NFU letter to National Energy Board, Sept 7, 2016

Re: Hearing Order OH-002-2016 File OF-Fac-Oil-E266-2014-01 02
Energy East Project, Asset Transfer and Eastern Mainline Project (the Project)
Comment on notices of motion from Strategies Energetiques (SE) and the Association quebecoise de lutte contre las pollution atmospherique (AQLPA), and Transition Initiative Kenora (TIK).

This submission is in reply to the National Energy Board’s invitation for written responses to the requests made by the two Quebec organizations (SE and AQLPA, Aug. 11/16) and the notice of motion made by TIK (Aug. 22/16). This submission is made on behalf of the National Farmers Union (NFU).

The NFU has been following the information that has emerged regarding secret, unauthorized meetings between senior National Energy Board (the Board) personnel and various external parties. Details of these meetings, which occurred in Montreal in January 2015, emerged last month. These details have seriously undermined the reputation of the NEB and its ability to eventually deliver a credible, legitimate decision with respect to the Energy East Project. These details have also resulted in formal motions being brought before the NEB.

The NFU applauds the Board’s decision to adjourn the Panel Sessions on this Project until it has dealt with the two motions before it. The NEB clearly faces a crisis of confidence and simply cannot proceed until the issues of governance, accountability, legitimacy and transparency are resolved.

With respect to the process that lies ahead, this intervenor notes that it is not clear whether the requests/demandes made by ES and AQLPA carry the same procedural weight as the subsequent Notice of Motion made by TIK. Nor is it clear to this intervenor what the legal status/procedural weight is of the subsequent request made by M. Marc Beshai (Belanger Avocats, Aug. 30/16) asking for all documents pertaining to the January 2015 meetings. What is clear is that all of these formal submissions reflect the profound concern of the various groups regarding what occurred, their desire to learn the truth and the need to restore public confidence in our Board. The NFU is of the same view: what occurred in Montreal in January 2015 was highly improper, we need to get to the bottom of this affair, and effective, corrective action needs to be taken.

It is worth noting that the three formal submissions mentioned above are not identical. Each has its own emphases and its own requests of the Board.

1. Neuman’s letter(Aug. 11/16)

In her letter on behalf of Strategies Energetiques (SE) and l’Association quebecoise de lutte contre la pollution atmospherique (AQLPA) Dominique Neuman lists seven requests/demandes of the Board. This letter is only available in French. This intervenor translates the demandes as follows:

1. Recusal of members Mercier and Gauthier from the NEB’s panel.

2. Recusal of Member George from the panel unless he makes a formal declaration that he was not aware of the Montreal meetings or that he was aware and actively opposed the meetings.

3. Withdrawal by Chair Watson and Vice-chair Mercier from the Energy East file and their replacement by an interim Chair and Vice-chair.

4. Suspension of the Energy East hearings until a new panel is formed.

5. Removal from the Energy East file of all employees who took part in the Montreal meetings, and the removal of their supervisors.

6. Release of all NEB documents & information related to the Montreal meetings.

7. Establishment by the future panel of an enquiry and special hearings in order to determine what occurred. This process would occur prior to resumption of the Energy East hearings. It would require all persons involved with the Montreal meetings to testify and be subject to cross-examination.

The NFU agrees that the above actions need to be taken for the reasons contained in Mme. Neuman’s submission, which are on the public record and do not need to be restated here.

2. Notice of Motion by Transition Initiative Kenora(TIK, Aug. 22/16)

This document was submitted by two lawyers representing TIK. It formally requests the recusal of Members Gauthier and Mercier from the Energy East panel. This document also calls for the matter to be referred to Federal Court of Appeal if the recusals do not occur.

TIK’s submission contains a Statement of Facts surrounding the Montreal meetings (as best they could be determined, based on the information available at the time) and the grounds for TIK’s motion. The latter section covers ten pages and provides a superb analysis of the legal framework that the NEB is obliged to honour. This framework is defined in the NEB’s Governance Manual, its Code of Conduct and Appendix 2 – Guidelines for Meetings of Board Members with Stakeholders (the “Guidelines) and its safeguard procedures.

It should be stressed that if TIK’s analysis is correct, the NEB’s internal rules are as clear as they are necessary. It seems inconceivable that the NEB personnel who were involved in the Montreal meetings could have so grossly misunderstood these rules. This applies above all to Chair Watson: the Chair is arguably the person who is most responsible for ensuring that internal rules are followed and that the reputation of the NEB is upheld.

The arguments advanced by TIK will not be restated here; it is sufficient to mention that TIK’s document concludes, “In sum, the Guidelines were disregarded wholesale” (TIK, p. 13). To which one should add that the Guidelines were disregarded wholesale — not by junior Board personnel but repeatedly by its most senior officers.

The NFU supports the TIK motions and congratulates its authors for so thoroughly outlining the legal framework that governs Board activities.

*Both the Neuman submission and the TIK document may be accessed via the NEB posting at https://tinyurl.com/gufuxpn (Aug. 23/16) which also provides context for the NFU‘s formal comment.

3. Belanger Avocats’ request for information (Aug. 30/16)

This request was submitted by M. Marc Bishai, a lawyer with Belanger Avocats, on behalf of four Quebec environmental groups. His letter states that an Access To Information request has been filed and lists eight categories of documents that are sought.

The NFU supports his request for these documents. As was pointed out by Mme. Belanger (above, #2) in her 6th and 7th demandes, it is important that exactly what occurred be uncovered and disclosed. Public confidence in the NEB is unlikely to be restored unless all relevant information has been made public.

The NEB is one of our most vital federal institutions for multiple reasons: energy is essential to our economy, the transport of energy involves safety, security and environmental risks, there are competing corporate and public interests to balance, etc. For these and other reasons it is imperative that NEB personnel are bound by clear, prudent rules. That such clear rules could be repeatedly violated by the Board’s senior personnel is profoundly troubling.

Equally troubling is the ongoing denial by NEB officials that anything inappropriate occurred in Montreal. As far as this intervenor is aware there have been two statements issued by the NEB regarding the Montreal meetings. Both statements contain the same wording: “… at no time did the NEB officials at the meetings permit any inappropriate discussion….” It has been nearly two years and the Board has never acknowledged that  NEB policies prohibit such meetings in the first place. Repeated violation of the rules by the Board’s senior officers is clearly “inappropriate” (to say the least) and raises a multitude of questions that now require honest answers.

The NFU strongly supports the actions requested in the three above-mentioned submissions and urges the NEB to act upon them. Canadians must have full confidence in their energy regulator. Unless and until the January 2015 Montreal meetings are thoroughly investigated, citizens will forever wonder what really occurred and why, and thus question the NEB’s integrity and the legitimacy if its rulings. Top-level violations warrant a top-level investigation.

Respectfully submitted by:

Rick Munroe

Howe Island, ON