Pensions on trial

By Briony Penn, November 2011

A First Nations case before an international court could spell trouble for the government pension funds that purchased TimberWest.

For the first time in Canadian history, an international human rights tribunal, the Inter-America Commission (IAC), will hear a human rights complaint against Canada, one brought forward by six southeast Vancouver Island First Nations of the Hul’qumi’num Treaty Group (HTG). With the failure of our provincial and national treaty process, First Nations are taking their cases to such international bodies to seek justice and, judging from comparable cases in the Americas, are likely to succeed.

All of us in the Capital region should be paying attention to this case as it could have broad and far-reaching implications—whether you are interested in human rights, urban sprawl, water quality, the future of our endangered forests…or your pension. 

Yes, pensions. Pension fund investments for many Victoria residents are involved in the complaint and might soon be found in violation of international law.

The Hul’qumi’num have charged Canada with the illegal and uncompensated seizure of their ancestral land—an act of “egregious piracy”—for the benefit of corporations which have engaged in clear-cutting, deforestation and environmentally-destructive development activities. Together with Amnesty International and over a dozen Canadian First Nations governments and organizations, including the Assembly of First Nations, HTG has been presenting evidence that Canada has failed to recognize and protect their rights to property, culture and religion, as recognized under the Organization of American States’ principal human rights instrument: the American Declaration of the Rights and Duties of Man, as well as the UN Declaration on the Rights of Indigenous People. This is following on an earlier ruling by the Commission that the BC treaty process has failed to find a timely and effective remedy to land claims.

The land in question—a full 40 percent of the land base of the southeast part of Vancouver Island, extending down into the backyard of the Capital Regional District—is part of the original E & N land grant stemming from 1884. BC awarded over 300,000 hectares, primarily old-growth forest and representing two-thirds of the HTG’s ancestral territory, to Robert Dunsmuir and his company  in return for building the Esquimalt & Nanaimo Railway. Dunsmuir had launched his company, which also received substantial cash grants, with US investors who were buying the coal. 

Robert Morales, chief negotiator for the HTG, says: “We cannot accept the position of the Canadian government to let it go just because the theft took place over 100 years ago. We are suffering the impacts of that decision now, and there has to be some kind of restitution.”

Three corporations are now the “successors in interest” to 190,000 hectares of that original land grant: TimberWest, which this spring was purchased outright for just over a billion dollars by two pension fund managers for federal and provincial government employee pensions; Hancock Timber Resource Group, owned by Manulife; and Island Timberland, an asset of the notorious Brookfield Asset Management Corporation, a company with multiple ties to BC Liberals, pension funds, and Western Forest Products (and on whose New York property Occupy Wall Street protesters are camped).

Morales believes the Hul’qumi’num’s case will be successful: “I believe that the international jurisprudence is going farther than domestic jurisprudence. Under international law there is a duty to consult under the principle of Free, Prior and Informed Consent.”

The decision is expected soon and if HGT wins, Canada will be in violation of international human rights law and will have to decide how it is going to redress this violation. International law standards demand a duty to return, replace or make compensation for the violation of seized lands.

Victorians are implicated and affected in many ways by this case. Victoria is a government and armed forces town. TimberWest’s new ownership, BC Investment Management Corporation (bcIMC) has clients with public sector pension plans, insurance funds and public trusts, while PSP Investments is a pension investment manager for the federal public service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. All employees in these agencies, some of whom have shown leadership in socially responsible investment in the past, will have to ask some tough questions of their employers, their unions, their investment managers and themselves—about who was/is responsible; about the implications for redress; and about future investments and whether they will exclude those that breach the OAS human right declaration and the UN International Convention.

Insurance holders with Manulife, of which there are a healthy number in Victoria, will also have to ask themselves these questions, as will shareholders of Brookfield Asset Management.

From the perspective of ecological justice, the implications are huge. The HTG has compiled a compelling case of photographs, maps, reports and other evidence of environmental degradation in now-endangered ecosystems. Over 1000 photographs alone of the clearcutting and deforestation are lodged in the file. 

