First Nations and Business: A New Deal

It was a walk in the woods one cool October day in 2006 that awoke John Irving, vice-president of general counsel at B.C. Transmission Corp. (BCTC), to what aboriginal consultation is really about.

It was a walk in the woods one cool October day in 2006 that awoke John Irving, vice-president of general counsel at B.C. Transmission Corp. (BCTC), to what aboriginal consultation is really about.

Irving knew that BCTC, a Crown corporation, had a legal duty to consult First Nations groups about the potential impacts of its 10-year, $5.1-billion capital expansion plan; several recent landmark court cases about aboriginal rights and title had made this clear. But as Irving and his colleagues followed their Chehalis guides through the patch of Fraser Valley forest, seven kilometres northeast of Harrison Mills, the spirit behind the law became vividly apparent: it was about listening and learning and respect.

The two Chehalis First Nation representatives, Robert Lagasse and Gordon Mohs, pointed to where their ancestors had once lived in underground winter homes. Surrounding cedar trees showed clear signs of cultural modification, deep scars where bark had been stripped to support the livelihoods and traditions of the people who had inhabited the area for thousands of years.

“They talk about First Nations being in this area from time immemorial, but I really didn’t know what that meant before,” says Irving, adding that the tour – an aboriginal-awareness session for BCTC managers – gave him a new appreciation for aboriginal concerns that sensitive areas could be disturbed by industry. “If we’re not completely aware of what we’re looking for, we could run into problems. We need these people to guide us.”

BCTC’s existing 18,000-kilometre power grid, part of which lies adjacent to the Chehalis First Nation reserve, requires regular maintenance and vegetation management. Moreover, the new 240-kilometre line that the corporation is now seeking regulatory approval for will cut through the group’s traditional territory, and many other First Nations communities are similarly affected by BCTC’s operations. While the company strives to mitigate the effects of its activities on aboriginal communities, Irving admits that “in the end, there will be some things that we are doing that will impact them.” Mitigating that impact is where accommodation comes in – and at meetings the BCTC team held with aboriginal groups across the province, one request was voiced again and again: more First Nations jobs.

“When you have someone who has a stake in what you’re doing the way First Nations people do,” explains Irving, “and you need to develop good relationships with them – and they’re telling you that what they really want is work, and you’re in a position to provide that – well, it all sort of came together. We have to do this work, we’re going to spend this money – so let’s spend more of it with First Nations people.” The result is a formal aboriginal business development program that has increased the value of services BCTC buys from First Nations suppliers almost eightfold in under two years.

Even before his walk in the woods, Irving had started contemplating how better to involve aboriginal groups in BCTC’s operations. He outlined the basic tenets of the program in March 2006 and then asked Claire Marshall, BCTC’s aboriginal relations manager, and Matt Vickers, director of aboriginal services in B.C. for consulting firm Meyers Norris Penny LLP, to talk to First Nations groups about ways to increase commercial opportunities for aboriginal suppliers and to eliminate barriers. That feedback was incorporated into a draft policy, which Marshall and Vickers reviewed again with key groups. Vickers, a self-described bridge builder between business and First Nations for more than 30 years, has seen many companies simply go through the motions of consultation. In BCTC’s case, he says, the process had a great effect on the end product. “I tip my hat to John Irving. I didn’t think that once we produced the draft he would take it for a test with the First Nations market. He did, and that says a heck of a lot.”


chehalisAncient Chehalis settlement

Marshall points to BCTC’s support of training initiatives as an example of how the final program was shaped by consultation. To mitigate concerns raised by some aboriginal representatives that their people lacked the skills or experience that BCTC needs, the company agreed to fund training in such areas as vegetation management, construction, maintenance and environmental work. In the spring of 2007, BCTC kicked in funds to help a four-person crew from the In-SHUCK-ch First Nations gain skills in first aid, pesticide application, fire suppression and hazardous materials handling. The group signed a three-year contract to provide vegetation management services to BCTC several months later. “This contract was a big deal for them,” says Marshall. “We were the first big company to hire them and now they’re getting other work. They credit us for getting them going.”

BCTC’s program includes several other strategies to increase aboriginal suppliers’ share of its business. When evaluating bid documents, it gives extra weight to qualified companies with aboriginal ownership or a substantial portion of aboriginal employees, and the company regularly monitors successful bidders afterward to make sure that commitments are kept. BCTC also recently launched an online directory of potential aboriginal contractors and helps registered companies achieve preferred vendor status. Though neither Marshall nor Irving will reveal the total amount BCTC now spends with aboriginal contractors, they say it has increased as a percentage of overall expenditures. “It’s a win-win,” Irving says. “What we want to do is build our projects. What [First Nations people] want to do, in part, is get work. Instead of having conflict, we’re helping one another.”

It’s not just corporate benevolence driving this new approach, of course. Recent legal developments have suddenly turned aboriginal consultation from a “nice-to-have” to a “need-to-have” process. Two 2004 Supreme Court of Canada decisions – Haida Nation v. British Columbia and Taku River Tlingit First Nation v. British Columbia – found that government’s duty to consult First Nations applies even if the latter have yet to legally prove the existence of aboriginal rights and title. A March 2005 B.C. Court of Appeal ruling that the province had failed in its duty to consult and accommodate the Musqueam Band in the attempted sale of University Golf Club, led to title of the golf course and a small portion of Pacific Spirit Regional Park being transferred to the Musqueam. And last November, B.C. Supreme Court Justice David Vickers found that the Tsilhqot’in First Nation proved aboriginal title to 2,000 square kilometres of land in B.C.’s Cariboo-Chilcotin region. If aboriginal title is ultimately declared to exist, the provincial Forest Act will not (according to several legal briefs) even apply to those lands.

