The Parliamentary Committee on Natural Resources had invited Jackson Wijaya, said to be the “sole owner and shareholder” of Canada’s largest pulp and paper company, to appear before it. In his place, the committee got four Paper Excellence executives.
If the idea was that the executives would be able to appease the committee, it failed rather spectacularly.
At yesterday’s committee meeting, NDP natural resources critic and MP for Timmins-James Bay, Charlie Angus, introduced a motion to change the invitation to the elusive Wijaya, to a summons:
Given the fact that the Parliamentary Committee on Natural Resources has a mandate to examine issues of natural resource policy on behalf of the Canadian people, and given the fact that the committee is attempting to get answers regarding the ownership structure of Paper Excellence, now reported to be holding 22 million hectares of Canadian forests, and given public reports that this company has relations with Asia Pulp and Paper and may be part of the holdings of the giant Indonesian company Sinar Mas, and given the outstanding concerns about connections to China-based banks and industrial operations, that pursuant to Standing Order 1081a [which stated that Wijaya be invited to appear before the committee], … the committee issue a summons for Jackson Wijaya of Paper Excellence to appear at a date and time to be determined by the chair and no later than June 20, 2023.
In response to Angus’ motion, committee chair, Liberal MP John Aldag, pointed out, “Our jurisdiction doesn’t extend beyond Canada,” and said they would have to discuss that when the motion is brought forward.
Angus later told the Halifax Examiner that his motion is before the committee, but he doesn’t know when it will be debated. “Hopefully soon,” he wrote in an email.
It began with a media investigation
Yesterday’s was the first of two meetings the committee has scheduled to scrutinize Paper Excellence and Canada’s pulp and paper industry. NDP MP and Natural Resources critic Charlie Angus called for the meetings in response to the findings of a months-long investigation by the Halifax Examiner, CBC, Glacier Media, Le Monde and Radio France into Paper Excellence, part of the Deforestation Inc. investigation led by the International Consortium of Investigative Journalists.
Paper Excellence non-executive board chair John Williams defended Wijaya’s absence, telling the committee, “We have tabled with the committee a letter from our founder and sole shareholder of Paper Excellence, Jackson Wijaya, with sincere apologies for being unable to appear before the committee due to extensive global business commitments.”
“However, he has asked that the senior leadership team be here in his place to address and respond to the issues and questions raised by the committee,” said Williams. “We are the executives and key members of the team that lead Paper Excellence and oversee its operations in the Canadian market.”
“How can we trust you?”
Big questions, however, remained unanswered. Committee members asked in vain about Wijaya’s actual whereabouts, for details on the corporate structure and ownership of Paper Excellence and its reported ties to Asia Pulp and Paper, and also why Wijaya didn’t show up to answer questions on Parliament Hill.
Other witnesses appeared virtually, so it is intriguing that Wijaya could not spare an hour to speak to elected officials in Canada, where Paper Excellence now controls 21% of the pulp and paper sector, and 22 million hectares of forest land, an area four times the size of Nova Scotia.
Paper Excellence disputed that 22 million hectare figure at yesterday’s meeting, even though it’s a figure provided to the Halifax Examiner in February this year by Kerry Patterson-Baker, vice president communications and public affairs for the Forest Products Association of Canada (FPAC).
Bloc Québécois MP Mario Simard, who represents Jonquière in Québec, pointed out that a quarter of forests in his province are “handled” by Paper Excellence since its acquisition on March 1 this year of Resolute Forest Products. Simard expressed concern about the corporate structure of Paper Excellence and where decisions will be made that affect workers and people his region.
“I don’t want Saguenay-Lac-Saint-Jean to be just a drop within the ocean of APP,” Simard said, referring to Asia Pulp and Paper.
APP is part of the multi-billion-dollar Sinar Mas Group headed by Jackson Wijaya’s father, Teguh Ganda Wijaya, which has been shown to have many links to Paper Excellence. The Halifax Examiner and its media partners also investigated this relationship in the Deforestation Inc. investigation earlier this year.
Related: Halifax Examiner “Deforestation Inc.” investigation
Simard pointed out that Williams could not reassure him that Paper Excellence decisions affecting his constituents would be made in their interest, and reiterated the need for Wijaya to testify before the committee.
“And if he doesn’t do that, we the elected officials and the media will be left with the same concerns. In other words, who is the true owner of Paper Excellence?” said Simard. “As long as that question is not settled, we won’t be able to move on and talk about your development plans.”
