Forestry giant J.D. Irving Ltd. has won its challenge against a Sussex-based marketing board that tried to regain control over how wood is bought and sold in southern New Brunswick.

The New Brunswick Forest Products Commission agreed with JDI and other companies that the SNB marketing board overstepped its authority when it issued an order saying all wood had to be sold to the board and bought from the board. 

But in a surprise move the commission also drafted proposed new rules to be used by wood sellers, contractors and purchasers operating in SNB's territory, including JDI.

The commission, which heard the case in the summer, threw out the SNB order that declared sales and purchases could only be made through the board.

An attempt to force negotiations

The commission described the order as an improper attempt by SNB to use its regulatory powers to force Irving to negotiate.

The decision is unlikely to change much for the province's seven forest product marketing boards, several of which are no longer able to negotiate price or other contract terms on behalf of their members in areas where Irving and a few other companies are involved.

Irving buys much of its wood by direct contracts with private landowners and skips the SNB board altogether, except for paying it a required commission.

Although the commission ruling did not deal with the controversial direct contracts, the rejection of SNB's order essentially allows JDI and the other companies to carry on with their preferred purchase practices.

Bypassing board since 2012

JDI and the SNB board have been locked in a dispute for eight years since the company began bypassing the marketing board and requiring landowners to negotiate wood sales on an individual basis.

In 2012, JDI stopped buying wood from the board entirely.

Irving, AV Group and contractors have since expanded the individual or direct contract model to other parts of the province, threatening the future of the entire marketing board system.

The board's written decision likened the dispute to something "between a party who is empowered and is desperately attempting to exercise its legislated powers and parties who desire that the exercise of those powers be done fairly, consistently and within the intent of the Natural Products Act."

Chance to comment

Although the commission rejected the SNB board's attempt to regain control of wood sales, the proposed new rules would require anyone selling, buying or processing forest products to be licensed by the marketing board.

Records would have to be kept from all harvesting and wood sales and forwarded to the board.

The draft rules will be cemented in place April 1, after all sides in the dispute have an opportunity to make written submissions.

"It doesn't really do what the SNB board was looking for them to do," Susannah Banks, executive director of the New Brunswick Federation of Woodlot Owners, said of the commission's ruling.

Nonetheless the licensing of buyers and sellers is a positive step, said Banks, and the rules are likely to be adopted by the six other marketing boards.

Helps to know who's who

"It helps in the sense that you know who is operating in the woods," she said. "It should give you the ability to know who all the players are in your area. We'll work our way toward some of the other issues."

Reached Tuesday by CBC News, J.D. Irving Ltd. spokesperson Mary Keith issued a brief statement.

"We respect the decision of the Forest Products Commission and look forward to establishing a productive relationship with the SNB board," the statement said.

A spokesperson for SNB said there would be no comment on the commission decision until after a board meeting Thursday evening.