11 July 2006

Due diligence, Kathy? Try unduly indifferent.

Kathy Dunderdale, currently collecting a paycheque as the minister of natural resources, likes the phrase "due dilligence".

In her former cabinet post, as the almost completely ineffectual minister of innovation, trade and rural development, she used the phrase all the time. A little over a year ago, Dunderdale was desperately trying to explain how her department had signed agreements with an American call-centre company and yet the department seemed completely unaware of a series of serious law suits involving the company.

Dunderdale's excuse at the time was that the department's "due diligence piece" had been completed before the law suits had been filed. Unfortunately a simple use of google would have turned up numerous suits that were filed before the deal was inked and the "due diligence piece" was completed. Former NDP leader Jack Harris called google "due diligence for dummies". All this was covered at the Bond Papers before.

That little episode followed on the heels of at least one other major failure of Dunderdale's department to handle its "due diligence piece" on a Chinese company under embargo from the United States for shipping sensitive weapons technology related to weapons of mass destruction.

All this is just to refresh our memories as we listen to Dunderdale tackle an interview with CBC television's Debbie Cooper on why the provincial government has run to Ottawa to ensure INCO lives up to its contractual commitments to build a smelter/refinery in the province.

The interview is amazing given that Dunderdale never really explains what is going on; but she does manage to say "due diligence" and "due diligence piece" twice in the space of about 30 seconds at the start of the interview.

Simply put, there is no logical reason for the pleadings sent off to prime Minister Stephen Harper. The provincial government has a development agreement with INCO that apparently binds the company to build a conventional smelter/refinery if the hydromet facility originally proposed for Argentia fails. If anyone is going to hold INCO's feet to the fire, to use another horrid cliche, then that would be Premier Danny Williams. Harper's probably scratching his head in bewilderment over the letter.

So are the rest of us... even after duly diligently piecing together whatever it was that Dunderdale said.

For some months now, the provincial government and INCO have been engaged in some sort of dance with INCO wanting to build its hydromet test facility at Long Harbour while the provincial government insisting on having it built at Argentia as originally planned.

INCO has given no indication it won't build a hydromet smelter, although if you read the government news release, you will find just such an implication - "[Premier Williams has] written the Prime Minister to seek his assurance that as the Government of Canada proceeds with its due diligence of takeover and merger arrangements involving Inco, it will ensure the company commits to the use of hydromet technology in Newfoundland and Labrador for its Voisey's Bay project."

The issue seems to be about where the smelter will go.

That's about all we know in the public.

The reason is because while the provincial government likes the phrase "due diligence", no one on The Hill seems to have a clue what it actually means. What Dunderdale appears to mean by saying "due diligence" is that government is looking to achieve a certain result that will be beneficial to the province.

Due diligence is a term popular in business and means simply that a project is thoroughly researched and assessed before it is pursued. It can also mean that all reasonable means are used to secure a good result.

Due diligence carries with it another expectation, namely that shareholders will be thoroughly and properly briefed on a project. This is especially true when the project is risky or when the sharehodlers may take a financial loss if the project fails.

In that respect, "due diligence" is like "accountability" and "transparency". It is also like one of the basic definitions of public relations: we communicate to gain and maintain informed support. That can't exist if there is no information.

It can't exist if there is no action. Due diligence, like transparency and accountability are more than words to be tossed at random during interviews.

Instead of due diligence, it appears that what what we have from Dunderdale and her colleagues is yet another example of government being unduly indifferent to the requirement that they be fully and properly accountable to the public.