October 13, 2015 / 2:56 PM / in 2 years

Canadian minister rejected Arctic drilling review warning -memo

CALGARY, Oct 13 (Reuters) - Canada’s Conservative government rejected advice from its bureaucrats warning it was “inappropriate” to use a sole-source contract to hire a consultant to review the country’s Arctic drilling legislation, according to a memo obtained by Reuters.

The memo, released under Canada’s Access to Information Act, was prepared for Aboriginal Affairs and Northern Development Minister Bernard Valcourt by his department. He is running again in Canada’s Oct. 19 election.

Canada is reviewing Arctic drilling at a time when low oil prices and tougher regulation following offshore spills are prompting companies like Imperial Oil Ltd, Exxon Mobil Corp, BP Plc and Chevron Corp to put projects on hold and seek concessions.

The memo, sent to Valcourt in late June, warned it would be “inappropriate” to hire the consultant, Rowland Harrison, without any open competition since this would violate federal rules for contracts worth more than C$25,000 ($19,157.09).

Valcourt rejected the advice, opting to appoint the former member of the federal energy regulator who was described by the department as a “scholar” of Canada’s energy regulatory regime with more expertise than other candidates who were considered.

Asked about the memo, Valcourt’s office referred questions to his department, which said its advice was based on a “misunderstanding” about whether the consultant’s mandate included engagement with stakeholders.

The revelations come as the Conservative government, plagued by a series of ethics scandals, battles to hang on to power after nearly a decade in office. The opposition Liberals and New Democrats have accused it of weakening environmental laws in response to industry lobbying.

Canada’s former parliamentary budget officer, Kevin Page, said it was not common for cabinet ministers to reject advice from bureaucrats seeking a competitive procurement process.

The department gave Valcourt background information with the memo explaining how Harrison could engage with stakeholders and produce a report in response to industry lobbying.

It also told Valcourt that an independent expert would help “lend credibility” to recommendations expected to help companies finalize investment decisions.

Other documents said Harrison’s core roles would include intervening “when political issues arise,” delivering news to stakeholders, and acting as a spokesman in consultation with Valcourt’s office or department.

Environmental group Greenpeace, which is opposed to Arctic drilling, questioned Harrison’s independence, noting that the lawyer was a member of the National Energy Board in 2011, when previously-released government documents described the federal regulator as an “ally” of the oil industry.

“It seems clear Minister Valcourt wanted to get Mr. Harrison into the driver’s seat for this review as quickly as possible without any questions or scrutiny,” Greenpeace campaigner Alex Speers-Roesch said.

Harrison did not respond to requests for comment.

$1 = 1.3050 Canadian dollars Editing by Jeffrey Hodgson and Paul Simao

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