Friday, 4 November 2016

Silent Stan and the Chalillo Boondoggle

Silent Stan and the Chalillo Boondoggle

By: Ryan Young

 “Silent Stan” Marshall, has finally broken his silence. In a lengthy interview with CBC this week, the Nalcor CEO offered his opinions on the recent protests and the potential dangers associated with the Muskrat Falls project. Many people, especially in Labrador, were not happy with his comments, but let’s be perfectly clear; Stan Marshall was never brought in to worry about the concerns of the people of Labrador. Nor was he brought in to address the peoples concerns about methylmercury or the north spur. Stan was brought in for one reason, and one reason only, to get the finances of the project back on track. His experience comes from the boardroom of an energy giant where decisions are made based on profit-margins, not heath or the environment. Stan Marshall has certainly had a long and successful career as a dam builder, but before we question his recent comments, we need to understand his position.

Stan Marshall was brought in to try to get the ballooning cost of the Muskrat Falls mega-project under control, while at the same time restoring the faith of the people in the leadership at Nalcor. He was outspoken against the project in the past, saying that he did not think it was a good idea, and he said he felt it was his duty to help the province get the project back on track. By all accounts he has been doing just that, albeit behind the scenes. Negotiations with Astadli have been ongoing, and yesterday it was announced that the federal government would be providing an additional $2.9 Billion on the loan guarantee. For Stan Marshall, this was never about clearing more soil or opening the north spur analysis to outside scrutiny. It was simply about trying to lessen the overall impact of Muskrat Falls on the provincial treasury.

When Stan Marshall comes out and says that he does not expect that any soil will be cleared from the reservoir, he is saying it from a business perspective. That is what the man knows. Methylmercury is just the cost of doing the dam business. As a CEO, it has never been his job to worry about the relationships between people and governments. It is curious to hear him challenge people to prove that there have been adverse health effects from the Upper Churchill reservoir, when fish consumption advisories have been in place in the area for decades, but that is what the CEO of the company building the dam is expected to say. It’s just the way the world works. We know that the science is very clear on the effects of methylmercury, but since when does science factor in to decisions made at the boardroom level? The only language the people in those positions speak is dollars and cents.

Make no mistake, the reservoir will be flooded to the minimum level in the very near future, no matter what comes of the meetings being held in Labrador this week. Winter is already upon the big land and there is no way that Stan is going to be willing to risk further delay and cost due to ice damage. While he says that he fully supports the agreement between the premier and indigenous leaders, his language makes it quite clear that he does not believe that the protesters concerns are valid and he does not expect to honor any commitment to clear topsoil from the reservoir. This has caused Opposition MHA, Barry Petten, to question if the premier and the CEO of Nalcor are on the same page when it comes to methylmercury concerns. Since Marshalls interview we have not had any comment from the premier.

So, what are we to think? Some in Labrador are already talking about feeling betrayed by Marshall’s comments and many have vowed to stand-up again if the province reneges on its deal. There is much uncertainty in Labrador right now as people are waiting to see what their leaders will say. It would not take much to send people back to the site to shut it down again, and certainly neither Nalcor nor the government wants that to happen. Stan has a job to do, after all.

Trust Stan. That has been the word from the government since Marshall took over as Nalcor CEO last spring. It kind of sounded like the “Trust Ed” kind of talk we were given for years by the previous administration, with the one obvious difference being that Stan actually knows a thing or two about building dams. But did anyone stop to look at Stan’s track record? While much of it is certainly impressive from a business and profit perspective, his record is far from perfect. Remember when he called Muskrat Falls a boondoggle? It was certainly an interesting choice of words to use as Marshall had heard them before. In 2002, environmental lawyer, Robert F. Kennedy Jr., called Fortis’ Chalillo dam project on the Macal River in Belize, “The worst boondoggle I have seen in two decades as an environmental lawyer.”

