Submissions include accusations of lack of proper oversight, costly decisions
Commissioner Richard LeBlanc is writing his final report from the Muskrat Falls Inquiry, and his considerations will include the final submissions made this week.
The lawyers covered a lot of ground, from their respective points of view. The following are a few notables from the week.
Dealing with loss of trust
Caitlin Urquhart, lawyer for the Labrador Land Protectors and Grand Riverkeeper Labrador, drove home the significance of consultation on provincial-federal project reviews.
“Unfortunately, we’ve seen throughout many years of the consultation processes, not only here with this project but with many projects across the country, that consultation can often be token, or note taking, or one-way, information-out, type of processes. So we’re hoping in the future (for) a more collaborative approach, both with Indigenous groups and governments, but also with environmental groups and local residents, to ensure that there’s a sense of buy-in within the community, and to build trust, respect and support between proponents and community,” she said.
Need to talk about risk
The consumer advocate made many points, including one on the risks of construction, relative to a project’s complexity, and what it can mean for overruns and the final cost.
“We’ve heard evidence that quite simply showed megaprojects do not stay on budget and can in fact double (in cost),” said lawyer John Hogan. “This was never communicated to the public and never built into the CPW (cumulative present worth) analysis (comparing two project options, before the Muskrat Falls project was chosen). This failure alone shows that the isolated option was preferable.”
There is dispute about the communication of risk, all left to be navigated by LeBlanc.
Told, versus knowing
The commissioner pressed several lawyers on the difference between what was on a slide or in a lengthy report, versus what was understood by decision-makers.
Lawyer Harold Smith, representing former Nalcor Energy president and CEO Ed Martin, was asked if Martin had properly advised on the “unknown unknowns” that might arise.
“What he would say to the government would be that there are unknown costs of building a project of this type, and he told Ms. Dunderdale (Premier Kathy Dunderdale) at a point in time that it could be as high as $500 million in his mind,” Smith said.
He added it was understood the management reserve, to cover the overruns, would be money from the province.
LeBlanc also pressed Nalcor lawyer Dan Simmons, who mentioned information in a Public Utilities Board report.
“It may have been publicly available,” LeBlanc asked, “but was it publicly known?”
Senior politicians and responsibilities
Lawyer Tom Williams represented former premiers Danny Williams, Tom Marshall and Paul Davis, and former ministers Jerome Kennedy, Shawn Skinner and Derrick Dalley. The former
Progressive Conservative leaders are standing by their work on the Muskrat Falls project.
“I would respectfully submit that the efforts, energy and personal commitment which they each made during their tenure in office is a true depiction of the due diligence that their administrations exercised along every step of involvement with this project over their 12 years in government,” their lawyer said.
He added it’s not that every decision was correct, but the PC politicians worked with the information available.
Ed Martin says Dwight Ball cost
It wasn’t a major part of the week, but in a written submission for Martin, his lawyer repeated that the former head of Nalcor was ordered away from a negotiating table.
“Mr. Martin submits that, while it is not possible to quantify the effects of this abrupt and unwarranted halting of negotiations (with Astadi), there were certainly significant financial consequences,” he stated.
The argument is timing. Martin was trying to settle something well ahead of the construction season of 2016 and before financial reporting. “Nalcor had the strongest lever it could have had in the negotiations at that time,” Smith stated.
Negotiations into June, they argued, meant the pressures swung the other way.
Astaldi-Nalcor dispute rolls on
The Muskrat Falls project isn’t over yet and there is also the matter of arbitration with Astaldi Canada.
Astaldi lawyer Paul Burgess offered LeBlanc an update on request.
A statement of claim was filed by Astaldi, and a response from Nalcor, possibly with counterclaim, is expected by the end of the month. The hearings are not expected until the fall of 2020, and LeBlanc summarized it means any decision is more than a year away.
All written submissions are available on the Muskrat Falls Inquiry website, with archived webcasts and transcripts available covering all of the inquiry hearings.