Products
Industries is one such enterprise.
Others include Warm Springs
Power Enterprises, Kah-Nee-f a
Vacation Resort and Warm
Springs Apparel Industries.
Warm Springs Forest Products
Industries is particularly impor
tant because of the role it plays
in the overall management of
the tribes' forest resource. That
forest resource is managed in a
cooperative effort between the
Bureau of Indian Affairs and the
Confederated Tribes. The stump
age payments established by
the Bl A are also a critical source
of revenue for the tribal govern
ment. In addition, Indian loggers
and haulers depend upon the
continued operation of the mill
for their livelihoods.
Many people are unaware that
the tribes are a sovereign gov
ernment with the ability to pass
and enfo,rce their own laws. As a
general rule, the laws of the
state do not apply on the reser
vation. Rather, tribal law, and in
some Instances, federal law,
applies. However, there are some
exceptions. For instance, state
police do enforce traffic laws
against non-Indians on Highway
26 and state courts generally
have jurisdiction over crimes
committed by non-Indians on
the reservation. However, It is a
fundamental principle of federal
Indian law that an Indian tribe
possess the sovereignty and
power to make its own laws and
govern its own territory.
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Letter supports mill's
position on proposals
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Log size mandates changes
The need for changes in log
ging practices and manufactur
ing methods has long been a
concern of WSFPI management,
Tribal Council and tribal man
agement and some local loggers.
All have seen the average log
size headed for WSFPI go from
over 14 inches to an average of
anywhere from six to 12 inches
in diameter. As the logs get
smaller so go the profits.
The problem of decreasing
log size is a fact but what's the
answer? Would a multi-million
dollar small-log facility be the
cure or should the logs be
exported to Japan, putting in
jeopardy the many jobs currently
held by tribal members. Unfor
tunately, it's economics versus
people again.
In a February, 1986 letter to
Tribal Council, WSFPI General
Manager Bob Macy noted that
the BIA branch of forestry had
projected that over 40 percent
of the annual allowable cut on
the Warm Springs block would
be smaller than 13Vt inches in
diameter. The Bureau also pro
jected that the number of small
logs would continue to increase
through the end of the century.
The identification of this
problem facing WSFPI led to
the employment of Dubai, Beck,
Harris and Humphries, an engi
neering firm, to perform a feasi
bility study to assist in seeking a
solution to the problem. The
engineering firm, after a full year,
recommended that a small-log
facility, preferably a random
length sawmill, be installed.
The facility would be flexible in
that it could produce studs when
favorable market conditions
occurred.
A two-day in-house test by D,
B.H& Hat the sawmill opertion
showed that the end product of
small logs was less valuable
than the end product of larger
logs and that time and piece
counts were both critical fac
tors in efficiency and profit
ability. In an availability report earlier
this year, BIA forestry reported
to Tribal Council that they
"assisted WSFPI in developing
plans to keep their mill competi
tive and to maximize income
from the processing of timber
from their forest while at the
same time serve as an employ
ment center for tribal members. "
It was important that the "mill fit
the forest and not try to make
the forest fit the mill, "the report
stated.
The existing facilities are un
able to efficiently process the
current supplies and because of
that inefficiency, WSFPI is pro
jecting a $900,000 loss between
July 1, 1988 and December 31,
1988. The strike, says Macy, will
force a greater loss.
"Without having a proper facil
ity to process the small logs,"
says Macys, "it will be difficult
to look at any cost increases.
On the contrary, if the entire cut
in the future has to be processed
through our existing facilties,
we would be faced with other
cost cutting measures which
could consist of salaries and
wages or look to the tribe to
subsidizing the operation. "
A ;
Dear Employee,
On August 8, 1988. the employees of
WSFPI began a work stoppage against
Warm Springs Forest Products Indus
tries. Because of the significant and
adverse impact of this economic action,
the Company felt compelled to com
municate with its employuees. As you
evaluate your individual situation in
regards to this action by employees, it
is important that you remain aware of
the present circumstances at WSFPI.
On Friday, August 5, the Company
met with the employees' representa
tives to respond to proposals on major
industry issues. That proposal con
tained several substantial cost items
directly increasing the Company's
operating expenses. We explained that
due to the present economic situation
at the Company, we could not bear the
additional costs presented by the em
ployees' representatives.
In support of our response, we made
an extensive effort to explain the
, , , Company's present financial status.
First, our projected loss for the period
between July to the end of the year is
one million dollars. The mill has not ,
made a dividend contribution to the
Tribe since fiscal year 1983, and the
projected loss for this year indicates
that no such contribution will be made
for the fifth straight year.
In addition, related to our projec
tions for the future, the mill's timber
supply is in a state of transition. We are
looking at a future where our supply
will primarily consist of small logs.
Because of this, our present operations
will not be profitable without new con
struction. Our goal is to build a new
small log mill so that we can adjust to
handle the change in our timber supply.
We are currently in the evaluation
stage of construction a small log mill
and one consideration is the company's
ability to fund that building. Of course,
the additon of a small log mill will
benefit both the Company and our
employees.
A third consideration which was
discussed was the Company's restricted
bidding on timber. Because of certain
restrictions, WSFPI does not have the
flexibility in timber supply that other
companies have. This increases the
need for the Company to find alterna
tive means to stay competitive and
viable.
