Thursday, 24 May 2018


First Progress Report from Muskrat Falls Concerned Citizens Coalition
Some people have been asking what is happening with the Inquiry into the Muskrat Falls project. This is our first update. Next time, a web site, which is under development, will be ready. Future updates will be found there and that platform is expected to offer timely communication throughout the period of the Inquiry. 
What's Been Happening?
The Coalition was created to serve as an intervenor in the Muskrat Falls Inquiry. Upon invitation of the Commissioner the group submitted our interpretation of the TOR, as did a number of others. It can be found here.  The goals of the Inquiry are set out on the Inquiry Website, particularly in the Commissioner’s Interpretation of his Terms of Reference (TOR) here
In the Annex below we quote some of the key paragraphs from the Commissioner’s Interpretation focusing upon the business case (paragraph 29) for the project, its exemption from the Public Utilities Board (30), government decisions and oversight (31), and project risks (41), including risks to health, safety and the environment, with particular mention of the North Spur and methylmercury contamination.  Specific mention is made as well in paragraph 41 to the mysterious SNC Lavalin risk management report which went missing for four years and which spoke of significant unmitigated risks as late as April 2013.
David Vardy
Several months ago we met with legal counsel to the Commission and made a presentation on the key issues surrounding Muskrat Falls. We also provided the Commission with submissions, letters and articles we have written regarding the Muskrat Falls project. 
We responded to the Inquiry’s invitation for groups and individuals to apply for standing and for funding and attended the Hearing held on April 6, 2018. 
The Commissioner accepted our application for standing and agreed to recommend to government that funding be provided to allow the Coalition to retain legal counsel. We learned that 22 applications for standing had been received by the Commission.
In his decision of April 6, 2018, approving our application for standing, the Commissioner wrote as follows:
All three of the individual applicants on behalf of the entity to be incorporated have been critics of the Muskrat Falls Project for some time. Mr. Penney is a retired public servant who has served in many high level capacities in the government’s public service. He is trained as a lawyer. Mr. Vardy has served as Clerk of the Executive Council in the past as well as having senior positions in other government agencies. He is an economist. Mr Sullivan is a former executive assistant to Premier Frank Moores and Premier Brian Peckford. He is President of the Sullivan Group of Companies and has been publishing the Uncle Gnarley Blog since 2012 dealing with public policy in this Province, including issues involving the Muskrat Falls Project. All three of these individuals have maintained a significant public presence regarding the Muskrat Falls Project and appear to represent the views of other people in the Province who have concerns emanating from the sanction and construction of this Project. I am satisfied that these three individuals have been writing and researching on this Project for some time and, as a result, could if permitted, assist in the conduct of this Inquiry as well as contributing to openness and fairness.
Subsequent to receiving Standing at the Inquiry the group began a search for legal counsel. That may seem like an innocuous task. However, it was necessary to find Counsel who was not in any way conflicted; a challenge in a small community.
We can now confirm that Mr. Geoff Budden of the law firm of Budden and Associates has now been appointed as the Coalition's legal counsel. The group has already begun a process of meetings to brief him on the Inquiry. 
In addition, a Company incorporated under the Corporations Act, under the name The Muskrat Falls Concerned Citizens Coalition Inc. (the "Coalition"). The founding directors are Ronald G. Penney, Des Sullivan and David Vardy.
What's next?
The Coalition is working to develop a website for the purpose of providing information to Coalition members and to the general public.
Ron Penney
While funding for the Coalition will be provided by government, it will cover the cost of legal counsel only. Other expenses will require private sector fund raising. For this purpose a Fundraising Committee will be established.
The Coalition is also appraising the requirements to get ready for the first phase of the Inquiry. The formation of a technical committee to advise the Coalition and to assess documents made available by the Commission will be among the first orders of business.
Other Committees will be formed later and Members sought who possess a skill-set having a direct bearing on the issues under consideration in each phase of the Inquiry.
 The Forensic Audit
The Commission has engaged the consulting firm of Grant Thornton to undertake a forensic audit. The Coalition has requested that the terms of reference for the audit be made public. The group has also asked what other research, analysis and data collection have been instigated by the Commission. 
Public funding will not be available for Intervenors to retain technical experts or to undertake research. Instead all research will be initiated and managed by the Commission. The Coalition intends to review the Commission’s research program and make recommendations where gaps have been identified. The Commission has indicated that all documents shared with Intervenors must be kept confidential until released publicly by the Commission itself. 
Hearings to Have Three Phases
The hearings will take place in three phases. The first phase will focus on pre-sanctioning decisions and will take place from September 17 to December 24, 2018.
The second will deal with project management and is scheduled to run from February 4 to April 4 2019.
The third phase of the hearings will deal with policy issues and the future of megaprojects. This phase will run from June 17 to July 12, 2019. Closing submissions will take place from July 29 to August 2, 2019. The final report of the Commissioner is due December 31, 2019.
