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IN THE MATTER OF AN ARBITRATION UNDER CHAPTER 11 OF THE NORTH AMEmCAN FREE TRADE AGREEMENT AND THE UNCITRAL ARBITRATION RULES WILLIAM RALPH CLAYTON, WILLIAM mCHARD CLAYTON, DOUGLAS CLAYTON, DANIEL CLAYTON, and BILCON OF DELAWARE Investors v. GOVERNMENT OF CANADA Respondent WITNESS STATEMENT OF PAUL BUXTON July 20, 2011 -1- I. Background I. I am the Project Manager of Bilcon of Nova Scotia. In this capacity, I am responsible for overseeing the business operations of the Company. I was educated at the University of Manchester in England, from which I hold an Honours Degree in Civil Engineering. I am a life member of the Association of Professional Engineers of Nova Scotia. 2. I am a resident of Nova Scotia, and have lived and worked in the Annapolis Basin area, which is very close to the Whites Point area, for almost 40 years. I have been involved in a number of local business developments, including serving as the: a. Director, Nova Scotia Chamber of Mineral Resources;' b. Executive Director, Municipality of Town of Digby Development Commission;2 c. Advisor to the Minister of Environment on Hazardous Waste Management;) d. Chairman, Minister's Taskforce on Hazardous Waste Management;4 e. Member, Executive Committee of the Nova Scotia Environmental Control Council;s and f. Executive Director, Annapolis Royal Development Commission.6 3. I have been President or Principal of several engineering firms: a. From 1978 until 20 II, I served as President of Acadia Developments Inc., a company specializing in heritage building restoration and management. b. From 1990 until 2006, I served as a Principal of Delta Four Associates Inc., an engineering consultancy firm. , From 2005-2006 2 From 1990-1995 ) From 1988-1989 4 From 1987-1988 s From 1983-1987 6 From 1979-1987 - 2 - c. From 1997 to 1999, I served as a Principal of Eastern Canada Bioremediation Inc., a company involved in the development of Bioremediation Solutions for contaminated soil. 4. I have been involved in providing professional engineering services to numerous projects throughout south west Nova Scotia. These projects have involved many heritage and tourism projects. I have also managed clean-up operations for oil spills to both residential and commercial premises. 5. I have also been involved with a number of Phase I and Phase II Environmental Assessments for other projects. I have carried out Phase I and Phase II Environmental Assessments for commercial buildings, service stations and the Town of Annapolis Royal, which is close to Whites Point community. 6. I am familiar with the duties of an environmental review panel under an environmental assessment. In the 1980s, I sat on a Board, administered by the Nova Scotia Department of Environment and Labour, known as NSDEL, to review the environmental impacts of the Waverly Quarry, near Halifax. The Board reported directly to the Minister of Environment on these issues. II. Involvement with the Whites Point Quarry Project 7. Nova Scotia is well-known as a desirable location for aggregate rock extraction. In 1992 alone, there were over 75 aggregate quarries in operation in the Province. 8. In January 2002, I was approached by Nova Stone to assist it in obtaining a permit to operate a quarry at Whites Point. The Company was interested in developing a significant quarry to produce crushed rock for export, and in applying initially for a permit for a 3.9 hectare quarry. The company planned to carry out preliminary investigations particularly for blasting to assist with the permitting of the larger quarry. Nova Stone applied for the permit, and the Nova Scotia government issued the permit on April 30th, 2002. 9. The Whites Point Quarry was the site for a former gravel pit, which had been operating in the 1940s and 1950s. I understand that the gravel from the site was specifically used to build a provincial highway (Highway 217), which is one of our highways in Digby County very close to the Whites Point site. 10. In May 2002, I was informed by Nova Stone that it had a partner, Bilcon of Nova Scotia, which was owned by the Clayton family from New Jersey. Thejoint venture between Nova Stone and Bilcon was known as Global Quarry Products. On behalfof the joint venture, I began preparing for an application for a larger quarry and a dock. 11. I anticipated that the environmental assessment process for the larger Whites Point Quarry would be straightforward and that the partnership would be quarrying by the end of2003. If the proponent designed the quarry with care and with due consideration of environmental issues, the permit to proceed is often granted within months. I personally carried out significant environmental research throughout 2002, in order for the process -3- to be as streamlined as possible. In no way did I expect a complicated joint review process. 