Two thirds of three fifths of f*** all

There’s an old limerick that, among other things, speaks to the ridiculous use some people make of numbers.

Like say, repealing an old piece of legislation that is long spent and then claiming the process that this contributes to government’s project to eliminate red tape.

The spent legislation is an act that gave effect to a series of agreements involved in the sale of Corner Brook Pulp and Paper Limited to Kruger in 1984. It’s an easy read, in plain English, and involving only 10 clauses and a couple of hundred words.

Take, as an example, this clause:

9. (1) Subject to the approval of the Lieutenant-Governor in Council, the Honourable the Minister of Finance on behalf of the Crown is authorized to enter into, execute and deliver agreements amending the agreements referred to in this Act.

Pretty simple stuff.  The finance minister can negotiate changes to the agreements if need be and if approved by cabinet.

There is not a single line in this entire piece of legislation that creates a single useless, unnecessary or irrelevant regulatory burden on business.

Not a one.

To go by the words of the business minister earlier in May, there is not any element of this 1984 statute that would  involve“administrative and regulatory inefficiencies, including excessive regulations, requirements, reporting, processes and paper.”

Nothing.

So why then, would the minister responsible for the Kruger agreements repeal act make this demonstrably ridiculous statement in the legislature:

The repeal of this legislation, Mr. Speaker, will reduce an additional sixty-five regulatory requirements from government’s operations.

By the minister’s own words – a mere few seconds before that claim was made – “[a]ll of these agreements now have expired and because these agreements have expired… this legislation is no longer required and will not impact on Kruger’s operations in any way.”

What we have here is a clue to the entire sham of red tape reduction.  While there are undoubtedly some good measures in the red tape project, the announcement earlier this month of government’s triumph contained both a raft of things that had nothing to do with red tape reduction and a few more elements that are entirely bogus.

Like this Kruger one.

Blatant misrepresentation – i.e. spin or bullshit -  has apparently become such an integral part of government’s political communications that it spills out into relatively simple things like a statement in the House repealing an old statute. There was no need of saying much about, but the minister rambled on for a few seconds and then threw in this little piece of nonsense about red tape reduction.

The bullshit is not without meaning.

If you take a look at these two elements – Kruger and red tape – you see a government which must make things appear to be much larger and more significant than they are.  The evident reason is that someone, somewhere in the bowels of government thinks it is important to make it appear that government is actually up to something productive.  So intense is the need for aggrandisement that even the trivial is co-opted to the cause.

Of course, for those familiar with the Rule of Opposites, such obvious knob polishing only makes one wonder what the bullshit is intended to conceal.

Pile up enough crap and you can hide just about anything. 

-srbp-

The second most dismal science

If economics is the dismal science, then reporting on economic issues is in contention for the title of second most dismal science.

Take, for instance, stories about oil prices and where they might go.

There’s one from The Star and a new one this sunny Wednesday from cbc.ca.  Both take quotes from different people all of whom suggest oil prices will zoom back up to 2008 levels and beyond in very short order.

You get this kind of stuff from the Star’s reporter, for example:

All of this means that when global demand comes roaring back – as it will in China, India and other emerging economies –and returns to its pre-recession levels in mature economies in North America and Europe, the needed additional supply won't be there to satisfy the resurgent demand except at exorbitant prices.

Lack of exploration will supposedly mean tight supplies at a time of supposedly high demand on top of that and all that will mean stratospherically high prices.  The cbc.ca story is in a similar vein and both take as part of their story the recent jump in oil prices into the US$60 a barrel range for West Texas Intermediate.

But hang on a second.

The most recent spike has been caused by declines in the value of the American dollar which are themselves tied to uncertainty about the future of North American car manufacturers.

Beyond that, it’s a little bit much to take the word of the Saudi oil minister or a guy – T.Boone Pickens – both of whom, it should have been noted,  have a vested interested in seeing oil prices shoot up to $200 a barrel.

The major problem with these two stories is that they disconnect the connected and then reconnect them in a way which is dubious, at best.

Take The Star for example, which blames the drop in exploration on falling oil prices and then adds that “[t]he worldwide credit scarcity didn't help.”

These two things aren’t unrelated. 

Oil prices dropped as the credit market crashed which itself took all the energy out of what was driving heightened American demand.  All of that economic boom stuff business writers were drooling over right up to mid-2008 was fuelled by an artificially inflated supply of  easy credit.  When the cash left, so did all the growth.  Not surprisingly, we’ve seen almost unprecedented drops across the board in the economy around the world.

Demand is not going to come “zooming back”, as The Star claims, when the American economy is still struggling and cash is tight.  If oil does shoot up in price for understandable reasons – security concerns, refining issues etc – then that will only prolong the recession. 

People with only so much cash to spend will be re-thinking their plans if the cost of transportation shoots up again.  It doesn’t matter if the people we are talking about are individuals or companies. Demand isn’t inelastic, as cbc.ca suggests, for plant expansions or cross-country road trips.  That’s pretty much optional, especially if you don’t have the cash.  

The other thing they miss-connect is price and exploration.

The local oil patch is a good indicator of how some of this works.  Exploring offshore Newfoundland and Labrador is costly.  We saw a growth in exploration here in years when oil prices were well below US$60 a barrel and no one in their right mind was forecasting $100 a barrel let alone $150 by 2008 and $200 by 2010-2012.

The Hebron project  - already discovered but very costly to develop - suddenly found life when oil was around US$25 a barrel and, as we’ve noted before, only people about to be pumped full of Thorazine (r)were screaming about paying 10 times that for oil within five or 10 years.

When it comes to exploration, we can take Chevron’s 2009 capital plan as a good indicator as well of how the major oil companies tie this stuff together.  Chevron’s 2009 expenditures announced in January were the same as 2008. 

They aren’t lower.  They are the same. 

In fact, the major oil companies have announced plans to continue their capex programs. The ones slashing are smaller, for the most part.  In the case of the oil sands, companies are lopping off spending on very costly projects which have a consistently low rate of return.  In other words, the projects that cost the most to produce and return relatively less profit are going into mothballs at a time when the cash needed to build the things is tightening.

Makes perfect sense.

And, at the same time, oil companies are continuing to bring new production on stream and are exploring for new conventional oil supplies because they know they can make money at it even at US$50 a barrel or less.

Deep water offshore oil might be a technological stretch today but in a couple of years time, technology will allow that to be produced far more efficiently than oil sands.  After all, what’s down there a few miles below the sea floor is basically the same oil that comes out of wells much closer to the surface.  You just need more pipes to reach the reservoir.

Part of what we are seeing in these reports is an echo of the basic problem we noted some time ago.  Forecasts tend to  travel in packs and those packs tend to carry around the same set of assumptions.  When oil was US$35 a barrel, everyone forecast oil at those prices into the future.  As oil prices went up and didn’t come back down, the new forecast norm kept getting reset higher and higher.

