As We See It: Better Business Practices
February 2015
By Myles Anderson, ALC President
Being in the logging business has always meant long hours away from home, hard work and a special fulfillment associated with accomplishing things most couldn’t dream of. As a business owner regardless of the industry, there are specific items that demand attention; cost of operations, a safe work environment, well maintained equipment, productive employees, just to mention a few. At times regardless of the amount of attention paid, problems can occur and a business owner must be prepared to deal with them. Unfortunately there are also cases where less than honest business practices can prevent an honest business owner from being able to compete on a level playing field.
Operating in one of the most dangerous industries in the country forces any good business managers to closely watch all business practice that adds to their overall liability. Any business in the Timber Harvesting industry should be a Corporation, LLC or some other structure that would limit an owner’s personal liability. If your business is not classified in this manner, it would be well worth your while to look into making a change. If you use subcontractors for falling timber, hauling logs or other activities then a well thought out and legally binding Subcontractor Agreement must be in place. If your Insurance companies have not already talked to you about this then I would contact them or your State Association for more information on the subject.
Understanding the legalities of a subcontractor’s role in your business is very important information, and at the end of the day, knowledge and the associated response are the things that separate a successful business from the others. A subcontractor is not privileged to the benefits that your company may give to employees such as health care, retirement, your workman’s compensation coverage or coverage under your liability insurance policy. A subcontractor is told where to do the work but not how to do it, and must possess the necessary tools required for the job. Ignoring the legality of this responsibility may in the short term provide an advantage in securing work, in the long run when the lawyers, insurance companies and injured third parties have their day in court, I for one would not want to hide behind ignorance of the law as my defense.
A fair bid process is one that would put cost control and production as the primary factors that dictate the outcome; however that is not always the case. Understanding the law and the liability associated with having subcontractors working for you is critical. As a business owner you cannot provide tools to a subcontractor to perform a service and at the same time enjoy the benefits of a subcontractor relationship, the same is true for the entity you may work for.
As the need for fiber increases, and we all hope it does, the path to get our products to consumers will be an interesting one. Laws have been put in place and continue to govern us as a country however some businesses tend to operate with comfort in the grey area. As an industry it seems the timber harvesting community has always put their heads down and worked harder and there is absolutely nothing wrong with that, assuming they are compensated appropriately. Fiber supply and consuming businesses are operated for a profit, just as we the producers do, some do it legally and some operate in the grey area.
Business practices are merely decisions that are made by individuals and if your business is run in the most ethical way you know, then you can look yourself in the mirror every day and be proud of what you’ve accomplished. I like to believe that in most cases, the CEOs of the companies that operate in the grey area are not completely aware of what is going on under them. One can only hope that these people that cannot look in the mirror with pride will be replaced with managers that can. Unethical business practices are not a sustainable business model. If we are to succeed as an industry it will be due to our character, the trust we have established and positive working relationships.
Myles Anderson is the current President of the American Loggers Council and he and his father Mike own and operate Anderson Logging, Inc. based out of Fort Bragg, CA.