Canada’s energy sector focused on remaining an ethical leader
CARRIE KELLY
Canada’s reputation as an ethical place for energy companies to do business surpasses most, yet there’s always room to improve.
That message was presented during the final lecture in a series on global perspective organized by Canada’s Public Policy Forum. Huguette Labelle, chair of Transparency International, spoke to a group of university students and oil and gas executives at the University of Calgary.
Transparency International created a corruption index and through surveys found that Canada’s level of corruption is considered low. It ranked 8.7 out of 10 on the list of countries with the biggest oil reserves. The higher the score is, the less perceived corruption in a country. Iraq received a score of 1.8 out of 10, Iran 2.7 and Saudi Arabia, with the largest oil reserves in the world, received a score of 4.4.
“There is nobody that has a monopoly on corruption and integrity, however, Canada is doing well,” Labelle says.
While Canadian companies may be working hard to avoid exploitation when drilling in other countries, it sometimes means they lose out. One in five executives surveyed said they had lost business because a competitor paid a bribe.
Responsible development is achievable, but not necessarily easy, especially in countries that are very rich in natural resources, yet very poor. Having ethics and compliance staff is essential and they should be part of daily operations, not just when there is a problem, says Labelle.
Canada completed its first foreign bribery case in 2001. Mining firm Niko Resources agreed to pay a $9.5 million fine for allegedly bribing Bangladeshi officials.
Transparency International’s vision is of a world in which government, politics, business, civil society and the daily lives of people are free from corruption. Labelle acknowledges that it will take great effort.
“There’s no magic bullet. It takes hard work,” says Labelle.
Do not stick to the minimum standards of a country when extracting resources on foreign soil, she encourages.
“Your staff will copy your approach. If minimum is good enough for the company, it will be good enough for the staff. They follow by example. For your reputation, it makes a big difference,” she says. “If you advertise that you are a ‘zero tolerance to corruption’ company, it will be to your benefit.”
18 THE WESTERN CANADIAN PIPELINE | WINTER 2013
Huguette Labelle, chair of Transparency International, says earning a community's trust is at the heart of sustainable operations. Photo by Monty Nicol, Suncor.
When doing business on foreign soil, companies must be willing to invest in the area.
Companies that extract resources can help drive the infrastructure as part of responsible development, especially in under developed countries.
Communities should be included from day one to ensure they are aware of the benefits they can gain from energy companies, so they know when they can expect jobs to be available and a relationship can be created.
“Earning the community’s trust and inclusion of the community is at the heart of sustainable operations,” says Labelle.
Keeping the local community and stakeholders engaged and ensuring thorough compliance will go a long way. It is not enough for companies to make sure everything they are doing is above board — they need to ensure their contractors and subsidiaries are also being transparent.
“Know your subsidiaries and know who their equity owners are as well,” Labelle suggests. “Transparency builds trust and is the best antidote to corruption for companies.”
Transparency International suggests companies publish individual financial accounts for each country of operation and it publishes a list of oil and gas companies’ disclosure. StatOil, Nexen and Talisman are at the top of the list for reporting.
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