Shareholder engagement moves Enbridge to address Indigenous rights in operations and investments

On June 21st 2018, National Indigenous Peoples Day, Enbridge quietly released a discussion paper that addresses in detail its approach to Indigenous rights and relationships with Indigenous Peoples in its operations and investments. The paper signifies an important step for the company in improving its accountability and transparency on Indigenous rights.

Enbridge committed to prepare the discussion paper in response to a shareholder proposal presented by SHARE at its 2017 AGM. The proposal called on the company to report to shareholders on its due diligence process to identify and address Indigenous rights in investment review for mergers and acquisitions and joint ventures. Of course, in order to report publicly on a process, a company must first ensure that it has that process in place.

SHARE’s current engagement with Enbridge on Indigenous rights was prompted by it’s acquisition of 27.5% ownership in the Dakota Access Pipeline (DAPL), at a time when Indigenous Peoples, investors and three US Federal Agencies had raised red flags about the adequacy of Indigenous consultation and environmental assessment for the project. Ultimately DAPL was approved following months of delay, violent attacks on protesters, and significant cost to project partners. Nevertheless, we continued our engagement with Enbridge because we don’t want to see the company involved in situations like DAPL again. An outcome of this longer-term engagement, Enbridge’s discussion paper addresses the companies approach to Indigenous rights and relations in its investment review processes and across company operations.

The investment review processes outlined in paper have yet to be tested, but if properly implemented should assist the company to avoid future investments that are risky to both Indigenous rights and its own operations.

In the meantime, the new and existing practices outlined for Enbridge’s own operations are already undergoing a major test with the company’s Line 3 replacement and expansion project. Although the project has received approval in Canada and the American states it traverses, Indigenous rights concerns remain outstanding. Enbridge has reached agreement with First Nations and Metis groups in Canada who are impacted by the project, but in the US, particularly Minnesota, Native American Tribes have unresolved concerns about the impacts of the project on tribal resources essential to cultural practices and identity.

Enbridge is seeking feedback on the discussion paper from Indigenous leaders and interested parties, including investors, over the next six months and has committed to provide updates on implementation in future sustainability reports.

At SHARE, we plan to draw from this experience with Enbridge to engage with other companies around investment review processes. We want to see the companies that Canadian shareholders are invested in identify and address the environmental and human rights implications of potential merger, acquisition or joint venture transactions before a deal is signed and the company become party to a risk or impact that it did not create and could have avoided.

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