env 420 - final report - april 21st, 2009

Mineral Development and

Revenue Sharing on

Aboriginal Lands Revenue Sharing Agreements from Around the World and

Application of Lessons Learned in Northern Ontario

Brian Chang, Innis College, Department of Political Science

Marco Covi, Innis College, Department of History

Willie Lo, Woodsworth College, Department of Economics

Jennifer Taves, University College, Centre for the Environment

Sarry Zheng, New College, Department of Human Biology

Mineral Development and Revenue Sharing 2009

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Mineral Development and Revenue Sharing on Aboriginal Lands

Revenue Sharing Agreements from around the World and

Application of Lessons Learned in Northern Ontario

Brian Chang, Marco Covi, Willie Lo, Jennifer Taves, Sarry Zheng Centre for the Environment, ENV 420 Y1Y

Under the Supervision of Professor Douglas Macdonald

Contents 1.0 Introduction .................................................................................................................................... 5

1.1 Purpose ....................................................................................................................................... 5

1.2 Subject......................................................................................................................................... 6

1.2.1 Relevant Examples of Mining Agreements from Around the World ................................... 7

1.2.2 Mining on Aboriginal Lands in Northern Ontario and the Possibility of Mining

Agreements ................................................................................................................................... 8

2.0 Methodology ................................................................................................................................. 10

2.1 Case Study Selection ................................................................................................................. 10

2.2 Definition of Success ................................................................................................................. 11

2.3 Factors of Success ..................................................................................................................... 12

2.2 Research Instruments ............................................................................................................... 14

2.2.1 Secondary Literature .......................................................................................................... 14

2.2.2 Primary Documents ........................................................................................................... 14

2.2.3 Interviews........................................................................................................................... 15

2.4 Limitations ................................................................................................................................. 15

2.5 Format of the Report ................................................................................................................ 15

3.0 Relevant Examples of Mining Agreements from Around the World ............................................ 16

3.1 Voiseys Bay Nickel Mine, Labrador, Canada ............................................................................. 17

3.1.1 Chronology ......................................................................................................................... 17

3.1.2 Relevant Agreements ......................................................................................................... 17

3.1.3 Identified Successes and Shortcomings ............................................................................. 19

3.1.4 Factors for Success ............................................................................................................. 20

3.2 Paix des Braves Agreement, Quebec, Canada .......................................................................... 20

3.2.1 Chronology ......................................................................................................................... 20




3.3 North West Alaskan Native Association, Alaska, United States ............................................... 25

3.3.1 Chronology ......................................................................................................................... 25




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3.3.4 Factors Leading to Success ................................................................................................ 32

3.4 Raglan Nickel Mine, Nunavik, Quebec ...................................................................................... 33

3.4.1 Chronology ......................................................................................................................... 33




3.5 Yandicoogina Iron Ore Mine Project, Australia ........................................................................ 38

3.5.1 Chronology ......................................................................................................................... 38


3.5.3 Identified Success and Shortcoming .................................................................................. 40

3.5.4 Factors for success ............................................................................................................. 43

3.6 Snap Lake De Beers Diamond Mine Project, Northwest Territories ........................................ 46

3.6.1 Chronology ......................................................................................................................... 46




3.7 Maori Rights in Resource Extraction Activities, New Zealand .................................................. 54

3.7.1 Chronology ......................................................................................................................... 54


3.7.3 Factors that Lead to Success of Failure.............................................................................. 57

3.8 Examples of Resource Revenue Sharing Provisions ................................................................. 60

3.8.1 Raglan Mine ....................................................................................................................... 60

3.8.2 Northwest Alaska Native Association ................................................................................ 62

3.8.3 Paix des Braves ................................................................................................................... 68

3.9 Summary of Factors that contributed to Case-Study Outcomes .............................................. 76

3.9.1 Most Successful Case by Each Factor ................................................................................ 77

4.0 Mining on Aboriginal Lands in Northern Ontario ......................................................................... 81

4.1 Federal Departments ................................................................................................................ 81

4.2 Provincial Departments ............................................................................................................ 86

4.3 Mining Industry in Ontario ........................................................................................................ 92

5.0 Applicability of Successful Case-Study Outcomes in Northern Ontario ..................................... 106

6.0 Recommendations ...................................................................................................................... 110

7.0 References .................................................................................................................................. 113

List of Tables

Table 1 - Types of Mining Agreements ................................................................................................. 7

Table 2 - Mining Firms in Ontario ......................................................................................................... 9

Table 3 - The Voisey Bay Impact and Benefits Agreements ............................................................... 17

Table 4 - Le Paix des Braves ................................................................................................................ 21

Table 5 - The Teck-Cominco and NANA Agreements ......................................................................... 27

Table 6 - The Raglan Agreement ......................................................................................................... 34

Table 7 - The Yandicoogina Tripartite Agreement .............................................................................. 39

Table 8 - The Yandi Regional Land Use Agreement ............................................................................ 40