All you can really see in The Star and cbc.ca is just a confirmation there are still people out there who – for one reason or another -  are still using the first half of 2008 as their frame of reference without allowing that the arse fell out of it all in the second half of the year. 

Put another way, the “fundamentals” all these people like to talk about were the old fundamentals.  They just haven’t figured out what the new fundamentals are. They have to reset their assumptions for the mid- to long-term.

And when it comes to peak oil and the end of cheap oil and all that stuff, people just have to recall the same sort of thinking from the mid-1970s.  Lots of people forecast the end of the world and super-high oil prices back then and those predictions didn’t come true. 

That’s basically because the world hit the end of $5 oil but the doom-sayers never noticed all the stuff out there that was viable at $10 and $20 or even $50.  In the current context there’s still lots of oil out there viable at those prices. 

We don’t have to go to $100 a barrel simply because the supply is there.  And over on the demand side of the equation?  Well,  let’s just say that the things which drove demand before June 2008 just aren’t there any more.

The global economy still hasn’t found its new “fundamentals” yet, but one thing is a good bet:  they won’t be the same ones we had before the Great Crash of 2008.

-srbp-

More help for Jerome

Finance minister Jerome Kennedy’s not alone.

He’s not alone on a lot of things, but in this case, we refer to his lack of willingness to read the documents relevant to an issue and to understand the plain English meaning of them.

Jerome’s already been poked a bit both here and at the Telegram over his apparent ignorance of the role of the Clerk of the House of Assembly.

But there’s more ignorance, and that has to do with one of the issues the House of Assembly Management Commission discussed at its May 13 meeting.

They were talking about recreating the financial statements of the legislature for Fiscal Years 1999 and 2000.  The issue is whether or not to pay an outside audit firm to rebuild the House accounts for those two years and then audit them.

Auditor General John Noseworthy believes this work would be for naught since many of the records are missing and there is no guarantee the accounts would be accurate.  He noted in correspondence dating back to 2007 that his reviews would be sufficient to meet the legislative requirement the management commission is looking at in trying to have this work done. There’s an estimate under discussion of hiring an outside audit firm at a cost of over $600,000 to do the work.

Jerome thinks the work ought to be done.

Without going into all the details, he’s right.

The work ought to have been done and it should have been done by the Auditor General under the task assigned to him by cabinet in 2006. The only problem is that it isn’t clear the work was done.

In the summer of 2006, cabinet directed the Auditor General to do two things as a result of the House of Assembly scandal. 

First, he was directed to go back to 1989 to find any other examples of overspending up to 2004.  He did that and apparently found nothing beyond what he’d already reported.  Note that he didn’t look in detail at the two years up to 2006 when the allowances account was overspent by about $1.0 million and the budget estimates presented in the House were known to be wrong.

Second, the Auditor General was directed to conduct “annual audits of the accounts of the House of Assembly from fiscal years 1999/2000 to 2003/2004.”

So where are those audits?

Good question, since they’ve never been made public. In fact, there’s no public sign that component of the order was ever done even though the Auditor General got extra money and staff in order to do the work.

What we got instead was a report that discussed some inappropriate spending from 1989 to 2005. We can say “some” inappropriate spending  since Noseworthy never went into enough detail to determine where all the cash actually went or if people misdirected money even if they didn’t exceed their allowance totals.

For example, Noseworthy never reported at all – apparently never even noticed – how much money was directed to partisan purposes even for a member now known to have funded party work out of his allowances.  There was a glaringly obvious breach of the Elections Act in there but it went unreported until the Ed Byrne trial.

If Noseworthy didn’t do that for one glaring example, then we have to wonder just exactly how much of a look his team of auditors actually gave any of their reports.  But that’s a digression.

The key point to bear in mind is that the Auditor General himself was tasked with producing detailed audits for 1999 up to 2004.  That’s irrespective of whether or not there was an audit by a private firm.

On top of that, there’s no sign Noseworthy and his team ever did the work they were tasked with by cabinet in 2006.

So what exactly is the House of Assembly Management Commission doing arguing about spending public money to recreate what the Auditor General already got paid to do?

-srbp-

But did he bring any seal products with him?

INTRD minister Shawn Skinner is in Europe this week on a junket promoting the Atlantic Canada gateway to Europeans.

The event is in Antwerp, one of the largest ports in Europe.

So in light of the government’s preference for the poll goosing potential of bashing seals over the larger trade interests of the province, one must ask:

1. Why is Skinner on this trip organized by the Government of Canada?
2. Does the Premier know?, and,
3. Did Shawn bring any seal products with him to promote on the trip?

-srbp-

The strange case of Harvey Hodder

Anyone who has been following the spending scandals in the Mother of Parliaments and in the Bow-Wow parliament cannot help but be struck by the contrasts.

For starters, voters in the United Kingdom actually know where the money went and who spent it.  In Newfoundland and Labrador, voters have no idea where the bulk of the money went even three years later.

Then there is the matter of Mr. Speaker.  In London, Speaker Michael Martin has been forced from office.  In St. John’s Harvey Hodder – who took office two years before the scandal broke - stayed in place and has even been called as a witness in one of the criminal trials under way coming out of the scandal.

Hodder is a curious figure, even as speakers in the Bow-Wow parliament go.  He did not prove himself particularly adept at keeping control of the House when it was in session.  He never strayed far from partisan politics, even in his supposedly non-partisan role as Speaker. Things got so bad at one point that the opposition had to try and embarrass the old fellow out of the chair.

His curious behaviour once the scandal broke, showing up at the hospital bedside of the guy at the centre of the scandal and apparently deferring repeatedly to direction from the Premier’s Office, prompted a post here that called for his resignation.  That’s just one of the many unfortunate moments in this mess when Hodder had the chance to do one thing but elected to do something else.

Even as he finally retired, Hodder couldn’t resist offering up a few self-serving explanations for his own spending habits.

All that makes it very odd that Hodder turned up as a witness in a court case but even the odd took a bizarre twist as Hodder’s comments appear to contradict many of the things already known about the scandal and his role.

For example, Hodder told the court  funder oath that

… he wanted to look at the books that former legislature finance director Bill Murray, who also faces fraud charges, was keeping.

Hodder testified his request met with resistance, and Murray did not want to share his records.

Hodder said he was later reassured by the former clerk of the house, John Noel, that everything was fine, and Hodder should concern himself with other things.

Leave aside for a moment the obviously lackadaisical leadership style Hodder displayed by allowing his subordinate to refuse a direct request.  Consider instead that when the scandal broke Hodder had a completely different explanation for his apparent inaction despite his own claims that he had misgivings about the House accounts:

"Early on, I expressed misgiving about some of the financial management practices," said Harvey Hodder, who became Speaker after the Progressives Conservatives took office in 2003.

