The not often talked about downside to foreign investment in British Columbia.
A little something for you to digest while I finish up the Port Mann story, something very relevent to my ongoing interest in how much of British Columbia is being bought and sold by foreign interests.
First up, let’s take a trip down memory lane to the emotional little moment Pat Bell had last year when he announced that a subsidiary of an Asian( Indonesian) forestry giant had bought the disaster known as the Mackenzie Pulp Mill. Don’t get me wrong, that community badly needed the jobs that mill provided – still does, matter of fact- however all is not well for the new owners and Pat Bell knows it.
The mill underwent a routine shutdown last fall to perform maintenance work and for unknown reasons, simply did not pay many contractors who have been left holding the bag. For all intents and purposes, the work performed and supplies provided were completely satisfactory to mill owners,the mill was back up and running as it should have been, however payment has not been forthcoming and sources indicate some contractors were left owing amounts of $ 700,000.00 plus!
Sources close to Pat Bells office also indicate that Bell himself is completely aware that the new owners of Mackenzie Mill did not pay these contractors after the shutdown and that Bell has stated that “they were encouraging the new owners to pay the bills, because that is how it works here.”
Indeed it does – most of the time. And one would hope that with Clarks gosh darn amazing Job Plan, this government would want to make sure new investors in BC understand that before they step up to the plate. And that leads us to number two interesting tidbit about how some foreign companies do business in BC.
Sources indicated as well, that a similar situation has occurred in Kitimat, where the new Chinese owners of the closed Methanex plant ( Ko Yo Development) abruptly terminated the contract with Blue Horizon Industries who had been in the final stages of dismantling the plant which will be shipped to China. The Methanex plant site will be the future location of none other than Shells LNG plant often heralded by Christy Clark.
Although it was reported that as of November 2011, Ko Yo Developments had paid Blue Horizon approximately $15 million of the $20 million contract, sources have confirmed to me that other contractors and suppliers on site remain unpaid as a result of the main contractor being taken off site. Calls to Blue Horizons CEO were not returned at the time of this posting, nor were calls to the other parties mentioned in both instances.
This kind of questionable business behavior poses some troubling questions, because pursuing legal remedies against foreign-owned companies is more often than not a cost prohibitive t remedy to all but the largest unpaid companies. Smaller companies will simply have to absorb the loss or place the debt into corporate collections where no fee is paid unless recovery of the debt is achieved. And while a larger company might be able to still pay their employees and keep jobs after non-payment of a large contract, mid size or small, growing companies are at risk of lay-offs and the trickle down implications of lack of expected revenue. Let me be clear, these unpaid contracts and invoices are not insignificant to the bottom line of every company involved.
My source laid it out best when he said:
” Our various governments spend a lot of time in China, which has bothered me a lot when we were talking about shipping raw logs, raw minerals and then some of the mills that were sent, but if we wind up with a lot of investment from companies who are discovering that they don’t have to pay their contractors, I’m even more alarmed.”
Now what would the Gosh Darn Amazing Christy Clark have to say about this?