“How can we trust you if we don’t actually know who the owners of Paper Excellence are?” asked Simard.
“Obviously, we’re the people who run the business on Jackson’s behalf,” Williams replied. “He would not be letting us make these commitments if he wasn’t absolutely comfortable that he was prepared to keep those commitments.”
Williams and his fellow Paper Excellence executives tried to deflect from the corporate ownership questions by painting glowing pictures of what the company plans to do in Canada. To wit, this PR piffle from Williams:
We’re proud to contribute to the growth and prosperity of Canada. As a company, we’re committed to building a sustainable business that benefits all Canadians. And we believe that by working together, we can create a brighter future for generations to come.
Where’s Waldo?
Charlie Angus was having none of it. He tried in vain to find out more about Paper Excellence’s ownership structure, and Wijaya’s actual whereabouts. Here is one of his lively exchanges with Williams. It’s a little long, but worth the read:
Angus: We know our mills are efficient. We know our workers produce the best in the country. That’s not why we’re here. We’re trying to find out about ownership. So what we’ve been able to figure out is that Sinar Mas is a pulp and paper empire based out of Shanghai and Indonesia that is entirely controlled by the Wijaya family. We know that Asia Pulp and Paper was founded by [the late] Eka Wijaya, and is under control of Sinar Mas. We know that when Jackson Wijaya tried to establish his Canadian presence through Paper Excellence, he received a bank loan at the extremely low rate of 0.1% from a Chinese bank controlled by the Wijaya family. So now we have a situation where one individual, not a Canadian, Mr. Jackson Wijaya, is in control of 22 million hectares of Canadian forests. Why did he not bother to come and explain his role and his family’s roles in the ownership of these natural resources assets of our country?
Williams: … So I actually have with me, which I’d love to put into the record, a note saying very clearly, we’ve repaid that loan in 2020. So we have no relationship with Chinese banks whatsoever at this point in time. And as I think Mr. Wijaya really expressed in his letter, you know, he’s traveling actively and, you know, we are the people who are accountable for this business. I think we’re capable of answering probably a little bit more detail than he is, given the scope of what Paper Excellence has now become. So we’re here to answer questions and happy to do so.
Angus: Thank you so much. Where is Mr. Wijaya now?
Williams: At this moment, I don’t know.
Angus: Does he still maintain his office at the White Magnolia Plaza in Shanghai?
Williams: I also don’t know the answer to that question.
Angus: Would you know if the White Magnolia Plaza [in Shanghai] is the headquarters of the Asia Pulp and Paper China Company, in a building that’s known as the Sinar Mas Plaza? Would you know if he has an office in that building?
Williams: I wouldn’t know either way.
Angus: So why are you able to answer about his ownership if you can’t answer those questions?
Williams: I think those are geographical questions. …It’s very clear there is no cross-border holding whatsoever between Asia Pulp and Paper and Paper Excellence. Paper Excellence is completely and solely owned by Jackson. He is the sole shareholder …
Angus: … who may have an office in the China office of APP in the building that’s known as Sinar Mas. But you can’t answer that. But I’m going to go on because Mac Anderson, who testified at committee at the B.C. legislative Committee said, and he worked for Paper Excellence through MacKenzie Fibre, he stated on the record, “Paper Excellence is a company owned by Sinar Mas.” And then he said, “The guys at Shanghai were reviewing what I was doing.” So who are these guys in Shanghai that was reviewing his work for MacKenzie Fibre?
Williams: I have obviously been in this business since November of [20]21. I have never had any interaction with anyone from Asia Pulp and Paper, nor have any of the people who work for me. And in fact, I’ve competed and continue to compete pretty aggressively with Asia Pulp and Paper in the North American paper market.
Angus didn’t let up. He later grilled Jean-François Guillot, Chief Operating Officer, Fibre Excellence, Northern Pulp Nova Scotia, Prince Albert Pulp Inc., about the findings of the Deforestation Inc. investigation that showed Asia Pulp and Paper handling market analysis and legal matters for Paper Excellence in recent years.
Guillot said Paper Excellence had not had a “relationship with APP since 2015.” This flies in the face of leaked correspondence showing close collaboration between APP and Paper Excellence in years after 2015, as reported by the Halifax Examiner, CBC, Glacier Media, and Le Monde in France.
