Transparency and its Other – Studying the Oil Industry

Article posted to Public Political Ecology Lab

By Anna Zalik

In this post I would like to give a few examples of my experience grappling with non disclosure and enclosure of spaces of contestation surrounding oil industry operations. The first example, as Kimia Ghomeshi and I have documented in greater detail via Antipode Foundation, concerns our attempt to access detailed information on Canadian government financing (through Export Development Canada) to controversial pipeline projects, including the Keystone XL and Northern Gateway. That experience underlined that substantive access to the specifics of Canadian corporate activities financed via government channels is unavailable to both the research community and the general public, expressing overall regulatory capture (at multiple scales) by the interests of the hydrocarbon industry. Under an increasingly financialized economy, and the (albeit volatile) rise of minerals and hydrocarbon investment that followed 9-11 and later the 2008 financial crisis, substantive democratic checks on over-exploitation by capital are compromised in increasingly obvious forms.

The second example concerns my experience with previously confidential files pertaining to Shell’s activities during the Nigerian Civil War available at the Kew Public Records Office in London. In 2004, I published the following extended citation of archived correspondence between British High Commissions in West Africa and the Foreign and Commonwealth Office in London (FCO) archives in an article in the Review of African Political Economy :

“You will, I imagine, already be aware from your close relations with Shell in the context of the Nigerian war, that Shell are also fuelling the planes carrying the airlift into Biafra from Sao Tome. This presents them with a minor conflict of interest.

As far as I can make out Shell are the only company who have been supplying aviation fuel at Sao Tome. When the war began they supplied the few planes staging there with fuel. This represented a small amount. As the war continued the amounts became larger, and in a modest way represented what appeared to be a money spinner for Shell. One of their customers was the American gun-runner, Wharton, who a year or so ago was flying arms into Biafra via Portugal and Sao Tome. Shell were apparently unwise enough to give him credit and he has left them with the bad debt of 5 million escudos (say 75000 pounds)

According to the local and newly arrived Shell manager here his head office told him in London that the less they knew about the Shell operations in Sao tome the better. They are evidently willing to do business there as long as this does not attract unfavourable publicity. Should they now cease to supply aviation fuel at Sao Tome this would presumably attract unfavourable comment about Shell in the world press for having deliberately held up the relief supplies being flown in by the church organisations…

Reflecting on this, we have been wondering whether any interruption or reduction of the airlift from Sao Tome into Biafra could help to bring about the end of the war? If so, then Shell could perhaps be prevailed upon to cut off their supplies of aviation fuel to Sao Tome for a short period…”

Source: The National Archives of the UK

The response from the Foreign and Commonwealth Office to this letter reads:

“This is a slightly tricky problem as I see it, in that the question of supplying aviation fuel for flights of all kinds from Sao Tome is a matter of Shell’s Commercial operations and interests. We should therefore have to be on firm ground of national interest if we were to seek to move Shell to change their present commercial practice.

On this criterion I should have thought that we should encourage Shell to provide fuel for the relief flights, but that (if this could be done separately) they should be dissuaded from assisting the arms flights. Inter alia, I should have thought that the Company’s standing in Nigeria generally would suffer substantially were the Nigerians to become aware of the assistance given to arms flights by Shell in Sao Tome.

In these circumstances I should have thought that we could reasonably have sounded Shell about their prospects of discriminating between their clients. Could they, for example, on the basis of their bad debt on the Wharton account, decline to supply arms flights further? Could a ‘Head Office decision’ be used to justify a change locally? Clearly, if it were not possible for Shell to discriminate between customers, we should not be in a good position to urge that they cut off all supplies, since this would affect relief flights…”

On a subsequent visit to Kew, I found the box containing this correspondence had been de-indexed and thus inaccessible to the public unless one had the box number already (which is File FCO 67 212). The file was also much disorganized, which my colleague Dr. Ike Okonta in Nigeria indicated had been his experience with other materials pertaining to the Nigerian civil war. I was advised, informally, that this was not accidental and that I should make a copy of every page in that box, a further example of which may be viewed above.

