Enough isn’t being done to ensure companies are following Canada’s weak lobbying and disclosure rules, according to democracy expert Duff Conacher.

Conacher, founder and long-time coordinator of Democracy Watch, told DeSmog Canada there are numerous ways to evade lobby rules.

“Overall, secret lobbying is legal,” he says. “You just have to exploit the loopholes.”

Conacher says the Lobbying Act is rife with loopholes, making it very difficult for citizens to keep track of when and with whom corporations and organizations are meeting.

For one, if a meeting concerns the “enforcement, interpretation or application” of a law or regulation that applies to a company, they don’t have to log it. The Lobbying Act also only requires paid personnel to log lobbying efforts, which can lead to a “hired gun” billing a company for “strategic advice” and the conducting the lobbying for ‘free.’

Also, only the “responsible officer” of a company or organization — usually the president or CEO — is required to list themselves in a lobbying effort. As a result, it’s impossible to know who actually lobbied the government in a meeting.

For instance, on January 11 (improperly listed as January 12 in the registry), the Petroleum Services Association of Canada met with international trade minister Chrystia Freeland about the Trans-Pacific Partnership (TPP).

Mark Salkeld, the president and CEO of the association, is the only person listed in the communication. But seven other people involved in the oil and gas industry also participated in the meeting (as well as two chiefs of staff and a deputy minister from the government of Alberta.)

On paper, it looks like it was a meeting between Freeland and Salkeld. But it actually included a dozen people.

How Secret Lobbying Occurs

But perhaps the biggest loophole of them all is that only “oral, prearranged” communications need to be logged.

That means that any lobbying that occurs via writing doesn’t qualify. Nor does “accidentally” bumping into someone at a fundraiser or in a hallway.

Conacher says such tactics could be used for “any emails or any meeting where both the minister or their staff or any government official and Lone Pine themselves want to get around a disclosure they communicated. And if the person inside government was also wanting that not to be registered, what they would do is have the person call them at a non-prearranged time.”

In 2008, the Conservatives introduced the revamped Lobbying Act, requiring the monthly logging of communications between lobbyists and “designated public officer holders.” In 2010, MPs and senators were added to the list of designated public office holders, meaning a company or organizations would have to log a report if they made a communication with them.

But the aforementioned loopholes were never closed.

Lone Pine Lobbied Without Registering Report

On January 15, Jeff Smith — a lobbyist representing Lone Pine Resources, the company suing Canada for $118.9 million over the Quebec fracking ban — met with Brian Clow, the chief of staff for the ministry of international trade.

We know this because Lone Pine, like with any company or organization that participates in lobbying of high-ranking public officials including MPs, senators, ministers and staff, must register such a communication in the federal lobbying registry.

You can see the report of Smith’s meeting with Clow here.

The nature of the communication was peculiar for a few reasons: If the company is attempting to negotiate a settlement, it’s safe to assume that such conversations would happen between lawyers, not politicians and civil servants (although Lone Pine may be attempting to put internal pressure on the government to settle.)

But stranger still were the results of an access to information and privacy (ATIP) request that DeSmog Canada made in regards to the meeting.

As it turns out, the meeting on January 15 wasn’t the first time that Lone Pine had lobbied Clow: an email exchange from four days earlier referenced a “discussion they had before Christmas.”

According to another email, Nadia Theodore — then a director of trade negotiations with the foreign affairs department — attended the January 15 meeting with Clow (an email noted that her “policy perspective would be appreciated.”)

Neither of these occurrences were logged in the lobbying registry.

Milos Barutciski, partner and co-chair of international trade and investment at Bennett Jones LLP (the firm that’s serving as counsel for Lone Pine in the suit against Canada), replied to a request made to Lone Pine’s CEO: “I can confirm that our client's government relations advisors understand and comply with their Lobbying Act registration obligations.”

“Note that only oral communications described in the regulations are required to be disclosed in monthly filings. The communications you reference are not within the scope of the regulations.”

The “discussion” prior to Christmas could have occurred via email, meaning it would not have to be logged in the database. And while Theodore’s presence at previous meetings with other lobbyists had been logged 22 times, she didn’t occupy a high-ranking enough position to legally require it.

This reality is a very major problem, and one that points to fundamental flaws in the way that lobbying is tracked and publicized.

‘Secret Lobbying is Legal’ if You Know Which Loopholes to Exploit, Says Democracy Watchdog https://t.co/dGh5LKGbWr pic.twitter.com/J8y1VO2CeO

— DeSmog Canada (@DeSmogCanada) July 8, 2016

Only Two Lobbyists Found Guilty of Breaking Rules Since 1988

The Liberals didn’t mention lobbying in their 2015 platform, although the party pledged to “amend the Access to Information Act so that all government data and information is made open by default in machine-readable, digital formats,” as well as extending the reach of the act to the Prime Minister’s Office.

Conacher says the government has shown no interest in increasing the responsibilities and scope of the lobbying commissioner, meaning many infractions are likely going unnoticed and unpunished.

