Turn to the nation's most objective and informative daily environmental news resource to learn how the United States and key players around the world are responding to the environmental...
Oct. 14 — A dispute resolution panel has awarded New York-based Windstream Energy LLP a record C$28.1 million ($21.4 million) for a project it couldn't build when Ontario imposed a 2011 moratorium on new offshore wind farms.
A North American Free Trade Agreement (NAFTA) tribunal found Ontario treated the company's investment unfairly because its moratorium blocked the C$5.2 billion ($4.0 billion) contract Windstream Wolfe Island Shoals Inc. had with the province to supply renewable electricity from a 300-megawatt wind farm, the company said Oct. 13 ( Windstream Energy LLC Inc. v. Canada, Permanent Court of Arbitration, No. 2013-22, 9/30/16 )
The ruling awards C$25.2 million ($19.2 million) in damages and C$2.9 million ($2.3 million) in costs, the largest award under the investor-state dispute provisions in Chapter 11 of the trilateral deal, Windstream said in a statement. The panel also said the contract to build the wind farm in Lake Ontario near Kingston, Ontario was still “in force,” according to the statement.
“This award is an appropriate first step at remedying the challenges we have faced. We look forward to working with the government of Ontario to build the project in accordance with the contract,” Windstream director David Mars said in the statement. The company said its investors are a New York City-based investment group.
The panel's ruling was delivered confidentially to the parties Sept. 30, Randi Rahamim, a spokeswoman for Windstream, said Oct. 14. The company is reviewing it for potential redactions, and it will likely be made public within the next two weeks, Rahamim told Bloomberg BNA in an email.
The ruling dismissed the majority of Windstream's claims and the damages award is much smaller than the C$568 million ($475 million) the company sought, an Ontario Ministry of Energy spokeswoman said Oct. 14. The Ontario and federal governments are “carefully reviewing” the ruling to determine next steps, the spokeswoman told Bloomberg BNA in an email.
The province stands by its moratorium on offshore wind projects, she said. “Ontario continues to take a cautious approach to offshore wind, which includes finalizing research into decommissioning requirements and sound propagation over water, to make sure that any future proposals can be developed in a way that is protective of both human health and the environment,” she said.
The federal government is disappointed with the tribunal’s ruling and is assessing it to determine how to proceed, Global Affairs Canada said Oct. 14. “However, we welcome the tribunal’s dismissal of the majority of the company’s claims and its decision to award only a small fraction of the damages requested,” the department said in a statement emailed to Bloomberg BNA.
The Windstream case is “tricky” because Ontario has never proved an environment-based justification for the moratorium, Keith Brooks, campaign director with Toronto-based Environmental Defence, said Oct. 14.
If the province had concerns over the environmental impacts of wind projects, they should have been addressed before granting Windstream a contract for its wind power, Brooks told Bloomberg BNA. “Using the environment as a scapegoat can be problematic,” he said.
Environmental Defence supports building wind farms in Lake Ontario, but is also concerned that Windstream was able to win a damages award given that it hadn't even started the approval process for its project, Brooks said. The ruling confirms the concerns of environmental and other groups that NAFTA Chapter 11 would lead to “arbitrary” rulings by a “bit of an arbitrary body”, he said.
According to a redacted transcript, Windstream argued in its closing statement to the panel, after 10 days of hearings between Feb. 15-26, that Ontario's initial decision on Feb. 11, 2011, to impose the moratorium wasn't what led to expropriation of its investment.
The government initially said it would “freeze” for five years the company's 20-year contract with the Ontario Power Authority, but on May 22, 2011, it became clear that the contract was not frozen and the project was “worthless,” John Terry, a partner in the Toronto office of Torys LLP and the company's counsel, told the panel.
The Canadian government stressed in its closing argument that the evidence presented at the hearing confirmed that Ontario's decision to pause development of offshore wind resources was a “prudent” policy decision based on the need to finalize its policy on offshore wind farms.
It was based on the lack of scientific evidence to withstand the court challenge that was considered “certain” in the wake of strong opposition from neighboring landowners, said Rodney Neufeld, a lawyer in the federal Department of Justice's Trade Law Bureau.
To contact the reporter on this story: Peter Menyasz in Ottawa at firstname.lastname@example.org
To contact the editor responsible for this story: Jerome Ashton at email@example.com
Case documents, including filings and transcripts of the oral hearings, are available at http://www.pcacases.com/web/view/36.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)