President and CEO
American Forest & Paper Association
On Behalf of American Forest & Paper Association
and Endangered Species Coordinating Council
on S. 1180 "Endangered Species Recovery Act of 1997"
September 23, 1997

Mr. Chairman and members of the Committee, thank you for the opportunity to testify today on S. 1180, the "Endangered Species Recovery Act of 1997."

I am W. Henson Moore, President and CEO of the American Forest & Paper Association (AF&PA). AF&PA is the national trade association of the forest, pulp, paper, paperboard, and wood products industry. We represent approximately 150 member companies which grow, harvest and process wood and wood fiber; manufacture pulp, paper and paperboard products from both virgin and recovered fiber; and produce solid wood products. The association is also the umbrella for more than 60 affiliate member associations that reach out to more than 10,000 companies. AF&PA represents an industry which accounts for more than eight percent of total U.S. manufacturing output. It directly employs about 1.4 million people and ranks among the top 10 manufacturing employers in 46 states.

I am also here today representing the Endangered Species Coordinating Council (ESCC). The ESCC is a coalition of more than 200 companies, associations, individuals and labor unions involved in ranching, mining, forestry, manufacturing, fishing and agriculture. A current list of members is attached. The labor unions alone represent over 2 million working Americans. We seek to provide workable procedures and positive incentives in the Endangered Species Act which promote conservation of wildlife in a way that considers economic factors and respects the rights of private property owners without impairing the law's fundamental commitment to protect listed species.

First, I would like to thank Chairman John Chafee and Sens. Dirk Kempthorne, Max Baucus and Harry Reid for drafting and introducing S. 1180, the Endangered Species Recovery Act of 1997. Given the challenge in reaching a consensus on these complex and sometimes contentious issues, it is understandable that the bill takes a modest approach at updating the law. I think we can all agree that the changes contained in S. 1180 are procedural only, which, while important, effect no substantive change in the statute or in species protection.

Congress enacted the Endangered Species Act to protect endangered and threatened species, a goal which we support. We believe the principles behind the Endangered Species Act represent those qualities which make our society the finest in the world. However, believing in these principles and writing a law that works are two entirely different matters.

As its operating premise, the Endangered Species Act mandates protection of the species to the point of its recovery, without regard to the interaction of these steps with the rest of society. Humans are part of the diversity of nature and are one of the natural elements that is capable of causing changes, sometimes dramatic change, in the environment. Humans have modified the natural environment in North America for hundreds, if not thousands, of years. A recent example is the virtual elimination of wildfire from the environment in the Southeast. A number of species, some of which are now listed under the Endangered Species Act, were dependant on these fires for their existence. Recovery of these species by restoration of their original habitat would mean the return of the widespread fires upon which the species thrive, a circumstance which would have devastating consequences for the people who live and work in this area. Yet, some would argue that is the literal mandate of the Endangered Species Act.

There is growing momentum within the American public for updating the ESA. A May 1997 national survey conducted by Market Strategies found that over 70% of the respondents favored updating the ESA. This is an substantial increase from the 42% who in a 1995 national survey believed the ESA needed to be amended.

When presented with the fact that 1,500 species have been listed and only 27 have been removed from the list since ESA's inception in 1973, a mere four due to recovery, 60% of those surveyed in May agreed that the law was under performing. Furthermore, 62% believed they are not getting their money's worth from the law as currently written. We have spent hundreds of millions of dollars in the name of preserving threatened and endangered plants and animals, but really have little to show for these expenditures in the way of recovered species.

The American public has strong opinions on how they would like to see the ESA updated. When presented with various options to consider, they overwhelming agreed with a number of the provisions included in the legislation currently being considered:

-- 88% approve of requiring sound science and a well defined set of

scientific criteria that is peer-reviewed when evaluating data concerning

an endangered plant or animal.

-- 85% want to include private landowners in the process through incentives

that allow them to work cooperatively with the government to protect listed

species that inhabit their land.

-- 81% agree that the government should consider alternative methods for protecting an endangered animal or plant which may be less disruptive in terms of its social and economic costs;

-- 80% support providing the specific incentive of certainty -- specifically that when the government and a private landowner agree on a plan to protect an endangered plant or animal on the landowner's property, neither party can change that plan without the consent of the other.

