BC Hydro is the utility that keeps the lights on in B.C. and generally it does a fine job of restoring wind-toppled power lines and firing up our smart phones and flat screens.

What isn’t going so well for the Crown corporation are its finances, which Energy Minister Michelle Mungall calls a “mess” and project finance expert Eoin Finn says are in the worst shape of any other public or private utility in North America.

Yet the NDP government has retained most of BC Hydro’s board of directors appointed by the previous BC Liberal administration — board members who were responsible for fiduciary oversight while the mess was gathering momentum — which raises troubling questions about the government’s readiness to fix problems at the deeply indebted utility.

And instead of implementing far stricter rules to avoid the perceived conflicts of interest that dogged the BC Hydro board during the BC Liberal era, most of the NDP’s recent appointees to the board have a strong connection to Site C dam project and other BC Hydro contracts, or to large mining and energy projects proposed for the province — a trend that government accountability experts call disturbing.

“If you are a publicly traded company and somebody credible comes along and says your finances are a mess, and the public accepted that your finances were a mess, the board would be dismissed,” said Dermod Travis, executive director of Integrity BC, a non-partisan political watchdog group. “And likely the entire executive team would be dismissed as well.”

Travis said while there is no doubt that BC Hydro board members have many professional qualifications, the NDP government “has left itself deeply exposed for a set-up by leaving this board in the hands of the BC Liberal party, which is effectively what they’ve done.”

“I think it’s going to be a recipe for stalemate or disaster.”

The NDP did fire BC Hydro board chair Brad Bennett, an advisor to former Premier Christy Clark who spent two election campaigns travelling on Clark’s bus and who, while he was BC Hydro chair, nominated Clark to run for re-election for the Liberals in the riding of West Kelowna.

And they gave the boot to board member Jack Weisgerber, a former Liberal MLA who was former B.C. premier Gordon Campbell’s energy minister and who worked as a BC Hydro consultant on the Site C dam from 2007 to 2014.

But six BC Hydro board members appointed by the BC Liberals remain, and five are donors to the BC Liberals, according to a search of B.C.’s political donations database.*

“There is no-one on that board today that would make me feel comfortable [about] a new direction,” Travis told DeSmog Canada.

“It’s a full steam ahead board. When you have a minister saying that BC Hydro’s a mess, the last person you should leave in charge, to make an analogy, is to leave the arsonist to put out the fire.”

Who are BC Hydro’s new board members?

Professional engineer John Nunn is one of the new board members appointed by the NDP in January. Nunn’s board bio on BC Hydro’s website describes him as an “engineer with over 40 years of Canadian and international experience in hydroelectric and water storage projects.”

What the bio doesn’t say is that Nunn was the chief project engineer for the Site C dam on B.C.’s Peace River, working for the engineering and consulting firm Klohn Crippen Berger, a Vancouver-based company that currently holds a contract, along with SNC Lavalin, for “design services” on the Site C dam project, according to BC Hydro.

Klohn Crippen donated almost $30,000 to the BC Liberal party between 2005 and 2016 (compared to zero dollars to the B.C. NDP).

According to Klohn Crippen Berger’s website, the company has provided “comprehensive engineering and support service since the earliest days of the Site C project.”

These include a 2005 assessment of design issues that “could affect the project cost” — then pegged at about $2 billion — and comprehensive engineering and consulting work services from 2009 to 2014, such as an acid rock drainage and metal leachate management plan.

Jim Brander, a professor at the UBC Sauder School of Business who focuses on Crown corporations, said there is a clear conflict of interest if companies that employ BC Hydro board members — or companies that used to employ board members — are awarded new BC Hydro contracts.

“It would look very suspicious if these new board members were there and new contracts were awarded to their old companies,” Brander said in an interview. “That’s an obvious conflict.”

Brander also said it is not unusual for new governments to leave crown corporation board members in place and that generally there is not a lot of turnover on these boards following the installation of a new government.

But he expressed concern that companies that donated to the BC Liberals — Klohn Crippen Berger, for example — received Site C dam and other BC Hydro contracts, saying “I don’t like the scenario of making donations and getting contracts.”

Vancouver attorney Christopher Sanderson was also appointed to the BC Hydro board in January.

