Former TransCanada employee and engineer Evan Vokes, who released thousands of pages of records after he was dismissed by the corporation in 2012, believes that a newly acquired internal email shows his managers tried to discredit him for raising the alarm on their safety practices.

Vokes obtained the email in Feburary 2014 through access to information legislation, reports Mike De Souza for InsideClimate News. Most of the message was censored by TransCanada before release, but the first line clearly mentions "managing the EV [Evan Vokes] credibility issue."

"My understanding is that we have been reasonably successful at influencing authorities [redacted] and pointing out EV is disgruntled, and actually had the responsibility to correct these same matters and did not," reads the email, dated July 26, 2013.

TransCanada has not disclosed the identity of the employee who wrote the email or the "authorities" referred to in it. "We are not going to debate interpretations of the wording used by TransCanada staff members in old emails or private records," spokesman Davis Sheremata told InsideClimate News.

The previous records released by Vokes document internal safety issues raised within the energy company over its operations in Canada, as well as in the United States, where it hopes to build the proposed multibillion-dollar Keystone XL pipeline project. Vokes submitted the records as evidence when he appeared before a Canadian Senate committee hearing on energy policies in 2013.

The U.S. State Department, which is reviewing the Keystone XL project, declined to comment on whether they'd discussed Vokes with TransCanada. The Pipeline and Hazardous Materials Safety Administration also declined to comment on the email.

Vokes believes TransCanada's management tried to discredit him because they got "fed up" with his allegations that the company was saving money by skimping on safety inspections and repairs.

 Pipeline section marked 'junk' by TransCanada. Photo by Dave Whitley via Flickr.

A pattern of dismissal 

"There are literally thousands of cracks in the system but they sit there until somebody disturbs them," Vokes told InsideClimate News in an interview. "Whether it's the ground or frost, construction in the area, or a farmer doing work, suddenly all these substandard construction techniques can become a major problem because they were never dealt with during construction."

Vokes's records include discussions that took place within TransCanada about safety concerns that management dismissed. In a January 2011 email exchange, an engineering technologist, Russell Wong, was told by management to "stop these e-mails" when he warned them not to hire a welding company based on its poor performance history. Another engineering technologist asked whether the company would provide inspectors to examine the Keystone pipeline in a June 2011 email. Manager Tom Hamilton, in charge of quality and compliance for Keystone, wrote "Ha ha ha" in his email response.

Another series of internal emails from June 2011 between Vokes and other engineers and managers documents how TransCanada employees were unable to find records on the company's welding procedures for months, after they were reqested by provincial regulator Alberta Boilers Safety Association.

In another June 2011 email, Vokes himself was told by David Taylor, a manager of materials and engineering, to stop raising concerns and "accept where we are and become aligned with where we are going as a company."

TransCanada said that it could not comment on Vokes' eventual dismissal or whether the managers in the emails were disciplined, because of privacy and confidentiality issues.

Breaking pipeline safety regulations and whistleblower protections in Canada

Vokes collected most of the records over his five years working at TransCanada, where he specialized in "non-destructive" examination of pipeline infrastructure using tools and visual inspections. His complaints about pipeline safety led the National Energy Board (NEB) to conduct an audit of TransCanada's operations, released February 2014. The NEB found no immediate safety concerns, but concluded that TransCanada was breaking Canadian pipeline regulations in areas including "Hazard Identification, Risk Assessment and Control…Inspection, Measurement and Monitoring; and Management Review."

Another audit on TransCanada's management, released April 24, found that the company's management wasn't meeting requirements to protect concerned whistleblowers like Vokes.

When asked by InsideClimate News about the email concerning Vokes, the NEB said that TransCanada did not try to interfere with the audits.

"At no time during numerous interactions between board staff and TransCanada staff did the company attempt to influence the board on the character of Mr. Vokes," NEB spokeswoman Erin Dottor said in an email. "The source of any complaint or issue identification in no way impacts the NEB's commitment to take action to mitigate or prevent potential hazards to public safety or environmental protection."

Keystone XL future uncertain

The controversy surrounding the proposed Keystone XL project has brought TransCanada's safety record under close scrutiny. The company's existing Keystone pipeline, which runs from Alberta to Oklahoma, has suffered at least 35 leaks or other incidents since it opened in June 2010. If built, the Keystone XL pipeline would transport 830,000 barrels per day (bpd) of oilsands crude from Alberta to refineries on the U.S. Gulf Coast, crossing several sensitive U.S. water sources. Oilsands development is currently the fastest growing source of greenhouse gas (GHG) emissions in Canada.

