We’re continuing to play catch-up with all of our unfinished business around here, while also re-visiting our notes from the Pipeline Safety Trust conference (the subject of our recently launched new series!). Among other things, we’re still scratching our heads over Enbridge contractor Precision Pipeline’s baffling flag faux-pas and we’re a little worked up over yesterday’s Enbridge Freep ad (teaser: they found a happy landowner!). We also drove around a bit this weekend and took some construction pictures– since entries to our photo contest are few and far between (but it’s not too late to submit! Please?!). More on all of that is coming up.
Meanwhile, it’s high time we wrapped up our series on our conversation with Enbridge Vice President Mark Sitek. We had a second call with him on Monday and while it, too, was candid and respectful, we’re not sure it was terribly productive. We haven’t quite given up on Mark yet, but we’re less hopeful now about the potential fruits of this exchange than we were a few weeks ago.
But we can start with one positive note: Mark assured me that Enbridge is going to change the indemnification language they present to landowners. The new language will not be two-way indemnification (which we’ve expressed lots of concerns about before), but only a one-way indemnification (that is, Enbridge will indemnify landowners, not the other way around). As an example– we don’t know if this is precisely what they’ll use– here is the one-way indemnification clause in the contract we signed (after objecting to the original two-way language):
Lessees agree to indemnify and hold Lessor harmless against any and all claims, demands, and causes of action, intentional misconduct of its employees, agents, representatives, contractors, subcontractors or invitees.
Now, this change is undoubtedly good news and it does show that Enbridge is capable of a certain degree of responsiveness. We are grateful to Mark for looking into the matter and taking action. He deserves credit for that. At the same time, we do have to qualify our praise on this point since (1) this is a pretty modest action, an easy step for Enbridge to take; and (2) Mark still refused to concede that there was any real problem with the original language other than that it was “confusing” (as opposed to an attempt to shift a portion of liability onto unsuspecting homeowners, as we’ve always maintained). Nevertheless, it is a little step and we’ll take it. And we thank Mark Sitek for it sincerely.
As for other matters, we’ll just say that in general it seemed to us that Mark demonstrated what we have already described as Enbridge’s general unwillingness to honestly, soberly, and self-critically reflect upon its actions and practices or to consider how they look, not from the perspective of Enbridge, but from the perspective of landowners. We believe that unwillingness– perhaps it’s stubbornness– is absolutely endemic to Enbridge corporate culture.
For instance, at a certain point in each of our conversations with Mark, he set forth a kind of bottom line: the fact is, he told us in our last conversation (as I recall, we were talking about compensation for “disturbance and inconvenience”) that Enbridge owns easement rights on most of these properties, rights they have owned for 40 years. And the further fact is that those rights allow them the use of adjacent land (i.e., temporary work space).
Now, on the one hand, this is an indisputable fact (although owning easement rights doesn’t mean they can simply do whatever they want), a fact that we have never once questioned in any way. On the other hand, as we said to Mark at the time, if that’s Enbridge’s bottom line–“we have rights and we’re going to use those rights to do what we want”– that’s fine. Then just say so. But don’t then also pretend that you’re devoted to being a good neighbor, that you want to cultivate good relationships, that you are committed to openness and honesty, etc, etc. Because if you say all that latter stuff, we are going to expect it. And expecting it, we are going to be disappointed and frustrated and call you out when you fail to live up to it.
We’ll give just one further example of this: at one point, Mark also said he thought we’d been a little unfair to Enbridge spokesperson Jennifer Smith. You remember, she’s the one who said that Enbridge does not ask landowners to sign agreements granting indemnification to Enbridge. We have also pointed out that Smith claims Enbridge compensates landowners for “disturbance and inconvenience,” even though Mark himself conceded that, strictly speaking, this is not exactly true. By contrast, we think it is absolutely fair to point out when someone makes dubious claims. In fact, we went out of our way to be fair to Jennifer Smith by writing to her directly to ask her for clarification. Her response? Nothing. She did not respond to us at all. (How’s that for respect and open and honest communication?)
In fact, if anybody has been unfair to Jennifer Smith– and to her fellow spokespersons, PR people, and marketers– it is Enbridge itself. As we said when we first mentioned her, we think it’s probably the case that the Jennifer Smiths who work for Enbridge have no idea about what’s in the agreements presented to landowners or what what actually goes on in negotiations between landowners and ROW agents. Instead, what Enbridge’s Jennifer Smiths know is what Enbridge tells them to say. And when those things turn out not to be true, it’s the spokespersons– because they’re the ones saying it– who have to take the heat for peddling misinformation. Which means that Enbridge is hanging its own people out to dry.
We don’t know whether our interactions with Mark have reached a conclusion. Graciously, he invited us to contact him in the future if we need to do so. We’ll also say that we think that Mark is a genuinely nice guy; we’re sure he’s quite good at his job. But we also think that he is a product of what we’ve been diagnosing as the peculiar malady that afflicts Enbridge culture. Consider this point of contrast: after our PS Trust talk this week, executives of Marathon Pipe Line told us that the story of our experience caused them to think, “is that us?” That is, we gave them reason to take a hard look at themselves and their practices, to consider whether they were actually living up to their own stated values. However, never once– and this includes our exchanges with Mark– have we heard the same from Enbridge. Instead, all we have ever heard from them is, “that’s not us.” Unlike Marathon and others, they remain steadfastly, intractably unwilling to take a hard look at themselves.
Here’s the latest (May 1, 2013) language Enbridge uses regarding indemnification in Indiana Temporary Workspace Agreements:
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Lessee agrees to indemnify and hold Lessor harmless from any and all losses of or damages to property or injuries to or death of any person to the extent resulting from Lessee’s negligence or intentional misconduct in connection with any activity on the TWS or ATWS.
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While this is indeed “one way” it is somewhat different than what you quote above.
Does anyone care to comment on the impact of these differences in language?
And, this appears only within the Temporary Workspace Agreement. Is it not necessary to indemnify within an Easement Grant that enlarges an original easement? Suppose someone dies on the Easement (original or extended) rather than the Temporary Workspace?
There’s two problems that occur to me, albeit I am NOT an expert at this stuff.
1. Not all releases of pollutants from the pipeline are due to negligence of intentional misconduct. What is Enbridge’s liability for other releases that cause damage to the landowner or third parties.
2. Apart from the problem of other causes (act of God) that may cause a release is the practical problem of PROVING Enbridge is guilty of negligence or intentional misconduct. Who is responsible if that can’t be proved for any number of reasons, many of which has nothing to do with Enbridge’s possible actual guilt.
Isn’t the better approach to make Enbridge liable for all releases that it cannot prove in court are due to the landowner’s negligence or intentional misconduct?
Thanks for the comment, Peter. But in this case, what the indemnification language refers to is not releases, but property damage that might occur during construction: cutting down a tree outside the right of way, dropping one on somebody’s garage, a crane falling on somebody’s house, wrecking a septic field, etc etc. Even still, though, your more general point applies: the “negligent” and “intentional” language potentially lets Enbridge off the hook. “Sure, our machine sent a rock flying through the landowner’s window and hit the cat in the head, but this was not negligence nor intentional.”