Thank you very much, Mr. Chair, and committee members. Enbridge welcomes the opportunity to be in front of you this afternoon on this subject.
I'd like to begin my presentation with a brief overview of our company before turning to a specific discussion about environmental impacts and human rights concerns in connection with a free trade agreement between Canada and Colombia.
Enbridge is a Canadian company based in Calgary and is a leader in energy transportation and distribution in North America and internationally. We transport the natural gas and crude oil used to heat homes, power transportation systems, and provide fuel and feedstock for industries. As a transporter of energy, Enbridge operates, in both Canada and the U.S., the world's longest crude oil and liquids transportation system. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, providing distribution services in Ontario, Quebec, New Brunswick, and New York State. We employ approximately 5,600 people, primarily in Canada. We have employees as well in the U.S. and South America.
We pride ourselves on being a socially responsible company. For us that means doing things right and doing the right thing. All our business decisions and actions have to be considered in light of their short-, medium-, and long-term economic, environmental, and social impacts. This includes decisions we make as to the countries in which we invest. Our decisions are governed by our desire to, first of all, conduct our business in a socially responsible and ethical manner; second, protect the environment and the safety of people; third, provide economic and other benefits to the communities where we operate; fourth, support universal human rights; and fifth, engage, learn from, respect, and support the communities and culture in which we work.
We have walked away from several countries because we did not believe we could live up to our commitments. On the other hand, we've done business in Colombia for about 15 years because it is able to meet these criteria. On the surface that may seem like a surprising statement, but let me elaborate.
We have been doing business in Colombia since 1994, when we made our first investment in Oleoducto Central SA, or Ocensa. That was our first investment outside North America, I might add. We own 24.7% of Ocensa, a consortium that built Colombia’s largest oil pipeline system at an investment of more than U.S. $2.3 billion. The pipeline runs from the Cusiana and Cupiagua oilfields in the central interior of Colombia to the Port of Coveñas on the Caribbean coast. Enbridge provides technical and management services to this pipeline, which has a capacity of 550,000 barrels per day. The other members of the Ocensa consortium, the other owners, are Ecopetrol, the largest company in Colombia and the state-owned oil company of Colombia, BP, and Total.
We knew going into the country that there were considerable risks associated with our investment, given that Colombia is a country with a past history of civil war and ongoing conflicts involving guerrilla and paramilitary groups. We also believed those risks were manageable. Why? First, despite the civil strife, Colombia is a long-established democracy. It has a relatively stable economy, well-developed trade relations with countries around the world, and a population that is predominantly optimistic and engaged in productive activities. The oil business can be, and is, carried on successfully and safely in Colombia.
We are pleased to have had Enbridge and Ocensa representatives participate in the industry round table that members of this committee met with on your visit to Colombia last month. We hope your firsthand experience in the country helps you as you deliberate the proposed free trade agreement between our two countries.
Let me just share briefly our experience there.
In the 15 years that we've been active in Colombia, we have transferred technology, skills, and technical know-how, as well as environmental, health, and safety standards. We are proud of our record in the country in which, along with our partners in Ocensa, we have helped to create economic, social, and environmental value by creating awareness, understanding, and respect for human rights; making corporate social responsibility a priority; and engaging all levels of stakeholders, including local communities, governments, landowners, NGOs, contractors, employees, and others.
Our policy of community relations expresses our commitment in three dimensions: first, to strictly comply with the law and all government regulations; second, to carefully manage our operations to minimize any possible adverse impacts to the public, to our employees, to our contractors, or to the environment; and third, to contribute to improving the socio-economic conditions and political stability in regions where our company is active.
The implementation of this policy requires the dedication of financial, human, and technical resources, as well as a high degree of coordination among municipal and departmental governments, institutions of national law and order, and international non-governmental institutions. The output of this work is called our social investment plan. The social investment plan is designed to empower communities as managers responsible for their own destiny and to generate new opportunities for growth and sustainability through better living conditions.
The program has four main thrusts.
The first thrust is the reduction of poverty through the construction of new homes and the making of improvements to existing homes, the training parents about proper nutrition, and strengthening the nuclear family through customized training programs to teach parents how to protect and care for their children.
The second is institutional strengthening through community courses and workshops designed to increase good governance skills in both elected officials and the citizens they represent.
The third is helpful communication, through the provision of FM radio shows and a monthly newsletter to remote regions along the pipeline's right-of-way—remember that pipelines traverse huge spans of geography—promoting respect for people and cultural diversity; knowledge about basic human rights and obligations; and news and interviews to increase the sense of community among isolated towns and villages
The fourth and last is increasing skills and self-reliance through our agreements and support of the Juntas de Acción Comunal, which are community cooperatives. These self-governed organizations supply manpower for both community projects and civil works in our right-of-way, and are funded by Ocensa. They provide an opportunity for members of the junta to learn about safety on the job, how to manage projects, how to interpret engineering drawings, and many other skills designed to increase their employability. Each year, between 200 and 400 people are employed on our right-of-way through the cooperatives.
Ocensa currently invests 2.2% of its ordinary operating costs in the communities—and that's assuming that we would deduct extraordinary costs associated with security and helicopters, which would not be necessary if the system were operated in Canada.
