High court says province can’t force insolvent company to clean contamination

The Canadian Press
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The former AbitibiBowater paper mill in Grand Falls-Windsor. — TC file photo

OTTAWA — The Supreme Court of Canada has ruled against the government of Newfoundland and Labrador in its effort to force insolvent newsprint giant AbitibiBowater Inc., pay for an environmental cleanup.

The province wanted the top court to decide if a debtor’s statutory duty to remove enviromental contamination is extinguished under Companies’ Creditors Arrangement Act.

The company had filed for protection under the act in 2009.

The province wanted to force the company to clean up five contaminated sites at a cost estimated at between $50 million and $100 million.

The Quebec Court of Appeal earlier refused to hear the province’s appeal against the Montreal-based company.

The Supreme Court ruled 7-2 against the province.

Organizations: Supreme Court of Canada, AbitibiBowater Inc.

Geographic location: OTTAWA, Newfoundland and Labrador

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Recent comments

    January 05, 2013 - 12:17

    The province took over and claimed the HYDRO plant AbitibBowater inc. had worth millions of dollars which provided HYDRO to Grand falls , If the province didn't do that it would have been sold for as little as scrap, Leaving the town without power. And costing millions to replace.

    January 05, 2013 - 10:25

    The province took over and claimed the HYDRO plant AbitibBowater inc. had worth millions of dollars which provided HYDRO to Grand falls , If the province didn't do that it would have been sold for as little as scrap, Leaving the town without power. And costing millions to replace.

  • Don II
    December 07, 2012 - 20:41

    While the Supreme Court of Canada was not specifically asked to rule on the merits, or lack thereof, of the expropriation of the Abitibi assets, it appears that the expropriation was nonetheless a pivotal factor in the rationale of why the Supreme Court ruled the way it did. If the Government of Newfoundland had not expropriated the Abitibi pulp mill there would be no question as to who would be responsible for cleaning up and paying for the environmental reclamation at the mill site. Abitibi would have been the totally responsible for the costs of the environmental cleanup of its property without any question. In this case, the Government of Newfoundland incompetently expropriated the mill site and acquired ownership of the Abitibi property thereby muddying the waters and allowing Abitibi to escape its responsibility. It appears that the Government of Newfoundland considers itself to be a future energy super power and had a hidden agenda to acquire the water rights and expand the electrical generating capacity of Nalcor by expropriating the water rights and electrical generating assets of Abitibi. It also appears that the Government of Newfoundland had no intention of adequately compensating Abitibi for the expropriated assets that it took. It is this kind of malfeasance, heavy handed, conspiratorial and unethical behavior that has brought the Government of Newfoundland into disrepute. It appears that the Government of Newfoundland went into Court without clean hands and got its head handed to it by the Justices of the Supreme Court of Canada. It appears that the Courts in Newfoundland will do the corrupt bidding of the Government of Newfoundland. Today, the Government of Newfoundland got a taste of its own medicine! I expect that in less than a decade from now the Government of Newfoundland will find itself before the Supreme Court of Canada fighting to keep the Muskrat Falls project and will find itself in a repeat performance of the Abitibi case.

  • Mount Pearl Guy
    December 07, 2012 - 13:50

    I think some have this wrong, I don't think this has anything to do with the expropriation. It has to do with Abitibi being in Bankruptcy protection. Regardless the NL government would have been on the hook for the site. This is a bad precedent to be set, companies will just fall into Bankruptcy to avoid costly clean ups.