But he said he was initially satisfied when a private accounting firm found nothing untoward in the legislature's spending and didn't flag what turned out to be nearly $3 million lavished on trinkets, gold rings and other baubles over the past seven years.

Was Hodder reassured by the Clerk or by an audit?  There’s a big difference in the implications flowing from the two stories. The one continuous thread, though, is that Hodder was aware of problems but found some reason to go back to his office and not bother to exercise the control which he held by virtue of his office as Speaker.

He turned a blind eye.

And then once the scandal had been exposed, Hodder set about to blame others, first his predecessor and the members of the House executive committee in 2000 and then Hodder’s subordinate:

"That could only happen where one person is responsible for controlling the information," Hodder said.

One person wasn’t responsible, of course.  He was allowed to function as he did by Hodder and others who have never been called to account for their inaction.

Hodder made some other curious claims under oath.  Like this one about his knowledge of the system:

Hodder testified that MHAs were keenly interested in issues surrounding constituency allowances, poring over spending breakdowns and the limits published just after their annual release.

If this meant the breakdowns for each member then he should have noticed something much earlier than anyone else.  But even if Hodder got fudged records, there is no mistaking the accounts maintained by the province’s comptroller general and published each year as the Public Accounts.

If Hodder indeed had such a “keen” interest then he would have noticed that in 2004 and 2005, the budget laid in front of the House of Assembly falsely reported that the members’ accounts were bang on budget when the Public Accounts showed them to be out of whack by about a half million each year.

Bond Papers noted this in August and December 2006 and the accounting was confirmed by the Green report on the spending scandal. neither the province’s auditor general nor anyone else has explained the overages in those two years as well as the discrepancy between the budget figures and the Public Accounts. The auditor general made no reference to these discrepancies in his annual reports for those years.

Then there’s another claim about the diligence with which Hodder kept his own track of his own spending:

Hodder testified he kept copies of every receipt, claim form, payment stub and other supporting documentation during his long career in provincial politics.

The auditor general’s report on constituency allowance spending by all members after 1989 showed that Hodder:

• double billed the legislature (albeit for $129)
• made donations of public money totalling over $30,000, and
• made alcohol only purchases out of his constituency allowance totaling over $1,100.

None of this was permitted under even the lax rules that applied during the scandal period.  If Hodder kept as close a track of his spending as he said under oath, then he knew about his own inappropriate spending. When the report was released, incidentally, he attributed the alcohol purchase to a mistake in accounting.  He also is in a position to identify specifically all the donations he made during his term in the legislature.

Now Hodder wasn’t the worst when it came to using public money for gifts to unnamed individuals and groups, but it is a bit rich for him to pass judgment on others when his own record is far from stellar.  While Hodder may not have known of criminal activity, he certainly was aware of the sordid practice of using the constituency allowances as what amounted to a slush fund.  He did nothing about it, by his own admission.

Did nothing, at all and yet Hodder found no shame in making this sanctimonious statement as he left politics:

"It is regrettable that there are hungry children in this province, in my former constituency, who could've benefited from some of that money."

That’s not all that is regrettable about the House of Assembly between 1996 and 2007, as the strange case of former Speaker Harvey Hodder shows.

-srbp-

Government computer system fails

The much vaunted office of the Chief Information Officer failed today as an unspecified electrical failure collapsed the entire provincial government computer system.
Internal and external systems are down and there’s no word when service will be restored.
The central computer agency, which has experienced phenomenal budget growth since being created by the Williams administration, evidently does not have a viable computer business continuity plan.  A functioning plan would involve switching to a back-up system or using redundancy to avoid  a single failure from shutting down all operations.

-srbp-

They're back Update:  A news release issued at 3:30 PM advised the public that the electrical problems at Knuckles 2 had been fixed and that systems were coming back on line. While that release is time stamped at 3:30 PM, systems weren't back on for some sections until sometime after that. Ministerial statements and a news release related to the House of Assembly weren't posted until 4:40 PM and after.

Offshore board S-92 inquiry release and terms of reference

Issued Monday by the Canada-Newfoundland Offshore Petroleum Board:

C-NLOPB Announces Commission of Inquiry Terms of Reference

The Canada-Newfoundland and Labrador Offshore Petroleum Board today released the Terms of Reference for the Inquiry into Matters Respecting Helicopter Passenger Safety for Workers in the Newfoundland and Labrador Offshore Area.

On April 16, 2009, the C-NLOPB appointed Hon. Robert Wells Q.C. to head the Commission of Inquiry.

The C-NLOPB has been working to develop the Terms of Reference and put the necessary supports in place for the Commissioner to begin his duties.

The purpose of the Inquiry is to determine what improvements can be made so that the Board can determine that the risks of helicopter transportation of offshore workers is as low as is reasonably practicable in the Newfoundland and Labrador Offshore Area.

The Commissioner’s mandate will be to inquire into, report on and make recommendations in respect of matters relating to the safety of offshore workers in the context of Operators’ accountability for escape, evacuation and rescue procedures while traveling by helicopter over water to installations in the Newfoundland and Labrador Offshore Area, in compliance with occupational health and safety principles and best industry practices.

Specifically, the Commissioner shall inquire into, report on and make recommendations in respect of safety plan requirements for Operators and the role that Operators play in ensuring that their safety plans are maintained by helicopter operators; search and rescue obligations of helicopter operators by way of contractual undertakings or legislative or regulatory requirements; and the role of the C-NLOPB and other regulators in ensuring compliance with legislative requirements in respect of worker safety.

Commissioner Wells stated that the process will provide ample opportunity for the public to express their views in respect of practices which will reduce risks of helicopter transportation in the offshore area.

“The public will be able to make written submissions and there will be formal and informal hearings,” said Commissioner Wells. “There will also be a need to consult other offshore safety regulators in other jurisdictions in respect of best practices and obtain the services of independent specialists with expertise in areas relevant to the Inquiry.”

The Commission of Inquiry offices are located at Tara Place, 31 Peet Street, Suite 213, St. John’s, Newfoundland and Labrador, A1B 3W8. It is expected that the offices will be fully functional and staffed in the coming weeks.

