Sep 232012
 

(Reported on page C8 of the Saskatoon Star Phoenix.  I think the article deserves front-page coverage, if Canadians are going to be an informed lot.)

By Jason Fekete, Postmedia News  September 21, 2012

As the Harper government reviews a proposed takeover of a Calgarybased energy  company by a state-owned Chinese oil giant, Canada’s spy agency is warning such  acquisitions can pose a threat to national security.

The shareholders of petroleum producer Nexen overwhelmingly approved Thursday  the $15.1-billion US foreign takeover of the company by the China National  Offshore Oil Corporation.

The proposed takeover – and the political environment for future foreign  acquisitions – now rests in the hands of a Conservative government conflicted on  the issue.

The vote by Nexen’s shareholders came on the same day the Canadian Security  Intelligence Service warned in its latest annual report that some state-owned  foreign companies are pursuing “opaque agendas” in Canada and that attempts to  acquire control over strategic sectors of the Canadian economy pose a threat to  national security.

The CSIS report does not identify specific state-owned companies or  associated countries, but highlights several potential security threats from  foreign investment in Canada.

“While the vast majority of foreign investment in Canada is carried out in an  open and transparent manner, certain state-owned enterprises (SOEs) and private  firms with close ties to their home governments have pursued opaque agendas or  received clandestine intelligence support for their pursuits here,” CSIS says in  its annual report, tabled Thursday in Parliament.

“When foreign companies with ties to foreign intelligence agencies or hostile  governments seek to acquire control over strategic sectors of the Canadian  economy, it can represent a threat to Canadian security interests. The foreign  entities might well exploit that control in an effort to facilitate illegal  transfers of technology or to engage in other espionage and other foreign  interference activities,” the report adds.

“CSIS expects that national security concerns related to foreign investment  in Canada will continue to materialize, owing to the increasingly prominent role  that SOEs are playing in the economic strategies of some foreign  governments.”

The CSIS report also highlights that knowledge is power in today’s global  economy, especially in areas of science and technology, meaning Canada is a  prime target for economic espionage.

With that in mind, many countries are going to great lengths to find an  advantage, the report says, which has led to “a noticeable increase in  clandestine attempts” to gain unauthorized access to proprietary information or  technology.

“As a world leader in communications, biotechnology, mineral and energy  extraction, aerospace and other areas, Canada remains an attractive target for  economic espionage. Several countries engage in economic espionage against  Canada to acquire expertise, dual-use technology and other relevant information  related to those and other sectors,” the report adds

The CSIS warnings pose yet another challenge for a Conservative federal  government examining CNOOC’s proposed takeover of Nexen under the Investment  Canada Act and whether the deal is of “net benefit” to Canada.

Under the act, the government’s review will consider a number of factors,  including whether CNOOC, as for all state-owned enterprises, adheres to Canadian  standards of corporate governance as well as how and the extent to which the  non-Canadian company is owned or controlled by a state.

The takeover bid is sparking heated debate, including within the Conservative  cabinet and caucus, about how much foreign investment Canada should allow when  it comes to strategic natural resources such as oil and gas.

Calgary Conservative MP Rob Anders, an outspoken critic of China’s human  rights record, said Thursday the Chinese “don’t play fair, they don’t believe in  fair trade.”

Anders said he believes that most Canadians oppose the deal and “have serious  objections with China’s human rights abuses and frankly even their record on  trade.”

© Copyright (c) The StarPhoenix

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