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Operating an oil and gas
company in western Canada has become a much more complicated endeavour in recent years – in large part traceable
back to the rise of the Internet and the age of instant communication. Those
living on the periphery of the industry are becoming increasingly vocal about
the impact of drilling and pipelines and fracking
and trucking are having on the quality of their lives.
In such a fishbowl
existence, then, gaining a social license to operate becomes not just a
one-off exercise for an operator dealing with a landowner, but an
industry-wide commitment requiring coordinated and cooperative efforts by
producers, industry associations and regulators to develop cohesive
consultation plans with a broad range of stakeholders.
“We are all out
there operating in the land base, but we are also in people’s neighbourhoods. Regardless of your company’s size,
people see us as the industry,” according to Patsy Vik,
who is EnCana’s Group Lead, Community Relations. Collectively,
“we are painting a picture that all of us are going to be branded with.
If we (in the industry) all work responsibly and respectfully, we will
reflect positively on other companies. We should all behave in such a way
that we garner respect from our neighbors.”
When the industry fails
in matters of common courtesy, terrible things can happen. Consider the
Keystone Pipeline, which was constantly in the headlines last fall. In an
interview, the University of Alberta’s Andrew Leach suggests that
“it’s important not to take this decision (to postpone a ruling
on Keystone until after America’s presidential election) as an anti-oilsands measure. At least in part, it’s a reaction
to high-profile oil spills in the United States by Canadian pipeline
companies.” Also, he suggested, project proponent TransCanada
Corporation may have been “a bit high-handed” when it planned the
line.
TransCanada spokesman
Shawn Howard disagrees. “Across the entire TCPL system, we deal with
some 60,000 landowners,” he said. “We understand that we need
good stakeholder relations to earn our social license to operate….We
have held more than 300 community consultation meetings” as part of
stakeholder relations for Keystone, for example.
Howard believes “a
well-financed, well-organized group of anti-hydrocarbon environmental groups
have taken on the project. The original Keystone pipeline was approved
without any problem. For them this is a very important symbolic
victory.” Clearly frustrated, he blusters that “A lot of the
information (these groups) submitted to the hearings was simply not true and
certainly not scientific. They would submit each other’s news releases
instead of scientific studies….”
Worst Case Scenario
While Keystone is the
most celebrated recent example of a project at risk because of public
engagement issues, it has many predecessors. For example, a decade ago Shell
was seeking a permit to develop a sour gas field at its Farrier location near
Rocky Mountain House.
A consultant specializing
in community engagement, Gay Robinson picks up the story. “Shell put in
an application to drill this well but in the hearings they began with their
emergency plan rather than starting in a positive manner,” she says.
The result was a classic:
the locals became frightened and upset and TV personality David Suzuki got
wind of the controversy. “He came in and did a documentary called Worst
Case Scenario, which aired on CBC-TV. The license was denied and the
hearing alone cost Shell many millions.” The mega-corporation also had
to forgo the Farrier property’s profit potential, and its reputation
suffered.
Robinson continues,
“A number of years later, Shell had another significant (sour gas)
discovery fairly close to Rocky Mountain House, at Tay
River. That time, they realized they had to work in a different way to
develop it. They had a different attitude about how to engage the community.
They talked to people, asking ‘What do you think we need to
do?’” The outcome was a license to operate.
Having focused the last
15 years of her career in public consultation, Robinson is passionate about
both the process and the reasons behind it. “There is a need for it. I
think there are opportunities for this, and I enjoy sitting down at the
kitchen table with people in the community and talking about how we can do
things better.”
She adds, “Good stakeholder relations are based on the belief that stakeholders have a right to be involved
in decisions that will affect their lives. If companies don’t believe
that, we have a basic disconnect from the beginning. People remember the
mistakes the industry made in the past, and they don’t want them to see
them repeated.”
What they see is a truck
Whether companies are
large or small, “they face exactly the same problems,” according
to Terry Bachynski, a vice president of emerging oilsands producer Athabasca Oil Sands Corp. (AOSC).
“When local people see a truck driving by, they don’t know or
care who the truck belongs to. What they see as a truck. If any company is
unresponsive to the needs of the people, then we as the industry can all be
affected.”
While in one sense stakeholder
relations is fundamentally the same for every company, local factors to make
a difference. “We have a wide network of stakeholders we have to deal
with,” according to EnCana’s Patsy Vik.”
These include the media, community leaders, organizations we provide
community investment support to, synergy groups, different industry groups
and interested environmental groups. Our contractors are another really
important stakeholder. They are out there representing us on a daily
basis.” EnCana’s interests stretch across the continent.
By contrast, Bachynski works primarily with aboriginal groups.
“Because we are up in northeastern Alberta, most of the stakeholders we
have to deal with are aboriginal communities. They have deep concerns: how
will oilsands development affect their land treaty
rights? Will it interfere with their use and enjoyment of their traditional
lands? When we talk to them, one of the areas we talk about is how they can
benefit from our efforts – for example, through employment and business
development. “There are some cases where it’s really important
for all the operators to work together – road building, for example.
People in those areas really don’t want a lot of roads going through
their traditional territory. What’s important is for the industry to
work as one on these projects, making sure they meet the needs of local
communities.
