Shareholders & First Nations to confront TransCanada Corporation at AGM

By April 14, 2008News

TransCanada Corporation (TSX: TRP) is expected to face difficult questions from shareholders and First Nations leaders at the company’s April 25 annual general meeting in Calgary.  Shareholders will raise concerns regarding the company’s application to build a new pipeline across disputed First Nations’ territory in Northern Alberta.  The North Central Corridor pipeline project will supply gas to north-eastern Alberta where increased oil sands production has created greater demand for natural gas delivery.

Leaders of the Lubicon Nation argue that TransCanada failed to adequately consult with indigenous people regarding the pipeline prior to filing an application for a construction license with the Alberta Utilities Commission (AUC).  In its application to the AUC, TransCanada stated, “no objections were raised in extensive consultation with landowners, native communities and other ‘interested stakeholders.’”

The Lubicon reject this statement, suggesting that the band’s leaders have repeatedly asked TransCanada officials to respect recognized Lubicon land rights and answer questions pertaining to the construction and operation of the pipeline, and that the company has failed to respond to these requests.  The Lubicon and shareholders, led by faith-based group KAIROS, argue that if the AUC approves the project as currently presented, any further discussions between TransCanada and the Lubicon would be meaningless since there would be no opportunity for Lubicon concerns to be meaningfully integrated into the project plan.

Best practice suggests that constructive discussions with the First Nations and other stakeholders should take place in advance of key project approval processes to ensure any concerns raised by stakeholders are adequately considered and addressed, either by altering project plans or developing appropriate mitigation measures.  A notable study from the World Resources Institute demonstrates that failure to obtain the free, prior and informed consent of stakeholders can lead to project delays and increased costs, and can even result in the outright cancellation of a project.  On the other hand, obtaining prior approval from First Nations can benefit both the community and the project operator.

At next week’s AGM, TransCanada executives will be expected to explain why the company has not addressed Lubicon questions or integrated their concerns into project planning.  The Lubicon will be asking the company to make a meaningful commitment to consult with First Nations regarding land use, as well as the long-term social and environmental impacts of the pipeline.