By Colin Laughlan | Originally appeared in Maritime Magazine · Summer 2019 |
After years of environmental studies, rebuttals to studies, rebuffs to rebuttals, and sheer doggedness by the Vancouver Fraser Port Authority (VFPA), its ambitious Roberts Bank Terminal 2 project (RBT2) reached the final public-hearing stage this past May.
The $3-billion project proposes a massive new terminal with three ultra-large container vessel berths, adding 2.4 million TEU capacity, on a 108-hectare artificial island to be built off BC’s shore 30 km south of Vancouver. Since it was first conceived in the early 2000s, opposition by environmental activists has been fierce over the risk to marine habitat and wildlife, as well as the impact of noise, pollution, and congestion in the neighboring City of Delta. Through all of this the Port has maintained a steadfast conviction that there is no feasible alternative on Canada’s west coast (some think it should be moved to the Port of Prince Rupert) to meet the projected increase in Asian container traffic by the mid-2020s and beyond.
Given its strenuous efforts at meeting objections to the project, including environmental remediation plans and a decision to relocate the proposed island farther out in deep water, the Port Authority’s posture suggests it believes the project’s approval is a fait accompli. Their terse comment prepared ahead of the hearings read simply: “We’re confident that the Roberts Bank Terminal 2 Project is the only project that will ensure Canada is able to meet its growing trade demands with global economies.”
That confidence was surely shaken by the Port’s own tenant, GCT Global Container Terminals Inc., which operates the Port’s Deltaport terminal situated on the marine doorstep of the proposed RBT2.
In a triple salvo fired at the Port Authority, GCT has filed for a federal judicial review, launched a public information campaign, and presented at the public hearings its own consultant’s forecast on container traffic, and other studies challenging the Port’s economic modelling for RBT2.
GCT alternative proposal
In its court documents, GCT claims the Port Authority unfairly denied GCT’s alternative proposal to add a fourth berth that would increase capacity at its current Deltaport operation by 2 million TEU, and which it says would provide sufficient capacity to meet future demand.
The GCT action shines considerable light on the Port Authority’s inherently conflicted roles as landlord and regulator, and now also as a competitor.
In an interview from New York, Doron Grosman, GCT’s President and COO, stated: “We have one objective: that GCT Deltaport’s Berth 4 is given an equal footing, regulatory process that’s fair, transparent, timely, and that we do not remain sidelined by our Regulator, the Port Authority, who is also our competitor.”
He continued: “There is no alternative in their mind, so they summarily dismiss our project. And so, we think it is appropriate for the public to be apprised that there is an alternative project – in fact an alternative project that will bring capacity on in time.”
At the heart of the matter, the issue raised by the GCT action goes to the governance structure of Canadian port authorities. In 2017 the Honourable David Emerson, former chair of the Canada Transportation Act Review, addressed the House of Commons Standing committee on Transport, Infrastructure and Communities on this very issue, saying:
“I think there is inadequate governance in relation to deployment of capital; there’s inadequate governance when it comes to making sure there is a recourse to a regulator where there is abuse of monopoly power; and there is inadequate governance when it comes to port or airport authorities entering into business in competition with their own tenants…”
Insight from Dr. Mary Brooks
Whether an abuse of power or a valid interpretation of its duties, acting in its conflicting role created a major problem for the Port Authority, comments Dr. Mary Brooks, Professor Emerita at Dalhousie University’s Rowe School of Business and one of Canada’s leading authorities in port governance. In a recent interview from Halifax, she said: “The separation of operator and regulator is really important, and that is a fundamental foundational piece to good governance – otherwise you have the fox in charge of the chicken house.”
Perhaps in recognition of the conflict, the VFPA, in its 2018 submission to Transport Canada’s Port Modernization Review, suggested a ‘fairness advisor’ could be useful is supporting the integrated roles. But that is probably not adequate. To paraphrase a well-known legal maxim: ‘Fairness must not only be done, it must be seen to be done.’
Besides, there’s another solution readily at hand. “You don’t need another job,” said Dr. Brooks. “That to me is the role of the Auditor General. The last time they looked at ports they were quite clear there was an issue with the regulator and operator.” But she added that the Auditor General’s office “has so many things on their plate, the real question would be: ‘Who calls for it?’” Hmm. Well then, consider it called for.