Williams - The De Terminator

When one of the Directors of Alderon Iron Ore Corp. addressed the St. John's Board of Trade a week ago - the purported virtues of the Muskrat Falls deal were not the only items discussed.

The representative of Alderon also extolled the virtues of his own investments while taking some quality time to attack some unknown and some known critics of the hydro deal.

As was predicted by Sue's Blog a few weeks ago - the businessman also took the time to use Russell Wangersky's words to demonstrate how the government and Nalcor have been supplying all kinds of information and that critics may be upset with the media because:

"I don’t think it’s correct to say that investigative work isn’t being done. Perhaps it just hasn’t led to what some people want to hear."

Of course what the businessman failed to mention was the numerous editorials Wangersky has done that have questioned process and details of the proposed energy deal. Then again that would not have satisfied the businessman's argument.


The businessman also talked about his massive land development - set to break ground next year - in the City of St. John's west end. He mentioned having acquired the land 15 years ago and that the development could be worth 5 billion dollars. What land was he referring to? What land was acquired 15 years ago? What land was acquired when the businessman was a politician?

Just as a side note to VOCM the businessman while talking about slander and libel and lies - he stated "we must hold people accountable for their words". Maybe the open-line and back-talk hosts should remember the businessman's words the next time they think about allowing callers like "bob" to out and out lie about a private citizen.

Continuing with the "we must hold people accountable for their words" mantra - how is it that the big deal now is to power mines with Muskrat power and that the potential 15 billion in mining projects in Labrador could be jeopardized if the Muskrat deal is squashed.

Now the businessman - a Director of Alderon - a company that has strict corporate governance for its executive - was clearly following those guidelines by pushing the need for Muskrat to power the mines. When that businessman was the Premier the power was for:

Of the total 4.9 terawatt hours per year of power to be produced, initially 2.0 terawatts will be allocated to the Island to meet domestic demand and to displace expensive, dirty bunker "C" oil used in Holyrood; 

Approximately 1.0 terawatt hours per year, or 20 per cent of the output of Muskrat Falls, will be provided to Emera Inc. for use in Nova Scotia.  

The remaining power will be sold into the Maritime Provinces and the New England market place. Nalcor Energy will be able to sell power in these jurisdictions as a result of gaining existing transmission rights from Emera Inc. The total cost of the project will be approximately $6.2 billion 

Clearly holding people accountable for their words - does not mean much.

Will his words of 6.2 Billion hold-up? It used to be the total cost of the project but now the businessman suggests to us that perhaps 8 billion might be the price.

Now further on the Alderon situation - where the power supply is of critical importance to the development. Was the government of Newfoundland and Labrador under the Premiership of businessman Danny Williams unaware of Kami? No of course not. The day after the businessman announced his resignation as Premier - Alderon announced that it had raised over 16 million on a share offering. Monies raised in part to "advance" its Kami property in Labrador.

And so vested was Alderon Resources in this project - that in October 2011 it changed it's Corporate name to Alderon Iron Ore Corp to reflect that importance.

I do not create the facts - others have. How much in business - big corporate business - is happenstance?

Gary Norris
Danny Williams
Todd Burlingame
Brian Dalton

all to the Alderon Team. They list the acquisition of the businessman as a Director for the company as an impressive accomplishment ranked up there with the 490 million tonnes of ore, pre-tax NPV of over 3 billion dollars, completing a 40 million dollar investment, and commencement of trading on the NYSE.

The laws of the province should reflect a reasonable time-frame for government MHA's, Cabinet Ministers, Premiers, senior officials to become involved with any company that has any interest in a file that the politician/bureaucrat had worked directly with.

The time should reflect the relative power the individuals office had. My suggestion as follows:

MHA's 2 years
Cabinet Minister 4 years
Premier 5 years
Deputy or Assistant Deputy Minister 5 years

All within the span of two years - the former Premier announced a deal to develop Muskrat Falls, became a special advisor to Alderon, became a Director in Alderon, began speaking publicly on the importance of the Muskrat Falls project to Alderon.