  • Maggy Carter
    December 07, 2012 - 13:41

    What do the Abitibi and Muskrat Falls fiascos have in common? Both are the legacy of a blind, arrogant, rash, fly-by-the-seat-of-your-pants dictatorship that is totally indifferent to public opinion or to the longterm consequences of its actions. The decision to recover the timber and water rights from Abitibi was a correct one, but Williams' propensity for acting on every impulse that pops into his head, and his habit of dismissing every bit of caution recommended by officials, led him to the disastrous outcome of having accidentally included the mill in the expropriation act. And although it will cost us an extra $100 million, it actually received more scrutiny in the House of Assembly than did Muskrat Falls - a boondoggle that could cost us far more in the decades ahead. Act in haste, repent in leisure is a maxim that seems to drive this conservative government. Government has its shills, of course, like John Smith and Tim Jamison to help throw the dogs off their trail. The most laughable in this case is Jamison's assertion that all this is down to liberal judges appointed by liberal governments. For your information Timmy, most senior judges in Canada were appointed by the Harper Conservatives - 439 of them to date and counting. Moreover, you'd have to be a real moron to believe that protecting multinationals from government efforts to keep them honest is a mark of a liberal judiciary. I think you and your handlers had better go back to the barrel to see if you can't find some better excuse for this $100 million mistake.

  • Todd
    December 07, 2012 - 12:59

    Why should AbitibiBowater Inc clean up the mess, the NL government should have to do this. With all the revenues from the oil, I am sure it can afford to do that, if AbitibiBowater Inc could afford that sort of expense they would never have closed the mill in the 1st place. This government sure thinks it has power. What a joke, at least the judge put the NL government in its place about time someone did.

  • Graham
    December 07, 2012 - 12:53

    Thank you Danny & Kathy Great job. We will thank you 100,000.000 ONE HUNDRED MILLION times. I can hardly waite to here Dunderdale mumble and stumble her way out of this one.

  • i told you so
    December 07, 2012 - 12:33

    why did the government waste money on lawyers and a court challenge, when they could have went to a kindergarden class and got the answer? my second question: when are MHA'S responsible for this going to resign?

  • mr. scrooge
    December 07, 2012 - 12:15

    there must a grinch afterall, and look no further then the government of newfoundland & labrador. the taxpayer are now responsible for the clean up of the old abitibi-bowater site all thanks to their screwwup under NAFTA. when the dummies, OOPS i meant government expropriated the resources they also took the mill and its responsiblities with it according to the supreme court of canada ruling.

  • Foghorn Leghorn
    December 07, 2012 - 11:58

    All this from the same administration that appears to have another case of tunnel vision in trying to ram Muskrat Falls down all of our throats. Why do we continually rush into some very serious decisions that will have an impact on all of us for generations to come. What makes it even more alarming is that many of these same politicians are supposedly educated individuals that you would think should know better!

    • Tim Jamison
      December 07, 2012 - 12:48

      I guess you didn't even read the title, let alone the article itself. The court made the decision against the cleanup, which the government wanted to force. If you don't like the court as it is now, stop electing liberals to positions where they get to appoint Judges. But who needs to read anything and make informed decisions when you can just depend on blind partisan hate, right?

  • Jack
    December 07, 2012 - 11:46

    Since Danny Williams is responsible for the Abitibi Bowater mill expropriation at Grand Falls-Windsor, he should be responsible for part of the cost.

  • MM
    December 07, 2012 - 11:38

    Let's put the blame where it belongs.Dan the man did this . The $100 million should be placed on his watch , not on anybody elses.

  • Casey
    December 07, 2012 - 11:29

    The vote was 7-2 against NL. Is anyone surprised? When did NL ever get a fair deal from the rest of Canada. Quebec gets the lions share of profit from our hydro, the fishery has been used by Ottawa to develop trade to benefit other areas of Canada for decades, yet Canada is not considered a corrupt society. Go fiqure!

  • Jeremiah
    December 07, 2012 - 11:05

    Exactly where do we dig up people to sit on the "supreme" court anyway?

    • Eli
      December 07, 2012 - 11:42

      An even better question would be why do we keep electing people on name recognitgion only. The author of this disgrace is is none other than the one who said: "No more giveaways". Add the debt of Muskrat Falls and our saviour of all saviours is nothing but a disguised clown.