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Terms of reference below. Media Contact: Hon. Robert Wells QC. Inquiry Commissioner (709) 753-7000 or (709) 579-0469 e-mail: robertwells@nl.rogers.com or Sean Kelly APR, FCPRS Manager of Public Relations C-NLOPB (709) 778-1219 (709) 689-0713 (cell) e-mail: skelly@cnlopb.nl.ca

------------------------

Commissioner’s Terms of Reference for the Inquiry into matter respecting helicopter passenger safety for workers in the Newfoundland and Labrador Offshore Area

 

WHEREAS the Canada-Newfoundland and Labrador Offshore Petroleum Board (C NLOPB) was established by the Government of Newfoundland and Labrador and the Government of Canada as a joint, independent, arms-length regulator of exploration, development, and production of oil and gas resources in the Newfoundland and Labrador Offshore Area;

AND WHEREAS the C-NLOPB has a mandate to interpret and apply the provisions of the Atlantic Accord and the Atlantic Accord Implementation Acts to all activities of Operators in the Newfoundland and Labrador Offshore Area and to oversee Operator compliance with those statutory provisions;

AND WHEREAS the C-NLOPB is required by legislation, before issuing an authorization for work or activity, to consider the safety of the work or activity by reviewing the system as a whole and its components, including its structures, facilities, equipment, operating procedures and personnel;

AND WHEREAS the C-NLOPB oversees the safety of Offshore Activities by review and approval of an Operator’s plans and implementation to determine that risks have been reduced to a level that is as low as reasonably practicable;

AND WHEREAS the crash of Cougar Helicopter Sikorsky S92-A flight 491 was a serious accident in the Newfoundland and Labrador Offshore Area;

AND WHEREAS pursuant to the Accord Implementation Acts an inquiry into a serious accident is mandatory, and the C-NLOPB has determined that an inquiry into safety matters respecting transport by helicopter to the Newfoundland and Labrador Offshore Area is essential for the C-NLOPB in carrying out its mandate as it relates to overseeing safety in the Newfoundland and Labrador Offshore Area;

NOW THEREFORE the C-NLOPB, pursuant to s. 165 of the Federal Accord Act (s. 161 of the Provincial Act), directs that an inquiry be made into safety matters respecting transport by helicopter to the Newfoundland and Labrador Offshore Area the terms of reference of which are set out herein;

1. Establishment of the Inquiry

There is established a commission of inquiry on matters respecting worker safety associated with helicopter transportation in the Newfoundland and Labrador Offshore Area that are within the jurisdiction of the C-NLOPB. The Commissioner shall be the Honourable Robert Wells, Q.C.

2. Definitions

In these Terms of Reference,

“Accord Acts” means the Canada-Newfoundland Atlantic Accord Implementation Act and the Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act;

“Board” means The Canada-Newfoundland and Labrador Offshore Petroleum Board;

“Commissioner” means the individual appointed pursuant to para. 165 of the Canada-Newfoundland Atlantic Accord Implementation Act and section 161 of the Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act;

“Newfoundland and Labrador Offshore Area” means the offshore area as defined in the Accord Acts.

“Operator” means a company which has been issued an authorization pursuant to the Accord Acts to conduct work or activity within the Newfoundland and Labrador Offshore Area.

“Participant” means a person who makes an oral presentation or files a written submission to the Commissioner pursuant to the Rules of Procedure and Practice;

“Rules of Procedure and Practice” means the procedures as may be implemented by the Commissioner;

“Secretariat” means the Commissioner’s support staff.

3. Purpose

The purpose of this Inquiry is to determine what improvements can be made so that the Board can determine that the risks of helicopter transportation of offshore workers is as low as is reasonably practicable in the Newfoundland and Labrador Offshore Area.

4. General Mandate

The Commissioner’s mandate will be to inquire into, report on and make recommendations in respect of matters relating to the safety of offshore workers in the context of Operators’ accountability for escape, evacuation and rescue procedures while traveling by helicopter over water to installations in the Newfoundland and Labrador Offshore Area, in compliance with occupational health and safety principles and best industry practices.

5. Specific Mandate

Specifically the Commissioner shall inquire into, report on, and make recommendations in respect of:

(a) safety plan requirements for Operators and the role that Operators play in ensuring that their safety plans, as represented to and approved by the Board are maintained by helicopter operators,

(b) search and rescue obligations of helicopter operators by way of contractual undertakings or legislative or regulatory requirements,

(c) the role of the C-NLOPB and other regulators in ensuring compliance with legislative requirements in respect of worker safety.

6. Limitation

The Commissioner’s mandate does not include an examination of any issues related to the airworthiness of aircraft, training of flight crew, or flight procedures or any other matters which are included in the Transportation Safety Board of Canada Investigation into Cougar Helicopter Sikorsky S92-A Crash except to the extent specifically described in paragraph 5 hereof.

The Commissioner’s mandate does not include an examination of the provision by the Government of Canada (Department of National Defence) of Search and Rescue facilities for all marine incidents and the location of such facilities within the Province of Newfoundland and Labrador

7. Powers of the Commissioner

Consistent with s. 165(2) of the Federal Accord Act and s. 161 (2) of Provincial Accord Act, the Commissioner shall be vested with the powers conferred by the Inquiries Act, R.S., 1985, c. I-11 and the Public Inquiries Act, 2006, SNL2006 c. P-38.1.

8.  Inquiry Methodology

The Commissioner shall design, make known and enforce rules, practices and procedures for the proper conduct of the Inquiry and where necessary may amend such rules, practices and procedure from time to time.

Phase I – (Parts A and B to be undertaken concurrently)

A. The Commissioner shall solicit the views of the public in respect of practices which will reduce the risks of helicopter transportation in the offshore area.

Mechanisms by which this phase of the inquiry is to be conducted made include:

(i) interviews and surveys,

(ii) calling for written submission, and

(iii) formal or informal hearings as the Commissioner deems appropriate.

B. The Commissioner shall gather information in respect of the specifically identified mandate issues described in paragraph 5 hereof.

Mechanisms by which this phase of the inquiry is to be conducted may include:

(i) research studies,

(ii) consultation with other offshore safety regulators in other jurisdictions in respect of best practices,

(iii) inspections and investigations,

(iv) calling for written submissions, and

(v) informal or formal hearings as the Commissioner deems appropriate.

• Any information gathered by the Commissioner during Phase I of the Inquiry which in his view should be addressed by the C-NLOPB or any other regulatory agency with urgency shall be brought to the attention of the C-NLOPB at a time and in a format the Commissioner deems appropriate. 
• To the extent that it reduces duplication of efforts and facilitates expeditious consideration of issues raised, the Commissioner shall maintain regular and frequent communication with the Transportation Safety Board of Canada Investigation into Cougar Helicopter Sikorsky S92-A Crash.

The Commissioner may retain and as needed request the services of independent specialists whose function would be to provide information on and interpret information and issues relevant to the Inquiry. Independent specialists retained by the Commissioner may be requested by the Commissioner to appear before the Commissioner as experts.

The Commissioner shall provide a Report to the Board on completion of Phase I, which Report shall be provided by March 31, 2010 unless an extension should become necessary.

Phase II Upon completion of the Transportation Safety Board of Canada Investigation into Cougar Helicopter Sikorsky S92-A Crash, the Commissioner shall undertake a review of the Report therefrom and particularly the findings and shall advise the C-NLOPB:

(a) which findings should result in actions being recommended to be undertaken by C-NLOPB and how they should be implemented,

(b) which findings should result in actions being recommended to be undertaken by other legislative or regulatory agencies.

