Canadian minister warns Nexen takeover bid needs close scrutiny

Thomson Reuters






* State-owned firms need particular scrutiny, Kenney says


* Amnesty, others say rights should be central consideration


* Kenney says government takes human rights into account


OTTAWA, Sept 24 (Reuters) - Ottawa should pay very close
attention to proposals by state-owned foreign companies to take
over big Canadian resource firms, a high-profile cabinet
minister said on Monday, referring to a Chinese bid for oil
company Nexen Inc.


Citizenship and Immigration Minister Jason Kenney, a
powerful minister who has long been a critic of China's human
rights record, made his remarks during a news conference in
which he was asked about the $15.1 billion bid for Nexen by
China's CNOOC Ltd.


"Most Canadians want to ensure that the government applies a
rigorous lens to acquisitions of large Canadian resource
companies, particularly by state-owned enterprises," he said,
adding that Industry Minister Christian Paradis would make an
impartial decision on whether to approve the Nexen takeover.


Ultimately, the decision on whether the transaction would be
of net benefit to Canada will be made by Prime Minister Stephen
Harper, whose cabinet is having "robust discussions" on the
issue, according to one insider.


Kenney spoke as news emerged about a letter to Paradis by a
coalition of groups, including Amnesty International, declaring
it vital that human rights be given central consideration during
the review of the bid.


"That includes assessing China's troubling general human
rights record (of particular importance given that CNOOC is
state-owned), CNOOC's own human rights record, and the existing
human rights policies and practices of Nexen," the group said in
the Aug. 16 letter, made public on Monday.


"All of those considerations must be thoroughly and
transparently taken into account during your review, with a full
accounting to Canadians as to how they have been weighed."


Kenney, asked if human rights should be part of the
calculus, said it was not for him to comment, but then he made a
reference to balancing trade with human rights.


"Our government has articulated a balanced approach on
Canada-China relations, one that advances both our interests,
such as trade and commerce, and our values, such as the
importance of human rights," he said.


"I think the prime minister has done an excellent job of
giving expression to that kind of balanced policy."


The Canadian Coalition on Human Rights in China, the group
that sent the letter to Paradis, said it had long expressed
concern about the subordination of human rights to trade and
investment in Canada's policy on China.


It said Nexen had frequently shown leadership on human
rights. "This track record stands in contrast to allegations
that CNOOC may have operated in ways that contributed to human
rights violations," it said in the letter.


It referred to reports, which it said could not verify, that
CNOOC may have been involved in oil exploration in Myanmar that
damaged villagers' crops and eliminated their income from
small-scale oil drilling operations.


"Numerous villagers have reportedly faced arrests and
interrogations at the hands of the Burmese army because of their
participation in protests against the confiscation of their land
and local refinery operations," the coalition letter said.


It also cited concern about CNOOC's operations in Tibet, and
said serious concerns had arisen about the labor rights record
of other Chinese companies in the Canadian oil sector.


A Canadian spokesman for CNOOC was not immediately available
for comment.