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Sixth in a six-part series on one of Canada's richest families: The House of Irving.
Shelly Mountain’s first and only encounter with Jim Irving did not go swimmingly.
It was April of 2012 and Mountain had traveled to the University of Maine’s campus located in Fort Kent in northern Maine to attend a forum about a proposed open pit mine to be built at Bald Mountain in that part of the state – about 56 kilometres west of Presque Isle – where gold, silver, zinc and copper are in abundance. Saint John, NB-based J.D. Irving Ltd. owns the 500-acre site and wants to develop a mine there. As one of the Canadian conglomerate’s co-CEOs, Jim Irving was attending the forum to make his case.
After the forum ended, Mountain, a blunt-spoken businesswoman and mother who lives in Mapleton, was introduced to Irving, who was informed Mountain’s husband was a logger who hauls Irving wood.
“Well, you then know how good our roads are in the woods,” said Irving.
“I know that you block off a lot of the roads that allow us to get to the fishing holes,” replied Mountain.
“Well isn’t that just like a woman – she’s never satisfied,” said Irving, according to Mountain's recollection. Although Irving doesn't recall meeting Mountain or saying those words to her, she said she walked away feeling stunned.
Moreover, while initially supportive of developing the Bald Mountain mine, she came to realize the pollution it could generate – especially arsenic and sulfuric acid – would threaten the rivers and lakes in that region, which attract a booming business in fishing, hunting, guiding and tourism. According to the Wall Street Journal, the area is "treasured by anglers and hunters" — but also afflicted with high unemployment. She soon became an activist against the mine.
Mountain also says Jim Irving’s attitude was off-putting. She recalls him talking at the forum about flying over Maine in his private jet. “He was a little unaware of his audience, to say the least,” remembers Mountain. “We are all struggling to make a living and he’s flying around in his private jet and needs more money, you know."
The battle over the proposed Bald Mountain mine is one of a number of controversies that have dogged the Irvings as they’ve expanded their operations and reach into Maine and New England. Many in Maine now fear the heavy-handed influence the Irvings wield in New Brunswick – where they dominate the province’s economic and political systems – are being replicated in this northeastern US state. In fact, a three-part series produced by the Maine Center for Public Interest Reporting about the Irvings published last year was entitled “Maine: Irving’s New Colony?”
“They are the dominant player in my area,” says Troy Jackson, a logger and former Democratic state senator in northern Maine who’s butted heads with the Irvings for years. “They are one of the dominant players state-wide.”
In fact, the Irvings’ presence in Maine goes back to the 1940s when the empire’s founder and patriarch, KC Irving, bought up timberland in the state to feed his mills in Saint John, NB. Today, J.D. Irving is the largest landowner in Maine, controlling 1.25 million acres. All told, the Irving group of companies operates sawmills, farms, railways, trucking, and convenience stores, 165 gas stations and is the state’s largest seller of gasoline, pumping out more than 14 million gallons of oil per month by 2013. And now, the Irvings have set their eyes on mining.
“Instead of building 200 outlets for whatever they’re producing all over the world, they just keep expanding laterally… into Maine and the rest of New England,” says Lance Tapley, a Maine-based journalist who’s investigated the Irvings. “They have this kind of 'oozing out' into the nearby territories and controlling not only power in one economic area like oil — but in several. It’s just really different economic model that has not been followed by most of the large corporations in the country.”
Bald Mountain mine controversy
If one issue highlights why some Maine residents are worried about the Irvings’ encroaching influence, the battle over the proposed Bald Mountain mine stands above all the rest.
Developing a mine in that area has been bruited about for years, but never occurred due to pollution and economic concerns. Nick Bennett, staff scientist at the Natural Resources Council of Maine (NRCM), an environmental advocacy group, explains that copper, gold and silver is usually found in sulfide deposits. Yet when iron sulfide is exposed to air or water, he says, it creates sulfuric acid. “Which is very toxic and very destructive to the environment,” says Bennett.