The businessman also articulated to the Board of Trade that:

"debate is good"
"asking questions is important"
but
"opposition for the sake of opposition is wrong"
"critics who knowingly put misinformation in the public domain are irresponsible and are a disservice to the people of the province"

The businessman will determine what debate is good, what opposition is acceptable, which critics are responsible?

He then asked "what in the world is to be gained" by Ed Martin or Gil Bennett by forcing a bad project on their own province.

So the businessman will determine that people opposed to the project might have less than honourable intentions but the people who are for it have nothing but the best intentions. Once again Danny will determine that.

He has also determined as evidenced by such remarks - that these individuals can't be wrong, might just be making a mistake.

How many politicians, officials, lawyers, and experts got it wrong with the Upper Churchill?
How many Newfoundland and Labrador Hydro officials and politicians and business people got it wrong when privatization was attempted?

The businessman will be the De Terminator on all these matters?

Then how many times - including in the businessman's speech to the Board of Trade did he state "no more giveaways"? Where's all the ore going Mr. Businessman? How much of the ore will be processed here in Newfoundland and Labrador Mr. Businessman?

Alderon Iron Ore Corp. (TSX: ADV) (NYSE AMEX: AXX) (“Alderon" or the “Company”) is pleased to announce that it has signed a definitive subscription agreement dated April 13, 2012 (the "Subscription Agreement") with Hebei Iron & Steel Group Co., Ltd. (“Hebei”), China’s largest steel producer. Hebei will make a strategic investment into both Alderon and its Kami iron ore project (the "Kami Project") in an aggregate amount of C$194 million, in exchange for 19.9% of the outstanding common shares of Alderon (the "Private Placement") and a 25% interest in a newly formed limited partnership that will be established to own the Kami Project.

A newly formed limited partnership? Who owns that?

The businessman will not influence my decision on the proposed Muskrat Falls project, or the land project, or the fibre optic deal. The businessman will not be the De Terminator of what is legitimate or reasonable criticism - or who is or is not an acceptable critic.

Time for a referendum - without question - and let all FACTS be debated openly. What people determine from those facts - of course - is entirely up to them - not the De Terminator.

Nalcor Responds Again - Leaves More ?????

It would appear that Nalcor responds only after I blog that they are not responding. That being what it is - what did Nalcor say?

I simply want to ascertain if Nalcor/Newfoundland and Labrador Hydro has bylaws - as per legislation - and what those bylaws say with respect to the responsibilities of the Board.

The first go-round the company responded by directing me to a paragraph in the annual report. This time I received a copy of "mandates" of the Boards. Still no "bylaws" - however interesting tidbits.

The "mandates" I received were established in 2010. What were the changes? Why was it changed? Who directed the change?

Within the "mandate" literature the following sentence occurs:

"The Board shall have the accountabilities and responsibilities set out below. In addition, the Board shall perform such duties as may be required under, and act in accordance with, the Corporation’s by-laws."

The bylaws are exactly what I requested from Nalcor in my two previous pieces of correspondence. It is exactly what they have avoided giving me in their two responses. 

They have at least admitted to bylaws albeit inadvertently in the latest reply. 

I will now ask a third time to see the bylaws of a company that I am a shareholder of.

For the record below please find what Nalcor did send and ask yourself - based on the information that has been provided - are the Board members and Chair the BEST choices for our energy company.

 

1. The Board of Directors of Nalcor Energy (the “Board”) is responsible for the stewardship of, and has the duty to supervise the management of, the business and affairs of the Corporation.

2. The Board is appointed by the sole Shareholder, the Province of Newfoundland and Labrador, as represented by the Minister of Natural Resources (the “Shareholder”). The Board is responsible for seeking and recommending suitable Board candidates to the Shareholder.

3. For director appointments, the Shareholder in the appointing Order-in-Council shall specify that the director will continue to serve after the expiration of his/her term until a replacement is appointed. This will ensure continuity on the Board while director replacements are being identified and appointed.

ACCOUNTABILITIES AND RESPONSIBILITIES

The Board shall have the accountabilities and responsibilities set out below. In addition, the Board shall perform such duties as may be required under, and act in accordance with, the Corporation’s by-laws.

