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Home > Speeches and Presentations > Speeches and Presentations 2008 > Public Hearings - How are we doing? Where are we going?

Public Hearings - How are we doing? Where are we going?

Presented by
Gaétan Caron
Chair and CEO
National Energy Board

CAMPUT Conference 2008
« In the Eye of the Storm »

21 April 2008

Good afternoon everyone. I am pleased to have the opportunity to talk to you today about public hearings from the National Energy Board's point of view.

The topic that I've been asked to discuss, Public Hearings: How are we doing? Where are we going? is particularly relevant given that we're moving into a period where we expect public hearings to grow in both intensity and complexity.

My thoughts on this matter are simple: I believe Canadian energy regulators, and the National Energy Board in particular, are well positioned to deal with the public hearings that lie ahead in Canada, its provinces and its territories.

Everywhere I go, everybody I talk with, and every time I examine today's topic for discussion, I get the same response: Canadian regulators are committed to continual improvement, they seek to learn from each other, they pursue best practices, and they constantly and meaningfully consult with the people who are impacted by regulatory decisions. In short, Canadian regulators seek to do the right things at the right time.

And we're determined to keep working on it. We have not yet achieved the perfect regulatory regime in Canada. There are opportunities to make our processes more efficient, in terms of time and resources, and there are opportunities to make our actions more effective. However, I also believe that taking advantage of these opportunities is the most direct path to achieving our shared goal of world-class regulation.

Every public hearing is an opportunity!

I am acutely aware that, for many people, including many people in this room, regulation is a drag. I do not feel bad about this. The reason is simple: when you prepare for a public hearing, you are preparing to solve a problem and deal with concerns. For this presentation, I will use the example of a hearing to deal with a pipeline project. Think about the various concerns this partial list of hearing participants may have as they prepare for a hearing, or as they hear about a hearing:

A company seeking approval for a project, concerned about missing an investment opportunity;
An intervenor with concerns about the project; for instance:
- A landowner whose land or lifestyle would be affected if the project were approved;
- An Aboriginal community with concerns about the impact of the project on their rights and their way of life;
- A person concerned about the environment and that the project, if approved, would not be consistent with responsible development;
Members of the public who are concerned about their quality of life, who do not have the time to assess the project, but who wish to be heard by filing a letter of comment or making an oral statement.

As a regulator, our basic purpose is to seize the opportunity to solve the problem and to deal with people's concerns.

Every public hearing is a challenge

Looking at our role in terms of opportunity, the next step of course is to acknowledge that addressing hearing concerns, is a challenge. A serious challenge. A difficult challenge. Hence the theme of this session: growing intensity and complexity. We must not be surprised by this. Society is evolving; people everywhere are better informed, better organized, better connected, and they have their own vision of a better future for themselves, their children and their grandchildren.

As a regulator, I see addressing hearing concerns as a noble challenge that leads to a profoundly meaningful task. As members of regulatory agencies, we have been appointed, by the government, to tackle these challenges and create significant value for society. We work under tight rules of transparency and disclosure. Our conflict of interest codes demand that there be no doubt, real or apparent, as to our impartiality. For example, as members of the National Energy Board, we cannot own shares of any corporation, in any economic sector.

Therefore, we do not have a vested interest in the outcome of our work, other than the public interest, and the desire to serve society the best we can. As Roland Priddle, a former chair of the NEB once said: "If we are not fair, we are nothing". Our pride in this work is why we have chosen, as members and staff of regulatory agencies, to make it our daily work. The bottom line: we will deal with hearings that HAVE grown in intensity and complexity as an opportunity to continue to create significant value for society.

The public hearing: a gathering place

Having defined a public hearing as a place where one seizes opportunities to resolve problems, I see the actual hearing, in its fundamental essence, as a gathering place. As regulators, our task is to draw on the many tools in our toolbox to promote and facilitate the dialogue that occurs at the gathering place. For instance, before the actual hearing, regulators can use one or more of the following:

Appropriate Dispute Resolution, which could include informal facilitation of dialogue to more formal mediation and arbitration;
Technical or pre-hearing conferences, where either the process for resolving the problem, or the definition of the problem, are better delineated; and
Community sessions that help members of the public to prepare themselves for effective engagement and a meaningful hearing experience.

The public hearing: a gathering place (cont'd)

Once the hearing has started, we are well equipped to allow the public, the intervenors and the applicant to have an orderly and respectful dialogue. I am always impressed, during a public hearing, by the wisdom of the basic methods for holding an effective public hearing that have evolved over time:

Only one person speaks at a time;
There is an established order for people to speak, so they can better prepare their participation;
Experts, often world renowned, are available for questioning by any member of the public who has registered as an intervenor;
You hear from all sides, one after the other;
In the case of the NEB and many other regulatory agencies, there are no prescribed time limits. Participants self-manage their time by avoiding repetition and not seeking out facts or opinions that are irrelevant to the problem being addressed in the hearing;
After all the facts, figures and analyses have been heard and questioned, once again you listen to everyone's views on what the regulator should do. This is known as final argument - that final part of the hearing when parties seek to persuade the regulator. Not only are hearing participants given the opportunity to seek to persuade the regulators, but parties usually get to comment on other people's arguments too.

