Legal Research

Newfoundland Standing Up for the Rights of its People, or Opening the Way to Trade Disputes?

By Connie Crosby

Yesterday the Government of Newfoundland and Labrador created history when it introduced and passed Bill 75 (now S.N.L. 2008, c. A-1.01), Abitibi-Consolidated Rights and Assets Act. The legislation takes away land and water rights, including ownership of all hydroelectricity rights from the generating station at Star Lake, and timber rights to forests on Crown land, from the U.S.-based company AbitibiBowater as of the end of March 2009 given to the company’s predecessor in 1909. Media are characterizing this both as “expropriation” and “repatriation” of the lands.

AbitibiBowater is set to close its mill in Grand Falls-Windsor, Newfoundland. According to news reports, the company planned to sell its land and water rights to help with company finances.

According to a Ministerial Statement made yesterday by Danny Williams, Premier of Newfoundland and Labrador, when the legislation was introduced:

This company has been granted some very generous terms in the past, in order to ensure they continue operations in this province. Now, through their decision to close their operations, they have effectively told the province that they are no longer willing to stand by their commitments. Abitibi has reneged on the bargain struck between it and the province over the industrial development of the province’s timber and water resources for the benefit of the residents of the province.

Having said that, we cannot as a government allow a company that no longer operates in this province to maintain ownership of our resources. We will not give away our valuable timber and water resources to a company that does not honour its historic commitments on industrial development of our timber resources.

For 100 years, Abitibi and its predecessors have enjoyed the privilege of Newfoundland and Labrador?s natural resources. It simply makes sense that if Abitibi are not going to continue the operation of a pulp and paper mill and renege on their commitment to our province they will no longer have access to our natural resources.

We will, therefore, today introduce a bill to ensure these valuable natural resources are returned to their rightful owners ? the people of Newfoundland and Labrador.

Premier Williams set the stage for at least some of the natural resources to be managed by government-owned Nalcor Energy with a press release last week from the Executive Council (Dec. 11/08) that states:

Positioning this energy producing province as an internationally-competitive player in the resource sector, the Honourable Danny Williams, Premier of Newfoundland and Labrador, today unveiled the new name and corporate identity of the province?s energy corporation: Nalcor Energy. The Premier was joined by the Honourable Kathy Dunderdale, Minister of Natural Resources, and Ed Martin, Chief Executive Officer (CEO) and President of Nalcor Energy.

“We have a tremendous wealth of energy resources in Newfoundland and Labrador and Nalcor Energy will enhance the value of the people?s assets, while growing an internationally-competitive corporation that will be a flagship for the province,” said Premier Williams. “No longer are we passive players in the development of our resources; rather we are now fully engaged partners, sitting at the table and actively involved in resource development for the benefit of our people. Nalcor Energy will represent the people of the province in developing and managing our energy developments, and we look forward to a bright future for this new provincial corporation.”

According to the the First Reading of Bill 75, Abitibi appears to still be responsible for environmental concerns regarding the lands:

13. Nothing in this Act affects the liability of Abitibi-Consolidated related to undertakings made by it in relation to environmental remediation.

Both the media and Premier Williams expect Abitibi to take legal action with regard to trade laws.

A news report and commentary from the Globe and Mail imply this will reduce the chances of another international company wanting to deal with the province. In contrast, a TV broadcaster on CBC Newsworld theorizes that this opens up the possibility for the government to create more industry and therefore more jobs in the province.

I’m curious to know how this move is seen by Slaw’s Newfoundland-based readers?

Full post as published by Slaw.ca on December 17, 2008 (boomark / email).