Trans Mountain wins bid to keep names of insurers secret

Trans Mountain wins bid to keep names of insurers secret | Insurance Business

Trans Mountain wins bid to keep names of insurers secret

The Canadian Energy Regulator (CER) has approved Trans Mountain’s request to keep the names of its insurers private, sparking outrage from a coalition of Indigenous and climate organizations that have been campaigning around Trans Mountain's insurers for the past few years. 

Trans Mountain lodged a request with the CER on February 22, 2021, asking if it could “file in confidence information in its certificate of insurance that discloses the names of its insurers”. The corporation, which is developing a pipeline that carries crude and refined oil from Alberta to the coast of British Columbia, also requested that the confidential treatment of the names of its insurers be applied to all future filings of its certificate of insurance.

In its submission to the Commission of the CER, Trans Mountain argued that disclosing the names of its previous insurers resulted in the termination of insurance coverage, a significant reduction in available insurance capacity, and a dramatic increase in insurance costs. The firm also argued that continued public disclosure of the names of its insurers would lead to ongoing targeting and pressure placed on those insurers to abort or restrict coverage.

Trans Mountain has long been a source of widespread community distress and opposition. Over the last few months, First Nations, politicians, insurance experts, and environmental organizations filed public comments calling on the CER to deny the request and ensure transparency around the identity of the pipeline's insurers for Canadian taxpayers and impacted communities.

Many comment letters focused on the un-insuring of fossil fuel projects, such as the Trans Mountain Pipeline, helping Canada shift towards a carbon-free energy future. Others argued that Trans Mountain’s high insurance costs and restricted coverage reflect a wider trend of the insurance industry divesting from fossil fuel projects, as well as Trans Mountain’s poor safety record, aging pipeline, and its long history of spills that have polluted culturally significant sites and drinking water aquifers.

Furthermore, the Tsleil-Waututh Nation stated that granting Trans Mountain’s request for confidentiality would deprive their Indigenous community of their ability to assert their rights and communicate with insurance companies about potential infringement of their rights and title.

Despite widespread, the CER has approved Trans Mountain’s request, stating: “The Commission is persuaded by the evidence and submissions filed by Trans Mountain that it has met the test for confidentiality set out in the second part of subsection 60(a) of the CER Act as the disclosure of the names of Trans Mountain’s insurers could reasonably be expected to prejudice its competitive position in its dealing with potential insurers including but not limited to, its ability to obtain adequate insurance at a reasonable price.”

This decision has sparked outrage from the pipeline’s opposers. Charlene Aleck, spokesperson for Tsleil-Waututh Nation Sacred Trust Initiative, said: “The CER is expanding Trans Mountain’s culture of secrecy when it should be doing the opposite, especially for a government owned company during a climate crisis. This is a dangerous precedent for the CER to set and it should be of major concern. By making the certificate of insurance confidential and removing a layer of transparency, the CER has reduced the options for Tsleil Waututh Nation to assert our inherent and constitutionally protected Aboriginal rights and fulfill our sacred obligation to protect and steward our territory.

“To make things worse, this CER decision is a continuation of the denial of our inherent and constitutionally protected Aboriginal rights. After all these years of regulatory process, including sharing our own independent assessment, grounded in our Indigenous own laws, the CER continues to undermine our sovereignty. This is not reconciliation.”

Following the CER’s decision, a broad coalition of Indigenous communities and global environmental groups have announced plans to ramp up pressure on insurers that have not yet ruled out supporting Trans Mountain, starting with those named on the certificate of insurance in 2020, which include: AIG, Chubb, Energy Insurance Limited, Liberty Mutual, Lloyd’s of London, Marsh, Starr, and Stewart Specialty Risk Underwriting.

“These insurers can’t hide. Any company that refuses to rule out insuring tar sands extraction and pipeline projects is complicit in Indigenous rights violations,” said Kanahus Manuel, a Secwepemc and Ktunaxa land defender with the Tiny House Warriors. “By not dropping Trans Mountain, insurers are also making a misguided business decision. Our presence and our assertions of Indigenous jurisdiction and territorial authority to our lands represent major risks to the construction and financial liability of the expansion project.”

Sven Biggs, Canadian Oil and Gas Program Director with Stand.earth, added: “A project which can only be insured secretly has lost its social license to operate. The fact that Trans Mountain is struggling to obtain adequate insurance makes clear that this pipeline system is too risky, and the Canadian government must shut it down and cancel the expansion project.”