Newsprint producer AbitibiBowater Inc., which now operates as Resolute Forest Products Inc, will not have to pay an estimated $200 million to cleanup contamination at five of its industrial sites, the Supreme Court of Canada has ruled.
The government of Newfoundland and Labrador took the newsprint company to court under the so-called “polluter pays” principle. But that fight has now been lost at three levels of court.
AbitibiBowater had filed for bankruptcy protection under the Act in 2009, however, the provincial government wanted the country’s top court to decide whether a debtor's statutory duty to remove environmental contamination is extinguished under the Companies' Creditors Arrangement Act.
“Subjecting such orders to the claims process does not extinguish the debtor’s environmental obligations any more than subjecting any creditor’s claim to that process extinguishes the debtor’s obligation to pay a debt,” the Supreme Court noted in its December 7, 2012 ruling.
On December 4, 2008, AbitibiBowater released a statement concerning imminent closure of the pulp and paper mill in representing a cutback of 205,000 tonnes of paper.
At one of the sites in question, the Grand Falls-Windsor mill, the last roll of newsprint was produced on February 12, 2009.
Editor’s Note: In the upcoming issue of HazMat Management magazine, Dianne Saxe and Meredith James present a legal perspective article on the landmark Abitibibowater ruling.