'We got completely played for suckers,' MP says of recent takeovers in Canadian forestry
Zach Dubinsky, Elizabeth Thompson | CBC News | Posted: November 22, 2024 1:40 PM | Last Updated: November 22
Paper Excellence owner to take over Asian conglomerate after repeatedly denying operational links with it
Opposition MPs are expressing concern that after buying up two major Canadian companies, the foreign owner of one of Canada's biggest forestry businesses is now also formally taking over an Indonesian-Chinese pulp and paper conglomerate from his family — a company he has long denied operating in tandem with.
A half-page notice quietly published by the European Union on Monday states that Jackson Wijaya, owner of Paper Excellence, is acquiring "sole control" of Asia Pulp & Paper from his father, Teguh Ganda Wijaya (also known as Oei Tjie Goan).
CBC News originally reached out to Paper Excellence with emailed questions on Thursday afternoon, but the company did not immediately respond. Shortly after this story was published on Friday, a Paper Excellence spokesperson confirmed the ownership transfer of APP, writing in an email that the latest development represents "normal course succession planning" by the senior Wijaya.
The controversial conglomerate has a record of forest destruction in Indonesia and has been a target of Indonesian and global environmental groups.
After it acquired Canadian pulp and paper companies Domtar in 2021 and Resolute Forest Products in 2023 — all with the federal government's blessing — Paper Excellence became the largest private manager of forests in Canada, controlling 22 million hectares, an area four times the size of Nova Scotia.
The company has repeatedly stated — including in testimony before Parliament last year — that while Jackson Wijaya got some assistance from his family in the early years of Paper Excellence, which he founded in 2007, the Canadian and foreign entities have operated completely independently for years.
"We got completely played for suckers by a very dubious company," Charlie Angus, the NDP critic for natural resources, said in reaction to this week's announcement.
"I don't think the Canadian government would have ever allowed Asia Pulp & Paper [to buy Domtar and Resolute] because of its dubious record. So the family sets up another company. The family says, 'Oh, we're not connected in any way.' Despite the obvious connections, they get.… to buy Canadian resources. So we are in a position that was entirely predictable," Angus said.
Jennifer Johnson, vice-president of communications for Paper Excellence, which last month announced it was going to adopt the Domtar name for its business, strongly disputed that idea.
"Domtar (formerly Paper Excellence) group was founded by Jackson Wijaya, as his sole initiative with a view to building a business that would reflect his ambition and values," Johnson wrote in an email to CBC. "Our key message to all Domtar executives and employees is that they must at all times act exclusively in the best interests of Domtar and Domtar alone."
'Deeply concerning'
Conservative natural resources critic Shannon Stubbs said the news "is deeply concerning for Canadian workers and communities" amid mounting job losses and mill closures in the country's forestry sector.
"The Liberals must answer to Canadians and be transparent since claims were made that the purchase of mills in Canada had no connection to Asia Pulp & Paper," she said in a statement.
Audrey Champoux, spokeswoman for Industry Minister Francois-Philippe Champagne, said there is little the government can do now under the Investment Canada Act, which allows the federal cabinet to potentially block foreign investments in Canada on economic and national security grounds.
The act "applies to investments in Canada by non-Canadians," Champoux said. "Asia Pulp & Paper is a corporate group that is headquartered in Indonesia and China and is a separate legal entity from Paper Excellence. As such, the change in ownership of Asia Pulp is not subject to the Investment Canada Act."
Since 2010, Paper Excellence has received hundreds of millions of dollars in federal and provincial loans and subsidies, promising revitalization and jobs in some economically hard-hit communities. But it ultimately closed numerous mills — including in Powell River and Mackenzie, B.C. Espanola, Ont., and Pictou, N.S. The company currently owns more than 30 mills in Canada, the United States, Brazil and France.
Johnson, the Paper Excellence spokesperson, said the company has an "exemplary" record of investment in its operations, "and this commitment to investing will not change."
A joint investigation by CBC and various Canadian and global media outlets last year found extensive evidence that as recently as 2020, Paper Excellence collaborated with Asia Pulp & Paper on market research, business strategy and legal filings, and even sought directions on pricing and sales volumes.
'Very opaque'
Priyanka Vittal, a lawyer for Greenpeace Canada, said the environmental group is apprehensive about the vanishing boundaries between Paper Excellence and its foreign cousin in part because it's a privately held company, with little financial transparency, that controls a huge part of a major national resource.
"It's been very opaque, and the concern is what that means in terms of their operations in Canadian forests and accountability," Vittal said.
Unifor, the union that represents an estimated 4,000 of the company's employees, is also concerned by the news that Wijaya is acquiring sole control of Asia Pulp and Paper.
"Wijaya has been consolidating corporate control in the Canadian forestry sector through a series of high-profile acquisitions, while at the same time displaying a troubling lack of transparency and accountability to elected and government officials, forestry workers and local communities," Unifor president Lana Payne said in a statement.
"The takeover of APP raises serious concerns about the long-term intentions of Wijaya and his growing forest empire."
Jayme Albert, a spokesperson for Canada's Competition Bureau, noted that during the bureau's review of Paper Excellence's takeover of Domtar, it considered whether there was a strong common interest between Paper Excellence and Asia Pulp & Paper.
The bureau determined that even if there was, there wasn't enough evidence to conclude that such a common interest would "substantially lessen" competition in the sale of pulp and paper in Canada.
Corrections:- A previous version of this story said CBC News reached out to Paper Excellence for comment on Wednesday (Nov. 20). In fact, it was on Thursday (Nov. 21). November 22, 2024 3:35 PM