Wednesday, January 7, 2009

As Canada's Native Peoples Assert Rights, Companies Make Concessions

As Canada's Native Peoples Assert Rights, Companies Make Concessions
Vesna Jaksic
Corporate Counsel
January 07, 2009

Last summer, after almost two decades of planning and construction, De Beers Canada Inc. finally opened the Victor diamond mine in the James Bay Lowlands in northern Ontario. One of the most time-consuming aspects of the project: the negotiations that De Beers had to conduct with the Attawapiskat First Nation, the Aboriginal community that owns the land where the mine is located. (Aboriginal is the term used in Canada to refer to the country's native population; the First Nations are the people known in the United States as Indians or Native Americans.)

R. Martin Bayer, one of De Beers' outside lawyers, says the company had to take some unusual factors into account during its discussions with the Attawapiskat and other Aboriginal groups near the mine site. For example, Bayer had to make sure that meetings didn't take place during the communities' traditional activities, such as the annual spring goose hunt.

"The point I wanted to make to our company officials is that when that happens, the community members will just stop everything they are doing to go on the land and hunt, because they rely on the geese for food and clothing," says Bayer. An attorney with the law firm of Weaver, Simmons in Sudbury, Ontario, Bayer himself was raised in an Aboriginal community, the M'Chigeeng First Nation. His background gives him the ability "to understand the unique aspirations and expectations of our own people," he says.

It was important that De Beers showed that it would respect the rights that the Aboriginal communities had been granted in their treaties with the Canadian government, Bayer adds. "This is exactly what we are talking about -- people are out on the land practicing their treaty right to hunt their geese." The company tried to be sensitive in other ways, such as not flying helicopters during the bird nesting season, and seeing that construction of power lines did not harm traditional medicinal plants. Bayer says that he tried to get the Aboriginal groups to understand that De Beers had priorities of its own. "First Nations need to know that at the end of the day, these businesses are there to make money, and there are often timing and scheduling issues that companies need to meet."

The careful strategy paid off for De Beers. In 1999 it signed a memorandum of understanding with the Attawapiskat; six years later the community voted overwhelmingly to approve the Victor project. Work on the mine began the following year, and production started this past July. More than 1,000 First Nations residents were employed during construction, and about 300 have been employed since Victor started operating. The mine is expected to yield 600,000 carats annually during its 12-year lifespan.

More Canadian businesses are finding that they have to engage in the same kind of delicate negotiations with Aboriginal communities that De Beers held with the Attawapiskat. Not only do Aboriginal groups own a lot of land -- especially in the remote places where resource companies are likely to dig mines, drill wells or build pipelines -- they generally enjoy more rights than Native Americans do in the United States. That's because recent decisions by the Supreme Court of Canada have expanded the circumstances in which Aboriginal communities must be consulted and accommodated.

According to the high court, the Canadian government is responsible for making sure that native groups get what they're entitled to under their treaties. But in reality, companies often have to conduct their own negotiations, since they're the ones planning projects on land owned or claimed by Aboriginal communities. Lawyers play a key role in conducting these talks, and they have to be attuned to what's being sought. In addition to financial compensation for the use of their land, Aboriginal groups are frequently seeking other forms of compensation, such as employment or educational opportunities.

The process that De Beers engaged in with the Attawapiskat, though lengthy, is often cited as a model of how to deal with native communities. Other businesses have been the target of high-profile protests by Aboriginal groups. That's led to skittishness: Several leading Canadian companies declined to discuss Aboriginal legal issues for this article.

But the better approach may be to talk more, not less. Harry Baxter, chief of the Marten Falls First Nation in northern Ontario, says that businesses "need to meet with First Nations and update First Nations in every movement they do, which most of them don't. You find out through press releases." Baxter adds that companies "especially need to talk to each First Nation about what we want, because that's our backyard" -- where corporate projects are taking place.

The Canadian Constitution recognizes three main Aboriginal groups: First Nations, or Indians; Métis, of mixed First Nation and European descent; and Inuit, the Arctic residents once inaccurately called Eskimo. All combined, they number more than 1 million -- nearly 4 percent of Canada's population. By contrast, the American Indian and Alaska Native population in the United States is larger -- 4.5 million -- but composes a smaller percentage of the U.S. population -- 1.5 percent. (The Native Hawaiian and Other Pacific Islander population in the United States is another 1.1 million.)

Aboriginal communities also own a big chunk of Canada. First Nation reserves (the term used instead of reservations) have increased by 23 percent over the last two decades to nearly 8 million acres, and are expected to exceed 12 million acres by 2022, according to Natural Resources Canada, a government agency.

The amount is continuing to grow because First Nation disputes are still being resolved. There are two types of Aboriginal claims in Canada: comprehensive claims, which always involve land; and specific claims, which concern grievances that First Nations may have regarding the fulfillment of their treaties with Canada -- for example, the failure to provide enough land, or the improper management of First Nation funds.