    • Tim Jamison
      December 07, 2012 - 12:50

      About two thirds of the time, it's a liberal sitting in the position that gets to appoint the Judges. If you don't like liberal-appointed Judges, don't elect liberals

  • former grandfalls-windsor resident
    December 07, 2012 - 10:51

    WELL WELL, the taxpayers are now on the hook for the enviromental cleanup of the abitibi-bowater site in my home town of grandfalls-windsor. THANKS ALOT FOR THE SCREWUP UNDER NAFTA. WHAT A JOKE, the government of newfoundland/labrador have become.

  • Don II
    December 07, 2012 - 10:48

    One, two, three strikes and you're out! The Supreme Court of Canada has simply affirmed the basic tenets of British Common law which are that possession is 9/10's of the law and if you expropriate it you own it and all of the liabilities that come with it. It appears that in 2008 the Government of Newfoundland acted in great haste and for unexplained reasons to expropriate the assets of Abitibi. It appears that through incompetence the Government of Newfoundland expropriated the Abitibi Pulp Mill which was not actually needed or required by the Province. It appears that by expropriating Abitibi, the Government of Newfoundland breached the NAFTA (North American Free Trade Agreement) and the Government of Canada was forced to pay Abitibi $300 Million to settle the matter. The Government of Newfoundland through expropriation became the owner of the polluted pulp mill property and therefore became legally liable for the costs of cleaning up the environmental contamination at the pulp mill site. Those facts were as plain as day and the Supreme Court of Canada just affirmed what the Government of Newfoundland refused to recognize or admit. The Government of Newfoundland is now legally liable to pay in excess of $100 Million to clean the former Abitibi pulp mill site. It is this kind of incompetence, malfeasance and abuse of power by the Government of Newfoundland which should make us very concerned about what this Government is doing with the Muskrat Falls project. It also appears that in 2008, the Government of Newfoundland expropriated privately owned land in the town of Cupids claiming the land contained the site of the Cupers Cove Plantation that was established by John Guy in 1610. When historic documentary and map evidence came to light which showed that the land was not the site of the Cupers Cove Plantation, the Government decided to keep the land and name it the Cupids Cove Plantation Provincial Historic Site to commemorate the Cupids Cove Plantation. The Government of Newfoundland expropriated privately owned land and dispossessed the owners to create the Cupids Cove Plantation, a place which has no connection to John Guy and which is never mentioned in the entire historic record of Newfoundland. It appears that the real reasons behind the Government of Newfoundland decision to expropriate privately owned land in Cupids is connected to development plans which required that the land be acquired. The Cupids expropriation requires further scrutiny and investigation. It appears that the Courts may have to review the facts behind the Cupids expropriation as well. President George W. Bush issued a Presidential Order which prohibited the use of Expropriation to take land from private owners in order to transfer title to the land to Government backed private developers. It appears that the Expropriation Act is being used by the Government of Newfoundland to take land from private owners for the benefit of other private interests, an extremely unethical practice which President George W. Bush found necessary to abolish in the United States of America!

  • Jay
    December 07, 2012 - 10:37

    Strangely enough, this comes on the heels of the Canadian Federation of Independent Business circulating a report about sick leave for individuals costing the public billions of dollars. Maybe now, they can do a study on how much corporate hooliganism costs us. An international corporation can open up business, rape the resources of the province, suck every bit of profit out of the resource they can, and then leave an expensive, unhealthy mess, and often death behind them. Then the courts protect them. Sadly, this is not the first time for this type of mess, and it won't be the last. Another interesting study might be how much all levels of government have to spend regulating these companies in order to protect the public from them. All in the name of greed.

    • Fred Penner
      December 07, 2012 - 13:20

      Well put. In simple terms, clean up your own mess. This seems perfectly reasonable to me. This "decision" on the part of the Supreme Court begs explanation. Perhaps the Telegram might do a follow-up story on why the province should up clean a mess made by a corporation.

  • saelcove
    December 07, 2012 - 10:34

    Well i guess the Rhodes scholar was wrong