Enforcement approach and the use of administrative monetary penalties

Background

On 29 June 2012, the Parliament of Canada passed the Jobs, Growth and Long-term Prosperity Act. As part of that Act, the National Energy Board Act (NEB Act) was amended to provide the NEB with authority to establish a system of Administrative Monetary Penalties (AMPs) through regulations to promote compliance with the NEB Act.

The NEB conducted consultations on a proposed approach to developing an AMPs regulation through a discussion paper from July to September 2012. A summary of comments submitted during the consultations and how they impacted the development of the draft regulations are described in the RIAS accompanying the draft regulations. Many of the comments and questions submitted were regarding how AMPs will be implemented in practice. Some initial policy direction regarding certain aspects of implementation is provided below. A more detailed guidance document describing the overall AMP process will be released for comment prior to the publication of the final regulations.

Enforcement approach and the use of AMPs

Administrative Monetary Penalties provide the Board with one more enforcement tool to obtain compliance with the Board's regulatory requirements regarding safety of workers and the public, and protection of the environment. The following statement articulates the guiding principle behind the Board's approach to enforcement:

The NEB will enforce regulatory requirements to obtain compliance, deter future non-compliance, and prevent harm by using the most appropriate tool or tools available.

What this statement means in practice is that AMPs will be used where they are the most appropriate tool to obtain compliance. AMPs will be used selectively as we will also continue to use our existing enforcement tools because they have been very effective in obtaining compliance. More details of our compliance verification and enforcement toolkit can be found here. With respect to damage prevention, we will continue to use our current activities under the damage prevention framework which are designed to ensure that pipeline companies, landowners and third parties understand and fulfill their responsibilities for preventing damage to pipelines. The Board's Exemption Order for low risk crossings by agricultural vehicles also remains in place. Additional information regarding damage prevention can be found here.

It is important to emphasise, however, that safety and environmental protection are of utmost importance to the Board, and we will take all necessary actions to protect the public and the environment, including the issuance of AMPs. For further clarity, the following criteria will be considered in guiding the use of AMPs:

  • When compliance is not obtained using either facilitated or directed compliance tools; or,
  • When harm is caused because of the non-compliance; or,
  • When harm would likely occur because of the non-compliance; or,
  • Any other situation where an AMP is the best way to obtain compliance or deter future non-compliance.

The Board has also decided that summary information related to AMPs that are issued will be published on the NEB website. This is consistent with the NEB's Action Plan on Safety and Environmental Protection goal of making enforcement actions public.

General Order on Electricity Reliability

On 29 November 2012 the Board issued an Order which imposes mandatory reliability standards on certain international power line companies under the Board's jurisdiction. During consultations on the AMPs discussion paper a number of comments and questions were raised by stakeholders in the electricity sector about how AMPs will be applied in respect of the General Order. The following policy statement is intended to provide guidance on the Board's perspective on this matter:

The Board will use AMPs to deter non-compliance with mandatory reliability standards where violations of the standards have or could have affected people's safety or the environment. The Board will take provincial enforcement actions into consideration when it decides what action, if any, it will take to enforce the General Order for Electricity Reliability, having regard to minimizing duplication and harmonizing with the provinces.

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