Review slams Mackenzie project's socio-economic agreement
Last Updated: Thursday, August 16, 2007 | 12:19 PM CT
http://www.cbc.ca/canada/north/story/2007/08/16/gas-agreement.html
The socio-economic agreement between the Northwest Territories and the Mackenzie Valley gas project consortium is unenforceable, says a review released by a social justice group Wednesday.
The Yellowknife-based group Alternatives North said its independent reviewer's report raises significant questions about the government's agreement with the consortium behind the Mackenzie gas project, a 1,200-kilometre pipeline from the N.W.T. community of Inuvik on the Beaufort Sea to Alberta.
In January the territorial government and the Mackenzie project's producer group, a consortium of Imperial Oil, ConocoPhillips, Shell Canada and ExxonMobil, signed the Socio-Economic Agreement for the Mackenzie Gas Project.
The agreement included policies on employment, hiring, training, business opportunities and monitoring of the project during its construction and operation.
At the time of the announcement, Imperial Oil's senior vice-president Randy Broiles described the agreement as a "significant step forward" in the project's progress.
The territory's minister of industry, tourism and investment, Brendan Bell, said in January the agreement would ensure that northerners benefited from the pipeline: "There were a number of things we wanted going in, and I think we, across the board, were able to achieve most of the aspects of the agreement."
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Alternatives North was not satisfied with the agreement, announced Jan. 22 but signed a week beforehand. The group said it was concerned about the agreement's provisions for monitoring revenue-sharing and added costs for public programs and services such as policing. This concern led to the commissioning of a review and Wednesday's report slamming the agreement.
Reviewer Ciaran O'Faircheallaigh, an Australian professor specializing in these types of agreements, said the January document is effectively unenforceable, with vague commitments and inadequate monitoring plans. He added that the agreement is weaker than similar ones the government has for diamond mines.
O'Faircheallaigh said the project's monitoring agency won't have the money or staff to monitor the pipeline effectively, adding that with meetings planned for just once a year, it would take a long time to address any problems that did occur.
The one aspect of the agreement O'Faircheallaigh liked was the multimillion-dollar training fund, because it is a specific and measurable commitment.
New agreement unlikely
Shelagh Montgomery of Alternatives North said O'Faircheallaigh's review raises enough questions to warrant scrapping the agreement.
"I think there's enough questions that could be raised, the fact that it's weaker than any other agreement that's been negotiated, that it's not going to protect people or provide the benefits it should or could," she said.
But both Montgomery and O'Faircheallaigh agree a new agreement would be both difficult and unlikely.
New negotiations "usually happen because one or the other of the parties, or the broader public for that matter, is able to demonstrate that the agreement has failed," O'Faircheallaigh said.
"One of the difficulties with this agreement is that the commitments are so broad and so general that it's going to be difficult for anyone to show that it's actually failing."
The project, originally conceived in the 1970s, has been hampered by massive cost overruns, regulatory delays and opposition from some native and environmental groups.