-- 77% believe state government should have a bigger role in the

identification and protection of animals and plants.

I. S. 1180 updates the Endangered Species Act in several key areas which we believe are essential to provide for a workable law. For example, this legislation would:

-- improve the quality of the science to be used for listings and recovery plans;

-- enhance the recovery process;

-- remove the inefficiencies and inequities from programmatic consultation on public lands;

-- provide a strong legislative foundation for Secretary Babbitt's policies which recognize the importance of including, rather than excluding, private landowners in species conservation efforts;

-- create mechanisms to assist smaller landowners faced with the complexities of the Endangered Species Act; and

-- establish reasonable sideboards on enforcement which are consistent with Supreme Court precedent.

Quality Science. We applaud the provisions in section 2 which assure that listings are based on quality science. While we have disagreed on occasion with the quality of the science which has been used, we nonetheless believe the listings must be kept in the scientific arena. We have long supported the concept that proposed listings should be subject to independent peer review, the normal process for scientific studies, a concept with which 88% of Americans agree. S. 1180 directs this, and as an important component, requires the Secretary to summarize and respond to the peer review in the final listing. We recognize that many criticize peer review of listing as a process which will unduly delay listings. We disagree, provided two things occur. First, the Secretary and the agencies must consider peer review as helping their deliberations on the status of a species, rather than as a hindrance. They must begin planning for peer review early in the process of preparing a proposed listing. Second, Congress must demonstrate its commitment to quality science through peer review by annually appropriating sufficient funds.

We believe the bill would be strengthened with a more rigorous requirement for the identification, and subsequent collection, of data which is necessary to determine whether the assumptions on which the Secretary based the listing remain valid. However, the provision in S. 1180 which requires identification of data which would assist in recovery, and of steps to acquire the data, at least recognizes that data, assumptions and conclusions are not set in concrete at the time of listing.

Finally, the bill focuses the agency on use of empirical and field tested data. In the past, the agency has relied too readily on computer models and assumptions. While these tools have a role, we believe that the damage to the Secretary's credibility from overreliance on computer models and assumptions far outweighs any benefit provided by listings which lack hard data.

Enhanced Recovery Process. Section 5 of the bill presents a completely revised process for the development and implementation of recovery plans. We have long advocated that recovery plans should be the focus of conservation efforts by the federal government, These plans should address the biologic needs of the species, the economic and social consequences of fulfilling those needs, and the financial and scientific capabilities of achieving recovery. S. 1180 goes a long way toward accomplishing this.

We particularly support the expanded membership of the recovery team required in the bill. We believe it is essential to include not only scientific experts, but representatives of all relevant fields and affected interests, particularly landowners who are likely to have specific information about habitat conditions. We also agree with the authors that each recovery plan should consider alternative measures to achieve the goal and the benchmarks, which balance biology, timeframes and economic dislocations. These provisions will require the Secretary to consider the impacts of recovery and to analyze strategies which will lessen or avoid social and economic disruptions. In the recent Market Strategies survey, 81% of those polled supported the consideration of recovery alternatives which could have less social and economic impact.

Programmatic Consultation. Section 4 of the bill contains a much needed improvement for management of public lands. A decision by the U.S. Court of Appeals for the Ninth Circuit, Pacific Rivers Council v. Thomas, needlessly complicated this management by requiring a halt to all site-specific activity on a national forest when a new species is listed until the Forest Service consults with the Secretary on the need to amend the existing forest plan. Even though site-specific activities would undergo individual consultation on their affect on the newly-listed species, the Ninth Circuit interpreted the Endangered Species Act to require they be halted until the plan-level consultation was completed. The bill would allow the site-specific activity to proceed, provided it meets the criteria of ESA section 7(a)(2), that is, it is not likely to jeopardize the continued existence of the listed species or destroy or adversely modify designated critical habitat.

Legislative Foundation for Private Landowners. S. 1180 would enact into law several existing Administration policies adopted by Secretary of the Interior Bruce Babbitt which are critical to the continued involvement of private landowners in conservation of listed species -- "no surprises," multiple species habitat conservation plans (HCPs), candidate species conservation agreements, and safe harbor agreements. The bill also provides new opportunities for landowner participation in recovery planning and consultation.