The Commissioner may retain and as needed request the services of independent specialists whose function would be to provide information on and interpret information and issues relevant to the Inquiry.

Independent specialists retained by the Commissioner may be requested by the Commissioner to appear before the Commissioner as experts.

Participation by Parties with Professional and Commercial Interests

The Commissioner shall provide criteria for Standing for those with professional and commercial interest in helicopter transport to the Newfoundland and Labrador Offshore Area.

The Commissioner shall also provide procedures by which Standing will be granted.

Parties with Standing shall provide the Commissioner with written submissions outlining the issues within the Inquiry Mandate upon which such parties have an interest. The Commissioner may request from such parties further submissions either by way of written reports or oral presentations.

The Commissioner may provide for sessions in which evidence is presented to the Commissioner and where appropriate may allow for cross-examination of such evidence.

Scheduling

The Commissioner will provide notice of the detailed schedule and announce specific dates, locations and topics respecting the public sessions, if any, of the Inquiry. This notice will be issued a minimum of thirty (30) days prior to the start of the sessions and shall identify the specific issues on which information is being sought. The Commissioner will hold sessions at such locations, within the province of Newfoundland and Labrador, and at such times as the Commissioner deems appropriate.

9. Consultation by Commissioner with the C-NLOPB

The Commissioner, the Secretariat, or both may consult the Board for the purposes of clarifying any matters respecting the Terms of Reference, the Inquiry process and any matters relating to support of the Inquiry.

The Commissioner may consult the Board to provide information in relation to matters within the Inquiry Mandate.

The Commissioner or Secretariat shall not consult the Board for the purpose of discussing any substantive matters respecting purpose of the Inquiry and the recommendations to be made.

Notwithstanding the above provision the Commissioner shall bring to the attention of the Board matters that come to the Commissioners attention during the Inquiry that are of an immediate nature relating to any safety issues within the jurisdiction of the Board.

10. Support for Commissioner

The Board shall provide funding to the Commissioner so as to fulfill the mandate and effectively achieve the objectives of the Inquiry.

The Commissioner shall occupy such space for offices and hearing rooms and employ staff as may be necessary in consultation with the Board and in accordance with Board policy and practices.

The Commissioner may engage professional services (public relations, technology, website) so as to fulfill the mandate and effectively achieve the objectives of the Inquiry.

The Commissioner shall not express any finding or recommendations regarding criminal or civil responsibility of any person, body or organization.

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Offshore safety and responsibility

CBC News reported Friday night that Cougar helicopters search and rescue helicopter can’t work at night. 

The story isn’t online.

The front-end of the story makes it sound like a winch problem but the supposed culprit is the lack of an auto-hover capability.  Apparently Cougar helicopters didn’t buy that feature.

Curious, given that the company knew when they bought the aircraft they had to provide a search and rescue (SAR) capability.

Curiouser too given that Sikorsky markets the S-92 as a SAR helicopter  complete with forward-looking infra-red radar.

Now while the locals are using this as fuel for their cause to get a search and rescue squadron in St. John’s, the real issue here is starting to look more and more like Cougar and the offshore oil companies making conscious decisions to live up to the letter of the offshore board regulatory requirement but not the spirit of it.

After all, if they were genuinely concerned for worker safety, wouldn’t they find  find the few extra bucks to buy a dedicated search and rescue helicopter that can do what needs to be done for their workers?

Incidentally, has anyone noted the number of times the provincial government – either the Premier or his natural resources/deputy premier stand-in – have tried to deny the government has any responsibility for offshore safety?

Funny that given that:

-  the provincial government regulates the offshore through the board, and,

- as one of those offshore oil companies we talked about a minute ago with employees at White Rose and eventually Hebron, they have a direct responsibility  - morally if nothing else - for ensuring their workers are safe.

It sure isn’t very comforting when the one organization that has responsibility for worker safety through not one but two of its activities tries to deny it has any responsibility at all for anything.

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So much for that…

Dean didn’t show in Gander.

Maybe his tights didn’t come back from the cleaners in time.

Or maybe he couldn’t find a telephone booth to change in.

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Phoenix

The provincial Liberal Party convention looks for all the world like the first big sign of a political party on the come-back trail.

A relatively large turnout – upwards of 200 people – and the election of a raft of new faces on the party executive suggest that interest in the party is rebounding after a few years of the doldrums.

Lawyer Judy Morrow replaced Danny Dumaresque as president. For all the concerns expressed around these parts about Dumaresque’s leadership intentions and the deferred leadership convention, the fact is the Danny and the old executive managed to keep the party alive and out of financial ruin. That was no small feat over the past four years. The old crew have passed on a pretty good foundation on which the new crew can start rebuilding.

One of the big tasks will be fund-raising and to handle that the party elected a new treasurer - John Hogan - to replace the septuagenarian senator Joan Cook.

One of the surest signs of revival is the speculation about Dean Macdonald as potential leader. Dean would normally not [inserted the word "not" which was left out of the first draft] be considered leadership material but the fact that some people are pushing him and the fact he’s been flitting about again over the past couple of weeks are a sign that the opportunists are sensing a potential vehicle for their own agendas.

Oddly enough, Macdonald told a Young Liberal breakfast meeting why he wouldn’t be a good leader. Differentiate yourselves from the other guys was his good but hardly novel advice. Coming from a guy who has already publicly stated his support for the other guys and for continued Dannyism, it’s pretty much impossible to differentiate yourself when all you offer is more of the same.

A new leader will turn up; he or she just won’t be one of the names that have cropped up already. In the meantime, politics in the province may get back to some sort of health if the Liberals can continue rebuilding and start offering a competitive challenge to the current set of policies from the Provincial Conservatives. Politics doesn’t work when one side dominates the agenda so completely.

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Never let it be said…

That Bond Papers didn’t offer cabinet ministers a bit of help with the demands on their time.

Finance minister Jerome Kennedy had a problem at the House of Assembly management committee’s meeting a couple of weeks ago.  The story made the front page of the telegram on Tuesday of last week.  The story isn’t on line but the committee Hansard record is. 

At issue was a resolution that would, in part, give effect to a commitment made earlier by the provincial government to give former citizen’s representative Fraser March an outside review of the circumstances surrounding his dismissal:

CLERK [of the House of Assembly, Bill Mackenzie]: Yes, thank you, Mr. Speaker.

As this is being drafted, I could ask the Government House Leader, I may be able to assist in the drafting of it. There are factual errors in this, and I think some matters which are not as comprehensive as they might be.

Referring just to travel expenses, this is not accurate in terms of the reasons for his dismissal. It should really refer to the very first item the Auditor General wrote about, which was violations of the Citizens’ Representatives Act, by carrying on a business, trade or profession. That is also what Michael Harrington gave his opinion on, and that was always the primary issue with Mr. March. So it would not be fully accurate just to say travel expenses. It should be more comprehensive; if, indeed, you have to say anything. It may be you do not have to put any of the issues like that. This could be a much condensed resolution in the House.

