Alberta Energy Regulator vows to strengthen public confidence following damning ICORE probes

The interim chair of the Alberta Energy Regulator is pledging to strengthen public confidence in the agency following a series of damning reports on an international centre it had created.

The AER has been under scrutiny since Alberta's auditor general, public interest commissioner and ethics commissioner launched probes this year into the now-defunct International Centre for Regulatory Excellence, or ICORE.

They found resources were wrongfully used to establish the centre outside the AER's mandate, while its former CEO Jim Ellis displayed "reckless and wilful disregard" for proper management of public funds.

On Tuesday, the regulator's new interim chair, Bev Yee, outlined for MLAs what steps the AER has taken in the weeks since the reports' findings were released in October.

She told members of the legislature's public accounts committee the board has updated the AER's whistleblower policy, revised the travel and expenditure review policies, and made changes to the AER's internal code of conduct. 

She said those steps, and others, are aimed at improving internal controls and oversight.

"Through these steps we will strengthen confidence in the AER," Yee said.

For one, she said its whistleblower policy now has process for escalating complaints to the board level if the CEO or a member of the executive leadership team is alleged to be involved.

The travel and training policy has also been updated to ensure funding for training requests is connected to the AER's mandated work and has the appropriate levels of executive approvals for any travel.

Yee told the committee the activity related to ICORE was driven by a few key individuals and that those individuals are no longer employed by the AER.

In his report last fall, Auditor General Doug Wylie said controls to track and monitor expenses related to ICORE activities were at first non-existent and then poorly implemented.

He also reported the tone at the top at AER did not support a strong control environment or compliance with policies and that a "culture of fear" at the AER stifled concerns regarding ICORE activities.

Yee said the board is reaching out to its employees to try to address concerns about that culture and reassure staff it is safe for them to talk about difficult issues.

"This culture of fear has come up to us repeatedly, and it seems that it's not just from the top, it seems to be at many levels in the organization," Yee said.

NDP MLA Shannon Phillips suggested it will important for the regulator to demonstrate publicly exactly how it is addressing those concerns.

The AER, funded by a levy charged to the energy sector, oversees the oil and gas industry and is expected to ensure the safe and environmentally responsible development.

Yee told the committee "at no time" did the actions related to ICORE detract from the delivery of the AER's regulatory responsibilities.

Still, during Tuesday's meeting, UCP MLA Jordan Walker called the ICORE matter a "debacle."

His colleague, Searle Turton, asked Yee what steps the regulator has taken to address the governance and oversight issues at the regulator so that a situation like ICORE doesn't happen again.

She said the interim board has financial, regulatory and industry expertise and is capable of asking tough questions. She said the board is also reviewing its mandate and rules document and looking for ways to enhance accountability. 

The UCP government launched a review of the AER in September, saying there were questions about "operational efficiencies, executive oversight and budgetary spending practices" at the public agency.

Reviewing the AER was a part of the UCP provincial election platform.