“New operators do
have particular challenges in some ways,” he concedes. “The
companies that are already established have a reputation among the local
people. If it’s a good reputation, they do have an advantage. New
operators have to go in and prove themselves.”
Unlike Bachynski’s AOSC, gas giant EnCana mostly produces
from more populated parts of the Western Canada Basin – thus, different
constituents with different issues. According to Patsy Vik,
“A lot of the issues are related to dust, noise and traffic. We try to
identify the impacts of our developments on our neighbours
so we can be proactive and manage them. We need to talk to people and listen
to people and create some kind of awareness and understanding around what
we’re doing. It depends on the scope and scale of the project. We have
different groups in our company that address different parts of the issues. A
lot of people work with landowners on issues like gathering lines, for
example, that might affect them.”
Vik stresses that public engagement is mostly about
communities and neighbourhoods. “People are
protective about their homes – that’s the one domain that they
want to have influence and control over. That’s why we developed our
signature Courtesy Matters program, which specifically addresses those things
that affect people when they’re driving to their homes and through
their neighbourhoods. Some of the things we do can
make it less appealing for them to enjoy their homes and enjoy their space.
We know that. We try to mitigate those impacts” through Courtesy
Matters, which she describes as a policy focused on “working with the
community to understand our impacts and working to resolve, mitigate and
minimize them.”
She adds, “One of
the things we really stress is how people utilize natural gas in their daily
lives. We want it to be personally relevant to people. We also communicate
with people around the different stages of our activities, and what it will
mean to them.”
Moving On
Returning to Gay
Robinson’s Tay River case study, “the
community recommended that the partners form a synergy group. I helped them
do that.” She adds that global best practices “show that public
acceptance of the decision-making process is the key to implementing a public
engagement program.” A strong advocate of synergy groups, she describes
this relatively new approach to public consultation as a public consultation
best practice.
The purpose of these groups
“is to bring people together to resolve issues, lessen impacts and
encourage the use of best practices in the areas of health, safety and the
environment,” according to Synergy Alberta, a not-for-profit
organization which promotes this form of conflict resolution. “They
connect people and organizations to a particular project, facility or neighbourhood. With relevant people at the same table,
true information sharing happens and projects or facilities can be tailored
to meet the needs of all stakeholders including industry, residents and
landowners and regulators.”
According to the
organization’s website, synergy groups “form for a variety of
reasons. Sometimes it’s community-driven to seek more information,
provide information or rally against something the community opposes. Other
times, groups are created by industry looking to proactively share
information on proposed projects and gather input from the community and
others with a stake in the project or area.”
Those working in the area
are adamant that good stakeholder engagement is critical if you want a
controversial project to move on – be it sour or shale gas, bitumen or
an environmentally contentious pipeline.
According to Robinson, “There is actually a solid business case for
meaningful stakeholder relations. It’s not something you do just to
avoid grief. You do it to get a social license to operate.” Quoting a
colleague, she says “‘the government grants the permits but the
community grants the permission.’ The idea is that if the community is
not in support, and you don’t have the social license to operate, you
will have a lot of trouble getting the project off the ground.”
To a very large extent,
those decisions reflect changes in the law. In 2004, for example, a Supreme
Court decision articulated the notion that governments and industry have a
“duty-to-consult.” Alberta’s recent Aboriginal Policy,
Water for Life, Land Use Framework, Biodiversity Monitoring Institute and
other policy-related pronouncements incorporate this notion. The same now
applies in one way or another across the country.
The duty of government,
public agencies and industry has simply become good practice.
The Granddaddy of them All
The granddaddy of
Canada’s public consultation regulations probably comes from Alberta’s
Energy Resources Conservation Board (ERCB). The Board has required public
consultation for decades, thus making Alberta a leader in public engagement.
According to ERCB historian Gordon Jaremko, the
board’s first major public hearing involved Imperial’s proposed
Cold Lake project in 1978-79, although it had done hearings on sour gas
development earlier in that decade.
The ERCB and its much
younger sibling, the Natural Resources Conservation Board (NRCB), have broad discretion
and little legislative guidance on what “the public interest”
actually means. In practice, these organizations consider social,
environmental and economic effects of development when they determine whether
a project is in the public interest.
Since regulatory agencies
have so much latitude, they can be very responsive to well-organized
campaigns opposing a particular project. For the proponent, therefore, it is
better to over-consult than to do too little.
“Companies should
recognize that the regulations are just the starting point. They are the
minimum requirement,” Gay Robinson stresses. “The ERCB has a
document called Directive 56 which outlines the application process. It
specifies that in some cases the public may require greater consultation
(than the directive specifies). Unfortunately, some companies only perform to
those minimums. They need to develop a principled approach to stakeholder
engagement rather than just use the one that is prescribed – the
regulatory minimum, as it were.”
Patsy Vik
puts the matter into a continental context. In her view, EnCana’s
stakeholder relations emerge out of “a reputation we have that
we’re proud of, and (that reputation) is based on standard values we
hold across the company. They are values that are dear and near to us, and
they don’t stop at the border.”
Peter McKenzie-Brown
Language Instinct
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