A new whistleblower has contacted the Uncle
Gnarley Blog — shedding new light on who is
responsible for the severe flooding and evacuation of the community of Mud Lake
in May.
The confidential
source has leaked a copy of a letter sent by Bernard Pennecon LP, the
contractor building the North and South Dams, to Nalcor’s subsidiary, Muskrat
Falls Corporation. The document states that the event was due to Nalcor’s “failure
to manage the downstream flows which resulted in the flooding of the Mud Lake
Community.” (Bold added to all direct quotes from the Barnard Pennecon letter.)
The letter dated 23-May-2017 was given exclusively to the Uncle Gnarley Blog.In January another whistleblower, the "Anonymous Engineer", gave the Uncle Gnarley Blog details of how the estimates for the Muskrat Falls project had been falsified in Nalcor's bid to get sanction, a process which continued until after the 2015 General Election.
When, on May 20th, the
Labrador Land Protectors stopped the buses bringing workers to the night shift at the Muskrat Falls project for a few hours, they could not have known that their actions had generated the best
proof yet that Nalcor is to blame for the flooding and subsequent evacuation
of Mud Lake.
Their protest
was not covered in the media, but one of the protestors confirmed to the Uncle Gnarley Blog that the
gate blockade had taken place.
Nalcor was fast
off the mark to deny culpability, though local residents possessed no memory of such flooding ever having occurred in the past.
"We are
not doing anything to manipulate the flows of the river," said Deanne
Fisher, Nalcor's general manager of corporate affairs. "Anything that is
happening with the spring thaw, it's really just passing through the
spillway."
On social
media, the Labrador Land Protectors posted that a worker at the site
claimed that he saw the release of water.
At Memorial
University, Nalcor’s denials concerned Ken Snelgrove, associate professor of
civil engineering, and Joel Finnis, a climatologist and associate professor of
geography, so much that they spoke to the CBC.
“Nalcor should
not be insisting outright that its operations are not to blame for the flooding
in Mud Lake, Labrador because the data isn't available to definitively rule it
out,” the CBC quoted the two professors as saying.
“I
think this really points to the need for a future study. I worry about the
dismissiveness that we've heard [from Nalcor],” said Ken Snelgrove.
The CBC
recorded Joel Finnis stating that the flood should be classified as either a “very extreme,
one-off event” or something more ominous that is bound to repeat.
It seems
that the Memorial professors and the Nalcor worker were on to something: that
the flooding of Mud Lake might well have been, as Joel Finnis suggested, a “very
extreme, one-off event” — quite possibly one that was within Nalcor’s control.
The pair
caused Nalcor Vice-President Jim Keating on May 25th to quell
Nalcor’s tone of “dismissiveness” over the suggestions that the company was
responsible. Keating told
CBC Radio's Labrador Morning, “I believe, initially, we responded
honestly, but probably not in the best way.”
The two
Memorial professors and the residents of Mud Lake weren’t the only ones,
however, with an eye to Nalcor’s management of the flows on the Churchill
River.
Gate Blockade Starts Chain Reaction
The contractor
building the two main dams for the Muskrat Falls project stayed quiet as the
water rose around the houses of the small community having a
population of around 50 residents.
Mud Lake is located a short distance by boat
from Happy Valley in Lake Melville — directly downstream of
Muskrat Falls.
The Labrador
Land Protectors, suspecting Nalor culpability, picketed the gate to the Muskrat
Falls site “for a few hours” on May 20th, according to a person who
was present. Nalcor declared the gate blockade a
Force Majeure.
Force
Majeure is a standard legal tool, inserted in many contracts, which lets either
party off the hook should an event occur that is beyond their ability to
control. The conditions of Force Majeure were described under Article 28 of the estimated $300-400 million BPLP dam contract.
Barnard
Pennecon LP was awarded the contract, in October, 2013 to “construct a
32-meter-high (105-foot), 432-meter-long (1,417-foot) roller-compacted concrete
(RCC) dam adjacent to the north end of the spillway and a 20-meter-high
(65-foot), 325-meter-long (1,066-foot) earthfill dam on the powerhouse’s south
side.”