Sanderson is a utility regulatory lawyer who has worked for BC Hydro on a “number of regulatory and judicial proceedings involving the extent of the Crown’s obligation to consult First Nations.”

That’s according to the website of Sanderson’s law firm Lawson Lundell, a company that donated $31,500 to the BC Liberals between 2005 and 2017 (there is no record of any donations to the NDP.)

Lawson Lundell currently represents BC Hydro in B.C. Utilities Commission hearings into BC Hydro’s $1.2 billion purchase of the Waneta Dam and generating station in Trail from coal giant Teck Resources Ltd. The Waneta Dam produces slightly less than one-half of the power that Site C would generate.

Sanderson has also represented the corporation Woodfibre LNG, which plans to build a liquefied natural gas processing and export facility near Squamish.

Notably, Woodfibre announced that it would proceed with the project on the same day that the former BC Liberal government made public its new eDrive electricity rate, offering a significantly lower power price to LNG projects that use hydro instead of natural gas.

BC Hydro’s website notes that it has been asked to supply power to Woodfibre LNG.

Woodfibre donated a total of $63,750 to the NDP between 2014 and 2017 and a total of $98,000 to the BC Liberal party between 2015 and 2017.

“If you have even the appearance of conflict of interest you should be disqualified [from the board of a Crown corporation],” said Duff Connacher, a founder of the civic organization Democracy Watch.

“If you don’t have strong conflict of interest and appointment laws you don’t have democracy,” said Connacher, a lawyer, academic and internationally recognized leader in the areas of democratic reform and government accountability.

A third BC Hydro board member appointed by the NDP in January, Robert Gallagher, is the retired CEO for New Gold, a company that donated $28,500 to the BC Liberal party between 2006 and 2011. New Gold donated $3,050 to the NDP from 2012 to 2013.

A New Gold project in B.C., the proposed Blackwater Gold mine in the Nechako Plateau southwest of Prince George, is currently under consideration by the B.C. Environmental Assessment Office.

“There’s something about a publicly traded company that seems to be entirely lost on the boards of public agencies and crown corporations in British Columbia,” Travis said.

“And that is the independent director, the person who has no attachment to anyone or anything who sits on that board of directors. The problem that you have with this particular board, even with the new appointees, is that you have cheerleaders. You don’t have devil’s advocates.”

“I think it’s going to be a recipe for stalemate or disaster.” https://t.co/fiA0waXpK1

— DeSmog Canada (@DeSmogCanada) March 19, 2018

Still no BC Hydro CEO

The NDP also maintained the status quo at BC Hydro when it promoted Chris O’Riley, the utility’s vice-president and a long-time hydro employee who helped shepherd the Site C dam project, to the role of Chief Operating Officer (COO) last summer.

Last August 30, O’Riley told the watchdog B.C. Utilities Commission that Site C was “on time and on budget.”

Yet, only three months later, it was revealed that the project had fallen behind schedule and had climbed $2 billion over budget, prompting former BC Hydro CEO Marc Eliesen to assert in an affidavit that BC Hydro executives had mismanaged the Site C dam’s budget and cost control process and that they are “not capable” of accurate estimates or controlling costs.

The NDP has not filled BC Hydro’s CEO position since it dismissed Jessica McDonald, former Liberal premier Gordon Campbell’s deputy premier and head of the B.C. public service (McDonald’s ex-husband Mark McDonald ran former Liberal premier Christy Clark’s election campaigns.)**

Brander said it is “a bit strange” and “a little surprising” that BC Hydro does not have a CEO. The successful business model, he said, is that a COO reports to a CEO.

Premier John Horgan, asked by DeSmog Canada about the lack of a BC Hydro CEO, said at a media briefing last week that he has “confidence” in O’Riley and that it is up to BC Hydro’s board to make a decision about the CEO position.

For now at least, the NDP has created a new BC Hydro board position called an Executive Chair, appointing Ken Peterson, a electricity industry veteran, to the role. Peterson is the former CEO of Powerex, the marketing and trading subsidiary of BC Hydro.