The third example is drawn from my observations at the environmental impact hearings held under the auspices of the 2012 Joint Review Panel concerning the Shell Jackpine Mine Expansion in the Alberta Tar Sands. This project was ultimately approved, but has been firmly opposed by the Athabasca Chipewyan First Nation (ACFN). The hearings process, in its tribunal form, is highly exclusionary – successful intervention in that process is severely limited by the expectation that opposing interveners would be represented by legal counsel. Among other observations made by Asume Osuoka and myself with regard to the materials under review, an anecdote from the hearings in Northern Alberta in the winter illustrates the overall power dynamics between the firm and opposing First Nations and Metis. Following an electrical blackout at the hearing venue, elders from ACFN waited outside at the venue for an hour, while Shell staff were allowed entry by security. But most telling was that the week immediately prior to the start of the hearings – in October 2012, Shell bought the naming rights for the facility via a 2.5 million dollar partnership. The extension of MacDonald Island Park, the sports facility at which the hearings took place, was to be named Shell Place, shifting the terrain in favour of corporate marketing. The general public, including First Nations and Metis with historic rights to the affected land, thus attended regulatory processes nominally aimed at protecting their interests, in a building held by the corporation whose project was under consideration. Upon approaching the hearings a billboard reading ‘Future Home of Shell Place’ was visible on the entry road to the facility. These kinds of dynamics have clear material consequences for decision-making under formally liberal-democratic processes. For excellent analysis concerning how transparency discourse is applied inequitably and problematically to Canadian First Nations, see Shiri Pasternak’s crucial work.

A final example concerns the erosion of labour protections in the oil industry in Mexico, as foreign industry participation in the offshore oil sector deepens. This creeping denationalization has been ongoing for some decades, and accelerated under recent oil and energy sector reforms under the Felipe Calderon and now Pena Nieto administrations. In conducting interviews regarding these issues on various occasions over the past decade, I have met workers engaged on offshore platforms who described nasty conditions, but were constrained from reporting this through non-disclosure clauses in their contracts. Workers who had been involved in an organizing drive on privately managed platforms had been black-listed, and had received threats. These dynamics have been described at length by labour rights organizations such as CEREAL and the Union of Technical/Professional Workers in Oil Industry (UNTyPP) in Mexico, and in a report published by the International Transport Workers authored by the award-winning Mexican journalist Ana Lilia Perez.

These experiences are just a few of the many that those who have studied the oil and gas industry, and corporate activity in general, could report concerning research on particular private sector activities. While a great deal of general reporting is available on industry activity, the detailed reporting sold to investors, on the other hand, runs in the various 1000s of dollars and is certainly not available in university libraries. All of this points to the contradictory nature of transparency discourse through such projects as that of the Extractive Industry Transparency Initiative, on which Sarah Bracking has written. Bracking offers the following central insight regarding the EITI:

“It targets so-called ‘host countries’ for oil and gas activity, largely in the Global South, while the ‘home countries’ – and thus socio-environmental and financial regulation driving the operation of transnational oil firms – remains insulated via corporate privacy protections in the Global North. Despite sincere efforts by civil society coalitions to promote implementation of these processes in the home country, and the passing of such regulations as the Dodd-Frank Act, the gaps in these measure remain enormous.”

In closing I turn to Dr. Mia de Kuijper- former oil industry executive – who argues in a recent book on business strategy for the new millennium entitled Profit, Power and Economics, that we are moving into a period of perfect transparency. On page 42 of that book, published by Oxford University Press in 2009, she provides this caveat:

“My use of the word transparency is meant to emphasize the fact that information will travel instantly and without obstruction, equally clear and perceptible to everyone. I am not describing the sort of transparency that is demanded when critics insist that windows into business or government operations be held open in order to enforce accountability” (de Kuijper, 42).

Indeed.

Anna Zalik is an Associate Professor in the Faculty of Environmental Studies at York University. She thanks Sonja Killoran-McKibbin for very helpful comments on this piece.

 

Shell (unsuccessfully) seeks to block critics from Jackpine hearing

On October 1st, 2012, Isaac Asume Osuoka and I submitted a letter  to the Joint Review Panel hearing on the proposed Shell Jackpine Mine Expansion in Northern Alberta.We attached the following evidence to our letter: The 2011 UNEP report on Ogoniland and the Amnesty International 2012 Briefing on Canada to the UN Committee on the Elimination of Racial Discrimination.

