Pipeline companies are facing increasing Indigenous opposition as they proceed with four projects that would dramatically expand Canada's crude export capacity, including a new pressure tactic aimed at the banks that help provide the massive amounts of capital needed to complete the expansions.
A coalition of aboriginal groups in Canada and the United States launched a campaign on Tuesday to press 17 banks – including Canada's big five – to stop providing funds to TransCanada Corp., Enbridge Inc., Kinder Morgan Inc., and U.S.-based Energy Transfer Partners LP, which is the majority owner of the controversial Dakota Access Pipeline.
Indigenous opposition has emerged as one of the greatest challenges to the oil-and-gas industry's bid to expand pipeline capacity to diversify markets and reduce transportation costs for growing oil sands production. Existing pipelines will run out of space to accommodate the growth in supply over the next several years.
While some First Nations are willing to work with pipeline companies and obtain benefits, every major current project faces some opposition from aboriginal critics. Indigenous relations have emerged as a fundamental challenge for any resource project proponent, especially for pipelines, which can span thousands of kilometres, Martin Ignasiak, a Calgary-based regulatory lawyer for Osler, Hoskin & Harcourt LLP, said in an interview.
"You have to have a pretty in-depth understanding of aboriginal law in today's day and age if you are going to advise clients on regulatory approvals for resource projects," Mr. Ignasiak said.
In British Columbia, First Nations communities are pursuing court challenges to federal approval of Kinder Morgan's plan to expand its Trans Mountain pipeline, and some leaders urged people to vote in Tuesday's provincial election for any party other than Christy Clark's incumbent Liberals, who support the project.
Shareholder activists plan to bring a resolution to Enbridge's annual meeting on Thursday that demands the company re-examine and report on its assessments of Indigenous rights issues that could affect acquisitions such as its recent stake in the Dakota Access Pipeline.
The Indigenous communities are now turning to a tactic the environmental movement has used: targeting the institutions that finance projects.
"We call on all banks and financial institutions to withdraw their investments in the corporations proposing to build new pipelines to carry even more tar sands oil out of Canada," Grand Chief Derek Nepinak of the Assembly of Manitoba Chiefs said in a release on Tuesday. He was speaking on behalf of the Treaty Alliance Against Tar Sands Expansion, a group of 121 Indigenous communities in Canada and the United States.
Protesters allied with the movement forced several branches of Morgan Chase & Co. in Seattle to shut down on Monday, demanding the giant U.S. bank refrain from lending to TransCanada's Keystone XL project and the $7.4-billion Trans Mountain expansion.
During the high-profile battle over the Dakota Access Pipeline, three European banks were persuaded to sell their loans to the project, a trend that, if continued, could increase the cost of capital for pipeline construction.
Earlier this year, Enbridge concluded a $1.5-billion acquisition of a 27.6-per-cent stake in the pipeline, a deal that prompted activist shareholders to call for greater scrutiny of the company's policy on Indigenous rights. A resolution to be voted on Thursday calls on Enbridge to provide better assessment and disclosure on aboriginal rights.
"There are divestment risks … but it's more around the delays and around the risk to business operations and reputation on an ongoing basis," said Delaney Greig, an analyst with Shareholder Association for Research and Education, which is managing the proposal for several Enbridge investors.
Enbridge urged shareholders to vote against the resolution, but said it will provide additional disclosure in its annual corporate social responsibility report on how it deals with Indigenous issues that arise during acquisitions.
"We believe this will better enable our investors and other stakeholders to consider our approach within the broader context of Enbridge's social and environmental commitments and performance as a whole," the company's chief sustainability officer, Linda Coady, said in an e-mailed statement.
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