1. Corporate Governance

(a) The Board is responsible for developing the Corporation’s approach to corporate governance, including developing appropriate policies and procedures and delegating such other matters as it sees fit to the Corporate Governance Committee for its review and consideration.

(b) The Board is responsible for the Corporation’s approach to its governance relationship with its sole Shareholder to ensure the Corporation can operate independent from the Shareholder.

2. Strategic Planning

The Board is responsible for:

(a) adopting a strategic planning process and approving, on at least an annual basis, a strategic plan which lays out the strategic direction of the Corporation in the context of the opportunities and risks of the business and the business and commercial environment in which it operates;

(b) reviewing and approving the business, financial, strategic and other plans proposed by management to enable the Corporation to execute its strategy; and

(c) adopting processes for monitoring the Corporation’s progress toward its

strategic and operational goals, and to revising and altering its directions to

management in light of changing circumstances affecting the Corporation.

3. Operational and Financial Performance

(a) taking action when corporate performance falls short of its performance targets or other special circumstances warrant;

(b) approving the audited financial statements and management discussion and analysis accompanying such financial statements following a review of the recommendation of the Audit Committee; and

(c) reviewing and approving material transactions outside the ordinary course of

business.

4. Risk Management

The Board is responsible for:

(a) Ensuring that management has a process for identifying the principal risks of the Corporation’s business and ensuring the implementation of appropriate systems to effectively monitor and manage such risks with a view to the long-term viability of the Corporation;

(b) overseeing the integrity of the Corporation’s internal control and management information systems;

(c) approving, and monitoring compliance with, all significant policies and procedures that impact the way in which risk is identified and managed; and

(d) approving policies and procedures designed to ensure that the Corporation operates at all times within applicable laws and regulations.

5. Human Resources Management

(a) The Board, through its Compensation Committee is responsible for maintaining a compensation philosophy and framework that will be utilized by the Corporation and its subsidiaries.

(b) The Board is also responsible for approving the compensation of the President and CEO following a review of the recommendations of the Compensation Committee.

(c) The Board is responsible for ensuring a process is in place to measure the performance of senior executives of the Corporation.

(d) The Board will, to the extent feasible, satisfy itself as to the integrity of the President and CEO and other executive officers, and that the President and CEO and other executive officers create a culture of integrity throughout the organization.

(e) The Board is responsible for ensuring that succession planning programs are in place, including programs to train, develop, monitor and retain senior management, including the President and CEO.

6. Board Meetings and Materials

(a) The Chair, in consultation with the President and CEO and the General Counsel and Secretary, shall develop the agenda for each Board meeting.

(b) Meeting materials shall be provided to directors before each Board meeting in sufficient time to ensure adequate opportunity for review.

(c) Independent directors shall hold regularly scheduled meetings at which nonindependent directors including members of management are not present.

7. Committees of the Board

(a) The Board discharges its responsibilities both directly and through its committees: the Audit Committee, the Corporate Governance Committee, the Compensation Committee, and the Safety, Health and Environment Committee. In addition to these standing Committees, the Board may, from time to time, appoint ad hoc Committees to address certain issues of a more short-term nature.

(b) The Board is responsible for approving the mandates for each Board Committee.

(c) The Board is responsible for the appointment of Committee Chairs and members. The Board has the ability to point and replace Committee Chairs and members as deemed necessary.

(d) To facilitate communication between the Board and each Board Committee, each Committee Chair is responsible for reporting to the Board on material matters considered by the Committee at the first Board meeting after the Committee’s meeting.

DIRECTOR DEVELOPMENT AND EVALUATION

1. Each new director shall participate in the Corporation’s Director Orientation Program and any continuing director development programs.

2. Annually, with the assistance of the Corporate Governance Committee, the Board shall evaluate and review the performance of the Board and the adequacy of this mandate

Nalcor Silent - Hiding Something?

At a time when corporate executives - around the world - continue to fail, flail, and founder - it's time for Ed Martin and Nalcor bosses to reveal where the orders are coming from.

There is no doubt that the proposed Muskrat Falls project with Emera is a matter of extreme public concern. That concern is coming from all corners - retired and working energy experts, lawyers, retired politicians from the PC rank and file, academics, journalists, and citizens.