Blockade of
the buses, however, caused a chain reaction invisible to all but Nalcor and
Barnard Pennecon. It went like this: a) following the blockade, Nalcor’s
subsidiary, Muskrat Falls Corporation, declared a Force Majeure; b) a claim
for costs associated with the blockade was sent to Nalcor from the contractor
anyway; c) Nalcor refused to pay; and d) the refusal caused Barnard Pennecon LP
to train its executive guns on who it had determined was actually responsible.
Barnard Pennecon says conditions did not constitute Force Majeure
In a letter
to Scott O’Brien, Nalcor Project Manager, the contractor’s displeasure was
unmistakable. The contractor stated that the
blockade occurred in consequence of the flooding which, in turn, was “the result
of the Company’s fault or negligence.”
BPLP told
Nalcor that the event was their responsibility because the blockade occurred due
to the flooding of Mud Lake which, in turn, was a consequence of its “failure
to manage the downstream flows which resulted in the flooding of the Mud Lake
Community.”
The letter was issued under the signature of
a senior official of Barnard Pennecon LP (BPLP) and dated May 23, 2017. The
correspondence references Contract # CH0009-001 — Construction of the North
and South Dams.
There is
little doubt that the declaration of a Force Majeure triggered BPLP’s ire. The company felt that Nalcor was ultimately responsible for the protest having formed, which caused their employees to be late for work. BPLP wanted to be paid the cost.
In BPLP’s view, Nalcor had no business declaring a Force Majeure to begin with.
Said the
senior official: “Missing from the Company’s Force Majeure Declaration is any
explanation or justification as to why the gate blockade constitutes a Force
Majeure event. The gate blockade does not constitute a Force Majeure event as
set out in Article 28 [of the contract].”
That Barnard
Pennecon’s senior man was bristling over what the official regarded as Nalcor’s
untenable position was obvious. And he had only just begun to build a head of
steam.
He continues:
“The blockade was formed
as the protestors believed that the Company’s recent release of water or
failure to properly manage the downstream flows resulted in flooding of the Mud
Lake community. Section 28.2 only allows the Company to claim a Force Majeure
event if such event is ‘beyond the control or without the fault or negligence
[the Company], and which by the exercise of reasonable diligence [the Company]
is unable to provide against it’.”
In short,
Bernard Pennecon was saying that the test of Force Majeure, as defined in the contract, required that the event was “beyond the control or without the
fault” of Nalcor which “the exercise of reasonable diligence” was unable to
counteract.
Barnard
Pennecon believed that Nalcor had not met that test; hence, the crown
corporation had no basis for having made the Force Majeure declaration.
Barnard Pennecon puts blame squarely
on Nalcor
The next paragraph
is one that Mud Lake residents will especially want to parse, particularly the lawyers
contemplating a class action lawsuit for flood damages and costs associated
with the residents’ mass evacuation. This is where Barnard Pennecon LP got down to business explaining
to Nalcor a position which the crown corporation has, so far, vehemently denied.
Continued the
company official:
“The blockade is the
result of the Company release of water or failure to properly manage the
downstream flows which resulted in the flooding of the Mud Lake Community. This
was clearly within the Company’s control and the result of the Company’s fault
or negligence. Further, the Company, by exercising reasonable diligence, could
have prevented the blockade by properly managing the downstream flows.”
Final Comment
These are unambiguous and serious allegations. They contain an array of
implications — including questions of integrity (yet again!) that place Nalcor’s already
shredded reputation in an even worse state.
As the North and South dam contractor,
Barnard Pennecon LP — more than any other — understood the importance
of, and had a vested interest in, monitoring the water levels on the river. The
company would have assiduously monitored the flows, the environmental
conditions affecting the natural spring thaw, ice jams and, of course, the
influence of the huge concrete structures that, for the very first time, acted
to alter those natural water flows.
There would
have been direct communication between the two entities at all times. Nothing
would have escaped Barnard Pennecon LP’s notice given the water’s direct threat to
the contractor’s work. Likely that is why the company seemed so unequivocal about
their rebuke of Nalcor Energy’s attempt to deflect the cost of their own
negligence onto the contractor.
Notwithstanding their public quiescence, in any class action lawsuit against Nalcor it
seems that the people of Mud Lake have just found the strongest, most knowledgeable, and like-minded ally in the form of Barnard Pennecon LP.