Since 1973, a total of 21 comprehensive claims have been settled, according to Indian and Northern Affairs Canada, a government agency. About 300 specific claims have been resolved since 1973, and 138 were still under negotiation as of this fall.

While the Canadian Constitution recognizes the rights of Aboriginal people, it does not specifically define those rights. But in recent years, the Supreme Court of Canada has provided more guidance about when and how Aboriginal peoples need to be consulted and accommodated so that their rights are not infringed.

Canada's high court has been more supportive of the rights of indigenous people than the U.S. Supreme Court, says Brad Jolly of Smith & Jolly, a Denver-based firm dedicated to the practice of Indian law. "A lot of [American] justices are very much for states' rights, and are generally very much opposed to tribal rights or indigenous rights," Jolly says. "The U.S. Supreme Court seems to be going back, whereas Canada is going forward."

Of the 40-odd decisions that the Supreme Court of Canada has issued on Aboriginal rights since 1982, the two most important are a pair of 2004 opinions, Haida Nation v. British Columbia and Taku River Tlingit First Nation v. British Columbia. In these rulings, the court said that the duty to consult Aboriginal communities is triggered when the government knows or should know about the potential existence of an Aboriginal right or title. This broadly expanded the consultation and accommodation duties, which previously occurred only when an Aboriginal group established title for land, not just claimed it.

The court said this duty rests with "the Crown," meaning the government. But the court also said "procedural aspects" of consultation can be delegated to third parties, meaning companies. And indeed, businesses have been doing most of the work. Companies in the natural resources sector -- mining and mineral exploration, oil and gas, and timber -- have been particularly affected because they often have projects on reserves or claimed lands. Because these developments can take years to complete and require numerous government approvals, it's in businesses' interests to ensure that consultation and accommodation are done appropriately.

Carmen Diges, vice president of legal and business affairs at Noront Resources Limited, a Toronto-based exploration-stage resource company, notes that the supreme court decisions "didn't specifically encompass private actors' duty to consult and accommodate." But Diges adds: "Because private actors need a good relationship from the beginning of a project, they often can't wait for the government to step in. It's too long and slow of a process. So the private actors are starting to take responsibility for those duties."

Aboriginal legal issues are a major part of Diges' work at Noront. Last year, the company discovered nickel, copper, platinum and other precious metals in the "Ring of Fire" area in the James Bay Lowlands (the same region of northern Ontario where De Beers's Victor mine is located). Diges says she is involved in building relationships and conducting negotiations with the nearby First Nations, which includes drafting contracts such as early-stage exploration agreements and Impact and Benefit Agreements.

Also called IBAs, these contracts spell out the relationship between Noront and the Aboriginal communities, and discuss the financial as well as nonfinancial accommodations that the company can make. "They try to address some of the issues, like employment and training obligations, and other contributions to reduce any negative impact," says Diges, who is also a partner in the Toronto office of McMillan.

Unlike many contracts, there is no standard form for an IBA since companies tend to keep them confidential, Diges says. A frequent speaker on Aboriginal issues, she has a workshop planned for February at which she hopes to get lawyers talking about standardizing at least the nonfinancial aspects of IBAs.

One of the local leaders that Noront has been negotiating with on the Ring of Fire project is Baxter, the Marten Falls First Nation chief. Because about 90 percent of his community members are unemployed, they need not just money, but employment opportunities too. "They've been doing well so far," Baxter says of Noront. "Community members are being hired and trained for the jobs."

Noront has also had experience with First Nations in other projects. In 2007 the company entered into a memorandum of understanding with the Waswanipi Cree First Nation for a gold exploration project at Windfall Lake in Quebec. Noront agreed to address a number of issues raised by the Waswanipi, such as environmental concerns, social support, training and employment, and remedial funding.

De Beers incorporated similar elements into its agreements with the First Nations communities affected by the Victor mine. But the partnership between the company and the Attawapiskat has not been without challenges. Back in 2002, the project was put on hold for two months while the Attawapiskat conducted an internal review.

And while many First Nation residents have been employed at the mine, that has produced some problems, according to Jonathan Fowler, vice president of Aboriginal affairs and sustainability for De Beers Canada. Speaking at a recent conference, Fowler said that the challenges have included the low education and skill levels of the First Nation employees, and their reluctance to travel outside the community for training. In addition, Fowler said it can be difficult for De Beers to split large contracts into small pieces so that local businesses with limited capacity can handle them.

The different cultural and communication styles of Aboriginal communities can also pose tricky issues. Stéphanie Malo, legal counsel for the Canadian Broadcasting Corp., worked with the Musqueam and Squamish communities during the redevelopment of a downtown Vancouver building in 2006. She says it took a while for CBC to realize that the two native groups were simply looking for more visibility.

"It is very different," Malo explains. "As lawyers, we are used to staying close to the law -- the law says this, the law says that. But that's really not the way to be dealing with these people, and sometimes I was under the impression that we were not talking the same language. I'd say the first meetings were difficult because we were not in the same mind-set at all." A meeting with the Squamish, for example, began with their traditional morning prayer.