The way the government puts it - is that Nalcor runs its own ship and that would mean Ed Martin and other senior executives take their direction from the Board.

That being the case - the recently appointed Board members and chairperson of Nalcor would have an onerous responsibility respecting the project.

The Premier has played down the role of the Board and it's newly appointed Chair - presumably to argue against the need for relevant and significant experience on his resume.

If Ed Martin as President and CEO is actually calling all the shots and the Board serves more as a figurehead position - we the people and owners of Nalcor are in real trouble. That would not be reasonable or responsible for our corporation.

If Ed Martin is taking direction from the government - then the independent role of our major utility is subject to political operation and failing therefore to serve its mission and mandate.

So who's the boss of our multi-billion dollar company? That is the question and we the people need answers. At this point - I trust - the media will get to the bottom of this enigma.

On June 18th I wrote Nalcor for the second time seeking information on the Board and its Bylaws. 

As yet NO Reply.

On what basis is Nalcor refusing this information? 

Here is the request I sent to Nalcor:

This is basic and does not interfere with propriety information and if the company were publicly traded - I could read it online. 

Under section 10 of both the the Hydro Corporation Act 2007 and the Energy Corporation Act

Hydro Corporation Act, 2007

10. The board may make by-laws

             (d)  respecting the duties and conduct of the directors and of the officers and employees of the board;
             (i)   generally, for the conduct and management of the affairs of the corporation.


Energy Corporation Act

      10. The board may make by-laws
          
             (d)  respecting the duties and conduct of the directors and of the officers and employees of the corporation;
              (i)  generally, for the conduct and management of the affairs of the corporation.

Please advise if the Board has made bylaws for both the Energy Corporation and the Hydro Corporation respecting subsections 10(d) and (i) of the respective acts.

If these bylaws exist please advise where I may see them.

If they do not please confirm and advise if the general statements found in the annual reports – under corporate governance – act as the sole guidance and literature to define the responsibilities of the Board of Directors. If not what other information exists regarding this matter? 

A Chair is a Chair is a Chair - How does Nalcor's Compare?

How do we compare?

We are the shareholders of Nalcor - we deserve the best people available on our Board of Directors. 

Do we have that? 

Chair of the Board, Hydro Quebec

Michael L. Turcotte obtained a Bachelor of Arts degree from the University of Montréal (Collège Jean-de-Brébeuf) and a Master’s degree from the School of Business of Laval University. He enjoyed a lengthy career with the Royal Bank of Canada and became Senior Vice-President, Québec, in l984.

Since his retirement from the Royal Bank in l998, Mr. Turcotte has served as a Corporate Director. Until 2004, he was Chair of the Board of Management of the Canada Customs and Revenue Agency, Chairman of the IRCM Foundation and Québec Chair of the Canadian Forces Liaison Council.

In November 2005, he became Chairman of the Board of Hydro-Québec. He continues to serve as a Director of various private corporations and institutions of the public sector.

Mr. Turcotte is Governor Emeritus of the Arthritis Society, of which he is also a past Québec President. Over the years, he has been a Director and Chairman of the Board of the Orchestre symphonique de Montréal.

Mr. Turcotte is Honorary Lieutenant-Colonel of the 6th Field Artillery Regiment. He is a recipient of the Hermès prize from the School of Business of Laval University and has been honoured by the Scouts Association of Canada. Mr. Turcotte has been a member of the IRCM Board of Directors since 2002. He chairs the Governance Committee and is a member of the Executive Committee. 

Chair of the Board, BC Hydro

Dan Doyle started his career with the Province of British Columbia as an engineer-in-training; 36 years later, he retired from the Public Service as the Deputy Minister of Transportation.

Throughout his career with the Ministry, Mr. Doyle built a legacy of B.C.-wide transportation infrastructure. In 2006, Mr. Doyle was appointed Executive Vice-President responsible for the development and building of venues and supporting infrastructure for the 2010 Winter Olympic and Paralympic Games by the Vancouver Organizing Committee.