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Table 9 - Snap Lake Socio Economic Agreement ................................................................................ 47

Table 10 - Summary of Factors of Success .......................................................................................... 76

Table 11 - Most Successful Case by Each Factor................................................................................. 77

List of Acronyms

ACNMR Agreement-in-Principle Concerning the Voiseys Bay project (2002)

AIATSIS Australian Institute of Aboriginal and Torres Strait Islander Studies

ANCSA Alaska Native Claims Settlement Act 1971

ATAL Aboriginal Training and Liaison Unit

ATNS Agreement, Treaties and Negotiated Settlements Project

BPA Boreal Prospectors Association

CEAA Canadian Environmental Assessment Act

CNI Central North Island

CSR Corporate Social Responsibility

DIAND Department of Indian Affairs and Northern Development

EA Environmental Assessment

EAPR Voiseys Bay Environmental Assessment Panel Report 1999

EIS Environmental Impact Statement

GNWT Government of Northwest Territories

IBA Impact and Benefits Agreement

INAC Indian and Northern Affairs Canada

JBNQA James Bay and Northern Quebec Agreement (1975)

LIA Labrador Inuit Association

MAC Mining Association of Canada

MMS Metals and Minerals Sector

MNDM Ontario Ministry of Northern Development and Mines\

MOU Memorandum of Understanding

MVEIRB Mackenzie Valley Environmental Impact Review Board

NANA Northwest Alaska Native Association

NDC NANA Development Corporation

NOPA Northwestern Ontario Prospectors Association


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NPA Northern Prospectors Association

NRCAN Natural Resources Canada

NSMA North Slave Métis Alliance

NWT Northwest Territories

OEC Ontario Exploration Corporation

OMA Ontario Mining Association

OPA Ontario Prospectors Association

PDAC Prospectors & Developers Association of Canada

PPDA Porcupine Prospectors and Developers Association

RRSA Resource Revenue Sharing Agreement

SDPA Sault and District Prospectors Association

SEA Socio-Economic Agreement

SOPA Southern Ontario Prospectors Association

SPDA Sudbury Prospectors & Developers Association

VBNC Voiseys Bay Nickel Company (1996 – 2007)

VINL Vale Inco Newfoundland and Labrador (2007 Onwards)

YMMMOU Yandicoogina Mine Mediation Memorandum of Understanding 1996

1.0 Introduction The impacts of mining activity on Aboriginal lands are very important in the history of Canadian

mining. While mining can bring economic prosperity to indigenous peoples, there is also a history

of negative economic, social, and cultural impacts. While economic development is important to

Aboriginal communities and Canada at large, the negative impacts must be mitigated in order to

ensure that the costs of development do not outstrip the benefits. One of the tools used to

mitigate these impacts is mining agreements.

1.1 Purpose

The purpose of the project is to develop a report for Klippensteins, Barristers and Solicitors.

The purpose of the project can be separated into four points, as discussed below.


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1. To identify successful mining agreements and identify the factors that produced that

success.

2. To examine the potential role of relevant government departments and mining companies

in Northern Ontario.

3. To analyze the applicability of successful case study outcomes in Northern Ontario.

4. To provide Klippensteins, Barristers and Solicitors with recommendations for action.

1.2 Subject

The subject of this report is bilateral and trilateral mining agreements between the mining

industry, government, and Aboriginal communities. The research team analyzed six case studies,

located in Canada, the United States, and Australia, to determine factors that lead to success in

each case. An overview of Maori rights in New Zealand is also provided. These cases are used to

determine the possibilities of applicability of successful factors in Northern Ontario.

The factors of success were determined by comparing the six cases and identifying trends

that contributed to success. The most important factors contributing to success are discussed in

detail in Section 3.8, and are listed below:

• That Aboriginal communities have developed strong capacity, including access to resources

and financial assistance

• That there is a established claim to the territory in question, either through land claims,

treaties, or land title

• That the mining firm has sufficient economic incentive in the mineral deposit to reach an

agreement

• That the mining firm engages in Corporate Social Responsibility (CSR)

• That there are regulations in place that govern the operation of the mining firms

• That the Government facilitates Aboriginal involvement

While other factors may be present in each individual case, these six factors have been isolated

as the most integral to success. Further factors that contributed to success are discussed in each

case study.


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1.2.1 Relevant Examples of Mining Agreements from Around the World

This section of the project presents case studies of successful mining agreements from

around the globe with various factors for success. Six case studies have been analyzed with

locations in Canada, the United States and Australia, as well as an examination of Maori rights in

New Zealand.

No overarching definition of these agreements can fully address the diversity, complexity,

and uniqueness of each agreement. For the purposes of this report, the following definitions of

Impact Benefit Agreements, Socio-Economic Agreements, Resource Revenue Sharing Agreements,

Regional Land Use Agreements and Tripartite Agreements have been used. When referring to the

body of agreements that govern these relationships, the term ‘mining agreements’ is used. When

each agreement is individually discussed in the report, each agreement will be called by its legal

name.

