Amid a federal investigation into Paper Excellence’s business ties, a briefing note shows the Nova Scotia government knew the company was controlled by a Chinese-Indonesian conglomerate in 2017. Former BC officials declined to comment.
Senior members of the Nova Scotia government knew that British Columbia forestry giant Paper Excellence was ultimately controlled by a Chinese-Indonesian conglomerate accused of widespread deforestation and human rights abuses, the documents show.
Paper Excellence is currently facing a parliamentary inquiry into its corporate structure and business ties after a series of media reports found a nexus of evidence linking the company to Asia Pulp and Paper (APP).
Jackson Wijaya is said to be the sole shareholder of Paper Excellence, while his father, Teguh Ganda Widjaja, is the long-time chairman of APP. When asked about a list of evidence linking the two companies, a Paper Excellence spokesperson told Glacier Media those links only existed for a short period of time.
“In the early years, as a young entrepreneur, [Jackson Wijaya] he benefited from some of the knowledge and relationships through his father to help establish his business…” a company spokesperson wrote earlier this year.
Eventually, Wijaya was able to “proceed alone, with nothing but normal and proper business relations,” he added.
On Tuesday, Paper Excellence executives told a parliamentary committee in Ottawa that ties between the two companies had not been severed until 2015.
But in the ministerial briefing note reviewed by Glacier Media on Thursday, the Nova Scotia government considered APP the ultimate controller of Paper Excellence until October 2017, at least two years after Paper Excellence said the companies had parted ways.
“[Paper Excellence Canada] is ultimately controlled by Asia Pulp and Paper (APP), an Indonesian-based integrated pulp and paper company (a division of the SinarMas conglomerate), the document reads.
The document, which was flagged in a social media post by a local fisherman, follows a months-long investigation by the International Consortium of Investigative Journalists (ICIJ), including media partners Glacier Media, CBC, Halifax Examiner , Le Monde and Radio France — about the company’s ties abroad.
That investigation revealed numerous links between Paper Excellence and Asia Pulp and Paper, a forestry and paper conglomerate that environmental groups say has been responsible for widespread deforestation, human rights abuses and conflicts with indigenous communities. Both companies say they are independent of each other.
With a registered office in Richmond, BC, Paper Excellence owns dozens of pulp and paper mills in Canada, the US, Brazil and France. In March, it closed its latest multi-billion dollar acquisition of Resolute Forest Products, a deal that gives the company control of more than 22 million hectares of Canadian forests and makes Paper Excellence the largest forest products company in North America.
As part of its investigation, Glacier Media and its ICIJ partners interviewed former employees and reviewed leaked emails showing staff working loosely between Paper Excellence and APP.
On Tuesday, Jean-François Guillot, chief executive of Paper Excellence’s French operations and two mills in Canada, told lawmakers that those emails showed an uncomplicated relationship between Paper Excellence’s French operations and APP in its role as buyer. According to the ICIJ investigation, the leaked emails go much further, suggesting a revolving door of employees working between Paper Excellence’s offices in Richmond and APP’s towering headquarters in Shanghai, China.
In several cases, the communications show APP employees providing key strategic analysis on a Paper Excellence application to Chinese regulators. Mac Anderson, a former employee who ran a fiber supply company Paper Excellence in BC, described the reporting to officials in Shanghai. Another former APP employee said that Paper Excellence pulp exported from Canada acted as “a feeder for the Chinese machine.”
The ICIJ media consortium used shipping records and satellite tracking technology to track one of Paper Excellence’s pulp shipments from BC to Shanghai via an APP-linked logistics company. The Asian conglomerate denied buying pulp “directly” from Paper Excellence.
On Tuesday, John Williams, non-executive chairman of the Paper Excellence Group board of directors, testified that the company was not seeking to redirect Canadian pulp to feed Chinese and Indonesian mills.