…

MR. KENNEDY: Mr. Speaker, I just want to point out that the document is in the booklet dated May 13, 2009. Perhaps just for clarification, before the Clerk leaves - this is only my second House management meeting. What is the role of the Clerk in these House management meetings? Is it set out anywhere here in the rules or procedure?

He is expressing commentary here. I just wonder, is it appropriate for the Clerk to be injecting himself into, essentially, the debate on a motion, telling us that the motion is not accurate? If it is, so be it, but I would like to see something here in the rules or procedures, something that tells me that is there.

MR. SPEAKER: That is the real role of the Clerk.

The Clerk.

CLERK: Minister Kennedy, you will remember the Speaker and I offered an orientation session for you, but you were unable to avail of it because of your schedule so we sent over materials. This is one of the matters it would have covered.

I am a member of the Commission. I am non-voting, but I am a member as well as acting as secretary, so I come to meetings, I express my opinion, I simply cannot vote.

MR. KENNEDY: Where? I would like to see something that outlines (inaudible) -

CLERK: Section 28 of the act.

MR. KENNEDY: Section 28 of the act allows you to….

CLERK: That is all of the duties of the Clerk. I would also suggest you read section 31. Sections 28, 29, 30 and 31 cover it all.

MR. KENNEDY: I will have a look at it (inaudible).

For Jerome’s benefit, here’s the section of the  House of Assembly Accountability, Integrity and Administration Act that lays out what that fellow in the funny black robe who sits at that table in the centre of the rooms does:

28. (1)  The clerk is the chief officer of the House of Assembly with the status equivalent to a deputy minister in the public service and in that capacity the clerk is

(a) the chief parliamentary advisor to the speaker; and

(b) the chief administrative and financial officer of the House of Assembly responsible to the speaker and through the speaker to the commission for the management of the operations of the House of Assembly service and the administration of the statutory offices.

(2) In his or her capacity as chief parliamentary advisor, the clerk is responsible for

(a) advising the speaker, deputy speaker, committee chairpersons and members on procedural matters concerning the rules, privileges and proceedings of the House of Assembly;

(b) directing and coordinating the provision of procedural services by the clerk assistant, sergeant-at-arms and other officers of the House of Assembly;

(c) coordinating all official parliamentary ceremonies and other events involving the House of Assembly;

(d) custody of and safe-keeping of the records of the House of Assembly and all bills, petitions and documents presented to or laid on the table of the House, and shall produce them when required by the speaker or by his or her order on motion of a member;

(e) recording and carrying out all recorded votes of the House of Assembly; and

(f) ensuring and controlling public access to the proceedings of the House of Assembly through the production and distribution of Hansard and the facilitation of electronic access to proceedings by the media.

(3) In his or her capacity as chief administrative and financial officer, the clerk is responsible for

(a) the provision of administrative, financial and other support services to the House of Assembly, its members, and statutory offices;

(b) direction and supervision of the clerks, officers and staff employed in the House of Assembly service and for the establishment of general administrative policies of the statutory offices;

(c) acting as secretary of the [House of Assembly Management] commission and has custody of all records and minutes of the commission;

(d) ensuring that disclosure, as required by law, of the proceedings of the commission and the financial matters pertaining to members and the House of Assembly service is provided for;

(e) the preparation of the estimates of the House of Assembly as required by section 26 and analysis and commentary, to the commission, on the budget submissions of the statutory offices and the office of the auditor general;

(f) administration of all services and payments to members;

(g) the orderly safekeeping of the records of the House of Assembly service;

(h) authorizing and recording all financial commitments entered into on behalf of the House of Assembly and statutory offices;

(i) reporting regularly to the commission and informing the secretary of the Treasury Board regarding the financial and budgetary performance of the House of Assembly and statutory offices;

(j) reporting to the commission and the audit committee on the status of audits of the House of Assembly and the statutory offices and, specifically, reporting if in his or her opinion the audit is not being conducted on a timely basis;

(k) maintaining and periodically assessing the effectiveness of internal controls in the House of Assembly and statutory offices and reporting on that assessment and effectiveness to the commission; and

(l) certifying to the commission as required that the House of Assembly and statutory offices have in place appropriate systems of internal control and that those systems are operating effectively.

[Emphasis added]

That lays out the complete list of duties of the Clerk.

Section 29 doesn’t seem to be directly relevant since it provides that the Clerk is responsible for reporting the status of members’ accounts. Likewise, section 30 provides that the Clerk’s responsibilities are generally similar to those of the Clerk of the House of Commons and section 31 covers the relationship between the Clerk and the Public Accounts committee.

And if Jerome was wondering why this curious fellow was deigning to speak to his betters, here’s the other bit he should have taken time to read before opening his ministerial maw:

18. (1)  The Commission of Internal Economy of the House of Assembly established under the Internal Economy Commission Act is continued under the name of the House of Assembly Management Commission.

(2) The speaker, or in his or her absence, the deputy speaker, shall preside over the commission and when presiding, shall vote in the case of a tie .

(3) The commission shall consist of

(a) the speaker, or, in his or her absence, the deputy speaker, who shall be the chairperson;

(b) the clerk, who shall be the secretary and shall not vote;

(c) the government house leader;

(d) the official opposition house leader;

(e) 2 members who are members of the government caucus, only one of whom may be a member of the Executive Council;

(f) one member who is a member of the official opposition caucus; and

(g) one member, if any, from a third party that is a registered political party and has at least one member elected to the House of Assembly.

All pretty simple really and perhaps it would have been helpful if Jerome had been able to find time in his schedule for the orientation offered to members.  It pays to have some idea what you are talking about and when helpful people actually offer up some of their valuable time to tell you stuff you really could find out for yourself, it’s really a good idea to take advantage of their generosity.

Makes one wonder, though, what the Clerk might have said to provoke Jerome’s ire.  One thing is pretty clear:  Jerome won’t be taking Bill Mackenzie for granted again.  The Clerk did his job with evident competence.  Too bad the same can’t be said of Jerome.

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Some ‘splainin’ needed on firearms bust

Take a look at the array of firearms seized from a 25 year old man in St. John’s on Tuesday. There’s an excellent picture accompanying the Telegram story.

Certain types of weapons have been illegal to own in this country since 1995.  The only way someone can legally own them is if they had them prior to 1995 and have maintained the necessary licenses since then.

It’s unlikely that a 25 year old man collected these weapons before he was 10 years old.

