P 0. Box esoo
MONTREAL. CAN^D^ 14A
K3C 3L4
Ar.s'd ... .. .........
April 17, 1980
Perscnal Confidential
P. Sheehy, Esq.
Windsor House
England
Dear Pat
I have your letter of April -10th and, if I interpret its substance correctly,
it Comes as quite a surprise to me.
a coincidence (which I will explain later), I had at hand the correspondence
file which records the mutual arrangements for consultation/reporting established
in 1969 and updated in 1973. 1 take this opportunity of enclosing copies of
that correspondence with this letter.
Despite changes in structure and staffing at both B.A.T Industries and Imasco
over the years, I believe our commitment to the relationships reflected in the
correspondence has been honcured; even in the context of legislative developments
which could have had an inhibiting effect on some communications. The visit of
Rod Foster and Matt Clezos last fortnight and the earlier semi-annual review in
1979 are expressions of our willingness and commitment to inform you, as we our-
selves would expect to be informed within our own group and to be consulted on
matters of major importance.
Referring to the specific acquisitions noted in your letter, they 'nave three
characteristics which I should note -
a) They are well within the investment limits agreed to in 1973.
b) They are modest extensions in businesses in which we are already involved.
O They are subject to the lengthy procedures of the federal Foreign Invest-
ment Review Agency with all the complexities and delays that involves.
Against the above background I frankly do not believe it would be proper or
judicious to engage in any form of mutual consultation or forewarning. Indeed,
I further suggest it would not make practical sense, in terms of effective
management and the flexibility required in our planning for growth, for us to
seek or you to expect detailed formal consultation on such acquisitions which are
not major matters by any yardstick when compared with our total investment.
By contrast, we are very conscious of the nature of major matters which, I believe,
was reflected in the visit in November 1979 by George Ross, Bun Matte and myself,
where full consultation was obviously a must for all concerned.
O
..2
N)
BAT Industries document for Province of British Columbia 13 April 1999

-2-
Now, to return to the coincidence I referred to at 'the outset. I had the
$$agreement" file out because I was planning to write to you about a reassessment
of the current understanding of a limit of $5,000,000 for any major project not
provided for in our annual plan. That amount way have been realistic at the
time but it is no longer so. It does not allow us the investment manoeuverabilicy
required in today's "market", which has been narrowed significantly for us by
inflation and by the availability of acceptable candidates for acquisition. We
would like to see the limit increased to $10,000,000 to maintain a reasonable
degree of flexibility in our environment. I raise the matter now because it is
one of the important items I look forward to discussing with you during you;- May
visit.
I am keen to have a good exchange when you are here because I feel that any problem
in terms of communication of information should 'be cleared up.
Best personal wishes..
Sincerely,
t
M)
C)
r; i-
BAT Industries document for Province of British Columbia 13 April 1999