Minutes January 2003

Fredericton NB, January 31, 2003
Meeting Notes
Compiled by: Stewart Cameron, CFS-AFC

Participants:

Nelson, Bernier, Chaichem Pharma
Stewart Cameron, CFS-AFC
Peter deMarsh, NB Federation of Woodlot Owners
Khalil Gorman-Asal, Business New Brunswick
Bill Hamilton, NB Dept. of Natural Resources and Energy
Lise Harrison, Serex (on behalf of Chaichem)
Ramsay Hart, Falls Brook Center
Anne LeBrun Ruff, INFOR Inc.
Colin Marr, Atlantis Bioactives Corp.
Simon Mitchell, Falls Brook Center
Jay Phillips, CFS-AFC
Kerry Scott, Active Botanicals Co. Ltd.
Eric Smith, Chatham Biotec. Ltd.
Ron Smith, CFS-AFC
Paula Stewart LeBlanc, CFS-AFC
Elise Turcotte, Quebec Assoc. of Land Owners
Sterling Wright, Atlantic Taxanes Ltd.

1. Welcome and Introduction:

[R. Smith] Suggestions for items to be added to the agenda:

• [E. Smith] an industry update
• [Mitchell] possibility of plans for an NTFP side event by CFS

2. Discussion of Minutes of Dec 2002:

[Scott] Rephrasing on p.9 is required. The lower cost of biomass in Atlantic Canada may cause to be focused there, which may not be good for the Atlantic Canada inventory.

[Turcotte] When will the website be ready?

[R. Smith] Work will start on it in February, and it will probably be up in March/April.

Re: Summary Section of Minutes: [R. Smith]

• Sustainable harvest trials have been established, but there are too many plants for pictures. They will be taken this coming summer.
• Daoust and Lalonde will assist with a correct French translation.

Re: Update on information for an FDA inquiry [Cameron]

• The contact person for the inquiry was Nancy Sager, Assoc. Director for Quality Implementation Staff, CDER, Office of Pharmaceutical Science (301-594-5633). She was asked two questions.

• How do you ensure FDA compliance?
• There are two options to ensure compliance for an operating company (actively marketing a pharmaceutical product):

(1) FDA have an enforcement group to audit, but they focus on safety and efficacy: enforcement is discretionary.

(2) the FDA accepts third-party reports, and they do have a system to process complaints.

• They are obligated to update a DMF II if changes occur.

• How does the FDA adjudicate – what is the process?
• Findings are not reviewed as part of a DMF II, but as one step in the ANDA process. There can be a finding that either more information is needed, or that there is ‘no significant impact’.

• The FDA always receives the EA information. They are obligated to look at EA data no matter where [in the world] the biomass grows for a product for sale in the US.
• The contact to receive complaints is the FDA Ombudsman, 301-827-3390, e-mail ombuds@oc.fda.gov.

Re: “General endorsement of intent …”

• [Hart] FBC is actively looking for funding. They will be submitting today to the Environmental Trust Fund for a verification and audit system study. They would be interested in other sources of funding they can access as a non-profit NGO.
• [R.Smith] The objective is to devise which is thorough but economic to implement.
• [Mitchell] Other funding is critical to continued participation of FBC in the Working Group.
• [Hart] Re: experiences with other species; there are not many other examples to use as models. He will look at general auditing methods soon to see what is useful – FBC appear to be setting the course rather than following it.
• [ Hamilton] Re: progress within DNRE; there appears to be nothing within the Principles which would conflict with departmental approval. He does not anticipate a problem with acceptance.
• [R. Smith] Brian White, NS DNR, has mentioned that NS is unlikely to have any problems.
• [ Hamilton] would be uncomfortable with endorsing third-party auditing on Crown Land without formal approval, but in principle, such auditing is in agreement with DNRE goals.

3. Objectives and Guiding Principles

[Scott] The Working Group should be the sounding board for the industry. Industry members should be able to come to the WG with problems. Even if the WG is not a regulatory body, there could be incorporated an obligation to discuss disputes. He emphasized the positive aspects: branding of Taxus, information on the exchange of technology that could be offered to industrial members.

[E. Smith] Terms of reference would only pertain to members within the WG – e.g., consideration of Chinese interests which want much product for export overseas where it can be cheaply processed would not be covered. Local complaints could be forwarded on to third-party auditing, followed by a warning, and if necessary a citation to a responsible authority.