Powerex was one of dozens of electricity trading companies accused of selling power to California at inflated prices in 2000 and 2001 during summers of electricity shortages. The subsidiary settled a lawsuit in 2013, paying US $273 million in cash to California and offering state electric utilities $477 million in credit.

(A Ken Peterson is listed on the B.C. political contributions registry as having donated a total of $3,500 to Premier John Horgan’s nomination and leadership campaigns in 2004 and 2011, although, in the absence of full disclosure, it may not be the same Ken Peterson.)

NDP recently re-appointed BC Liberal board member

Horgan told DeSmog Canada at the same media briefing that Peterson is “taking stock of the [BC Hydro] executive, he’s taking stock of the board members. And we’re going to be replacing board members as their terms expire.”

Yet only three months ago, the NDP re-appointed John Ritchie to the BC Hydro board when his term was up.

Ritchie, a civil engineer who was installed on the Hydro board by the BC Liberals, is a former senior consultant for Hatch, an engineering and consulting firm that BC Hydro hired to work on Site C.

Together with Klohn Crippen Berger, Hatch holds a long-term contract with BC Hydro to work on dam safety projects that “may include dams and spillways,” according to an announcement of the agreement on Klohn Crippen Berger’s website. The agreement is valid until 2024, the year that Site C will become operational.

Like the five other board members retained from the Liberal era, Ritchie sat on BC Hydro’s board while the price of Site C climbed from $8.8 billion in 2016 to $10.7 billion in 2017.

Hatch donated $10,000 to the BC Liberals in 2009, the year before Campbell announced that his government would proceed with the Site C dam. There is no record of any donations to the NDP.

And when Hatch was part of a larger firm called Hatch, Mott MacDonald, it also donated just over $4,000 to the BC Liberals between 2007 and 2011, along with $1,600 to NDP candidate Gabriel Yiu in 2013.

Connacher said B.C. is in urgent need of a fully independent appointments commission comprised of people outside government that are chosen by all political parties with seats in the legislature.

“They should be required to do a public, merit-based search for nominees for appointments,” he told DeSmog Canada.

Travis agreed that board appointments should be reviewed by all political parties, noting that it can save money for taxpayers because after a change in government “you won’t have to be firing as many people as we do now.”

Boards need people who aren’t afraid to hit the pause button to avoid boondoggles, he said.

“We need people who can look at government and say, ‘that might make for good politics, but it’s lousy business and I’m not supporting it.’ ”

*Updated at 9:40 p.m. on March 19, 2018: The story originally stated that three of the remaining six BC Hydro board members appointed by the BC Liberals are donors to the BC Liberals, but further research has indicated that five of six are actually donors to the BC Liberals.*

** Updated at 10:42 a.m. on March 20, 2018: This story has been updated to reflect that Mike McDonald, not Mike Marrisen as previously stated, is Jessica McDonald’s ex-husband and worked on Christy Clark’s election campaigns.*

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Rumoured changes to the way the federal government makes decisions about offshore oil and gas projects have fishermen and environmentalists crying foul on Canada’s East Coast.

The changes would give offshore petroleum boards in Nova Scotia and Newfoundland and Labrador a major hand in future environmental assessments, a move that Gretchen Fitzgerald of Sierra Club Canada calls a “betrayal.”

“This is more than what the oil companies would have got under Stephen Harper,” Fitzgerald, director of Sierra Club Canada’s Atlantic region chapter, told DeSmog Canada.

Offshore oil and gas boards were originally designed to promote oil and gas development. But now they may be assigned a major role in assessing the environmental risk that development poses. These conflicting roles — part regulator, part promoter — is a major source of concern.

For Ottawa, the stakes are high. In 2015 the Liberals were elected in part on the promise to “make environmental assessments credible again.”

DeSmog Canada took a deep dive into the murky waters of offshore petroleum boards to help understand the concerns about the proposed changes.

What are offshore petroleum boards?

There are two such entities in Canada — the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) and Canada-Nova Scotia Offshore Petroleum Board (C-NSOPB). Both were created shortly after the Atlantic Accord of 1985, which established joint management and resource sharing of offshore oil and gas resources.

“The boards were created and primarily designed to ensure economic benefits from oil and gas development,” said Angela Carter, assistant professor of political science at the University of Waterloo and expert in Newfoundland’s offshore regulatory structures.

