Reuters reported on February 25 that, “AbitibiBowater said (it has) filed a C$500 million ($467 million) claim under the North American Free Trade Agreement, seeking compensation from a Canadian province for assets expropriated after the bankrupt forestry company closed a mill there.”
“Five months before the filing, the provincial government of Newfoundland and Labrador passed a bill allowing it to take over lands, timber and water-use rights in the Atlantic province — a move that AbitibiBowater claims violated international law.”
Late this afternoon, the Department of Foreign Affairs and International Trade stated that, “The Government of Canada has agreed to make a payment of $130 million to AbitibiBowater upon the company’s restructuring. This payment represents the fair market value of the company’s expropriated assets.”
AbitibiBowater’s media release notes that, “As part of the settlement agreement AbitibiBowater will waive its legal actions and claims against the Government of Canada under the North American Free Trade Agreement (NAFTA).”
AbitibiBowater’s CEO David J. Paterson says, “AbitibiBowater would like to thank the Government of Canada for its efforts to reach this settlement and avoid a protracted and expensive NAFTA case. We look forward to continuing our strong working relationships with Canada and contributing to the country’s economic, social and sustainable development.”
The CBC had reported in February that, “(Newfoundland and Labrador Premier Danny) Williams said AbitibiBowater will be compensated for its physical assets, but not the timber and water rights — and the company should expect to get less than $300 million.”
Details of the settlement are still pending. More to come.
For past campaign blogs on this, please go to http://canadians.org/campaignblog/?s=%22abitibibowater%22.
The DFAIT media release is at http://www.international.gc.ca/media_commerce/comm/news-communiques/2010/268.aspx
AbitibiBowater’s media release is at http://www.prnewswire.com/news-releases/abitibibowater-announces-intention-to-withdraw-nafta-notice-of-arbitration—settlement-agreement-reached-with-the-government-of-canada-for-c130-million-101415149.html.