Let me reference two of the programs that we have supported, just as examples. First, Ocensa's reforestation program is part of its commitment to the environment. Ocensa has an ongoing program to plant trees along the pipeline's right-of-way. To date, about 1,970 hectares of trees have been planted. In sensitive shoreline areas, 122 hectares of red mangrove trees, a rare and endangered species, have been planted with the assistance of local communities. Ocensa has also purchased 167 hectares of high mountain forest, and plans to buy an additional 50 hectares. Ocensa took this action as part of an agreement with Colombia’s environment minister.
In the area of human rights, Ocensa was one of the first companies in Colombia to publicly declare its philosophy and commitment to the respect of human rights in all company activities—and this was in 2002. The human rights policy emphasizes respect for human dignity and no discrimination; support for the rule of law and of public institutions; a rejection of all forms of violence and of any kind of relationship with illegal armed groups; protection of the civil character of all personnel and assets granted by international human rights laws; promotion of security practices that favour and uphold the exercise of all human rights; and the promotion of a culture of respect for human rights among employees and contractors.
Ocensa follows the Voluntary Principles on Security and Human Rights and the UN’s Global Compact—as does Enbridge, I might add. Ocensa adopted a detailed human rights policy and code of conduct in 2004, an action-oriented program that includes: mandatory attendance for all employees in basic human rights training and workshops, held four times a year every year; the use of human rights clauses in all contracts, demanding from contractors concrete assurance practices, with compliance being reviewed directly as well as through independent auditors; and the promotion of specific assurance practices for security contractors that guide their conduct and behaviour in any situation where human rights could possibly be violated.
In 2007 Ocensa led an industry and government project that resulted in the publication of the first-ever handbook of Guidelines on Human Rights for Private Security Companies.
It also provides funds for third-party training by accredited academic institutions for public enforcement personnel on the subject of human rights.
Now, the Ocensa pipeline traverses an extensive part of Colombia’s geography and includes some zones of conflict. Those zones are patrolled regularly by the Colombian army to protect people, infrastructure, and resources. In 2006, 1,400 soldiers, airmen, and marines from 17 military bases stationed near Ocensa's pipeline participated in Ocensa's human rights awareness training programs. Since the implementation of these programs, more than 4,000 military personnel have received extensive training designed to achieve a strict application of international humanitarian law and respectful conduct towards the people in communities close to our facilities.
Last, there is an anonymous, confidential reporting system in place to receive and investigate any allegations related to the human rights policy. Ocensa has also appointed a human rights coordinator, who tracks and audits the company’s human rights practices and monitors employee and contractor compliance with the human rights policy.
Despite our best efforts, but also, more importantly, those of the Colombian people and their democratically elected government, we are all too aware of the ongoing human rights issues in Colombia today. What we are encouraged by, though, is the positive trend we have seen recently. Some indicators of this include the fact although there were 2,882 cases of kidnapping registered in the country in 2002, by 2007 there were 486 cases.
Terrorist actions have declined from 1,645 in 2002 to 387 in 2007. Homicide rates have declined from the 28,837 registered in 2002 to the 17,198 by the end of 2007. In terms of forced displacements, 392,431 persons were classified as forcibly displaced in 2002. By 2007 that number was reduced to 220,439. The United Nations High Commission on Human Rights has recognized the increment of public efforts to alleviate this problem for which the illegal armed groups are being held responsible.
Unions have a strong protection under the law in Colombia, although the illegal armed groups have seriously affected the exercise of the right of association. The government’s advance against those groups has achieved a reduction from 192 union members killed in 2002 to 26 in 2007. The UNHCHR has shown confidence in the Colombian government’s efforts to prevent the killing of union workers through activities such as the improvement of the protection capabilities of persons in danger or under menace. In 2006 the general prosecutor's office created a special unit to investigate this specific type of crime. The unemployment rate has declined from 15.1% in 2002 to 11.1% in 2007.
We know things aren't perfect in Colombia. In fact, they are far from it. We do believe, however, that more engagement and investment in the country by us, by other Canadian companies, and increasing engagement between our two societies and governments can help continue to advance a number of these indicators. The problems in Colombia are not caused by trade and investment, but they may be partially addressed by increased trade and investment.
We believe we've made a positive difference in Colombia. We see the growth of new forests along our pipeline right-of-way. Even more telling, we see the growth of new ideas through our education and awareness programs on human rights and social and environmental issues with our employees and their families, as well as our contractors and the groups we interact with on a daily basis. Because we have a long-term commitment to the country, we will continue with those programs regardless of the outcome of these discussions.
In summary, it's our firm belief that we have contributed positively. We believe Canada stands to benefit from access to new and growing markets, such as the one in Colombia. We believe a greater presence of Canadian companies operating in Colombia will be of benefit to the people of Colombia and of Canada. This is a country that is making improvements, has a wealth of highly skilled and committed workers, proven respect for commercial agreements, and a long-term history of democracy. In short, we believe Colombia is a worthy partner for a free trade agreement with Canada.
We thank the members of the committee for allowing us the opportunity to make our presentation. We'll be glad to take any questions at the appropriate time.