The Obama administration's decision on Keystone XL has been continually delayed since the project was first proposed in 2008, and has met with opposition in both the United States and Canada. The final decision on the project isn't expected till November, owing to the latest hurdle–an ongoing court case over the pipeline's route through Nebraska.

Dave Domina, a lawyer representing Nebraska landowners challenging the Keystone XL pipeline's route, said that "TransCanada has a tug-of-war going on between environmental safety and profit." He said that the emails acquired by Vokes probably couldn't be used in the court case, however, though they come into play if the state is forced to restart the approval process.

Meanwhile, Vokes has been notified by the federal privacy commissioner's office that it is reviewing the censored portions of the documents released by TransCanada to him, after the company agreed to an audit. The privacy commissioner's investigator will be meeting with TransCanada management face to face after the materials are reviewed, though the company has asked that Vokes not be present.

Image Credit: TransCanada promotional video screen cap

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Companies responsible for two separate oil spills in Alberta failed to provide adequate oversight for their operations, according to federal government documents released by Environment Canada through Access to Information legislation.

The documents detail how Devon Canada and Gibson Energy violated environmental laws, including the federal Fisheries Act, when their operations cause two oil spills into fish-bearing waterways in 2010.

Gibson Energy, a midstream pipeline operator, spilled a few hundred litres of oil into an Edmonton creek after failing to properly abandon an unused pipeline. According to a warning letter issued to the company from Environment Canada, "Gibson Energy ULC made a business decision to keep the Kinder Morgan lateral full of crude oil and to not purge it with nitrogen."

The pipeline released a "brown foamy substance" into the waterway, indicating the pipeline suffered internal corrosion. "Based on information obtained, I have reason to believe Gibson Energy ULC was responsible for the release of a deleterious substance into (a creek) leading to the North Saskatchewan River and they were not duly diligent in preventing this release," wrote an Edmonton-based inspector and Environment Canada fisheries inspector, Deanna Cymbaluk.

Violations of this kind can encur a fine of up to $1 million or three years in prison in Canada. Similar infractions in the United States are often met with heavy fines and penalties levied against operators.

When Postmedia's Mike De Souza contacted Gibson Energy, communications manager Nicole Collard, refused to comment on the two-year old file, saying "we're not interested in participating in this." The Alberta regulator Energy Resources Conservation Board issued Gibson a "high-risk non-compliance" order for "improperly discontinuing/abandoning a pipeline."

An additional spill, of 350,000 litres, or the equivalent of 3,000 barrels of oil, occurred when a blowout could not be contained for 36 hours by Devon Canada, a major operator in the tar sands.

At the time Devon was conducting steam-assisted gravity drainage oil production, a process that uses steam to heat underground bitumen, allowing the viscous substance to more freely flow up a well-bore. The relatively new technique poses new operational challenges industry may not always be prepared for.

In this instance, Devon lost control of the procedure at its Jackfish facility after a combination of human error and damage cause by sand erosion caused a well failure. According to Environment Canada's Cymbaluk, Devon had "poorly documented protocols" and a "lack of planning for a well failure" at the time of the accident.

Tim Waters, manager of operations engineering at Devon told Postmedia "there were certain risk areas around the well-head and how the wells were operated that we didn't fully understand, quite honestly."

Devon is one of many tar sands operators hoping to improve their image through public relations campaigns. Recently Devon released a series of television commercials intended to highlight the company's environmental stewardship at its Jackfish facility.

Greenpeace's Keith Stewart suggests the commercials can't undo the industry's operational shortcomings: "When the oil industry's poster child for clean water can't stop a blow-out for 36 hours, it makes me wish we had stronger truth-in-advertising laws in this country."

Waters, however, maintains the commercials are accurate and demonstrate Devon's concern for the environment.

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This post is second in a series on the Canada-China Investment "Straitjacket:" Exclusive Interview with Gus Van Harten. You can read Part 1 here and Part 3 here.

Right now Canadians stare down the barrel of a 31-year long legal trade agreement with the Chinese government that did not become public knowledge until September 26, 2012.

The trade treaty, known as the Foreign Investment Protection Agreement or FIPA, has garnered notable opposition in the past three weeks, with NDP trade critic Don Davies calling for public hearings, Green Party MP Elizabeth May calling for an emergency Parliamentary debate, and campaign organizations Leadnow.ca and SumofUs.org gathering over 39,300 opposition signatures (and counting) to deliver in person to Ottawa.

Yesterday, the Canadian Press reported the Harper government's refusal to host public hearings. Elizabeth May's October 1 request was also denied on the grounds that FIPA does not meet the test of emergency.

