January 22, 2013
(Prepared by Sean Howard, Executive Committee Member)
1. Introduction: The Big Picture
Nearly one year ago – January 30, 2012 – the outlines of a timely solution to the MV Miner crisis were unveiled at a packed public meeting at the Main-à-Dieu Coastal Discovery Centre. Under the plan, a salvage would be conducted by the Bennington Group of New York, working under contract to the ship’s owners, Arvina Navigation, under the supervision of provincial and federal authorities: work would begin in June, and the wreck would be gone (and the site remediated) by the end of August. There’s no need to replay the slow-motion farce which then ensued: suffice to say that Bennington proved woefully inadequate to the task at hand, incapable of compliance with Canadian health and safety regulations and either unwilling or unable (or both) to act in a reliable, professional or even trustworthy manner. The effort could not have failed more completely; the wreck is still there, slowly being eaten by the sea; and no ‘Plan B’ is in place. That’s the bad news: the good news, we believe, is that with political will and investment a range of viable and affordable options exist to finally resolve the crisis this year.
Before we lay out those options, let me summarise the consequences of inaction: the ‘Big Picture’ that can sometimes get lost. The MV Miner was being towed on a federal Department of Transport license to a Turkish scrapyard on September 20, 2011, when its tow-line broke in heavy seas and it crashed onto Scatarie Island, a provincially-protected wilderness area. There have been many wrecks on Scatarie, but none like this: 12,000 tonnes, 222 metres long, a broken down freshwater warhorse riddled with asbestos and other hazardous material, left at the mercy of the elements – which, it must be said, have so far proved decidedly kinder than the federal government – and abandoned to one of two fates: remaining partially intact as a long-term nuisance, eyesore and danger (the ‘best case’ scenario); or completely breaking up, dispersing large amounts of steel, capable of causing interference, injury or worse to fishers and other sailors, with wreckage washing up on adjacent coastline along with who knows how much toxic material, casting a pall over both our tourism and fishing industries. That might not happen, but it very well could, and the point is, it needn’t: this should not be a problem beyond the wit, wisdom and resources of a 21st-Century Canadian Province and Federal Government to solve.
2. So Near to the Summit: The Meeting We Could Have Held Today
It was to bring a solution closer that we announced in December we would be convening on this date an MV Miner Summit. Before explaining why the Summit was, to our profound regret, cancelled, let me say what we’d hoped to achieve – and seemed within reach of achieving. The discussions that should have been starting right now would, ideally, have involved four main groups of interested parties: government leaders, federal and provincial; political representatives – federal, provincial and municipal; salvage industry representatives and experts; and local fishers. Convening in private, to allow as open a discussion as possible, we would have held two sessions, first to discuss costs and capabilities – how expensive and complicated a salvage would be – and then politics and strategy – how best to secure funding to get the job done. This order was chosen for an obvious reason: if a salvage is likely to prove either prohibitively expensive or difficult, why bother discussing who should assume the nightmarish burden? Following the sessions, we hoped to adopt a Summit Declaration and program of action. The rationale for the meeting was aptly captured in a Cape Breton Post editorial, ‘Brainstorming,’ on January 4: “To ignore the invitation,” the paper wrote, “would be irresponsible. Influential representatives from the federal and provincial governments should be at the summit to contribute to a creative solution…to having the MV Miner made history.”
We sent out invitations in mid-December and set an RSVP date of January 15. We quickly received a positive response from political representatives, salvage companies, and local fishers. The level of interest expressed by salvage companies – local, national and international – was particularly impressive. The problem, as so often, lay with government. From the outset, our Association has argued that prime responsibility for causing the crisis lay with the Federal Department of Transport for licensing the towing of an obviously unseaworthy vessel during hurricane season without adequate bond or insurance from the owners. The Department of Transport, however, has limited its role to washing its hands of the matter, claiming (we believe implausibly) the wreck poses neither a navigational hazard nor a risk of pollution. Predictably, therefore, the Minister of Transport, Denis Lebel, and his Minister of State, Stephen Fletcher, snubbed the Summit, not even bothering to decline the invitation. Our expectation, however, was that the provincial government – which paid for a preliminary clean-up of the wreck by Mammoet Salvage; which at least attempted the impossible of working with Bennington; and which has consistently expressed its sympathy for our plight – would be prepared to send senior figures, with open minds, to participate.
