Demonstrations in Japan RAN File Photo
Mitsubishi: The money and power behind Alpac
By Michael Marx
Albertans may be surprised to learn that the true financial force behind the controversial Alpac project is the giant Mitsubishi Corporation (MC) of Japan. MC is the core member of one of the largest and richest corporation families in the world with assets and income greater than Canada. MC is also arguably the worst corporate destroyer of forests in the world with a legacy of illegal, unethical, and unsustainable logging that is unparalleled. It is important to understand who Mitsubishi is, how it does business, and what problems to expect.
The Mitsubishi keiretsu (affiliation) is compromised of nearly 1,000 companies. In terms of employees, net income, and assets, it is the largest corporate family in the world. MC is the soga shosha, or trading company for the keiretsu. Its mission is to locate resources, identify partners, negotiate deals, and insure that the other Mitsubishi companies receive a constant supply of inexpensive raw materials, energy, etc.
MC is the dominant member of the Mitsubishi keiretsu. It is affiliated with over 600 of the other companies. Founded by Yataro Iwasaki in 1870, MC quickly rose to become one of the most influential companies in Japan. Prior to World War II, MC was the parent company in the Mitsubishi group. After World War II, General Douglas MacAurthur broke the company into separate entities because of its powerful role in fuelling the Japanese war machine with airplanes, ships and armaments. In 1949 antitrust laws were relaxed in Japan and the Mitsubishi companies re-grouped under a highly interdependent family structure.
Shortly after the end of World War 2, Mitsubishi entered the logging trade with operations in North America and Southeast Asia. Since then, MC and other Japanese companies have become the largest importers of timber in the world.
Mitsubishi is arguably the worst corporate destroyer of forests in the world with a legacy of illegal, unethical, and unsustainable logging that is unparalleled.
The U.S. based Rainforest Action Network, which tracks Mitsubishi's trading activity closely, claims that Mitsubishi is the worst corporate destroyer of forests in the world. RAN bases that distinction on the fact that Mitsubishi has been logging other countries' forests for over 40 years. In that time MC has consistently been one of the largest importers of logs from forests in Southeast Asia, South America, North America, and Siberia. Mitsubishi also has a deplorable record of illegal and unethical practices and has lead the way in masking destructive logging activity with expensive public relations campaigns.
MC claims its operations are all sustainably operated, but even the conservative International Timber Trade Organisation acknowledges that less than .5% of all rainforest logging is conducted in a sustainable fashion. While some different tree species can regenerate in tropical forests, thousands of plant, insect and animal species are brought to extinction by loggers. Hundreds of thousands of forest people are impoverished. Considering that much of the wood is used to make plywood forms for concrete that will be used 1.4 times and thrown away, the benefits hardly justify the cost.
The US Forest Service found that the APC actually kept two sets of invoices to mask their true transactions.
In Alaska's Tongass National forest, Mitsubishi Corporation and Mitsubishi Bank together are part owners of the Alaska Pulp Company. It was found guilty of trying to monopolize the timber industry in southeast Alaska through a "pattern of collusive communications and joint projects" according to US District Court Judge, Barbara Rothestien. The U.S. Forest Service found that APC actually kept two sets of invoices to mask their true transactions.
In January the APC closed down its pulp mill after years of legal battles with the union and shifted its emphasis to a saw-wood operation that was more profitable. In April of this year the US Department of Agriculture voided APC's 50 year agreement for breach of contract.
In Washington and Oregon, Mitsubishi was for 20 years one of the largest purchasers of whole logs, many of which originated in old growth stands in national forests.
In the Philippines, MC is part owner of Agusan Wood Industries, which logs rainforests to manufacture plywood. In Indonesia, MC is one of the largest purchasers of plywood. In Malaysia, MC controls Daiya Malaysia Sdn. which is logging a 240,000 acre concession despite blockades by Iban, Kayan, and other tribal groups. In Burma, Mitsubishi is buying teak and lobbying the Japanese government to support the repressive Burmese military government.
In Papua New Guinea, Mitsubishi was accused by a government commission of evading millions in royalties through illegal transfer pricing. Now Mitsubishi is positioning itself to log or to buy timber from Vietnam and Cambodia.
Revenue Canada filed a suit against Crestbrook Forest Industries for systematically evading payment of $12.8 Million in taxes.
Other Mitsubishi companies are finding new ways to destroy Amazon rainforests. They are engaged in gold mining and tar sands extraction in Venezuela. They are prospecting for a new mine in Ecuador's Andean Rainforest. They even offered to pay off $115 billion (US) of Brazil's foreign debt in exchange for gold mining rights in the Brazilian Rainforest. Gold mining has been devastating to Brazil's environment and indigenous cultures.
Mitsubishi recently pleaded guilty to a price fixing conspiracy in Canada and the US. Acknowledging it schemed to raise the price of thermal fax paper by 10%, the company and its co-conspirators agreed to pay $7 Million in criminal fines.
Mitsubishi is now turning its attention to temperate and boreal forests in the U.S., Canada, and Siberia where it has become the largest importer of timber.
In British Columbia, Mitsubishi's Crestbrook operation is clearcutting to produce pulp for export. The Vancouver Sun called Crestbrook one of the worst polluters in the province. Federally, Revenue Canada filed a suit against Crestbrook for systematically evading payment of $12.8 million in taxes.
The tax collectors regard Mitsubishi's marketing agreement with Crestbrook as an illegal form of "transfer pricing". Transfer pricing is a scheme where profits are moved offshore through sales discounts. Al-Pac has acknowledged that its sales agreement with Mitsubishi is very similar to Crestbrook's.
Mitsubishi has broken other laws after the pulp was sold. It recently pleaded guilty to a price fixing conspiracy in Canada and the U.S. Acknowledging it schemed to raise the price of thermal fax paper by 10%, the company and its co-conspirators agreed to pay $7 million in criminal fines.
Also in British Columbia, Mitsubishi's Canadian Chopstick Manufacturing Company is the largest disposable chopstick factory in the world producing 6 million pairs of chopsticks per day. According to Fort Nelson Ministery of Forests officials, CCMC wastes 85% of the timber it cuts from old growth aspen forests to ensure "the finest unstained, disposable chopstick." Until forced to do otherwise, CCMC left all unused trees lying on the ground, impeding forest regeneration. They finally burned the trees to avoid public embarrassment.
RESOURCES
Available from:
Rainforest Action Network
San Francisco
(415) 398-4404
In three years, Mitsubishi executives have refused to meet with environmental leaders. The company has sent hundreds of thousands of carefully worded letters defending its logging activities by pointing to poverty as the real cause of the destruction of the rainforest. It even produced a comic book for Japanese Schools refuting environmentalists' claims. The Ministry of Education recalled it as propaganda, ordering its removal from High Schools and libraries. Mitsubishi corporation has ignored criticism of its operations outside tropical zones in its public relations literature. MC has also refused to allow an independent commission to investigate its operations to validate its claims.
The international campaign against Mitsubishi is heating up. Groups in Canada and the Rainforest Action Network (with 150 groups worldwide) are joining forces. Canadians have protested at autoshows in Toronto, Ottawa, Edmonton, and Calgary. They are lobbying Chrysler dealerships, some of whose cars are made by Mitsubishi, to send letters to Chrysler headquarters asking them to pressure Mitsubishi to meet with environmentalists.
Michael Marx, Rainforest Action Network – Mitsubishi Campaign Director
