A fishermen’s group says dozens of lobster traps were destroyed during the “rush” to deploy the Cape Sharp Tidal turbine in the week before the bankruptcy of OpenHydro, the Irish company that spearheaded the project.
The accusations comes as court records show that OpenHydro’s management knew it was heading to insolvency before the two-megawatt demonstration turbine was installed in the Minas Passage.
Darren Porter, spokesperson for the Fundy United Federation, which represents fishermen in the area, said on the morning of July 19 he and others watched as Cape Sharp Tidal Venture vessels ran over buoys. About 65 lobster traps were lost to the bottom of the ocean, he said.
“They had no problem running over our gear, we even videotaped them running over our gear and they didn’t care. So they were definitely in a rush to get [the turbine] to the bottom of the Minas Passage,” he said.
“It caused so much grief it was unbelievable. It’s such a loss to the fishermen … We have all this marine debris, ropes floating around the ocean, buoys, and a whole bunch of lobster traps sitting on the bottom.”
Cape Sharp Tidal Venture is a collaboration between OpenHydro, which has an 80 per cent stake, and Nova Scotia energy company Emera Inc. to try to harness the power of the tides in the Bay of Fundy.
The first demonstration turbine was deployed in the Minas Passage and grid-connected in November 2016. It was pulled out about six months later.
The new tidal turbine was deployed on July 24 and connected to the power grid, according to a July 26 press release from OpenHydro’s parent company, Naval Energies.
The same release said based on a board meeting on July 25, the company would no longer be investing in tidal energy. The Irish High Court appointed a liquidator for both OpenHydro Technologies Ltd. and its parent group, OpenHydro Group Ltd., the next day.
Darren Porter says he and other fishermen witnessed their lobster trap buoys being run over by Cape Sharp Tidal Venture vessels. (Submitted by Darren Porter)
Porter said fishermen believe the turbine wasn’t supposed to go back in until after the lobster fishery closed on July 31.
“They’re supposed to wait until the lobster season is over and if they don’t wait, they’re supposed to compensate the fishermen to move. And they wouldn’t do that,” he said.
An environmental assessment for the Fundy Ocean Research Centre for Energy (FORCE), a non-profit agency of public and private developers managing the tidal site, states project vessels must try to minimize the effect on fisheries.
Construction activities, maintenance and decommissioning of the site should be done during non-lobster seasons, according to the assessment, but if activities must take place during lobster season, fishermen will be informed of the vessel movements and traps will be relocated if necessary.
Government, Emera says turbine not deployed early
But Emera, the Nova Scotia Department of Energy and the federal Department of Fisheries and Oceans all deny the turbine was put in early, saying it went into the water in the timeframe allowed.
Stacey Pineau, spokesperson for both Emera and Cape Sharp Tidal, said representatives worked with fishermen in the months leading up to deployment.
“No fisher provided feedback at that time that indicated that a deployment should not proceed, so CST went ahead with a July deployment,” she said.
Porter said about 65 lobster traps were lost during the deployment. (Submitted by Darren Porter)
FORCE’s environmental assessment also states that if damage does occur, the fishermen will have to demonstrate the loss of gear, “and FORCE will work with the gear owners to determine the appropriate level of compensation.”
Pineau said no fishermen have filed claims with Cape Sharp Tidal relating to gear lost during deployment, but the process for managing claims will be determined by the liquidator.
‘It’s a big impact for a small town’
Porter said he’s doubtful the fishermen will ever see that money.
But they aren’t the only ones waiting to get paid, as many local businesses in nearby Parrsboro, N.S., say they’re out thousands.
Ulrike Rockenbaur, owner of the Maple Inn, said she’s not been paid $3,800 for four rooms booked in June for OpenHydro employees.
She called the company, which told her it would take a bit longer because the money was coming from Ireland, but later said she had to resend the invoice.
