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Newfoundland ruling slows Mowi Canadian expansion

JASON HUFFMAN Feb 28, 2020

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Byproduct from MOWI's disaster die-off last autumn on Newfoundland's south coast ASF/Bill Bryden

A judge’s ruling in the Canadian province of Newfoundland and Labrador might be nothing more than a temporary setback for Mowi and its efforts to significantly grow its Atlantic salmon business, but it could have greater meaning for all aquaculture in the area, says one of the attorneys who won the case.

NL Supreme Court justice Daniel Boone ruled Thursday, in a 41-page opinion, that Andrew Parsons, the province’s former minister of municipal affairs and the environment, erred in September 2018 when he instructed Northern Harvest Smolt, a division of the Norwegian salmon farming giant, that it could expand its Indian Head hatchery from the production capacity of 4.5 million smolts per year to 6.7m – nearly 50% – without first conducting an environmental review of its area net pens.

Boone agreed with the challenge of Parsons’ decision filed by Ecojustice on behalf of several wild salmon advocacy groups back in April 2019. He rejected Mowi’s argument that the smolts grown as part of the hatchery expansion would go into some of the company’s 33 cages already in place and, therefore, not require new pens, triggering the need for an additional review.

He said such a review was also triggered by the expression of public worry, noting that 25% of the comments received in response to the registration filed by Mowi were opposed to the project, expressing concern in particular about the possible impact on wild salmon populations.

“The legal constraints imposed on the minister by the act and regulations required environmental assessment of the sea cages that were intended to be utilized in connection with the hatchery expansion. The decisions of the minister did not demonstrate an internally coherent and rational chain of analysis from that requirement to the release of the project from environmental assessment,” Boone concluded.

The decisions to allow the project to go forward without the necessary reviews was “unreasonable,” he found, citing the judicial threshold necessary.

Boone’s ruling sends the expansion request to Derrick Bragg, who took over the province’s environmental minister position in Sept. 2019, to give it another look, and the Liberal Party lawmaker will be hard-pressed to do anything but require some level of environmental review of the net pens, explained attorney Sarah McDonald, who along with James Klaassen, argued the case for Ecojustice back in November in St. John’s, NL.

Both Bragg and Mowi will have 30 days from the not-yet filed order to appeal,

The ruling comes only about five months after a major salmon mortality event in Fortune Bay, off the southern coast of NL, in which the deaths of some 2.6m of Mowi’s salmon were blamed on a prolonged period of warm water. The net pens involved are many of the same ones fed by the hatchery.

The catastrophe, which received major publicity in the Canadian press, placed considerable heat on NL minister of fisheries and land resources Gerry Byrne, who temporarily suspended much of Mowi’s operation in the area and chastised the company for not being forthcoming with the public.

Mowi later responded by making a series of commitments, including the replacement of multiple net pens and the introduction of new technology to better handle warm water conditions. Even after receiving some insurance payouts, Mowi acknowledged that it would take a $5.5m financial hit as a result of the event.

A Mowi spokesperson refused to comment on Boone’s ruling Thursday, saying it was still reviewing the decision, and he likewise declined to respond to Undercurrent’s request for an update on its effort to replace net pens.

The bigger victory for wild salmon advocates

The magnitude of Boone’s decision doesn’t seem spectacular on the surface.

Ultimately, Bragg could order an environmental review or even a more intense environmental impact statement to be conducted on Mowi’s net pens off the southern coast of Newfoundland, which might delay the salmon farmer’s expansion for as long as eight months or a year. It won’t likely stop the effort, McDonald acknowledged.

But the Ecojustice attorney told Undercurrent on Thursday that she would be okay with that.

The bigger victory, she said, is that the ruling serves to stop a pattern by the province of making it easy for salmon farmers to expand their operations by configuring applications in such a way to avoid environmental reviews, transparency and public scrutiny.

“We are pleased that the Supreme Court of Newfoundland and Labrador has confirmed that aquaculture projects in the province can’t proceed without a robust and comprehensive environmental assessment,” McDonald said in a statement. “Today’s ruling means the province must now strengthen its regulatory approach.”

Ecojustice was acting on behalf of the Salmonid Association of Eastern Newfoundland (SAEN), the Freshwater-Alexander Bays Ecosystem Corporation, the Port Au Port Bay Fishery Committee, and three Newfoundland residents: Alan Pickersgill, John Baird, and Wayne Holloway.

Their cause was supported by a coalition of other groups, too, including the Atlantic Salmon Federation (ASF), the Canadian Parks and Wilderness Society, Center for Long-term Environmental Action in Newfoundland, For A New Earth and the Freshwater-Alexander Bays Ecosystem Corporation.

Boone’s ruling closely follows and builds on an earlier decision in Placentia Bay, NL, in which a judge agreed with a request by ASF and forced a major environmental review to be conducted on Norway’s Grieg Seafood planned 33,000-metric-ton, 11 farm expansion.

Grieg was required to meet not-before-seen conditions, including the monitoring of genetic and ecological interactions between aquaculture and wild salmon, mandatory marking of smolts prior to leaving the hatchery, and a requirement to publicly release reports of disease and escapes within 24-hours, according to Neville Crabbe, ASF’s spokesperson.

“Simply delaying a project has no benefit for wild salmon or the environment,” Crabbe said. “In the Grieg case, if that was going to be the only outcome, we would not have gone to the expense or effort of filing for judicial review. We did so because it was obvious that the decision made by the minister was unreasonable and logically flawed.”

He said the efforts of ASF in the Grieg case and SAEN and other groups in the Mowi case are helping set a new standard for this industry.

“The cowboy days of trial and error are over,” he said. “It’s not enough to just think a cage will work here or there, and if fish get out, well so what. If this industry has demonstrated one thing consistently over the years it’s that it is in need of greater scrutiny and stricter regulation.”

The moment when Mowi tipped its hand

As Mowi reviews the Newfoundland judge’s decision in the weeks to come, it might consider the moment when it tipped its hand to its opponents, based on the judge’s opinion.

The Indian Head hatchery, near the town of Stephenville, had been considered a major prize when Mowi acquired St. George, New Brunswick-based Northern Harvest Sea Farms (NHS) in July 2018 for more than CAD 300m ($229m), along with a processing operations and 45 existing farming licenses in Newfoundland and New Brunswick as well as another 13 licenses that were applied for.

Its expansion was expected to cost $51m and involve putting in more tanks to follow a recent industry trend of keeping smolts longer on land and growing them larger before introducing them to net pens, according to area newspaper accounts.

But NHS initially informed the NL government that it intended to also build 12 new net pens to go along with its hatchery expansion, according to Boone.

“The department advised NHS that these new sea cages would have to be included in the environmental review,” the judge recounted. “NHS changed its plans and the project presented for registration instead stated an intention to raise the smolt in existing sea cages. NHS still intended to construct 12 new sea cages, but to stock those cages with smolt from a different source.”