Are SOEs really SOBs? – by Russel Noble (Canadian Mining Journal – January 2013)

Russel Noble is the editor for the Canadian Mining Journal, Canada’s first mining publication. 

Ten years from now when Asian governments have strengthened their grip on Canada’s petroleum and other natural resources and are pumping “our” oil through the Northern Gateway pipeline to their awaiting ships at either the Port of Kitimat, or Prince Rupert, or both, Prime Minister Harper will probably be back in Alberta somewhere thinking that perhaps his decision in 2012 wasn’t very good for Canada after all.

Like you, I have no crystal ball show¬ing what 10 years from now will look like exactly in terms of state-owned-entrepreneurs (SOEs) controlling our resources (or who knows what else by then?), but I have an uneasy feeling that it won’t be pretty because of the suspicions and the facts that we already have about how SOEs conduct business.

I’m not, for example, necessarily singling out Chinese or Malaysian governments in particular (or maybe I am), but from what I’ve read and heard about their tenacious ways of doing business and in particular, their seeming disregard for whatever gets in their way (especially people), I can’t imagine they’ll change their business plans when they set up shops here in Canada.

In fact, I think it will be business as usual, Asian style, and that should be everyone’s concern because, just by example, have you ever looked deep into the face of a Chinese coal miner? There’s not a whole lot of happiness in those eyes. They’re filled with pain and fear, and that’s what I’m afraid Canada is in for too as more and more state-owned-entrepreneurs move in and take control. Human rights are not high on the agenda of a country determined to surpass the United States as the number one economic power in the world.

Like most things in life, however, there are exceptions and I hope that I’m wrong with my thinking about what’s trending insofar as a foreign ownership is involved, but I still can’t help thinking that the recent oil sands’ sell off is a one-sided deal where Canada gets the wrong end of the stick. I am pretty certain that if Canadian companies tried to buy any natural resources (especially those containing rare earths) from an Asian country, they’d be sent packing.

Granted, Asian investors are paying a great deal of money that will immediately help our country in terms of localized employment, and taxes to Alberta and ultimately Ottawa, but for the rest of the country, there’s little benefit that I can see.

Again, it’s what I can’t see that bothers me the most. Even with Federal Industry Minister Christian Paradis’ assurance that SOEs involved with the recent oil sands takeovers in Alberta are under “significant” commitments regarding “governance, transparency and disclosure,” he didn’t spell out what they are?

Based on past experiences involving foreign, and even our own government(s), I’m willing to bet that we’ll never get a “transparent” picture of the whole issue until after the oil starts flowing through the Northern Gateway pipeline.

And, like Prime Minister Harper’s meetings with the Chinese before he told most of us that he was even going there last year, I suspect the thousands of protesters gearing up for a battle to stop the pipeline across the Rockies are wasting their time because it is probably already part of a “done deal.”

SOEs may appear to be here under a so-called “transparent” agreement but I still think they’re “stealers of business,” and the acronym for that is SOBs.