19 June 2013

The New Chinese Connection #nlpoli

Premier Kathy Dunderdale took off for China on Tuesday as part of a new effort to get Chinese state-owned companies to invest in the province’s mining and offshore oil and gas industries.

The story brought to mind three things.

First, the trip to lure the Chinese to the province is probably tied to government reluctance to offer any comment on a recent federal announcement that companies will be required in future to reveal their payments to governments, including provincial governments. 

That would be payments of any kind including royalties as well as any other payments.  The federal initiative is an anti-corruption measure as much as anything else.

The provincial government already blocked public disclosure of royalty payments by companies through the now-infamous Bill 29.  State-owned companies from China involved with strategic minerals would likely prefer to deal with a jurisdiction that is closer to their own view when it comes to the public’s absolute right not to know what their government is doing. 

Second, the talk of Chinese companies brought back memories of Sino-Energy.  That was a consortium of companies that included a Chinese company linked to illegal arms shipments.  The Conservatives signed a deal with the group to let them have access to information on Newfoundland and Labrador Hydro and the northeastern electricity system in exchange for their potential investment in the Lower Churchill.  Nothing came of the memorandum of understanding signed in early 2004.

Interesting note:  in may 2004,  then-natural resources minister Ed Byrne lied to the House of Assembly about the deal.  Byrne was asked if there was any news about the Lower Churchill.  He gave a flat “no”.  Next day, Byrne signed a confidentiality agreement with the consortium. In June, Byrne signed a memorandum of understanding with Sino-Energy. 

No one knew of the deal until July when Premier Danny Williams mentioned it during a scrum.

Secrecy, the Chinese state-owned companies, and the provincial Conservatives:  a familiar combination.

Third, there’s the ongoing national security issue.  There was a big one in the 2004 secret deal.  in 2009, the Canadian Security Intelligence Service (CSIS) hosted a conference on the security implications for Canada of China’s energy strategy.

In 2010, the director of the Canadian Security Intelligence Service told Peter Mansbridge that CSIS had some concerns about Chinese investment and activities in Canada.

“We're in fact a bit worried in a couple of provinces that we have an indication that there's some political figures who have developed quite an attachment to foreign countries."

The director never identified the provinces and, in fact, he subsequently apologized for the comment. 

But still, you have to wonder.

There would certainly be a reason for caution if any Chinese company did express an interest in strategic minerals in this province.  There’s more at stake than provincial government royalties.