• [Mitchell] There is usually a corrective section contained within an auditing package.
• [ Hamilton] There should be an authority for the resource – e.g., DNRE could revoke permits for Crown Land harvest – but what further ‘big stick’ is available? The bottom line: if an individual woodlot owner wishes to allow his land to be pillaged, should the WG try to stop it?
• [Wright] The WG is about as diverse a group as can be found, whose mandate is to promote sustainability; there is no right to enforce accountability.

[R. Smith] A question for CITES might be: if T. canadensis is not on the CITES list and spans both private and public (provincial) land – over several jurisdictions – what opportunities exist federally for regulation – e.g., export controls?

• [E. Smith] Quebec has taken steps to protect both private and public lands by implementing marketing board control over all harvesting.
• [R. Smith] Smith and Cameron could do a little more homework [with Environment Canada] on what could be put into place federally.

[Hamilton] Given the different levels of control – landowners, marketing boards, Crown land controls, federal measures – he would like to see wild resource management as a WG objective.

[Gorman-Asal] asked for clarification: is the PQ method using marketing boards a model that could be followed by others?

• [E. Smith] Provincial marketing boards outside of PQ do not have as much power.
• [DeMarsh] There are PQ boards that have total sales exclusivity, while others have rights to a limited range of products. There is nothing to prevent a similar arrangement in NB. The problem is that Taxus is a new industry – many woodlot owners are unaware of what is on their property.
• [Gorman-Asal] Is there not an opportunity for education provided through the NB marketing boards?
• [Mitchell] NS does not implement marketing boards to the same extent [as NB or PQ], nor does PEI.
• [E. Smith] It is worth noting that a woodlot owner with a lot of Taxus can make just as much from the biomass as from timber.

[DeMarsh] They had a plan in place for a small-scale trial for marketing. It has not yet begun, but they are pursuing it. However, it may not resemble the ones in PQ.

• [E. Smith] re: training; part of the funding goes to the community college, part to instruction, so part could also go toward landowner education.
• [Mitchell] There may be no need to implement woodlot groups (as marketing boards). Good tracking and control by the harvest contractor would also suffice.
• [DeMarsh] There are three boards in the main production areas that are willing to get involved. Taxus falls under the marketing boards’ mandate.
• [R. Smith] Is it the mandate of the WG to be proactive about the sustainable use of ground hemlock?

[ Hamilton] Why are the large freehold owners not at the WG meeting? They hold one-third of the land in NB.

• [R. Smith] Their core business is timber, not NTFP’s.
• [Wright] The NB Forest Products Association is aware of the WG, and would probably join if asked.

[Scott] If the ‘big stick’ approach is employed – e.g., approaching the FDA – there is the risk of large or drastic actions occurring. It would be preferable to work from within the WG in a positive fashion.

• Branding and having WG membership means that responsibility is conferred to group members by default.

[R. Smith] Are any additional terms of reference required? It appears there is general agreement on sustainable management of the resource.

• [Hart] Additional items which might be included: education, research, promotion of the resource. Does enforcement need to be included?
• [Cameron] WG membership: it should be open as long as members agree to abide by WG principles.
• [Hart] If enforcement is to be considered, membership conditions become much more important.

[ Harrison] Serex are working on behalf of Chaichem, and are present to learn more about the WG. It has been helpful to be at the WG meeting, since the situation and rules differ in Quebec.

[Mitchell] Putting an audit in place can assist standards being set up for regulation of the resource.

[R. Smith] Are there any additional key elements that need to be considered?

• [Marr] If the group is interested in promoting a growth industry, a pedigree on the biomass should be an objective. He noted that without an EA, no DMF can go forward, and that an inventory is needed for the EA.
• [E. Smith] The taxane content in sustainably harvested [3-year] foliage is higher than in long branches. The industry should be willing to pay a higher price for quality biomass. Should there be a defined parts-per-million specification? [R. Smith] The guidelines need to remain general rather than deal in details.
• [Marr] The WG should devise a way to maintain product quality – i.e., show the industry a good product. [Cameron] Does “good” include both good quality and sustainable harvest? [Marr] Yes, it means a product that the industry will buy.
• [Turcotte] The WG must guard the viability of the resource.
• [R. Smith] Each WG member comes at this sector from their own perspective, but the WG goal is the viability of the industry.
• [Hamilton] Is it the viability of the resource or the industry?
• [Wright] All WG members have different interests. The WG mandate should be the common points of interest for all of the group: guidelines for sustainable harvest, guidelines for training of the workers, and an emphasis on value-added products.
• [Gorman-Asal] Focusing on defining the sustainable harvest standards alone should be a sufficient justification for the WG to continue.
• [Hart] Education perhaps should be added. [R. Smith] This could be done as part of the sustainable harvest standards.