Athabasca Chipewyan First Nation’s legal challenge to Shell oil is at http://acfnchallenge.wordpress.com/about/

On October 4th Shell’s lawyers filed a letter seeking to exclude many people from presenting evidence at the hearings. Isaac Asume Osuoka and I were among them,  as was Keith Stewart of Greenpeace. The letter may be viewed at http://www.ceaa-acee.gc.ca/050/documents/p59540/82081E.pdf.

Asume and I submitted a letter in response to Shell’s. See http://www.ceaa.gc.ca/050/documents/p59540/82191E.pdf 

On October 17, the Joint Review Panel indicated that we did have standing to present evidence at the hearing, but that material concerning Shell’s practices in Nigeria was not to be treated substantively.

See Keith Stewart’s blog on this incident at http://www.greenpeace.org/canada/en/Blog/shell-fails-to-silence-greenpeace-at-hearing-/blog/42651/

Shell’s lawyers employ the recent gutting of Canadian federal environmental legislation (under the Harper government’s controversial omnibus budget Bill C-38 of June 2012) to justify the call for exclusion.  For background on Bill C-38 and the environment see http://www.huffingtonpost.ca/2012/06/04/minister-defense-environment_n_1567570.ht

See media coverage at:

http://www.ctvnews.ca/business/shell-tries-new-rules-to-block-greenpeace-from-jackpine-hearings-1.999721

http://www.sunnewsnetwork.ca/sunnews/business/archives/2012/10/20121018-072951.html

http://thetyee.ca/Blogs/TheHook/Environment/2012/10/17/Shell-attempt-to-bar-Greenpeace-from-oil-sands-hearing/

 

 

The Keele Street Tank Farm: A report from Sentinel Road

The Keele St. Tank Farm: A report from Sentinel Road

Justin Podur and I first wrote this in February 2012.  This piece concerns a downstream facility across from York University that stores fuel used at Toronto filling stations, via Montreal refineries and elsewhere. We intend to write more “reports from Sentinel Road” on matters of shared interest.  On a different end of the production chain, hearings concerning  Shell’s proposed Jackpine Mine Expansion in Alberta are  ongoing. Having recently returned ‘downstream’ from those hearings in Fort McMurray, it seems apt to post this now; more on those hearings  in a subsequent post.

Justin Podur and Anna Zalik

February 15, 2012, Updated: November, 2012

In July 2010, the Toronto Transit Commission recommended that City Council exempt a petroleum tank farm on Keele Street from a 1954 by-law that prevents oil and gas trucks from traveling over subway lines (1). Today, plans for the subway extension to York University intersect with the Keele Street tank farms of Imperial Oil/Esso, Shell and Suncor. The TTC’s recommendation for an exemption is based on improvements to truck safety since 1954. And as “the tank farms won’t be going anywhere” anyway, it is also practical to change the rules. City Council agreed – in August 2010 they granted the exemption (2). See http://www.torontosun.com/news/torontoandgta/2010/07/08/14651326.html  and http://www.toronto.ca/legdocs/mmis/2010/cc/bgrd/backgroundfile-33276.pdf. This also involved re-design of nearby roads to accommodate tanker traffic.

The tank farm, for those who don’t live near it or pass it on the way to work or school in the morning, is owned by a who’s who of Canadian petroleum interests: Imperial Oil and Imperial Oil pipelines, Shell Oil, Sun-Canadian Pipe Line Company, Trans-Northern Pipelines Inc., Enbridge Pipelines (3). Built in the 1940s, the facility stores fuel that ultimately supplies local filling stations (3a).

The debate between the TTC and City Councillors concerned risks of spills, collisions, explosions, and fires (4). Proponents argue that the facilities are too expensive to move and the risk of an explosion is below acceptable levels.

