HOW TO RESTORE NEB’S TROUBLED REPUTATION

It is in everyone’s interest to trust this vital institution, Lesley Matthews says.

Ottawa is now accepting public comment on the recently released report of its expert panel on the modernization of the National Energy Board (NEB).

The panel made 46 recommendations to the minister of natural resources. Many recommendations, if accepted, would fundamentally change the structure, mandate and governance of the NEB. They would also change how decisions are made about pipelines and transmission lines that cross provincial borders. Unfortunately, the report missed a major opportunity to restore the tattered reputation of the NEB.

Reform is needed to assist the federal government and the NEB, or any successor organization, to regain public credibility and trust in decision-making related to federally regulated energy development.

The panel made many wise recommendations, such as improving relationships with landowners along pipeline routes and recognizing the unique role of aboriginal people in decisionmaking on energy projects.

However, some of the recommendations related to the mandate and decision-making roles in the review process are problematic.

The panel envisions a two-step decision-making process for “major” federally regulated energy projects. In their proposal, the government would determine whether a project proposal is in the national interest.

If it is, a joint panel would undertake an environmental assessment and technical review of the project. It would determine if and how the project would proceed, including terms and conditions on an approval.

Would this process be an improvement to the current system? No. It would relegate to an afterthought the current transparent and quasi-judicial process bound by the rules of justice. Instead, the most important first decision would be an opaque and subjective political decision open to outside influence.

Special interests on both sides would seek access to the government. How would that improve public trust in the process?

One of the main reasons the panel recommends government determine national interest is: “… because there are no pre-determined criteria or set of rules that can satisfactorily adjudicate the types of tough decisions involved in major project approvals.”

Rather than letting politicians decide, the minister should do the tough, upfront work of establishing criteria by which federally regulated energy projects could be approved.

The policy framework for projects should be robust enough to signal what types of federally regulated infrastructure would be acceptable.

The NEB should develop its regulatory framework to specify the desired outcomes by which all regulated projects would be measured. That would answer the panel’s need for a “pre-determined criteria or set of rules.”

The logistics of this two-fold decision-making process are also curious. The panel noted the government “… must make the ultimate determination of whether or not a project is in the national interest after indigenous consultation and public engagement.”

The challenge arises with the level of detail required to understand a project’s effects. The level of detail required to understand how a project may affect aboriginal rights and interests implies a greater level of detail than contemplated in the expert panel’s report. If you want to understand how a pipeline could affect an aboriginal person’s right to fish, you need to understand where the proposed pipeline will cross the watercourse.

That begets questions of when the person typically fishes, what species and habitat are present, the method of crossing, and when the pipeline would be constructed.

At this stage it is not surprising the details of how the recommendations would work are not yet available. However, in contemplating which recommendations to accept, the government must be aware of practical challenges to implementation.

Effective and efficient regulatory institutions are a necessary part of a functioning democracy. While regulators are not elected officials, they should do the work delegated to them by elected politicians. Ideally, a transparent policy framework should guide their decisions.

It is in the shared interest of all Canadians to have trust in institutions whose decisions will shape the next steps in Canada’s energy future.