The current commissioner, Karen Shepherd, doesn’t audit government departments. Since 2004, only 67 lobbyists have been caught violating the Lobbying Act. Almost all have been let off the hook without punishment or public scrutiny.

Only two lobbyists have been found guilty of illegal lobbying since 1988.

Bruce Carson, a former top aide to Stephen Harper, will be receiving a ruling on his alleged prohibited lobbying in the next few months.

Estimated 1,600 Lobbyists Broke Rules Over Past Two Decades

Conacher says there are some 5,000 active lobbyists working at any given time, and that around 25,000 that have registered since 1988. The number of lobbyists over the course of a year — many will deregister as soon as they’ve finished work for a company or organization — has increased in recent years as well.

In 2014-15, Shepherd only conducted 20 administrative reviews, finding one worthy of referring to the RCMP. The identities of lobbyists who violate the code, but aren’t charged, are kept hidden.

“The percentages are so small that our conclusion is only five per cent have been caught,” Conacher says. “And that 1,600 lobbyists have likely violated the code or the act since 2007. But only three have been charged.”

Conacher suggests the lobbying commissioner should be conducting random samples of every government institution: for example, obtaining all communications with ten companies for the last three months, including phone logs for the minister and staff.

Feds Not Interested in Changing Rules

Shepherd’s seven-year term just finished. She’s expressed interest in being reappointed, something that Conacher says “would be a tragedy and continue to undermine transparency in lobbying.”

There’s also talk about merging the responsibilities of the ethics commissioner and lobbying commissioner into one, which could potentially impact the overall effectiveness of the role.

Prime Minister Justin Trudeau has already been accused of getting too cozy with lobbyists (during the campaign, the party’s co-chair had to step down for providing recommendations to TransCanada on how to lobby a Liberal government.)

All up, there’s clearly plenty of work to be done in improving the communication and monitoring of lobbying activities. What’s less obvious if anyone’s going to take such opportunities seriously.

Image: Danny Huizinga/Flickr

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The Alberta government titled its 2016 budget “The Alberta Jobs Plan” but there’s one group in the province that’s disappointed it will not see its jobs proposal funded.   The reclamation and clean-up of abandoned oil sites was proposed as a potential job creator by the Petroleum Services Association of Canada (PSAC). With over 37,000 orphaned and inactive wells across the province and thousands of unemployed, highly-skilled workers, PSAC said the provincial government should dedicated funds to well clean-up and reclamation.   It’s a proposal similar to Saskatchewan Premier Brad Wall’s ask for federal funding to clean up his province’s orphaned oil wells. His request for $156 million went unanswered in the federal budget. Wall argued the funding would have put 1,200 people back to work.   Alberta’s economic downturn has seen 40,000 jobs lost in the energy sector. PSAC argued putting money into decommissioning oil sites could reclaim some oil and gas sector jobs and get companies back to work.    “We are losing tens of thousands of workers from the oil and gas services sector and, along with them, the intellectual capital and expertise we need when the economy turns around,” Mark Salkeld, president and CEO of PSAC, said.   PSAC has advocated for several months that $500 million in funds, whether from the province or federal government, be put into a decommissioning program for orphaned and inactive wells.   But on budget day in Alberta the only funding dedicated to this issue was a $30.5 million injection into the Orphan Well Association, a group funded predominantly by industry (they received a one-time boost of $30 million from Alberta a few years ago) that cleans up sites abandoned by bankrupted companies.   The cost of reclaiming a single well starts around $10,000 but can become millions in some cases. Since its inception just over two decades ago the Orphan Well Association has reclaimed over 650 wells. Over 540 wells have been abandoned in Alberta in the last 12 months, up four times from previous years as especially junior and intermediate companies have struggled with record-low oil prices. An estimated 700 orphaned wells are the result of bankruptcy.   Brad Herald, vice president of Western Canadian Operations with the Canadian Association of Petroleum Producers and director of the Orphan Well Association, said the group is on its way to reclaiming 160 abandonments a year, which is up from 40 to 50 per year previously.   “We’ve effectively quadrupled the wells we’re going to put to bed in just a couple years,” Herald said.   A lack of fresh funds to handle the growing number of abandoned sites means the Alberta government hopes sticking with a polluter-pays model will pan out in the long run.   “Many Albertans and Canadians alike don’t want their tax dollars going to cleaning up after someone else,” Alberta Energy Minister Marg McQuiag Boyd said in a statement to DeSmog Canada.   Don Bester, president of the Alberta Surface Rights Group, agrees. Tax-dollar subsidized reclamation creates the expectation government will simply pay for industry’s abandoned projects, which, according to Bester, removes any incentive for companies to carry out costly clean-up.   “Oil and gas companies that are not in trouble are going to just say ‘well, why not just leave them? Somewhere down the road the government will clean them up.’”   In the meantime, however, thousands of inactive wells dot the provincial landscape on at times valuable farmland, like environmental potholes left for future generations.

