Except briefly, let’s avoid environmental questions about Woodfibre LNG for today and concentrate on fiscal matters.

Even if Woodfibre LNG was an environmental bonus to Howe Sound and the surrounding communities; even if it was clean as a whistle, its plant and accoutrements safe as a church, and the tanker traffic absolutely guaranteed by God to cause no accidents, the case against having this plant would be open and shut.

Let’s look at it from a business proposition.

The business case against BC LNG

To start with, BC’s negotiators have absolutely no experience whatsoever in the business field, much less dealing with the likes of Sukanto Tanoto, a certified, major league tax evader – not avoider, evader.

Up against this shady, at best, Indonesian billionaire, we have Premier “Photo-Op” and her poodle, Natural Gas Minister Rich Coleman, prancing around the world, hyping LNG, dealing way over their heads in what is, more and more each day, a losing proposition. They’re doing this because they’re politically committed and rather than simply say, “we were premature and excessive in our enthusiasm,” and lose face, they’re bluffing it through, at our expense (1st Class all the way), hoping like Mr. Macawber that “something will turn up.”

BC leaders in way over their heads

Here are the business qualifications of this pair.

Christy Clark, though she attended three universities, has no degree and no professional background, let alone so much as 24 hours experience in any business.

Before his election to the Legislature, Rich Coleman ran a real estate management and consulting company and is a retired policeman.

His Official Legislature biography utters not a peep about his work background, but says:

[quote]Before entering public life, Rich was governor of the BC Kinsmen, president of the Aldergrove Chamber of Commerce, Langley’s 1988 Volunteer of the Year, and a director on several volunteer boards. As a member of the Aldergrove Kinsmen Club in the 1980s, Rich oversaw the volunteer fundraising and construction efforts that built the Aldergrove Kinsmen Community Centre, a vital community facility which houses a preschool, library, workout area, and meeting space. The Club was also involved in building a successful housing project in Aldergrove. Rich is a life member of the Kinsmen.[/quote]

The premier and Mr. Coleman especially seem to have been fine citizens yet just how that qualifies them to deal with international corporate slime bags is quite another matter.

About said Slime Bags

Before getting into this, let’s have a quick look at Tanoto’s environmental record. Greenpeace calls him “Indonesia’s lead driver of rainforest destruction”. Tanoto doesn’t deny his gross, unwarranted destruction of rain forests but claims he has reformed.

Woodfibre LNG Vice-president Byng Giraud was, from 2010 until 2013, vice-president corporate affairs for Imperial Metals, owner of the Mount Polley mine which, in 2014, caused massive destruction in Quesnel Lake, Polley Lake, Hazeltine Creek and Cariboo Creek, the entire Quesnel and Cariboo river systems right up to the Fraser River.

When asked about Tanoto’s appalling environmental record, Mr. Giraud scarcely puts up a vigorous defence for his boss, stating:

[quote]When you come (to B.C.) you have to follow the rules, regulations and conditions imposed by our regulatory regime.[/quote]

Just as Tanoto’s companies do in Indonesia, presumably.

Tax evader extraordinaire

But what about his corporate reliability? Can we trust Tanoto to be responsible and meet his financial responsibilities?

Surely even to Clark and Coleman this is of huge importance and requires the highest degree of “due diligence”.

Let The Guardian, one of the most respected papers in the world, speak the evidence:

[quote]Giant Asian logging companies that make billions from destroying rainforests use a labyrinth of secret shell companies based in a UK overseas territory, the British Virgin Islands (BVI), which operate as a tax haven, according to documents seen by the Observer. The 13 companies own millions of acres in Indonesia, provide much of the world’s palm oil, timber and paper, and use complex legal and financial structures to keep their tax liabilities low.

An unpublished two-year investigation by anti-corruption experts, and seen by the Observer, says Britain should launch a major investigation into the use of the BVI and other tax havens by “high-risk” sectors such as Indonesian forestry. This follows a court case in Jakarta in which one of the world’s largest palm oil companies, owned by billionaire Sukanto Tanoto, was fined US$205m after being shown to have evaded taxes by using shell companies in the BVI and elsewhere. The company has agreed to pay the fines.

Documents arising from the case show that Tanoto’s company, Asian Agri, systematically produced fake invoices and fake hedging contracts to evade more than $100m of taxes. [emphasis added][/quote]

When you see and read ads by their PR prevaricators about the huge advantages Woodfibre LNG will confer on British Columbia, you might just recall those words: “Documents arising from the case show that Tanoto’s company…systematically produced fake invoices and fake hedging contracts to evade more than $100m of taxes.”

Thus we might well wonder, “Will Tanoto leave behind, for our generosity, a penny of taxes or royalties or, more likely, will the money all somehow wind up in Singapore?”

Even a casual investigation of Tanoto’s modus vivendi discloses a pattern of moving money around his companies so as to avoid, if not evade tax – why wouldn’t he do the same with Woodfibre LNG?

Thinking like Tanoto

This scenario is corporate child’s play.

Suppose Pacific Energy Corp., a Tanoto company, buys gas on the Alberta exchange (Woodfibre LNG has opened a Calgary office to do just that), then transfers it to Woodfibre LNG Export Pte. for just enough to cover Pacific’s Energy’s costs to Woodfibre – resulting in zero profits there. No problem – all the same owners.

Now, Woodfibre LNG Export Pte. has a deal with Woodfibre LNG Ltd. (WLNG) – the guys at Squamish – for the latter to liquefy the gas and store the LNG. That contract also sets a price that just covers WLNG’s costs. Result: No profits at WLNG, either.

With me so far?

Here’s where it’s “now you see it, now you don’t” – so do pay close attention!

Woodfibre LNG Export Pte. – a company which may be as insubstantial as a single trader at a desk anywhere – sells the LNG to an overseas firm for an annual profit of over $275 million (our Dr. Eoin Finn confirms this as a reasonable prognostication) in the hands of the Singaporean-registered (and domiciled) Woodfibre LNG Export Pte.

LNG sleight of hand

Now, watch the corporate fingers carefully!

Because of the Canada-Singapore tax treaty, which states that Singapore – not Canada – gets to tax this entity, no income taxes for any of this will be levied in Canada. Nor royalty taxes, which are levied at 3.5% on domestic profits, only after capital costs have been fully depreciated (by Woodfibre LNG Ltd., which will own the facility).

Now, folks, here’s where you act really surprised.

Singapore has a 10-year tax holiday for LNG firms!

If you listen carefully, wafting through the tropical palms, you can hear the soft refrain, “let me call you sweetheart…”

What’s in it for us?

So, back to the main question: will Tanoto and his corporate plaything, Woodfibre LNG Export Pte., leave anything behind in taxes or royalties for the considerable privilege of doing business here?

The answer is surely “not a chance”. Why the hell would he? What is there in his track record to make us believe that this time will be different and out of a spirit of corporate generosity he’s going to leave his money in Canada and pay every cent of the taxes and royalties owed?

Apart from welcoming an environmental pariah, we’re walking, eyes wide open, into a deal with a man who’s a convicted big-time tax evader, coming into a jurisdiction where tax evasion isn’t even difficult!

Joining this welcome are a former BC premier, two former attorneys-general, the elite of the business community and The BC Business Council, calling themselves “Resource Works”, spending money like drunks in a Cat House, dishing out half-truths at best to convince us plebes that they know what’s best for us.

And aren’t we so lucky also to have a business-oriented government, guided by Christy Clark and Rich Coleman, looking after our affairs?