Farmers, ranchers, land agents, and energy companies need to have a basic understanding of ethics as they relate to energy negotiations, says an official with the Farmers’ Advocate Office (FAO).
“One of the roles of the FAO is to assist farmers and ranchers to understand the laws that guide the energy industry and their rights and obligations in relation to negotiations with energy companies,” said Carol Goodfellow, assistant farmers’ advocate for land and energy.
“People who have never undergone energy negotiations may not have an understanding of what the process should look like, and, as a result, may unknowingly sign agreements that aren’t to their benefit.
“While there are many excellent companies and land agents, unfortunately there are also some who use questionable ethics in their negotiations with farmers and ranchers.”
Ethics are the standards of right and wrong that govern the behaviour of a society or group.
“Legal requirements set a valuable baseline, but they are not a sufficient guideline for ethical behaviour,” said Goodfellow. “Just because something is legal doesn’t make it ethical. A land agent seeking to be ethical in energy negotiations must rise above the legal requirements.”
Don’t feel pressured
A landowner should have enough time to review an agreement, research, and ask questions prior to signing, said Goodfellow.
“If the landowner lacks specific expertise in the area of surface rights, he should be afforded the opportunity to seek representation,” she said.
“Landowners should be aware that signing bonuses can be tactics to get a landowner to sign quickly (and ignorantly). Putting pressure on landowners by suggesting that the bonus will be withdrawn without expeditious signing of an agreement is a highly questionable approach.”
From time to time, the FAO hears of situations where landowners have been given an agreement for review and been told they have a specified time to sign.
“In reality, a landowner has 48 hours of uninterrupted time (not including weekends and holidays) to review the documents,” she said. “They may choose to take additional time after that.”
The landowner also has a right to all information that affects them.
“Agreements should fully disclose all impacts of the development and be forthright about the future intentions of the project as they relate to the landowner,” said Goodfellow. “Furthermore, the agreement should detail all commitments that were formed during the discussions. This is vitally important for ensuring a landowner’s needs and interests are reflected throughout the development, maintenance, and reclamation processes. The obligation should be on the land agent to direct and lead the process in cases where the playing field may not be level.”
Treated with respect
Land agents should recognize the business acumen and diversity of skills it takes to be a farmer or rancher, and that they should be treated as professionals and as equals, said Goodfellow.
And the negotiations should be respectful.
“Many Albertans have invested deeply in their properties for generations, both financially and emotionally,” said Goodfellow. “A person who has spent their life on a piece of property will be rightfully insulted if they receive instructions from someone who has been on their property for a few hours. Land agents should be sensitive and polite, remembering that they are uninvited guests in a landowner’s home. Statements such as, ‘we will just force entry,’ or, ‘government and the Alberta Energy Regulator will support us,’ are unacceptable.”
Land agents should remember that signing is a weighty decision for the landowner, she added.
“Changes to their property have implications for a landowner’s family, farming operations, investment, and future.”
For more information on ethics and energy negotiations, contact Carol Goodfellow at 780-427-2350 or [email protected]