But petrochemical facilities raise other concerns – for example, toxicity. In 1991, Health and Welfare Canada (HWC) investigators raised concerns of contamination of fruit and vegetables grown near the tank farms. A toxicologist from the Ontario Ministry of Environment and Energy sampled fruits, vegetables, and soil on September 23, 1991 and found no evidence of contamination beyond slightly elevated levels of lead – again, like the acceptable levels of explosion risk, the lead was found to be below acceptable thresholds (5).

Even if all of the analyses to date have found the tank farm’s risks to be in the acceptable range, it would be nice to know much more about it. How does it benefit the city, and the local community – what are the benefits to be weighed against these acceptable risks? How have toxicity analyses come out in the 20 years since the 1991 study?

A 2003 Map produced by The Toronto Environmental Alliance illustrates a high concentration of industries releasing toxic chemicals in Toronto’s North West and North East, with a significant mark for the area that comprises the Tank Farm detailed in the tables linked here. If we compare this map to material from the Color of Poverty project, we note a correlation between communities of lower income, racialized communities and toxic chemicals. From the perspective of the literature on Environmental Justice, this is unsurprising. Our review of the National Pollutants Release Inventory for the past 10 years, indicates an overall increase in the air contaminants released over time from the Imperial Oil, Shell Canada Products and Suncor facilities for the years up until 2009. The  data for the Shell Facility indicates a 23% increase in VOCs released between 2009 to 2010, from 39 to 48 tonnes.

Also of note –  these facilities are likely to store fuel imported from a range of controversial sites.

One possibility for an updated study: using toxicity and safety risk metrics from comparable facilities elsewhere, analyze the problem spatially – what buffer is required for safety from possible spills and explosions? Who lives within that buffer? What risks are posed by the pipeline network, and what might the role of alternative energy be in the future – could this facility be decommissioned? From where are the products at these locations sourced and what socio-environmental conflicts (problems) do we find at the other end of the production chain?

———————————————————————————————————————————————–

Sources:

1) David Nickle, July 15, 2010. “Oil tankers slide closer to Keele and Finch: Council to review bylaw banning oil and gas trucks from intersection”. http://www.insidetoronto.com/news/cityhall/article/848069 Accessed February 15, 2012.

2) Toronto City Council Minutes for August 25, 26, 27, 2010. http://www.toronto.ca/legdocs/mmis/2010/cc/minutes/2010-08-25-cc52-mn.htm Accessed February 15, 2012

3) City of Toronto. Bus-Only Lanes Downsview Station to York University Class Environmental Assessment. http://www.toronto.ca/wes/techservices/involved/transportation/downsview_york/ Accessed February 15, 2012.

3a). Brian Gray. 2008 The City Cannot Run on Empty”. Toronto Sun. August 18, p5. Accessed November 15, 2012.

4) Toronto Transit Commission. July 14, 2010. Report: Transportation of Inflammable Liquids Over Subways – City of Toronto By-Law Exemption. http://www.toronto.ca/legdocs/mmis/2010/cc/bgrd/PW34.8b.pdf Accessed February 15, 2012.

5) J. Craig Kinch. 1991. Phytotoxicology Assessment Survey in the vicinity of the Shell, Petro-Canada and Imperial Oil Petroleum Tank Farms, Toronto – 1991. ARB-251-92-Phyto. http://www30.us.archive.org/details/phytotoxicologya00kincuoftI Accessed February 15, 2012.

Published works and writing

Zalik, A. 2015. “Resource Sterilization: Reserve Replacement, Financial Risk and Environmental Review in Canada’s Tar Sands”. Environment and Planning A, 47, 12: 2446-2464.

Zalik, A. 2015. “On Huber’s Lifeblood: Oil, Freedom and the Forces of Capital” Book Review Forum. Cultural Geographies, October 22: 743-746.

Michelle Arroyo and A. Zalik. 2015. “Displacement and Denationalization: The Mexican Gulf 75 Years after the ExpropriationArea doi: 10.1111/area.12183

Zalik, A. 2015. “Trading on the Offshore: Territorialization and the Ocean Grab in the International Seabed” p 173-190. K. Ervine and G. Fridell (eds). In Beyond Free Trade: Alternative Approaches to Trade, Politics and Power, Palgrave MacMillan.