Many landowners intend to use or manage their land for a period of years. Forest landowners, for example, will establish a management strategy designed to produce income over the growing cycle of the trees, called a rotation, which in some cases may be as long as 80 or 100 years. These landowners are willing to discuss how this land will be managed, provided they receive the certainty that the business decision they make today is likely to be constant for the life of the intended use, such as the rotation of the affected trees. Indeed, they might be willing to adjust their management in return for more certainty.

Prior to 1993, a landowner had no certainty with respect to the Endangered Species Act. Then Secretary Babbitt announced he would sign agreements, habitat conservation plans authorized by the ESA, which would contain a "no surprises" commitment. In other words, landowners could rely on the fact that the lands they agreed to set aside for the species would remain constant over the life of a plan. If more land, or other changes, becomes necessary, it is the government's responsibility to fund what is needed. With this change, the number of approved plans increased by over 1000% in three years. This incentive of certainty is supported by 80% of those polled by Market Strategies.

This policy must be put into the statute, and S. 1180 would do so. The Secretary has been sued once over its adoption and will likely be sued again. This concept of certainty has given protection to hundreds of endangered species. This successful concept should be protected from litigation by enactment into law.

The bill provides a standard for approval of multiple species agreements and candidate species conservation agreements which appears confusing at first, but which we find ingenious in its simplicity. The standard measures whether the landowner's proposed management activities, if undertaken by all similarly situated persons, would eliminate the need to list the species based upon these activities. It recognizes that no one person may be able to protect a species and that species face risks from a variety of sources. It then focuses on the risk within the applicant's control and measures it as if undertaken by all persons who could control that risk. This provision is likely to allow creative use of these agreements and to make them available to landowners with only a small amount of habitat but who could nonetheless provide a true benefit to a species.

We do have a concern about the continued reference to "conservation," particularly for species not yet listed. The Endangered Species Act (ESA) defines "conservation" to mean "to use and the use of all methods and procedures" to remove the need for protection under the ESA, i.e. recovery. In particular, a candidate species conservation agreement is designed to avoid the need to list the species in the first instance. We suggest either the removal of references to "conservation" where recovery is not intended or an explanation in the Committee Report that the use of "conservation" is intended to identify appropriate methods and procedures, and not to require an actual recovery process unless clearly indicated, such as the reference to plans for "the conservation and recovery" in new section 5(a) added by section 3 of the bill.

Assistance to Smaller Landowners. Small, family-owned tree farms, ranches and agricultural farms are the backbone of rural America, and in many respects, the backbone of the country itself. In the forest and paper industry, for example, over 60% of forested land in the country is owned by some 10 million nonindustrial landowners. As might be expected, the needs and philosophies of these landowners are as numerous as the individuals. S. 1180 provides several mechanisms to encourage these landowners to work with the Endangered Species Act, including low effect habitat conservation plans, grants and habitat reserve agreements. We certainly recognize the difficulty Congress will face in fully funding these programs. We hope that the Committee will continue to work with the Finance Committee and others to craft other provisions which will present landowners with an array of options and thus gain the broadest support for conservation of listed species.

Enforcement. If you drive your car in excess of the posted speed limit, you know you have broken the law and could legitimately receive a ticket. If you break into a building and take goods or money, you know you have broken the law and face possible arrest. However, under the Endangered Species Act, if you farm your land or harvest your trees, you face prosecution if a federal bureaucrat speculates that you might break the law. These bureaucrats will advise you repeatedly that you will break the law by managing your land, referring to some vague study which may or may not be based on empirical data. They may even drag you into a federal court and try to prove their case to a judge. Landowners are usually helpless in the face of these escalating threats of prosecution.

We applaud the effort in section 6 of the bill to remind the bureaucrats, and citizens who would file these lawsuits, that the burden is on them to prove a "take" has occurred or will occur, using "scientifically valid principles." This provision encapsulates the Supreme Court's decision in Babbitt v. Sweet Home Chapter of Communities for a Great Oregon by requiring proof of an actual "take," thus eliminating such concepts as "reasonably likely" to take, and by emphasizing a causal connection between the action and the take.

The reference to "scientifically valid principles" is taken directly from the 1993 decision by the Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc. However, the court used the phrase, 509 U.S. at 599, in the context of "pertinent evidence based on" such principles. On remand, the U.S. Court of Appeals emphasized the importance of the evidence being capable of testing. We strongly recommend that the Committee avoid confucion on this point and include a reference to "evidence" in the legislative language, or at least in the Committee's report.

