What Makes Public Disclosure Effective? The Case of Fracking Disclosure in Canada

Published June 24, 2016

2016-06-24 09:46:44

We recently published a report on “The Effectiveness of Fracking Disclosure Regimes in Canada.” Our research was funded by the Social Sciences and Humanities Research Council of Canada as part of its Imagining Canada’s Future Initiative. Overall, our research had three phases.

First, we searched prior studies to identify factors which have been shown to influence the effectiveness of public information disclosure policies and regulations. Research by Weil, Fung, Graham and Fagotto (2006) seemed especially relevant, and we chose to extend their typology into a conceptual model comprised of four main criteria:

Accessibility: How easy is it for the end-user to access the information?
Comprehensibility: How understandable are the data to the average user?
Granularity: At what spatial and temporal resolutions are the data provided?
Timeliness: How quickly are data provided?

Second, because oil and gas development in Canada is regulated at the provincial level, we researched existing regulations in the four Canadian provinces where fracking currently takes place: Alberta, British Columbia, Manitoba and Saskatchewan. As a point of comparison, the provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia and Quebec have various regulatory prohibitions on fracking. Given the breadth of oil and gas regulations involved, we focused on analyzing disclosure regulations related to four key fracking concerns: water consumption, water contamination, induced seismicity, and quality of life.

Third, we evaluated the fracking disclosure regulations in the four provinces using our information disclosure effectiveness framework. Overall, we found that while oil and gas companies are required to disclose a variety of information to provincial regulators, there are almost no regulations requiring this information to be disclosed to the public. In fact, we found only two regulations requiring a regulator to disclose information of any kind to the public, both in British Columbia.

We concluded our report by recommending that regulators be more proactive in disclosing data they are already collecting. This would entail very little additional effort or cost, and could dramatically increase transparency. We also suggested that regulators adopt a more precautionary stance, and report on a wider array of environmental and health indicators, even if certainty about the effects of fracking on these indicators requires further scientific study.

As an example of what an effective information disclosure program might look like, we used our conceptual model to briefly compare the information provided by the World Air Quality Index project (WAQI) with the information provided by the main fracking disclosure websites (FracFocus.org in the United States and FracFocus.ca in Canada).

Accessibility: WAQI users can choose their location by clicking on a visual representation of the world map. By contrast, FracFocus asks its users to specific geographic information to reach desired local data.
Comprehensibility: WAQI data are provided in terms of simple one-word adjectives (e.g., “Unhealthy,” “Moderate,” “Good”) accompanied by an intuitively matching color-scheme (e.g., red, yellow and green, respectively). Fracking data are provided in professional jargon from which it is hard to derive implications related to public health (e.g., contains 2-Amino-2-methyl-1-propanol 0.00019% concentration by mass).
Granularity: The WAQI index enables city- and neighborhood-based granularity, which is highly useful for the public. In contrast, the fracking data are provided per drilling well, thereby requiring users to compile information from multiple sources. A family might have 10 wells in their backyard and 100 more in their town, but FracFocus provides no way of aggregating these impacts, let alone understanding their consequences.
Timeliness: WAQI information reflects real-time measurements, whereas fracking information is based on the last periodical report provided by the operator. By design, it does not provide data on timely critical events such as water contamination, fracking induced seismicity and so forth.

Looking beyond fracking specifically, we believe our model is potentially applicable to other settings where information is transmitted to the public, whether in environmental contexts (such as public disclosure of factory toxic releases in the United States), commercial contexts (such as financial planning information provided to banking customers), or on a day-to-day basis (such as information regarding urban traffic). Assessing current disclosure practices in each of these contexts using our framework may reveal useful insights both for information providers and their audiences. In addition, the model presented here may be further developed using a behavioral perspective, which examines how people make decisions when confronted with information formatted in different ways.

About the Authors
Miron Avidan is a doctoral student at McGill University.
Dror Etzion is associate professor of strategy at McGill University’s Desautels Faculty of Management.
Joel Gehman is assistant professor of strategic management and organization in the Alberta School of Business at the University of Alberta.

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