AbitibiBowater to challenge provincial governments expropriation under NAFTA

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AbitibiBowater Inc. (TSX:ABH) is proceeding with a challenge under the North American Free Trade Agreement against the Newfoundland and Labrador government's expropriation of its resource rights and assets in Grand Falls-Windsor.

The Montreal-based paper company says the expropriation violates Canada's obligations under NAFTA because it does not ensure payment for the fair market value of its expropriated assets and rights.

AbitibiBowater also claims that the expropriation is retaliatory and discriminatory.

"AbitibiBowater has been operating in Newfoundland and Labrador for more than a century, contributing significantly to the region's economic, social and sustainable development," AbitibiBowater CEO David Paterson said in a statement Thursday.

"The nationalization of our assets was unexpected and an unnecessary course of action. It came despite our proactive outreach to form a joint working group to address and resolve all issues related to our rights and assets in the province."

Paterson said the company is still willing to negotiate a "collaborative resolution" with the federal and provincial governments.

The company is seeking more than $300 million in direct compensation plus additional costs.

In December, the Newfoundland government passed legislation to expropriate AbitibiBowater's hydroelectric assets, and water and timber rights at the Grand Falls-Windsor mill.

At the time, Premier Danny Williams accused the company of breaking a century-old "covenant" with the province when it decided last year to shut down the mill and lay off 800 workers.

Organizations: AbitibiBowater Inc., TSX

Geographic location: Newfoundland and Labrador, Grand Falls-Windsor, Canada

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Comments

Recent comments

  • Tony
    July 02, 2010 - 13:34

    Once A-B is bankrupt the creditors will be happy to accept what the province is offering and try to recoup some of their loses.

  • July 02, 2010 - 13:30

    Hey Nasty we'll just do a repeat of 1812 and burn the Whitehouse down again. Then we can sell them our lumber to rebuild it.

    Anyways, it's all show and no go that's all. Don't worry. Last gasps of a dying desperate company with no where to turn. I bet they don't survive long enough to see it through. Can you say 'decades' ?

    BTW '3 writes' is correct.

  • Nasty
    July 02, 2010 - 13:28

    Hate to say I told ya, but hey! When your right your right. Better raise the taxes to pay for this and cut the Nurse's pay increase. Now we can not afford it. Can Danny fight the Whitehouse and win? I doubt it.

  • William
    July 02, 2010 - 13:27

    This gentleman David Paterson has the audacity to say AbitibiBowater has been operating in Newfoundland and Labrador for more than a century no doubt the mill has been there for 100 years under different regimes. This company has ill- repute in Newfoundland and Labrador. I trust the Government will fight this and sent this Corporation packing.

  • William
    July 02, 2010 - 13:20

    This issue was laid to rest for the last couple off months, just was this a time to lay a strategy to come back. This is just the beginning for the infamous nl premier, i was recently warned of the recurrence of the food stamps that we newfies was finally glad to get rid off. So with the 5% debt of our oil deal, abittibi, our taxes that well have to be raised to pay for all this, the rising prices/cost of living, job losses, sadly brace yourselves its looking that he might be right.

  • Tony
    July 01, 2010 - 20:23

    Once A-B is bankrupt the creditors will be happy to accept what the province is offering and try to recoup some of their loses.

  • July 01, 2010 - 20:17

    Hey Nasty we'll just do a repeat of 1812 and burn the Whitehouse down again. Then we can sell them our lumber to rebuild it.

    Anyways, it's all show and no go that's all. Don't worry. Last gasps of a dying desperate company with no where to turn. I bet they don't survive long enough to see it through. Can you say 'decades' ?

    BTW '3 writes' is correct.

  • Nasty
    July 01, 2010 - 20:16

    Hate to say I told ya, but hey! When your right your right. Better raise the taxes to pay for this and cut the Nurse's pay increase. Now we can not afford it. Can Danny fight the Whitehouse and win? I doubt it.

  • William
    July 01, 2010 - 20:14

    This gentleman David Paterson has the audacity to say AbitibiBowater has been operating in Newfoundland and Labrador for more than a century no doubt the mill has been there for 100 years under different regimes. This company has ill- repute in Newfoundland and Labrador. I trust the Government will fight this and sent this Corporation packing.

  • William
    July 01, 2010 - 20:03

    This issue was laid to rest for the last couple off months, just was this a time to lay a strategy to come back. This is just the beginning for the infamous nl premier, i was recently warned of the recurrence of the food stamps that we newfies was finally glad to get rid off. So with the 5% debt of our oil deal, abittibi, our taxes that well have to be raised to pay for all this, the rising prices/cost of living, job losses, sadly brace yourselves its looking that he might be right.