02 April 2010

Epic Fail of The Week: prov gov loses to Abitibi… again

First, the provincial government’s Legal Genius(es) drafted the expropriation bill which seized - all, as it turned out -  AbitibiBowater assets in Newfoundland and Labrador.

They told the good burghers of Danny-ville that this meant only that the power plants and everything else belong to the people of Newfoundland and Labrador.

Everything, except that is for the mill itself, they said which would be used as leverage in negotiations over any compensation for the expropriation.

It would all be a wash, in the end.

Or so people were told publicly and in briefings before the expropriation bill turned up in public.

Then, people discovered that the same Legal Genius(es) didn’t actually exclude the mill as they’d originally claimed.


They seized it all.

Big screw up.

Now, the people of Newfoundland and Labrador discover that trying to get some sort of court action forcing the former mill owners to foot the bill for environmental clean-up – as the legal genius(es) assured everyone – won’t work either.

Hands up anyone who is surprised at the latest failure by the provincial government?

Okay, well just stop and think for a minute: 

The Legal Genius(es) behind this latest string of expropriation epic fails would be exactly the same Legal Genius(es) who brought you the Ruelokke legal mess.

And they’d be the same Legal Genius(es) who are now betting massive chunks of the public purse on a law suit against Hydro-Quebec to try and settle a dispute over the 1969 contract.

Any bets on how good that one will turn out for taxpayers in the end?


Medvale School for the Gifted Update:  Seems the Legal Genius(es) indeed have caught themselves in another bit of jurisprudential bother.  As Russell Wangersky astutely points out, the lovely Abitibi expropriation bill clearly gives no value to water rights and timber rights.  Yet, the scheme to funnel money to Corner Brook Pulp and Paper is based on timber rights having value.

The two things cannot live in the same space.

So either no cash will go to CBPP or, as your humble e-scribbler expects, the real legal geniuses who work for AbitibiBowater (they are 2-0 so far) will use the CBPP cash hand-over to put a much higher price on the expropriation now that they can legitimately claim cash for timber and water rights.

Not only that but AbitibiBowater can also claim – quite rightly – that the expropriation was unusual and punitive aimed specifically at one company and remains without any merit. Coupled with all the nasty words flicked by ministers toward Abitibi, they can likely show that the whole thing was prejudiced and that will only add to the poor beleaguered Newfoundland and Labrador Taxpayer’s legal misery in other places (NAFTA challenge anyone?)

Momentous Update:

Hypothetical Answer by Hard-done-by Citizen:  “Golly Gee Mr. Finance Minister, what will happen if they get more money?”

Not-so-hypothetical Answer by Finance Minister:  “The debt will go up.  We cannot stop the momentum.”