03 May 2010

Abitibi “intended to go bankrupt”': Williams

Newfoundland and Labrador Premier Danny Williams today said that the expropriation of assets belonging to three companies was a “very deliberate move” and that as a result of the expropriation of assets belonging to three separate companies, the provincial government can now “use the value of these assets to deal with the environmental liability which we would have been responsible for because they [AbitibiBowater] intended to go bankrupt in the first place.”

Williams made the comments in Question Period during an afternoon sitting of the House of Assembly.

He said that AbitibiBowater “would have walked away from their responsibilities”.  Williams said the paper company would have gone bankrupt, sought creditor protection or “done what they were in the process of doing and that was trying to sell off those assets to somebody else.”

That’s the first time Williams has linked the expropriation to a failed bid by the provincial government to buy one of those assets, a hydro project at Star Lake which was not supplying power to the mill at Grand Falls.

In another answer to questions from opposition leader Yvonne Jones, Williams described the mill at Grand Falls and the two houses associated with it as “the most valuable piece of real estate in Grand Falls”.  He did not explain why the provincial government intended to expropriate all the other assets and leave  AbitibiBowater with the most valuable piece of real estate in Grand Falls when he had earlier described the expropriation as seizing the valuable assets to forestall their being sold off.

Those assets would have been lost to an irresponsible company that did not give a darn about the people of Newfoundland and Labrador, the people of Central Newfoundland and Labrador. They would not - they would have walked away from their responsibilities. They either would have gone into consumer protection, they would have gone bankrupt or they would have done what they were in the process of doing, and that was trying to sell off those assets to somebody else.

While Williams has been careful in previous statements and made no comments during debate on the expropriation bill, his most recent remarks could weigh heavily against the province’s efforts to fight off a NAFTA challenge and to push the environmental liabilities onto AbitibiBowater.

Williams comments raise the prospect that the expropriation was not done  - as he originally suggested  - because AbitibiBowater breached a 1905 lease.  In a statement to the legislature before his natural resources minister introduced the expropriation bill, Williams said:

Abitibi has reneged on the bargain struck between it and the Province over the industrial development of the Province’s timber and water resources for the benefit of the residents of the Province.

Mr. Speaker, having said that, we cannot as a government allow a company that no longer operates in this Province to maintain ownership of our resources.