Enbridge and the black spots of the leopard - part 2
The BC government has just put forward five
requirements for it to agree to Enbridge’s Northern Gateway pipeline
proposal. These include commitments from Enbridge itself, as well as the
Harper federal government and the Alberta provincial government. But in
any such arrangement, everything depends upon how serious and
responsible the parties are to meeting those commitments, otherwise the
arrangement is not worth the paper it is printed on.
For its part, the Harper government has been
backing away fast from stronger regulation and oversight at the federal
level, which, as the U.S. National Transportation Safety Board has
noted, is necessary to ensure companies like Enbridge keep their
commitments and avoid oil spill disasters like the one on the Kalamazoo
And then there is the Christy Clark Liberal
government. Despite its newly released “five requirements,” the Clark
government appears to be all over the map in regards to where it stands,
and does not inspire confidence that it could, even if it wanted to,
keep Enbridge in line or resist pressure from the Harper government to
further erode standards.
In regards to Enbridge, it has a long history
of making commitments in words, but violating them in deeds. “Say one
thing and do another” appears to be its unofficial motto. This has
resulted in hundreds of citations being levelled against it by
government regulators over the years for environmental and safety
violations and a huge loss of public trust.
The U.S. National Transportation Safety Board
characterized the company as having “an operating culture in which not
adhering to approved procedures and protocols was normalized.” In other
words, Enbridge not only fails to meet commitments it makes to external
regulators, but also those that it makes internally. As the NTSB noted
in regards to the Kalamazoo River spill, “if Enbridge’s own procedures
had been followed during the initial phases of the accident, the
magnitude of the spill would have been significantly reduced” (1).
Enbridge’s CEO at the time of the spill,
Patrick Daniel, was himself known for making solemn commitments to
safety on a regular basis, but not meeting these year after year. For
example, from 2006 onwards, Enbridge’s professed goal was to have zero
spills and leaks (as opposed to 70 the previous year). However, in the
following years, it got nowhere near reaching that goal. In 2007, the
corporation had 65 reported spills and leaks. In 2008, 80 reported
spills and leaks. And in 2009, a whopping 103 reported spills and
leaks. This was followed by another 80 in 2010 (2).
Adding it all up, the total volume of crude
oil leaked from Enbridge pipelines between 1999 to 2010 alone came to
approximately 5 million gallons which “amounts to approximately half of
the oil that spilled from the oil tanker the Exxon Valdez after it
struck a rock in Prince William Sound, Alaska in 1988” (3).
Despite this record, CEO Daniel was still
singing the same safety song several years later in 2011 when, once
again in a letter to Enbridge stakeholders, he claimed that the
corporation was “more committed than ever to meet [its] goal of zero
incidents” (4). Such a statement, of course, has become part of the
company’s “boilerplate” responses to oil spills, a set of responses
which are repeated almost verbatim every time a major spill takes place.
2010 was a particularly bad year for the
company. In July, the Kalamazoo oil spill happened, triggering what has
been described as “the costliest onshore pipeline spill in U.S. history”
(5). In addition, in August 2010, the company was fined $2.4 million
for a pipeline explosion in which two Enbridge employees were killed in
Minnesota three years prior (6). The company had been warned beforehand,
and a federal investigation found that Enbridge committed eight
probable violations leading up to the accident.
If a corporation was serious about safety, it
would make sure some heads would roll – especially at the top of the
organization - for allowing such terrible incidents to happen. This is
especially the case since Enbridge Inc. has been singled out as a whole
for “organizational failure” and a “culture of deviance” from protocol
and procedure. Such systemic problems are first and foremost a problem
But heads did not roll in 2010. Far from
it. The leadership of the company rewarded itself, with all executives
receiving bonuses, as well as compensation for CEO Patrick Daniel being
increased “from $6 million to $8.1 million” (5). A year after the
disaster the bonuses were upped even further for five senior executives
who had their pay increased by over $4.5 million.
The Enbridge leadership appears to be
afflicted with what might be called the Wall Street banker syndrome,
i.e. the greater the disaster, the greater the bonus.
And there is a reason for this. Although 2010
was a disastrous year for safety, it was a banner year for Enbridge in
another way, with the company amassing $970 million in profit (7). As
one analyst noted, while Enbridge does not have a reputation for being
“a star player” in regards to safety, it certainly does have “a good
reputation of delivering for their shareholders” (8).
It is this contradiction between Enbridge’s
narrow private interests and the interests of the public at large that
seem to be at the core of its “say one thing, do another” problem. This
is a serious issue given that both the federal and provincial
governments have a track record of handing over even more power and
responsibility to private corporate interests like Enbridge. In this
situation, who will stand for the public interest?
rupture and oil spill accident caused by organizational failures and
weak regulations.” National Transportation Safety Board. United States.
July 10, 2012. http://www.ntsb.gov/news/2012/120710.html