As public hearings grow in intensity and complexity, these are the tools we will use with growing effectiveness, so that there is a full and open dialogue, in an environment of respect where everyone seeks to understand and seeks to be understood.

A public hearing resolves problems

The regulator is then in the enviable position of having heard from everybody. No corners have been cut. The facts are clear and complete. People's opinions, and their views on other people's opinions, have been clearly stated. For most people, the hearing is finished. For the regulator, the most important part is just beginning.

This is the time when the regulator resolves the problem. The fact that there was a hearing clearly means that people were not in agreement. The marketplace did not solve the problem. In our case, Parliament has asked us to solve the problem, which is what we do at this stage, pursuing one main objective: the public interest.

Public Interest at the NEB

At the NEB, we define the public interest in our Strategic Plan as follows:

"The public interest is inclusive of all Canadians and refers to a balance of economic, environmental and social interests that change as society's values and preferences evolve over time. As a regulator, the Board must estimate the overall public good a project may create and its potential negative aspects, weigh its various impacts, and make a decision."

A public hearing brings closure

"... and make a decision".

This is the significant value that is added by a regulator. The discussion has taken place. Everybody has been heard. Left to their own devices, people would probably continue to debate the issue for a long, long time still.

Parliament felt that debates in the energy sector had to eventually come to an end. The 1956 Great Pipeline Debate, as it is referred to, was the driver for this strategic move. This shows that intensity and complexity of debates in the energy sector is not something new!

Three years after the Great Pipeline Debate, in 1959, the Diefenbaker government passed the National Energy Board Act. Forty-nine years later, the NEB Act is fundamentally the same. It has been refreshed here and there, and will likely be refreshed here and there in the future. When we celebrate our 50th Anniversary next year, we will celebrate 50 years of resolving concrete problems and bringing closure to debates.

That closure is not absolute, of course. Parties have the opportunity to ask the NEB to change its mind if, for instance, they feel we have made an error in law or if new facts have arisen. There is again a well defined process for that. In addition, people have recourse to the courts, where again, specific processes are in place.

A public hearing is not everything

Today we are talking about the growing intensity and complexity of public hearings. But the public hearing is not everything. There are many other ways in which we can address the growing complexity and intensity related to energy projects.

At the NEB, we see the regulatory process for energy infrastructure as a life cycle, or a life span:

Before applications are filed;
After applications have been filed, but before the hearing begins;
The hearing itself, which I have already covered;
After the hearing.

Pre-hearing

For Canadians to engage effectively in an energy dialogue, they must know the rules of the game. I will refer to that as a regulatory framework. The framework mainly consists of regulations, guidelines, publications and past decisions. Just as the public interest evolves over time, the regulatory framework will also evolve.

For example, at the NEB, we have decided to launch a Land Matters Consultation Initiative. Through a comprehensive and intensive consultation process, the intent of the Land Matters Consultation Initiative is to identify issues facing people interested in land matters and to identify sustainable solutions to these issues. This initiative will enable us to update our regulatory framework in respect of land matters. The results should provide much clearer guidance to everybody involved in land matters.

Another example of the work the Board is undertaking in order to improve our regulatory framework is our partnership with the Pembina Institute. The Pembina Institute is uniquely situated to help the NEB identify and engage environmental non-governmental organizations with an interest in national energy infrastructure. As is the case with all of our proactive public engagement efforts, better understanding of people's interests helps resolve issues and supports better project designs. This work will improve our regulatory framework in the area of environmental protection.

Hosting community meetings before an application is filed, or shortly after it is filed, is another example of something we can undertake in order to deal with the growing intensity and complexity of hearings. For example, we received good feedback on sessions held in Quebec communities in anticipation of the Eastern Access project filing, a project which has now been withdrawn. These sessions have provided residents with information that would help them participate effectively in any future hearing on this project. We are prepared to go anywhere in Canada to do the same. We also promote the use of Appropriate Dispute Resolution as a means of improving the hearing process, or to eliminate the need for one.

Pre-hearing (cont'd)

Rather than bring their differences to a public hearing, parties will sometimes settle their differences and resolve the problem amongst themselves. This is called a settlement.

