Canadian Energy Law : Lawyers & Attorneys for Environmental Energy Law

Susan Hutton and Paul Beaudry -

On June 24, 2011, Niko Resources Ltd., a Calgary-based oil and gas exploration and production company, entered a guilty plea under Canada’s Corruption of Foreign Public Officials Act (CFPOA) with respect to charges of bribing a public official in Bangladesh. Niko, which operates in a number of countries around the world, had been notified by Canadian authorities in January 2009 that it was being investigated over allegations that it had provided the Energy Minister of Bangladesh with a $190,000 vehicle for personal use as well as with trips to Calgary and New York. These gifts had been made at the time when the Minister was assessing how much compensation was owed to Bangladeshi villagers for water contamination and other environmental concerns caused by explosions at a Niko operation.

Niko’s sentence included a $9.5 million fine and a three-year probation order that requires the company to implement a detailed compliance program subject to review by an independent auditor. Prior to Niko’s conviction, only one Canadian company had been convicted of foreign bribery under the CFPOA in the past decade. The $25,000 fine issued by the court in that case, known as R. v. Hydro Kleen Services Inc., was less than the bribe involved.

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The Ministry of Finance is proposing amendments to Ontario Regulation 282/98 that will alter the property tax treatment of certain renewable energy installations for the 2011 tax year. A summary of the proposed changes can be found in the table below.

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On July 21, 2011, the federal government announced a new plan to monitor air quality, biodiversity and water quality in the Canadian oilsands region in an effort to provide “hard science’ to reinforce the fact that the oilsands are being developed in a responsible manner. Water quality and quantity will be monitored in the lower Athabasca river. Air quality will be measured at 14 sites for a range of contaminants and those results will be combined with satelitte data. The plan will also examine the effects of contaminants and habitat disturbances on different species.  The plan will integrate many monitoring components already in place, but will boost the number of monitoring sites over a greater geographic area with a specific focus on downstream and downwind impacts. Environment Minister Peter Kent indicated that the government will start to work with the province of Alberta and industry to implement the monitoring plan quickly.

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The Ontario government has announced the amendment of its green energy investment agreement with Samsung C&T Corporation and the Korea Electric Power Corporation (Samsung). The $7 billion dollar agreement is for the development of 2,500 megawatts worth of renewable energy generation (wind and solar) in addition to building four clean-technology manufacturing plants.

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 The Republican-led U.S. House of Representatives has passed H.R. 1938, a bill which would direct President Obama to expedite the consideration of the construction of the Keystone XL pipeline. 

The bill requires that the President issue a final order granting or denying the Presidential Permit for the Keystone XL pipeline no later than 30 days after the issuance of the final environmental impact statement, but in no event may the decision for the final order be made later than November 1, 2011.

The U.S. State Department has previously stated that the permitting process for Keystone XL would be completed by the end of 2011. H.R.1938’s prospects of being approved by the U.S. Senate and being signed into law by President Obama are very slim, but nonetheless, its passage received support from various industry groups and trade unions.

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On August 2, 2011, the Ministry of Energy directed the OPA to allow Suppliers under Ontario’s Feed-In Tariff (FIT) program to obtain a waiver of the OPA’s termination rights contemplated in section 2.4(a) of the FIT Contract.

Obtaining a waiver of this termination right is meant to expedite issuance of a Notice to Proceed (NTP) by reducing contractual termination risk and allowing Suppliers to procure financing for equipment orders. 

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