Environmental group claims environmental consultant has undisclosed conflict of interest

The US environmental group Friends of the Earth claims that “the company hired by the State Department to review the environmental impact of the Keystone XL tar sands pipeline lied on its conflict of interest disclosure form about its work for pipeline builder TransCanada and other oil companies”. Ross Hammond, senior campaigner for Friends of the Earth is quoted as saying “If ERM lied about its relationship with TransCanada, how can Secretary Kerry, President Obama or the American people believe anything the company says about the pipeline’s environmental impact?”

Among other claims by FOE are claims that:

  • In papers filed with the State Department in June 2012, ERM certified that it had “no existing contract or working relationship with TransCanada” for at least three years.
  • Public records show that TransCanada, ERM and an ERM subsidiary, Oasis Environmental, have worked together at least since 2011 on the Alaska pipeline project.
  • ERM certified that it had no “direct or indirect relationship … with any business entity that could be affected in any way by the proposed work.”
  • ERM’s own publicly available documents show that in the period 2009-2012 the firm was working for over a dozen of the largest energy companies which stand to benefit if Keystone is built, including Exxon, Shell, Chevron, Conoco Phillips, Total and Syncrude.

Friends of the Earth claims that “it is impossible for the State Department to fairly evaluate whether the pipeline is in the national interest when its environmental review was conducted by a company with deep ties to the oil industry”.

So far there has been no State Department response to FOE’s claims which are clearly intended to derail the US Administration’s review of the Keystone XL pipeline.

Unfortunately the environmental consulting industry is rife with direct and indirect, actual and potential, conflicts of interest. For example, without commenting on FOE’s claims, GallonDaily can report that most environmental experts with knowledge of pipelines will have worked for, or hope to work for, pipeline companies. Indeed, it may be that one of the only ways a person can gain the knowledge needed to fully and properly evaluate the environmental impacts of pipelines is by having spent some time working with the industry. We are betting that there are not many pipeline environmental experts who do not have some connection to the pipeline or oil and gas industries.

It is not just in pipelines that these challenges exist. In the area of certification of green products, most companies that provide certification (but not GallonDaily’s parent) get paid, at least in part, on the basis of a percentage of the price of the products sold. One might well ask how a certifier can provide unbiased certification if they stand to gain from sales of the certified product.

GallonDaily recalls that a few years ago a senior official in the Ontario Ministry of Transportation said that roads could easily be built to last for twenty years or more but that the system of selecting the lowest price bidder, less than adequate government specifications, and the fact that the builders who built the road stand a chance of being selected to repair the road when it fails, all mitigate against the construction of longer life more sustainable roads.

It is not just consultants that face these challenges. Many environmental groups accept contributions from industry and, in an individual case, it is difficult to know to what extent these funds influence the group’s findings but it seems somewhat likely that they do.  At the end of the day it may be the integrity of the company and of the individual that matters most.

While environment and Sustainable Development remain discrete specialties to be added on to other activities, rather than being incorporated automatically into everything we do, allegations of conflict of interest in the environmental consulting community will likely continue because consultants work for a wide range of clients with differing interests. It will be interesting to see how the US State Department deals with this particular one.

GallonDaily reports and comments on information about the environment and Sustainable Development that we consider may be of value to the Canadian environment and green business communities. We have not independently verified FOE’s claims.

The FOE press release is available at http://www.foe.org/news/news-releases/2013-07-conflict-of-interest-state-dept-kxl-contractor-lied-on-oil-ties

Additional information from FOE’s partner on this matter, The Checks and Balances Project, is available at http://checksandbalancesproject.org/

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