Burnaby-New Westminster MP Peter Julian is calling for a more thorough government review of a massive foreign takeover bid of a Canadian oil company in the midst of insider trading allegations.
"This is a really important example of why we need investment rules that allow for an open and transparent review," Julian said. "There has been a lot of controversy around this takeover."
Julian, the energy and natural resources critic, along with industry critic Helen LeBlanc, has been calling for two parliamentary standing committees to review a proposal from the China National Offshore Oil Corporation (CNOOC) to buy Nexen, Canada's 12th largest oil and gas company, in a $15.1-billion deal.
Normally, foreign takeovers involving more than $1 billion have to be reviewed by Industry Canada, which approves the deal if there is a "net benefit" to the country. The problem, according to Julian, is that "net benefit" is not well defined and the Industry Canada review is reduced to a rubber-stamping process - that's why he's calling for the extra review.
"What's happened for thousand and thousands of (takeover) cases is simply a rubber stamp," Julian said, adding that there is nothing in place to ensure these foreign companies follow through on their promises on things like protecting Canadian jobs.
"The companies have broken these commitments with impunity, and this has been an ongoing problem," he said. "We have this fundamental problem that there is no real review process."
Another concern for Julian is the Foreign Investment Promotion and Protection Agreement that Canada recently signed with China, which hasn't been released yet.
"There's some speculation that that agreement will allow these companies to sue the Canadian government for environmental protections put in place, but we haven't seen it yet, so we don't know what's in the agreement," Julian said.
Meanwhile, on July 27, the U.S. Securities and Exchange Commission filed a complaint against a group of Hong Kong investors for insider trading, alleging they made $13 million with insider knowledge that CNOOC was proposing to buy out Nexen.
Nexen runs various oil and gas operations around the world and an oil sands facility at Long Lake, Alberta, upgrading bitumen into crude onsite, then shipping it to North American refineries via the Athabasca pipeline system.
Julian has concerns that the CNOOC takeover will mean more bitumen shipments go overseas, along with valueadded jobs for Canadians.
In a company press release, Nexen has stated that CNOOC intends to retain Nexen's management team and employees.
Julian expects the federal government to announce its plan with the proposed Nexen deal in the beginning of September.
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JenniferMoreau
