Good morning Mr. Chairman and members of the Committee.

I am Robert Olszewski, Vice-President of Environmental Affairs for Plum Creek Timber Company, Inc. Plum Creek is the largest private timberland owner in the United States with nearly 8 million acres in 19 states. Owning this vast resource base of some of the world’s most productive timberlands allows our 2,000 employees to produce and sell forest products for a variety of markets. I have worked for state government, industry trade associations and private industry on forestry and environmental issues for the last 25 years.

I am here today to talk about Plum Creek’s experiences working within the Endangered Species Act to develop a variety of conservation agreements and plans to address both the biology and business of managing forest habitat for endangered species. The Nature Conservancy estimates that half of the country’s 1263 federally listed species have at least 80% of their habitat on private lands. Habitat for more than a dozen species currently protected under the Endangered Species Act can be found on Plum Creek lands including northern spotted owls, marbled murrelets, grizzly bears, gray wolves, bald eagles, red-cockaded woodpeckers, bull trout and pacific salmon.

Plum Creek is no stranger to conservation planning under the Endangered Species Act. Over 2 million acres, nearly a quarter of our corporate ownership nationwide, is under four Habitat Conservation Plans and a conservation agreement for grizzly bears in Montana.

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Plum Creek’s Central Cascades HCP, a 50-year plan covering 315 species on 121,000 acres in Washington State, was approved in 1996 and is now in its 9th year of implementation.

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The Native Fish HCP, covering 1.4 million acres in 2 northwestern states, is a 30-year plan that addresses the needs of 8 species of native trout and salmon and is now in its 5th year of operation. This HCP was the first one in the country to incorporate the Services’ “Five Points Policy”.

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s the largest private landowner in the Wisconsin statewide HCP for the karner blue butterfly.

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In 2001, the company completed a 30-year HCP for the red-cockaded woodpecker in Arkansas covering 261,000 acres.

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Plum Creek manages 75,000 acres of our land in Montana’s Swan Valley under a grizzly bear conservation agreement with the U.S. Fish and Wildlife Service, the U.S. Forest Service and Montana Dept. of State Lands. This agreement was completed under Section 7 of the ESA and has been in place since 1995.

These agreements were not easy to complete. The commitment is expensive, time-consuming and requires us to open our operations to public scrutiny in an unprecedented fashion. They have worked successfully for Plum Creek because of the location and characteristics of our land ownership.

But these voluntary conservation agreements under the ESA have indeed solved problems. The listing of the northern spotted owl in 1990 and subsequent federal “guidelines” trapped over 77% of Plum Creek’s Cascade Region in 108 owl “circles.” Indeed, with every new listing, Plum Creek was skidding closer to becoming the “poster child” for the taking of private lands. For us, the answer was the advent of HCPs and other agreement tools combined with incentives such as the “No Surprises” Policy. Plum Creek and the federal government have accomplished concrete contributions to the conservation of endangered species.

Our HCP’s and conservation agreements have been in place long enough to see the progress made on the ground. In our Native Fish HCP, over 5600 miles of logging roads have been “reconditioned” with surfacing and drainage to reduce sediment leading to fish-bearing streams and improved fish passage with use of “fish-friendly” culverts and bridges. Conservation commitments in the Arkansas red-cockaded woodpecker plan have been completed years ahead of schedule and breeding pairs have been increased from 9 to17 in Plum Creek’s 3,000 acre RCW conservation area.

Mr. Chairman, with proper incentives, these voluntary agreements can lead to even greater conservation outcomes. The Central Cascades HCP provided the stimulus to complete the largest land exchange in Washington since the 1940’s, with 39,000 acres transferred between Plum Creek and the U.S. Forest Service. This exchange allowed the federal government to acquire more property for backcountry recreation while Plum Creek achieved more efficient operations by consolidating our ownership. The HCP allowed Plum Creek to fully value its land for the exchange without the uncertainty related to the presence and future regulation of endangered species on our property.

With the assistance of federal funds from the Cooperative Endangered Species Conservation Fund authorized under Section 6 of the ESA, the state of Montana has purchased the largest conservation easement west of the Mississippi River on 142,000 acres of Plum Creek property in the Fisher and Thompson Rivers within the Native Fish HCP. These Section 6 funds, which are granted for land acquisition within HCPs, have also been instrumental in the recent purchase of 1,100 acres of Plum Creek property in northwestern Montana by the Montana Department of Fish, Wildlife and Parks. In the Ouchita River of Arkansas, Plum Creek and the U.S. Fish and Wildlife Service are engaging in the development of a Safe Harbor Agreement for the red-cockaded woodpecker on property adjacent to our HCP. The planning and habitat improvement work now occurring on this 12,000-acre ecologically important area of mixed pine savanna and intermingled bottom land hardwood has the potential to more than double the red-cockaded woodpecker population from 20 to over 50 territories. The potential acquisition of the area by the Upper Ouchita Wildlife Refuge is the greatest incentive driving this ESA conservation project.