By late 2006, the two groups decided not to pursue any land claims, and CBC agreed to give them a voice in the project through contributions such as Aboriginal art displays, Malo says.

Julia Quon, an in-house lawyer at BC Hydro, says another issue is that each First Nation group may want to be consulted in a different way. Some may wish to be consulted individually by their band, while others may prefer that negotiations be handled collectively by their tribal council. "On a project that involves many First Nation areas, the coordination challenge is significant," says Quon, one of three in-house lawyers at BC Hydro who work exclusively on Aboriginal issues.

Vancouver-based BC Hydro, Canada's third-largest electric utility, is currently seeking approval for a $480 million project to build a 150-mile, 500-kilovolt power transmission line in British Columbia. Sixty First Nations and seven tribal councils have been identified for the consultation process, Quon says.

De Beers officials say that they agreed to respect a number of native practices while planning the Victor diamond mine. The company signed a confidentiality agreement with local Aboriginal communities to protect their traditional knowledge, such as the location of burial sites, medicinal plants, and hunting and trapping spots. "That's really intellectual property and we treated it as such," says Derek Teevan, the director of government and corporate affairs at De Beers Canada.

Theresa Hall, chief of the Attawapiskat First Nation, the main Aboriginal group involved in the development of the Victor mine, says that it's crucial for native communities to protect their traditional knowledge, and to have a thorough understanding of any factors that could impact their community activities. "To us, the environment and the land is everything," Hall said during a recent conference in Toronto. "We survived off the land for centuries, and still rely on the land today for our well-being."

Despite their best efforts to work with Aboriginal groups, companies find that projects don't always go smoothly. Many First Nation communities are poor, but they've learned that a media-friendly protest and a carefully crafted legal challenge can make up for a lack of financial resources.

In northern Alberta, the Lubicon Lake Indian Nation has teamed up with Amnesty International to try to halt the construction of a 185-mile natural gas pipeline by TransCanada Corp., a Calgary energy company. While the Alberta Utilities Commission approved the pipeline last October, the Lubicon community has claimed that traditional activities such as hunting and trapping will be compromised by the industrial activity that the pipeline will bring.

Line Lacasse, senior legal counsel for TransCanada, did not talk specifically about the pipeline. But she says that it's difficult for companies to carry out their responsibilities "and see that your project is being challenged because there is a land claim that's outstanding, or the First Nations are not satisfied with the consultation taken by the Crown."

Another proposed pipeline, by Enbridge Inc., was the target of protests by First Nation communities in Saskatchewan last September. The 1,000-mile oil pipeline would stretch from Alberta to Wisconsin. An Enbridge spokeswoman declined comment.

Some projects get tied up in court. Eight years ago the Kwadacha First Nation filed suit against BC Hydro, claiming that the community's lands had been damaged by one of the company's reservoirs in British Columbia. BC Hydro finally reached a settlement with the Kwadacha, which ratified the agreement in October. The community will receive a one-time payment of $12 million, as well as annual payments of about $1.2 million.

No Canadian project has had more setbacks than the Mackenzie Valley gas pipeline. First proposed in the early 1970s, the $13 billion, 750-mile pipeline would deliver natural gas from northern Canada to the rest of the country and the United States. The project has been opposed by a number of Aboriginal communities which would be affected by it. In 1977 a judge proposed a ten-year moratorium so that the Aboriginal land claims could be settled. But the delay turned out to be even longer, and planning on the pipeline didn't resume until earlier this decade. The companies involved in the project -- including TransCanada -- have since signed agreements with several Aboriginal communities, some of which will be able to acquire a one-third interest in the pipeline.

Several lawyers say that the recent Supreme Court of Canada decisions have spurred Aboriginal groups to become even more assertive about their rights. The Assembly of First Nations, a nationwide organization of Canada's native communities, has held two "Days of Action" -- one in June 2007, and another in May 2008. The protests included blockades of several major transportation routes.

Aboriginal rights may get even more attention next year. Canada's top native chief has indicated that he thinks the 2010 Winter Olympics, to be held in Vancouver, will be a good opportunity to draw publicity to Aboriginal issues, much like what Tibetan supporters tried to accomplish during the 2008 Summer Olympics in Beijing.

Not all native leaders are opting for a confrontational approach, however. Shawn Atleo, the British Columbia regional chief to the Assembly of First Nations, says that a closer relationship between companies and native groups can benefit both. "The First Nations are still the most impoverished population in the country, and they are reaching out for support to develop business in their territory," Atleo says. "And the people who have that expertise are in the business community."

In Atleo's view, companies are recognizing that First Nations can provide valuable knowledge and dedicated employees as well as resource-rich land. "The trend is very exciting," Atleo says. "I think business and industry are recognizing the huge opportunity with First Nations."

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