For Northern Gateway, the proposed pipeline that has stirred a hornet's nest among first nations in British Columbia, it was an impressive number. Last week, Enbridge Inc. said nearly 60 per cent of the first nations along the project's route had agreed to become part-owners in the line, splitting a 10-per-cent stake worth $550-million.
What Enbridge did not mention is that in accepting company shares, those groups also agreed not to stand in the project's way.
The equity agreement, which Enbridge acknowledged but is taking pains to play down, helps explain why 40 per cent of the groups declined what was essentially free money. It also illustrates the tactics the company is using as it fights a strident opposition to its $5.5-billion project.
Under the terms of the deal, unearthed through a Greenpeace freedom of information request, first nation groups that sign on to pipeline ownership “cannot proactively oppose” the Gateway project. They can, however, “raise legitimate, specific concerns” at hearings of the joint review panel that is examining Gateway.
Such language is common among equity partners, expected to support what they fund. But critics say it is an unusually strong requirement for first nations groups made up of diverse communities, who have none of their own money in the deal.
“I read that as, ‘If you want the money, shut up about the risks,' ” said Keith Stewart of Greenpeace.
That requirement was not originally in the Enbridge contracts, which in their early forms asked simply: “Would you like to be an equity partner? And in return for that, we want nothing,” said Roger Harris, a consultant who spent two years working on the aboriginal file for Gateway. “It was to make sure the bands were actual financial participants in the project, and it didn't come with any strings attached to it.”
That was intended to simplify the process of bringing first nations into a deal that is expected to generate $280-million in financial benefits. But by adding the “no opposition” clause, Enbridge has substantially changed the terms of the offer, Mr. Harris said. “It's not free money at all,” he said. “Any clause like that normally means the bands can't oppose any of the permitting processes that the project would be involved in.”
The wording is broad, and would also likely proscribe any attempts to physically block construction of the line, he said.
Enbridge argues it's not using its offer to beat down opposition.
“Is it an attempt by Enbridge to buy some silence or censor first nations who signed on? That's just not the case,” said Enbridge spokesman Todd Nogier. “The evidence is in the joint review panel process,” during which first nations, including some that have signed the agreement, have vigorously opposed Gateway.
But such opposition during the panel hearings is explicitly allowed in the equity agreement. Mr. Nogier said the intent in using the “no opposition” clause was to “seek only an assurance that our aboriginal partners won't actively seek to undermine the project.”
One lawyer familiar with such deals said Enbridge is clearly looking to buy peace.
“That's part of the quid for accommodation. [Enbridge] is going to accommodate your interests and in return, it expects you to support the project – or at least not oppose it.”