Some Day the Sun Will Shine and Have Not Will Be No More (42 page)

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Authors: Brian Peckford

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Not long after this initial contact, labour issues at Labrador City reached a
critical stage. Mr. Mulroney decided to become personally involved and I
accompanied him to Labrador City for meetings with the management and a hostile
union leadership. He was successful in lessening the tensions in meeting with
the union leadership, highlighting the financial position of the company and
showing that he was not playing games with the union but that the facts demanded
some responsibility on all sides for a peaceful solution. This was achieved as a
result of this intervention and impressively showcased an able negotiator and
leader.

It was in these visits to Labrador City that I first became aware of Mr.
Mulroney’s fondness for alcohol, having on one occasion literally put him to bed
one evening. He was up at the crack of dawn the next morning, alert and ready
for the business of the day. What was most amazing for those of us who were
aware of this problem was how scrupulously disciplined he became later as prime
minister in completely conquering this.

We were both big sports fans and had occasion to attend hockey and American
football games together on my visits to IOC
headquarters in
Montreal and to Cleveland, Ohio, where some of the ownership group of the
company were headquartered. It was during such visits that I met Mila Mulroney,
truly a lady of commitment and class.

It wasn’t long before the leadership of the federal Progressive Conservative
Party was once again a hot topic, given the problems of the short-lived Clark
government. Once again, I would not be a supporter of Mr. Mulroney as he again
sought the leadership. Under ordinary circumstances I would have supported this
second effort, but Newfoundlander John Crosbie was also running and of course my
allegiance was first and foremost to one of our own. However, I was a vocal and
ardent supporter of him and his government in two elections.

But we did have one significant disagreement and this one was over the fishery.
The federal bureaucracy and most of the federal ministers in both Liberal and
Progressive Conservative governments were entrenched—as they are to this day—in
the mistaken notion that some better sharing of fishery powers between the
federal and provincial governments would somehow be injurious to the stability
of the country. Mr. Mulroney was unable to change.

Two large national issues, to which he directed his attention, displayed his
prowess and skill. On the constitutional front, Mr. Mulroney was masterful,
open, and genuinely attempted to bring the country together. Tragically, this
was sabotaged by a jealous and vindictive Pierre Elliott Trudeau and others of
his ilk, manufacturing false fears on a weary population. The Meech Lake Accord,
history has proven, would have been a reasonable accommodation.

On the economic front, Mr. Mulroney’s free-trade initiative, which led to the
Canada/U. S. Free Trade Agreement was truly a remarkable achievement. In this
his government had frequent and extensive consultation with all the provinces
and industry and is one of the most important bilateral arrangements of the
century. Mountains of empirical evidence have accumulated demonstrating the
significant positive effect that it has had on both countries. The false
nationals of the day (the Liberal opportunists who promised to
tear up the agreement when elected) and the New Democratic Party have all been
silenced by the results. People forget that Mr. Mulroney was loudly and falsely
attacked as a traitor to his country because of his passionate advocacy of this
milestone.

But for me, Mr. Mulroney will go down in history as Newfoundland’s best friend.
He understood the place. Bill Marshall says it was Mulroney’s understanding of
the Churchill Falls issue that made him support the offshore:

I believe that his knowledge of that plight cemented his resolve to see
that we were treated fairly in the offshore settlement. Certainly, he took a
marked personal interest in the matter and his resolve to see an agreement
that was fair to Newfoundland and Labrador without compromising legitimate
national interests was evident at each meeting.

Without Brian Mulroney there would be no Atlantic Accord, and without the
Accord Newfoundland and Labrador would not be a “have” province today. And this
book would have been much different.

Sadly, if a poll was taken today asking who had the greatest positive impact
upon Newfoundland and Labrador’s fortunes, the majority would likely say Mr.
Trudeau.

Perhaps this book will help to change that view.

