By Joshua Martin | Originally posted in Environmental Paper Network
In November 2021, the relatively small and privately owned company, Paper Excellence, acquired Domtar, a major, publicly-traded North American uncoated freesheet paper and packaging producer that today has 11 pulp and paper mills and 9 manufacturing and converting facilities in the U.S.and Canada, in a transaction valued at $3 billion USD. Not long after, in January 2023, regulators approved Paper Excellence’s takeover of Resolute Forest Products, a publicly-traded lumber and pulp company controlling over 22 million hectares of forest in Canada’s boreal region, for a sale price of another $2.7 billion USD.
In both cases environmental organizations warned investors and authorities about a lack of transparency and the apparent business ties to the Indonesian paper giant Asia Pulp & Paper (APP), a company linked to 30 years of deforestation, forest and peat fires and the destruction of wildlife habitat in the 2 million hectares of land under their control in Indonesia. Yet the acquisitions were both approved by regulators.
But now in response to additional revelations now published in a major, cross-border investigative journalism project, politicians in Canada are questioning if the recent corporate acquisitions by Paper Excellence were approved with complete and accurate information. MP Charlie Angus, of the NDP (New Democratic Party), “is calling for parliamentary committee hearings to examine who is behind the company that has become Canada’s largest producer of wood pulp”, and on March 21, introduced a motion to the Standing Committee on Natural Resources asking for a debate on Paper Excellence.*
Deforestation Inc., a global journalism project by the International Consortium of Investigative Journalists (ICIJ) involving 39 media outlets, and 140 journalists in 27 countries, uncovered widespread greenwashing and a lack of transparency in the global forestry industry. Spurred by the concerns of environmental NGOs and by extraordinary information shared by whistleblowers who had previously worked at Paper Excellence, the investigation included a deeper look into the pulp and paper giant’s claim that it had no business relationship with APP.
What they found was substantial additional evidence that the two companies are under common control by the same corporate group. Their discoveries, published across numerous articles, expanded on the information already revealed in Papering over Corporate Control: Paper Excellence’s relationship with Asia Pulp & Paper and the Sinar Mas Group, published by Environmental Paper Network, Greenpeace, Rainforest Action Network and Woods and Wayside International in October 2022.
As Stefan Labbé of Glacier Media, writes, “Paper Excellence says it’s independent from Asia Pulp and Paper. But a Glacier Media investigation with partners from the International Consortium of Investigative Journalists has found a sprawling nexus of ties.” The investigation into Paper Excellence included several media outlets, including the Halifax Examiner, CBC, Le Monde, Radio France, and Inside Climate News.
The Forest Stewardship Council (FSC) is also facing questions, as Asia Paper and Paper’s disassociation from the FSC system would conceivably jeopardize the certifications held by Paper Excellence if the companies are a part of the same corporate group.
From supply chains to finance and certification, the principle of group-level responsibility is becoming widely accepted as the way to ensure that sustainable practices are implemented consistently by all entities under common control. To assist stakeholders, Greenpeace has led the development of a standard methodology – Shining Light on the Shadows – to discover the structure of corporate groups, providing practical guidance for researchers, accountants and regulatory enforcement officials to evaluate evidence consistently and objectively. The methodology offers a solid and consistent basis for the development of a unified regulatory approach.
EPN encourages all stakeholders, including local communities, government regulators, the FSC, conservation groups, consumers, financiers and banks to carefully consider the information published in the ICIJ investigation and our reports.
* On March 31st (after the original publication of this blog) Canada’s Standing Committee on Natural Resources passed a motion to investigate the ownership structure and business relations of Paper Excellence, a pulp and paper company based in Richmond, B.C.