Enbridge, Pipelines, and First Nations protests

Another day gone by, and another energy sector project is in limbo because of disputes between the corporate sector, the federal government, and Canadian First Nations. The particular conflict in question concerns the proposed Northern Gateway Pipeline (NGP) which has been developed (on paper, at least) by Enbridge, and which would span some 1, 173 kilometers in length, extending from its place of origin outside of Edmonton and terminating near the town of Kitimat in northwestern British Columbia. Unless of course, some 100 First Nations bands have anything to say about the matter.

Now, as with all oil pipeline projects, the NGP has its fair share of adversaries – particularly within communities that would be affected by the proposed route that Enbridge through which chosen to lay its conduit for the black gold emanating from Alberta’s equally controversial Athabasca oil sands. The plans for this development have been complicated by more than just outcry from environmental activists and their ilk. Dozens of First Nations bands with territory straddling the proposed NGP route have outright rejected any construction on their lands, setting the stage for another very public battle between Canadian First Nations peoples, the federal government, and the Canadian corporate sector.

In a recent article about dispute resolution vis-à-vis communities in developing regions, I discussed the so-called “Indian Summer” of 1990 when Mohawk from the Kanesatake First Nations band became violently embroiled with the federal government over a proposed real estate development project that would have encroached on their ancestral lands in Oka, Québec. Many of us remember the tension, the animosity, and the bloodshed which saw Cpl. Marcel Lemay of the Surête de Québec killed while attempting to help remove a barricade that had been erected by Mohawk protestors, blocking access to their village.

As with any conflict between two parties, there are two distinctly conflicting narratives surrounding the dispute around the proposed NGP pipeline. While Enbridge – a major energy conglomerate – promises to provide benefits to First Nations by sharing a portion of all future proceeds from the pipeline’s revenue, the bands feel that their traditional livelihoods of fishing, hunting, and gathering would be under an existential threat from any potential environmental disasters resulting from activities related to the construction and operation of the pipeline.

The plot continues to thicken, with the recent election of Nishnawbe Aski Nation Grand Chief Harvey Yesno to the post of National Chief of the Assembly of First Nations, an organization that represents Canadian aboriginal groups from coast to coast. Prior to the election, one of the candidates for National Chief, Chief Terrance Nelson of the Roseau River Anishinabe First Nation of Manitoba, said that he would personally nullify any attempt to construct the pipeline on native land if he is elected National Assembly Chief, further confirming the brevity of the situation.

Although Enbridge argues that “sixty-percent” of the affected bands along the proposed NGP route support the project, the company has nevertheless rejected requests to release hard evidence in support of that assertion. Adding to the mystery surrounding Enbridge’s purported First Nations partnerships, an equal measure of confusion reigns within aboriginal communities due to questions of legitimacy and representation. The confusion is clear through the lens of recent contractual negotiations; in one instance, Enbridge recently signed a deal with the “Métis Nation British Columbia” which claims to represent Métis interests in the province and of the Metis bands along the proposed pipeline route.

Vancouver-based NEI Investments, which represents thousands of Enbridge shareholders through the company’s subsidiary Ethical Funds, recently filed a motion at the Enbridge annual general meeting in Toronto which further overshadowed the future of this project. While NEI holds only about 1% interest in Enbridge, the firm is still a major player in the world of Canadian ethical investments, and its motion raises further concern about Enbridge straying from its hitherto steadfast commitment to best practice.

NEI Investments cited a number of potential risks to the project which have cast doubt upon the viability of the NGP project including:

• The potential for lengthy litigation against the National Energy Board and the project which when coupled with First Nations opposition could lead to extreme delays
• Possible financial and political consequences which may be suffered in the almost certain event of sustained  protests and blockades during construction
• Long-term damage to relationships with Aboriginal communities in these and other jurisdictions
• Risk of damaging overall corporate reputation as a result of proceeding with this project in the face of widespread opposition

In turn, Enbridge has presented a very different case which is no doubt meant to boost confidence in both its corporate image, and designed to turn the tide in favour of the NGP project. In particular, the energy giant claims that:

• The company has disclosed substantial information about the Gateway project and the risks it faces
• The project enjoys significant support from the First Nations along the pipeline corridor
• Support from the First Nations is not a legal requirement
• The National Energy Board (NEB) is ultimately responsible for ensuring that the Crown’s duty to consult is fulfilled
• It is premature for the board to discuss plans for the Gateway project until the NEB decision is rendered

At the end of the day, the NGP debate is a narrative with many different storylines and numerous lessons to be learned. First, this dispute has shown that even a foremost leader in ethical business like Enbridge can get entangled in a project with good intentions, and end up on the wrong side of social and environmental positivity. Second, question marks are raised again regarding corporate and governmental commitment to respecting the wishes of First Nations communities and to avoiding conflagrations like the Oka Crisis. Finally, the issue of shareholder resolution and activism takes front and centre stage, underscoring the importance of ethical investing.