06 May 2013

Why separate? #nlpoli

Last week, the federal Auditor General pointed out many serious problems with the state of offshore search and rescue.

Last week, the usual gang grabbed any microphone they could find to call  - yet again - for everything from a provincial public inquiry into the state of search and rescue in the province to a new agency to regulate safety in the offshore oil industry.

The idea that we had to split safety from other aspects came up during the offshore helicopter inquiry.  The idea is popular.  Helicopter safety inquiry commissioner Robert Wells included it as one of his recommendations in volume one.

But here’s the thing:  what is a so-called separate safety agency supposed to do that we aren’t doing now or couldn’t accomplish any other way?

You see, none of the people pushing for a separate safety agency have explained anything about it.

They don’t explain why we need one beyond a couple of very superficial observations.

They don’t explain what actual problem the separate agency would solve.

And what’s more they don’t explain how such a separate agency would work offshore Canada.

Justice Wells offers two reasons for a separate agency.  The first was because three other offshore jurisdictions have one.  That’s it.  Wells uses up a lot of words describing the three regimes – Australia, the United Kingdom and Norway – but he doesn’t offer any specific reasons why the local offshore needs a new agency specifically to handle offshore health and safety.

Wells’ second reason was something called “regulatory capture”.   Essentially, the term describes a situation where the regulator becomes so friendly with the industry it regulates that regulator.  Wells acknowledged flatly in his report that there is no evidence such a problem exists currently with the offshore board.

In other words, Wells proposed a solution for a problem that does not exist.  What’s more, there is no proof  in a separate agency – in itself – that such an entity would not fall victim to the same risk of going native as any other group.

What’s most noteworthy here is that Wells readily accepted that a separate agency may not be possible.  In its place or at least as an interim measure, Wells recommended that  the offshore board establish a larger safety division  within the existing board to accomplish the purpose he wanted:  a stronger, more robust and proactive approach to safety.

As for the three countries with separate safety agencies, it is a giant hole in Wells’ report that he doesn’t consider a more detailed comparison of those three countries with the Canadian example.  That’s a shame really, because only someone of Wells’ stature would give a toss about this sort of thing.  The other proponents, like Lana Payne of the labour federation aren’t given to more than vacuous sloganeering. A separate safety agency has nothing to do with safety in her world. It is just another slogan to spout.

But let’s take a look and see if such an idea might work in Canada.  The United Kingdom and Norway are unitary states with a single offshore area.  Neither is vaguely like Canada in political constitution or in the varied offshore operational environments.

Australia is a federal state but one in which the  national government applies uniform national standards to the entire offshore area regardless of where it is in the country.  Again, that’s nothing like Canada where the federal government has agreed to share control with coastal provinces.  Wells notes that the Atlantic Accord is now over 25 years old but he fails to discuss at all the political implications of creating a separate safety agency in Canada.  None of the other proponents of the separate agency have given this a thought either.

Wells’ idea would not produce a single safety agency.  Rather, the federal government would be obliged to create one for Newfoundland and Labrador, another for Nova Scotia, another for any of the Gulf of St. Lawrence provinces,  for Ontario and for British Columbia.  Rather than a single offshore safety regime, this separate agency would be one of a half a dozen or more and that is only for the offshore.

Just this past week, the federal government, Nova Scotia, and Newfoundland and Labrador announced new health and safety rules for the offshore.  Wells mentions them in his report written in 2010.  The three governments took 14 years to sort out a common set of rules for health and safety in just two jurisdictions. 

14 years.

One can hardly imagine that the health and safety of workers would be advanced by creating either an even greater set of inter-jurisdictional talking shops or a patchwork quilt of rules from one province of Canada to another in an industry that cuts across all of them.  Imagine the not-too-distant future in Newfoundland and Labrador, for example, where the offshore oil industry straddling three provinces would have to deal with no fewer than six agencies governing things like well management on the one hand and safety on the other. If it took 14 years to resolve things with just two agencies, one can only imagine the bureaucratic horror show of six such boards.

The alternative to that would be the creation of a single offshore safety agency for all of Canada.  Bureaucratically, it would be very neat and tidy.  Such a safety agency would be a wonderful thing, except for one small issue.

In the 1980s, the federal and provincial governments on the east coast agreed to share control of the offshore even though it belongs lock, stock, and barrel to Ottawa.  There are a couple of agreements that layout the way the governments share control, including assignment of responsibility for health and safety to these new agencies that exist at arms’ length from either the federal or provincial governments. 

They are, in effect, separate agencies already, at least from government.  And if you look at things like the rules that government aircraft and ships and the like, those rules are already handled by agencies separate again from the offshore regulatory boards.  It’s important to remember that the Cougar 491 crash was caused not by a failure of the offshore regulator’s safety regime but by a mechanical problem that lies exclusively in the hands of a separate regulator:  the transportation safety board. 

If you wanted to create a separate agency of the kind in the Wells report,m you;d have to  change fundamentally the 1985 federal-provincial agreement.  Would that be enough to make it a new agreement entirely?  There’s an argument to made that it would, just as the sort of changes the provincial Conservatives wanted for perpetual Equalization transfers would have altered the deal materially.  One of the reasons the provincial Conservatives gave up their fight for permanent hand-outs was the risk such a change posed to the rest of the Accord.

You see, changing the 1985 agreement substantially would open up the agreement to a challenge under the North American Free Trade Agreement. The local benefits provision, in particular, run contrary to NAFTA.  The federal government won an exemption for them in 1987 because the Accord pre-dated NAFTA.

But a new deal would be easy legal pickings for the offshore companies.  Good-bye Bull Arm and Marystown.  Hello, Pascagoula.  If they think that the existing aircraft regulatory system is too closely tied to the Americans, imagine how easy it will be to ensure that the Canadian safety regime matches the American one in the Gulf of Mexico once the offshore here is brought under NAFTA.

Rest assured the slogan screamers haven’t thought about those sorts of issues in this separate safety agency racket just like they joined Danny in his sloganeering in 2004 without giving a moment’s thought to their precious local benefits and NAFTA.

Robert Wells was right:  safety offshore is important and it will become increasingly important as we push farther offshore and into deeper and deeper water.  A separate safety agency might seem like a good idea to some, but in reality, a range of very practical legal and operational reasons  argue against it for the local offshore. 

We can get far more out of the existing regime with its very good history of offshore safety than there would be from hastily adopting an idea that its proponents clearly haven’t thought about very much.