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NAME AND TITLE: James A. Kraft, senior vice president, general counsel and secretary. AGE: 47 COMPANY: Plum Creek Timber Co. Inc. owns timberlands, manufactures wood products and recently diversified into real estate development. The Seattle-based company owns more than 7 million acres in 19 states, making it the second largest owner of timberland in the nation, and has 10 wood-product mills in the Northwest. In 2001, the publicly traded company had earnings of $338 million, up from $162 million the year before. THE MAKEOVER: GC Kraft acknowledges that in the 1980s, Plum Creek’s predecessor companies, Burlington Northern and Burlington Resources, engaged in aggressive logging operations with little regard for the public’s growing environmental sensitivities. Though he feels the company’s practices were no worse than those of its competitors, it came to be singled out for opprobrium for actions such as clear-cutting right up to the borders of public land and for turning a blind eye to the public clamor for sustainable forests by harvesting its forests at a rate that outstripped their ability to regenerate. The low point came in 1990, when Rep. Rod Chandler, R-Wash., told The Wall Street Journal, “Within the industry, they’re considered the Darth Vader of the state of Washington. And I think they’ve earned it.” At the time, Kraft had been serving as general counsel for about a year, after about five years as assistant general counsel in Plum Creek’s predecessor companies. Kraft was part of the leadership team that shepherded in a change in corporate culture. He helped develop the company’s statement of environmental principles (which includes a commitment to sustainable forestry), oversees environmental training, and plays an active role in negotiations with the federal government and environmental groups. “By the mid-1990s, we were in a position to be an environmental leader,” Kraft says. Plum Creek’s efforts have not gone unnoticed. In an anthology published this year, “Organizations, Policy, and the Natural Environment,” a group of business school professors, including Andrew J. Hoffman of Boston University, held up Plum Creek’s Native Fish Habitat Conservation Plan as a model of how corporations can create win-win situations by looking beyond rigid regulatory schemes, reaching out to their erstwhile enemies in the environmental camp and negotiating creative solutions to environmental problems. Kraft told the professors that the company could have insisted that the federal government prove that fish-conservation measures were needed, “But … do we want to be in that mode of being in a confrontational approach, and often ending up in legal actions?” SUITS AND CRITICS: Many environmentalists agree that Plum Creek has improved since the “Darth Vader” days. But they deny that it is more environmentally sensitive than its competitors. Moreover, they are angered by the legal tactics that the company has used to vindicate its Native Fish Habitat Conservation Plan — ironically, the very plan upheld as a win-win model and that Kraft had hoped would buy legal peace. According to Hoffman and his colleagues, Plum Creek began work on its plan after Kraft learned of a court decision that pointed to the imminent listing of the bull trout as an endangered species, which could ultimately restrict Plum Creek’s logging. Plum Creek responded by proposing a plan that would allow the company to continue to engage in some activities that might otherwise have been banned under the Endangered Species Act, in exchange for which the company pledged to take steps that would result in a net gain in habitat over the course of 30 years. According to Kraft, it was by no means certain that the company’s practices were harming the bull trout, but the company preferred the plan’s certainty to the uncertainty of how regulators might enforce the act. The U.S. Fish and Wildlife Service and the National Marine Fisheries Service approved the plan in 2000 over the objections of several environmental groups. Kraft calls the plan “groundbreaking,” adding that “no other company is doing anything for fish over and above state regulations.” SLAPP SUIT?: On June 12, three environmental organizations — Trout Unlimited, Montana Trout Unlimited and the Pacific Rivers Council — gave notice that they intended to sue the two federal services on the ground that their approval of the Plum Creek plan violated federal law. The organizations complain that the plan’s goals are too vague to constrain Plum Creek, leaving the government with little recourse to protect the bull trout during the plan’s 30-year term. One attorney for the organizations, Kristen L. Boyles of Earthjustice Legal Defense Fund, says that Plum Creek has not responded to their offers to negotiate in lieu of litigation. On Aug. 8, Plum Creek filed suit in the U.S. District Court of Idaho, naming the two services and the three organizations as defendants, and asking the court to declare the plan valid. In an Aug. 19 letter, Earthjustice demanded that Plum Creek’s outside counsel, Seattle’s Perkins Coie, withdraw the lawsuit, arguing that there was no case or controversy since the three organizations had not yet filed suit and Plum Creek would not have been named as a defendant in any event. Earthjustice also argued that by naming the three organizations in addition to the federal services, Plum Creek was engaged in a strategic lawsuit against public participation (SLAPP), in violation of Washington state law. Kraft dismisses the idea that Plum Creek’s lawsuit stifles public participation, noting that it seeks no more than a declaration of the company’s rights and was prompted by the organizations’ threat of a lawsuit. The company filed a similar suit in 1999 when environmental objections held up a land exchange between Plum Creek and the U.S. government. Kraft says it reached a compromise with Earthjustice in that case. Boyles argues that the 1999 suit was frivolous and abusive but acknowledges that it prompted negotiations that were ultimately satisfactory to several parties. THE LEGAL UNIT: Kraft has five staff members who do substantive legal work, including two attorneys in Atlanta and two in Seattle. Notwithstanding the Aug. 8 lawsuit, Kraft says that most of their work is business-related, not litigation. That includes mergers and acquisitions, environmental compliance and real estate transactions. OUTSIDE COUNSEL: Kraft turns to New York’s Skadden, Arps, Slate, Meagher & Flom for corporate and tax advice, to Seattle’s Cairncross & Hempelmann for real estate transactions and to Seattle’s Perkins Coie on environmental matters. ROAD TO THE TOP: Kraft graduated from Harvard College in 1978, majoring in East Asian Studies. After graduating from Harvard Law School in 1982, he worked in the Tokyo office of New York’s Milbank, Tweed, Hadley & McCloy. In 1984, Kraft moved to Burlington Northern Inc., out of which Plum Creek emerged in 1989. FAMILY: Kraft is married to Dominic Posy, and they have two children, Emily, 14, and Thomas, 12. LAST BOOK READ: “A Fine Balance,” by Rohinton Mistry.

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