THE ATLANTIC ACCORD

MEMORANDUM OF AGREEMENT BETWEEN THE GOVERNMENT OF

CANADA AND THE GOVERNMENT OF NEWFOUNDLAND AND

LABRADOR ON OFFSHORE OIL AND GAS RESOURCE

MANAGEMENT AND REVENUE SHARING

THE ATLANTIC ACCORD

The Government of Canada and the Government of Newfoundland and
Labrador have reached an Accord on joint management of the offshore
oil and gas resources off Newfoundland and Labrador and the sharing
of revenues from the exploitation of these resources. The Accord
will be implemented, to the extent possible, through mutual and
parallel legislation to be introduced by both governments into the
Parliament of Canada and the Legislature of Newfoundland and
Labrador.
PURPOSES OF THE ACCORD
The purposes of this Accord are:
1. to provide for the development of oil and gas resources
  offshore Newfoundland for the benefit of Canada as a
  whole and Newfoundland and Labrador in particular;
2. to protect, preserve, and advance the attainment of
  national self-sufficiency and security of supply;
3. to recognize the right of Newfoundland and Labrador to
  be the principal beneficiary of the oil and gas
  resources off its shores, consistent with the
  requirement for a strong and united Canada;
4. to recognize the equality of both governments in the
  management of the resource, and ensure that the pace and
  manner of development optimize the social and economic
  benefits to Canada as a whole and to Newfoundland and
  Labrador in particular;
5. to provide that the Government of Newfoundland and
  Labrador can establish and collect resource revenues as
  if these resources were on land, within the
  province;
6. to provide for a stable and fair
  offshore management regime for industry;
7. to provide for a stable and permanent arrangement for
  the management of the offshore adjacent to Newfoundland
  by enacting the relevant provisions of this Accord in
  legislation of the Parliament of Canada and the
  Legislature of Newfoundland and Labrador and by
  providing that the Accord may only be amended by the
  mutual consent of both governments; and
8. to promote within the system of joint management,
  insofar as is appropriate, consistency with the
  management regimes established for other offshore areas
  in Canada.
JOINT MANAGEMENT
The two parties agree to establish the Canada-Newfoundland Offshore
Petroleum Board, hereinafter called “the Board”, to administer the
relevant provisions of the Canada-Newfoundland Atlantic Accord
Implementation Act as enacted by the Parliament of Canada and the
Legislature of Newfoundland and Labrador, and other relevant
legislation.
The Board shall consist of seven members: three of whom shall be
appointed by the Government of Canada and three of whom shall be
appointed by the Government of Newfoundland and Labrador. The
Chairman shall be jointly appointed by both governments. Members of
the Board shall not be public servants of Canada or Newfoundland and
shall be subject to conflict of interest guidelines.
In the event that after three months of consultation, the two
governments fail to agree on the Chairman, the Chairman shall be
chosen by a panel consisting of one nominee from each government who
shall agree on a third person to chair the panel. In the event that
the nominees fail to agree on the Chairman of the panel, the
Chairman shall be selected by the Chief Justice of Newfoundland. The
decision of the panel shall be binding on both governments.
The first members of the Board shall be appointed by each
government for staggered terms of four, five and six years
respectively in order that only two members retire in any one year.
The Chairman shall be appointed for
a term of seven
years. Subsequently, members and the Chairman shall be appointed for
terms of six years. On completion of a term, members and the
Chairman may be reappointed for further terms. They shall hold
office during good behaviour. Each government may appoint one
alternate member to serve as a member in the absence of one of the
members nominated by that government.
The quorum of the Board shall be four of the members.
The offices of the Board and its staff shall be located in
Newfoundland.
The Board may from time to time establish or change its rules and
procedures including provisions for reasonable notice of
meetings.
The Board may review and make recommendations to the two
governments with respect to proposed amendments to the legislation
implementing the Accord and the regulations made thereunder.
The Board shall keep the Government of Canada and the Government of
Newfoundland and Labrador informed of its decisions in a timely
manner.
Both governments agree that the Board should make its decisions on
the basis of consensus. Members of the Board are not to act as
nominees of the government which appointed them. In the absence of
consensus, decisions will be made by the Board on majority
vote.
The Board shall provide both governments with full and complete
access to all information held by the Board. In addition, the Board
shall require applicants, permittees, and licencees to concurrently
file copies of all material filed with the Board with both
Governments.
The Board shall report promptly and concurrently to the designated
department or Agency of both governments any significant event or
information received by the Board.
The Board shall meet at least once monthly and at any other time at
the call of the Chairman, or at the call of any two members. The
Board shall also meet when requested by either one or both of the
two governments, to review any matter referred to it by a
government.
The Board shall select and appoint a Chief
Executive Office through an open competitive process. Alternatively,
the two governments may appoint the Chairman of the Board as Chief
Executive Officer. The appointment of a separate Chief Executive
Officer is subject to the approval of both governments. Failing
agreement, the arbitration process set out for the appointment of
the Chairman shall apply for the selection of a Chief Executive
Officer. The Chief Executive Officer shall be fully accountable to
the Board.
The Board shall, upon the recommendation of the Chief Executive
Officer, appoint sufficient staff to fully carry out its functions
under the Accord legislation. The staff shall be selected on the
basis of merit, generally following a public competition and shall