Some academics and conservation organizations have been critical of HCPs, citing the lack of “good science” and public involvement in their development. We would like to dispel this myth and offer this example. When Plum Creek created its first HCP in the Washington Cascades, we assembled a team of scientists representing company staff, independent consultants and academic experts. We authored 13 technical reports covering every scientific aspect from spotted owl biology to watershed analysis. We sought the peer reviews of 47 outside scientists as well as state and federal agency inputs. We conducted over 50 briefings with outside groups and agencies to discuss our findings and obtain additional advice and input. During the public comment period, all HCP documents and scientific reports were placed in 8 public libraries across the planning area. It is important to note, Mr. Chairman, that all of the science and planning completed in our HCPs and conservation agreements has been made available to other landowners and agencies developing their own conservation plans.

Recommendations

As confident as we are in the value and success of voluntary agreements under the ESA, there are several recommendations we think would make the ESA conservation planning process more “user-friendly” and effective.

First and foremost, more incentives are needed because they fuel the innovation and commitment for private landowner participation. We believe the “No Surprises Policy” should be codified in law. This policy was an important incentive for Plum Creek to embark on the development of its first HCP. These agreements provide more predictable outcomes for the government and the “No Surprises” policy balances the bargain by making it a more secure deal for the landowner. Codifying the “No Surprises Policy” will induce more landowners to work with the Services to develop more voluntary agreements.

Congress must authorize appropriate funding of the Department of Interior’s HCP program to continue the important work discussed here. We recommend increased support for Section 6 of the ESA, which includes the Cooperative Endangered Species Conservation Fund to support development of HCPs and land acquisition within functioning HCPs and other conservation agreements. The support of Congress for voluntary endangered species conservation also includes support for the U.S. Fish and Wildlife Service and National Marine Fisheries Service to acquire, train and retain the skilled and seasoned personnel needed to craft and monitor these agreements with private landowners. Mr. Chairman, HCPs and other ESA conservation agreements are not only science plans but also business plans, which commit millions of dollars of a company’s assets in a binding agreement with the federal government. The stakes are high for both conservation and shareholder value in private timberlands. The substantial commitment made by private landowners to develop and implement these voluntary agreements must be matched by a commensurate investment from the federal government.

With regards to regulatory and policy issues, we would like to make the committee aware of two areas of conflicting regulation that significantly complicate and delay the completion of conservation agreements under the ESA. The first is the National Historic Preservation Act, which requires the federal government to “authorize and permit” any activity which may adversely affect existing or potential historic sites. When permitting the incidental “take” of habitat under the ESA, the federal government believes it is compelled to evaluate the potential of ESA-permitted activities to conflict with NHPA. This sets in motion a process, which can require private landowners to commission expensive surveys of potential cultural and archeological resources on their land, often with extensive delay and no benefit to the conservation of either historic sites or endangered species. Congress should pass statutory language, or include in the legislative history to make clear Congress’ intent to exempt ESA conservation agreements from NHPA review.

Moreover, the National Environmental Policy Act is triggered by the development of Habitat Conservation Plans, Safe Harbor Agreements and other ESA agreements. We have found the generation of environmental impact statements and assessments under NEPA to be an expensive and redundant process, since the “preferred alternative” is the HCP or other agreement that is already well documented and described as a result of work with the Services. Combined with the complexities of working with 2 federal agencies like the US Fish and Wildlife Service and National Marine Fisheries Service, NEPA compliance becomes an unnecessary and powerful disincentive for large and small landowners to engage in the ESA voluntary agreement process. Regulatory language should be developed which can require adequate public review and input to ESA voluntary agreements without engaging the landowner and agencies in the parallel and redundant NEPA process.

Mr. Chairman, I thank you for the opportunity to testify before you today. The testimony you will hear today should provide the committee with a better understanding of the variety of ESA voluntary agreements and how they have been applied on our property. I hope my testimony has given you an appreciation of the strategic value of these voluntary agreements for both the conservation of species and protection of resource economies.