I should stress here our long-standing view that, while chief responsibility for the mess lies with Ottawa, the status of Scatarie as a provincially protected wilderness area confers on Halifax some responsibility to intervene. We were, therefore, distressed to receive – shortly before midnight on the RSVP date – a letter from Natural Resources Minister Charlie Parker making clear the Province was prepared neither to fund nor commission, nor even discuss, alternative salvage proposals. In prior consultations with the Minister’s office it was made clear to us that the Province wished to send an official to the Summit – a highly-respected official, but not a political decision-maker – to read a statement conveying this stark and non-negotiable position. In those circumstances, especially with a number of salvage industry representatives planning to fly to Cape Breton in the expectation of meaningful dialogue, we believed we had no choice but to cancel the event and provide instead an update for press and public. Since the cancellation, Minister Parker has claimed the Province was willing to participate in good faith, which presumably means being open to considering alternative plans. If that is the case, he is contradicting his own position, laid out in the letter. It is time to examine that position more closely.
3. Three Lines of Defence: the Province’s Position
The letter establishes three lines of defence for the Province’s refusal to fill the breach left by federal inaction. The first is legal; the second, jurisdictional; and the third, political. In sum, the defence reads as follows: legally, there is nothing the Province can do about the wreck; if there was no legal bar in the way, there would be a jurisdictional one, as the wreck is solely a federal responsibility; but even if there were no legal or jurisdictional obstacles, we still wouldn’t be prepared to spend a dime to solve the problem. The three lines come together in the following quote: “The parties responsible for the MV Miner should pay the removal costs; Nova Scotia taxpayers should not be required to fund the removal… Responsibility for the removal rests with the owners of the MV Miner…and the federal Minister of Transportation who has the authority to direct and oversee its removal.” Because the Province knows this will not happen, it is effectively condemning us to live with the wreck and deal with the danger it poses. But is the Province’s three-line defence defensible? Let us take the claims in order.
First, the legal line. Shortly after the wreck, the Province issued what was described consistently in statements and reports as a ‘Removal Order’ to Arvina Navigation: a measure we interpreted as legally-binding and thus entailing legal consequences in the event of non-compliance. Due to the spectacular incompetence of the Bennington Group, Arvina failed to comply: what then are the consequences? Might the Province, perhaps, take Arvina to court, demanding payment sufficient to fund a salvage? The Minister’s letter reveals a frankly absurd state of affairs. First, it appears something called a ‘Notice to Remove,’ rather than a ‘Removal Order’ was issued: the legal distinction is not explained, but appears to consist in the difference between having teeth and not. But there’s worse – much worse – to come. The letter states that the Province “exerts no claim of ownership over the MV Miner”. Now, no one has ever suggested the Province exert any claim to ownership; the issue is what power it has to compel the rightful owners to remove the wreck. But the Province also appears to believe that despite its failure to comply, Arvina retains the sole power to commission a salvage, and therefore to bestow sole salvage rights (in perpetuity, presumably) on, guess who, the Bennington Group! The Minister’s letter states: “Bennington [is] still asserting salvage rights”, and cites a November 7, 2012, letter from Bennington threatening legal action if any other salvage company is approached to do the work it evidently can’t! Our Association has no legal expertise, and insufficient funds to procure a legal opinion, but we do suggest Bennington’s position seems ridiculous and should at minimum be scrutinized and if need be challenged by the Province’s lawyers.
