Corporate Social Responsibility Report 2004

Regulatory Compliance

Enbridge's "license to operate" is subject to extensive local, provincial, state and federal regulations and laws. We manage compliance with these requirements through system controls and regular reviews and inspections.

Our goal is compliance with government regulations and corporate procedures. Although we generally meet these requirements, occasionally equipment failures or human errors occur that result in non-compliance. In each case, we conduct an internal investigation, determine the cause of non- compliance and correct deficiencies.

In 2003, we received 21 regulatory notifications from government agencies for environmental or safety issues.

Liquids Pipelines received seven regulatory notifications. Of these, four resulted from the NEB audit of our Canadian Liquids Pipeline System, identifying the need for improvements to training, internal reviews and environmental monitoring. These deficiencies are being corrected.

Gas Distribution received three orders from the Ontario Ministry of Labour. Two orders were received after government inspectors perceived inadequate traffic control and protection plans at work sites in the Toronto area. Another order resulted after a contractor vehicle contacted an overhead transmission line at an Ottawa work site. We are addressing these issues through adjustments to construction and maintenance procedures and increased safety communications with contractors.

Our U.S. Natural Gas Business also received 11 notifications for air permit and pipeline non-compliance issues, mainly in Texas. Of these, the most significant involved a sulphur extraction plant in Texas, which released about 7,000 tonnes of sulphur dioxide above permit limits as a result of a plant catalyst bed failure. Corrective measures were taken, and a comprehensive compliance assurance program was initiated.

Enbridge is an equal opportunity employer, and we seek the best and most qualified people for positions with the company. However, qualifications for directors have become more specific and varied post-Enron, and when we are looking for a member of the board who, for example, has been the president or CEO of an oil and gas company, we have a limited pool of people to choose from.

We do use professional recruiting services to find appropriate members of the board and for other positions at Enbridge. We are explicit in the criteria we give to those firms, and ask that they also encourage women and applicants from diverse cultural and professional backgrounds to apply.

We have had some success in having more diversity on our boards and we are optimistic that, as directors retire and we seek replacements, we will have more options to consider. For example, along with Susan Evans, who sits on the Enbridge inc. Board, former FERC commissioner Martha Hesse was appointed to the board of Enbridge energy company, the general partner of Enbridge energy partners. Elizabeth Cannon is a member of the board of trustees that oversees Enbridge Income Fund.