“It was like a tactic to not pay us,” she said. “It’s a big impact for a small town like Parrsboro.”
Jay Grant of Riverview Cottages said he’s out roughly $7,000.
Grant said he “got a little leery” after the company repeatedly changed the dates and number of nights. He then got a call saying the guests would be checking out, as the project finished earlier than expected.
“They just grabbed their stuff and left. There was about three or four cars that absolutely sped out of here. I kind of thought, ‘That was strange.’ But then again I knew they had finished early,” he said.
He tried to process the final bill, but the credit card was denied and emails bounced back.
“Your heart sinks. I just thought, ‘Oh, here we go,'” he said.
The first Cape Sharp Tidal turbine was lowered into the Minas Passage in November 2016. (Cape Sharp Tidal)
David Beattie owns the Black Rock Bistro, which was providing dinner for the marine operations crew. He also owns the Gillespie House Inn, which had guests from OpenHydro.
He said he’s spoken with Alisdair McLean, one of the directors of Cape Sharp Tidal and formerly OpenHydro’s manager for Canada. There’s “some degree of hope” that local businesses will be paid, Beattie said, but no guarantee.
Despite CBC’s repeated requests to interview MacLean, Pineau said he was unavailable.
Emera seat on OpenHydro board
According to OpenHydro’s website, Emera’s vice-president of special projects, Christian Richard, had a seat on the Irish company’s board.
But Pineau said Emera hasn’t been on the board since March 2018 and no Emera representative was at the July meeting. She also said Emera only learned of the OpenHydro liquidation on July 26.
Court documents show that concerns around OpenHydro Group go back as far as October 2016.
A copy of Naval Energies’s petition to the Irish High Court for OpenHydro Technology Ltd., dated July 26, says both that company and its parent, OpenHydro Group Ltd., had “a very challenging year in 2017,” leading to a full review of all assets.
A financial overview dated July 9 forecasted that OpenHydro Group would run out of cash on Aug. 20, and the company would make a loss before interest over the next eight years — totalling about $194 million Cdn.
The documents also show that between October 2016 and July 2018, minority shareholders raised concerns that the role of the OpenHydro board was limited and there was an absence of debate about strategic issues, as well as conflicts of interest and breaches of corporate governance.
Concerns from senior management
But it wasn’t just the minority shareholders who were worried.
The documents reference a letter dated July 24 where five senior managers of OpenHydro Group wrote, “For some months, our clients have been extremely concerned that OHG cannot pay its current or future liabilities and is within the zone of insolvency.”
The documents say the issue of the company’s insolvency was raised with its CEO on a number of occasions.
Naval Energies wrote that it disputed both the minority shareholders’ and the managers’ allegations, but it used the letter as reinforcement that OpenHydro should be wound up.
“The letter is, in effect, critical of OHG’s directors for not having taken action to wind up OHG sooner,” the documents read.
A specially designed barge was used to move the new turbine into position in the Minas Passage. (Cape Sharp Tidal)
Naval Energies also asked that liquidators facilitate an independent investigation into the allegations.
Right now, the fate of the turbine still floats in uncertainty, but a spokesperson for the Department of Environment said on Wednesday the province is not considering making an investment.
“This situation is a corporate issue, and it’s up to the private companies that own the turbine to settle the matter,” JoAnn Alberstat said.
FORCE officials said last week that Cape Sharp Tidal has isolated the turbine from the power grid and it is not generating electricity.
But the turbine is still subject to weekly monitoring. A spokesperson for the Department of Environment confirmed it received an update as recently as this week.
If it goes unmonitored for more than a week, a contingency plan is in place — but it’s unclear at this point who is responsible to enact that plan and whether the liquidators would have to be involved.
When asked whether there was an agreement in place outlining what would happen if one of Cape Sharp Tidal’s partners could not fulfil its obligations to the project, Pineau said any agreement between Emera and OpenHydro is “commercially sensitive” and will not be shared publicly.
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