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Overview

At Enbridge, corporate governance means ensuring a comprehensive system of stewardship and accountability is in place and functioning among directors, management and employees. We employ a variety of policies, programs and practices to manage corporate governance and ensure we have a strong corporate governance culture built on integrity, accountability and transparency.

Corporate Governance Highlights

Corporate Governance Scorecard

Objective 2005 result 2006 result Target Challenges
Apply management systems to focus our Company's EH&S objectives, improve worker safety, reduce adverse impacts on health and the environment, and measure our progress. Dupont Safety Resources completed a comprehensive review of Liquids Pipelines' Health and Safety Management Systems. Det Norske Veritas completed a qualitative assessment of Liquids Pipelines’ contractor safety management system against 15 best practice processes. E.Vironment, LP completed a comprehensive review of Liquids Pipelines’ environmental management systems. Increase the consistency of our EH&S activities and ensure they are closely tied to our business and CSR objectives. Enbridge's operations, facilitiesand petroleum product shipments are subject to extensive national, regional and local environmental, health and safety laws and regulations.
Have mechanisms in place to continually evaluate the effectiveness of our environment, health and safety programs. We conducted several internal audits of our EH&S systems throughout all of our business segments and also participated in external audits and inspections of our operations. E.Vironment, LP conducted an environmental compliance audit at seven Liquids Pipelines facilities.
In the United States, environmental reviews were conducted on Enbridge Pipelines, North Dakota and the Spearhead Pipeline.		 Assess each business segment's compliance with government regulations and our internal policies and management systems, and provide guidance for making improvements. Enbridge's facilities could experience accidents, malfunctions or other unplanned events that could result in spills or emissions in excess of permitted levels and result in personal injury, fines, penalties or other sanctions and property damage.
Manage compliance with laws and regulations through system controls and regular reviews and inspections. We received 10 regulatory notifications from government agencies for environmental or safety issues, with fines totaling $101,114. We received 10 regulatory notifications from government agencies for environmental or safety issues, with fines totaling $3,580. Continuous compliance. Environmental laws and regulations are likely to become more stringent over time.

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CSR Committee of The Board

Enbridge's Corporate Social Responsibility (CSR) Committee oversees EH&S and CSR guidelines, policies, procedures and practices of Enbridge and its subsidiaries. In 2006, the CSR Committee met three times.

Executive Compensation

Enbridge's executive compensation is described in the Management Information Circular.

Besides performance against financial, operations and strategic objectives, which are key determinants of incentive payments under our company's executive compensation program, Enbridge senior executives must also meet non-financial objectives that reflect EH&S performance and CSR commitments.

Meeting Sarbanes-Oxley

The Sarbanes-Oxley Act, enacted by the United States Congress in 2002, was created to restore public trust in capital markets after several high-profile business scandals. As a result of Sarbanes-Oxley, the U.S. Securities and Exchange Commission and the stock exchanges have established rules that govern how boards and committees are required to review disclosures, company processes and internal control systems. Enbridge Inc. and our United States businesses comply with applicable Sarbanes-Oxley requirements. Enbridge’s governance practices are also consistent with and follow the Canadian securities regulators’ corporate governance guidelines and rules. In ensuring compliance, Enbridge’s CEO and CFO sign certificates attesting to the fair presentation, in all material respects, of the Company’s financial position, results of operations and cash flows, as well as attesting to the design and effectiveness of disclosure controls and procedures, and the design of internal controls over financial reporting to provide reasonable assurance that all material information is disclosed.

Employee Awareness

Liquids Pipelines’ Incentive Compensation Program for all its employees is 25 per cent weighted on safety and environmental (system integrity) performance. The company that conducted the outside review of our Environmental Management System noted this as an industry “best practice”.

In the United States, Liquids Pipelines developed and implemented an environmental training program for our operations staff, and expanded environmental training provided for project inspectors, who are contractors hired by our engineering and operations departments to work on capital projects.

One of the ways Enbridge Gas Distribution engages its employees in environment, health and safety issues is through its 10 joint EH&S committees, which are situated throughout our Ontario operations.

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In addition to communicating safety performance updates and corporate safety initiatives to local staff, the committees conduct regular workplace inspections and meet to provide improvement suggestions to management. In 2006, we introduced Employee Digest, an email-based employee newsletter sent out to all Enbridge Gas Distribution employees. The newsletter regularly features on-the-job and off-the-job EH&S-related articles. Enbridge Gas Distribution also organizes a Environment, Health, Safety and Communities Day, which is held in Ontario in early summer, and at which employees are invited to engage with company and community representatives (such as the police, fire department, energy-conservation groups and bicycling associations) to learn about socially responsible advances at the company and in the community.

Continuous Improvement of Our Management Systems

Our business units apply management systems specifically adapted to their activities and business needs. These systems are designed to focus our company’s EH&S objectives, improve worker safety, reduce adverse impacts on health and the environment, and measure our progress. A goal of these systems is to increase the consistency of our EH&S activities and to ensure our activities are closely tied to our business and CSR objectives.

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In 2006, we continued to strengthen these systems:

  • Det Norske Veritas (U.S.A.), Inc. (DNV) completed a qualitative assessment of Liquids Pipelines' contractor safety management system (CSMS) against 15 best-practice processes. The goal of the assessment was to determine the most appropriate focus areas for prioritizing ongoing improvement of the CSMS within Liquids Pipelines Engineering and Operations. The CSMS was rated as “managed” against all 15 best-practice processes and, therefore, there was no evidence supporting a major overhaul of any individual process. DNV's first recommendation was for the findings to be reviewed in a structured workshop to confirm a prioritized action plan. DNV's other recommendations addressed: risk management; organizational decisions; training; change management; contractor collaboration; and safety management priorities within project designing, planning and execution.
  • E.Vironment, LP completed a comprehensive review of Liquids Pipelines' Environmental Management Systems (EMS) to: assess its effectiveness; identify strengths, gaps and opportunities for improvement; benchmark against industry best practices and recognized EMS standards; and provide prioritized findings and recommendations. E.Vironment's four key findings and recommendations focused on compliance assurance, the role of Liquids Pipelines' current EMS, environmental support, and environmental performance goals. Liquids Pipelines' executive management reviewed the results in December and a corrective action plan will be initiated in 2007.
  • In 2005, Enbridge Gas Distribution finalized the implementation of its Distribution Management System (DMS), a major portion of which is its EH&S Management System. The end result of the DMS implementation is that process maps have been clearly laid out for all critical processes that support the gas distribution system in Ontario. These process maps ensure that operating activities – from obtaining regulatory approvals for system expansions, to responding to unintentional liquids spills, to reviewing safety aspects of newly introduced equipment – are dealt with effectively, efficiently, transparently, and consistently. Of the over 100 gaps or improvement points discovered by the company during a third-party audit of the system, the company is ahead of target in closing the gaps or implementing the identified improvements, resulting in exceptional safety and reliability of the gas distribution system.
  • We continued to strengthen EH&S compliance in our United States Gas Transportation Business through the use of our Ops Environmental compliance database system, an online set of EH&S tracking and notification tools that help staff and Operations in monitoring compliance with federal, state and internal requirements. We have successfully implemented this system in all areas of the United States Gas Transportation Business. In an effort to further safety compliance and knowledge, we implemented a new web-based safety training and tracking program in 2006. This system allows EH&S and Operations staff to better track the training status of their employees and provides employees with additional training materials and tools to complete necessary training.
 

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