Bennett says the sulfide content of Bald Mountain is extremely high, with levels reaching 50 per cent — pointing out that a mine with levels as low as 1 per cent can have problems. Bald Mountain also contains high levels of arsenic. “So you are going to get lots of acid leaching out of waste rock and tailings,” says Bennett. “You really couldn’t pick a worse site to mine because of the high sulphide content and because of the fact this is in the headwaters of really really good brook trout streams in Aroostook County. And a lot of people make their living off the quality of those streams – guides, tourism businesses. It would really do a number on them.”
Moreover, when NRCM investigated why previous owners decided against developing the mine, they discovered one reason was because it would have been difficult to avoid contaminating ground and surface water. In fact, J.S. Cummings, who originally found the Bald Mountain deposit, warned that if J.D. Irving received permission to build an open pit mine there, it would be a “debacle” because "undoubtedly there will be unwarranted environmental problems down the road." Cummings, in particular, was alarmed by the high arsenic levels in the sulfide.
J.D. Irving, however, says that their mining subsidiary, Aroostook Resources, "engaged leading scientists and mining experts to define best practices and to ensure the highest standard of environmental protection in the potential development." Noting that the area suffers from high unemployment and youth outmigration, the company suggests that by using modern technology and best practices, a mine could be developed which would not harm the environment.
Yet NRCM has questioned the claim about new technologies, saying that reverse osmosis is one method that J.D. Irving has cited - although a report from a mining consulting firm from a previous owner dismissed reverse osmosis as a viable option on the Bald Mountain site. (The company says that other technologies are available).
One hurdle to developing the mine economically is Maine's mining regulations, specifically as they pertain to the treatment of ground and surface water. J.D. Irving wanted the regulations changed so that the point from the mine to where the waste water has to be in compliance was set at a greater distance than the regulations called for. But Bennett says the further that compliance point is, the greater the risk of pollution seeping into the environment.
After intense lobbying from J.D. Irving, the Republican-controlled Maine legislature passed a law in 2012 to direct the state’s department of environmental protection to change its mining regulations to make the compliance point a greater distance. In 2014, Maine’s Republican governor submitted rules on this legislation to the legislature – which rejected them.
J.D. Irving, however, says that Aroostook Resources "worked with a variety of respected scientists and stakeholders to propose a modernization of 20 year old laws and rules which reflect best environmental and operational practices. The outdated legislation did not reflect modern mine technology and environmental improvements that have been realized since the 1990s."
Last year, for a second time, the rules were once again submitted to the legislature for consideration. By then, however, J.D. Irving’s lobbying methods were becoming an issue.
A key supporter, state senator Thomas Saviello, accepted a free private plane ride to Aroostook from Irving's lobbyists in 2013. Traveling with Saviello was J.D. Irving’s chief lobbyist, Anthony Hourihan; together they toured Irving-owned sites.
All told, J.D. Irving spent (US) $104,000 on 12 lobbyists last year in their bid to get the rules approved (in total, the company has spent at least US$250,000 on lobbyists since 2011 trying to get the laws changed and the mine into production).
In response, J.D. Irving said that "A majority of the monies spent on the process of modernizing the mining laws in Maine were expenses related to having experts available to the Environment and Natural Resource Committee as they undertook a review and revision of the original bill. All expenses incurred regarding these experts and their staff is reported as lobbying expenses."
Meanwhile, J.D. Irving was claiming the mine would generate up to 700 direct or indirect jobs. The NRCM found this estimate to be inflated, noting its two previous owners estimated it would create 80-130 and 75 jobs respectively (the latter sum was for a smaller mine).
J.D. Irving now says in this regard: "The previous owners had only planned to mine a small portion of the deposit, just the gold and silver. Our numbers were the result of an economic model run by well-regarded economists at Planning Decisions in Maine, based on a probable mine design and production which was put together by experienced mining engineers."
As the details of the potential environmental damage and costs to taxpayers emerged, public opposition snowballed. “The mining would ruin what we already have in terms of opportunities for employment,” explains Mountain. “Because a lot of people come up here for sporting and tourism and fishing and hunting.”
