The Financial Post reports this morning that, “Insolvent pulp-and-paper giant AbitibiBowater Inc. is set to launch a free-trade challenge to fight what it contends is the illegal expropriation of its assets in Newfoundland and Labrador.”
“The challenge, made under Chapter 11 of the North American Free Trade Agreement, is imminent and could come as early as today.”
“Talks are ongoing between the company and federal and provincial officials and a resolution was still possible, one source said last night.”
“Some legal observers said (though that) they believe an amicable, nonlegal solution is impossible.”
“When Abitibi filed notice (last April), it estimated it was owed more than $300-million related to the seizure of its property and commercial rights. That figure ballooned after revision.”
“(This claim) would be the largest such claim brought against the federal government.”
“In December 2008, Abitibi announced it would shut its Grand Falls mill, the last it operated in Newfoundland, to respond to a decline in product demand. Roughly two weeks later, the provincial government passed the Abitibi-Consolidated Rights and Assets Act. The company contends the legislation, crafted in retaliation for its actions, effectively confiscated most of its assets in the province, including land rights, timber rights and water rights. It argues the new law also cancelled all water and electricity agreements it had with the province, cancelled all lawsuits the company had against the province, and blocked access to the courts to redress the situation. When they expropriated Abitibi’s assets, Newfoundland’s politicians said they would fairly compensate Abitibi for things like dams and power plants, according to The Telegram newspaper in St. John’s.”
“(Premier Danny) Williams later said the province was seeking to recoup worker severance payments from Abitibi and that the company may also have environmental liabilities to clean up its former operations. Both of those things would be subtracted from the fair market value of its assets, he said.”
The full article is at http://www.financialpost.com/story.html?id=2609571.