The Board is very supportive of parties pursuing settlements. If discussions are successful, the Board's practice has been to accept settlements, unless they violate a basic principle of regulation, a situation we have never encountered since the emergence of settlements in the 1990s. We have endorsed several tolls and tariff settlements, settlements between landowners and pipeline companies, and settlements between Aboriginal communities and pipeline companies. We believe that when the parties most affected by the project are involved in the settlement, the outcome is likely to be in the public interest. The Board is of the view that a regulator doesn't provide any extra value by attempting to adjust a settlement, when no basic principle of fairness or public interest has been breached. The parties are in the best position to know how they will be affected by each aspect of the settlement.

I see our regulatory process as having two main doors: the settlement door, and the hearing door. It is up to the parties involved to decide whether they will try to negotiate a settlement, or whether they prefer to come to us for a hearing. While we encourage parties to discuss and attempt to reach a settlement before a hearing, we are equally committed to being part of the solution either by way of endorsing a settlement or by having a hearing.

Earlier I addressed the hearing itself. Let me now fast-forward to the day after the hearing has concluded.

After the hearing

As people prepare for a hearing, they have a range of outcomes in mind, the two main ones, if the hearing is about energy infrastructure, being: (i) the project is approved, or (ii) the project is turned down.

If the project is turned down, this is the end of the story, subject to a possible review and/or appeal. Two such cases in point are the Board's decisions in the Sumas electricity transmission project and the TransCanada Gananoque extension. If the project is approved, this typically occurs with conditions being attached to the certificate, one of the standard conditions being that the applicant must keep the commitments it made on the record during the hearing. More specific conditions are also typically included in a Board approval.

This is an important point. One of the manifestations of increasingly intense and complex public hearings is the dialogue about what these conditions should be. The Board seeks the views of all hearing participants on what potential conditions should be. This has two main implications. First, the Board is responsible for implementing commitments and conditions and if a project is approved our role does not stop there. Our role keeps going through construction, operation and abandonment. The Board is accountable to Parliament for the entire life cycle of pipelines. The other implication is that not all potential problems related to an energy project need to be nailed down in detail during the hearing phase. Certificate conditions are an ideal tool to deal with such matters as the final facility design or choosing specific mitigation techniques. Given the Board's GOAL-ORIENTED philosophy, conditions typically specify what needs to be done. The how it will be done is often left to the post-approval phase, so that better field data and site specific information can be used for the best possible outcomes.

After the hearing (cont'd)

Therefore, at the hearing, conditions are discussed and the Board, after the hearing, as part of its decision, will decide what specific conditions will be attached to a project approval.

Given the Board's responsibilities throughout the life span of facilities, we will send our inspectors to the construction sites as well as conducting inspections during operations. In addition, the Board conducts audits in safety, environmental excellence and tolls and tariffs that are based on a risk-model. The Board adopts the philosophy embodied in the ISO standards, notably the ISO 9000 and 14001. This means that our focus during an audit is the existence and performance of management systems, driven from the top, within the companies we regulate; i.e. it is goal-oriented rather than prescriptive.

The Board also expects companies to proactively prepare for abandoning their facilities. Our Land Matters Consultation Initiative will allow us to be more specific as to what that means, physically and financially. We are also there of course when it is time to abandon, as our regulator role includes the abandonment phase.

Therefore, as hearings on facilities applications grow in intensity and complexity, one of the tools that helps make public hearings more effective and focused on the key factors of the public interest is the recognition that the dialogue continues beyond the hearing, on these cases where the project is approved. Many of the details that do not inform the determination of public interest and are not relevant to the Board's Go or No Go decision can be taken care of after a hearing.

The future is promising

In conclusion, it is my view that energy regulators in Canada, its provinces and territories are well equipped to deal effectively with public hearings that will continue to grow in intensity and complexity. I gave you the NEB's story but I believe you will hear a comparable story from all of the CAMPUT members. Moreover, the continual improvements you find in every regulatory agency are only part of the story. The other part, perhaps even more importantly, is the work regulators do amongst themselves to improve the relations between agencies. These connections make the system as a whole more efficient and effective, notably in terms of the relationship between environmental assessments and regulation as a whole. Let me outline three of the initiatives currently underway that put me squarely within the camp of the optimists:

Major Projects Management Office;
Northern Regulatory Improvement Initiative; and,
CAMPUT's work with the Council of Energy and Mines Ministers.

As a result, it is my strong belief that, as you observe regulators handle public hearings that are growing in intensity and complexity, you will see them take care of business, and seek ways to continually improve. You can help in this undertaking by participating in improvement initiatives, using all the tools in the regulator's tool box, such as settlement discussions and pre-hearing opportunities such as community meetings, not trying to resolve every detail during the public hearing and relying instead on conditions. Furthermore, be candid and direct when you see opportunities for improvement in the system.

Contact us

Thank you for hearing my vision of the future of public hearings. Please do communicate with us if you have ideas to share on how to continually improve our hearing process.