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James Temerty, his business and his views
James Temerty is a founder and Chairman of Northland Power, a leading private energy-generating company in Canada. Northland Power holds a controlling interest in a joint Ukrainian-Canadian venture, Darnytsia Central Heat and Power Plant (CHPP). He is also Chairman and controlling shareholder in Softchoice Corporation, a large distributor of software in Canada and the United States. He began his working career at the IBM Company, and in fifteen years rose through the ranks. Later, he founded and headed a company which had grown into Canada's biggest network of ComputerLand stores. Mr. Temerty is a member of the Foreign Investment Advisory Council to the President of Ukraine, head of the Supervisory Council of the Business School of the University of Kyiv Mohyla Academy, a member of the Board of Governors of the Sunnybrook and Women's College Health Sciences Centre, and Chairman of the Royal Ontario Museum Foundation.
“Ukraine has all the necessary resources and potential to become a prosperous European state,” says James Temerty, a Canadian businessman and philanthropist, well known in Ukraine. Mutual trust and positive attitude to life — in other words, faith — are the things needed, in his opinion, to help Ukrainians overcome all the obstacles. These and other thoughts were expressed by Mr. Temerty in his talk with the Welcome to Ukraine publisher, Oleksandr Horobets.
You are a Canadian citizen but you were born in Ukraine, weren’t you? Could you say a few words about yourself, please?
Yes, I was born in Ukraine, in the Donbas region, during the Second World War. My parents were deported as forced labour to Germany. After the war, my father, a mining engineer, went to Belgium where he found work and several months later he arranged for my mother, my sister and me to join him there. We lived in Belgium for three years. I learnt French and when we moved to Canada and settled down in Montreal, which is a predominantly French-speaking city, I had no communication problem. In spite of my fluent French, I had to go to an English school because French schools required the pupils to be Catholics at that time and if you were not a Catholic, you had to pay extra, and we could not afford it.
After I’d done my schooling, I went to work for IBM. I was twenty-three then, and I started as a salesman in Montreal. IBM sent me to the USA for further development. I spent four years in Lexington, Kentucky, at an IBM facility that employed several thousand people. I worked in product development and product planning. Over time I managed a number of branch offices in Montreal and then I moved to Toronto to become the district manager for that region. I married Louise, a girl of French-Canadian descent. I’d known her from my Montreal days. I was young and ambitious and I wanted to run my own business. I left IBM and became involved with ComputerLand. We started from one store and gradually brought the number to thirty. I eventually sold my ComputerLand stores to a subsidiary of the Bell Telephone Company and started a new business — Northland Power. And currently I’m chairman of this company as well as chairman of Softchoice Corporation.
What does the Northland Power company do?
We design, build and operate power projects. We’ve got three such projects in Canada, and in Ukraine we own 51 percent of Darnytsia CHPP. We’ve been running it for six years now.
What about the forty-nine percent of the Ukrainian side? Are they happy with your participation?
Why shouldn’t they be? We believe we are running one of the most efficient combined heat and power plants in Ukraine. We pioneered a system of collection which was later adopted in large part throughout Ukraine resulting in a very high percentage of collections for ourselves and Ukraine.
What could make Ukraine more attractive for investors?
It’s essential that Ukraine develop a positive image. That starts with the government and works its way down through every rung of the economy. Investors need to feel that they will be doing business in an environment that is reliable, predictable, accountable and reasonable. For instance, is it reasonable that your tax authorities can interrupt a business with tax inspections anytime and as many times as they wish? At a recent conference devoted to improving the investment climate of Ukraine, initiated by President Kuchma and attended by him, one Western businessman spoke of having had ten tax inspections in one year. That’s absurd. In his own country he had had three inspections in ten years. I’m sure that’s an isolated and exaggerated case but nevertheless word of that kind of experience spreads quickly and can be quite damaging.
The culture of business and government in Ukraine has to change and evolve quickly to reflect the kind of professionalism that one finds in Western Europe. That’s not so difficult, start by finding out how your peers do things in the West then emulate them and eventually build on that foundation something that includes the best of the West plus your own Ukrainian style.
You’ve made very large financial donations to the Business School of the University of Kyiv Mohyla Academy. What motivates you to do it?
The same motivation as in any other philanthropic activity — the desire to do something useful, to promote a good cause. If you have been fortunate in life then you share your good fortune with others, it’s called giving back. Ethnically, I’m Ukrainian, I feel my Ukrainian roots. It is clear to me that Ukraine has to prepare a new generation for building up Ukraine as a free and prosperous state. I do believe that changes for the better will accelerate when this country’s government will be made up of a new generation of people who have come into it from all walks of life including successful and practical business experience. In Canada, for example, a child grows up in the atmosphere of a well-developed business culture, but in Ukraine there is no business-culture tradition, things are just getting started. That is why Ukraine badly needs more business schools. Kyiv Mohyla Academy is a university with several centuries of cultural tradition behind it; it is a school of Western orientation, of European thinking. The business school’s emphasis is on leadership development, borrowing largely from the management practices of Jack Welch, the former Chief Executive Officer and Chairman of General Electric Corporation. I was happy to have enlisted Jack Welch’s support which permitted Pavlo Sheremeta, the Dean of the school, and some of his professors to spend a few days in Crotonville, GE’s famous and highly respected management school.