A strong believer in having the right team in place to do the job, Mr. Doyle is widely known for his ability to deliver major projects on time and on budget. 

In recognition of his highly respected public service and professional expertise, Mr. Doyle was awarded the Order of B.C. in 2010. He was also awarded B.C.'s premier distinction for professional engineering, the R.A. McLachlan Award, by the Association of Professional Engineers and Geoscientists of B.C. in 2006.

Chair of the Board, NB Power

Mr. Barrett is co- CEO of Barrett Corporation, a North American investment and management company.

He is CEO of Barrett Diversified Inc., which operates wholesale distribution companies in Canada and the US, and is co-founder, significant shareholder, and serves on the Board of Xplornet Communications, a leading broadband and communications company in Canada

In addition to NB Power, Mr Barrett serves on the Board of Wajax Industries, a public company traded on the TSX which is a leading mobile equipment and industrial supplies company in Canada, two private companies based out of New Brunswick, Atlantic Industries and Apex industries, and is Past Chair and Board member of Crandall University.

Chair of the Board, Manitoba Hydro

Mr. William C. Fraser, FCA served as the President and Chief Executive Officer of Manitoba Telecom Services Inc. from 1994 to 2006 and served as its Vice President of Finance from 1986 to 1994. Mr. Fraser served as the Chief Executive Officer of MTS Media Inc., Qunara Inc., AAA Alarm Systems Ltd., MTS Allstream Inc., MTS Communications Inc., MTS Advanced Inc. In this capacity, he provided overall leadership and direction to MTS and its 7000 employees. Having joined MTS in 1986 as Vice-President of Finance and risen to the position of President and Chief Executive Officer in 1994. 

Mr. Fraser has ably steered Manitoba Telecom Services Inc. through a generation of dramatic and unprecedented change in the telecommunications industry. From 1972 to 1981, he held various senior positions in the federal government, including Director General Finance for the Department of Agriculture.

In 1981 he was appointed to the position of Assistant Deputy Minister of Finance with Manitoba government, the youngest person ever appointed to that position. He served until 1986, when then-Minister of Telephones Gary Doer, who is now Premier of Manitoba, appointed him to his first post with MTS. He is also a member of the St. Boniface Hospital and Research Foundation. Mr. Fraser is widely respected in both the telecommunications and chartered accounting industries.

He has served as a strategic and visionary leader at Manitoba Telecom Services Inc. for almost 20 years. Mr. Fraser served as Chairman and Director of MTS Media Inc., Qunara Inc., MTS Advanced Inc. and AAA Alarm Systems Ltd. He serves as a Director of Mts Communications Inc. He has been Director of IMRIS, Inc. since August 2007. He serves as Director of Bell West Inc. and Manitoba Hydro-Electric Board. Mr. Fraser is also a Member of the Board of Directors of the Conference Board of Canada. He served as Director of MTS Allstream Inc.

He served as Director of Manitoba Telecom Services Inc. from January 1997 to December 7, 2005. He serves as Vice Chair of St. Boniface Hospital Foundation. In 2002, in recognition of his leadership and his high ethical standards, he was named a Fellow of the Institute of Chartered Accountants. Mr. Fraser received his BBA in 1970 from St. Francis Xavier University, where he was honored as the university's top graduate among the entire 1970 class. He became a Chartered Accountant in 1972.

The Lowest Common Denominator - says Dunderdale?

A new concept has been introduced by our Premier.

The lowest common denominator is not new however using it for Board appointments is.

In a CBC report on Monday Premier Kathy Dunderdale defended the skills and experience of four new appointees to the boards of Nalcor and Newfoundland and Labrador Hydro.

In the Telegram today Dunderdale is quoted as saying "it’s not a problem that recent appointees to the Nalcor board have no experience in oil and gas, hydroelectricity or megaprojects."

First of all Premier - which is it? Do they have the experience or not?

Then in defending the lack of experience in the energy sector the Premier added the following: “What qualifies me to be premier of Newfoundland and Labrador?” Dunderdale asked. “What qualifies Dwight Ball or Lorraine Michael?”

That may be a good question for the Premier to ask herself - however in this very real fiasco unfolding before us - her comment is beyond ridiculous.

