WFP TFL scheme: Born in Scandal
Another betrayal of the public trust?
Power does not corrupt men; fools, however, if they get into a position of power, corrupt power.
-George Bernard Shaw
There is no better example of the power of money and influence than the scandals associated with the creation and deletion of Tree Farm Licences (TFL) in British Columbia. The proposed sale of lands that were recently deleted from a Western Forest Products (WFP) TFL is just the latest in a series of scandals dating back over half a century.
When they were given away in the late 1950’s, the TFLs were a sweat-heart deal set up by a corrupt minister who took bribes to ensure favourable terms for forest companies. In exchange for placing their lands in TFLs and managing them sustainably and for community benefit, forest companies were allowed to log large swathes of public forest. Now, with the stroke of a pen, Coleman has turned that sweat-heart deal into a steal.
The newest scandal erupted with the announcement that WFP’s new real estate agent, Colliers International, had listed for sale approximately 6,300 acres of the former TFL lands in the Sooke-Port Renfrew area. The listing of 4.1 kilometres of waterfront within what Collier’s calls “some of British Columbia’s most amazing land,” triggered outrage in the community and critical headlines.
But this is not the first time government decisions about TFLs have triggered scandal and calls for an investigation. Back in the 1950’s, when the government of the day originally set up the Tree Farm Licence system, then Forest Minister Robert Sommers went to jail for taking bribes in allocating the tenure. And in 2004, the previous Forest Minister, Mike de Jong, privatized almost 215,000 acres of Weyerhaeuser’s TFL lands – producing a windfall worth a potential $800 million for the US logging giant. The fact that Weyerhaeuser had donated almost $500,000 to the Forest Minister’s party over the previous decade raised eyebrows.
The abuse of power continues today as the BC Liberals dismantle public protections for public forests and turn over management to corporate donors. Last January, Forests Minister Rich Coleman signed off on a secret deal that removed ~ 70,000 acres from protected status as forest land within TFL’s 25, 19 and 6 on Vancouver Island.
At the time of the deal, Jessica Clogg, staff lawyer with West Coast Environmental Law, summarized the betrayal: ” For the average British Columbian … it’s hard to see where we’re benefiting…This is a corporate benefit. In fact, it goes beyond that. It’s a huge [public] loss.”
As the story unfolds it becomes apparent that protecting the public interest wasn’t at the forefront of Minister Coleman’s mind when he penned the deal; WFP’s rights to log public land remains unchanged, but all public interest restrictions given as consideration for access to public land have been removed.
The privatization-which occurred with no consultation with affected First Nations, communities, or local elected leaders-removed the land from public oversight, reduced environmental standards for streams and wildlife, removed raw log export restrictions and freed the lands for subdivision and sale. The only benefit is to WFP and to the potential developers of these priceless lands, such as Ender Ilkay and his ilk. The public, First Nations, surfers, and forest critters lose; WFP, and the developer(s) get rich. Many are characterizing the deal as a betrayal of the interests of Islanders and British Columbians.
The only justification Mr. Coleman has offered publicly is that it would make the debt-ridden WFP stronger: “if it makes the company stronger, it makes forestry stronger and it makes the future of forestry for all those communities up and down Vancouver Island … that much more stable.”
But when examined closely this argument collapses. WFP is largely owned by a conglomerate called Brookfield Asset Management (formerly Brascan), which acquired control through the bankruptcy and restructuring of Doman/WFP. The ~$247 million of debt that WFP had around the time of the privatization wasn’t held by a cutthroat bank with a knife at the company’s jugular. No, it was held by Tricap Management Limited, which is described in government filings as “an indirect wholly owned subsidiary of BAM [Brookfield] that acts in the interests of its underlying investors.”
And for a debt-ridden company in need of government giveaways, WFP sure seems to have a lot of money. First, it was involved in Brascan’s (Brookfields) $1.2 billion takeover of Weyerhaeuser’s coastal operations; then it acquired Canfor’s Englewood logging division for more than $45 million; and finally, WFP received $109 million in rebated softwood tariffs. I bet we all wish we were so financially troubled.
Oh, and did I mention that in 2005 Western Forest Products just happened to donate $44,000 to the BC Liberal party – this was one of the largest donations they received that year.
As to how a company with over $200 million in debt can find money to donate to a political party, Coleman said: “There’s lot of companies out there that are considered successful companies that do carry debt, so I don’t think that’s a relative figure.”
Shockingly, Minister Coleman ignored the advice of his own Ministry staff who advised that tenure holders given TFL deletions should pay compensation…
A 2004 government briefing note notes:
The government and the landowner made a contract decades ago to manage the [TFL] land as if it were public; deletion undoes that contract. Since the initial contract involved consideration – the award by government to the landowner of timber rights on Crown land – it would seem that the landowner should be able to buy out of that contract by providing appropriate consideration in return.
The Victoria Times Colonist appropriately sums up the situation thus:
“This deal has been a shocking betrayal of the interests of Islanders, and British Columbians. It’s up to local politicians and the public to repair the damage done and hold the provincial government to account.”
So, given this betrayal, what should happen?
- The pending sale of the property by WFP to Ender Ilkay Development should be stopped until the decision to privatize these lands is investigated.
- Affected First Nations should file suit and ask for a writ of prohibition preventing sale of the land until underlying title and failure-to-consult issues are resolved.
- Options for protecting the tress, critters, and public access need to be researched and imposed.
It is clear that Minister Coleman and his government want to avoid a dialogue on this erupting scandal. Thus, it is up to us to open one up for them.