Dr. Tane Ward, center, talks with reporters during a press conference at the Houston Public Library following an appearance at Kinder Morgan International's Annual General Meeting on May 9, 2018, in Houston. Ward and Neskonlith te Secwepemc chief Judy Wilson, right, talked about their opposition to the Trans Mountain Pipeline.Godofredo A. Vasquez/The Associated Press
Just weeks before a decision on whether to cancel construction of the $7.4-billion Trans Mountain pipeline expansion, Kinder Morgan Inc. shareholders voted on Wednesday to demand audits of the company’s environmental and legal risks.
The audit proposal was led by a New York State agency that controls a US$210-billion pension fund and delegated an Indigenous leader from British Columbia to deliver it at Kinder Morgan’s annual general meeting in Houston, Tex.
The proposal cites delays caused by opposition to the project as grounds for a shift to a business model that emphasizes sustainable resource development.
Neskonlith Chief Judy Wilson of the Secwépemc Nation in B.C.’s Interior secured her entry ticket to the AGM from the New York State comptroller, who manages the state employees’ pension fund.
“We do not believe that the risks of this project have been accurately evaluated nor fully disclosed, and we want you to know that we have the law on our side and we intend to enforce our rights,” Chief Wilson told the meeting in a statement.
The Secwépemc people collectively hold Aboriginal title and rights in the largest Indigenous territory the proposed pipeline expansion would cross.
Kinder Morgan Inc.’s executive chairman, Rich Kinder, told the meeting the proposal passed − he did not say by how much − but added that it is non-binding. However, he promised the board would “carefully consider” what actions it will take as a result.
Opponents of expanding the Trans Mountain pipeline have tried to stop it through the courts and civil disobedience in Canada, but the most influential leverage may be the “responsible investment” movement of Wall Street money managers who see strategic value in sustainable business practices.
It’s not the first time New York State comptroller Thomas DiNapoli sought to push Kinder Morgan on the pipeline, but Wednesday’s meeting was held at a pivotal time for the project − and his proposal this year was backed by the influential proxy advisory firm Institutional Shareholder Services, which provides analysis to help investors with decision-making.
The comptroller, as the trustee for the massive state pension fund, has used the fund’s leverage to persuade Fortune 500 companies to adopt auditing measures that allow investors to determine whether environmental, social and governance issues are being managed to avoid risk.
The pension fund holds about US$77-million of stock in Kinder Morgan Inc.
Mr. DeNapoli welcomed the result of the vote.
“This is a resounding victory for shareholders and others concerned about the company’s lack of reporting on environmental, social and corporate governance issues,” he said in a statement. “Long-term investors want Kinder Morgan to be transparent and accountable about the risks in its operations, that includes the controversy that arose over the Trans Mountain pipeline.”
Alberta and the federal government have vowed to meet Kinder Morgan’s May 31 deadline to address the issues that stand in the way of the project. Ottawa has promised to deliver assurances that it can be built, but the company’s shareholders heard on Wednesday that the opposition will remain.
“We are here to tell you that even if the Canadian government tries to minimize political or financial risks, we will not stop fighting,” Chief Wilson told the meeting. Although Kinder Morgan has signed agreements with many First Nations along the pipeline route, Chief Wilson told the meeting those deals do not constitute consent. “Property rights cannot be ceded by individual groups.”
The alliance of the pipeline’s opponents in British Columbia and Wall Street investors was fostered by an online advocacy group, SumOfUs.
Lisa Lindsley, capital-markets adviser at SumOfUs, brought B.C. Indigenous leaders to New York to meet with bankers and credit-rating agencies in 2015 about Trans Mountain.
She said her organization is not calling for divestment in Kinder Morgan because there is more influence in speaking to the company as investors.
“This company is playing by an outdated set of rules and the ground has shifted below them,” she said. “We are speaking the language they understand to the people they care about.”
Edmonton
Detail
Proposed Trans Mountain
Pipeline route
ALBERTA
BRITISH
COLUMBIA
Banff
National
Park
Revelstoke
Kamloops
Pipeline route
First Nations Reserves
Kelowna
Vancouver
Parks
0
100
Water
Penticton
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Abbotsford
THE GLOBE AND MAIL, SOURCE: national energy board
Edmonton
Detail
Proposed Trans Mountain
Pipeline route
BRITISH COLUMBIA
ALBERTA
Banff
National
Park
Revelstoke
Kamloops
Proposed pipeline route
First Nations Reserves
Kelowna
Vancouver
Parks
0
100
Penticton
Water
KM
Abbotsford
THE GLOBE AND MAIL, SOURCE: national energy board
Willmore
Wilderness
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Edmonton
B.C.
ALTA.
SASK.
Detail
Jasper
National
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Proposed Trans Mountain
Pipeline route
Wells Gray
Prov. Park
U.S.
BRITISH COLUMBIA
ALBERTA
Banff
National
Park
Revelstoke
Kamloops
Vernon
Proposed pipeline route
Kelowna
First Nations Reserves
Vancouver
Parks
Penticton
0
100
Water
KM
Abbotsford
JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: national energy board