Contributing equitably, not equally

Thirteen oil sands CEOs signed a Charter in March of 2012 committing their companies to a set of shared beliefs and commitments that would guide their actions towards improving environmental performance.

For its first year in operation, COSIA and its member companies were focused on developing the structure that would facilitate a globally precedent setting level of collaboration and innovation. The only catch? No such structure existed.

After months of consultation with industry experts and lawyers COISA’s member companies developed a new and innovative series of legal agreements based on the concept of equitable contribution. These legal agreements would serve as the foundation for how member companies would work together to accelerate the pace of environmental performance management in Canada’s oil sands.

COSIA uses the concept of equitable contribution at all levels of operation as a mechanism for member companies to fund operations and projects, make decisions and participate in the development of new technologies fairly.

Equitable contribution is based on the idea of giving equitably, rather than equally. It levels the playing field for COSIA’s smaller member companies and makes it easier for them to participate on projects involving COSIA’s larger member companies. It also ensures that companies that benefit most from their oil sands operations contribute the most to developing new environmental technologies and projects.

Joining COSIA

COSIA, as an organization, does not generate any revenue. A COSIA membership fee allows member companies to fund the day-to-day operations that take place under the auspices of COSIA. Fifty per cent of the budget is shared equally by all of the member companies and the other 50 per cent is shared based on the amount of oil sands each company produced the previous year. The operating budget includes COSIA’s administrative costs, the salaries of the Chief Executive and the Environmental Priority Area (EPA) Directors. It also covers a modest operating budget for each of the EPAs, but does not include the costs of EPA project work.

COSIA’s direction is determined by a Shareholder Steering Committee which is made up of vice president level representatives from each of COSIA’s member companies. A weighted system based on the previous year’s oil sands production is used to ensure that companies contributing the most get a larger say.

Joining the EPAs

Project work is done within individual EPAs. Each EPA consists of a Joint Venture Agreement between the participating member companies. This provides the basis for technology sharing to accelerate Environmental Performance. Any member of COSIA can elect to join individual EPAs.

As a member of an EPA, each company is asked to share equitably in the development of environmental technologies within the scope of that EPA. The equitable sharing is based on the member company’s oil sands production in the previous year.

Technology development within each EPA is done through individual Joint Industry Projects (JIP). The technology developed within a JIP will provide user rights to members of that EPA. An EPA member’s expenditure towards a JIP forms the basis for their equitable contribution. The equitable contribution of all COSIA members is assessed on a periodic basis to ensure all members are contributing equitably to the development of technology to improve environmental performance in the oil sands.

Equitable contribution allows COSIA’s member companies to fairly and effectively work together to achieve common goals. It ensures that everyone pulls their weight when it comes to funding and developing new projects and technologies that will improve environmental performance in Canada’s oil sands.