Engagement with Aboriginal Groups

CANADA’S SIGNIFICANT HISTORY of mining and mineral exploration takes place within the context of a much longer history of Aboriginal occupation of traditional lands within Canada. Th is article will examine the need for industry proponents to consider engagement with Aboriginal groups as a threshold issue in the development of mining projects. Such need is especially pronounced in light of recent Supreme Court of Canada decisions and the developing jurisprudence.  

Mining in Canada > Despite fl uctuating commodity prices and general global market uncertainty in recent years, Canada’s mining sector remains vibrant. Numerous factors contribute to continued success in this regard:  

1. Political climate > Compared to many other mining jurisdictions, Canada enjoys a stable political climate, with provincial and territorial governments being generally respectful of privately held mineral rights. Moreover, several provincial governments have demonstrated the political will to support growth in the mining sector.  

2. Investment incentives > In alignment with the general political will to advance mining projects, several provincial governments have encouraged investment in mining through royalty programmes and tax incentives.  

3. Skilled workers and advisors > Canada is home to a wealth of experts with specifi c expertise in the mining industry including fi nancial analysts, accountants, lawyers, consultants, suppliers and other service providers.  

4. Stable mining laws > Canada’s provinces and territories generally have well-defi ned mining laws that have not been subject to sudden or dramatic changes. Such a stable legal regime provides comfort to project proponents embarking on a long-term investment.  

Threshold Issues > Th e major threshold issues to be addressed when developing or signifi cantly expanding a mine in Canada include: environmental assessment, project permitting and Aboriginal consultation and negotiations.

1. Environmental assessment (“EA”) > Most new mine projects and signifi cant expansions of existing mines are likely to trigger some level of EA. Th e Canadian Environmental Assessment Act and its regulations establish the legislative basis for the federal EA process, while the provincial or territorial EA processes are outlined in legislation. If both the provincial and federal/territorial EA processes are triggered, harmonization can oft en be achieved.

2. Project permitting > Numerous permits are required in the development of a new mine or the expansion of an existing mine. For projects that trigger EA, many of the operational permitting matters may be resolved within the EA process, which enables prompt issuance of the approvals following completion of the EA. For projects below EA thresholds, operational permits may be required before proceeding with any mine development.

3. Aboriginal consultation and negotiations > All Canadian jurisdictions have a requirement that aff ected Aboriginal peoples be consulted in the development or expansion of a mine; however, the specific consultationrequirements will vary depending on the diff erent underlying legal regimes in place in diff erent parts of the country.  

Aboriginal Issues for Project Proponents > In Canada, there are over 600 First Nations, plus many Inuit and Métis groups and organizations. Th ese groups comprise numerous rich and varied linguistic and cultural traditions. At the risk of over-simplifi cation of this immense diversity, the Aboriginal landscape in Canada can be grouped into three distinct legal contexts that need to be understood:  
(i) historic treaties – entered into between the early 1700s and the early 1900s in the regions covering southern Ontario, parts of the Maritimes and the Prairie provinces;  
(ii) modern treaties or comprehensive land claims – entered into from 1975 onward and most predominantly in northern Canada and a few very small areas of British Columbia; and  
(iii) non-treaty areas – predominantly in British Columbia in areas where historic or modern treaties have not been concluded.  

1. The “Duty to Consult” > Th e Crown’s duty to consult can arise in all three contexts, but the purpose, scope and extent of the duty to consult may diff er in each context. In some provinces or territories, a project developer may encounter more than one such context and must be alert to the potential diff erences in the ways the duty to consult may apply.

  • In non-treaty areas (where Aboriginal rights and title have been asserted but not proven), the Crown has a legal duty to consult with Aboriginal groups when the Crown has knowledge, real or constructive, of the potential existence of the Aboriginal right or title and is contemplating conduct that might adversely affect it. The scope and content of the duty to consult varies with the circumstances.
  • In historic treaty areas, consultation is also required if the Crown contemplates conduct that might adversely aff ect a treaty right or exercises the Crown’s ability to “take up” land for various purposes, including mining.
  • In modern treaty areas, consultation may also be required if the Crown contemplates conduct that might adversely affect a treaty right; however, the nature of the consultation “can be shaped by agreement of the parties” to the modern treaty. Third parties, such as mining companies, do not have a legal duty to consult. However, the Crown may delegate “procedural aspects” of consultation to industry proponents seeking approval for a particular development. In practice, this has oft en meant that project proponents shoulder the lion’s share of the engagement eff ort with Aboriginal groups.
2. Aboriginal Title > In much of British Columbia, historically, treaties between the Crown and First Nations were never signed. In the absence of treaties, the Supreme Court of Canada determined that unextinguished Aboriginal title continues to exist in British Columbia. However, with the notable exception of the Tsilhqot’in Nation, the courts have not identifi ed precisely where Aboriginal rights or title exist for the vast majority of First Nations. In the absence of such defi nition, Aboriginal groups have asserted Aboriginal rights and title over large tracts of Crown land. Many of these asserted “traditional territories” overlap with neighbouring claims.

