Oil Company Enbridge
Canadas Own Oil Pipeline Problem. Alistair Macdonald and Paul Vieira, April 19, 2015
The specific topic addressed in the article from the assigned chapter is Corporate Social Responsibly (CSR).The article describes how oil company Enbridge tries to satisfy needs and demands of aboriginal population in Canada where it wants to build a new oil pipeline in order to transfer Canadian oil to Asia. In particular, the company has promised a range of protections for Gateway and jobs as well as a 10% equity stake for local people.
Key Issues
Keeping environmental standards significant part of oil pipeline will go through wild nature, so the company pays much attention to protection environment from spills of oil (Frynas, 2015). Enbridge promises careful monitoring and immediate response to any spills.
Observing the rights of local population and offering locals jobs and trainings. Moreover, aboriginal population will have preferences over the rest of people.
Involving of locals into managing the company - Enbridge offered the First Nations (it unites representatives of aboriginal population) to buy a 10% equity stake. Furthermore, the firm has promised to help them to find money for this operation.
Following all local laws and regulations the company obtained a license from the national government last fall. To get it, Enbridge completed a range of various conditions. Today, the company tries to fulfill conditions of the British Columbia provincial government.
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Analysis
The oil company Enbridge is planning to build a 730-mile pipeline, which would help to transfer Canadian oil to West Coast port. According to the claims of aboriginal communities, 30, 100 square miles will be affected by Enbridges pipeline in the northern part of British Columbia (Macdonald & Vieira, 2015). This increases the responsibility of company, particularly the importance of keeping environmental standards. Seventy percent of aboriginal people that inhabit these areas are unemployed (Macdonald & Vieira, 2015). Therefore, fishing salmon or hunting moose is the only source of survival for many of them. In addition, locals are very dependable on the wilderness in a spiritual sense, so any environmental issues would make have negative effects on them. To deal will this problem, Enbridge has pledged to include numerous protections for Gateway (the name of the pipeline). For instance, environmental standards will be kept with a help of 24-hour monitoring on the territories of pump stations and control centers.
In addition, Enbridge has promised to provide aerial surveillance and 132 valves, which would stop oil flow to any spills. However, no promises can reduce worrying of people concerning negative impacts of oil pipelines on environment. The authors of the article included the commentaries of locals, where they said that any economic benefits would not make them change their negative attitude to pipelines. They often support their position by the Imperial Metals Corporations case. The company has recently spilled over billion gallons of arsenic and other dangerous materials into waterway. Imperial Metals states that its waste materials have not caused any dangerous impacts on wildlife and that everything has been already cleaned up. However, this statement does not reduce the locals opposition. The state authorities also try to reduce opposition of local communities because the Enbridges pipeline is highly important for Canada, particularly it can reduce the dependence of the country on Americas demand and make it an energy superpower (Macdonald & Vieira, 2015). The major Canadian regulator the National Energy Board states that pipelines are safe and hardly ever spill. Oils spills reach only about 883 barrels per year (for the period from 2011 to 2013) and they were recovered (Macdonald & Vieira, 2015).
To start building of the pipeline, Enbridge has to reach agreement with aboriginal population. The influence of locals has increased due to the recent decision of Canadian Supreme Court. Thus, the Court allowed them to fight against a project that could be dangerous for their environment and culture. Enbridge has had talks with representatives of Tlazten, who composed a range of conditions for the oil corporation. The company says that included these suggestions over the last four years. Enbridge demonstrates this importance for the area by promising to create about 4,000 jobs along the pipeline. Moreover, aboriginals will get 15% of all jobs and will be also provided with training opportunities. Another benefit is that Enbridge will purchase materials from native-owned suppliers (Macdonald & Vieira, 2015).
The company also offers the First Nationals to purchase a 10% equity stake and even promises to help obtain finances for this. This would involve locals into managing the company and would motivate the corporation to follow the norms of the CSR. Besides, aboriginals will be less worried about the negative effects of the oil pipeline on their environment due to this involvement.
The company follows the regulation regime and has a license from the national government. It also tries to execute the conditions of the British Columbia provincial government. On the other hand, the position of the aboriginals is very important for officials due to further elections. Therefore, they are starting to change their attitude to Enbridge. For example, Tlazten officials state that they are reviewing three other offerings for resource development. In particular, there are some attractive projects that deal with a gas pipeline and two mines (Macdonald & Vieira, 2015). Officials say that these objects are not so risky for the environment as oil pipelines. That it why, Enbridges attempts to fulfill all the requirements probably are not rational due to high opposition.
This article is related to the chosen topic because it demonstrates how modern companies act when they follow the vision of CSR. From the reading materials, CSR is a vision that offers business accountability to greater number of the sides, not only investors or shareholders. The major fields include keeping environmental standards, protecting of employees and local inhabitants, observing the regulation regime (Frynas, 2012). Besides, the current article is related to the topic because it focuses on the major aspects of CSR, including environmental protection, satisfying needs of local people and keeping local laws.
Conclusions
The article demonstrates the ways in which CSR acts in the oil industry. The authors focus on the oil pipeline called Northern Gateway, which will increase Canadian oil export. The project raised opposition from the side of First Nations that believe that it is risky for their environment and culture. The builder of the pipeline is Enbridge. The company demonstrates that it keeps the norms of CSR that are common for the industry. In particular, Enbridge tries to make their constructions as safe as possible. This includes continuous monitoring of pump stations and control centers, aerial surveillance and more than a hundred of valves to deal with oil spills. The company also protects local communities and promises to provide them with jobs (aboriginals will get 15% of jobs) and training opportunities. Besides, the builder is planning to purchase materials from local suppliers, which will create additional economic benefits for the public. Aboriginals would be able to monitor the work of Enbridge through opportunity to buy a 10% equity stake. However, no attractive offerings as well as significant efforts of the company to follow the regulation regime, gain support of the local population. The problem is that aboriginals have already had a negative experience with another company that had a spill of waste materials. Therefore, they do not believe that the oil pipeline will be safe for their environment and culture. Besides, locals do not demonstrate a high interest in getting jobs. Despite the fact that seventy percent of aboriginals are unemployed, they do not try to use opportunities offered by the authorities. They prefer hunting and fishing. The officials are also starting to change their position. For example, they informed about reviewing another three requests relating to resource development. These projects are believed to be less risky than an oil pipeline. Enbridge also sees that the preparation process takes longer than it was expected. Earlier they planned to start construction works in 2018 but now they cannot say any specific date.
