Policy 16.25 - Collusion Deterrence and Enforcement

Effective Date: 01-Sept-03
Responsible Branch: Compliance and Enforcement Branch, BC Timber Sales Headquarters, and Revenue Branch

Resource Management Volume Table of Contents | Amendment Log

Scope

This policy applies to all timber harvested under section 12 of the Forest Act.

Purpose

To deter, detect, monitor, report, and investigate collusive bidding practises related to timber sale licences advertised and entered into by timber sales managers.

To deter, detect, monitor, report, and investigate collusion in the bidding on, and/or purchase of, and/or sale of timber harvested under an agreement pursuant to section 12 of the Forest Act.

To enable the prosecution of persons alleged to have taken part in such practices.

Definitions

A "Bidder" is a person deemed eligible to submit an application for a timber sale licence advertised by a timber sales manager pursuant to section 20 of the Forest Act or an associate, employee, or agent of that person.

"Collusion" is generally defined as the making of an agreement by two or more persons for the purpose of perpetrating fraud, or engaging in illegal activity, or in legal activity with an illegal end in mind.

With respect to timber sale licences "collusion" may, without limitation, be evidenced where:

• A Bidder/s offers an inducement to another Bidder in an attempt to have the other Bidder bid in a particular manner.
• A Bidder/s threatens another Bidder in an attempt to have the other Bidder bid in a particular manner.
• Bidders agree not to bid in an attempt to ensure there are no bids.
• Bidders bid in a manner prearranged between themselves.

With respect to the purchase and sale of timber harvested under an agreement pursuant to section 12 of the Forest Act, "collusion" may also be, but is not limited to instances, when, on the open market:

• A person offers an inducement to another person in an attempt to have the other person bid on the purchase of timber or agree to sell timber in a manner designed to defraud another person.
• A person threatens another person in an attempt to have the other person bid on the purchase of timber or agree to sell timber in a manner designed to defraud another person.
• There is an agreement between persons not to bid on the sale of timber in an attempt to ensure there are no bids on that particular sale of timber.
• Purchasers bid on the sale of timber or sellers agree to sell logs in a manner prearranged between themselves.

Policy

It is Ministry policy that

All suspected incidents of collusion in the sale and purchase of timber harvested under section 12 of the Forest Act will be investigated. All suspected incidents of collusion in the BCTS timber sale licence bidding process will be investigated.

It will be recommended to the statutory decision maker that the first person involved in a collusive practice to voluntarily provide evidence of the collusion be granted immunity from any administrative penalty. It will be recommended to Crown Counsel that the first person involved in a collusive practice to voluntarily provide evidence of that collusion be granted immunity from prosecution.

Responsibilities

Timber Sales Manager

The Timber Sales Manager is responsible for:

• Reporting all activities that might be considered as collusion in the timber sale licence bidding process to the Regional Compliance and Enforcement Manager.
• Providing BCTS staff to act as experts on the timber sale bidding process when requested by the Regional Compliance and Enforcement Manager.
• Maintaining a database of all bids received and awards tendered during the timber sale licence bidding process.
• Assisting C & E staff in the development of reports for the purpose of analysing for suspicious trends or patterns in the timber sale licence bidding process.
• Implementing the Memorandum of Understanding between BC Timber Sales and the Compliance and Enforcement program.

The Director of Revenue Branch

The Director of Revenue Branch is responsible for:

• Providing Revenue Branch staff as experts when requested by the Regional Compliance and Enforcement Manager.
• Notifying the Regional Compliance and Enforcement Manager of any suspected collusion in the buying and selling of timber harvested under section 12 of the Forest Act.

The Regional Compliance and Enforcement Manager

The Regional Compliance and Enforcement Manager is responsible for:

• Investigating all reports of collusion.
• Conducting random audits of the timber sale license bidding process.
• Recommending to the statutory decision-maker that a Bidder or person who participates in bid rigging in any form and who voluntarily first provides evidence of that bid rigging be granted immunity from any administrative penalty.
• Recommending to Crown Counsel that a Bidder or person who participates in bid rigging in any form and who voluntarily first provides evidence of that bid rigging be granted immunity from prosecution.
• Implementing the Memorandum of Understanding between BC Timber Sales and the Compliance and Enforcement program.

References

• Forest Act, ss. 12, 20, 164, 164.1, and 165.1
• Small Business Forest Enterprise Regulation