Thursday, July 17, 2008

Watchdog finds bungling, negligence in forest deal that enriched company

After the auditor general's devastating report on the government's incompetence and negligence in removing vast tracts of prime Vancouver Island land from a tree farm licence, things shouldn't have got much worse.
Within hours, they did.
Current Forests Minister Pat Bell responded to the report as if he hadn't read a single word.
Instead of accepting the recommendations, or offering a fact-based rebuttal, he attacked Auditor General John Doyle, an Australian chosen for the independent post by a unanimous vote of the legislature. "If Mr. Doyle thinks this is the way we do business in Canada, he's dead wrong," Bell blustered.
It was a lame attempt to divert attention from the most damning auditor general's report since the fast ferry scandal.
And a written response from the ministry, while it raised some sound points, did nothing to refute the auditor general's main findings.
Last year, then forests minister Rich Coleman handed Western Forest Products a big gift. The international corporation wanted the government to release 70,000 acres, including prime real estate along the coast of Victoria, from tree farm licences.
The land had been protected as working forest and managed under the same rules as Crown land. In return, the government had provided extra harvesting rights on Crown land.
Getting the land out of the tree farm licence meant up to $200 million in windfall gains for WFP, which could sell it for real estate development, export more raw logs and work to lower environmental standards.
But for communities, the change meant loss of wildlife habitat, green space and other economic opportunities.
All development planning became irrelevant when Coleman signed the deal and what had been 280 square kilometres of protected green space was opened for subdivisions.
The auditor general found Coleman made the decision without knowing how much the deal was worth to the corporation. He didn't seek compensation - normal in such deals - because he wanted to company to get all the benefits.
Coleman thought Western Forest Product needed the money to strengthen its balance sheet.
But he didn't how much it needed, or whether other sources besides the taxpayers were available or what Western Forest Products would do with the windfall.
And he made the decision without any consultation with affected communities or other stakeholders and without information on the costs to the public.
Coleman got a five-page briefing note from the ministry and said OK. He's never offered any explanation beyond saying the company needed the money and supporting it was good for the coastal forest industry. But Coleman could never produce an analysis or cost-benefit study to justify the decision.
In fact, the auditor general asked Coleman for a meeting as part of his reviews so he could understand the minister's thinking. Coleman refused. (Which makes Bell's bluster more ridiculous.)
The auditor general found the removal was made "without sufficient regard for the public interest."
The government failed to do the most basic due diligence to see if the company really did need assistance.
And the watchdog found the government failed to make any effort to assess whether the gift to the corporation would be of any public benefit, whether in protecting forest jobs or in some other area.
Coleman had made the decision based on a five-page briefing note, which Doyle found was "incomplete" and "did not make a persuasive case for allowing the land removal."
The option of compensation wasn't even considered in the material.
"There was no explanation of how allowing the land removal was in the public interest," the report found.
And Coleman was ultimately responsible.
"The minister was the final check in the process and the statutory decision-maker but, given the importance of the decision, he did not do enough to ensure that due regard was given to the public interest," the auditor general concluded.
It's a devastating report, one that finds both incompetence and negligence.
Footnote: Bell's bizarre reaction included a complaint that there were no recommendations in the report, as if a call for basic competence and diligence was not enough.
Coleman's place in cabinet should be in count as a result of the report, particularly given the sensitivity of his new role responsible for welfare and services for the disabled.
Premier Gordon Campbell also faces some tough questions about his role.


Anonymous said...

1) Has anybody in government defined -- exactly -- what the "public interest" is yet?

2) Earlier this year, Coleman said he wasn't in conflict, and pointed to a 2005 letter from the former conflict commissioner. That letter, he said, indicates that due to a memo Coleman sent to his deputy minister -- which says any issue to do with his brother should not come to him -- eliminates him from the appearance of conflict. - Judith Lavoie
Times Colonist, July 17, 2008. So in 2005 Coleman was told to stay away from his brother's business, but in 2007 he becomes his brother's keeper?

3) CCPA has a timely study out this week: "Forest Land Reserve urgently needed to counter unsustainable logging rates and massive sell-off of Vancouver Island forestlands: study"

Stephanie said...

I am disabled and recently lost my apartment due to circumstances beyond my control and am having extreme difficulty in finding a place I can afford. Now that Coleman is responsible for services for the disabled, does that mean I will soon be getting my $200 million, too?

Anonymous said...

I'm sorry, but the questions that immediately came to my mind in reading your comment, Stephanie: Are you related to Minister Coleman? How many tens of thousands of dollars have you contributed to the BC Liberals?

Anon at 7:42 is right. It all comes down to how how you define "public" interest. And it seems that Mr Coleman's and Mr. Bell's idea of "public interest" is a tad more self-centred than how you or I might define it.

I can't help thinking how many horrific individual and family crises and how much long-term harm would have been averted if this $200 million had gone to provide community living supports to those in the most dire need across BC instead.

I understand the forestry industry is in trouble and would support reasonable use of public money to support the worst-hit communities, but I don't see that this decision helped anyone beyond the shareholders of a company that was a major political donor to the BC Liberals, and that had uncomfortably close personal ties to the Minister.

Any company that can afford to give away tens of thousands of dollars in political donations could hardly be defined as being in dire financial straits! Some have questioned whether the AG's report should have mentioned the donations, but IMHO, it's hugely relevant.

Anonymous said...

approx. 24 percent of forest land on vancouver Island is private land but subject to TFL rules. The rules were changed by the present government aawhile back. Expect to see more largess from this government to these poor forest cmpanies now switching to real estae salesfolk. Coleman and campbell before him both worked in real estate sales so know how to snow the client. Davi schreck of startegic Thought has a good article on the way the Liberals manipulate money. worh reading.