In support of our conclusion that the
Company was unable to pay the addi
tional costs contained in the employee'!
representatives proposal, we offered to
open our financial records so that our
position could be verified. We pre
sented an opportunity for the employee'!
representatives to have an auditor
inspect our financial statement and
records. Instead, a work stoppage was
initiated.
After thoroughly justifying why the
proposal was unacceptable, the Com
pany made a counter-offer. Our por
posal was for a one-year extension of
the present terms and conditions of
employment with a few exceptions.
The Company did not propose reduc
tion or a long-term freeze. Rather, we
proposed the one-year extension in the
hope that we can at that time look at
doing some positive things.
We value our employees and remain
hoepful that this situation can be
resolved. At the same time, we sin
cerely believe that our proposal is
necessary and will have a long range
positive impact on both the employees
and khe Companyl v
The Company has evaluated its alter
natives for continuing operations. Our
present lack of production does not
move towards resolving our situation,
but only adds to the present concerns.
Accordingly, the Company has deter
mined that it is necessary to resume
operations as soon as possible. Those
employees wishing to return to work
should notify the personnel office
(Woody, at 553-2100) by August 15,
and will be notified of a schedule for
work. Commencing August 22, the
Company will begin filling vacancies
created by the work stoppage.
We hope it will not be necessary to
hire additional workers. Please recog
nize that WSFPI has an obligation to
the community, its customers, and the
Confederated Tribes to continue a a
viable operation.
Again, as you evaluate your individ
ual situation, we hope you will con
sider the facts at WSFPI. Whether or
not you participate in the work stop
page is your choice alone.
Sincerely,
Robert Macy, Sr.
Stumpage: Where does it
come from, where does it go?
Stumpage. What is it and how does it fit into the scheme
of Warm Springs Forest Products Industries and tribal
operations?
Stumpage is the value of timber as it stands in the forest.
Stumpage rates are established by the Bureau of Indian
Affairs.
Tribal timber revenue comes from two different sources
the McQuinn Strip and the Warm Springs block. That timber
on the McQuinn Strip block, which is competitively bid
upon, is currently sold strictly to outside mills.
Because all timber in the Warm Springs block is bought
exclusively by WSFPI, no bidding occurs. All logging units,
both in the McQuinn Strip and the Warm Springs block,
have individual appraisals. All characteristics, such as
terrain and havest treatments, are taken into consideration
when appraisals are conducted and stumpage rates are set.
One reason to establish stumpage prices is to ensure that
the tribe is realizing the fair market value of their timber
resource. In addition, this also gives mill management the
opportunity to determine operation efficiency.
The salepurchase agreement between the Confederated
Tribes and WSFPI is unique in that the tribes, as owners of
WSFPI, charge themselves for their own timber.
Any further questions concerning stumpage can be
directed to the BIA Forestry department.
Five M's figured into business' success
On August 29, 1966, tribal members,
through referendum, granted the Tribal
Council the authority to "borrow, not to
exceed $15 million for the purpose of
buying, leasing or constructing and
operating timber operating facilities...." In
a letter to voters, Council explained that
the "woods products complex.. ..probably
would replace the sawmill of the Warm
Springs Lumber Company...." After
allowing for closure of the existing, it was
estimated that an additional 550 jobs
would be available at the mill with hiring
preference being given to tribal members.
However, before the issue went to tribal
voters, Tribal Council spent much time
discussing the possibilities. According to
Council minutes dated in 1965, 1966 and
1967, all options were taken into
consideration before finally deciding which
proposal would be the most beneficial to
the tribal membership.
In early 1965, Council began discussing
the possibility of buying and or
constructing a mill on the reservation to
process reservation timber. More than one
feasibility study was conducted; all studies
predicted success.
Though the Tribe eventually purchased
the sawmill from Sam Johnson, a Harvey
Gunderson figured heavily in the original
dealings. His proposal was to build a
plywood mill at Dry Creek. The proposal
did not inlcude the construciton of a
sawmill but provided for the sale of
peelable logs directly to other sawmills.
Somewhere down the line, negotiations
with Gunderson failed, and the Tribe opted
to purchase the sawmill, plywood plant
and equipment and the veneer mill and
layup equipment from Johnson. A fire in
August, 1966 at Jefferson Plywood in
Madras, created the opportunity for
Jefferson Plywood to help the tribe get into
the woods products business. Management
responsibilities were given to Persh
Andrews, who was a partner of Jefferson
Plywood. The 20-year management
contract was terminated five years later to
"eliminate the 10 percent of net profits paid
to Jefferson Plywood as incentive fee and
to enter into a contract with" Andrews in
lieu of the original contract. Andrews
served as general manager of WSFPI until
October, 1977.
Throughout the three or so years of
discussion, tribal member employment,
community economic impact and
reservation stabilization were all
considered. Five items that would
determine the soundness of the business
were the five 'Ms': money, management,
market, manpower and materials.
In a July, 1966 meeting, it was reported
that job opportunities to residents in the
area were appealing. In addition, said one
Council member, "the Confederated Tribes
are the true owners of their timber and
resoucres and it is only right to try to get
the most from the resources."