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BC government has questionable dealings with South Korean transnational

PoscoThe Council of Canadians is critical of the British Columbia government’s dealings with the South Korean transnational corporation Posco.

The Tyee reports, “A South Korean company at the centre of a controversy over a proposed coal mine in British Columbia is embroiled in a slush fund scandal in its home country, which the provincial government only learned of recently. Harjap Grewal of the Council of Canadians, a national social justice organization, said the case shows a lack of oversight on the part of Canadian provincial and federal governments when it comes to foreign companies doing business. ‘Obviously, the government should know what these practices are, it’s not hard to Google search and find these things’, Grewal said. “But I literally think it’s them turning a blind eye to their friends.'”

“According to press reports from South Korea and Vietnam, prosecutors in South Korea are investigating top former Posco executives for allegations that they operate a $9 million slush fund. The group is suspected of exaggerating the costs of building a highway in Vietnam. The allegations started in mid-March after an internal audit of the company. The Vietnamese government is now investigating the projects too. The executives have not been charged. The Tyee asked the provincial government about the slush fund scandal last Friday. On Monday, the government answered saying it had only just heard about it.”

“Grewal said Posco also has problems in India with another proposed mining project [in the State of Odisha], which locals there oppose. The United Nations asked the company to stop building because it would displace thousands of people. He said the fact that B.C. politicians were unaware of the scandal shows that local and indigenous levels of government should have a larger say in what companies are allowed to do business in their areas. ‘They probably would look up what the records of these companies are and made a decision on whether they would like to welcome them into their territory’, he said.”

The company had been planning to open a coal mine in the Klappan region of northwest BC for its steel manufacturing business, but the Tyee notes that, “The proposal has met with strong opposition from First Nations in the region who are concerned about the environmental impact of the mine. The province previously granted the company mining licences, but last week purchased back those licences effectively shelving the project. Posco Canada Ltd. and its Canadian partner, Fortune Minerals Ltd., have a 10-year window to purchase back the licences.”

In a campaign blog posted earlier this week, Grewal wrote, “Fortune Minerals and Posco are not leaving empty handed, unfortunately. The BC Government has purchased the mining permits from the companies for $18.3 million while allowing them the option to buy the permits again before a 10 year deadline. There are important reasons to denounce this move by the government.” He then highlights that this transaction did not help protect the territories because “mining companies, if not generously compensated for projects derailed by community opposition, would be discouraged to continue investing.”

To read his fuller analysis please click on Concerns about how Fortune Minerals exits the Sacred Headwaters.