The trade agreement, or treaty, as it is called, is slated for ratification at the end of this month. The Commons trade committee will be briefed on the document in a one hour hearing.

With a trade deal that threatens Canadian sovereignty looming on the horizon and a government committed to expediting its approval, DeSmog caught up with trade investment lawyer and Osgoode professor Gus Van Harten to talk through some of the details.

In this segment Van Harten discusses why the Canadian government would pursue a deal of this sort, outlining the implications of the agreement for environmental legislation in Canada and development in the tar sands, especially in light of the spring's Omnibus budget bill C-38.

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Van Harten also considers the implications of the trade agreement for undecided energy projects like the Northern Gateway Pipeline and, significantly, if first nations and environmental groups were to blockade projects of this sort – who's rights the government would be obliged to protect. 

Below is Part 2 of our interview:

Carol Linnitt: As you have described it, it doesn't seem to make much sense for Canada to sign this agreement.

Gus Van Harten: I can tell you – trying to think about why the government would sign the China-Canada deal – it’s very unfavourable to Canada because of the way in which, as I was saying earlier, we have an open economy and China’s is closed, so the deal really, in fact appears likely to benefit Chinese investors far more than Canadian investors in China, because there will just be more Chinese investment here, because we’ve allowed more in. But I was trying to think why the government might do it, well I thought of different reasons, one might be that they sort of want to score the political bragging rights, of, ‘we signed the deal’, which is, you know, very short sighted, but sometimes governments are kind of shallow like that.

Another explanation would be that they want to open up the economy to this investment, and so that shareholders in Canadian companies in the oil patch can sell their shares at a premium to the Chinese, and get that benefit.

But another more troubling explanation which would require greater sophistication by the government but is not – certainly shouldn’t be ruled out – is that they foresee changes in attitudes about the oil patch, in the United States, in Canada, and that this may lead to new regulations on the oil patch, in that, climate can’t just be wished away forever, and that governments might take steps to regulate the oil patch in ways that investors wouldn’t like.

If you bring in a lot of Chinese investments, and you sign the Canada investment deal, you kind of get the Chinese investors to do your dirty work for you, for years after the current government is gone, because the Chinese investors can beat up on new governments that actually do take steps to change the balance between the investor rights in the oil patch and the general interest in addressing climate change or other issues like pollution and so on.

CL: Wow.

GVH: So that’s probably the most troubling aspect, is that this is designed to be a straitjacket, and it will have effect on Chinese investments that have been let in for the next 31 years after the deal’s been signed. Because the deal has a 15 year term, you have to give another year’s notice to terminate the deal and then after it’s terminated it still applies for another 15 years for investments that are in the country at the time of termination.

CL: So you’re saying that this deal has an active shelf life of 15 years, but stays in effect for 31 years?

GVH: Yes, the treaty does, meaning the treaty will be available to protect Chinese investors, including not just the Nexen investors, if they’re allowed to buy Nexen, but any other Chinese investors who come into the oil patch. I don’t think the government wants to see the whole oil patch Chinese owned, but I think it’s quite likely we’ll see significant portions of it Chinese owned, and once significant portions are Chinese owned, the you’ve also given lawyers who work for the Chinese investors this powerful tool to beat up on governments anywhere in Canada, you really frustrate the ability of Canadians to elect governments that are going to get more serious about the environmental consequences of the oil patch. That will be for 31 years from the date of this deal coming into effect, which is right now forecast to be about a two weeks away.

CL: And what’s the significance of that for, say, something like the northern gateway pipeline project that’s still in decision process?

GVH: Well, I mean, first of all, if that pipeline is owned, if foreign investors are spending money in relation to the proposed pipeline, then they right there could conceivably use the China-Canada deal to object to decisions taken by Canada, for example the British Columbian government, in objection to the pipeline. So the BC government may say ‘we don’t like the deal for the pipeline, we won’t supply electricity to it,’ well if they did that and the pipeline had Chinese money in it, the Chinese investors could say ‘you are discriminating against us, you don’t treat other investors in pipelines the same way in BC, so why are you discriminating with this pipeline, you’re not allowed to do it, and any money we lose as a result, you have to compensate us. You, Canada.’

And that’s not just the money that they put into the pipelines, they that’s their lost profits, that’s the money that otherwise reasonably would have earned, had this pipeline gone forward.

CL: I’m thinking about how tenuous the situation has already become in terms of environmental regulations after the Omnibus budget bill was passed and we saw a severe weakening of our environmental reviews and assessments and regulations. In effect the Harper government has instituted this new legal framework in which our pre-existing environmental laws have been weakened, gutted and now we are introducing this new 'straitjacket' to maintain those laws because of the possible difficulty of ever reinstituting them in stronger ways.

