Multi-faceted approach to managing risks 

Risk Management

Our risk management process includes controls and procedures for reducing controllable risks to acceptable levels, and the identification of actions for events outside of management’s control.

We use an Enterprise Risk Management (ERM) Program to identify, evaluate, report, and monitor key risks. The ERM Program aligns with the International Organization for Standardization’s standard for risk management, ISO 31000. Management is carried out at three levels, with risk assessments carried out in concert with core corporate processes.

Our board of directors provides oversight to the risk management process, which includes identification, evaluation, reporting, monitoring, and mitigation of key risks that may affect the achievement of our business objectives.

Management is responsible for approval of the framework for:

• enterprise risk management; 
• policy review and recommendations; 
• risk management policies and processes; 
• monitoring and reporting of compliance with the policies and processes; and 
• conducting risk mitigation activities within specific operational areas.

Our risks and risk management approach are described in detail in our Management’s Discussion and Analysis on pages 45 to 55 found in our 2012 Annual Report.

Corruption Risk

We conduct an annual fraud risk assessment across the entire organization. It considers all areas of the business and includes potential fraud scenarios. If gaps are identified in control structures, remedial action plans are developed.

Information about complaints we received in 2012 is found here.

Our position on climate change policy

We support Canadian targets and regulations that mandate emission reductions from coal-powered generation, including national and provincial regulations that would significantly reduce greenhouse gas (GHG) and air emissions from coal-fired electricity plants, helping Canada achieve its Copenhagen commitment to lower GHGs.

To support our position, our people have:

• Advised governments on the impacts of potential policies and regulations for the achievement of GHG reduction targets;
• Advised governments on implementation mechanisms for existing policies (such as Alberta’s Specified Gas Emitters Regulation and Canada’s “Capital Stock Turnover” regulation for coal-fired electricity), including the creation of offset quantification protocols and the design of emission trading regimes; and
• Advocated with Regional Greenhouse Gas Inititative (RGGI) States and California that provide a cap-and-trade system to create financial incentives as a method for generators to achieve GHG emissions reductions.

Public Policy

In accordance with the Federal Accountability Act, we report all lobbying of Canadian federal Designated Public Office Holders (DPOHs) on a monthly basis.

In 2012, we participated in 11 meetings with DPOHs, primarily regarding greenhouse gas and air emissions policy. We participated in discussions regarding:

• capital stock turnover for coal-fired power plants; 
• market structure; 
• greenhouse gas and other air emissions; and 
• electricity transmission policy in the jurisdictions where we operate.

We contributed no monies to Canadian federal political parties in 2012, 2011 and 2010. Total expenditures on various political events and fundraisers across all provinces in Canada in 2012 were $32,319 (compared to $30,596 in 2011 and $20,439 in 2010).

Human Rights

None of our operations are at risk for incidents of child labour or forced labour. The right to free association and collective bargaining is not at significant risk. We have not been subject to human rights reviews or any impact assessments. Zero human rights violations, including the rights of indigenous people were identified in 2012, and all security personnel receive training in policies and procedures related to human rights. Our contractors must align with our policies, although they do not undergo a specific screening on human rights. We do not have significant investment agreements that include human rights clauses.

Precautionary Principle

When any Canadian statutory decision maker, court or tribunal applies the precautionary principle in making its determination, we consider this principle in the conduct of our activities in like circumstances. The ‘Precautionary Principle’ says that when an activity raises threats to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically.