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Tiny Cortes Island girds for battle with China's huge CIC wealth fund

Reports CIC considering stake in timber firm exacerbates opposition on Cortes Island, as residents fear most benefits will flow overseas

PUBLISHED : Friday, 07 December, 2012, 12:00am
UPDATED : Friday, 07 December, 2012, 5:00pm
 

Residents of an idyllic island off the west coast of Canada are facing off against corporate opponents set to include a Chinese sovereign wealth behemoth, the US$480 billion China Investment Corporation (CIC).

Environmental activists and Cortes Island residents last week blockaded land owned by the Island Timberlands (IT) company, in a bid to prevent logging. They object to the environmental impact of felling on the island and fear that jobs and economic benefits will be sent to China.

Cortes Island activist Zoe Miles said that a reported deal for CIC to buy a 12.5 per cent stake in IT was a "huge part of the issue". She also said that because IT was exporting raw logs to China, not finished products, the bulk of the economic benefits were being exported, too.

With a population of about 1,000, the British Columbia (BC) island is known for its natural beauty and thriving arts community.

"We aren't anti-logging. We're opposed to Island Timberlands' model of industrial-scale logging," said Miles, who was raised on the island, 160 kilometres north of Vancouver.

"The jobs after the cutting of the trees aren't staying in BC," she said. "Our concerns are both ecological and economic. We want to preserve the ecosystem and jobs for locals."

She said the activists wanted IT to produce a logging plan "that meets the community's desires". That included preserving old-growth forest, setting logging back from waterways and not clear-cutting.

Some activists, including Ken Wu from the Ancient Forest Alliance, want the provincial government to protect parts of Cortes by purchasing it.

"You ultimately have to buy the private land that you want protected," said Wu, whose group wants to re-establish a BC parks acquisition fund. "The government isn't going to expropriate it."

The Wall Street Journal reported last month that CIC was negotiating with Brookfield Asset Management to buy one-eighth of IT. Brookfield, with US$150 billion in assets under management, is a general partner and "significant majority shareholder" in IT said Brookfield senior vice-president for communications, Andrew Willis.

Willis said he could not comment on the reported US$100 million CIC deal. He said other investors in IT currently include Canadian provincial retirement funds. CIC did not respond to a request for comment.

The blockade last week resulted in IT withdrawing work crews sent to carve out logging roads. IT, the second-largest private landholder in BC, owns about 1,000 hectares on Cortes.

Mark Leitao, director of human resources at IT, said the firm was considering its next move, but still intended to log its land. "At the moment we are taking a rest and exploring our options … but our plan is to harvest those two blocks, safely," he said.

IT workers were blocked last week by protesters lying in front of vehicles. Some protesters brought placard-waving children to the site.

Leitao said that the land in question was not virgin forest, having been through "at least one rotation" of logging, perhaps as long as 100 years ago. He said the firm was committed to saving "veteran" trees older than 250 years old.

He said that the land would not face clear-cut logging, in which most or all trees are razed.

"We are managing this tree by tree," Leitao said. "We believe we have done right."

Although the goal was to replant, he said that some of the felled land could be sold for property development.

Miles, the activist, said that singling out old trees to be saved was not good enough. "We'd draw a distinction between saving individual old growth trees and saving the old growth forest as a whole," she said.

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