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A clear case of conflict of interest

A clear case of conflict of interest / DNY59

In November 2015, a series of investigative media stories shone a national spotlight on the relationship between oil and gas giant Enbridge Inc., and the University of Calgary. The reports, which examined documents and e-mails brought to light through access to information requests, revealed a picture that was troubling to many people in academe. So troubling, it spurred CAUT to act. An investigatory committee was struck to look into the circumstances around the establishment of the Enbridge Centre for Corporate Sustainability (ECCS) at the U of C’s Haskayne School of Business (HSB).

Those circumstances were in many ways fairly typical: in 2011, the university began looking into securing sponsorship from Enbridge in order to help establish a research institute. An agreement was reached and Joe Arvai chosen to lead the soon-to-be named ECCS.

But what followed, according to the story that eventually unfolded, was not so typical. As the media had depicted, and the investigating CAUT committee later found, the relationship between the university, its president and Enbridge was forged not only in an ethically inappropriate manner, but also divisibly and unfairly, pitting colleagues against one another, leaving the institute at a disadvantage and in an untenable financial situation, and tainting the U of C’s reputation for academic independence and objectivity.

In conducting its investigation, the committee reviewed the information uncovered by the media, as well as mounted their own line of inquiry with current and former faculty, student representatives at the U of C, and the former dean of HSB. They also examined U of C board policy documents, agendas and minutes posted online, and a December 2015 report produced at the university’s request by retired judge Terrence McMahon.

The committee’s report was released last month and contains a number of key findings about what transpired after March 2011, when the U of C first began working toward securing sponsorship.

In the authors’ words, “(Dr.) Arvai came into conflict with the sponsor and his dean over a number of important decisions about the ECCS, including the naming of the centre, the choice of its partner institutions, and the role of the director. Arvai informed us that he was eventually removed from his position as director a week after he informed Enbridge’s public relations firm of his opposition on scientific grounds to the Northern Gateway pipeline. Arvai later left the U of C entirely.”

The strident conflict between administrators and Arvai in his role as head of the institution was further compounded by the fact that university president Elizabeth Cannon was at the same time “highly remunerated” as a member of the Enbridge Income Fund Holdings board, which in turn was controlled by Enbridge Inc. through majority ownership.

According to the committee’s report, it was the accumulation of all the facts taken together in the case that painted a picture of “a significant failure of collegial governance, accountability and oversight” in the way the ECCS was established, and which allowed the attack upon and compromise of Arvai’s academic freedom.

“Academic staff have the right to engage in robust debate without fear of intimidation or reprisal,” says CAUT executive director David Robinson. “The U of C not only failed to protect and promote academic freedom in this case, but succumbed to pressure by Enbridge to compromise the autonomy of the work being conducted within the ECCS.”

As for why it took the digging of journalists, aided by freedom-of-information laws, in order to bring the story to light, there remain “worrying signs of a culture of silencing and reprisal at U of C,” the report concludes.

Some key findings: Elizabeth Cannon was in a “clearly ap­parent conflict-of-interest” by serving in a paid position with Enbridge alongside her duties as president of the university. She could have avoided the conflict by recusing herself publicly from all Enbridge-related discussions and decisions, but she did not, and nor did the school’s board of governors insist she do so, although they should have. Arvai’s academic freedom was compromised by the university’s mismanagement of the Enbridge Centre, which appears to have been due to a “desire on the part of U of C leadership to please a significant donor.” Further, senior administrators should have but did not tell Enbridge that its attempts to influence decisions at the centre were “inappropriate,” and that it was up to academic staff alone to determine academic direction — a lapse “motivated by a desire to avoid offending the donor.” The Enbridge sponsorship was skewed in the company’s favour from the start, with the school making unfunded promises to Enbridge, including commitments to enhance Enbridge’s reputation at the university’s risk and expense. The resulting funding shortfall led to an untenable situation in which fingers were pointed at the centre’s directors, “instead of the administrators who negotiated the skewed sponsorship … the board members who were party to it, and the senior U of C leadership who failed to exercise proper oversight.” As far as it can be determined, the Enbridge sponsorship was never vetted beyond HSB, and does not appear to have come before the school’s BOG for approval.

The report’s authors also point to “how easily a university can make itself dependent on corporate money.” The flawed Enbridge deal placed the U of C in the precarious position of having to raise more money that it ever received from Enbridge, a liability which “created inherent pressure to compromise academic objectivity where it came into conflict with donor priorities.”

Based on its findings, the committee makes a number of recommendations, including: a review of the governance structure and processes at the U of C in order to make them more transparent and clearly linked to the principles of academic freedom and collegial governance; that all senior university officials be barred from paid service on outside corporate boards and that relationships with external entities be reviewed and made to comply with CAUT recommendations on university-corporate collaborations; and a review and strengthening of processes of collegial governance and shared decision-making involving the U of C leadership and faculty, students and staff, along with the overall accountability of senior administrators.

Arvai, who is now Faculty Director at the Erb Institute at the University of Michigan, welcomed the report’s findings as confirmation of what he and others felt about the relationship between Enbridge and the university.

“In my view, the CAUT report spells out what many of us at the U of C were thinking at the time: what happened in ECCS was far from normal,” he said. “At the end of the day, the reputation of — and the value of the science and degrees from — any university rests upon a foundation of credibility. So, while the report provides a very personal sense of vindication for me, it plays a much more important role in that it points to some very clear and very sensible recommendations that I hope the leadership of the U of C will heed.”


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