Minister notes 'concerning' reports about pulp and paper giant's behaviour, vows to monitor situation

The Canadian government will monitor Canada's largest pulp and paper company to ensure it respects the promises it made the federal government as the company's owner takes over his family's controversial Indonesian-Chinese pulp and paper conglomerate, Natural Resource Minister Jonathan Wilkinson told a parliamentary committee Wednesday.

Responding to a series of questions from New Democrat MP Charlie Angus, Wilkinson said Paper Excellence, which recently rebranded to Domtar, made commitments to the government when it sought permission in 2023 to buy Resolute Forest Products.

"Certainly, some of the information that you (mention) and is in the public media in terms of the behaviour of this particular company is concerning," Wilkinson told members of the House of Commons Natural Resources committee.

"But I would say that the government, through the Investment Canada review, obtained a number of different commitments on the part of the company before any decision was made on the basis of a net benefit to Canada. Of course, the government will monitor, and is monitoring, those kinds of conditions that were actually imposed on the company."

In June 2023, industry officials told the committee that Paper Excellence had committed to ensuring that no less than two-thirds of its board of directors and three-quarters of its senior managers would be Canadian, to continue to produce kraft pulp at the mill in St. Félicien, Que., to maintaining annual maintenance levels and existing Canadian patents, to adhering to Canadian employment and environmental laws, and to learning from Resolute's environmental practices.

Last year, company officials insisted to both the Canadian government and MPs that Paper Excellence, owned by Jackson Wijaya, was completely independent from Asia Pulp & Paper (APP), owned by his father.

APP has been the subject of controversy over the years for its track record of destroying forests in Indonesia.

On Nov. 15, Paper Excellence served notice to the European Commission that owner Jackson Wijaya is acquiring "sole control" of APP from his father, Teguh Ganda Wijaya (also known as Oei Tjie Goan).

The company has described the move as normal succession planning by the Wijaya family and said APP will simply be a client of Paper Excellence.

Angus questioned why industry department officials told the committee last year that Paper Excellence was separate from APP.

"Officials from your government came and told us that you couldn't find any connection whatever," Angus asked Wilkinson. "So did they just play you guys for suckers?"

Angus said Paper Excellence is feeding Canadian wood fibre to China and said he is concerned that decisions about Canadian forests were being made in Shanghai.

"Are you looking into whether or not our mills and our forests are being used by Asia Pulp & Paper as a feeder into the Chinese machine?"

Wilkinson said Angus should put his questions to Industry Minister François-Philippe Champagne.

In an interview with CBC News following Wilkinson's appearance, Angus described Wilkinson's answers as "pitiful."

"The fact is that this government rubber-stamped an agreement where one company was allowed to come in and take control of a good chunk of Canada's pulp and paper industry while ignoring the fact that they were actually another company," said Angus.

"Now, they have had to admit that Paper Excellence is Asia Pulp & Paper. So, did Paper Excellence lie to the government? Was the government misled? Were they just stupid? What are they going to do about this?"

Angus is planning to propose Champagne and Wijaya be called to appear before the natural resources committee. Wijaya declined to appear before the committee last year, saying he was too busy.

These latest developments come more than a year after CBC News took part in a months-long investigation of the global forestry industry under the umbrella of the Washington-based International Consortium of Investigative Journalists.

That investigation raised questions about who is actually behind Canada's pulp and paper powerhouse.

It found the people behind or associated with Paper Excellence appear to have a pattern of using thickets of corporations — including some in tax havens — effectively shielding transactions and assets from public and government scrutiny.

The company has also been tight-lipped about its past financing, some of which was facilitated by the China Development Bank, which is owned by the Chinese government.

Call to cancel certification

On Wednesday, the World Wildlife Fund called on the Forest Stewardship Council (FSC) to cancel its certification for Paper Excellence, Domtar and Resolute in the wake of the news that Wijaya is taking over control of APP. The FSC disassociated from APP in 2007 over its destructive forestry practices in Indonesia.

Most of Paper Excellence's operations have some kind of FSC certification, which enables a forestry company to command higher prices and attract environmentally conscious clients. It stood to lose that certification if it was deemed a part of the APP business empire.

"APP has a legacy of deforestation, destruction of wildlife habitat, fires and greenhouse gas emissions from peat development, and conflicts with local communities related to land grabbing, forest clearance and pulpwood plantation development in Sumatra and Kalimantan, Indonesia," the WWF wrote.

The WWF also called for APP, the Wijaya family and Domtar/Paper Excellence to repair the environmental and social damage caused by APP in the past.

In a statement on its website, the FSC said Domtar is in good standing and that, earlier this year, APP began taking steps to remedy "the environmental and social harms" from its previous activities. The website said it signed a remedy framework agreement that puts it on track for possible certification and association with the FSC once the remedies are completed and verified.

Now, the FSC wants to take a closer look.

"We are evaluating what the implications of the two companies being owned by one individual will mean for our Policy of Association," the FSC wrote. "To determine the potential consequences of this change in ownership, a rigorous legal review of relevant company connections will be initiated."