High and expensive stakes for Nova Scotians
Kody Blois, Liberal MP for Kings-Hants in Nova Scotia, also had some tough questions for Paper Excellence. He zeroed in on the creditor protection that Paper Excellence’s Northern Pulp has been enjoying under the Companies’ Creditor Arrangement Act (CCAA) in the British Columbia Supreme Court since June 2020.
Like Angus, Blois had trouble getting clear answers:
Blois: … right now under the creditor protection order are employees that work for Northern Pulp being paid their pensions, yes or no?
Guillot: To answer your question … we are following the rules of CCAA, under bankruptcy protection rules.
Blois: So I take that to say no, because the rules don’t call for it necessarily.
Guillot: I would repeat my answer.
Guillot also said, “it would be difficult” for him to answer Blois’ question of how much Northern Pulp owes its creditors. This, Guillot said, “is a question of CCAA.”
However, Guillot did say the biggest creditor is the province of Nova Scotia.
This is perplexing.
The list of creditors with the amounts owed by Northern Pulp and its affiliates is a public document submitted to the British Columbia Supreme Court. Those documents show that Paper Excellence, which owns Northern Pulp, is also its largest creditor.
Those public documents also show Nova Scotia is the second largest creditor. Northern Pulp still owes the province more than $86 million, a debt it is not repaying while under creditor protection.
The Nova Scotia Superintendent of Pensions has also submitted letters to the British Columbia Supreme Court – which are publicly available here – pointing out that Northern Pulp has failed to pay “approximately $3.34 million for each of 2021 and 2022.” In his April 2022 submission to the British Columbia Supreme Court, the superintendent says this is “contrary to law.”
Blois then asked Paper Excellence’s board chair John Williams what he would say to the people of Nova Scotia about the company’s $450 million lawsuit against the province, if he thought that was “fair and equitable” for the million Nova Scotians who would be on the hook for nearly half a billion dollars.
Williams replied that Paper Excellence feels it needs to protect its interests because it had a profitable mill in Nova Scotia, which no longer operates, causing “severe losses.”
However, Williams said he would not comment further on the detail of that “legal activity.”
“A legacy of broken trust and promises”
Green Party co-leader Elizabeth May had pointed questions on Paper Excellence’s decision to seek creditor protection in the British Columbia, where the $450 million lawsuit – filed in the Nova Scotia Supreme Court – is now part of a forced mediation process.
Related: Northern Pulp and its wealthy owners seem intent on taking Nova Scotians to the cleaners
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Addressing the Paper Excellence executives, May criticized Paper Excellence’s choice to use the Companies’ Creditor Arrangement Act and go to a judge at the Supreme Court of British Columbia to seek binding arbitration.
May said this, “deliberately excludes any role for Pictou Landing First Nation who have been aggrieved through lies and abuse and environmental racism for years.”
“Does it trouble you at all that your approach to getting your mill reopened is to exclude any Indigenous involvement?” May asked.
Lana Wilhelm, Paper Excellence manager of community and Indigenous relations, replied that the company inherited “a legacy of broken trust and promises” when it purchased some mills in Canada. “And in no place was that more apparent than in Boat Harbour and Northern Pulp,” said Wilhelm. “We’re determined to rebuild that relationship with communities.”
Wilhelm did not acknowledge that under Paper Excellence ownership, Northern Pulp’s environmental record continued to be poor. It repeatedly failed emissions tests. And in 2016, a provincial court judge fined Northern Pulp $225,000 after its poorly maintained effluent pipeline ruptured and spewed 47 million litres of toxic effluent on sacred Mi’kmaq burial grounds.
Pictou Landing First Nation Chief Andrea Paul has said she will “never be able to support” Paper Excellence or the Northern Pulp mill.
May also asked Williams if the connections between Paper Excellence and the People’s Republic of China are sufficient that China could invoke the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA), secretly signed by the Conservative government of Stephen Harper in 2012. FIPA allows China to seek damages in secret if it doesn’t like the way its business interests are regulated in Canada, according to May.
Williams replied that he is “not cognizant of that approach” so he could not answer May’s question.
“Tax efficiency”
Liberal MP Francesco Sorbara from Ontario also tried to get answers from Williams about the opaqueness of Paper Excellence corporate structure.
Williams’ reply:
There are a series of holding companies, most of which exist actually for tax efficiency, but they’re not abnormal for an international business.
“Tax efficiency” is one way of putting it.