II. Although we believe S. 1180 updates the ESA in a positive manner and moves species protection in the correct direction, we are concerned that a few provisions run the risk of perpetuating the confrontational tone of the existing law. It is possible that proper implementation could be achieved. However, we have seen too many instances in the past where good intentions failed in the face of political pressure or expansive interpretation.

Consultation. Section 4 of the bill substantially revises the consultation process between federal agencies and the Secretary. Since we do not believe that process works very well at present, particularly with regard to the "informal" consultation process set out in the ESA regulations, the process in the bill may actually improve the situation. However, we have three concerns. First, the bill allows the Secretary to exclude categories of action from the new process by regulation. This strikes us as an invitation to focus on the politically out of favor or controversial activities. Second, the bill allows the Secretary to object to an agency's conclusion if the Secretary finds there is insufficient information. ESA determinations are always looking for more information, thus the emphasis in the bill on quality science. It should be sufficient to object based on disagreement with the adverse affect finding. This at least requires the Secretary to analyze the other agency's determination. Finally, we believe the objection based on the need for more time beyond 60 days is too open-ended. In our experience, federal agencies never believe they have enough time. The bill would allow the Secretary to plead lack of personnel, lack of money, crush of other business, or any number of excuses that undermine the purpose of the deadline.

Recovery Goal. We have considerable concern about the manner in which the recovery goal is developed. The bill provides that, notwithstanding the fact that the goal is subject to peer review, it is "established" by only those members of the recovery team "with relevant scientific expertise" and then recommended to the Secretary. The bill does not explicitly provide for how or when the Secretary reviews this "recommendation." We submit that this establishes two classes of membership on the recovery team and renders the "recommendation" virtually impossible to change. In our view, this could defeat the benefits of expanded team membership and once again allows a small group of scientists to tie the hands of the Secretary.

Recovery Plan Implementation Agreements. We are concerned with the targeting of federal agencies in the recovery plan, accompanied by a mandatory implementation plan. Even though the bill clearly requires identification of a federal agency in the recovery plan only if the agency takes an action "likely to have a significant impact on the prospects for recovering a species," such phrases in the Endangered Species Act have a history of being read interpreted broadly rather than narrowly. We find it questionable to allow one law to impinge on every federal program without, at a minimum, providing strict sideboards to require a showing that the agency action be likely to prevent recovery. Moreover, the provision exempting the agency action from consultation under ESA section 7(a)(2) requires such specificity as to make the exemption difficult to apply for most future actions. Most agencies would likely prefer consultation since it also provides incidental take protection.

The bill allows the Secretary to enter implementation agreements with private parties as well. The bill provides no encouragement for private parties, or state governments, to enter these agreements, so their exact purpose is not evident. We are concerned that they will somehow be used to attach a recovery goal to habitat conservation plans (HCP). We strongly recommend that either the bill or the Committee's report emphasize that these are entirely voluntary and should in no way be coupled with an HCP. Indeed, the purpose of the HCP, to allow land use activity to proceed, while containing any take of listed species within acceptable limits and providing offsetting benefits for the species to the extent possible, should be set out in the report to avoid any confusion with recovery, an entirely separate process.

Existing Recovery Plans. We would prefer that existing recovery plans be required to comply with the provisions of section 3 of the bill by a specific date. The bill exempts both existing plans and plans which have been released for public comment but not adopted at the time of enactment of the bill into law. This latter provision could cause particular mischief since the Secretary may have released a draft plan for public comment some years ago but never issued a final plan. For example, the recovery plan for the northern spotted owl was released for public comment in April 1992 but has never been adopted as final. Under the bill, any recovery plan for the owl would be exempt from the new procedures.

III. Finally, there are two areas which we believe should be addressed in this legislation.

NEPA/Biological Opinion Equivalency. The experience of our members has been that preparation, negotiation and completion of an habitat conservation plan is an expensive and time-consuming process. The HCP contains considerable analysis of the species' biology, of the existing environment, of impacts and of alternatives. Then, a portion of this analysis must be repeated in a document to satisfy the National Environmental Policy Act (NEPA), at yet more expense. In addition, the Secretary brings in more personnel to conduct consultation under ESA section 7. We certainly do not object to a process that ensures the analysis is complete, but we do object to redundant compliance. Since the Secretary has as yet been unable to provide an Administration solution to these needless frustrations, we urge the Committee to do so. A legislative solution would likely be the safest course as well since the federal courts tend to view NEPA and ESA compliance in a literal manner, viewing even legitimate streamlining with disfavor.