be employees of the Board. When requested by the Board, both
governments will take action to facilitate mobility between
employment in the federal and provincial public services and
employment in the Board, including secondments and portable
pensions.
The Chief Executive Officer shall prepare a budget for the Board on
an annual basis. Following approval of the budget by the Board, it
shall be submitted to both governments for their consideration and
approval. The budget shall be sufficient to permit the Board to
carry out its duties under the legislation implementing the Accord.
Each government shall pay one-half of the approved annual cost of
Board operations.
The Board shall establish, maintain and operate a facility in
Newfoundland for the storage and curatorship of all geophysical
records and geological and hydrocarbon samples relating to the
offshore area.
The Board shall prepare an annual report and submit it to both
governments by the end of the first quarter of the following
calendar year. The report, which shall contain an audited financial
statement and a description of the Board’s activities during the
previous year, shall be tabled in the House of Commons and the House
of Assembly by the Minister of Energy, Mines and Resources and the
designated Newfoundland Minister respectively. Provision will also
be made in the legislation implementing the Accord for the
Government of Canada and the Government of Newfoundland and Labrador
to have access to the books and accounts of the Board for the
purposes of an audit.
DECISIONS IN RELATION TO OFFSHORE
MANAGEMENT
For the purposes of defining the role of the Board and Ministers,
decisions on offshore resources shall be divided as follows:
1. decisions, made by Parliament, the Government of
  Canada, or Federal Ministers (clause 22);
2. decisions made by the Newfoundland Legislature, the
  Newfoundland Government or Provincial Minister (clause
  23);
3. decisions made by the Board subject to no
  ministerial review or directives (clause 24); and
4. decisions made by the Board subject to the approval
  of the appropriate Minister (Fundamental Decisions,
  clause 25), or subject to directions from the Ministers
  of both governments (clause 33a).
Decisions made by Parliament, the Government of Canada or Federal
Ministers alone comprise:
1. decisions related to Canadianization policy (e.g.,
  discretionary Canadian Ownership requirements);
2. decisions made under legislation of general
  application not specifically related to oil and gas
  exploration and production (e.g., Fisheries Act,
  Canada Shipping Act, Immigration
  Act); and
3. decisions related to the application of federal
  taxes.
Decisions made by the Newfoundland Legislature, the Newfoundland
Government, or Provincial Ministers alone comprise:
1. the royalty regime and other provincial-type
  revenues (see clause 37);
2. decisions related to provincial laws of general
  application having effect in the offshore pursuant to
  clause 61.
The Board shall make all other decisions relating to the regulation
and management of petroleum-related activities in the offshore area.
Except for fundamental decisions, as set out in clause 25, all
decisions of the Board shall be final. Without limiting the
generality of the above, such final decisions shall include:
1. The Declaration of Discoveries:
  - declaration of significant discoveries and
    commercial discoveries
2. Production Licence
  - granting and renewal of a production
    licence
  - exclusion of lands from a production
    licence
3. Compliance Functions:
  - prosecution, notices, and orders regarding
    offenses
4. The Administration of Regulations Respecting “Good
  Oilfield Practice”:
  - orders relating to waste
  - entry into pooling and unitization
    agreements
  - administration of technical regulations
    related to safety, environmental protection,
    resource conservation, and other matters during
    the exploration, development and production
    phases
  - production installation, facility and
    operations approvals, certification of
    fitness
  - oil and gas committee appellate
    functions
5. The Exercise of Emergency Powers (which may be vested
  in the Chief Executive Officer) Respecting Safety,
  Spills and Conservation:
  - orders to prevent waste (excluding waste from
    flaring of gas or unsound recovery methods)
  - taking action or directing action to repair,
    remedy or mitigate the impacts of an oil
    spill
  - orders, evidence of financial responsibility,
    inquiries.
Where a fundamental decision is made by the Board, notice of that
decision will be transmitted to both governments before the decision
becomes final. Both governments will then consider the decision and
advise the Board whether its decision may stand and be put into
effect or whether either one or both of the governments disagree
with the decision. Fundamental decisions primarily affecting pace
and mode of exploration and pace of production are:
1. Rights Issuance, comprising
  1. the calling for proposals
    relating to the granting of an interest in lands
    and the selection of the proponent to whom an
    interest is to be granted;
  2. the direct issuance of an interest in
    lands;
  3. the determination of the terms and conditions
    to be contained in an Exploration Agreement;
  4. the variation of the terms and conditions
    contained in an Exploration Agreement; and
  5. the continuation of any provisional lease or
    the variation in the conditions now applying in
    such lease.
2. Extraordinary Powers, comprising the issuance of
  orders:
  1. directing an interest holder to drill a
    well;
  2. requiring the commencement, continuation,
    increase or suspension of production;
  3. cancelling the rights of an interest holder;
    and,
  4. requiring an interest holder to introduce
    specific measures to prevent waste.
  Fundamental decisions primarily affecting the mode of
  development are:
3. Approval of the development plan with respect to:
  1. the choice of production system,
  2. the planned level of recovery of the resource
    in place,
  3. the pace and timing of the implementation of
    the project, and
  4. any fundamental revision to any of the
    foregoing.

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