In June 2014, the Supreme Court of Canada—for the fi rst time—issued a declaration of Aboriginal title in favour of the Tsilhqot’in Nation over approximately 1,700 km2 of land. Th e Court confi rmed that Aboriginal title is a unique and benefi cial interest in the land that cannot be equated to other forms of property ownership. Aboriginal title confers ownership rights similar to fee simple, including the right of enjoyment and occupancy of the land and the right to decide how the land will be used, possess the land, reap the economic benefi ts of the land, and proactively use and manage the land.

However, Aboriginal title is not absolute and must be held collectively for the present and future generations. It cannot be alienated except to the Crown, nor encumbered in a way that would prevent future generations of the group from using and enjoying it.

Tsilhqot’in stipulates that governments and others seeking to use the land must obtain the “consent” of the Aboriginal title holders. If consent cannot be obtained, then the government can still “justify” an incursion onto the land if the test for justifi cation can be met. Absent consent from the Aboriginal title holders, a government that wishes to take action on Aboriginal title lands must show that:
  • it discharged its procedural duty to consult and accommodate;
  • its actions were in pursuit of a compelling and substantial objective; and
  • the action is consistent with the Crown’s fi duciary obligation to the Aboriginal group.
Further, the Court has stated that it may be necessary for the Crown to “reassess prior conduct” in light of declaration of Aboriginal title. Perhaps most troubling for project proponents is the following statement from the Court:

“…if the Crown begins a project without consent prior to Aboriginal title being established, it may be required to cancel the project upon establishment of the title if continuation of the project would be unjustifi - ably infringing.”

For proponents looking to develop resource projects in areas where Aboriginal title has been asserted (and treaties have not been concluded), this decision means there are compelling reasons to continue the now well-established practice of early engagement with Aboriginal groups and the negotiation of impact benefi t agreements.

3. Impact benefi t agreements between proponents and Aboriginal groups > For the vast majority of projects, there is no legal obligation to enter into impact benefi t agreements, yet they are becoming common practice. As a practical matter, few companies are content to leave the fate of their projects entirely in the hands of the government. Proponents seek to de-risk their projects and build long-term positive relationships with the host Aboriginal community.

The terms of such agreements can vary broadly from project to project and there are no standard form agreements containing “usual terms.” However, there are certain common elements found in most agreements and there are a number of challenges that repeatedly present themselves in their negotiation, including:

Employment Opportunities: Generally, the employment opportunities that are the best fi t between the desires of Aboriginal groups and the needs of industrial proponents are those that are of a lasting or ongoing nature as opposed to the short-term opportunities that arise during construction.
Business Opportunities: Many Aboriginal groups have established contractors that may be either owned directly by the Aboriginal group or owned or controlled by its members. These may provide opportunitiesforAboriginal groups to benefi t from a project and off er a needed service to industrial proponents.
Financial Opportunities: A common feature of such agreements is monetary payments. Although the vast majority of agreements are confi dential, the federal government has made a commitment to require the disclosure of annual payments over $100,000 as of June 2015.
Legal Certainty and a Competitive Advantage: In exchange for the above benefi ts, proponents seek support for their project and the consent of the Aboriginal group. For these agreements to be successful, they must provide both value to the proponent and benefi ts to Aboriginal groups. Th e typical goals of industrial proponents in entering these agreements are to obtain legal certainty, and to create an approval and operating environment that is timely, cost eff ective and provides a competitive advantage.  

Conclusion > Canadian law concerning the rights of Aboriginal peoples and the lands over which they claim Aboriginal title requires that mining project proponents engage in consultation with Aboriginal groups. In many cases, proponents also seek to enter into meaningful contractual arrangements with, and acquire the consent of, aff ected Aboriginal communities. While this represents a major threshold issue in connection with building a mine in Canada, Aboriginal consultation and negotiation also provide mining companies with the opportunity and encouragement to build long-term relationships and to engage positively with the Aboriginal communities in and around which they operate, thereby strengthening their social license and reducing project risk.
These factors ultimately combine to transform this issue into yet another unique strength of Canada’s vibrant mining sector.