There is no environmental impairment insurance at Mackenzie
Paper Division. Abitibi-Consolidated Inc. has a comprehensive,
company-wide general liability policy with an overall
deductible that includes third party environmental liability.
The costs of the premium are allocated to each site on
a pro-rata basis based on production units, employee headcount
or other relevant factors. The policy may apply to sudden
accidental losses and potential clean up costs that may
include environmental costs; although (as noted below) specific
claims for environmental costs arising from an accident are not
thought possible.