Best Practices

Consultation and Negotiation with Aboriginal Groups

November 2012

MCCARTHY.CA

2Consultation and Negotiation¬ Consultation and Negotiation

¬ two streams

¬ legal obligation v. business imperative

¬ Duty to consult is a Crown obligation which must be satisfied

¬ But delegation of procedural aspects to proponent

¬ Role of agreements

¬ in most cases, not legally required

¬ not strictly speaking “accommodation”

¬ FPIC, CSR and social licence considerations

¬ mitigate aboriginal risk

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3Aboriginal risk ¬ Aboriginal risk is the primary focal point on many projects seeking

Crown approval

¬ Aboriginal-related risk is not simply a legal issue

¬ The law v. managing risk - not always the same

¬ Understanding the sources of risk: ¬ Legal Risk

¬ Practical / Implementation Risks

¬ Government / Regulatory / Political Risk

¬ What is managing / mitigating the risk worth?¬ Budget

¬ Reputation

¬ Schedule

¬ Investor confidence

¬ Precedent concerns

¬ Business case

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4Consultation¬ No formula – will depend on circumstances

¬ Information gathering – preliminary due diligence prior to initiating consultation¬ Identification of the general location of the project and preliminary

identification of likely potential effects

¬ Identification of likely legislative and regulatory requirements to consult

¬ Identification of the aboriginal communities using or claiming the project area

¬ Rights and claims vary depending on location: identification of the existence of a treaty, comprehensive land claims agreement, land claims, specific claims or other aboriginal claims with respect to the territory (e.g. treaty land entitlement)

¬ Determination of the status of the lands and rights (lands under treaty, Indian reserve lands, lands under land claims agreement), the intensity of the aboriginal rights or the status of claims

¬ Experience of other projects

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5Who to Consult?¬ Crown

¬ Consult with Crown decision-makers early in project planning¬ Confirm which Aboriginal groups should be consulted with respect to the project¬ Avoid getting caught between Crown and First Nation¬ Practical reality of limited Crown resources and time¬ Ensure Crown is involved in the process

¬ Aboriginal groups¬ Collective not individual rights

¬ “the entitlement of the trapper Johnny Sam was a derivative benefit based on the collective interest of the First Nation of which he was a member. I agree with the Court of Appeal that he was not, as an individual, a necessary party to the consultation.” (Little Salmon)

¬ May be challenging to identify aboriginal groups¬ Indian bands v. traditional groups¬ splinter groups¬ Métis groups

¬ Legally mandated groups should always be consulted, e.g. First Nation Chief and Councils¬ Larger political organizations can play a role – but they cannot be the sole focus of

consultation ¬ Document authority of those that you are dealing with¬ Best practice: case by case analysis

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6Consultation – Specific issues¬ Tension between relationship building versus regulatory certainty

¬ focusing solely on relationships without covering the legal requirements of consultation can leave a project vulnerable (both in terms of the decision-maker but also in terms of negotiating with aboriginal groups)

¬ but focusing solely on legal solutions may not present a full understanding of risks

¬ Is this consultation? ¬ Consultation is a Crown obligation - entitled to delegate the “procedural

aspects” to third parties

¬ Proponent consultation often forms part of overall consultation process established by Crown - can be complex and controversial issue

¬ Most activities involving an exchange of information, discussion and consideration of concerns is part of consultation

¬ Consultation should be “on the record”

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7Consultation – Specific issues ¬ Process/Funding Agreements

¬ Many forms, including protocols, memorandums of understanding, capacity funding agreements, or other framework agreements

¬ often valuable tools - critical to understand what is being agreed to. ¬ We are seeing more agreements at early stages of projects (e.g. exploration

agreements)

¬ Funding¬ to date, no case law requiring private third parties to fund aboriginal consultation

efforts but will be expected and in many instances can be very beneficial¬ framing funding as “assisting” consultation v. blank cheque

¬ Documentation¬ Processes for documentation are essential – can be very resource intensive on large

projects¬ Document efforts to engage with Aboriginal groups even where lack of engagement

(strategic v. actual lack of interest)¬ If litigation ensues, record will form part of evidence that Crown has met its duty to

consult.

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8Benefits Agreements ¬ Distinction between process/funding agreements and

substantive benefits agreement

¬ Agreements generally arise out of business imperative rather than legal obligation

¬ De facto obligation?¬ Expectations of aboriginal group

¬ Impact on Crown decision-making

¬ British Columbia Environmental Assessment Office:“…the EAO will consider any information it receives

regarding such agreements when assessing the impacts of a proposed project…”

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9Types of Benefits Agreements ¬ Benefits agreements come under many different names:

¬ Memorandum of Understanding

¬ Cooperation Agreement

¬ Impact Benefit Agreement

¬ Adverse Effects Agreement

¬ Participation Agreement

¬ Master Access Agreement

¬ Joint Venture Agreement

¬ Equity Participation Agreement

¬ Ultimately defined by contents, not name

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10Negotiating Benefits Agreements¬ Develop your strategy

¬ Critical to know business case and strategy before beginning negotiations (but be prepared to revisit)

¬ Have a game plan

¬ Understand your objective(s) and ensure your overall strategy supports achieving objective(s)¬ e.g. - Objectives may not be clear internally – Why is an

agreement important or necessary? Are alternative approaches available? Questions such as these and their answers may effect how a negotiation is approached and managed

¬ Mandate¬ Develop a clear mandate for the negotiation team that supports

the strategy

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11Negotiating Benefits Agreements¬ Ensure negotiation team is appropriately resourced – not

peripheral matter

¬ Once your team is in place – keep it there

¬ Recognize tension between strategy and relationships¬ Build and maintain relationships

¬ But focus on your strategy when building the relationship

¬ Speak with one voice¬ have internal pre-meetings prior to negotiation meetings

¬ use break-out meetings to clarify your team’s position before speaking on an issue or to address matters arising at the table

¬ support (and defer to) lead negotiator - do not fall for divide and conquer tactics

¬ Where possible, control the drafting¬ “he/she who drafts wins”

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12Negotiating Benefits Agreements¬ Focus on the outcome and your objectives

¬ Not about being “right”

¬ Keep your eye on the “prize” – focus on the success of the project

¬ Difficult issues - where possible: ¬ be frank about what you need or why something will not work

¬ address issues head-on

¬ early on in negotiations, nice to have issues agreed to – may mean leaving some difficult issues until end of negotiations – showing progress at the table can be critical

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13Negotiating Benefits Agreements¬ Key Issue – Confidentiality

¬ Majority of benefits agreements and negotiations are strictly confidential in order to protect the economic and political interests of the parties

¬ Cuts both ways – balance desire to share versus precedent concerns

¬ Practically speaking, confidentiality may be limited with large beneficiary population

¬ Will usually be critical to be able to share at least part of the agreement with Crown decision-makers

¬ Must ensure that consultation not confidential¬ clear distinction between business discussions and consultation

¬ Press releases and continuous disclosure obligations? Consider any requirement to file agreement under 12.2 of NI 51-102

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