Muskrat Falls Inquiry to probe report that went mysteriously astray

“Like the layers of an onion, under the first lie is another, and under that another, and they all make you cry.” — Derrick Jensen, American author

Remember the April 23, 2013, Snc-lavalin risk assessment report that ended up in some sort of paper-trail Bermuda Triangle?

As engineering, procurement and construction management lead on the Muskrat Falls project, Snc-lavalin acknowledged in the report that it had the “legal obligation to advise its client of any major risks that will cause prejudice to the project and which deviates significantly from its budget and schedule.”

It warned of serious concerns about Muskrat Falls and Nalcor’s limited experience in carrying out “huge civil work and earth-filled dam work, power line and power station works.”

It’s the report that former Nalcor CEO Ed Martin puzzlingly said had never been “transmitted” to him, even though a Snclavalin spokesman confirmed the company had “attempted to hand it over to Nalcor.”

In all my time as a journalist, I have never encountered another document that has followed a path as slippery and elusive as that one — presumably the copy that Snc-lavalin tried to deliver to Nalcor is hovering in some nebulous netherworld, perhaps in a format only certain eyes can see, or written in magic ink that self-dissolves over time.

Thanks to Justice Richard Leblanc, who is heading the commission of inquiry into Muskrat Falls, I now have some optimism that the truth about what really happened with the Snc-lavalin report will be unearthed.

Reading Leblanc’s interpretation of the inquiry’s terms of reference this week, Section 3, subsection 41 was a standout. It gets to the heart of things many of us hoped the inquiry would tackle, including “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.”

Leblanc says the inquiry will also look into construction scheduling and contractual arrangements, including those with so-called embedded contractors — Muskrat Falls’ shadow workforce whose members made up about 90 per cent of the management team and were paid between $90 and $250 per hour, depending on the work — some of it fairly routine to any corporation, such as human resources and management duties.

The inquiry will also probe “whether any reports or risk assessments were obtained by Nalcor, who they were shared with and how they were responded to by Nalcor,” Leblanc wrote.

“One such report will be the SNC Lavalin Report dated April 23, 2013, which will merit particular attention by the Commission.”

That report is key, because it was a red alert, warning in no uncertain terms of the great potential for cost overruns, delays, political fallout and safety risks at a time when Muskrat Falls was only 20 per cent complete and could have potentially been halted, reconsidered or reconfigured.

Writing about Nalcor’s perplexing unfamiliarity with the report at the time, and Ed Martin’s claims of never having seen it, I interviewed an expert in corporate governance — coincidentally named Richard Leblanc. He was shocked at Martin’s response.

“It’s highly irregular for a CEO not to have knowledge of this report,” said Leblanc, who’s an associate professor of law, corporate governance and ethics at York University in Toronto and has worked with Crown corporations all over the world.

“I have never heard of a report outlining significant risk being rejected. This is a significant report . ... A reasonable interpretation was that the report may have been intentionally quashed…”

If the report was purposefully ignored, the inquiry may well discover that, as well. Justice Leblanc says they will investigate “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…”

That Justice Richard Leblanc has singled the Snc-lavalin report out for “particular attention” is proof it is absolutely relevant to unlocking the puzzle of how Muskrat Falls was approved and seemingly pushed forwarded, at all cost — and at great cost to all of us.