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Lake Ontario Waterkeeper's comments concerning recusal of Board members.

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Waterkeeper made submissions concerning apprehensions of bias of the initial NEB decision-making panel members.

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1 Lake Ontario Waterkeeper comments on notices of motion from Transition Initiative Kenora and other intervenors in the matter of TransCanada Pipelines Limited Energy East Project and Asset Transfer, and Eastern Mainline Project, OF-Fac-Oil-E266-2014-01 02, Hearing Order OH-002-2016 These submissions address the current motion and letters before the Board requesting Board Members recusal. These submissions also address the current letters before the Board concerning the scope of the Boards review and Environmental Assessment (EA) of the abovementioned application (the TransCanada application). Each will be discussed in turn. Motion and letters before the Board requesting Board members recusal On August 22, 2016 Transition Initiative Kenora (TIK) filed a motion with the National Energy Board (the Board) requesting among other things the recusal of Members Gauthier and Mercier.1 By August 23 the Board issued a notice to inform intervenors that it had established a written process to consider the motion. The Board required submissions by September 7, and assured it would establish any further steps after that date.2 No timelines for this decision were provided, however the notice did explain that the Board would proceed with its regional panel sessions while the motion was being considered, and that panel sessions would proceed according to their originally scheduled dates. On August 29, the Boards panel session in Montreal was interrupted by protestors. On August 30, the Board announced that it would postpone all panel sessions until it reached a decision on the TIK motion.3 Again, no expected timeline was provided for this decision. The TIK motion relies of significant evidence to show that Member Gauthier initiated a private meeting with Jean Charest about the Energy East application, after that application had already been submitted by its proponent TransCanada. The motion also explains that Members Gauthier, Mercier and the Boards Chairman and Chief Executive Officer (CEO) Peter Watson had a series of separate private meetings with Mr. Charest and several other stakeholders. No public announcements about any of these meetings were ever made. When an online newspaper first released information about these meetings, which had been verified via an access to information application, the Board denied the story, only later conceding its truth. The Code of Conduct for National Energy Board Employees (the Code of Conduct) applies to all who work for the Board, including its CEO, Chair, and Board Members. The Code of Conduct has several provisions and an entire appendix dedicated to ensuring against improper meetings between Board employees and stakeholders. While it recognizes that employees must have 1 TIK motion, available here. 2 Hearing Order, August 23, 2016 available here. 3 Hearing Order, August 30, 2016 available here.
2 relationships with stakeholders to ensure they understand industry standards, project operations, and local communities needs, it also recognizes that when quasi-judicial hearings are in progress, the neutrality and impartiality of decision-makers is paramount. For this reason, the Code of Conduct permits meetings with stakeholders, but only when certain safeguards are in place so that they can be conducted in a transparent and proper way. For example, the meetings must be approved by Board officials, agendas and minutes of these meetings must be filed with the Board, and any Members or staff involved in an ongoing hearing must not discuss the application before them. Importantly, counsel for TIK argues that the private meetings between the Board CEO, Members Gauthier and Mercier, and Board staff with Mr. Charest and other stakeholders did not comply with several of these provisions: neither the Boards Chief Operating Officer nor Member George authorized these meetings to take place; Board Members and staff involved in the current TransCanada application hearings were not identified and excluded from discussions about the application at these meetings; and no formal agenda was established for the meetings. TIK was unable to find any evidence that the Code of Conducts requirements for meetings was ever consulted or discussed before any of these meetings took place. Several other intervenors have also expressed concerns with regards to Board members conduct. Strat辿gies nerg辿tiques (S) and lAssociation qu辿b辿coise de lutte contre la pollution atmosph辿rique (AQLPA) have submitted a letter requesting the recusal of all three Board Members presiding over the current hearings. These groups also want Mr. Watson and Member Mercier to step down from their respective positions as Chair and Vice Chair of the Board. Both groups have requested an immediate suspension of the process until a new review panel is established, and that records of all private meetings to date be made public. They are also requesting an independent inquiry into this matter.4 Lake Ontario Waterkeeper (Waterkeeper) stresses that the Board must clearly and publicly disclose whether and to what extent all of the current members of hearing panel and other staff involved in these hearings have complied with the Code of Conducts requirements with regards to meetings with stakeholders. The Board must also ensure that any lack of compliance will have real consequences and either require non-compliant individuals to recuse themselves from the proceeding, or else ensure they are subject to other appropriate disciplinary measures. More recently, Nature Canada has raised concerns over the fact that Member Gauthier was President and CEO of LVM Inc. until his appointment to the Board in 2012. While in these positions with LVM Inc., the company was contracted by TransCanada (via Stantec Inc.) to collect geotechnical data for the proposed Energy East Rideau River crossing, thus assisting the company with its application before the Board. Nature Canada explained that it is concerned about a possible conflict of interest for Member Gauthier, given the close temporal proximity of his positions with LVM Inc. and the Board, as well as his prior involvement while at LVM Inc. with the actual application before the Board.5 4 S- AQLPA letter available here. 5 Nature Canada letter available here.