4. Criteria and Indicators (C&I)

[R. Smith] The WG needs to define C&I for T. canadensis in relation to the principles defined before. C&I are measures of adherence to the guidelines.

The intent is to walk through the principles to define what C&I are needed. It is suggested that smaller groups take away individual C&I assignments, then resubmit their findings to the WG for discussion. The groups will need to find concrete things to assess, and then devise how to evaluate them.

[Mitchell] discussed how the C&I process works.

• Standards consist of principles and criteria, where criteria are specific items devised for the purpose of evaluation under a principle. Indicators are used to judge whether criteria are being met using verifiers.
• Example: for Principle 1 (“Harvesting of ground hemlock will follow all applicable provincial and federal legislation, and international treaties.”)
• Criteria: the laws and regulations that apply to harvesting
• Indicators: specific laws in various jurisdictions
• Verifiers: none for laws
• Example: for Principle 7 (“Economic and social benefits from harvesting and processing will be fairly distributed and focused on the long-term well being of forest workers, landowners and local communities.”)
• Criteria: local employment in the industry
• Indicators: lower unemployment numbers
• Verifiers: a higher number for the ratio of workers per unit biomass collected
• [DeMarsh] Care must be taken not to over-reach with generalities (e.g., biodiversity) being too comprehensive.
• [R. Smith] All items should be discussed only within the context of T. canadensis.

The WG was divided into sub-groups of two to tackle individual principles and C&I.. The following dates were set:

• Feb 28: each sub-group to have their work back in to the WG.
• Mar 14: redrafting to be complete for common language/format (R. Smith, Mitchell or other FBC person, Cameron)
• Mar 14: redistribute compiled findings to the WG
• April 4: feedback to be received from WG members
• April 11: completion of the second draft
• April 16: meeting in Edmunston, 9AM, location to be determined

[Mitchell] will redefine the terms of reference and distribute a format document.

5a. Other Agenda Items: Industry Update

[E. Smith] Two years ago the total harvest was less than one million pounds; last year 2-3 million pounds, and next year it is likely to be 2-3 million plus pounds. There are only about 10 million pounds available sustainably, and there is a dramatic increase in demand. Processors are currently at significant risk. There is over $10 million being invested by two processors this year.

The concern for new and existing Canadian processors is that the sustainable harvest will be sufficient to supply local processors, versus those who wish to process the biomass overseas (e.g., in the Czech Republic).

• [DeMarsh] The demand appears to be well in excess of the supply.
• [R. Smith] Only fairly crude estimates of the biomass supply are available, but projected demand is already getting close to the maximum if sustainable harvesting is to be practiced.
• [E. Smith] CBL will be going out this year to attempt to sell biomass abroad (USA, Europe), but the goal is to develop a Canadian processing industry as well.
• [R. Smith] The WG is hopefully all about not only developing the sector, but also to help the value-added chain to stay in Canada.
• [DeMarsh] If the market demand is continuing to grow, will the prices remain the same? Does the season of harvest matter? [R. Smith] The taxane content is higher in the fall.
• [DeMarsh] How does the season of harvest affect the health of the plant? [R. Smith] It is best to avoid the peak growth period – resources are being put into new foliage at that time, not taxanes. Harvesting before August should not be encouraged, except in the very early spring, before flushing.

5b. Other Agenda Items: the World Forestry Congress

[Mitchell] asked what activities of interest to the WG were taking place, if any.

- [R. Smith] Sept. 21-24 is the Congress in Quebec City. However, the day before there will be an NTFP Workshop. There is also an NTFP workshop at 9AM on Feb 1 in Fredericton at the Maritime Forest Ranger School, Rm 133.