While these and other court cases have made clear that government, not industry, has the duty to consult, the business sector has a keen interest in the process. In B.C., the Crown holds 93 per cent of the land base, and its productive use by resource companies is what drives the provincial economy. Accommodation of First Nation concerns – often through what are called impact-benefit agreements – can substantively alter a project or obligate a company to take certain environmental measures, guarantee a level of employment or commercial opportunities and/or inject real dollars into targeted social programs.

According to a January 2007 report released by the New Relationship Business Group (composed of the Business Council of B.C., the B.C. Chamber of Commerce and various industry associations), there are some 200,000 decisions taken each year – meaning permits, tenures and licences – that attract the obligation to consult First Nations. “The timeliness and appropriate degree of consultation is therefore of great interest to business.”

The report recommends that the province develop a clear policy outlining a process for adequate consultation and accommodation, saying that the lack of a workable process “imposes a huge cost on industry.” The Mining Association of B.C. – representing a sector that is currently enjoying an upswing and is therefore most keen to avoid any development delays – estimated in March 2007 that “over $10 billion in potential capital investment is stalled and potentially at risk” due to difficulties with the permitting process and uncertainty about aboriginal consultation and accommodation.

Despite the pressure on government from the business community, “not a great deal” has happened since the release of the report a year and a half ago, says Jock Finlayson, executive VP of policy for the Business Council of B.C. “We underestimated the complexity and uniqueness of this,” he concedes. “It’s clear this whole file is being handled and managed cautiously and it’s a political process.” Nevertheless, Finlayson maintains that everyone would benefit from a clearer set of guidelines.

[pagebreak]B.C.’s aboriginal leaders agree. In January the B.C. Assembly of First Nations, the First Nations Summit and the Union of B.C. Indian Chiefs wrote to Premier Gordon Campbell expressing their urgent desire for passage of a bill that would legally enshrine the province’s New Relationship – the Campbell government’s pledge to resolve First Nation title claims. The proposed (but as yet untabled) Indigenous Nations Recognition Act would include an updated process for consultation and accommodation and would override hundreds of provincial statutes and regulations “so that we’re more clear about how the duty gets played out,” says Shawn Atleo, B.C. regional chief of the Assembly of First Nations. “I could easily show you about $16 billion in projects that are currently held up because of the lack of clarity.”

But rather than join the chorus calling for a legislative framework, the premier appointed Geoff Plant, B.C.’s former attorney general, to lead further study of the issue, adding that he hoped a joint solution could be found by the end of his term in May 2009. Talk of possible protest blockades and legal action swiftly followed from First Nations leaders. As both sides amp up the rhetoric, the increasingly cool “New Relationship” seems ready to freeze.

“2008 is going to be a very challenging year again for First Nations, for industry and for government,” says Atleo, adding hopefully: “But that means this must be the year with the most opportunity.”

Whatever the outcome of the legislation, several B.C. business leaders – such as BCTC’s John Irving – are not waiting to act. “Industry recognizes that B.C.’s population would be in decline if not for immigration,” says Atleo, “and that the booming indigenous population should be seen as a great potential of human capital.” Adds Clint Davis, president and CEO of the Canadian Council for Aboriginal Business: “Some companies are sort of doing the Chicken Little approach [about consultation and accommodation]: ‘The sky is falling, we have no idea how much this will cost, no idea what to expect, no idea what delays will occur.’ The companies who are setting themselves apart,” he observes, “are seeing a supply of labour, a supply of business partners and an opportunity to be socially responsible.”

Davis points to EnCana Corp. – a participant in the council’s Progressive Aboriginal Relations (PAR) program – as another model for developing creative approaches to working with First Nations stakeholders. The oil and gas giant has a team of aboriginal-relations specialists spearheading joint-venture initiatives, procurement programs, targeted recruiting and education efforts, employee and contractor aboriginal-awareness training, and in-community event sponsorships. The company’s annual spending with aboriginal businesses now exceeds $100 million, and it has received rave reviews from partners such as the Fort Nelson First Nation, which in 2003 became the first aboriginal community in B.C. to own and operate a drilling rig as a result of an EnCana joint venture. EnCana and other PAR companies are enjoying productive relationships with First Nations stakeholders, Davis says, because they have “put it on themselves to seek out and facilitate involvement of those aboriginal individuals and communities who are affected by the work they’re doing.”

While EnCana and BCTC undoubtedly view the cost of building aboriginal-relations programs as money well spent – given the potential legal challenges, project delays and negative publicity of doing nothing – consultation should not be treated as mere risk management, according to Cliff Proudfoot, a partner in Lawson Lundell LLP’s Vancouver office. Proudfoot – who has helped numerous clients through the aboriginal consultation and accommodation process – says that a developer who wants to build a new mine near a First Nations community, for instance, “has to live there and work there, and develop a relationship with the community they’re going to exist in. They can’t start off in a way that gets everybody angry from the beginning.”

Proudfoot envisions a scenario in which businesses approach First Nations communities about possible projects well before they are fully conceptualized. By talking about each other’s interests early and looking at each other as partners in a project’s success, businesses and First Nations might pull in the same direction from the get-go. “You actually might get a First Nation community trying to convince the company that [its project] is a good idea,” says Proudfoot. Shawn Atleo agrees, adding that while industry and First Nations will continue to press government to take the lead in developing a framework, the two communities must “show the government that there are solutions on the ground.”

For John Irving, finding these solutions has meant less focus on the destination and more on the journey – walking down the same path, at the same time, with First Nations. “The basis for consultation is trust, and that starts with the relationship,” he says. “I often think, as I read about various confrontations between businesses and First Nations, that there is no relationship there, that maybe if people worked more closely and talked more, some of these things just wouldn’t happen.”