Moreover, Mountain says they are worried that taxpayers would likely end up paying to repair any significant environmental damage. “As it went along, I couldn’t find any examples where the destruction wasn’t more expensive than the mine,” says Mountain, “and so the profits all went to the company and the taxpayers were left to pay to clean up the mess.”
However, J.D. Irving said "the draft rules were all very clear that any mine developer in the State would need to fund a contingency fund to deal with any issue through a trust as a condition of operation. That is, the fund had to be in place before operations would commence."
Yet no calculation for the size of the contingency fund has happened. And in recent years, many mining disasters have been staggeringly expensive to taxpayers: for instance, the Summitville gold mine catastrophe (owned by a Canadian company) in the early '90s in Colorado has cost US taxpayers (US) $250-million to clean up, and the Mount Polley mine disaster in B.C. two years ago, when a tailing ponds broke, is looking at a clean up bill possibly as high as $400-million.
When the new mining rules came before the Maine legislature again last summer, they were resoundingly defeated. “To me, it was just irresponsible for them to consider mining at that site, let alone gutting our mining regulations for the entire state just so they could mine a very dangerous site that would cause major pollution problems,” says Bennett. “I think it was the most aggressive lobbying campaign I’ve ever seen.”
Jim Irving, however, has said that he is adamant his company will not move forward until it can be said with 100 per cent certainty that filtering technology will make all ground water affected or used in the mine safe for human consumption. “If I can’t go and drink the water at the end of the pipe coming from the mine, we shouldn’t be doing it,” he told one Maine newspaper. “We have to be honest about what we are doing [and] we hold ourselves accountable because as far as we are concerned, we are home here.” (Bennett retorts that drinking water standards are actually too low for water that impacts on fish and other ecology.)
Criticisms of forestry practices
But while the Bald Mountain imbroglio may have raised eyebrows in Maine about how the Irvings operate, their reputation in the forestry sector has also come into question.
Shelly Mountain’s husband has worked for 40 years as a logger in northern Maine and she says one impact the Irvings have had is keeping compensation levels for logging low. “Rates have not gone up at all over 20 years now, and expenses have gone up tremendously,” she says.
J.D. Irving, on the other hand, has said "Productivity of loggers and truckers has been a focus of our operations for many years, and earnings per week have improved steadily for a number of years on Irving’s operations... Irving Woodlands monitors its contractor health and earnings very closely through weekly and 8 week reviews. More specifically, its FSC certification has an indicator that it pays fair and reasonable compensation to its contractors. These audits are a matter of public record."
Mountain also says loggers in that region are, in effect, pressured to buy everything from the Irvings, whether it’s equipment, fuel and garage services. “It’s like the old coal mining companies where you live in their houses and you’ve ended up owing them at the end of the week,” she says. “So everybody owes them.”
The company, however, says that "We do not have outlets for equipment. We do however do bulk buys for a large number of machines to create better, more competitive pricing for contractors that wish to participate."
J.D. Irving’s most controversial action in forestry has been over whether it is sidestepping environmental protections. For example, J.D. Irving contributed (US) $125,000 to successfully help defeat the 1996 Maine referendum that would have banned forest clear-cuts, according to Jacques Poitras' 2014 book, Irving vs. Irving.
But its most significant victory occurred in 2012 when the company struck a five-year deal with Maine’s Forest Service whereby J.D. Irving’s 1.25 million acres fell under into a little known state program called Outcome Based Forestry (OBF).
Under this program, Irving was exempted from certain provisions of the state’s Forest Practices Act that cover clear-cutting – in return for meeting other environmental and economic standards. “The thing that was pretty stunning about it was they did it secretly,” says Cathy Johnson, a lawyer with NRCM who follows Irving’s forestry practices. “We only found out about it about 18 months after they’d signed a deal… Irving definitely pulled a fast one here.”