3 Waterkeeper again stresses that the Boards Code of Conduct addresses the issue of conflicts of interest. The Board must clearly and publicly disclose whether and to what extent all of the current members of hearing panel and other staff involved in these hearings have complied with the Code of Conducts requirements to prevent conflicts of interest. The Board must also ensure that any lack of compliance will have real consequences and either require non-compliant individuals to recuse themselves from the proceeding, or else ensure they are subject to other appropriate disciplinary measures. TransCanadas proposed project is massive. If its application is approved, the Energy East and Eastern Mainline pipelines would cross thousands of waterbodies that provide important habitat for a myriad of species (including species at risk). The pipelines would also traverse several sources of drinking water for millions of Canadians, not to mention the many beloved waterways that are used for subsistence and recreational fishing. The Board exercises an enormous amount of discretion in ultimately deciding whether or not to approve the current application. It determines the necessary detail for the project application to be deemed complete (including the necessary detail of maps with each pipelines route).6 Its Chairperson designs the hearing process and determines who will sit on its decision-making panels.7 It is also the filter through which months of hearings and the concerns of local communities across much of the country will be presented to the Prime Minister for a final approval or rejection of the pipeline.8 A neutral and impartial decision-making process is always crucial. However, with a project that could have such significant impacts on the swimmability, drinkability, and fishability of the countrys waterways, it is especially important that all applicable internal procedures ensuring a fair process are followed. Ultimately, if the Board is serious about providing a process to earn the trust of Canadians, it must follow its own internal codes and procedures and publicly demonstrate its strict adherence. Or, if the Board would prefer, Waterkeeper supports this matter being referred to the Federal Court of Appeal. Letters concerning the scope of the Boards review and EA of the current application To date two organizations have raised concerns about the Boards defined scope for TransCanadas application: the Algonquin to Adirondacks Collaborative (A2A),9 and Aroland First Nation.10 On August 24, 2016, the Board agreed to consider written submissions concerning their letters.11 Comments concerning these letters were also required by September 7. A2A and Aroland First Nation believe the Board has effectively fettered its discretion, improperly delegating its authority to TransCanada to determine the scope of the projects EA and other 6 National Energy Board Act RSC, c N-7, ss 52 and 32(1) (1985) available here. 7 Ibid at s 6(2). 8 Ibid at s 52. 9 A2A letter available here. 10 Aroland First Nation letter available here. 11 Hearing Order, August 24, 2016 available here.
4 aspects of its regulatory review. Both argue that the Board fully adopted TransCanadas suggested project review scope without making any significant changes and without eliciting public comments. They also argue the Boards accepted scope for these reviews is too narrow. They request that the following additional considerations be included: the impact of new electricity services needed to operate pumps along the pipelines; the impacts of construction work along the pipelines; site and regional emergency response plans; and Aboriginal procurement plans. Waterkeeper is concerned that the July 20, 2016 decision by the Board on the scope for TransCanadas applications EA12 was presented as a fait accompli. Waterkeeper is especially concerned about this if the Board merely adopted the proponents definition of an appropriate assessment scope without eliciting any specific comments from affected members of the public, Indigenous peoples, or any intervenors in this hearing process. The July 20 decision was released only a short time after Waterkeeper was informed it was granted intervenor status in these hearings. The Board did not elicit our input on the scoping of the projects EA, nor did it provide enough time for the organization to have prepared submissions on the subject had the opportunity existed. Waterkeeper believes the scope of the EA should be subject to a more formal and distinct public participation process. This would be consistent with the purposes of the Canadian Environmental Assessment Act one of which is to ensure that opportunities are provided for meaningful public participation during an environmental assessment.13 A final note on timing Several organizations have already expressed concerns that the review process for TransCanadas application may have begun prematurely. Ottawa Riverkeeper expressed concerns that TransCanadas application should not have been deemed complete until a method for crossing the Ottawa River was included. The organization explained that TransCanada had originally commissioned a study of a preferred means for the pipeline to cross the river. However, that method was subsequently deemed technically unfeasible, and the report was removed from the proponents application without any alternative means for the crossing being suggested. The Ottawa River is one of the largest waterways to be crossed by the Energy East pipeline and the crossing was planned for an area close to Montreal in which 4 million inhabitants rely on the Ottawa River for their drinking water. Given these factors, Ottawa Riverkeeper hoped that the Board would wait until an alternative type of crossing was proposed by the proponent before deeming TransCanadas application complete.14 However, the Board subsequently dismissed the organizations letter.15 Environmental Defence has also expressed concerns that the current hearing process was begun prematurely as the federal government is still planning an overhaul of the National Energy Board and federal EA processes.16 12 National Energy Board Factors and Scope for the Environmental Assessments, available here. 13 Canadian Environmental Assessment Act SC, c 19, s4(1)(e) (2012) available here. 14 Ottawa Riverkeeper letter available here. 15 Board letter available here. 16 Environmental Defence letter available here.