“Environmental responsibilities are a secondary concern. So there’s something very wrong about the Boards taking on lead environmental assessment responsibility.  — that is not their primary function.”

The chair and CEO of Newfoundland and Labrador’s offshore board previously worked at Chevron, while his counterpart on the Nova Scotia board was the former CEO of Sproule, a Calgary-based petroleum consulting firm. Other board members have industry experience with companies including ExxonMobil, Nexen, Encana, the Maritimes Energy Association, Lasmo and offshore fields including Hibernia, Terra Nova, White Rose and the Sable Offshore Energy Project.

There are no marine biologists on either of the boards, Carter pointed out.

Newfoundland and Nova Scotia both have significant economic stakes in the development of offshore resources, with plenty of potential revenue from royalties and taxes on the line.

ICYMI: BP Wants to Drill Underwater Wells Twice the Depth of Deepwater Horizon in Canada

Both provinces are facing fiscal woes, so their governments — which jointly appoint board members with Ottawa — aren’t exactly advocating for environmental laws that would restrain future development prospects. For example, Newfoundland recently excluded emissions created by offshore oil and gas projects from its greenhouse gas legislation.

“The supposed prosperity that this industry was supposed to bring hasn’t panned out in either province,” Fitzgerald said. “But they’re desperate for the royalties.”

What are the potential changes being proposed?

In mid-2017, the federal government released a discussion paper about its broader overhaul of the environmental assessment processes in Canada.

While the discussion paper only made a handful of references to offshore oil and gas projects, it set off serious alarms for fishery and environmental groups.

That’s because it proposed that future environmental assessments of offshore oil and gas projects would be “jointly conducted” between a new federal “impact assessment” agency and the relevant offshore petroleum board. The Canadian Environmental Assessment Agency currently heads up assessments for major offshore projects, so this would be a significant shift.

Fitzgerald said it would effectively be a de facto abdication to the offshore boards, pointing to an ongoing court case over an oil drilling lease in the Gulf of St. Lawrence, which the federal government passed up the opportunity to intervene on despite having the ability to. As she put it, the federal government is often very reluctant to step in.

ICYMI: How Oil Lobbyists Pressured Canada to Allow Drilling in a Marine Park

While the potential change doesn’t go as far as some would like — with industry and politicians calling for the delegation of offshore boards as “responsible authorities” like the National Energy Board and Canadian Nuclear Safety Commission, which have the power to conduct environmental assessments — recent precedent suggests boosters may get close to the same thing.

“In a way, they are delegating to the provinces what is supposed to be a federal responsibility over our endangered species and over our oceans to a board that’s in a conflict of interest position from the get-go,” Fitzgerald said.

Okay, what would be a better way of doing things then?

Well, listening to the expert review panel on environmental assessments appears to be a good start.

The four-person panel advocated strongly for a single agency to perform all environmental assessments: “An authority that does not have concurrent regulatory functions can better be held to account by all interests than can entities that are focused on one industry or area and that operate under their own distinct practices,” the panel wrote.

According to critics, taking this approach would help avoid the conflicting mandates of both promoting and regulating resource development. As the East Coast Environmental Law Association put it in a recent policy paper, this would promote “impartiality, accountability and public trust.”

Carter said Newfoundland and Labrador’s offshore board has a long-standing problem of lack of transparency and accountability, something which must be rectified with any new assessment arrangement.

“A cornerstone of environmental assessments has to be a free flow of information with the public and ample input from independent experts,” she said. “Transparency is fundamental to environmental assessment, but communicating with the C-NLOPB Board has been compared to meeting a wall of silence.”

Industry often criticizes the duplication of environmental assessments between federal and provincial governments. In a recent presentation by the Canadian Association of Petroleum Producers, the lobby group argued that the 2012 reforms resulted in a “fragmented, repetitive licence by licence approach” for offshore activities.

Creating a single, neutral agency responsible for all assessments could feasibly resolve that issue.

What’s next?

We could see draft legislation in the next few weeks.

The Canadian Environmental Assessment Agency recently told Canadian Press it will “ensure that the views of Canadian, as well as facts and evidence, will guide project decisions moving forward.”

