Tuesday, April 10, 2012

NEI files pipeline resolution with Enbridge

Concerned that Enbridge Inc. has not adequately assessed the risks related to the Northern Gateway pipeline, NEI Investments has filed a shareholder resolution with the company, asking Enbridge how First Nations’ opposition will affect the decision to move forward with the project.

Despite an ongoing six-year dialogue with Enbridge related to the pipeline, NEI says it has been “unable to determine how the board of directors of Enbridge has assessed the risks facing the project from First Nations’ opposition, and to what degree the board is aware of these potential risks.”

“NEI has been unable to reconcile Enbridge’s claims that First Nations support will be acquired with statements of opposition from key First Nations’ leaders along the pipeline right of way,” NEI said in a proxy alert.

NEI – which owns the Ethical Funds brand – notes that the Gateway pipeline is a $50 billion project affecting more than 80 native communities and organizations.

“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 resolution asks Enbridge to produce a report detailing how the board has assessed the risks associated with First Nations’ opposition to the pipeline project. “The report should discuss how First Nations’ opposition will factor into the final decision to pursue Gateway. If the project will be pursued regardless of opposition, the report should detail how the company will mitigate the operational, reputational, and legal risks of such opposition.”

Enbridge has maintained that the project enjoys “significant support” from First Nations along the pipeline corridor, however NEI points out that as of the date of the proxy "less than half the First Nations along the pipeline route are supportive and most of the other First Nations have expressed emphatic opposition to the project.”

“NEI is concerned that the level of First Nations’ opposition to the Gateway project brings significant risks to both the project and the company,” NEI concludes. “These risks will likely manifest in several ways, ranging from almost certain legal challenges and delays, to long-term damage to the company’s corporate reputation as a responsible company.”

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