We are talking about:

• Several AK-47s or variants from China or eastern Europe;
• Several SKS rifles from several possible sources. [The one on a bi-pod with a drum magazine appears to be an SKS]; and
• A STEN gun;

The guy has been charged with the appropriate offenses since he apparently didn’t have a license for them but in several interviews aired on Wednesday a police spokesperson made it sound like there was a possibility these weapons might not be illegal.  What’s worse, some of the rifles – like maybe the M1 Garand in the photo – have to be sent to a lab on the mainland to determine if they’ve been modified to fire as fully automatic.

Some further explanation seems to be in order:

1. Let’s make it abundantly clear that these weapons are illegal except for a handful of licensed firearms owners and – as a result – this arrest is extremely serious.
2. Let’s have someone explain how the heck the guy could accumulate the arsenal of patently illegal firearms in the first place.

Your humble e-scribbler has argued for years that the firearms laws in the country need to be changed dramatically from the motley collection of measures applied in the early to mid-1990s.

But…

There’s no reason to leave the impression what this guy had was legal to own. The next thing you know we’ll be back in the loopy days of the early 1990s when under two different governments – Liberal and Conservative – the country adopted entirely useless firearms laws and ignored the sorts of measures that would have worked much more effectively to ensure public safety.

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Nurses deal!

A tentative deal in the nurses labour dispute.

Achieved at 0528 hours Wednesday morning.

Who blinked?

More to follow.

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Count down to H Hour

Is it a strike, a lock-out or just a labour dispute?

Is it part of an agenda by nurses  - directed by the national nurses union - to see “Newfoundland and Labrador taken to court over its principles”?  That little bit of dog whistling was part of the Premier’s scrum today outside the legislature.

The “principles” the Premier is referring to are not principles as most people would understand them. They are actually just clauses in a contract that are, like all other clauses, subject to negotiation, clarification or other action to ensure that the parties come to agreement.

Whatever you want to call those two clauses there is no question that the provincial government is insisting on them unaltered and that the nurses are rejecting them with equal vigour.

One would almost believe that the provincial government had intended to push this to the wall all along, given that they’ve caved on everything else except those two clauses. 

Take the wage portion, for example. Not so very long ago newly minted finance minister Jerome Kennedy was insisting that the 21%-over-four-years template every other union had signed was the only thing there was.

Listen to the scrum and count the number of times the Premier and finance minister refer to 31%.  They didn’t miss-speak.  They’ve actually sweetened the financial portion in an effort to get nurses off the objection to the two clauses so important to government.

Incidentally, the government was not intent on a strike all along so they could legislate the settlement of their choice.  Nothing could be further from the truth, as the Premier assured us all in a very peculiar bit of self-praise/pre-emptive denial:

We’ve bargained in good faith.

That would be as opposed to bargaining bad faith.

Lots of people are going to pay a steep price for this dispute.  In all honesty, it would be difficult to imagine that anyone outside government or the union could give us the simple explanation of why government is insisting on the right to pay new employees more than old ones doing the same job. 

Aside from creating an incentive for new employees, as claimed in the scrum today, or union busting as the union has suggested, the idea of paying new employees coming through the door the same or more than long-service employees just smacks of the most backward-assed labour policies.  it tells long-serving employees their loyalty and experience and dedication are worth exactly nothing.

Consider how unappealing is the scenario the Premier painted today, that of a nurse being able to attend a child’s wedding because there would now be a nurse to replace her on the shift.  The price for that nurse – with more than two decades of service – is to have someone hired off the street be paid more than him or her.

And for all the finance minister’s efforts to dismiss hypothetical scenarios, it’s pretty easy to see the concern.  The finance minister confirmed that government is developing a policy that would see just that situation:  new employees paid off the grid set out in collective bargaining.  Kennedy basically admitted that what the nurses have claimed is true.

For all the insistence on patterns and policy, it’s interesting, too,  that the provincial government didn’t apply the same rule to other employees - working close to ministers every day –recently, especially when those employees  who received across the board upward reclassification weren’t unionized.  Same problem – difficulty recruiting – produced an entirely different solution.

In another sense, though none of this matters.  The claims and counterclaims are irrelevant.  It doesn’t even matter if what starts tomorrow is a strike of a lock-out.

The only things we know for certain are that this could have been avoided and that a whole bunch of people across the province are going to pay a price for it.

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NL exports down 50% in ‘09 according to EDC

Export Development Canada is predicting Newfoundland and Labrador exports will drop by half in 2009 and rebound only 7% in 2010.

“Newfoundland and Labrador will have a tough go in 2009 as massive commodity price declines and production cutbacks lead to high double digit drops for energy, industrial goods, and forestry exports,” said Peter Hall, Chief Economist of EDC.

“In 2010, gains in prices for key commodities like crude oil and iron ore will lift the value of the province’s exports, but volumes will likely weaken again as crude production continues to fall. Ongoing mega construction projects mean the long-term outlook is bright, but the export benefits of these projects lie largely beyond 2010.”

While oil prices started the year well above the EDC forecast of USD 47 per barrel, they may be right about production declines over the course of the year. Other economic forecasts have shown a forecasted 15% drop largely due to downtime at the three production platforms for regular maintenance. 

No one appears to have forecast the effect a drop in demand would also have on production levels.  According to figures from the offshore regulatory board, cumulative production in the first three months of calendar 2009 is down about 5% from the same period in 2007 and 2008.

The fishery is also expected to take a hit:

The agrifood sector accounts for 6 per cent of the province’s total export picture. While commercial fishermen have seen the combined pressures of high oil prices and a high CAD disappear since last year, faltering demand in the wake of the global recession has now set in. This will drive agrifood exports down 4 per cent in 2009 before a modest price increase adds to the underlying strength in the emerging aquaculture sector.

Exports of farmed salmon and steelhead trout could see tremendous upside as a result of the province’s significant coastline and ongoing investments. EDC does not anticipate any major quota adjustments for key species such as crab or shrimp through 2010, but there is some upside for landings of lesser valued ground fish.

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Government follows through on promised AbitibiBowater corporate subsidy

Premier Danny Williams and a gaggle of cabinet ministers took the trip to central Newfoundland on Tuesday to announce that the provincial government will pay former AbitibiBowater workers money owed to them by the company.

That’s pretty much the logical result of government’s announced intention in late April to subsidize AbitibiBowater:

2.  If that’s the case, why doesn’t the government just cough up the cash and then sort it out with AB later on, rather than leave the workers hanging?

The announcement comes as discontent grows in central Newfoundland.

Meanwhile in totally, completely unrelated news, the provincial government’s pollster is currently in the field collecting the quarterly poll goose and the nurses are about to go on strike. 

In other totally, unrelated and completely coincidental events, the provincial government is threatening to legislate the nurses back to work in the event they take strike action.  Government has committed to paying the nurses according to the template agreement which would be considerably less than had been negotiated. Government is also insisting on two clauses which the union has said are deal-breakers.  The nurses have suggested sending the two disputed clauses to binding arbitration.  The provincial government has refused.

