Global Courant 2023-05-16 02:28:31
MPs are expressing concern after Canada’s new pulp and paper giant fired Resolute Forest Products’ previous board of directors and replaced it with one dominated by longtime Paper Excellence executives.
They also question whether the new board meets the commitment Paper Excellence made to the federal government when it approved the acquisition of Resolute — that it would “maintain” a Canadian presence on Resolute’s board of directors.
“I think Canadians are waking up to the fact that a company whose ownership is unclear, which has direct ties to Shanghai and Indonesia, may be controlled by a family that has tremendous control over the international pulp and paper markets, now at power sits on top of and in control of 22 million hectares of Canadian forest,” said Natural Resources critic Charlie Angus.
“We need to know who’s making the decisions here. They were allowed to take over Resolute, they made commitments on the take over of Resolute, that this would remain very much Canadian.”
Seth Kursman, spokesman for Resolute Forest Products, confirmed that the company’s previous board of directors is no longer in place. He said that two of the three current directors are Canadian citizens and that “all members of Resolute’s executive team are also Canadian”.
Industry Minister François-Philippe Champagne will not reveal what the company has promised the federal government regarding the percentage of Resolute’s board who must be Canadian citizens, saying he must respect the Investment Canada Act. He said his department will be watching to ensure the company delivers on the promises it made when acquiring Resolute.
“Canadians know me by now. I’m a hawk on these things,” Champagne told CBC News. “We have a sophisticated process and we have always made sure that any commitments people (make) to the Government of Canada, we follow through and make sure they are respected.”
Industry Minister François-Philippe Champagne says the government will keep Paper Excellence on the commitments it has made. (Alex Panetta/CBC News)
Champagne’s comments come after Paper Excellence-owned Domtar acquired Resolute Forest Products earlier this year – a deal that consolidated Paper Excellence’s dominance in the Canadian pulpwood industry.
In March, CBC News participated in a months-long survey of the global forestry industry involving 40 media outlets under the umbrella of the Washington-based International Consortium of Investigative Journalists. That investigation raised questions about who is behind Canada’s new pulp and paper powerhouse.
The people behind or associated with Paper Excellence seem to have a pattern of using corporate scrubs – including some in tax havens – to effectively shield transactions and assets from public and government scrutiny.
The company was also tight-lipped about its past financing, some of which was facilitated by the China Development Bank, which is owned by the Chinese government.
CBC’s investigation also found leaked documents and insider accounts showing that, at least until a few years ago, Paper Excellence closely and secretly coordinated business and strategic decisions with Asia Pulp & Paper.
Asia Pulp & Paper is one of the world’s largest pulp and paper players and has a track record of environmental destruction.
Jackson Wijaya, right, with Brazilian politician Eduardo Bolsonaro on July 30, 2019. (BolsonaroSP/Twitter)
The company claims that Paper Excellence is independent from Asia Pulp and Paper and owned by Jackson Wijaya.
In the wake of the investigation, the House of Commons Natural Resources committee voted to call witnesses to testify about the company and its property. Those hearings were plagued with committee meeting cancellations for technical reasons and problems scheduling Paper Excellence representatives to appear.
The committee also struggles to get Jackson Wijaya to testify. In a May 1 letter obtained by CBC News, Wijaya told the committee he was unable to appear “due to extensive global business commitments.”
Wijaya told the committee that Paper Excellence and its subsidiaries are “solely and exclusively owned by me and are completely separate and independent from any other company, including Asia Pulp and Paper and the Sinar Mas group.”
Asia Pulp and Paper is part of the Sinar Mas group, owned by the Wijaya family.
Wijaya also shed new light on a $1.25 billion U.S. demand bond issued by the China Development Bank in 2012.
“Relying in part on connections I had developed through family and other relationships, Paper Excellence sought funding to make large capital investments in three Canadian factories,” Wijaya wrote. “Based on these goals, our team successfully negotiated a loan and credit facility from the China Development Bank (CDB), which at the time was actively procuring international project finance in many parts of the world, including Canada.
“This was a standard commercial loan and we paid off that financing over subsequent years and then paid it off in full in 2020. We have no relationship with CDB or any other Chinese bank today.”
CBC’s investigation found that the company then obtained financing from two Indonesian banks that had registered mortgages on factory properties in BC and Saskatchewan.
The Resolute Forest Products pulp and paper mill in Thunder Bay, Ont. (Matt Prokopchuk/CBC)
The most recent questions are about the deal to acquire Resolute, which provides Paper Excellence with mills, power generation facilities and wood supplies in Ontario, Quebec and the US.
When the federal government approved the deal, the company assured it would retain Canadian participation on the board of directors. Prior to the acquisition, seven of the eight directors on Resolute’s board lived in Canada.
After the deal to acquire Resolute closed, the previous board was removed, with the exception of company president Remi Lalonde, and two new board members were added: Sugiarto (Awie) Kardiman and Peter (Hardi) Wardana.
Sugiarto (Awie) Kardiman (left), Peter (Hardi) Wardhana (center) and Remi Lalonde. (Credit: PaperExcellence.com, PRpeak.com, Resolute Forest Products)
Filings with the US Securities and Exchange Commission for Domtar in 2022 say Wardhana has been with Paper Excellence since its inception and was a director of Paper Excellence B.V. and the company’s global head of mergers and acquisitions. They say Wardhana, a former consultant at McKinsey & Co., earned a bachelor of science degree in mechanical engineering from Columbia University, a master of science degree in engineering economic systems from Stanford University, and a master’s degree in finance from London Business School.
A 2010 Globe and Mail article stated that he previously worked with Sinar Mas. As late as 2017, company records listed an address in Indonesia, although the latest documents for Resolute list his residence as Paper Excellence’s headquarters in Richmond, B.C.
Kursman said Wardhana is not a Canadian citizen and did not say where he lives.
Kardiman worked for Paper Excellence from 2010 to 2013, according to his LinkedIn profile, and then rejoined the company in November 2020 after working for two other companies. Kardiman did his BA in accounting in Indonesia and listed an address in Indonesia in early corporate documents for Paper Excellence companies. Kursman said Kardiman holds Canadian citizenship and lives in Coquitlam, BC
Green Party co-leader Elizabeth May said she does not believe Resolute’s current board meets the terms of the government’s guarantee.
“With a board of directors that includes key players from outside Canada who come from the Paper Excellence culture and Background, it is concerning to see people joining the board with ties to Indonesia,” she said.
Elizabeth May, MP for the Green Party, says she doesn’t think the current administration meets the terms of the Paper Excellence agreement with the federal government. (Chad Hipolito/The Canadian Press)
Greenpeace’s Shane Moffatt said Resolute’s board of directors tends to play an important role in determining the company’s direction.
“When it comes to Resolute Forest Products, I’ve certainly seen their boards as a major force within the company and I’d be surprised if the appointment of new Paper Excellence representatives wasn’t meant to bring fresh perspectives around the company’s direction. assure.” he said.
Moffatt, one of those about to testify before the Natural Resources Committee, said it was important for Wijaya to appear before MPs.
“I really think it’s so crucial to public confidence in what’s happening in the forests that Jackson Wijaya shows this,” Moffatt said. “I can’t possibly imagine him not showing up and thinking that will be acceptable to everyone.”