12. My expectation of a quick quarry approval was also informed by the speedy approval process of the 3.9ha quarry and other quarries operating nearby. For example, I reviewed the "Standard Conditions That Apply to Any Rock Quarry" which was provided to me upon request by the Nova Scotia government.' 13. From May 2002 until September 2003, I worked under the direction of Mark Lowe of Nova Stone to prepare the environmental assessment for the quarry and shipping dock. 14. The first meeting between the Nova Stone and various government officials, including representatives of the CEA Agency and NSDEL occurred on August 28, 2003. This meeting was an opportunity to ask questions as to why a joint panel review would be used to assess the Whites Point Quarry project. 15. In October 2003, Nova Stone advised the Clayton family that it wanted to be bought out of their partnership. Bilcon agreed, and I assumed the role of Project Manager on behalf of Bilcon. III. Canada's Encouragement of Bileon to Invest i. Encouragement by Cabinet Minister Gordon Balser 16. In 2002 and 2003, the Province of Nova Scotia was engaged in a prominent advertising campaign, proclaiming that "Nova Scotia was Open for Business". The campaign was actively promoted throughout the environmental assessment process for Whites Point. David Morse, who at the time was Nova Scotia's Minister of Natural Resources, made many related proclamations to the public, and to me. 17. I also met on several occasions with Gordon Balser, a Cabinet Minister, and the Member of the Nova Scotia Legislature for the Digby area. He was very keen to have new jobs and investment in his constituency. 18. The Nova Scotia Premier himself, Rodney MacDonald, personally told the Claytons that the Province was "Open for Business". Like Minister Balser, the Premier was supportive of the quarry investment the Claytons were considering making in Nova Scotia. 19. Throughout 2002, I had at least 15 meetings and discussions with Minister Balser,S who always encouraged the Clayton's investment in the region, and kept reinforcing the 7 Fax from Danette Deveau (NSDEL) to Mark Love (Nova Stone), "Standard Conditions that apply to any rock quarry", dated January 25, 2002. (Buxton Exhibit /0) 8 These meetings and discussions took place on June 3, June 10, June 16, June 24, July 4, July 19, August 9, August 16, October 31, November 6, November 20, November 27, December 2, December 17, and December 20,2002. -4- positive impact the Whites Point Quarry would have on job creation and related investment in the area. Other department officials from the Nova Scotia Department of Natural Resources made representations to encourage the Claytons to invest in the aggregate sector. 20. Given Minister Balser's position as a Cabinet Minister, his continuous encouragement of the benefits of Whites Point Quarry to me and the Claytons was vital to their decision to proceed with the Quarry. 21. There were even discussions on public relations with Minister Balser, where I discussed how Bilcon could better present the benefits of the project to the local area. 22. On June 24,2002, Bill Clayton Sr., Bill Clayton Jr., John Wall, and myself, attended a meeting with Minister Balser at his office. At that meeting, Minister Balser personally invited the Claytons to invest in a quarry at Whites Point. 23. Following the meeting with Minister Balser, Silcon received a letter from Minister Balser's office thanking the Claytons for meeting with him. Minister Balser's letter also said: I hope that you and your company will continue to move the project forward as I feel it has the potential to benefit both you and our area. Please do not hesitate to contact me in the future ifl can be of any assistance.9 24. On July 5, 2002, Mr. Clayton wrote to Minister Balser, thanking him for providing assistance to Bilcon, and also for guiding Bilcon's quarry manager, John Wall, personally around the area. 'o Mr. Wall then had many more meetings with Minister Balser. 25. In December 2002, Minister Balser and I discussed what Bilcon could do to help with the quarry's creation ofjobs and being a financial stimulus throughout the local economy. 26. In August 2003, Minister Balser was replaced by Harold (Junior) Theriault as the local Member of the Legislative Assembly for Digby in that month's provincial election. Mr Theriault was a lobster fisher and was opposed to the Whites Point Quarry. ii. Encouragement by the Department ofNatural Resources 27. The Nova Scotia Department of Natural Resources was also supportive of Bilcon's investment in the Whites Point Quarry. Departmental officials actively assisted Bilcon with the planning and locating of the Whites Point Quarry. 28. Mr. Kontak came to visit me at my home on December 20, 2004 to examine in detail the drill cores obtained from the drilling program at Whites Point Quarry.
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