GVH: Yes, exactly, and let me spell it out very precisely. In many cases the arbitrators have allowed the investors to argue under the treaties that their treatment by the government was unfair and inequitable, if the government did not provide a stable regulatory framework. So if the regulatory framework is in a particular state, let’s say its currently denuded state because of the changes in the spring budget to environmental legislation, investors from China now say ‘well, we’re going to invest now because we don’t think any of our projects will be subject to environmental assessments and fisheries act regulations’, and so on. A new government comes in when the projects are underway, and says, ‘well actually we’re putting the laws back in place’. The Chinese investor can then say 'ah, but you can’t because we made our investments based on an expectation that there was a stable regulatory framework and that the previous government promised us that that regulatory framework would be stable’.

And so you can’t change the laws so easily. I’m not saying that the arbitrators necessarily would, but many have, interpreted the treaties broadly enough to allow the Chinese investors to receiver full market compensation in those circumstances from the new government due to a change in the regulatory framework. And, in a way, some of the things that the Harper government has done, I understand second hand – but have not confirmed this myself – that one of the ministers, I think Joe Oliver, had said at press conferences that they were changing the environmental laws because that’s what the investors wanted. If he did in fact say something along these lines, the he could have done nothing more to feed the arguments to the  investors’ lawyers down the road, if a new government decided to put the laws back in place. Because Chinese investors would be able to point specifically to his statements, which would be statements on behalf of Canada, that Canada was prepared to remove its environmental laws in order to bring in Chinese investment because that’s what investors wanted. It almost becomes part of the deal. A new government can reverse that decision, but they will have to pay for it.

CL: Well, that is astounding to hear.

GVH: Yeah, it’s kind of disheartening to those who care about, let’s say, protecting the environment for future generations. But on the other hand, the system has invoked very strong reactions by some countries, and increasingly governments that don’t put investor rights ahead of the rights and interests of everyone else are taking steps to unplug the system as best they can. But the decision to allow the China-Canada investment deal to come into effect will have the greatest impact on Canada’s ability to take sovereign decision with respect to its resource sector since any treaty we have signed since NAFTA. And it is comparable to NAFTA in terms of the effect that it will have. Yet it does not allow any access by Canadian exporters to the Chinese market, unlike NAFTA for the U.S. market. For this reason, it seems to be just a very lopsided deal for Canada.

CL: And this is why the conversation that you see coming, even from conservatives, expressing concerns about the fact that China is not a benevolent nation, that this is why that statement is so significant. They’re not talking about whether these are nice guys or not. This is a much more meaningful and significant thing to say about a county like China when you’re preparing to engage in this kind of deal.

GVH: Well let me give you another example. Under the treaties investors are entitled to something called ‘full protection and security’. Now what that has been interpreted by arbitrators in some cases to mean, among other things, that the government has to protect the investors’ property, assets, from public opposition and public protest. So let’s imagine that there are blockades of the pipeline as it’s being built through British Columbia, let’s say by native groups and by environmentalists. The Chinese will have an expectation, backed by the treaty, that the Canadian government through its police, through the courts, will take strong steps to protect the Chinese investors’ business plans from public opposition.

Now, sometimes public protests in opposition to foreign investments in other countries, I’m thinking in particular of a couple of cases in Latin America, one involving oil drilling in the Amazon by Texaco and then Chevron, and the other involving the disputes over a privatised water system in a city in Bolivia, some of those protests have actually led to violence, people have died, and that becomes part of the context for the arbitrators deciding whether the governments’ protection of the investor were sufficient. So it’s a concern, and I think it’s fair to say the Chinese investors may have a different view of how to handle that kind of situation from what we’re used to in Canada.

CL: And suddenly the onus is placed on the federal government to uphold this agreement, and their loyalty will in some sense be split between preserving this agreement that they have with the company and also protecting the rights of the citizens.

GVH: Yes, exact. So the question that the government will now have to face is, how is it going to balance its obligations to respect Canadian democratic protests, including when it’s actually effective in frustrating a pipeline, to balance that against its new obligations to provide full protection and security, backed by a very powerful international arbitration process, which tends often to favour the investors in its legal approach, and to provide that full protection and security under the treaty to Chinese investors. That’s the question the government will now have presented for itself.

[END OF INTERVIEW PART 2]

Gus Van Harten has written extensively on foreign investment deals. His research is freely available on the Social Science Research Network and International Investment Arbitration and Public Policy website.

Stay tuned for Part 3 of my interviews with Gus Van Harten.

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.