5 Waterkeeper agrees that both organizations concerns are serious and merit the Boards or Federal Court of Appeals thorough consideration. A detailed application will make the projects review more practical and meaningful. Further, a review that is initiated once the National Energy Board and federal EA processes have been strengthened and modernized would better inspire public confidence in any subsequent hearing and decision. In the alternative, with the Montreal panel sessions abrupt end, all further panel sessions postponed indefinitely, and no timeline given for the Boards decision on the motions currently before it, Waterkeeper has concerns about the legislated timeline for this project. Should the Board decide to continue with the present process, the timeline for the hearings should be extended so that the current interruptions do not infringe on the time intervenors have to prepare for future panel sessions and other opportunities for comments. There are still eight regional panel sessions yet to take place, and several procedural steps and oral hearings after these panels, all to take place within the extended statutory time lime limit. The current motions before the Board require thorough consideration and this should not occur at the intervenors expense. All of this is respectfully submitted September 7, 2016.

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Lake Ontario Waterkeeper's comments concerning recusal of Board members.

  • 1. 1 Lake Ontario Waterkeeper comments on notices of motion from Transition Initiative Kenora and other intervenors in the matter of TransCanada Pipelines Limited Energy East Project and Asset Transfer, and Eastern Mainline Project, OF-Fac-Oil-E266-2014-01 02, Hearing Order OH-002-2016 These submissions address the current motion and letters before the Board requesting Board Members recusal. These submissions also address the current letters before the Board concerning the scope of the Boards review and Environmental Assessment (EA) of the abovementioned application (the TransCanada application). Each will be discussed in turn. Motion and letters before the Board requesting Board members recusal On August 22, 2016 Transition Initiative Kenora (TIK) filed a motion with the National Energy Board (the Board) requesting among other things the recusal of Members Gauthier and Mercier.1 By August 23 the Board issued a notice to inform intervenors that it had established a written process to consider the motion. The Board required submissions by September 7, and assured it would establish any further steps after that date.2 No timelines for this decision were provided, however the notice did explain that the Board would proceed with its regional panel sessions while the motion was being considered, and that panel sessions would proceed according to their originally scheduled dates. On August 29, the Boards panel session in Montreal was interrupted by protestors. On August 30, the Board announced that it would postpone all panel sessions until it reached a decision on the TIK motion.3 Again, no expected timeline was provided for this decision. The TIK motion relies of significant evidence to show that Member Gauthier initiated a private meeting with Jean Charest about the Energy East application, after that application had already been submitted by its proponent TransCanada. The motion also explains that Members Gauthier, Mercier and the Boards Chairman and Chief Executive Officer (CEO) Peter Watson had a series of separate private meetings with Mr. Charest and several other stakeholders. No public announcements about any of these meetings were ever made. When an online newspaper first released information about these meetings, which had been verified via an access to information application, the Board denied the story, only later conceding its truth. The Code of Conduct for National Energy Board Employees (the Code of Conduct) applies to all who work for the Board, including its CEO, Chair, and Board Members. The Code of Conduct has several provisions and an entire appendix dedicated to ensuring against improper meetings between Board employees and stakeholders. While it recognizes that employees must have 1 TIK motion, available here. 2 Hearing Order, August 23, 2016 available here. 3 Hearing Order, August 30, 2016 available here.