In TimberWest’s own management circular outlining the sale last spring, the harvesting rates are currently at 1.9 million cubic metres per annum, which already exceeds any sustainable rate of harvest, even by Crown forest standards. In another 2011 public document, the company states, “given TimberWest’s historical practices and emerging markets, harvesting will continue and will be accelerated to meet emerging market demand and future supply shortfalls due to the Mountain Pine Beetle epidemic in the interior of BC.”

The creation of TimberWest’s real estate arm, Couverdon, is described as “an enabler of growth on Vancouver Island…To accomplish its mission, Couverdon is actively working to entitle land for these end uses in and around communities on the southeast coast of Vancouver Island.” Over 55,000 hectares are slated for “entitlement changes”—new-speak for urban sprawl in rural areas. 

In the April 11 press release from bcIMC and PSP Investments on the purchase of TimberWest, they state, “No fundamental changes in the operations of the business are anticipated. It will be business as usual on the ground and existing operating systems and processes will remain in place.” 

“Business as usual” was laid out fairly clearly in a TimberWest PowerPoint presentation delivered to the McElvaine Investment Management 2010 Partner Conference on May 7, 2010. There are plans for resorts to villages and sprawl in-between, from Sooke to Port Renfrew, and the Malahat to Campbell River. For areas like Port Renfrew, it notes: “Opportunities best pursued after a five-year development timeframe due to lack of current development, a need for increased infrastructure or a change in the political environment.” [emphasis added] One wonders what change they are anticipating. And how objective will governments be in their decision-making around smart growth strategies and development of rural lands (consider the recent Juan de Fuca resort debacle) if civil servants’ pensions are relying on real estate development? (Not to mention the lobbying and political donations such large corporations often engage in.)

The decision to find redress in the international tribunals is taking place against the recent announcements of the failed internal BC treaty process, with a half billion dollar debt incurred by First Nations to participate in the negotiations. Head of the BC Treaty Commission, Sophie Pierre, recommended both governments shut the treaty process down unless they can commit to the agreements reached by the negotiating teams. The HTG themselves have incurred a $22 million debt during the failed negotiations.

Another very interesting element to this story is the recent announcement by TimberWest and Pacific Carbon Trust (PCT) that these same ancestral lands have been developed as a carbon offset project—the Strathcona Ecosystem Conservation Project. 

PCT wrote the forest protocol, and is the buyer and seller of the credits to public sector bodies, which in itself differs from other international offset regulatory bodies, like the Verified Carbon Standard. The project commits TimberWest to leave what’s left of the old growth—only eight percent remains on these lands. The conservation of the old growth is expected to reduce emissions by nearly 8,749,482 tonnes over a 25-year crediting period, which will net TimberWest and its pension fund owners a healthy return over time, depending on the price of carbon (currently $5-$25). Yet, it is only because of ancestral stewardship that the carbon is even stored on the land. This carbon has taken 500 to 1000 years to be stored in the old trees and soil—it certainly wasn’t done by TimberWest.

The case that business-as-usual would have meant liquidation of old growth is made clearly in the Project Summary prepared by the Pacific Carbon Trust. It states, “In the absence of this project, old-growth forest would be harvested and converted to second-growth forest with higher timber production values.”

While it’s encouraging that TimberWest is now bound by a legal agreement to not cut down old growth anymore, it is worrying that we have had to pay through our own public sector organization’s carbon liabilities to get that agreement. Also on the negative, the continued lack of separation between government employee pension holders, the Pacific Carbon Trust, government, land-use decision-makers, and the company are enough to make any conflict commissioner’s head spin.

Come the Commission’s decision, Canada will have to respond. Redirecting these carbon revenues to the rightful owners, as is already being done in Haida Gwaii and the central coast for stewarding their ancestral lands, seems to me to be the first act of redress that the federal and provincial governments are supremely poised to make.

Naturalist and writer Briony Penn, PhD has been working on forest carbon projects for a couple of years in the non-profit sector. She is author of A Year on the Wild Side and The Kids Book of Geography.