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Paper Excellence | Little known, the buyer of Resolute raises concerns

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Paper Excellence, which is about to take control of Resolute Forest Products, is structured so opaquely that it is difficult to know who its real beneficiaries are, worries Greenpeace in a report. The environmental organization also establishes links between the company and other companies with poor environmental practices in Asia.

In just a few years, Paper Excellence has established itself in the Canadian forest industry with several transactions. Its most recent take – Resolute Forest Products – is expected to be formalized on October 31 when shareholders of Quebec’s largest forestry company vote on the $2.7 billion transaction announced last July.

“This company is going to become one of the largest forestry companies in Canada and we don’t know much about Paper Excellence,” says Priyanka Vittal, lawyer at Greenpeace Canada. It is important that communities and governments know who is using the forest in their territory. »


The organization says it wrote its report after going through several hundred public documents available in Canada, Indonesia, the British Virgin Islands and elsewhere in the world to try to understand the structure of Paper Excellence. The report also contains responses from the company, which says it disagrees with the environmental body’s findings.

Greenpeace sought comment from Resolute, which has repeatedly clashed with the environmental group in recent years, but the company directed questions to its future owner. Paper Excellence did not respond to questions from The PressMonday.

Founded in 2007, Paper Excellence is based in British Columbia but is owned by Indonesian businessman Jackson Widjaja. This one comes from the family behind conglomerate Sinar Mas, whose pulp and paper division Asian Pulp and Paper (APP) is a global paper giant in Indonesia as well as China.

Sinar Mas and its subsidiary have been the subject of reports, including from the Associated Press, which demonstrated that the conglomerate’s practices had led to the rapid destruction of thousands of hectares of forest in Indonesia. Greenpeace believes that Sinar Mas and APP have links with Paper Excellence, which the acquirer of Resolute denies.

Who are the beneficiaries ?

In Canada, the Greenpeace investigation alleges Paper Excellence sawmills are owned by companies registered in places like the British Virgin Islands, the Netherlands and Malaysia. A similar structure is used for corporate assets in countries like the United States, Brazil, and France. It is difficult to see clearly and to conclude 100% that Mr. Widjaja is the ultimate beneficiary of this whole structure.

“A corporate structure that may conceal the ultimate beneficiary(ies) in this way is not in itself evidence of criminality or wrongdoing, but it may be a sign of risk that may warrant careful scrutiny.” The report.


PHOTO SARAH MONGEAU-BIRKETT, LA PRESSE ARCHIVES

Head office of Resolute, rue De La Gauchetière Ouest, in Montreal. The business will become the property of Paper Excellence.

Based on a copy of the agreement, Greenpeace claims that Paper Excellence benefited, in 2010, from a loan of 17.5 million US dollars obtained from a Chinese bank owned by Sinar Mas, at a rate of 0 .1%. This was well below the average rate of 2.6% that was in effect at the time in Canada, according to the World Bank. According to the US Public Company Accounting Oversight Board, such transactions may “indicate the existence of related parties”, notes Greenpeace.

The other aspect on which the environmental group relies in order to establish links between Paper Excellence, Sinar Mas and its subsidiary is the overlap of managers and professionals such as lobbyists. The report names executives who in the past have concurrently been employees of Paper Excellence in addition to serving as directors of certain divisions of APP between 2007 and 2018. of Paper Excellence Canada also state that they are affiliated with Sinar Mas.

We do not say whether the transaction to buy Resolute is good or bad. We want to highlight information that shows the company has ties to companies that have poor environmental records elsewhere in the world.

Priyanka Vittal, lawyer at Greenpeace Canada

Paper Excellence is also involved in litigation with Nova Scotia. Its pulp mill in the province took shelter from its creditors in 2020 after being forced to shut down because its residual effluent treatment process was deemed inadequate. The company retaliated last year with a $450 million lawsuit against the Nova Scotia government.

Resolute has been repeatedly targeted by Greenpeace in recent years. The relationship between the company and the organization is stormy. Greenpeace had publicly apologized to the logging company after falsely accusing it. In the United States, Resolute is suing Greenpeace for defamation.

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  • 3500
    Quebec workforce of Resolute, which has some 6,500 employees

    SOURCE: solved



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