Zalik, A. 2015. “Vicious Transparency: Contesting Canada’s Hydrocarbon Future ” p 354-370 , Hannah Appel, Arthur Mason, Michael Watts (eds). In Subterranean Estates: Life Worlds of Oil and Gas. Ithaca, Cornell University Press.

Zalik, A. 2015. “Transparency, Auditability and the Contradictions of Corporate Social Responsibility”, Charlotte Walker-Said (ed) Corporate Social Responsibility? University of Chicago Press.

Zalik, A. 2014. “Transparency and Its Other: Studying the Oil Industry” at http://ppel.arizona.edu/?p=911 invited to the University of Arizona’s Public Political Ecology Lab special blog series on Extractive Industries and Indigenous Peoples, November16.

Ghomeshi, K and A. Zalik. 2013. “Corporate Privacy and Environmental Review at Export Development Canada Intervention to Antipode Foundation site.

Zalik, A. 2012. “The Race to the Bottom and the Demise of the Landord: The Struggle over Petroleum Revenues Historically and Comparatively” in John Andrew McNeish and Owen Logan (eds) Flammable Societies: Studies on the Socio-Economics of Oil and Gas.  Pluto Press,  267-286.

Zalik, A. 2011. “Protest as Violence in Oilfields: The Contested Representation of Profiteering in Two Extractive Sites” in S. Feldman, C. Geisler and G. Menon (eds)  Accumulating Insecurity: Violence and Dispossession in the Making of Everyday Life.  University of Georgia Press,  215-239.

Zalik, A. 2011. “Shipping the Next Prize” in Christopher Sellers and Joseph Melling (eds) Dangerous Trade: Histories of Industrial Hazard across a Globalizing World. Temple University Press, 87-98.

Zalik, A. 2011. “Labeling Oil, Reconstituting Governance” in Cyril Obi and Siri Rustad (eds.). Oil and Insurgency in the Niger Delta. London: Zed Books,  184-199.

Zalik, A. 2010 “Marketing and Militarizing Elections: Social Protest, Extractive Security and the De/legitimation of Civilian Transition in Nigeria and Mexico” in Philip McMichael (ed) Contesting Development: Critical Struggles for Social Change. Routledge, 83-97.

Zalik, A. 2010. “Volatilidad y mediación en diferentes campos petroleros: Las Arenas Bituminosas y el Delta del Níger como lugares en controversia.” (`Volatility and Mediation across Oilfields: The Tar Sands and the Niger Delta as Contested Sites` In Umbrales 20 Hydrocarbons, Politics and Society. Bolivia, CIDES La Paz. http://www.cides.edu.bo/webcides/images/pdf/Umbrales_20.pdf

Osuoka, A. and A. Zalik. 2010.”The Dilemmas of Global Resistance against Extractive Capital: The Oilwatch Network in Africa.” Canadian Journal of Development Studies.

Zalik, A. 2010.“Oil Futures: Shell’s Scenarios and the Social Constitution of the Global Oil Market” in Geoforum 41, 4, 553-564.

Zalik, A. 2009.“Zones of Exclusion: Offshore Extraction and Physical Displacement in the Nigerian Delta and the Mexican Gulf.” Antipode. 41, 3. 557-582.

Zalik, A. 2008. “Liquefied Natural Gas and Fossil Capitalism.” Monthly Review. November. Special Issue on Ecology. 60, 6. 41-52.

Peterside, S. and A. Zalik. 2009. “The Commodification of Violence in the Niger Delta” in Leo Panitch and Colin Leys (eds). Violence Today: Actually Existing Barbarism: Socialist Register 2009. Monthly Review Press

Zalik, A. 2008. “Oil Sovereignties: Ecology and Nationality in the Nigerian Delta and the Mexican Gulf” in Extractive Economies and Conflicts in the Global South K. Omeje (ed).  Ashgate, 181-198.

Zalik, A. 2006. “Re-regulating the Mexican Gulf Working Paper. No 15.  Center for Latin American Studies, University of California at Berkeley.

Zalik, A.  2004. “The Niger Delta: Petro-Violence and Partnership Development”. Review of African Political Economy. No. 101, 4. 401-424.