N.L. on hook for $200M mill cleanup: Quebec court

There is growing evidence that Newfoundland and Labrador may have to pay forthe multi-million dollar cleanup of former AbitibiBowater properties in the province, including the defunct Grand Falls-Windsor mill in central Newfoundland.

In a recent legal decision, a Quebec judge called Newfoundland and Labrador's position that AbitibiBowater is responsible for the cleanup "unrealistic" and "preposterous."

Opposition party members referred to theruling in the provincial house of assembly in St. John's Wednesday.

"How can[the provincial government]continue to say that we are not on the hook for this case when the courts clearly state that we are?" asked Liberal Leader Yvonne Jones in the house.

Deputy premier Kathy Dunderdale dismissed the court decision as nonsense. She said AbitibiBowater will be responsible for the cleanup, whichcould cost as much as $200 million.

"The polluter pays regardless of who owns the property, Mr. Speaker," she said.

But a March 31 Quebec court decision questions Dunderdale's argument.

In that decision,JudgeClment Gasconrejected Newfoundland and Labrador's request for secured creditor status in the Abitibi bankruptcy.

The judge also questioned whetherthe province can forcethe companyto clean up areas it no longer owns that were expropriated against its will.

Gascon wrote that the province's position was "at a minimum, rather awkward" and that "some would go as far as to say that it is preposterous."

Hesaid a cleanup order from the province to AbitibiBowateris "as unenforceable as it is unjustifiable."

The Newfoundland and Labrador government has appealed Gascon's decision in the Quebec Court of Appeal. Arguments will be heard on May 12.

In a December 2008 bill that was rushed through the legislature, the government gave itself the power to seize AbitibiBowater assets, particularly timber and water rights, as well a hydroelectric power station.

It came up with the bill shortly after AbitibiBowater announced it was closing the Grand Falls-Windsor mill in order to prevent the company from selling off the assets.

A few monthsafter the bill passed, Abitibi declared bankruptcy.

The government has said it assumedthe responsibility for decommissioning its closedfacilitieslay withAbitibi.