China Investment Corporation Eyes BC Forests, Spells FIPA Danger

Thu, 2012-12-13 14:05Carol Linnitt
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China Investment Corporation Eyes BC Forests, Spells FIPA Danger

The China Investment Corporation (CIC), one of the world's largest sovereign wealth funds, is set to become a powerful landowner in British Columbia if a $100 million deal with Island Timberlands, the second-largest owner of private forests in the province, goes through. The Ancient Forest Alliance (AFA) is concerned that closure of the deal, especially in light of Canada's pending ratification of the Foreign Investment Protection and Promotion Agreement (FIPA), could have negative consequences for protection of BC's treasured old-growth forests, forestry jobs, and the rights of First Nations, according to an AFA press release.

“The Communist Party of China is about to become one of the biggest landowners in British Columbia if this deal goes through,” said Ken Wu, executive director of the AFA
 
“In light of the proposed Canada-China investment treaty, this could be at the expense of BC’s environment, forestry workers and First Nations,” said Wu, adding, “Chairman Mao’s spirit is seemingly being channelled by Chairman Harper these days, as it’s hard to see how this proposed agreement will be a net benefit to Canadians.”
 
Chinese investment in Canadian resources has taken on a new significance since the Harper government announced the possibility of entering into a strict trade agreement with China. The deal, an investment treaty with a 31 year lifespan, would strongly dissuade municipal, provincial and federal governments from making any decisions that might affect the profit margin of Chinese investors.
 
“The China-Canada FIPA would allow Chinese investors in Canada to sue the federal government for lost profits due to new regulations, taxes, and environmental laws enacted federally or provincially. This would undercut the ability of future federal and provincial governments to enact new regulations or policies that might result in a lawsuit by Chinese companies which are accountable to the Chinese government,” says the press release.
 
The Harper government has yet to ratify FIPA, but the consequences of the trade deal have gained new significance after the rushed approval of China's takeover of Canadian oil-producer Nexen. Although Harper promised the sell-out of Canadian resources to foreign state-owned enterprises signals the 'end of a trend and not the beginning,' he did not mention that such acquisitions will continue and that all such sales occurring under a $330 million mark will receive no federal review.
 
If Island Timberland successfully deals with China, the CIC will own a  12.5 percent in Island Timberland's 254,000 hectares of private forest land on Vancouver Island and the Sunshine Coast. 
 
Under the banner of FIPA the deal between the CIC and Island Timberlands could have significant consequences for how those forests are managed. The Ancient Forest Alliance is calling on the government to establish a $40 million annual “park acquisition fund to purchase and protect endangered ecosystems on private lands.” BC has not had an acquisition fund of this kind since 2008.
 
“While private land trusts are vital for conservation, they simply don’t have the capacity to quickly raise the tens of millions of dollars needed each year to protect most endangered private lands before they are logged or developed —only governments have such funds,” stated TJ Watt, Ancient Forest Alliance campaigner and photographer. “More than ever, considering the potential future difficulties to strengthen environmental laws on private lands under FIPA, the BC government must fund the purchase of the last endangered old-growth forests on private lands before they are logged.”
 
According to the Ancient Forest Alliance, the combination of FIPA with Chinese investment in BC forests could prove disastrous for the conservation measures needed to ensure responsibly stewardship of the land.
 
Among other possible concerns, the AFA says the Island Timberlands sale, when considered in tandem with FIPA, raises these immediate concerns:
 
- The future obstruction of “new regulations or taxes to curtail unprocessed 'raw' logs from being exported from BC to sawmills in China and abroad.”
 
- The undermining of “stronger Forest Protection regulations on private forest lands.”
 
- The move away from the establishment of a “Forest Land Reserve” which mirrors other popular conservations strategies such as the “Agricultural Land Reserve.”
 
- The obstruction of “implementation of First Nations land-use plans and shared decision making measures that may require legally-binding orders from the BC government to protect sacred sites, important cultural use sites, and natural resource areas.”
 
Communities across Vancouver Island and the Sunshine Coast, where Island Timberlands holdings are located, are fighting the company's plans to harvest in the region, suggesting the area's unique and highly-prized ecosystems should warrant the land a no-go zone. Island Timberlands should forego logging in these “forest hotspots” and practice “community, ecosystem-based forestry standards” elsewhere. 
 
The company temporarily halted logging plans earlier this month on Cortes Island after protestors blocked operations. The island's community members are currently raising funds for the purchase of a 250 hectare “Children's Forest” that will be protected from future logging. 
 
In a recent interview with trade investment lawyer Gus Van Harten, he told DeSmog that FIPA is preparing Canada “to play the role of the supplier of raw resources to feed the Chinese industrial machine. We will have difficulty competing with Chinese manufacturing because of the extremely low cost of labour in China.”
 
He added, “The real economic benefits is not taking the resources out of the ground, it's adding value by manufacturing the resources and then exporting the manufactures.”