The Chalillo dam made headlines worldwide for the amount of controversy related to the tiny 7MW project that Fortis was building under its local subsidiary Belize Electricity Limited (BEL).  The area that was flooded contained the only known nesting site in Belize for the rare Scarlet Macaw as well as habitat for endangered jaguars, tapirs, and howler monkeys. Celebrities such as Harrison Ford and Princess Anne raised public concerns about the project and environmentalists and biologists from all over the world condemned the damming of the Macal River.

The whole project was mired in controversy with allegations that there was a cover up by Fortis and engineering firm, AMEC, to suppress data that questioned the feasibility of the dam. In an editorial in 2013, Robert F. Kennedy Jr. goes even further, accusing Fortis of digitally removing visible fault lines from satellite photographs to suppress the local earthquake risk. This information did not come out until after the dam was complete. He also alleges that BEL lied about its claims that it would not harm endangered wildlife habitat, and that it withheld information about methylmercury contamination downstream from another one of its nearby dams. Sound familiar?

On top of all that, BEL promised that the project would not raise electricity rates for local customers, but in 2005, 2 years after the dam went live, electricity rates rose by 25%. A few years later BEL became insolvent and attempted to raise rates again by 25%, threatening to implement rolling blackouts if they were not allowed to charge higher rates. With local electricity rates already double that of neighboring countries, the Government of Belize rejected the idea and in 2011 it decided to expropriate BEL and the Chalillo Dam.

The expropriation of the Chalillo dam led to a long court battle between Fortis and the Government of Belize. It was ultimately settled in 2015 with the government having to pay Fortis $35 Million US dollars and return a 33% stake in the company. This settlement came not long after Barry Perry had taken over as CEO after Marshall’s retirement. Marshall was not willing to let the government off so easy and had been holding out for a $300 Million payment, plus damages. Since the takeover, however, BEL has been stabilized and electricity rates have been reduced to a new modern low. The government has worked closely with its partners to restructure the company back onto a sound footing.

Now, what can we take away from the Chalillo story? It certainly highlights how a corporation can be willing to bend the facts and do what it takes to make sure that pet projects see the light of day. The withholding of information and misleading of the public and the government that was witnessed in Belize sounds eerily familiar to the situation here with Nalcor. When you start to look at it from that angle, it is easy to see why Stan Marshall was the right man for the job. Stan is a man who gets things done. He doesn’t worry about pesky protesters or governments with cold feet. Stan was given a job to do and he fully intends to do it. It has been made quite clear that the project will not be stopped, and all Stan is worried about now is getting the project finished by 2020, without topping out over $15 Billion. This was what he was hired to do.

So, as much as we all want to hate on Stan Marshall right now, try to remember that the man is only doing the job he was asked to do. The real culprit is the government, who tried to sell us on the fact that one man could somehow come in and make this project magically right. The government does not care about the protesters anymore than Stan does, but they don’t have the will to face the people and say it. That is why the ball was put in Marshall’s court this week and Dwight has been silent again. They might have been wise to keep Stan’s muzzle on until next week when the flooding is done and the amount of damage that could be done by another occupation of the camp would be minimized. People in Labrador were already skeptical, and Marshall has only added fuel to the fire. But Stan knows that he was not put there to answer to the people of Labrador, he was put there to get this project done. The CEO and the Board of Directors may have changed, but it is still business as usual at Nalcor. Until government is willing to take a real stand and bring some transparency back to the company through an independent audit and a real hard look at the science and economics of Muskrat Falls don’t expect anything to change soon, or at all. Full steam ahead.

1 comment:

  1. Stan Marshalls comments may seem cold and callous but have you every met a multi billion dollar company CEO ever worry about anything other than profit margins. Of course environmental and health concerns are nminimized. And James Gordons retration a day after Silent Stans blowhole interview is highly suspect without acknowledging his sources for the channge of perspective on the North Spur when he has been so vocal in speaking against it for many years.