Second, the jurisdictional line. We do not dispute the Province’s view that removal of the wreck falls under federal purview, namely the terms of the Canada Shipping Act of 2001. But, as the letter often stresses, the wreck is on its, Nova Scotia’s, shores: the shores, moreover, of a part of its coast, a provincially-protected wilderness area, for which it has especial jurisdictional responsibility. The whole mess, true, originates in Ottawa, but it is in Nova Scotia – and it’s Nova Scotians who will pay the price if the wreck remains or disintegrates.
Which brings us to the third, political line of defence. The Province’s position now seems that in principle, i.e. regardless of cost, Nova Scotia taxpayers should not be asked to pay any portion of a salvage (even if action is later taken to reclaim costs from the Federal Government or the ship’s owners). This was not, however, always so. Early in the crisis, on October 7, 2011, the Canadian Press reported that Premier Darrell Dexter “said he would make sure the stricken vessel is quickly removed if the current salvage operation gets bogged down.” The CP piece, which ran in the Halifax Chronicle Herald, quoted the Premier as saying: “We don’t want to allow it to languish over questions of who is responsible for it. It is not good enough to simply pass this back and forth. … I’m not ruling out anything, including taking on the job, if necessary.” The Premier has since denied saying that, though we find it hard to believe the Canadian Press would make the quote up or twist it beyond recognition. In subsequent remarks, the Premier backed away from any provincial commitment, but it is important to note why: not the principle at stake, but the cost involved. According to him, the cost would exceed $20 million, a figure “which,” as he wrote in a letter to The Cape Breton Post on November 28, 2011, “should not fall on the back of provincial taxpayers.” And nearly a year later, on November 14, 2012, Dexter told the Nova Scotia House of Assembly: “I don’t think we should be taking money that we need to support education, health care, and other services in order to pay for something that is the responsibility of the federal government.” Presumably, then, if a salvage could be conducted at appreciably less than that sum, the Province might be open to persuasion. The issue of cost is thus crucial, and it is in this area that we believe we have some valuable new information to provide.
4. Salvage Facts and Figures: New Information on Costs and Capabilities
For many months, we have been asking the Province to clarify where its $20+ million cost estimate came from. The Minister’s letter finally explains: “The only estimate received by the province…has been received from Mammoet Salvage and it exceeds $20 million. It is not considered a binding estimate and we cannot speak as to its accuracy.” To repeat: without seeking a second opinion, or apparently even conducting a serious analysis, the Province cannot vouch for the veracity of a figure trotted out time and again to effectively take the option of a provincially-funded salvage off the table.
This is disturbing enough, but even more remarkably it appears that a ‘second opinion’ was prepared for the Province but apparently never reached the desks of senior officials or Ministers. According to our information, which we trust to be reliable, shortly after the shipwreck Nova Scotia Lands, a Crown Corporation, prepared on its own initiative (and without conducting a site survey) a preliminary assessment of salvage options. The report was finalized in November 2011, but set aside when the Province endorsed the Bennington plan. Shortly before Christmas 2012, we received, via our MLA Alfie MacLeod, a copy of the report, entitled ‘Summary of Potential MV Miner Vessel Salvage Options’. While we are not in a position to provide full details, we can reveal that the study outlines three salvage options, all of which are costed far below the low end of the Mammoet estimate – all three, in fact, comfortably under $10 million.
Let me stress two things: I am not dismissing the Mammoet estimate as irrelevant or absurd: they are a major international salvage company who remain, as we will see, interested in removing the wreck. Nor am I suggesting that the Dexter Government somehow knew of the Nova Scotia Lands report and covered it up. What I am saying is if the study had been known to the Government, it would presumably have planted serious doubts about the $20+ million figure that understandably alarmed it so much. Likewise, if the NS Lands study had been made public, it would have surely have affected political debate and press coverage of the issue. Given the passage of time since November 2011, we are proposing today that the Government request a fresh report into salvage options from Nova Scotia Lands, thus finally providing the kind of independent, impartial, expert assessment so valuable in assessing the relevant claims and estimates of interested companies.