However, “evidence-based decision-making” can be difficult to pull off when dealing with a lack of baseline data to assess environmental impacts, which Carter said is the case in the offshore.

ICYMI: Is Canada Fudging the Numbers on its Marine Protection Progress?

“Right now, given the climate crisis, we need to be winding down fossil fuel extraction,” Carter concluded. “We need regulatory regimes that are focused on managing the decline of fossil fuel production, not ones that are focused on streamlining regulatory processes so we can get more oil out faster.

“That’s the opposite direction we ought to go if we’re interested in climate stability.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Senior administrators at the University of Calgary suppressed academic freedom and failed to address glaring conflicts of interest while attempting to establish an Enbridge-funded research centre, according to a report commissioned by the Canadian Association of University Teachers (CAUT) that was released Wednesday.

The report — co-authored by Alison Hearn of the University of Western Ontario and Gus Van Harten of York University — is the result of almost two years of investigation, and starkly contradicts the findings of the university’s own internal review of the situation.

The Canadian Association of University Teachers is a nationwide federation of associations representing 70,000 post-secondary workers.

“Academic staff and professors involved at the centre reached out to senior administrators and said ‘we’re concerned about Enbridge’s influence over the centre, we don’t think we should be a PR firm for Enbridge,’” said David Robinson, executive director of CAUT, in an interview with DeSmog Canada.

“Those concerns were rebuffed. That’s a very serious matter that strikes at the heart of the academic credibility and integrity of work at the University of Calgary.”

Here are five key takeaways from the report.

1) University president Elizabeth Cannon was in a stunning conflict of interest

In 2011 and 2012, the University of Calgary fervently worked to launch the Enbridge Centre for Corporate Sustainability within the university’s renown Haskayne School of Business.

A small problem: the University of Calgary’s president, Elizabeth Cannon, was a board member of Enbridge Income Fund Holdings Board, for which she received an annual remuneration of $130,500 per year (that’s in addition to the $454,000 in salary that she made in 2013). At the end of 2014, Cannon owned over $800,000 of shares in the income fund.

Yet she failed to recuse herself from any of the negotiations for the sponsorship deal with Enbridge.

In fact, she made several direct interventions in the process, including an email in August 2012 to the dean of Haskayne School of Business stating that Enbridge is “not seeing your leadership on this file and are feeling that once the funding was committed, the interest from you was lost. This is not good for you or the university. I want to have a good relationship with Enbridge given that Al Monaco is incoming CEO and our grad (and I am on one of their Boards!).”

The CAUT report concluded this represented a “clear appearance of a conflict of interest” that “should have been readily apparent to anyone who knew of the circumstances.”

Its advice? Quite obvious, really: she shouldn’t have occupied a paid position on an external corporate board as U of C president, or should have recused herself from all involvements with Enbridge.

2) Former Enbridge Centre director Joe Arvai had his academic freedom seriously compromised by the university

Joe Arvai, a former Michigan State University professor and member of Barack Obama’s energy advisory group during the 2008 campaign, was hired on as director of the proposed centre.

Almost immediately, he started resisting the company’s push to create what he called a “PR machine for themselves.” His concerns included Enbridge’s request for the institute to partner with Central Michigan University — which was geographically close to where the catastrophic Kalamazoo River oil spill happened in 2010 and served as an opportunity for the company to try to rehabilitate its reputation in the area.

In addition, he became concerned that the centre’s name and terms would “strip away my credibility when it comes to the kind of research and policy work I do best.”

He eventually left the directorship after Enbridge strongly opposed his dual appointment to the U.S. Environmental Protection Agency science advisory body. Furthermore, he told the CAUT committee that he was actually removed from his position only a week after he indicated his opposition to Enbridge’s proposed Northern Gateway pipeline when asked by the company’s public relations firm.

The report held nothing back on this front.

“This mishandling appears to have been due to a desire on the part of senior U of C leadership to please a significant donor,” the authors wrote. “On repeated occasions, one or more University officials who should have been affirming and defending Arvai’s academic freedom instead undermined it.”

3) The university failed to credibly maintain any independence from Enbridge

The agreement was that Enbridge would provide $2.25 million over ten years to help fund the research institute, which would focus on “corporate sustainability and triple bottom line decision-making.”

