Whether it’s the environment or native land claims, Shell Canada Ltd.’s general counsel has his hands full — especially as the previously publicly traded company became part of Royal Dutch Shell and is now undergoing a recession-related restructuring.
For David Brinley, an American ex-pat who’s lived all over the world and currently calls Canada home, it’s a job with plenty of challenges, but also plenty of rewards. Brinley moved to Calgary three years ago with his family and is accountable for Shell’s legal work in Canada. This includes advising senior management and managing a legal team of 53.
In the energy sector, some companies focus on only one area, such as exploration or retail. Shell, however, is involved in every aspect of the energy continuum, from the upstream to the downstream. One example of an upstream operation is the uniquely Canadian oilsands, more like mining than the traditional oil extraction method of drilling. Downstream operations include refineries and gas stations. The upstream is concentrated mainly in Alberta and the downstream is more diffused, with concentrated markets in Ontario and Quebec.
“The oil industry is a cyclical industry, and this one was accompanied by an economic cycle,” says Brinley. “Since I’ve been here, it’s been pretty much constant change.”
The first big change occurred when Royal Dutch Shell took over Shell Canada in 2007. Prior to 2007, Royal Dutch Shell was a 78-per-cent shareholder of Shell Canada, but Shell Canada was a publicly traded company and its shares were traded on the Toronto Stock Exchange. Because minority shareholder rights are strong in Canada, Shell Canada ran fairly independently of its parent company, Royal Dutch Shell. In 2007, Royal Dutch Shell acquired the remaining 22 per cent of shares from Shell Canada. It no longer runs independently of the parent organization and there are no more minority shareholders.
“That’s still a new world for the people here in Canada,” Brinley says. “All the Shell processes and standards are fully integrated, whereas before we adopted many of them but there was still quite a measure of independence.”
This change was followed up by the economic downturn, which resulted in belt-tightening measures and, most recently, a restructuring of some of the global Shell businesses. “Managing an organization through change has a lot of components, such as helping people cope, and everybody deals with that differently,” Brinley says. “Change management is one of those often-used terms, but it’s a big part of being a leader, and it’s certainly been a major component of my time here.”
Brinley, who attended the United States Air Force Academy, spent much of his life overseas, particularly in Asia, where he was intrigued by the different societal and legal rules people lived by. That led to an interest in law, so while he was living in Japan teaching for the Ministry of Education, he applied for law school at Brigham Young University in Utah.
During law school he had a summer clerkship split between clerking in-house with Shell in Houston and clerking for Nixon Hargrave Devans & Doyle LLP, now Nixon Peabody LLP, a large New York law firm. He clerked with the firm to see if he was interested in large-scale law firm work. He wasn’t. “I always felt that in-house was where I wanted to go, and that summer confirmed things for me.”
He liked working with a single client and being involved in business decisions from day one, as opposed to generating clients and billable hours.
Brinley was hired by Shell right out of school, and although he’s parented and paid out of Houston, he’s never worked there, aside from that half-summer clerkship. He started out in a satellite office in Bakersfield, Calif., with hopes of one day doing international work. At the time Shell kept its U.S. operations separate from global operations. One day, as a joke, he sent a settlement request form written out in Japanese to his boss’ boss in Houston. A few months later, Shell was looking for a Japanese speaker, and Brinley ended up in London to get some international experience and then on to Japan. “I had an unusual spring out of the U.S. that you certainly wouldn’t have had three years into Shell normally. And I’ve been international ever since.”
This is the first time his kids have lived in North America, since he’s spent most of his career going back and forth between Asia and Europe. One reason he took the posting in Canada was to give his kids some North American flavour.
Canada also has some unique legal challenges. Environmental regulations, for example, are more sophisticated here than most other jurisdictions. Business lawyers advising the oilsands are involved with environmental issues on a regular basis – whether that’s a lawsuit from a non-government organization or an ongoing regulatory issue involving water, air, or subsurface soil quality.
Canada has also taken a stand on CO2 emissions, and the Alberta government has allocated $2 billion in funding for projects that capture and store CO2. “There’s a lot of talk now about re-injecting CO2 into the ground as a way to manage it,” says Brinley. “That sounds easy, but there’s a legal issue. You can own land, but who owns the porous base that you’re injecting the gas into? These are new cutting-edge issues we’re seeing now.”
Shell Canada has had a number of major land and company acquisitions in the oilsands during the past five years, raising the issue of native land claims. Brinley has worked in several countries with aboriginal issues, including Australia.
In Canada, aboriginal rights are enshrined in the constitution — and that’s unusual. “It’s pretty hard to have any kind of project in Western Canada that doesn’t have First Nations rights as an element of that,” says Brinley.
The U.S. has delineated reserve areas. In Canada, following the 2004 Supreme Court of Canada decision in Haida Nation v. British Columbia (Minister of Forests), First Nations people have the right to be consulted and, when necessary, accommodated for any activities that would impair their traditional ways of living. Given that Western Canadian First Nations people tended to be migratory, traditional territory could be anywhere. “Academically it’s a fascinating area, but it’s a little tricky to deal with from a business point of view.”
These unique challenges make the job interesting but, for Brinley, working in Canada is particularly rewarding because there’s a much lower level of litigation here compared to the U.S.
At Shell Canada, Brinley gets to focus more on development. “I don’t find litigation to be a particularly effective way of solving problems. If you’re general counsel in the U.S., a lot of your time is spent looking at those 6,000 lawsuits you’ve got going. The Canadian environment enables me and my organization to focus more on the positive aspects of business.”