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Enbridge under pressure to disclose risks of indigenous rights in new investments

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Enbridge Inc. is facing fresh calls to explain how it assesses indigenous rights and environmental risks facing new investments after the Dakota Access Pipeline ignited a firestorm south of the border.

Shareholders for Canada’s largest pipeline company will vote Thursday on a resolution by the Sisters of Charity seeking disclosure on the weight Enbridge gives to indigenous and environmental concerns when making new acquisitions.

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The vote comes as Enbridge and other pipeline companies face a growing public perception — whether it’s deserved or not — that they aren’t friendly to indigenous communities, according to a shareholder advocacy group.

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“They seem to be in a position to take some important steps and to be understanding the importance of the issue,” said Delaney Greig, an analyst at the Shareholder Association for Research and Education, which came up with the idea for the resolution.

“The reason we are going to a vote instead of withdrawing the proposal is because we think they need to hear that from their shareholders in order to make the move.”

Enbridge has recommended shareholders vote against the resolution, which calls for a report outlining which units of the company are involved in assessing indigenous rights and environmental risks, what standards guide the assessment and what impact this information has on investment decisions.

The pipeline operator says it has taken steps to improve its approach with indigenous communities and will explain in a company report next year how it integrates “indigenous and human rights sensitivities into our investment review process.”

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The shareholder group says this doesn’t go far enough, calling the promise vague and “misaligned with the significance of the issue.”

“Regardless of the outcome of the vote on this shareholder resolution, we will bring this disclosure into our annual (corporate social responsibility) and sustainability report on an ongoing basis,” Enbridge said in a statement. “And we will continue to engage with stakeholders to ensure that it addresses the issues they have identified.”

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Greig said her group represents long-term shareholders who take the view that industry must fully consider their impacts on indigenous communities and the environment to avoid reputational damage and financial loss, but also because it’s “the way we want our society to operate.”

The resolution put forward by the non-profit Sisters of Charity, which owns some Enbridge shares, is in response to the company’s 2016 purchase of a large stake in the Dakota Access Pipeline.

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Before Enbridge announced it was joining forces with U.S. refiner Marathon Petroleum Corp. to buy a 49 per cent stake in the Dakota project and another pipeline for US$2.6 billion, indigenous groups raised red flags about the project.

There were fears an environmental assessment failed to consider the project’s impact on reservation lands, sacred sites and drinking water supplies for the Standing Rock Sioux.

Days before Enbridge announced its acquisition in the Dakota pipeline in August 2016, an indigenous group filed a lawsuit challenging the project’s approval, a move that was followed by a major opposition uprising.

“Red flags were already there, so probing them would be what we’d expect,” Greig said.

The pipeline, which continues to face legal challenges, leaked nearly 320 litres of oil in South Dakota in April, a small spill that still heightened concern among indigenous groups about the risks to drinking water, according to The Associated Press.

Sister Cecilia Hudec, of the Sisters of Charity, said as long as economies remain reliant on oil and gas, there will likely be a role for Enbridge’s pipelines, “but when it’s going through people’s land, you have to look at the risks.”

According to Greig’s group, a similar resolution was presented to shareholders of Enbridge’s partner in the pipeline, Marathon Petroleum, but it was rejected in a vote last month, with 32 per cent of shareholders in favour.

rsouthwick@postmedia.com

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