MPs ask whether pulp giant's revamped board is Canadian enough

Members of Parliament are raising concerns after Canada's new pulp and paper giant dismissed the previous board of directors of Resolute Forest Products and replaced it with a board dominated by longtime Paper Excellence executives.

They are also questioning whether the new board satisfies the commitment Paper Excellence gave the federal government when it approved its takeover of Resolute — that it would "maintain" a Canadian presence on Resolute's board of directors.

"I think Canadians are waking up to the fact that a company that has very unclear ownership, that has ties directly to Shanghai and to Indonesia, may be controlled by a family that has massive control over international pulp and paper markets, is now sitting on top of and in control of 22 million hectares of Canadian forest," said NDP natural resources critic Charlie Angus.

"We need to know who's making the decisions here. They were allowed to take over Resolute, they made promises about the takeover of Resolute, that this was going to remain very much Canadian."

Seth Kursman, spokesperson for Resolute Forest Products, confirmed that the company's previous board of directors is no longer in place. He said two of the three current directors have Canadian citizenship and "all members of the Resolute executive team are also Canadian."

Industry Minister François-Philippe Champagne won't reveal what the company promised the federal government regarding what percentage of Resolute's board have to be Canadian citizens, saying he has to respect the Investment Canada Act. He said his department will be watching to ensure that the company keeps the promises it made when it acquired Resolute.

"Canadians know me by now. I'm a hawk on these things," Champagne told CBC News. "We have a sophisticated process and we have always made sure that whatever undertakings that people (make) to the government of Canada, we follow up and we make sure that they are respected."

Champagne's comments come after Domtar, owned by Paper Excellence, acquired Resolute Forest Products earlier this year — a deal that consolidated Paper Excellence's dominance of Canada's wood pulp industry.

In March, CBC News took part in a months-long investigation of the global forestry industry with 40 media outlets under the umbrella of the Washington-based International Consortium of Investigative Journalists. That investigation raised questions about who is behind Canada's new pulp and paper powerhouse.

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.

CBC's investigation also found leaked records and insider accounts that show that, at least until a few years ago, Paper Excellence appeared to have been closely and secretly co-ordinating business and strategy decisions with Asia Pulp & Paper.

Asia Pulp & Paper is one of the world's biggest pulp and paper players and has a track record of environmental destruction.

The company maintains that Paper Excellence is independent of Asia Pulp and Paper and is owned by Jackson Wijaya.