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Two degrees of separation: nurses strike version

Anyone care to go back and look at the last nurses strike? 

Check the issues.  Check the government behaviour. Look familiar?  But then take a look at the premiers involved and play the old two degrees of separation game.

1.  Who connects Brian and Danny, besides Debbie Forward? This person isn’t directly involved in the labour issues.  It’s just curious to see the same people popping up.

(Hint:  it’s hard to differentiate two political parties when they are the same.)

2.  What was the political impact of government shafting the nurses and legislating them back to work?

3.  How long did Brian Tobin last in provincial politics after he legislated nurses back to work?

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It’s war!

After lengthy talks on the weekend aimed at averting a nurses strike, the provincial government refused to change it's position at all.

A strike is now guaranteed, in apparent fulfillment of government’s agenda. The provincial government appeared to change positions on other language and provisions but consistently refused to change its position on two controversial clauses. 

One would enable government to set different wage scales for nurses based on recruiting issues.  The other would allow government to fire nurses injured on the job who hadn’t returned to work after two years and been deemed to have a permanent injury. These two provisions were aimed from outset, it would appear, at the nurses.  Other public sector unions accepted the government’s position whole, without change.  These provisions did not affect their workers.

The premier has promised that if the nurses strike (as opposed to buckle to government’s diktat), the government will introduce legislation imposing a settlement that includes all the provisions nurses have rejected. As well, the government has committed to eliminating all the pay raises and incentives that were negotiated.

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Two degrees of separation

Around these parts, we’ve always joked that you can play six degrees of separation everywhere else but in Newfoundland and Labrador you can likely only get to two, at best.

Here’s a case in point:

1.   Engineering firm SNC-Lavalin just bought Spectrol Energy Services for an undisclosed sum.

2.   SNC-Lavalin is a contractor on the Lower Churchill project according to the project’s website.  Its boss is a strong proponent of the project.

If you google “SNC-Lavalin + lower churchill” or look in the upper right hand corner of your browser, the website still reads Newfoundland and Labrador Hydro, incidentally, just to emphasise the interconnected nature of these ventures. The Lower Churchill project used to be run by Newfoundland and Labrador Hydro, but is now another subsidiary of NALCOR Energy, the provincial government’s umbrella energy corporation.

3.  In February, 2009, SNC Lavalin was one of six firms invited to express interest in a piece of work on the project.

4.  Danny Williams used to be a director  - some report it as president - of Spectrol Energy Services;  his interest in the company was placed in a blind trust after he became premier.  In his 2008 filing with the legislature’s members’ interest commissioner, Williams listed a loan guarantee to Spectrol as one of his liabilities.

5.  Spectrol is an oil and gas industry service company that has done work for, among others,  ExxonMobil and the Hibernia project as well as Husky and the White Rose project (starting in 2005). 

6.  The provincial government owns a 4.9% interest in White Rose, which it manages through a subsidiary of NALCOR.  It acquired the interest last year.

7.  Bill Fanning, Spectrol’s chief executive was appointed to the Bull Arm Corporation by the Williams cabinet in 2006.  Questions were raised about the appointment at the time but the government brushed them aside.

8.  Last year, the Bull Arm Corporation was made a subsidiary of NALCOR Energy.

9.  Fanning still sits on the Bull Arm board right alongside directors who also sit on the boards of the other NALCOR subsidiaries in the true fashion of interlocking directorates.

10.  SNC-Lavalin subsidiary BAE Newplan is suing the proponents of a refinery project in Placentia Bay.  In a trip to the Middle East in 2008, Danny Williams reportedly promoted the project unsuccessfully to overseas investors.

How many degrees of separation does all that add up to?

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A mere pittance

Just a few other observations come to mind at the end of the week on the province’s newest old research and development agency.

The original post – that highlighted the sooper sekrit powers the R & D agency has – can be found here.

1.  Glenn Janes,  The chief executive officer of the thing, was appointed in December 2007. 

2.  The legislation to reinvent the agency was passed through the legislature in December 2008, isn’t in force yet and is already being amended in a bill currently being rushed through the legislature before the nurses’ strike hits.  It’s a council or agency or thingy since one of the changes being made will give cabinet the power to change the name whenever it feels like it.

3.  On the one hand, support for research and development is good.  On the other hand, $25 million is a paltry sum.  Well, paltry compared to what will be flowing from the oil and gas sector – for example – under offshore board regulations. 

The first three projects will pump considerably more than that annually.  As The Telegram described it in February:

The new rules require companies to spend a percentage of their annual offshore revenue on research, development, education and training activities in the province.

The rate will vary from year to year. This year, for instance, it is 0.36 per cent.

Basically, one project offshore will pump more cash into research and development than the provincial government alone.  We are talking hundreds of millions from Big Oil thanks to the offshore board.

4.  Had the government been really serious about R & D, they could have worked a deal with the oil companies to channel the Big Oil R & D payouts through the revamped agency/council/ thingy.  Since they appointed Janes way back in 2007, it’s not like they didn’t have time to work that into the Hebron talks or something.

5.  Speaking of Hebron talks, getting excited about $25 million in funding for R & D seems a bit odd given that the provincial government settled for a flat amount from Hebron.  That flat amount  - $120 million over the entire 25 year lifespan of the project - is way below what the project would have had to put into the provincial economy if the offshore board regs were applied. 

Put another way:  Big Oil involved in Hebron will shell out about less than $5.0 million a year.

Put another way still, Hibernia alone has put on average almost $20 million a year into local research and development since first oil in 1997.

6.  A couple of years ago there was plenty of tough talk, but the reality is that both the royalty deal and especially the R & D aspects of the Hebron project are actually a lot less than they should have been.

That’s pretty ironic, considering the Premier was quoted by the Financial Post two years ago talking about the need – supposedly – to get more out of Big Oil, not the less he settled for:

"In these times of extremely high oil prices where consumers are bearing the burden and companies are taking in exorbitant profits, the time has come for new arrangements for projects on a go-forward basis."

It was a new arrangement, of course, just one that ensures the companies keep more of their cash from Hebron.

7.  When it comes to the independence needed to run a successful research and development operation, the new agency won’t have it.  The chief executive officer is appointed by cabinet – not the agency’s board – and all staff hiring must be approved by the minister. 

With any R & D agency like this, autonomy should be the watchword.  Think of the research successes at Memorial University and its associated agencies.  Instead what we are getting is like a think tank where the thinking is watched over by Joan Burke and her colleagues. 

That never works well, especially if this new agency is going to be funding social science and policy research. 

All of this is a big shame really, since the guy in charge is evidently a sharp fellow.  Too bad he is working under such obvious hindrances.  It would be hard to imagine Janes came up with these himself working from what he described as a clean sheet of paper.

Maybe in a few years time, some other administration of whatever political stripe can  fix the fairly obvious problems with what started out as a really good idea.

40 years ago.

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