Appearing as an individual witness at the meeting, Greenpeace Canada’s Shane Moffatt described Paper Excellence’s complex and confusing corporate structure this way:
Other than its Domtar holdings, its Canadian mills are primarily owned by Paper Excellence Canada Holdings Corp., incorporated in Canada in 2010. The corporation is itself owned by Paper Excellence B.V., registered in the Netherlands. The owner of Paper Excellence B.V. is Fortune Everrich, registered in Malaysia. Fortune Everrich is owned by yet another Malaysian company, Capital Asset Holdings, registered in an offshore financial centre. At the end of this rabbit hole, Elite Shine Investments Ltd, registered in the British Virgin Islands, is Paper Excellence Canada Holdings Corporation’s ultimate owner. Domtar is now owned by holding companies in the Netherlands and Hong Kong.
Moffatt continued:
Paper Excellence maintains that it’s wholly owned by Jackson Wijaya, the son of Sinar Mas and APP boss Teguh Wijaya. But who exactly is Jackson Wijaya? Is he an owner we never see who lives in Shanghai or Jakarta? Or is Jackson a code word for the financial interests of a family that owns a global logging empire?
Moffatt suggested the latter is the case, quoting from Paper Excellence filings with the U.S. Securities and Exchange Commission that state:
Jackson Wijaya means (a) Jackson Wijaya, (b) family members of Jackson Wijaya, (c) trusts, partnerships, or limited liability companies for the benefit of any of the individuals identified in the foregoing clause (a) or (b).
Asked by Mario Simard if he would provide the Natural Resources Committee with all the documents Greenpeace and its co-authors used for their October 2022 report, “Papering over corporate control,” which details APP’s links with Paper Excellence, Moffatt said he would be “delighted” to do so.
Canada’s “vulnerability to foreign interference”
Christian Leuprecht, a professor at the Royal Military College of Canada, who describes himself as an “expert on financial crime,” also appeared as an individual witness before the committee.
He said his “overall concern” is that the investment by Paper Excellence in Canada may not ensure a “level and competitive playing field” in the country.
“It appears Paper Excellence may have been and may still be in violation of Canadian law by effectively circumventing Canadian law,” said Leuprecht. “And that may be the reason why Paper Excellence continues to be non-transparent and not forthcoming about its foreign resourcing or its corporate structure.”
“I’m concerned about the structures behind the company, but I’m also concerned about the pace at which it has acquired a significant share of the Canadian of a Canadian business,” said Leuprecht. “If another business acquired 21% of, say, the telecommunications, media or airline business in Canada, and we had the sort of questions that we have here about financing and ownership structure, Canadians would be up in arms.”
Leuprecht added:
Canada needs proactive disclosure of foreign direct investment in Canadian companies and real estate by means of a Canadian equivalent of the U.S. Foreign Investment Risk Review Modernization Act of 2018, and the political will to deter a possible deliberate misrepresentation … of foreign financial flows into Canada, as well as control of Canadian companies. This case raises Canada’s potential vulnerability to foreign economic interference and manipulation across the vast spectrum of what happens here.
More motions in the works
In addition to the motion from Charlie Angus to have Jackson Wijaya summoned to appear before the committee before the end of June, Conservative MP from Lakeland, Alberta, Shannon Stubbs said the Conservatives will also be bringing forward a motion. Theirs will be to have François-Philippe Champagne, Minister of Innovation, Science and Industry, who approved the Paper Excellence acquisition of Resolute Forest Products, “appear for one hour alongside appropriate officials to discuss the ownership structure and business relations of Paper Excellence Corporation, and that the Chair schedule this meeting at the earliest possible opportunity.”
Mario Simard said the Bloc Québécois will also be tabling a motion to have confidentiality lifted on discussions held between Paper Excellence and Minister Champagne.
The Parliamentary Committee on Natural Resources will convene again on Friday morning to continue its discussions on the Canadian pulp and paper industry.
The witnesses at the Friday meeting will be Dojack DeNeige, Director, Investment Review Division of the Department of Industry (Innovation, Science and Industry Canada), Mark Schaan, Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector in the Department of Industry, Gregory Smith, Director, Economic Analysis Division of the Canadian Forest Service in the Department of Natural Resources, and Richard Bilodeau, Director General of the Department of Public Safety and Emergency Preparedness.
It seems very doubtful the PCNR would be looking into this if not for all the amazing work by Joan Baxter and the Halifax Examiner. This is what journalism should be!