When J.D. Irving’s participation in the program became public in 2013, it provoked an outcry from some lawmakers and Maine’s environmental advocates, who called it a “loophole” that put Maine’s forest at greater risk for dangerous clear-cutting. The Forest Practices Act calls for buffer zones of forests that must be created around clear-cuts. Now, says Johnson, “Irving does not have to leave a buffer around their clear-cuts. Theoretically they are setting aside other lands for similar quality and quantity that provides the wildlife and ecological benefits that we would’ve preferred. But there is no way to test, in fact, if that is happening. I suspect what is happening is they are clear-cutting and not creating buffers and leaving lands who would not have been cut anyway.”
J.D. Irving responds to this allegation that the OBF program "is based upon science and not prescriptive regulations that aren’t based in science. OBF demands a higher standard of accountability. The activities on the ground must meet the criterion laid out by the State to achieve the State’s forestry and environmental objectives. The OBF program also requires a technical group of experts to review the operations and report to the forest service. We believe OBF results in better forest management and more productive forests and more vibrant local communities." They also say that in regards to buffers around clearcuts: "We remain subject to many regulations regarding buffer zones along environmentally sensitive areas and restrictions regarding large clearcuts."
Johnson also says J.D. Irving insists on building straight roads through the forests in order to save money on transportation costs. “They don’t wind around wetlands and important habitats if they can possibly avoid it,” she says. “They want them straight so their trucks to drive as fast as possible. Their forestry (practices are) very intense.”
J.D. Irving defends their forestry practices by claiming they have an active watercourse management program and maintain over 94,000 acres or 5,917 miles of watercourse buffers. "We comply with all state and federal regulations and our responsible watercourse management is annually audited by the Sustainable Forestry Initiative (SFI) and the Forest Stewardship Council (FSC). These audits are a matter of public record." In regards to straight roads, the company says "they are a policy which was adopted many years ago, straight roads allow safer roads for viability for traffic, but also take less land out of forest production by minimizing the area disturbed with road building. The fact is that Outcome Based Forestry has reduced the amount of stream crossings and road building on our Maine woodlands. Road building is down by about 30 per cent — better for the environment and the independent contractor."
Then there’s what happened to a 2004 law that allowed independent loggers and forest workers to collectively bargain with large landowners. “When we passed it, the Irvings ended up changing their whole operations in Maine (to get around the law),” claims former state senator Troy Jackson, who says J.D. Irving set out to sabotage the act (which was never actually enforced by state authorities). In 2009, the company was accused by Jackson of seeking to “blackmail” the legislature over this law by cutting production in its mills and laying off workers.
When National Observer asked about the accusation of blackmail and the actions it took in 2004, the company did not respond to this issue.
Irving Oil's monopoly practices
Meanwhile, Irving Oil has run into blowback in Maine too. In 2009, the company made a bid to buy ExxonMobil’s oil storage and transportation assets in Maine, specifically ExxonMobil’s petroleum products terminals in South Portland and Bangor, as well as a pipeline connecting the two terminals.
The state intervened, arguing this purchase would reduce competition, and stopped Irving Oil from buying all of the assets, allowing other companies a stake in the operations. “We have challenged this transaction for one very simple reason,” said the Attorney General at the time, William Schneider. “Promoting competition in an industry where consumer impact is high is critical, particularly in these times of rising fuel and gasoline prices.”
This was not the only instance where Irving Oil has run into accusations of monopoly influence. In the late ‘90s, a company running gas stations in central Maine launched an anti-trust action against Irving Oil. The suit said Irving Oil was undercutting their competitors by providing oil to its Irving gas stations from Irving Oil's refinery at a below-market price – thereby giving them an unfair competitive advantage. The lawsuit claimed Irving Oil was breaching US competition law. (The lawsuit failed).
Today, people like Shelly Mountain are alarmed about the burgeoning power of the Irvings, heightened since her run-in with Jim Irving four years ago. “What I have always heard is about Jim Irving is him driving around in the woods and the more chrome he sees on pickups the lower the (pay) rates go,” she says. “If he thinks you’re doing more than just surviving he thinks you’re doing too well.”
Through its company's lawyers, J.D. Irving says this claim about Jim Irving has no basis in fact.