In addition to the comparatively inexpensive options contained in the NS Lands study, as a result of our call for an MV Miner Summit we now have a number of cost estimates provided by other salvage companies: some we are not in a position to disclose, some we can. To start with Mammoet: on January 14, Mammoet Salvage Americas, Inc., provided a summary of “solutions for removal” of the Miner defending their initial estimate. The company cites four reasons why a salvage would be “neither an easy nor a low cost operation”: logistical challenges; the precarious state of the wreck; the fact that “the vessel is full of asbestos”; and the stringent environmental safeguards to be followed. According to the company: “Right after we removed the fuel from the vessel we were asked to give an indication how much it would cost to remove the Miner and we indicated somewhere between $20 and $30 million. This is still realistic [as] a budget that is required to do [the work] in [a] safe [manner], environmentally friendly and in compliance with Canadian laws and regulations.” This claim may be right, but it is also fiercely disputed in the salvage industry, and it would be wrong to assume, rather than verify, its basis in fact.
A Canadian company, SaskSteel from Saskatchewan, which was hoping to fly senior management figures to the Summit, has stated its willingness (and detailed its capability) to salvage the vessel at no cost to any level of government, calculating it can make a profit from the sale of scrap metal. SaskSteel has told us that, despite the cancellation of the Summit, they would like to visit the site this Spring. What sense would it make for the Province not to explore this option? What has it got to lose?
Another Canadian company, with extensive experience in the marine sector, has submitted preliminary assessments suggesting a salvage cost far below Mammoet’s, though still requiring government funding. The company, Venture Solutions Inc., anticipates the complete removal of the vessel and full remediation of the site to cost between $3.5 and $5 million, offset by the sale of salvaged scrap estimated at a value of between $2.7 and $3.6 million.
These are the only prospective bids I am able to outline here. I can say, though, that in addition, a local, Cape Breton company estimates the cost at around $2 million, and that we have received an expression of serious interest from a major British salvage company, which was also prepared to fly a senior representative to the Summit, and from a number of other companies, Canadian and international.
Before concluding, I want to relate that when we cancelled the Summit we sent all the interested companies a copy of Minister Parker’s letter. None of them urged us to reconsider, and many expressed their sympathy with our plight, namely, being stranded within sight of a solution on the shoals of government squabbling.
5. Conclusion: the Fight Goes On
The situation, then, in summary in this: that a range of potential salvage options are on offer, priced from $30 million to zero dollars, and that a significant number of interested companies find themselves queuing up outside the two closed doors of the federal and provincial governments. Put more succinctly, the situation is both absurd and utterly unacceptable to our Association, our community, and, I believe, to many of our friends and supporters.
Where do we go from here? We’ve talked a lot in the past year, as the Bennington farce played out, of the need for the Province to prepare a ‘Plan B’. Our ‘Plan A’ remains to persuade the Province to reconsider its position, review its assessment of costs and capabilities and commit to an investment in solving the problem. This is a government, after all, that has spent in excess of half a billion dollars to rescue, bail out or prop up various failing industries. And the MV Miner, remember, poses a threat not to a failing industry, but a hardworking fishery – in effect, over 50 successful small businesses – that doesn’t need a hand-out, just a helping hand. Maybe if we weren’t merely a small rural community but a bankrupt corporation we’d find a more receptive audience in the corridors of power, either in Ottawa or Halifax? And talking of the two levels of government, we would like to suggest today that the Province consider appealing to the federal government to share the costs of a salvage (of course retaining the option of suing the ship’s owners)? If the feds say no, at least you’ve tried, and so gained the high ground: again, what have you got to lose?
If the province maintains its stubborn – we would say, illogically inflexible – position, Plan B would consist of a campaign to keep the issue alive as a matter of political controversy through to the next provincial election. At present, both opposition parties have the same – we would say, logically flexible – MV Miner policy: irrespective of the issue of federal culpability, the province should fund a salvage and sort the financial mess out later. It would be our job to ensure that commitment is maintained and the promise kept in the event of a change of government. We shouldn’t have to count on that or wait that long – especially given the deteriorating state of the wreck – but if we have to, we will: the fight goes on.