Programs Delegated to States. We recognize that S. 1180 updates the Endangered Species Act in virtually every program. We have long advocated the need to provide comprehensive changes in this law, rather than targeting one or two issues. However, one area not addressed by the bill is State action. The bill would substantially increase the role of States in the conservation of listed species. At the same time, the bill does not address the recent efforts by the Secretary and the Environmental Protection Agency which enmesh State programs with additional federal bureaucracy and which will dramatically reduce States' ability to run their water quality programs.

Within the past several years, the Environmental Protection Agency (EPA) has begun requiring that States, as a condition to obtaining the delegation under the Clean Water Act to issue point source discharge (NPDES) permits, agree to consult with the U.S. Fish and Wildlife Service (FWS) (or the National Marine Fisheries Service) on proposed individual state permits which may adversely affect a listed or proposed species. If, as a result of the consultation, the FWS and the State environmental agency are not able to reach agreement on appropriate terms for the proposed permit, FWS will notify EPA. EPA agrees to then veto the permit and issue it as a federal permit with conditions acceptable to FWS, or refuse to issue it at all.

EPA imposed this procedure, which provides FWS with a veto over State-issued permits, on Louisiana and Oklahoma as a condition for the delegation of the NPDES permit program, with an earlier version imposed on Florida and South Dakota. We understand that now EPA and FWS are preparing to expand this process to the 40 or so States that have been delegated the NPDES program since 1972. The agencies are also considering application of the process to State wetlands and sewage sludge programs. Moreover, they are planning to provide FWS with a prominent role in the development State water quality standards.

The Clean Water Act and EPA's own regulations require EPA to delegate the NPDES program to a state as long as the state program meets the enumerated statutory criteria, none of which pertain to the ESA. Also, EPA, in its oversight of state permitting, is only authorized to veto a proposed state permit that is "outside the guidelines and requirements of the Clean Water Act." EPA is not authorized to reject a State-issued permit on the basis that it is not in compliance with the ESA.

No one can object to FWS providing the permit-issuing entity appropriate information, including the presence of listed species. However, Congress has not imposed the ESA on the States, other than through the prohibited activities in section 9, such as take. The Clean Water Act is designed to be implemented through State programs, with federal oversight merely to ensure consistency with national water quality goals. Federal agencies should not be allowed to impose these sort of burdens on States, burdens that neither agency thought were appropriate for over 20 years, without careful consideration by Congress. We strongly recommend that the Committee include in S. 1180 a provision which puts a halt to these bureaucratic efforts. If the Committee finds it in the national interest, we suggest you conduct a review to determine the appropriate interaction between the Clean Water Act and the Endangered Species Act at the State level.

IV. Conclusion. We support this bill as an important first step to update the Endangered Species Act to a law that actually achieves wide support for species conservation. I have expressed our concern with some of its elements, but overall we believe the bill will improve both protection of species and the ability of landowners to manage their land in the presence of listed species. We fail to understand how anyone can oppose such concepts as peer review, allowing landowners and applicants to participate in the process, analysis of alternatives recovery measures so as not to miss less disruptive methods, providing certainty as an incentive to conserve species and habitat.

As I indicated, we believe more needs to be done in order to fully update the Endangered Species Act. For example, we have not lost sight of the need to recognize and protect private property rights. The Fifth Amendment to the U.S. Constitution requires that landowners be compensated if the government takes their property for a public purpose. It is unfair -- it is un-American -- to impose the cost of the public purposes embodied in the Endangered Species Act on a few unlucky citizens. In this regard, we applaud the introduction of S. 1181, the "Endangered Species Habitat Protection Act," by Senator Kempthorne, and urge other Members of the Senate to support this effort.

On behalf of the American Forest & Paper Association and the Endangered Species Coordinating Council, I appreciate the opportunity to offer our views on S. 1180, the "Endangered Species Recovery Act of 1997." I would be happy to answer any questions you may have.