27 July 2005

The offshore board and benefits plans

Follow this link and you'll wind up at the federal implementation act for the Atlantic Accord. The provincial one is largely the same, but the federal one is actually easier to read and doesn't have a bunch of annoying shorthand in the official text, like using "1st" for first.

The Implementation Act

Scroll down to Section 45 and you'll find the bit that the powers held by the Canada-Newfoundland and Labrador Offshore Petroleum Board related to benefits plans. The language is pretty simple and plain.

Notice that under Section 45 (5), the board has to consult with both energy ministers to ensure the benefits plan submitted by a proponent meets the requirements of the federal and provincial implementation acts. What that means, in simple terms, is that there is no way for a development to proceed if one or both of the governments doesn't like the benefits plan.

Notice as well, though, that the act doesn't say that a fixed percentage of work has to come here, a set number of jobs have to be here or that any particular amount of work need actually be carried out in the province.

If you look closely at Section 45 (3)(d), local companies need only be given first consideration and then only if their goods and services and competitive in terms of fair market price, quality and delivery.

In Practice

In practice, benefits plans have been reviewed by the province and the federal government, even if in general terms, well before the entire development applications ever hits the offshore board. A smart operator would want to make sure that the development plan is a smooth as possible so they will invest energy before submitting the plan to make sure it meets the governments' requirements.

That's why it was the Premier and his energy minister of the time who were involved in the discussions with the Terra Nova about the possible transfer of engineering and procurement jobs to Newfoundland and Labrador. It wasn't the offshore board.

That's why it was Premier Williams who stated the province's terms for local benefits on the Hebron project.