  • 2. 2 relationships with stakeholders to ensure they understand industry standards, project operations, and local communities needs, it also recognizes that when quasi-judicial hearings are in progress, the neutrality and impartiality of decision-makers is paramount. For this reason, the Code of Conduct permits meetings with stakeholders, but only when certain safeguards are in place so that they can be conducted in a transparent and proper way. For example, the meetings must be approved by Board officials, agendas and minutes of these meetings must be filed with the Board, and any Members or staff involved in an ongoing hearing must not discuss the application before them. Importantly, counsel for TIK argues that the private meetings between the Board CEO, Members Gauthier and Mercier, and Board staff with Mr. Charest and other stakeholders did not comply with several of these provisions: neither the Boards Chief Operating Officer nor Member George authorized these meetings to take place; Board Members and staff involved in the current TransCanada application hearings were not identified and excluded from discussions about the application at these meetings; and no formal agenda was established for the meetings. TIK was unable to find any evidence that the Code of Conducts requirements for meetings was ever consulted or discussed before any of these meetings took place. Several other intervenors have also expressed concerns with regards to Board members conduct. Strat辿gies nerg辿tiques (S) and lAssociation qu辿b辿coise de lutte contre la pollution atmosph辿rique (AQLPA) have submitted a letter requesting the recusal of all three Board Members presiding over the current hearings. These groups also want Mr. Watson and Member Mercier to step down from their respective positions as Chair and Vice Chair of the Board. Both groups have requested an immediate suspension of the process until a new review panel is established, and that records of all private meetings to date be made public. They are also requesting an independent inquiry into this matter.4 Lake Ontario Waterkeeper (Waterkeeper) stresses that the Board must clearly and publicly disclose whether and to what extent all of the current members of hearing panel and other staff involved in these hearings have complied with the Code of Conducts requirements with regards to meetings with stakeholders. The Board must also ensure that any lack of compliance will have real consequences and either require non-compliant individuals to recuse themselves from the proceeding, or else ensure they are subject to other appropriate disciplinary measures. More recently, Nature Canada has raised concerns over the fact that Member Gauthier was President and CEO of LVM Inc. until his appointment to the Board in 2012. While in these positions with LVM Inc., the company was contracted by TransCanada (via Stantec Inc.) to collect geotechnical data for the proposed Energy East Rideau River crossing, thus assisting the company with its application before the Board. Nature Canada explained that it is concerned about a possible conflict of interest for Member Gauthier, given the close temporal proximity of his positions with LVM Inc. and the Board, as well as his prior involvement while at LVM Inc. with the actual application before the Board.5 4 S- AQLPA letter available here. 5 Nature Canada letter available here.
  • 3. 3 Waterkeeper again stresses that the Boards Code of Conduct addresses the issue of conflicts of interest. The Board must clearly and publicly disclose whether and to what extent all of the current members of hearing panel and other staff involved in these hearings have complied with the Code of Conducts requirements to prevent conflicts of interest. The Board must also ensure that any lack of compliance will have real consequences and either require non-compliant individuals to recuse themselves from the proceeding, or else ensure they are subject to other appropriate disciplinary measures. TransCanadas proposed project is massive. If its application is approved, the Energy East and Eastern Mainline pipelines would cross thousands of waterbodies that provide important habitat for a myriad of species (including species at risk). The pipelines would also traverse several sources of drinking water for millions of Canadians, not to mention the many beloved waterways that are used for subsistence and recreational fishing. The Board exercises an enormous amount of discretion in ultimately deciding whether or not to approve the current application. It determines the necessary detail for the project application to be deemed complete (including the necessary detail of maps with each pipelines route).6 Its Chairperson designs the hearing process and determines who will sit on its decision-making panels.7 It is also the filter through which months of hearings and the concerns of local communities across much of the country will be presented to the Prime Minister for a final approval or rejection of the pipeline.8 A neutral and impartial decision-making process is always crucial. However, with a project that could have such significant impacts on the swimmability, drinkability, and fishability of the countrys waterways, it is especially important that all applicable internal procedures ensuring a fair process are followed. Ultimately, if the Board is serious about providing a process to earn the trust of Canadians, it must follow its own internal codes and procedures and publicly demonstrate its strict adherence. Or, if the Board would prefer, Waterkeeper supports this matter being referred to the Federal Court of Appeal. Letters concerning the scope of the Boards review and EA of the current application To date two organizations have raised concerns about the Boards defined scope for TransCanadas application: the Algonquin to Adirondacks Collaborative (A2A),9 and Aroland First Nation.10 On August 24, 2016, the Board agreed to consider written submissions concerning their letters.11 Comments concerning these letters were also required by September 7. A2A and Aroland First Nation believe the Board has effectively fettered its discretion, improperly delegating its authority to TransCanada to determine the scope of the projects EA and other 6 National Energy Board Act RSC, c N-7, ss 52 and 32(1) (1985) available here. 7 Ibid at s 6(2). 8 Ibid at s 52. 9 A2A letter available here. 10 Aroland First Nation letter available here. 11 Hearing Order, August 24, 2016 available here.
