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Ethics of B.C. investment attacked

By Neil Horner
May 9^th, 2008

The Province of B.C. came under fire on two fronts this week after allegations arose about a potential conflict of interest with Island Timberlands.

In a press conference Thursday, Hupacasath First Nation Chief Judith Sayers said she has learned one of the major investors in the Vancouver Island forest company is the BC Investment Management Corporation, through a numbered company registered in Manitoba.

"What we found is that the BC Investment Management Corporation, which invests money from government surplus funds and pension funds for the public sector, Crown corporations, MLAs, universities and colleges, invested $156 million in Island Timberlands,"Sayers said. "This is about divided loyalties. The government is trying to look after their investment and weighing it against their obligations ... Is it ethical for the B.C. government to invest in a company that is devastating the land?"

Sayers noted the Hupacasath First Nation is involved in an ongoing court battle with the B.C. government over the removal of 77,000 hectares from the tree farm license in the Port Alberni area and the alleged failure of the government to live up to its treaty obligations in the area.

She said the Hupacasath protested the removal of the lands in 2004 and since then, the lands were sold by Weyerhauser to Brascan, which in turn sold an interest in the now-private lands to institutional investors, including BCIMC, which owns 25 per cent of Island Timberlands.

"We believe the actions of the provincial government not only violate our rights,"she said, "but also constitute a conflict of interest because an arm of the government is investing in this development."

Her view is shared by Alberni-Qualicum MLA Scott Fraser, who called the revelations a major scandal.

"The government took the land out of the TFL, gave away the rights to compensation, brought in the Private Managed Forest Land Act to allow extreme forest activities and unfettered raw log exports,"Fraser said. "That's what Island Timberlands does now. Now we find one of their major shareholders is a numbered company out of Manitoba, and it's the B.C. government."

Fraser said this same government changed laws to benefit a company, while at the same time holding shares in that company.

"The government changed laws for a company, designed to export our raw logs and have a much higher impact on the land base,"Fraser said. "All the while, [the same company] was acting as a vehicle for a government investment arm."

Fraser said he was particularly concerned the investment appears to have been done in secret.

"If they had known, the public reaction would have been outrage. Are they using their powers as government for other ... than the public interest? It appears they are, and they're doing it in a clandestine way."

Fraser raised the issue in the B.C. legislature Thursday, questioning Forests Minister Rich Coleman, who said he would take the question on notice.

Noting Brookfield Asset Management, which owns 50 per cent of Island Timberlands, donated $50,000 to the BC Liberals in 2007, Fraser asked why secret, hidden government companies and Liberal friends and donators were able to make windfall profits. This query was fielded by Finance Minister Carole Taylor, who stressed the investment and political arms are kept separate.

"I want to make it clear on the record that, of course, government does not have any influence with the investment decisions of BCIMC,"Taylor said. "They are outside of the government entity. Furthermore, the majority of the directors of BCIMC are from the pension funds, and further to that, even the board of directors has no influence on the investment decisions that are made by the Investment Corporation."

Neither Coleman nor Island Timberlands president Darshan Sihota returned calls at press time.




Original Source:
http://www.bclocalnews.com/vancouver_island_central/parksville_qualicumbeachnews/news/18786619.html