Any other philanthropic activities here in Ukraine?
Oh yes. I provide financial support for the Priyately Ditey Society Charity Fund which takes care of Ukrainian orphans. Still another thing I’m involved in is in the publication of an Atlas of Mineral Resources of Ukraine. It’s an English-language edition to be published by the University of Toronto.
I feel you regard it to be more than just a useful publication.
That’s correct. You see what we were hoping to do with this publication is bring to bear Canadian mining expertise to this sphere of the Ukrainian economy. I always said that we will not publish this atlas until I am satisfied that along with it we can print a brief “roadmap” for investment in the Ukrainian mining sector. Canada is a country that is friendly to Ukraine and this atlas gave us an opportunity to apply our mining expertise to helping Ukraine. After all, other countries, Chile and Indonesia come to mind, have borrowed largely from Canadian practices in the mining sector much to their advantage. Investment flows where investors feel familiar territory and in Chile and Indonesia Canadian mining executives found themselves on familiar legislative turf, as a result, in Chile for example, billions of investment dollars flowed in from the Canadian mining industry.
You’ve mentioned that a change in business legislation is badly needed in Ukraine…
Yes, sure. To publish this atlas and its “roadmap” I enlisted the help of three prominent Canadians of Ukrainian extraction, they were Dr. Walter Curlook (formerly a president of Inco Canada), Taras Podolsky, and Dr. Walter Peredery. All highly accomplished mining executives. When they reviewed Ukrainian legislation governing the mining sector they found that it was part of the “production sharing” legislation that had been passed to promote oil and gas exploration, development and exploitation. But that legislation was inadequate for the mining sector. When you explore and find natural gas or oil the cost of building an extraction infrastructure and operating the field is not very great in relation to its sales value. However, once you have found minerals the infrastructure and operating costs are huge and involve hundreds if not thousands of people. To encourage mining exploration Canada and other Western countries had developed something we call a “Contract of Work” approach. This allowed mining investment to proceed and for governments to receive their benefits based on taxing the income produced by the mine rather than a preemptive sharing of production. And I am happy to say that after three years of effort we have received the Cabinet of Ministers’ approval for the “Contract of Work” model and I am looking forward to the publication of the atlas and its “roadmap” including a summary of the “Contract of Work”.
I hasten to say that I am not a miner nor am I looking to get into this field. It was just an opportunity to do something constructive with the help of some friends, pure and simple. Once published we will circulate the atlas to prominent mining executives in North America
You’ve been working in this country for some time now — do you observe any changes?
Oh a lot of changes! Since I spend so much time here I don’t always notice them but then a moment comes when I become aware of their magnitude. Recently, for example, we had a family reunion in Kyiv. My wife and daughter told me: “Ten years ago, when we came here for the first time, it looked so bad we felt we would never want to come again, but now, after our extensive tour of Ukraine, we saw so many good and exciting things. And it’s not just the beauty of the Carpathians or elsewhere, it’s the churches, hotels, stores, restaurants — everything! They are completely different from what they were ten years ago.” Take the hotel we stay in, for example — it’s a five-star place with excellent service comparable to the best in Europe.
Do you have any idea whether there are many businessmen of Ukrainian descent working in Canada?
No, not too many, really. I wish there were more. There are a lot of people of Ukrainian descent working at management levels for all kinds of companies and we are very well represented in all the professions — but not too many of those who run their own businesses. I was even toying with an idea for some time of opening a business school at the Institute of St Volodymyr in Toronto to train people in how to start and run their own businesses.
Is there anything here in Ukraine that worries you most?
Yes, there is — the level of cynicism. And it’s not only among the older generation but among the younger one as well! You must get to be more positive! That’s where you have to start working hard — to foster a positive attitude to so many important things. That’s the first priority. Second — develop a culture of openness and trust. You should learn to regard your partners with respect, with openness, and not with suspicion and mistrust. It seems a simple thing to achieve but, in fact, it takes a great effort to develop such an attitude, but it is well worth the effort and your business dealings will become more efficient. Somebody has to take the first step, so go ahead and make that leap of faith.
You support the development of business culture. What about other spheres of culture?
I’m very proud of the truly great cultural heritage of Ukraine. The world does not really understand how much Ukraine has given to Europe. The exhibition Scythian Gold from Ancient Ukraine — the exhibits were brought from Ukraine — in the Royal Ontario Museum some time ago was to show how deep the cultural roots in Ukraine are. The exhibition was a great success. In fact, the general opinion was that the Scythian Gold was one of the best exhibitions ever held in the Royal Ontario Museum. And, of course, I’m proud that I played a role in staging it.
Some work is being done on creating a positive image of Ukraine abroad, particularly by Ukrainian tourist agencies. Do you have any ideas to share as to what could make it more successful?
Hold honest, open, democratic presidential elections. It is a key benchmark against which cultural development of a country is measured. And if the election is held the way it should be, then it will be a convincing argument for the world that Ukraine is a country on the right track.[Prev][Contents][Next]