Come By Chance environmental deal document can be released, watchdog says

·3 min read
The Newfoundland and Labrador government has agreed to an environmental indemnity of up to $180 million for potential liabilities at the Come By Chance refinery, pictured here in September. (CBC - image credit)
The Newfoundland and Labrador government has agreed to an environmental indemnity of up to $180 million for potential liabilities at the Come By Chance refinery, pictured here in September. (CBC - image credit)

A memorandum of understanding related to a taxpayer-backed environmental indemnity at the Come By Chance refinery site should be made public, according to a recently released report by Newfoundland and Labrador's information and privacy commissioner, Michael Harvey.

In late November, Texas-based Cresta Fund Management announced that it had acquired a controlling interest in the Come By Chance refinery and would rename it Braya Renewable Fuels.

Previous owner Silverpeak remained on board as a minority partner in Braya while maintaining control of the aspect of the business that imports and distributes fuel like gasoline into the province.

The long-idled oil refinery is being converted to produce renewable diesel and sustainable aviation fuel.

Part of the Cresta-Silverpeak deal saw Newfoundland and Labrador taxpayers take on a new environmental indemnity to cover certain pre-existing problems at the refinery site, capped at $180 million.

Shortly after the announcement, CBC News asked the province whether that agreement and its supporting documentation would be publicly released.

The government never provided an answer, so CBC filed an access-to-information request.

A raft of documents — mostly email correspondence, along with some presentations and briefing materials — were supplied earlier this year.

Terry Roberts/CBC
Terry Roberts/CBC

But the refinery owners objected to the release of the memorandum of understanding on the environmental indemnity.

"The third party argued some of the information contained in the MOU was required to be protected from disclosure … in order to protect its business interests," Harvey wrote in his report.

We are participating in a process to protect the confidential business information that is commercially sensitive and critical to the competitiveness of our operations and the ongoing refinery conversion. - Braya Renewable Fuels

However, the transparency watchdog found that "the burden of proof had not been met" and recommended that the information be released, save for one agreed-upon figure.

The Department of Industry, Energy and Technology has accepted Harvey's recommendation.

The owners now have 10 business days to decide whether to appeal the decision to Newfoundland and Labrador Supreme Court.

In a statement to CBC News, Braya Renewable Fuels did not directly address whether it would take that step.

"We are participating in a process to protect the confidential business information that is commercially sensitive and critical to the competitiveness of our operations and the ongoing refinery conversion," the company said.

"We are confident that the Come By Chance refinery will become one of the world's premier renewable fuels facilities, as we move towards completing the first phase of the conversion project and begin producing renewable diesel in late 2022."

Premier has lauded 'upside protection' of agreement

In November, Premier Andrew Furey pointed to the importance of the $180-million cap and "upside protection" in the environmental indemnity deal.

Government officials have indicated that the province's exposure could reduce over time based on the profitability of the refinery and logistics sides of the operation.

But they haven't provided details on the mechanics of how that would work.

The last time the province signed an environmental agreement with the refinery's then-owners eight years ago, that entire 30-page document and 120 pages of schedules and supporting information — including the company's business proposal and spending plans — were posted on the government's website.

When the 2014 deal was inked, the province pledged to release the results of an environmental site assessment aimed at determining the extent of contamination.

But that work was never completed, and the government has since walked back its transparency commitment, instead saying those reports are the property of the refinery's owners.

As part of last fall's deal, new environmental site assessments are due by mid-2023.

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