The people elected you - and you can be summarily dismissed - which I predict will be soon - by booting you out. Not so with the Nalcor appointees (don't be cute with this one - I'll tell you why in the next post).

So basically what the Premier is saying is - I have no qualifications and you elected me - so I will appoint others with no relevant qualifications to the Board of Nalcor.

Premier, are we the people, or experts in the sector, or the Opposition parties permitted to have a question period in the House of Assembly with these new appointees? No? Well they are not the same thing.

However if you should choose to allow this - sign me up.

The Premier has now introduced the lowest common denominator in the equation of appointing people to the Boards of Crown agencies and companies. What might we guess will be the outcome of that?

Nalcor Board - Are the Qualified?

As I await for specific information from Nalcor - let's review what Nalcor did point me to - with respect to Nalcor Board responsibilities.

The principal functions of the Board include:

(a) developing Nalcor’s approach to corporate governance;
(b) reviewing and approving the business, financial, strategic and other plans to enable Nalcor to execute its strategy;
(c) adopting processes for monitoring the company’s progress toward its strategic and operational goals;
(d) approving the audited financial statements and Management’s Discussion and Analysis;
(e) ensuring that management has a process for identifying the principal business risks;
(f) overseeing the integrity of the internal control systems;
(g) ensuring that Nalcor has processes for operating within applicable laws and regulations;
(h) ensuring the company has a compensation philosophy and framework;
(i) ensuring a process is in place to measure the performance of senior executives of Nalcor;
(j) ensuring management creates a culture of integrity throughout the organization; and
(k) ensuring that succession plans are in place for senior management, including the President and CEO.

1. Based on the above what should the qualifications of Board members be?

2. Based on the above which of the new appointees to the Board - including the Chair - is qualified?

3. Do you agree with Premier Dunderdale that these appointees are no different than politicians who she says need no experience for the job?

4. Does this meet Dunderdale's criteria - which says the government has the best experts available working on the Muskrat Falls development?

5. Do you feel - as a shareholder of Nalcor - that your best interests are being served by these new appointees? 

Nalcor Replies - Does not answer Question

As you are aware - my last post dealt with a simple email request for information to Nalcor.

I asked for: Please advise where I may find a copy of the bylaws outlining the responsibilities of the Board of Directors.

Up until this morning I had not received a reply.

I now have the reply:

    

Good day Ms. Kelland-Dyer,

For information regarding responsibilities of the Board of Directors, please see the Corporate Governance section of Nalcor's 2011 Business and Financial Report (pages 93-96).

Here is a link to the report: http://www.nalcorenergy.com/uploads/file/2011%20Nalcor%20Energy%20Business%20and%20Financial%20Report.pdf

Regards
Merissa

Merissa Wiseman

Senior Communication Advisor - Hydro

Corporate Communication & Shareholder Relations

Newfoundland and Labrador Hydro - a Nalcor Energy company

Needless to say – I know there is an annual report and outside government and the corporation I probably have the largest collection of annual reports on the Corporation from the past 40 years.

So let’s try this again but this time – I will try to make it less simple and more complicated. Considering the corporation could not or would not answer the simple request – I will spruce it up.

This time the request is the following:

Under section 10 of both the the Hydro Corporation Act 2007 and the Energy Corporation Act

Hydro Corporation Act, 2007

10. The board may make by-laws

             (d)  respecting the duties and conduct of the directors and of the officers and employees of the board;

             (i)   generally, for the conduct and management of the affairs of the corporation.

Energy Corporation Act

      10. The board may make by-laws

          

             (d)  respecting the duties and conduct of the directors and of the officers and employees of the corporation;

              (i)  generally, for the conduct and management of the affairs of the corporation.

Please advise if the Board has made bylaws for both the Energy Corporation and the Hydro Corporation respecting subsections 10(d) and (i) of the respective acts.

If these bylaws exist please advise where I may see them.

If they do not please confirm and advise if the general statements found in the annual reports – under corporate governance – act as the sole guidance and literature to define the responsibilities of the Board of Directors. If not what other information exists regarding this matter?