Nfld. & Labrador

Former Northern Peninsula mayor questions timber deal with AEG

Former Main Brook mayor and forestry operator Leander Pilgrim has big questions about the company involved in the timber rights deal in his backyard. And he's spending his own money to find the answers.

Leander Pilgrim fears the company will make big profits at the expense of forestry management

Former Main Brook mayor Leander Pilgrim fears the forest of the Northern Peninsula will be changed forever if a deal with Active Energy Group moves ahead. (Jonathan Hayward/Canadian Press)

A former mayor and forestry operator on the of the Northern Peninsula has big questions about the company involved in the timber rights deal in his backyard. And he's spending his own money to find the answers. 

Leander Pilgrim, who served as the mayor of Main Brook for over 30 years, says the U.K. company Active Energy Company has no experience in forestry management and will ruin the traditional way of life in the area.

In late November, the province announced two five-year cutting permits for Timberlands International, a subsidiary of AEG. 

"All they're thinking about was the few extra jobs for eight to 10 years or whatever it's going to create," said Pilgrim. "We just can't let it happen." 

The AEG acquired 500,00 cubic metres of timber rights on the Northern Peninsula to make biofuel to sell to European markets. (Government of Newfoundland and Labrador)

The deal gives the company rights to 500,000 cubic metres of forest in districts 17 and 18, which encompass the entire Northern Peninsula. 

The company will also construct a wood pellet plant in Hawke's Bay.

AEG's past failures 

But Pilgrim fears there will be no pellet plant and government didn't do its due diligence when researching the company's past. 

Pilgrim hired a consultant to look into the company's history, sending his findings to key political figures.

In a letter written to government in December, he highlights AEG's failures in the forestry industry.

The company's interim financial results from the first six months of last year show the company hadn't generated any revenue in two financial quarters, after the failure of its wood fibre operations in Ukraine.

The company also had a failed timber deal in Northern Alberta.

In July 2014, the company formed a corporation with three Métis  groups to commercialize 250,000 hectares of Métis land, but the Alberta government suspended that deal, when the groups were found to have violated the province's Métis Settlements Act by entering into a joint venture agreement with AEG without due diligence.

Pilgrim worries AEG is here just to line its pockets at the expense of nature.

"The forest plays a part in everything within our environment, like the temperatures of the rivers. Everything will be affected by this, what I calls a mess," said Pilgrim. 

Minister stands by deal 

Fisheries and Land Resources Minister Gerry Byrne couldn't disagree more.

He said the provincial government has done all it can to mitigate the risk to the public and to taxpayers.

Minister of Fisheries and Land Resources Gerry Byrne says the province did its due diligence with AEG and no taxpayer money went into the agreement. (Eddy Kennedy/CBC)

"The company is regulated by the U.K. stock exchange and their securities exchange commission. We sought and received a verification from from the United Kingdom's stock exchange that the company was in good standing."

Byrne does acknowledge the deal isn't fail-proof, but says no government money went to the company. And the agreement puts pressure on AEG to produce in the province.

"If they fail to harvest 40 per cent of their existing allocation within the first 30 months, they start to lose access to forest resources.

CBC has requested an interview with Richard Spinks, managing director of Timberlands International, but has not received a response.

Read more from CBC Newfoundland and Labrador

With files from Newfoundland Morning

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