BC government reported that capital spending decisions were made in ‘Indonesia’
Following the publication of its investigation with the ICIJ, Glacier Media received a briefing note prepared for senior BC government officials ahead of a meeting with lobbyists from Paper Excellence. The document, which dates from December 2020, shows that the government of the day knew that “Indonesia” was making important capital spending decisions.
One entry states “Indonesia has approved the largest capital expenditure at Port Alberni since the 1990s…” while another says “Indonesia has approved the reopening of the third paper production line at Crofton…”
The rest of the page, posted via a freedom of information request, was largely redacted.
Glacier Media reached out to several senior officials who received the briefing note, including former Prime Minister John Horgan’s chief of staff Geoff Meggs, deputy minister Bobbi Plecas and now BC Hydro board member Lori Wanamaker, but they all declined. or ignored requests for comment.
Meghan Dewar, a former Paper Excellence lobbyist who actively petitioned the Prime Minister’s Office while her father was Horgan’s top strategist, deferred questions from Glacier Media to the province and the company.
Paper Excellence spokesman Martin Croteau said “Indonesia” was likely a reference to Wijaya himself.
“It is well known that Jackson Wijaya, the last and sole owner of Paper Excellence, is an Indonesian national. Any reference to Indonesia by [Paper Excellence] employees in Canada is likely a reference to him,” Croteau wrote in an email.
“That being said, to answer your underlying question, we have repeatedly stated that Paper Excellence is completely independent from APP/Sinar Mas. Many stakeholders and regulators (global funding institutions, regulatory and certifying bodies, among others) have recognized this reality.”
Paper Excellence executives say it has paid off Chinese debt
The briefing note, written for a minister on the letterhead of the Nova Scotia Finance Department and Treasury Board, raises questions about the expansion of APP in recent years. He points to APP’s record default of US$13.9 billion in 2001, and that it “has not been rated by any major rating agency since the early 2000s.”
“It does not appear that APP has had difficulty accessing the capital required for expansion in the recent past, however it is not clear who are the banks/financiers that have been financing the APP group of companies,” the report says.
In its examination of Paper Excellence properties, the ICIJ investigation revealed several mortgages in BC and Saskatchewan with a curious link to the Chinese state.
More than a decade ago, Paper Excellence secured a $1.25 billion loan from the China Development Bank, the offshore investment arm the Chinese government has used to buy offshore infrastructure and develop its Belt and Road initiative.
On Tuesday, Williams testified before the federal committee that the company had paid in full the bonds of the $1.25 billion loan for 2020 and was free of any Chinese debt.
In fact, within weeks of ending its relationship with the Chinese lender, the documents show that Paper Excellence transferred its mortgages on several BC plants to two Indonesian banks: Bank Mandiri and Bank Negara Indonesia (BNI).
The two banks have worked with the China Development Bank in the past. In 2015, Mandiri and BNI were among three Indonesian banks used to park a $3bn investment from the China Development Bank.
That money was meant to be used to develop the country’s infrastructure. But the Indonesian House of Representatives later raised questions about how funds were being redirected to finance manufacturing, including two pulp and paper mills owned and operated by APP.
Federal investigation into company’s corporate structure and ownership ties continues
Back in Canada, Christian Leuprecht, a professor at the Royal Military College of Canada, told the parliamentary committee on Tuesday that he was concerned about Paper Excellence’s pace of expansion and questioned who is behind the company.
“This case raises Canada’s potential vulnerability to foreign economic interference and manipulation across a broad spectrum,” Leuprecht said.
Conservative MP Shannon Stubbs and NDP MP Charlie Angus notified this week that they would table motions to summon the Minister for Innovation, Science and Industry, François-Philippe Champagne, and Paper Excellence’s sole shareholder, Jackson Wijaya, for questioning.
“I think the solution would be for Mr. Wijaya to come and testify before the committee,” added Bloc Québécois deputy Mario Simard.
“And if he doesn’t, well, we elected officials and the media are left with the same concerns; In other words, who is the real owner of Paper Excellence?
The parliamentary inquiry continues on Friday, when lawmakers are scheduled to hear from the federal departments for industry, natural resources and public safety.