News Release

Spruce Falls Inc., A Division of Tembec Inc., Pleaded Guilty to Charges Under the Fisheries Act

Montreal, Quebec, May 16, 2006 - Spruce Falls Inc., a division of Tembec Inc. that operates the industrial complex in Témiscaming in Quebec, appeared yesterday before a Quebec Court judge and pleaded guilty to charges under the Fisheries Act.

Spruce Falls Inc. pleaded guilty to having deposited a deleterious substance (final effluent from the biological treatment system) into the Ottawa River 16 times between April 9, 2003, and December 14, 2004, in violation of subsection 36(3) of the Fisheries Act. In addition, the company twice failed to monitor final effluent from the biological treatment system. Lastly, between March 1 and June 14, 2004, Spruce Falls Inc. partially ignored a direction issued by an inspector under 38(6) of the Fisheries Act requiring the implementation of measures to prevent further deposits of deleterious substances from occurring.

The $750,000 penalty that Spruce Falls Inc. was ordered to pay consists of a $250,000 fine and a $500,000 payment to the Environmental Damages Fund, administered by Environment Canada. The judge based the decision on a submission submitted jointly by the Crown and the defence. Company officials attested to the fact that an anaerobic effluent treatment system was fully installed at the Témiscaming industrial complex and that the system has been in operation since January 2006. The payment to the Environmental Damages Fund will be used to promote rehabilitation projects. Local community and environmental groups will have an opportunity to submit project proposals for the funds. The Environmental Damages Fund ensures polluters take responsibility for offences and gives courts a way to guarantee that money is directly invested to improve the quality of the environment.

The charges were laid following an investigation by Environmental Enforcement officers of Environment Canada - Quebec Region. Environment Canada investigates potential pollution offences under the Canadian Environmental Protection Act, 1999 and Canada's Fisheries Act. They help ensure that companies, government employees and the general public comply with legislation and regulations that protect Canada's environment.

For aditional information, consult Environment Canada's Environmental Law Enforcement web site.

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