NLIS 7
September 22, 2005
(Executive Council)
(Natural Resources)
Extensive negotiations with
Abitibi unable to produce resolution
Despite several weeks of exhaustive and extensive
negotiations between Abitibi Consolidated Inc. (ACI) and the Government of
Newfoundland and Labrador, no resolution has been achieved to reverse the
decision by Abitibi to close certain operations in the province. On July 27, the
company announced that by November 2005, they would close the mill in
Stephenville and shut down machine No. 7 at their operation in Grand
Falls-Windsor.
�We are extremely disappointed to announce today that, despite extensive
discussions and intense negotiations with Abitibi, we have reached an impasse,�
said Premier Danny Williams. �The primary reason for this impasse is quite
simple � the demands and position of the company were a moving target and, quite
frankly, their demands are much more than any reasonable and responsible
government could agree to. We understand all too well the consequences of the
closure of these operations, especially in Stephenville. The ramifications will
be significant for the entire Port au Port Peninsula and the Grand Falls-Windsor
area. However, I can assure the people of those regions that we have done
everything possible to achieve a resolution.�
The premier went on to say that it is important to recognize that the pulp and
paper industry world-wide is facing challenges, including but not limited to
declining prices, lack of energy supply, a weakening US dollar and international
competition. One of the main challenges facing Abitibi is the lack of an energy
supply in Stephenville. �While we recognize the challenges facing the company
and the industry generally, our government was not willing to sit idly by and
accept, without a fight, the closure of these operations,� added the premier.
�This is why ever since Abitibi announced these closures we, as a government,
have been sitting at the table with Abitibi officials making every attempt to
find solutions to the company�s problems. In fact, we had been working on
resolving the company�s problems for more than a year. We promised that we would
leave no stone unturned, and I can assure you that we have not. We have expended
a tremendous amount of time, energy and resources on these negotiations;
however, sometimes you just have to acknowledge that a deal simply is not there.
Our final proposal to Abitibi remains on the table for their acceptance.
However, we will now turn our attention to finding new opportunities for the
affected regions.�
Ed Byrne, Minister of Natural Resources, explained that while government would
not lay out all of the details of the negotiations with Abitibi, government has
given an extremely fair and reasonable proposal which would have assisted
Abitibi through a period of at least five years.
�After several weeks of negotiations, we honestly felt very optimistic that a
resolution was within our reach,� said Minister Byrne. �Then the company came
back to government with new demands, different positions and a fundamental shift
in the negotiations. Essentially, after weeks of thoughtful and careful talks
and discussions, the company came back with a proposal that was a back-door
approach to the unreasonable and unfair demands they placed before the province
back in July. These demands were completely unacceptable to this government, to
consumers and other industrial customers.�
The fundamental elements of government�s proposal to the company included:
A sufficient level of protection and benefit to the company for a five-year
period. In other words, the proposed deal would have seen the Stephenville mill
remain in operation for at least five more years.
Continued operation of the No. 7 machine remain for a significantly longer
period of time than the current planned closure in November of this year.
Government agreement to purchase Abitibi�s surface rights � again, a significant
benefit to the company.
Government�s offer to work throughout the five-year period of the agreement with
Abitibi to find long-term solutions to their energy requirements and power
issues.
A willingness to assist the company with energy requirements throughout the
five-year period in a manner that was reasonable and fair to other industrial
customers and consumers; however, we could not justify large subsidies for this
company. To do so is simply not possible.
�And, I want to assure the people of the affected regions, particularly the Port
au Port Peninsula, that our government will be working tirelessly to help you
through this very difficult time and we will work together with you to find
solutions and new opportunities for your region,� said Premier Williams. �We
will not turn back on this region of the province. That is a promise. Already
this morning, we have established a Cabinet Committee which will convene
immediately to begin the task of finding solutions and new opportunities for the
affected regions.�
Media contact:
Elizabeth Matthews, Office of the Premier, (709) 729-3960, 690-5500
Carmel Turpin, Natural Resources, (709) 729-5282,685-4624
2005 09 22
1:50 p.m. |