Barry Robinson, lawyer and National Program Director with Ecojustice, said if there was ever a time for government to step in with funds for orphaned wells, it would be now during the economic downturn when costs are low and people need jobs.   “The sooner you clean up the really old wells the less environmental risk you have,” he said.   Robinson said government investment could get clean up going in the short term while a longer-term repayment program could be put in place through royalties.   “Ultimately polluter-pays is the way to do it,” Robinson said. “We’d like to see companies post security for the abandonment and reclamation right at the time the well was drilled.”   It would avoid the current situation of companies going bankrupt and disappearing, leaving their wells to be handled by the province. For Robinson, it’s a long-term solution, which, when it comes to Alberta’s orphaned wells, have been in short supply.   Robinson says a big issue is the absence of timeline rules in oil and gas regulations. Without meaningful time limits regulators have nothing to enforce.   “Companies are not doing anything wrong or illegal by simply leaving wells inactive,” Robinson said, adding there are at times “good reasons for wells to be inactive.”     But he said there are orphaned wells dating back to the 50s and 60s that still have not been dealt with.   The longer a well sits abandoned, the higher the risk of accidental release or groundwater contamination.   For the landowners Bester works with, these legacy wells mean they’re stuck with inoperable and potentially hazardous land. 

During a major review of Alberta’s royalty structure last year, the Alberta Surface Rights Group recommended the government integrate clean up payments directly into the oil and gas regulatory structure.   Bester said he also recommended the government require companies to clean up old well before building new sites. Ultimately his group’s recommendations went nowhere.   Bester’s group has met with Environment Minister Shannon Phillips and Minister McQuiag-Boyd on the issue and is hopeful a regulatory change will come this spring during the legislative session.

Image: Chris & Lara Pawluk/Flickr.

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Saskatchewan Premier Brad Wall announced Monday he asked the federal government for $156 million to help fund oil and gas well cleanup efforts. In a press release he said the program “will stimulate economic activity and job creation while at the same time delivering environmental benefits.”

But Saskatchewan already has a fund in place for dealing with so-called “orphan wells,” or wells that have been left behind by companies or individuals who are no longer financially able to pay or legally responsible. Since 2009 the province has collected payments from wells in operation, and if the well doesn’t meet a particular threshold for financial stability the province may demand a refundable deposit as a guarantee. As of last fall that fund held $11.4 million in payments, up a million dollars from the previous year, plus another $45 million in refundable deposits.

The Alberta NDP government said in a statement on Tuesday that the province — despite having about seven times as many orphan wells as Saskatchewan — will not seek federal money because “industry should continue covering costs related to remediating abandoned wells.”

So why does Saskatchewan need $156 million now?

“Some workers have been laid off, some are job-sharing, some doing things like taking Fridays off without pay,” says Kathy Young, chief of communications for the provincial government. “The funds will help these people stay employed.”

The province’s oil and gas industry has shed 1,900 jobs in the past year, according to government statistics, and Wall’s plan would put 1,200 of them back to work.

Young would not say exactly what the money would be used for. She says the Ministry of the Economy came up with the $156 million number based on an estimate of 1,000 well clean-ups, which are typically funded by industry.

The health of the orphan wells fund depends on the health of the industry. Since the money is collected incrementally from well owners, a downturn and the ensuing bankruptcies can mean the province is left holding the bag for cleanups that haven’t yet been paid for.

“If [oil and gas firms] have the ability to pay, the fund is fine,” says Judy Ferguson of the provincial auditor’s office. “If there is a risk to their ability to pay, the province is at risk, financially.”

As of last November the fund was reporting that it had just $5 million in unfunded liabilities, or work that needed to be done that was not covered by money the province had already collected.

In the same budget report, it claimed that in 2014-2015 it had cleaned up 58 orphan wells and a number of other sites, all of which cost $1.7 million. The province has 100 left to go, according to Young — and last year it expected to complete about 70 of them.

It is not clear, however, how many new orphan wells have appeared since the oil downturn prolonged and intensified. It’s also unclear whether wells that are orphaned within a year of breaking ground are included in the province’s figures; companies get a break on their payments for the first year. Young declined to comment on these wells.

Among the proposed purposes for the federal funding, the provincial government said in its press release that it wants to fund “environmental site assessment, the safe removal and disposal of old equipment, the remediation of oil and salt water spills, the restoration and re-contouring of the site, and the re-vegetation of the land.” It is unclear which of these procedures are already required by the language of the existing legislation, and Young has also refused to answer questions about this.

In Alberta, the Petroleum Services Association of Canada is preparing a similar pitch to the provincial government, despite Notley’s statement that taxpayer dollars would not be used to fund reclamation.

“There’s ways to do it with industry in conjunction with the government where we don’t go after the taxpayers,” says association president and CEO Mark Salkeld, saying he wants to explore “partnerships” with the government that would tap into an as-yet undetermined pool of money.

“We just like the whole concept,” he says. “If you’re going to spend money on infrastructure — if they’ve got money to spend putting people back to work again — well, then we can put people back to work again.”

He says the petroleum service association’s proposal should be ready in two weeks, and that he is “a bit miffed” that Saskatchewan beat it to the punch.

“It’s such a great idea,” he says. “We wish we were first to it.”

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