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AB to fight expropriation


February 1, 2009
By Pulp & Paper Canada

Montreal, QC – AbitibiBowater says it will fight the Newfoundland and Labrador government’s expropriation of its assets in the province, but according to a Dec. 23, 2008 CBC News report, Premier Danny…

Montreal, QC – AbitibiBowater says it will fight the Newfoundland and Labrador government’s expropriation of its assets in the province, but according to a Dec. 23, 2008 CBC News report, Premier Danny Williams does not feel threatened by the possibility of legal action.

When AbitibiBowater confirmed plans to shutter its Grand Falls-Windsor newsprint mill in December, the Williams government responded with legislation that enabled the expropriation of the company’s dams and power stations in the region. The seizure does not include the mill itself, which is scheduled to close in March.

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In a letter to Williams, AbitibiBowater president and CEO David Paterson called the government’s move illegal, and added the company is consulting with Canadian and U. S. officials to see if the expropriation violates the North American Free Trade Agreement.

Williams, however, argued the province is within its rights. He maintains that by closing the mill, AbitibiBowater effectively broke a “covenant” with Newfoundland, and the province will not “give away” hydro assets to an organization that is no longer doing business there, the Associated Press reported in December.


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