Enbridge faces AGM challenge
By TRACY SHERLOCK, Vancouver Sun
May 8, 2012
NEI Investments’ Ethical Funds has filed a motion to be voted on at Enbridge’s annual general meeting in Toronto Wednesday, asking the company to address the risks associated with first nations’ opposition to their proposed pipeline.
The $5-billion Enbridge Northern Gateway oil pipeline project would transport oil from Alberta’s oilsands to Kitimat, where it would be loaded on tankers and shipped around the world. The legal, operational and reputational risks cited by Ethical Funds include a possible lengthy court battle, delays from protests or blockades and potential damage to Enbridge’s reputation, NEI Investments said in their proxy alert to shareholders.
“ ... [I]f the company cannot provide a compelling rationale that refutes the risks that we’ve identified, then the prudent course of action would be to put the project on hold,” said Jamie Bonham, manager, extractives, research and engagement at NEI Investments, the parent company of Ethical Funds.
Enbridge is encouraging shareholders to vote against the motion because they are making good progress in their negotiations with first nations along the proposed pipeline route and think the opposition is overstated, said Todd Nogier, Enbridge Northern Gateway spokesman.
“We have solid support of first nations for the proposal,” Nogier said. “We’ve been consulting with first nations for years. Nogier said that many of the first nations with land or land claims along the route have agreed to a 10-per-cent stake in the pipeline.
A coalition of Northern B.C. first nations called the Yinka Dene Alliance and their supporters have taken a train across Canada to the AGM in Toronto to protest the proposed pipeline.
Ethical Funds holds Enbridge shares in their Ethical Balanced Fund. Enbridge is one of the top 10 holdings in the fund with 148,700 shares worth about $6 million, Bonham said, adding that they’ve owned the shares for more than six years. Bonham said that aside from this project, Enbridge is a good example of an ethical company.
“They’re very progressive … they have significant investment in renewable energy and they’re probably the only energy company in Canada that accepted greenhouse gas reduction targets and met them,” Bonham said. “They’ve had fantastic returns over a number of years, which is an indicator of management quality, but companies can make bad decisions, and I think this is one of them.”
The project will affect more than 80 first nations communities and organizations, the motion states.
“Numerous court rulings have reaffirmed that Aboriginal communities must be consulted and accommodated on developments that potentially impact their title and rights, as guaranteed in the Constitution. Gateway faces vocal opposition from several Aboriginal communities who state the project will be detrimental to these rights,” the motion states.
Bonham said NEI Investments has been talking to Enbridge about this motion since November, but they are not satisfied with the response. However, he said he’s not convinced that first nations’ opposition will permanently kill the planned pipeline.
“If the project could get the free, prior and informed consent of the communities involved, then it could move forward,” Bonham said.
Results of the vote should be known by this afternoon.
Enbridge AGM: Pipeline protest drums pits pipelines against land, water
May 09, 2012 | Vanessa Lu
The proposed Northern Gateway pipeline appears locked on a collision course, as First Nations chiefs put Enbridge officials on notice again that they won’t budge from their opposition.
“We are a very patient people,” warned Chief Na’moks of the Wet-suwet’en nation, near Smithers, B.C., at Enbridge’s annual general meeting in Toronto on Wednesday.
“We don’t base the wellbeing of life on money,” said April Churchill, vice-president of the Haida Nation. “Money will not change our minds.
“There is no compensation that is acceptable that will kill off cultures and kill off people.”
First Nations leaders have repeatedly sent their message to Enbridge officials, and they travelled thousands of kilometres from British Columbia by train, to make their point again in Toronto.
They argue the pipeline may bring jobs, but will also change their way of life, and possibly destroy land and water in the event of a spill or accident.
They were joined by more than a hundred protesters outside the King Edward Hotel, holding placards ranging from “no tankers” to “no pipeline without consent.” “We can’t drink oil,” they chanted.
Inside, Enbridge CEO Patrick Daniel also repeated his message again and again that the pipeline is of critical national interest.
Designed to move 525,000 barrels of oil a day, it would bring bitumen from Alberta’s oilsands across to the west coast of British Columbia, where the crude could be loaded on tankers to Asia, especially China.
It will also bring 193,000 barrels of condensate a day from Kitimat to near Edmonton, used to thin heavier oil for pipeline transport.
But Daniel said Enbridge won’t unilaterally impose the $5.5 billion pipeline, which would stretch 1,172 kilometres from Bruderheim, Alta., to the port of Kitimat, B.C.
“We’re not going to force anything through,” he said.
He said energy is a way to enable “the kind of life we all want,” though he conceded people don’t want that infrastructure in their backyards.
And he acknowledged getting unanimous support was unlikely.
“Unfortunately, I don’t think we have done a project anywhere where we had 100 per cent acceptance,” Daniel said. “No energy infrastructure project is accepted by everyone.”
He said some communities along the pipeline are supportive of the project, in part because of the potential economic boon the construction would bring. To date, he said 22 out of 45 First Nations groups affected have signed on for a 10 per cent equity stake.
But Enbridge will not reveal which groups approve of the pipeline, saying it’s up to them to self-disclose.
He did day those First Nations groups are within 80 kilometres of either side of the pipeline.
During the meeting, shareholders voted down a resolution put forward by NEI Investments, which holds Enbridge shares under its Ethical Funds banner, for more public reporting by next May of the risks involved with the Northern Gateway pipeline.
“We are quite alarmed by the level of opposition that seems to be hardening against the pipeline,” said Jamie Bonham, NEI’s manager of extractives research & engagement, in an earlier interview. “The resolution is an action of last resort.”
At the meeting, Bonham said the fund is worried about the significant opposition to the pipeline, and that it will be years before litigation is settled.
“Enbridge has spent considerable time building a reputation as a progressive company in the energy sector,” he said, adding it fears the continuing controversy around the pipeline could damage Enbridge’s reputation.
Only 28 per cent voted for the resolution, while 60 per cent rejected it. Enbridge had urged shareholders to reject it.
Fuelling growing opposition to the project is a recent decision by the federal government to streamline the environmental reviews for major energy infrastructure projects.
Last month, Natural Resources Minister Joe Oliver warned regulatory delays threaten $500 billion in investments over the next decade.
Daniel told reporters after the meeting he is still hoping Enbridge will be able to somehow bring all First Nations groups on side.
“All I can do is commit to working and trying to come up with some way to make this a win-win for all First Nations,” he said. “I don’t have the magic answers today.”
The company, whose lines move the bulk of Canada’s crude oil exports to the United States, also said on Wednesday it would want to play a role in any potential reversal of the massive Capline oil pipeline as it looks to move Alberta oil sands crude to refineries on the eastern Gulf of Mexico coast.
Enbridge would be interested in participating in any acquisition of the underused 630-mile line that now takes oil from Louisiana to southern Illinois.
Earlier Wednesday, Enbridge reported a 14 per cent rise in first-quarter adjusted earnings to $376 million.
With files from Toronto Star news services