In return for a mere $225,000 a year, the company pushed to receive naming rights, influence over who funding awards were given to, ability to push for partner institutions such as Central Michigan University and “customized opportunities to meet with researchers pursuing projects of interest.”

The university happily granted them all their wishes.

That led to business professor Harrie Vredenburg writing an email in August 2011 to Haskayne School dean Leonard Waverman, suggesting the situation “smacks of us being apologists for the fossil fuel industry rather than independent scholars and teachers doing work in a broadly defined area.”

The report concluded that “there appears to have been a significant failure of collegial governance, accountability and oversight in the establishment of the [Enbridge Centre for Corporate Sustainability].”

Robinson of CAUT said in an interview with DeSmog Canada: “It doesn’t surprise me at all that companies want to try to influence university research to their advantage. What does surprise me, and frankly shocks me, is when universities give into those demands so easily.”

4) The university has no serious interest in admitting its mistakes

In response to the criticism following the explosive investigation in late 2015 by CBC News into the situation, the university’s board of governors launched a “comprehensive and independent review,” led by former judge Terrence McMahon.

The 17-page report, which took under two months to prepare, cleared Cannon of any alleged wrongdoing. The university maintains that “the McMahon Report is the proper, comprehensive and independent review of matters connected to the Enbridge Centre.”

The authors of the new report strongly disagreed, concluding the McMahon Report was “undermined by his limited acknowledgement and consideration of the role of academic freedom at universities” and gave “significant benefit of the doubt” to higher-ups at the university.

In an interview with DeSmog Canada, Kate Jacobson — current student and former editor-in-chief of the student paper, the Gauntlet — noted the McMahon Report only looked at whether the university had violated its own “very narrow” policy.

“In my mind, the University of Calgary likes this report because it doesn’t ask any hard questions and exonerates them within the confines of their own policy,” she said.

Furthermore, the University of Calgary’s senior administration refused to participate in the report, despite having what Robinson described as “numerous opportunities in which they could have contributed.” When CAUT came to campus in 2016 to interview faculty members for the report, university provost Dru Marshall warned that the group may not protect the confidentiality of participants.

Without expanding on its reasoning for concluding the report “lacks legitimacy due to flawed process,” the board of governors “considers the Enbridge matter closed.”

Arvai, who now teaches at the University of Michigan, wrote in an email to DeSmog Canada that: “To be perfectly honest, it wasn’t a lot of fun to read the CAUT report because it brought back very vivid memories of the conflicts and intimidation I experienced at the time. But, on a positive note, it’s a vindication after the McMahon report, which felt incomplete and one-sided to me.”

5 Things We Learned from the Damning Report on the University of Calgary’s Connections with #Enbridge https://t.co/hkNXwsCWnV @UCalgary

— DeSmog Canada (@DeSmogCanada) October 13, 2017

5) There are many opportunities for the university to improve, but it won’t be easy

The report concluded with nine recommendations.

They included prohibiting the president and other senior officials from serving for remuneration on any external corporate board, acknowledging publicly that it was wrong for Cannon not to have recused herself from Enbridge-related matters and implementing a policy governing the creation of externally sponsored research institutes.

But that itself might require a re-evaluation of the institution’s entire relationship with the oil and gas industry.

After all, the University of Calgary has a long history of controversies relating to alleged collusion with oil and gas interests, including channeling oil funding for Friends of Science via “research accounts” and housing the Bruce Carson-led Canada School of Energy and Environment.

“This keeps happening because all of these people are part of the same class: they go to the same events, and parties, and Petroleum Clubs,” Jacobson concluded. “They have a vested interest in maintaining the status-quo in Alberta, and that manifests itself on campus in terms of how oil companies are involved.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

On January 9, the National Energy Board (NEB) finally announced the new panel members that will review TransCanada’s proposed Energy East pipeline, replacing the trio that recused themselves in September 2016 after revelations that panel members had secretly met with a TransCanada consultant.

But within hours of news breaking about the new panel members, a notice of motion was filed by the environmental law firm Ecojustice on behalf of Transition Initiative Kenora, calling for the complete cancellation of the entire Energy East review based on an unresolved “reasonable apprehension of bias.”

