University of Victoria green-washes aboriginal problems for energy companies

 

The University of Victoria is sacrificing its progressive reputation for funding from two energy corporations who are seeking to green-wash their corporate brand against concerns raised by First Nations.

In the last month UVic’s School of Business announced it will set up Canada’s first National Chair in Aboriginal Economic Development with $1.2 million in donations from energy companies. These companies are seeking to find ways to ease growing tensions with First Nations in British Columbia on whose traditional territories it seeks to develop fossil fuel projects. UVic accepted $1 million from EnCana to fund aboriginal economic development projects. Now, Enbridge has announced an additional $200,000 in funding for the same program.

While supporting First Nations is a noble endeavour, the timing of these donations is suspect. Enbridge and EnCana’s donations are a blatant attempt to green-wash their growing problems with aboriginal people across British Columbia and in other parts of the world.

It is no coincidence that Enbridge’s donation comes at a time when First Nations from across British Columbia and Alberta are organizing a collective response to Enbridge’s proposed Gateway pipeline project.

In fact, just recently the Carrier Sekani released a report indicating that they are likely to oppose the project. Coastal First Nations, including the powerful Haida, have publicly expressed their concerns.

And Enbridge’s efforts to secure investment and win the race against competing pipelines proposals had a major setback when CIBC World Markets issued a report indicating the project could be delayed by opposition from aboriginal groups.

EnCana is also facing aboriginal opposition here and abroad. Although not widely reported in Canada, EnCana was forced to sell its Ecuadorian operation to China Petrochemical Corp. and China National Petroleum Corp. in September 2005 for US$1.42 billion because of pressure from indigenous groups and Canadian human rights groups.

It is interesting that in the post Enron/WorldCom era of tougher disclosure of risks and liabilities, EnCana’s legally required  disclosure documents (e.g. annual reports and SEC filings which are required to trade shares on exchanges) have been silent on the risks associated with the Ecuadorian operations.

Thus it must have come as a shock to EnCana’s investors when they learned that the company may be on the hook for the US$1.42 billion it received from the Chinese oil giants to indemnify them against losses suffered when EnCana’s former Ecuadorian operations were nationalized by the government. If EnCana had not been silent on the  risks associated with indigenous opposition over the past few years, perhaps investors wouldn’t have been blindsided by the decision to nationalize its oil fields.

The Ecuadorian situation also raises question about what else EnCana may not be disclosing to investors. A reading of its security filings and annual report indicates that the company is not being forthright about the risks associated with First Nations issues in British Columbia.

Nowhere does Encana disclose that recent Supreme Court of Canada and BC Court of Appeal rulings raise serious questions about the oil and gas tenures EnCana has and is seeking. The courts have held that the Crown has an obligation to engage affected First Nations on “strategic level decisions” including allocation and tenure. This will dramatically inhibit business as usual on unceded First Nations lands. In fact, courts have held that the failure to meaningfully engage affected First Nations when tenures are granted, replaced or sold may invalidate the tenures.

Nothing could be more risky to EnCana’s operations than First Nations contesting their tenures. And First Nations in BC are preparing to do just that.

As a result of dozens of workshops Dogwood Initiative has held training First Nations in how to engage in the financial markets to address title issues, many First Nations are short listing EnCana and Enbridge for combined legal and financial pressure. Yet EnCana, Enbridge and other Canadian fossil fuel corporations operating on unceded First Nations lands are not disclosing these risks.

Instead EnCana and Enbridge are attempting to green-wash their names with donations to UVic for aboriginal economic development.  A worthy cause, but insufficient to insulate the companies from the coming battles with First Nations.

The biggest loser in this may be UVic whose reputation may be tarnished by association with these companies once First Nations opposition becomes more high profile.

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