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The Train Company Responsible for the Lac Mégantic Catastrophe Still Hasn't Paid Up

As if the damage done to Lac Mégantic by a derailed train owned by the Montreal Maine & Altantic Railways, the company has refused to pay over $4 million to the town, and is planning to file for bankruptcy.
July 29, 2013, 4:51pm

Jean-Francois Hamelin's photo of the destruction in Lac Mégantic.

The charred ruins have now cooled, most of what’s left of the victims’ bodies have been found, and a memorial service took place this weekend in Lac Mégantic to honour the 47 people killed. Unfortunately, however, closure for the townspeople is far from realized. Now comes the tricky matter of getting paid—or rather—getting what the residents of Lac Mégantic and the relief workers deserve.

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We already told you how easy it is to blame Montreal, Maine & Atlantic Railways, the company who owned the 72-car train that derailed carrying 7.2 million litres of crude oil and exploded in the heart of Lac Mégantic, but they have somehow worsened their image in the aftermath of the catastrophe.

During the PR disaster that was the July 10 news conference in Lac Mégantic, MM&A Chairman Ed Burkhardt promised immediate reparations, but the company has done just the opposite by not making any payments, while avoiding lawyers and the press for the past two and a half weeks.

Due to the fact that no one from MM&A was picking up the phone, Peter Flowers, the attorney representing more than a dozen class-action cases against the company, hired a private investigator to find Burkhardt this weekend to serve him the cases at his home in Illinois. Flowers encouraged the investigator to film the moment Burkhardt got served, presumably so that the residents of Lac Mégantic could get some type of righteous amusement out of it.

While we wait for that potentially satisfying footage, workers contracted by MM&A for cleaning up the destruction still haven’t been paid a dime from the company. The town of Lac Mégantic has had to foot the rising $4.1 million bill for the labourers, just to keep them from walking off the job after 18 days without pay. Lac Mégantic’s mayor said last week they were suing to get the money back, but MM&A just isn’t ready and needs until tomorrow—past the legal deadline—simply to respond.

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With these lawsuits, the cost of the damage, and the accusations of criminal negligence, the company could be paying upwards of $100 million dollars—which they don’t appear to have tucked under their proverbial mattress. Instead of settling their debt, the company will likely declare they are filing for Chapter 11 bankruptcy as early as tomorrow, when they officially respond to the lawsuit. That would give the company the ability to keep operating while they search for a new buyer. According to a transportation analyst for the Montreal-based Green coalition, a Chapter 11 declaration could cause the cases to be dragged out for up to 15 years while Canadian taxpayers are forced to foot the bill for cleanup in the interim.

Obviously the government doesn’t want to have to pay, so they will do everything they can to pin this on MM&A and its parent company Rail World Inc., but the Federal government deserves some of the blame too. Over recent years, the government has left safety regulations mostly up to the private companies responsible, while more trains carrying more hazardous materials are taking to the tracks every year. Oil transport over rail, for instance, has increased a whopping 28,000 percent since 2009.

Last week, the government added much needed regulations, like the addition of at least one other employee onboard a train carrying dangerous cargo, and protection for whistleblowers who call out companies for unsafe practices. Check out our interview with a CP rail conductor who had to be kept anonymous to make some rail safety commentary of his own…

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But even with all of that being put in place, more needs to be done. One glaring issue is that train companies are still not under the same liability regulations as companies responsible for pipelines, nuclear accidents, and offshore spills. With such a dramatic increase in oil transportation running across our country's railways, clearly this policy needs to be re-examined.

Until this all gets sorted out, the pressure on MM&A doesn't seem to be wavering anytime soon. On Thursday, police raided MM&A headquarters in Farnham, Quebec to look for clues and pin any negligence charges against them. Hopefully they find something that can speed up this process, so that the rebuilding of beautiful Lac Mégantic can officially begin.

Follow Joel on Twitter: @JoelBalsam

More VICE Canada coverage of Lac Mégantic:

Impressions from Lac Mégantic

Lac Mégantic Could Have Been Saved if the Train Had a Conductor

Examining the Aftermath of Lac Mégantic