“The original panel presided over the review for years,” says Charles Hatt, one of the two Ecojustice lawyers representing Transition Initiative Kenora, in an interview with DeSmog Canada.

“All of those important decisions that they made along the way occurred after the conduct that gave rise to the reasonable apprehension of bias, after those meetings with the interested stakeholders.”

Hatt says it is clear the entire proceeding had been tainted by the reasonable apprehension of bias.

“There’d be no way for this new panel to look back and try to determine which of those many decisions were tainted and which were not.”

For Hatt and representatives from Transition Initiative Kenora, it simply isn’t enough for the former panel members to recuse themselves. The original panel’s work is tainted by a the apprehension of bias which Hatt describes as “the idea that there’s been some conduct that in the eyes of a ‘reasonable person’ gives rise to the perception of bias.”

These lingering concerns have led the petitioners to request the National Energy Board void the entire proceedings, leaving TransCanada with the option of starting from scratch.

‘Tainted’ Panel Made Dozens of Preliminary Rulings and Requests

The original Energy East review panel was announced in December 2014.

Only the following month, the two review panel members and NEB chair/CEO Peter Watson met privately with former Quebec premier Jean Charest, who was then working as a consultant for TransCanada.

While the NEB denied it at first, the meeting did in fact include specific discussions about Energy East including suggestions of “using the ‘Lac Megantic example’ to show that pipelines are safer than rail.”

Other private meetings took place that Watson and the panel members didn’t publicly disclose.

At least a year-and-a-half of preliminary work was completed by the panel prior to the beginning of the formal review in June 2016. This work was completed without any acknowledgment that members of the review panel had secretly communicated with the project proponent.

The new notice of motion by Transition Initiative Kenora, submitted to the NEB on Jan. 10, reports that the previous panel decided “dozens of procedural and substantive matters that have shaped the Board’s review of Energy East,” including 27 rulings, six procedural directions and nine information requests to TransCanada.

It notes the original panel also determined when TransCanada’s project application was complete and decided who could or could not participate as intervenors in the National Energy Board’s review of Energy East.

“It’s a continuation of work that we had started earlier,” says Teika Newton, executive director of Transition Initiative Kenora.

“We filed the notice of motion back in August that resulted in the original review panel recusing themselves in September. This is a natural progression on that.”

NEB Has to Respond to Notice of Motion or Refer It to Federal Court

Newton’s organization has specific concerns about the proposed construction of Energy East, especially the impacts of a potential oil spill on water sources, wetlands and marshes.

But she emphasizes the notice of motion is something that should concern any participating group given the need to ensure a fair regulatory process and review: “I don’t think we’re any different or have any unique concerns just because of who we are or where we are.”

“I think it’s an issue that applies universally to all participants,” she says.

Transition Initiative Kenora must now wait for the new panel to formally issue a response to the motion.

Hatt says the NEB will have to hear from all interested parties, which will include TransCanada and many intervenors. It could take weeks or longer to hear from all parties, after which the panel will have to make a decision.

The National Energy Board can refer the matter to the Federal Court of Appeal or could refuse to grant relief.

Hatt says “if and when that happens we will advise our client about challenging that decision in court.”

He adds that the motion provides the federal government with the opportunity to restart the process under a renewed National Energy Board Act and Canadian Environmental Assessment Act, both of which are currently under federal review.

Strengthened environmental laws could result in “a totally different type of review of these important pipeline projects,” Hatt says.

“They’ve put bandaids on the existing legislation but it’s still the legislation that was reformed by the previous government.”

It was also announced on Jan. 9 that Ginoogaming and Aroland First Nations had filed a lawsuit and injunction against TransCanada to ensure proper consultation for pipeline maintenance and prevent “integrity digs” that some fear are actually preliminary work connected to Energy East.

Environmental Defence has also called for the NEB to “pull the plug on the Energy East review and restart it only when an overhauled review process with a credible climate test is in place.”

Newton says her group is “content to just see what happens next in this ongoing saga.”

