NEB: Independence of the Regulator - The Canadian Story

In a speech to the World Forum on Energy Regulation, Gaetan Caron, Chair and CEO of the National Energy Board (NEB) had this to about the independence of the NEB from industry:

The easiest topic to cover in my presentation is that of independence from the industry we regulate. The Board and its staff must not only be free from bias, but also the perception of bias.  This aspect of independence is governed by an explicit array of conflict of interest requirements, the Codes of Conduct for NEB employees, and specific prohibitions for Board members and staff to invest in or hold shares of energy companies. We also have clear guidelines on meetings with external parties, requirements to prepare and make available meeting minutes, a requirement that decisions are based on materials on the public record, and other methods of preserving independence.

Another important way to promote independence and guard against perception of industry bias is

the recruitment process for Board members. [...]

Choosing people with the right background, experience, and attitudes in relation to the public interest and natural justice is one effective tool in creating and maintaining an independent regulatory tribunal. 

The same can be said about the recruitment of staff.

Mr. Caron's speech did not appear to address the historical flow of Board and staff members back and forth between the NEB and industry.

See the full presentation with speaking notes at: May 14, 2012.

B.C. MLA challenges NEB on changes to its Strategic Plan

Gary Coons, the MLA for North Coast in British Columbia, has sent a letter to the National Energy Board (NEB) expressing his concerns about changes to the NEB's Strategic Plan language.  He notes a number of significant changes, including the replacement of the NEB's mission statement.  Previously, the NEB sought to "promote safety, security, environmental protection and efficient energy infrastructure and markets in the Canadian public interest".  The NEB now says that "WE REGULATE PIPELINES, ENERGY DEVELOPMENT AND TRADE IN THE CANADIAN PUBLIC INTEREST".  Coons asks whether this change signifies that safety, security and environmental proteciton are no longer within the NEB's mandate.  Coons also notes that the Board has removed the language referring to the "responsible development" of the energy industry.  He says that these changes are of particular concern in the context of the ongoing Enbridge Northern Gateway Project application and in the context of growing public concern about the influence of "big oil" interests on government.

NEB received $58.5 million from regulated companies in 2010

The financial statements of the National Energy Board (NEB) disclose that the amount the regulator received from regulated energy companies in 2010 to cover the costs of its operations was more than $58.5 million.  This marked an increase of more than $5 million over 2009 "regulatory" revenues.  Note 3 to the financial statements explains that the federal government initially funds the expenses of the NEB through annual Parliamentary appropriations, but that the majority of the expenditures are recovered through the companies regulated by the NEB in payments back to the government.  Expenditures in 2010 included more than $45 million for salaries and employee benefits. 

Read the financial statements at: National Energy Board.

Interesting debate about the NEB and regulatory capture from Andrew Nikiforuk

Click on the following link to read an opinion piece by Andrew Nikiforuk on the regulatory capture of the National Energy Board, followed by an in-depth line of comments and responses between Nikiforuk, Andrew Leach (an Alberta-based regulatory economist), and Dave Core (of the Canadian Association of Energy and Pipeline Landowners Associations - CAEPLA): National Energy Board: Captured Regulator?