APRIL 14, 1999
National Post, CanadaWednesday, April 14, 1999
At a breakfast meeting in Toronto last month at which Ibrahim Ferradaz, Cuban Minister for Foreign Investment and Economic Co-operation, was promoting his country as a great place to invest, one man rose to suggest otherwise.
Clarence Boudreau, chairman of Mississauga-based FirstKey Project Technologies Inc., pointed out that his company and partners had invested many millions of dollars, at the invitation of the Cuban government, laying groundwork for a giant joint-venture electricity generating project. Now the Cuban government was, not to put too fine a point on it, trying to weasel out of the deal.
Mr. Ferradaz, a typically cynical Cuban bureaucrat (there is only one politician in that country), asked Mr. Boudreau to send him the details. Last week, Mr. Boudreau did so, claiming $9-million (US) in compensation. "This action," wrote Mr. Boudreau, "is taken as a last attempt to reach an honourable settlement before we are forced to resort to an international arbitration tribunal."
Fidel will not be quaking in his boots.
Cuba has a long history of trampling on foreign investors, starting with the theft of all the private property on the island -- including that of Canadians -- in the name of the 1959 revolution. Significantly, the Helms-Burton legislation, which was designed to right those historical wrongs, received widespread international condemnation. One unstated reason for that opposition was that many companies and countries were eager to do deals on the property, stolen from Americans and Cuban-Americans that Helms-Burton sought to protect.
One such was Toronto-based Sherritt International, led by "Fidel's favourite capitalist," Ian Delaney, who invested in a big nickel project that had been taken from an American company. Mr. Delaney was subsequently barred from travel to the U.S. Mr. Delaney hasn't been making too many speeches about the "moral high ground" he claimed to occupy in Cuba since nickel prices tanked and Mr. Castro said he might stop nickel production altogether. Sherritt is also reported to be having problems with a new power project.
Canada's history of recovering earlier Cuban investments should inspire confidence neither in Mr. Boudreau nor in Sherritt shareholders. The Royal Bank and the Bank of Nova Scotia did relatively well after the revolution because they held Cuban deposits in Canada, thus possessing the only argument for fairness Castro understands: power.
As for the rest, 50 claimants waited more than 20 years to receive a total of $850,000. That pathetic level of compensation did not include Canadian Life insurers, who underwrote a stunning 70% of Cuban business before the revolution. Until last April, they had received not even a promise of payment. Then, Prime Minister Jean Chretien, during his visit to Cuba, announced that Cuba had agreed in principle to compensate one of the five companies involved, to the tune of $9-million (US) over five years. Strangely, the company chosen for this late largesse was Confederation Life, which was in receivership.
Agreed in principle? Five years? Sounds a little loose. Has any money been paid under the agreement? When asked yesterday, a spokesman for Foreign Affairs said that such "commercial" issues weren't tracked. The important thing, obviously, was for Mr. Chretien to look as if he had achieved something. After that, who cared? Or at least, who cared until recently.
The barbaric sentencing in March of four Cuban dissidents provoked worldwide outrage and demonstrated quite clearly the value of "constructive engagement" and "soft diplomacy." Now even the CBC seems to have caught on to the fact that Mr. Castro is a bad man. And yet the useful idiots continue to trek down to Havana.
A couple of weeks ago, Major League Baseball assumed the position, allowing the Baltimore Orioles to play in Cuba, with Mr. Castro as guest of honour. Then there was the airlift of a pathetic group of jet-setters participating in a "Music Bridges" tour to Havana. Supermodel Naomi Campbell typified the utter brainlessness of some of those present, comparing Fidel Castro to Nelson Mandela. "They have fought with integrity to stick to their beliefs," she said.
Nevertheless, in the wake of last month's sentencings, Mr. Chretien, who, during that trip to Cuba a year ago had to stand and listen to Mr. Castro reject allegations of human rights abuses as "infamous manipulations and slanders," felt obliged to issue a mild rebuke. He also announced that Canada would be reviewing its bilateral activities with Cuba.
FirstKey's Mr. Boudreau is hoping to meet this week with Mr. Chretien to gain Canadian support for FirstKey's claim, but he would still be wise not to expect too much.
Mr. Boudreau's claim notes that "FirstKey's position at this time is that if Canada is to pursue its policy to support Cuba politically and financially, it must first of all make abundantly clear to the Cuban government that it has an obligation to act in good faith."
Good faith? Cuba? One wonders how much historical due diligence and political risk analysis FirstKey did before it spent its money in a country that has a long track record of reneging on contracts, and whose fundamental rationale is the demonization of capitalist investors.
The larger issue is why Canada continues to support this regime.
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