  • 4. 4 aspects of its regulatory review. Both argue that the Board fully adopted TransCanadas suggested project review scope without making any significant changes and without eliciting public comments. They also argue the Boards accepted scope for these reviews is too narrow. They request that the following additional considerations be included: the impact of new electricity services needed to operate pumps along the pipelines; the impacts of construction work along the pipelines; site and regional emergency response plans; and Aboriginal procurement plans. Waterkeeper is concerned that the July 20, 2016 decision by the Board on the scope for TransCanadas applications EA12 was presented as a fait accompli. Waterkeeper is especially concerned about this if the Board merely adopted the proponents definition of an appropriate assessment scope without eliciting any specific comments from affected members of the public, Indigenous peoples, or any intervenors in this hearing process. The July 20 decision was released only a short time after Waterkeeper was informed it was granted intervenor status in these hearings. The Board did not elicit our input on the scoping of the projects EA, nor did it provide enough time for the organization to have prepared submissions on the subject had the opportunity existed. Waterkeeper believes the scope of the EA should be subject to a more formal and distinct public participation process. This would be consistent with the purposes of the Canadian Environmental Assessment Act one of which is to ensure that opportunities are provided for meaningful public participation during an environmental assessment.13 A final note on timing Several organizations have already expressed concerns that the review process for TransCanadas application may have begun prematurely. Ottawa Riverkeeper expressed concerns that TransCanadas application should not have been deemed complete until a method for crossing the Ottawa River was included. The organization explained that TransCanada had originally commissioned a study of a preferred means for the pipeline to cross the river. However, that method was subsequently deemed technically unfeasible, and the report was removed from the proponents application without any alternative means for the crossing being suggested. The Ottawa River is one of the largest waterways to be crossed by the Energy East pipeline and the crossing was planned for an area close to Montreal in which 4 million inhabitants rely on the Ottawa River for their drinking water. Given these factors, Ottawa Riverkeeper hoped that the Board would wait until an alternative type of crossing was proposed by the proponent before deeming TransCanadas application complete.14 However, the Board subsequently dismissed the organizations letter.15 Environmental Defence has also expressed concerns that the current hearing process was begun prematurely as the federal government is still planning an overhaul of the National Energy Board and federal EA processes.16 12 National Energy Board Factors and Scope for the Environmental Assessments, available here. 13 Canadian Environmental Assessment Act SC, c 19, s4(1)(e) (2012) available here. 14 Ottawa Riverkeeper letter available here. 15 Board letter available here. 16 Environmental Defence letter available here.
  • 5. 5 Waterkeeper agrees that both organizations concerns are serious and merit the Boards or Federal Court of Appeals thorough consideration. A detailed application will make the projects review more practical and meaningful. Further, a review that is initiated once the National Energy Board and federal EA processes have been strengthened and modernized would better inspire public confidence in any subsequent hearing and decision. In the alternative, with the Montreal panel sessions abrupt end, all further panel sessions postponed indefinitely, and no timeline given for the Boards decision on the motions currently before it, Waterkeeper has concerns about the legislated timeline for this project. Should the Board decide to continue with the present process, the timeline for the hearings should be extended so that the current interruptions do not infringe on the time intervenors have to prepare for future panel sessions and other opportunities for comments. There are still eight regional panel sessions yet to take place, and several procedural steps and oral hearings after these panels, all to take place within the extended statutory time lime limit. The current motions before the Board require thorough consideration and this should not occur at the intervenors expense. All of this is respectfully submitted September 7, 2016.