AbitibiBowater vs. the Rock



Canadian taxpayers could be footing the bill for a $500 million challenge launched by AbitibiBowater Inc. if the international pulp and paper company wins a dispute under NAFTA (North American Free Trade Act).
 
The company shut down its paper mill in Grand Falls-Windsor, N.L., in late 2008 and put 800 of its employees out of work.
 
In response, the government of Newfoundland and Labrador expropriated the company's assets and took away AbitibiBowater's rights to the province's water and timber. The government says these rights were given to AbitibiBowater on the condition they operated a pulp and paper mill in that province (per a lease agreement signed by the company and the government over 100 years ago).
 
On the CBC's Power & Politics, AbitibiBowater Vice-President Seth Kursman said his company's $500 million NAFTA claim "is in response to the illegal and inappropriate expropriation by the province of our assets and rights."
 
Kursman says Newfoundland and Labrador's expropriation of its assets and rights was discriminatory and unfair.
 
"It's pretty clear based on the requirements of NAFTA that you have due process, that you not discriminate, the you are provided fair compensation, that an expropriation, if it's done, is done in a certain manner. And we believe that those standards certainly have not been met in this case," Kursman told Power & Politics.
 
Click here to watch AbitibiBowater's Vice-President on Power & Politics.
 
We also asked Newfoundland & Labrador Deputy Premier and Natural Resources Minister Kathy Dunderdale to appear on Power & Politics, but she was unavailable. However, her office sent us this statement during the show:
 
"The Government of Newfoundland and Labrador confirms that AbitibiBowater has filed a Notice of Arbitration against the Government of Canada under Chapter 11 of the North American Free Trade Agreement. This filing follows legislation passed by the Provincial Government in December 2008 for the expropriation of AbitibiBowater's generating assets. The Provincial Government will now review the document and assess AbitibiBowater's allegations. Both federal and provincial governments are following the processes put in place by NAFTA and are working cooperatively to resolve issues with AbitibiBowater. NAFTA falls under the responsibility of the Government of Canada. As a result, the province will allow the established legal process to unfold and will provide no further comment at this time."