A Reminder what the Inquiry is About
The Inquiry is expected to find out the reasons why such a seriously flawed Muskrat Falls project received Sanction. It will examine if the damage can be minimized, identify how the benefits of the project can be maximized and make recommendations to government on how the public interest can be advanced by changes in public policy.
Des Sullivan
The Coalition will assist the Inquiry find the truth around all facets of project sanction, implementation, cost overruns and other issues within the Commission's scope.  
The Coalition will use the expertise of the founding members and others who have volunteered their time and have knowledge of the Muskrat Falls project as well as experience in public service and public policy.
The Coalition believes the Commission should take a holistic approach, which recognizes that health and safety, environmental and social impacts are no less important than engineering, financial and project management.
As already noted, the Coalition will appoint technical committees in order to bring to bear information and technical advice to ensure that the Commission has all the information it requires.
Public Information a Key Goal of the Coalition
The Coalition believes that the Commission has a responsibility to ensure that the public is given all the information needed to understand the full magnitude of the obligations and impact of Muskrat Falls. To that end the Coalition will seek to have the many legal agreements summarized and the complex financial details of the project explained in simple language, removing jargon and technical terms.
The Coalition also believes that the Commission must test and compare the practices and policies adopted in the planning phase of the project, including the exemption of the project from the jurisdiction of the PUB, with internationally accepted best practices. Similarly, we will seek to have the financial management and project management practices adopted for the project contrasted and compared with international best practices. We do need to learn why the project has become such a public policy fiasco.
The Coalition believes in a balanced approach, one which identifies the mistakes of the past as well as the future changes in policy and practice needed to reduce the negative impact of the Muskrat Falls project.
Now that the Coalition has been incorporated and legal counsel appointed, we expect that the period up to the final report of the Commission will be a busy one. We encourage people who support our goal to join the Coalition. When our new website becomes operational we expect to provide regular updates on our work.
Ronald G. Penney, Des Sullivan and David Vardy
Excerpts from the Commissioner’s Interpretation:
[29] Generally speaking, it is clear to me that the Order in Council, and specifically section 4, is geared to focus the Commission's work and mandate, primarily at the least, on the business case put forward by Nalcor leading to the official sanction of the Muskrat Falls Project by Government in December 2012 as well as the reasons why the costs of construction of the Project have escalated from the initial estimates made. By business case, I mean specifically the case advanced by Nalcor, and accepted by the Government, for the need, financial viability, costs and benefits of the Muskrat Falls Project. Really what is primarily being asked of the Commission is to explain what was done by Nalcor and the Government of Newfoundland and Labrador to cause the Muskrat Falls Project to be sanctioned, whether the analysis done by Nalcor and the Government was reasonable considering best industry practice and why the Project cost has escalated so significantly.
[30] Also to be considered is why the Project was exempted from PUB scrutiny, notwithstanding that ultimately a reference was made to the PUB to compare two potential options for supplying power to the island part of the Province. Once that assessment by the PUB was commenced, the Government decided it would not give the PUB the extension of time that it requested to complete its work. To assess the possible impact of the PUB exemption or lack of scrutiny of the development, costs and operation of the Project, the Commission will be investigating the full circumstances surrounding the PUB’s degree of involvement.

[31] Based upon section 4( d), it will also be necessary for the Commission to investigate the involvement of the Government in the Project prior to sanction and whether it was fully informed and was made aware of any risks or problems anticipated with the Project so as to assess whether it had "sufficient and accurate  information upon which to appropriately decide to permit the Project to proceed". Once sanction was given, the Commission of Inquiry must consider what measures the Government has taken to oversee the Project. In doing so, the Commission is directed to focus on governance arrangements and decision-making processes as related to the Project. Such an examination will be a broad one and will have to include both the prior governments as well as the present government for the Province.
[41] While there is some overlap between the issues to be considered under terms 4(a) and 4(b), matters for consideration under 4(b) will include such things as Nalcor's ability to oversee and manage a project of the magnitude of the Muskrat Falls Project, whether construction scheduling for the Project was reasonable, whether the contractual arrangements with contractors, subcontractors, consultants and others, including embedded contractors, were appropriately entered into in accordance with industry best practice, whether any reports or risk assessments were obtained by Nalcor, who they were shared with and how they were responded to by Nalcor. One such report will be the SNC Lavalin Report dated April 23, 2013 which will merit particular attention by the Commission. As well, I must consider whether appropriate or proper consideration was given and actions taken regarding potential risk to the environment, human safety and property related to the stability of the North Spur and methylmercury contamination. How these reports or assessments were received by Nalcor and whether they were made available to the Board of Nalcor as well as the Government will also be a part of the investigation to be conducted.