Business Conduct

Topics of Importance Business Conduct & Ethics

2015 Performance

KEY FACTS

In 2012, we appointed our first dedicated Chief Compliance Officer, who is responsible for enterprise-wide oversight of our overall state of compliance and for enhancing our culture of ethics and integrity. In 2015, the role was expanded to include responsibility for Enbridge’s privacy program and it is now titled Vice President, Chief Compliance & Privacy Officer.

The Enbridge Statement on Business Conduct is our formal statement of expectations for all individuals engaged by Enbridge.

We maintain an Ethics and Conduct Hotline that individuals can use at any time to raise issues through a third-party service provider.

Enbridge Gas Distribution (EGD) has an Office of the Ombudsman as part of a formal complaint-escalation process to resolve customer complaints.

Issues and Complaints

Ethics & Conduct Hotline Reports

In 2015, we received 106 new Hotline reports, 59 of which related to human resources issues, 15 of which related to safety issues, two of which related to financial concerns, 14 of which related to allegations of misappropriation or misuse of assets, four of which related to policy and process integrity, and 12 of which related to customer concerns. By way of comparison, we received 93 hotline reports in 2014. Because some of the reports did not disclose any connection to Enbridge, we were not able to investigate them.  All other reports were investigated and any confirmed events of non-compliance with Enbridge policy or the law were addressed appropriately.

Issues Reported to the Enbridge Gas Distribution Office of the Ombudsman

In 2015, nearly 7,700 issues were reported to the EGD Office of the Ombudsman, the majority of which (approximately 5,600) pertained to billing and collections. With few exceptions, the issues were resolved to the customers’ satisfaction.

Incidents of Corruption

We discovered that a former employee had converted Enbridge fleet vehicles for personal use. We referred the matter to the local police for investigation and agreed to cooperate in any criminal proceedings against the individual.

Customer Data Incidents

In EGD, a sorting error led to the inadvertent disclosure of customer billing information of 10 customers  to another customer, which we quickly discovered and resolved. For more information, please see the Customer Relations section of this report. [provide link to the “Enbridge Gas Distribution” heading in the Customer Relations section]

Incidents of Discrimination

We are not aware of any ruling or decision of a court, administrative tribunal or quasi-judicial authority in 2015 that contained a finding that we discriminated against anyone.

Significant* Fines, Penalties and Non-monetary Sanctions for Non-compliance with Laws and Regulations

Canada

In 2014, the Ontario Ministry of the Environment and Climate Change charged Enbridge with an offence under the Ontario Water Resources Act related to storm water ponds at the Sarnia Terminal.  In 2015, a settlement was reached with the Ontario Ministry of the Environment and approved by the Ontario Court of Justice under which Enbridge agreed to plead guilty and pay a fine in the amount of $70,000, plus a 25 percent victim surcharge. The fine has been paid and the guilty plea has been accepted.

In 2015, the National Energy Board (NEB) issued six Administrative Monetary Penalties (AMPs) to Enbridge in respect of activities on Enbridge’s Canadian Liquids Pipelines system.  The first AMP resulted from a project that was not constructed in accordance with Enbridge’s NEB application, but the amount of the AMP ($16,000) fell below Enbridge’s reporting threshold.  A review of this AMP was not requested.  Three of the AMPs were subsequently rescinded by the NEB in response to applications for review filed by Enbridge.

The two remaining AMPs were reduced in response to Enbridge’s applications for review (one of the AMPs was reduced from $52,000 to $28,000 and the other one was reduced from $100,000 to $76,000, although the latter AMP remains under review by the NEB).  Both of these AMPs were based upon alleged violations of applicable environmental guidelines or construction plans. The NEB’s decisions to reduce these AMPs were received by Enbridge during the first quarter of 2016 (shortly before Enbridge’s 2015 CSR & Sustainability Report was finalized).

U.S.

In 2015, Enbridge paid a US$45,000 penalty imposed by the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) for deficiencies found with certain tanks at our Tank Farm Terminal in Cushing, Oklahoma. We have taken steps to remediate the deficiencies. There is a related US$38,700 civil penalty assessed by PHMSA that remains unresolved.

In 2014 the Michigan Department of Environmental Quality (MDEQ) issued a Notice of Violation (NOV) related to facility hazardous waste disposal status and record-keeping practices on the Eastern Access Project.  In 2015 the MDEQ issued an Administrative Consent Order in connection with the NOV and Enbridge paid a penalty of US$56,000 in early 2016 as a result.

In 2015, as a result of Enbridge’s 2010 crude oil spill in Michigan, Enbridge and MDEQ reached a settlement under which Enbridge agreed to spend US$75 million to:

  • provide at least 300 acres of wetland through restoration, creation, or banked wetland credits, to remain as wetland in perpetuity (US$30 million),
  • mitigate impacts to the banks, bottomlands, and flow of Talmadge Creek and the Kalamazoo River for the purpose of enhancing the Kalamazoo River watershed and restoring stream flows in the River (US$5 million),
  • continue reimbursing the State of Michigan for costs arising from overseeing Enbridge activities since the 2010 spill (as of July 2014, Enbridge had reimbursed the State more than US$12 million), and
  • continue monitoring, restoration and invasive species control activities within the state-regulated wetlands that were affected by the spill and associated response activities.

In addition, although these activities were not part of the settlement, Enbridge had already completed the following projects over the last few years during the negotiation process:

  • removal of the Ceresco dam and complete associated river restoration activities (US$18 million), and
  • completion and/or enhancement of five initial river access sites (and later six) to enhance public recreational access to the Kalamazoo River, and creation of an endowment to assure continued maintenance at these sites (US$10 million).

* For the purposes of Enbridge’s 2015 CSR & Sustainability Report, “significant” means an amount in excess of $50,000 when referring to the amount of any fine or penalty imposed by a law enforcement or regulatory authority.  In addition, any incident that resulted in bodily harm and/or injury (or had the potential to do so) is also deemed to be significant.  Unless otherwise noted, significant fines, penalties or non-monetary sanctions reported in this section include fines or penalties that were paid and recorded in Enbridge’s records for the 2015 financial year, as well as any fines or penalties paid in 2016 prior to the completion of Enbridge’s 2015 CSR & Sustainability Report.