Pulp giant Paper Excellence's secretive owner could face parliamentary summons

The secretive owner of Canada's largest wood pulp manufacturer could soon face a summons to appear before a parliamentary committee after he sent company executives in his stead to testify Tuesday.

New Democratic Party Natural Resources Critic Charlie Angus served notice Tuesday he will ask the Natural Resources committee to issue a summons to force Paper Excellence owner Jackson Wijaya to appear before the committee to answer questions about who owns the company and its complicated network of holding companies.

"What kind of message is he sending to Canadians if he's at a headquarters in Shanghai or in Jakarta and he refuses to respond," Angus said on his way out of the committee. "These are our forests, these are our workers, these are our communities. If this individual is in control of all of this, he should be able to come and give us pretty straightforward answers."

Angus's motion calls on Wijaya to testify before June 20. However, if the committee agrees to issue the summons, it can only be executed if Wijaya sets foot in Canada.

John Williams, chair of the Paper Excellent Group, who testified before the committee Tuesday, wouldn't comment on the motion. Williams, who told the committee that he had no idea where Wijaya was, said on his way out of the committee meeting that he last saw Wijaya "a few weeks ago" in the United States.

"He's a Hong Kong resident, he has a house in Shanghai and he has a house in Newport Beach, California," Williams told CBC News.

Conservative Natural Resources Critic Shannon Stubbs said she wants to force Industry Minister François-Philippe Champagne to testify about his decision to allow Paper Excellence to recently acquire Resolute Forest Products. The committee adopted Bloc Québécois MP Mario Simard's motion for Wijaya to lift the confidentiality surrounding talks the company had with Champagne and the assurances it made.

Asked during the committee hearing, Williams said he did not know the details of those discussions.

CBC's investigation

Tuesday's committee hearing, with testimony from four Paper Excellence executives based in Canada, came in the wake of an investigation into Paper Excellence by CBC News in conjunction with other media outlets — part of a wider look at the global forestry industry under the umbrella of the International Consortium of Investigative Journalists (ICIJ).

The investigation found that the people behind or associated with Paper Excellence appear to have a pattern of using thickets of corporations, including tax havens, effectively shielding transactions and assets from public and government scrutiny.

The company won't open up about its past financing, some of which was facilitated at one point by a $1.25 billion US demand debenture with the China Development Bank. The bank is owned by the Chinese government.

CBC's investigation also found leaked records and insider accounts that show that Paper Excellence, at least until a few years ago, appears to have been closely — and secretly — co-ordinating business and strategy decisions with Asia Pulp & Paper, one of the world's biggest pulp-and-paper players, which environmental groups have complained has a track record of environmental destruction.

The company maintains that Paper Excellence is completely independent from Asia Pulp & Paper and is owned solely by Jackson Wijaya. Wijaya is a member of the family that owns Asia Pulp & Paper and Indonesian giant Sinar Mas.

With its recent acquisition of Resolute Forest Products, Paper Excellence is now Canada's largest producer of wood pulp and manages nearly 22 million hectares of Canadian forests.

'Really concerning'

Tuesday, Paper Excellence executives moved to reassure MPs that the company considers wood pulp a promising industry and that Wijaya didn't have any hidden agendas.

Asked about the company's complicated structure, Williams said it consisted of a series of holding companies for tax reasons, something he said was not unusual with international companies. He assured the committee that all of those companies track back to Wijaya. While the executives acknowledged that Wijaya's family helped him at the outset, they insisted that Paper Excellence is not acting as a front for Asia Pulp and Paper or Sinar Mas to grab Canadian wood fibre.

However, Williams and Jean-François Guillot, chief operating officer of three Paper Excellence subsidiaries, shed little light on the financing the company received from the China Development Bank, saying that the $1.25 billlion US demand debenture was paid off in 2020 and the company no longer has any outstanding loans with the bank.

The executives got a warm reception from Conservative MPs Gary Vidal and Randy Hoback, who outlined how the company has brought jobs and investment to Saskatchewan.

However, the testimony left Angus with unanswered questions.

"I find this really concerning," Angus said after the hearing. "We couldn't get straight answers as to where Mr. Wijaya is headquartered, what his connections (are) to Asia Pulp and Paper. We got obscure responses on the connections to Sinar Mas."

The committee also heard from Greenpeace campaigner Shane Moffatt about an investigation into the company by environmental groups, and from Christian Leuprecht, a professor with the Royal Military College of Canada, who outlined his concerns about Paper Excellence.

"My overall concern here is to assure a level and competitive playing field for foreign direct investment in Canada and that the investment we see here may not meet that test," Leuprecht told MPs. "It appears that Paper Excellence may have been and may still be in violation of Canadian law by effectively circumventing Canadian law and that may also be the reason why Paper Excellence continues to be intransparent or not forthcoming either about its foreign resourcing or about its ownership structure."

"I'm concerned about the structures behind the company but I'm also concerned about the pace with which it has acquired a significant share of a Canadian business," Leuprecht said, adding if the same questions about ownership and financing swirled around a company in another industry like telecommunications "Canadians would be up in arms."

The committee resumes its hearings into Paper Excellence Friday, with officials from the industry, natural resources and public safety departments scheduled to testify.