Image: Environmental Defence poster outlining risks of TransCanada's Energy East pipeline. Photo: Environmental Defence via Flickr (CC BY-NC 2.0)

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Public interest group Democracy Watch released a letter (link to pdf) to ethics commissioner Mary Dawson Friday, requesting she launch an inquiry into former Conservative cabinet minister Chuck Strahl in the wake of revelations that he's working as an Enbridge lobbyist while also serving as Canada’s top spy watchdog.

The letter points to rules in the Conflict of Interest Act that require public office holders to manage their private life to avoid conflicts of interest. Strahl’s work as a lobbyist, Democracy Watch suggests, invites conflicts of interest, rather than prevents them.

Recently the Vancouver Observer revealed Strahl had registered in B.C. as an Enbridge lobbyist. As the chair of the Security Intelligence Review Committee (SIRC), some questioned Strahl’s suitability to judiciously oversee the Canadian Security Intelligence Service (CSIS), the spy agency involved in the monitoring of Enbridge’s Northern Gateway pipeline hearings.

Democracy Watch also notes that Strahl violated the waiting period meant to prevent former public office holders from using their government contacts to advance private corporate interests.

Enbridge met with Strahl in his role as a cabinet minister on April 29, 2010. Strahl left his position on May 17, 2011. Five months later, in October 2011, Strahl signed an open letter in support of Enbridge's Northern Gateway Pipeline. In December of 2013, Strahl registered as a B.C. lobbyist listing Northern Gateway Pipelines L.P. as his client.

According to Duff Conacher, board member of Democracy Watch and adjunct professor with the University of Toronto faculty of law, Strahl is allowing his work with government departments and Enbridge to overlap in illegal ways.

“There’s a rule that you cannot work for any entity, or any organization, or anyone, that you had significant dealings with during your last year in office… And therefore Strahl should not have been dealing with Enbridge until May 18, 2013, which would have been two years after he left office,” he told DeSmog Canada.

"The open letter Strahl signed on to was illegal,” Conacher said. “You’re not allowed to make representations to anyone for any entity that you had significant official dealings with during your last year in office.”

Yet signing an open letter in favour of Enbridge projects is just the beginning of Strahl’s misdeeds, according to Conacher. Far more serious is Strahl’s position with the oversight committee tasked with protecting citizen rights from CSIS.

“Beyond that though there is a general rule about preventing conflicts of interest…so I don’t think he can work for Enbridge as chair of SIRC because that causes conflicts; it does not prevent them.”

In addition, Conacher worries Strahl’s cabinet position may have exposed him to government information that could be used to benefit Enbridge’s push for the Northern Gateway pipeline.

“There is another rule, that never ever in your entire life after you leave cabinet can you give advice using secret information that you’ve learned on the job,” he said.

“It’s not only that your not allowed to share the secret information; you’re not allowed to do that. But you’re not allowed to even give advice using the secret information. He can’t un-know what he knows and so his advice is based on what he knows. What he knows is secret information, therefore he’s prohibited from giving that advice.”

Canada’s ethics commissioner Mary Dawson has been politely side-stepping the issue, Conacher says. Her track record shows she tends to avoid controversy as well, with over 80 former ethics rulings made in secret. Conacher’s concern is that Dawson, a Conservative-appointed commissioner, is avoiding the hard questions — questions Democracy Watch details in its eight-page letter to her.

“It’s beyond conflict of interest. It’s also these other rules that apply and it’s not resolved by Strahl just recusing himself if a complaint comes forward about CSIS and Enbridge," he said. “And that’s what Mary Dawson has been dodging.”

Dawson is not required to investigate ethics complaints filed by members of the public. She would be required to investigate, however, if a member of parliament made the same complaint.

Strahl’s behaviour, Conacher says, is “very dangerously undemocratic” and “unethical” because it places “the interests of a few private companies way above the public interest.”

“That’s why it’s illegal,” he says. “Thankfully, it’s illegal.”

The Conflict of Interests Act has been reviewed over the past year by the House of Commons ethics committee. A full report outlining the position of each federal party on ethics issues is due out this week or when parliament resumes.

“You don’t have democracy if these rules are not strict, strong and enforced. As everyone knows: if you allow private interests to trump public interests then you don’t have democracy,” Conacher said. 

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