Table 1 - Types of Mining Agreements

Name Definition Case

Impact Benefit

Agreements (IBA)

These are bilateral agreements negotiated

between an Aboriginal group and the mining

company. They deal with reducing the negative

impacts of mining and providing benefits as

compensation. They do not usually touch on the

political aspects of the issues regarding mining on

Aboriginal lands. They are implemented by the

company and the community, although as they are

considered confidential agreements it is difficult to

establish how they are enforced. The concept of

IBAs is a Canadian development.

• Voiseys Bay IBAs

• Snap Lake IBA

• NANA IBA

Socio-Economic

Agreements (SEA)

These are negotiated between Aboriginal groups,

the mining company, and government. They arise

out of the Environmental Assessment process, and

cover employment, cultural, social, and economic

provisions, and establish monitoring agencies to

implement the agreements. They are often held in

conjunction with IBAs. SEAs are generally only seen

in Canada.

• Snap Lake SEA


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Resource Revenue

Sharing

Agreements

(RRSA)

These are comprehensive documents that

specifically deal with relations between Aboriginal

groups, industry, and government. They involve

much more than just the mining development

project in question.

• Paix des Braves

• Raglan Agreement

Regional Land Use

Agreements

Landowners lease their land to another party. The

formal definition is "a voluntary agreement about

the use and management of an area of land or

waters made between one or more native title

groups and other parties, such as mining

companies” (AIATSIS, 2008).

• Yandi Land Use

Agreement

Tripartite

Agreements

These Agreements are negotiated between the

government, Aboriginal communities, and the

mining companies. The mine project lease

becomes valid when all parties signed the

agreement. It is separate from the EA process,

unlike an SEA. They are not considered confidential

documents.

• Yandi Land Use

Agreement

Using these various agreements, the six cases provide a worldwide scan of mining

agreements. The research team used a definition of success found in Section 2.1: Definition of

Success. This was used to determine case selection. Finally, the factors of success were found in

each case and the important trends are described in Section 2.3: Factors of Success.

1.2.2 Mining on Aboriginal Lands in Northern Ontario and the Possibility of Mining Agreements

Using the lessons learned in the case study analysis and the factor of success, the research

team analyzed the applicability of these factors in the context of Northern Ontario. This study

focused on the relevant federal and provincial departments, and the mining industry in the region.

The following is a list of actors that have been examined:

Federal

• Indian Affairs and Northern Affairs Canada

• Environment Canada

• Natural Resources Canada


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Provincial - Ontario

• Ministry of Northern Development and Mines

• Ministry of Aboriginal Affairs

Mining Industry

• Ontario Mining Association

• Ontario Prospectors Association

• Prospectors and Developers Association of Canada

• Mining Association of Canada

• Twenty- seven Mining Firms

There are twenty-seven mining firms operating in Ontario under the Ontario Mining

Association. These firms have been reviewed to determine the role of Corporate Social

Responsibility (CSR) in mining operations and relationships with Aboriginal communities.

Table 2 - Mining Firms in Ontario

Mining Companies Website CSR

Agnico-Eagle Mines Limited www.agnico-eagle.com Yes

Agrium Inc. www.agrium.com No

Barrick Gold Corporation www.barrick.com Yes

BHP Billiton www.bhpbilliton.com Yes

Breakwater Resources Ltd. www.breakwater.ca Yes

Cameco Corporation www.cameco.com Yes

De Beers Canada Inc. www.debeerscanada.com Yes

Denison Mines Inc. www.denisonmines.com No

First Nickel Inc. www.firstnickel.com No

FNX Mining Company www.fnxmining.com No

Goldcorp Inc. www.goldcorp.com Yes

Johnson Matthey Limited www.matthey.com Yes

Kinross Gold Corporation www.kinross.com Yes

Kirkland Lake Gold Inc. www.klgold.com No

Lake Shore Gold Corp. www.lsgold.com No

Luzenac Group (Rio Tinto Minerals) www.luzenac.com Yes

Newmont Canada Limited www.newmont.com Yes

North American Palladium Ltd. www.napalladium.com No

Northgate Minerals Corporation www.northgateminerals.com Yes

Richmont Mines www.richmont-mines.com No


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Sherritt International Corporation www.sherritt.com Yes

Teck Cominco Limited www.teckcominco.com Yes

Unimin Canada Ltd www.unimin.com No

Vale Inco www.valeinco.com Yes

Wallbridge Mining Company Limited www.wallbridgemining.com Yes

Wesdome Gold Mines www.wesdome.com No

Xtrata www.xstrata.com Yes

Yamana Gold Inc. www.yamana.com Yes

2.0 Methodology The process of selection of case studies is outlined in Section 2.1: Case Study Selection. As

success was used as a tool for analysis, the definition of success is given in Section 2.2: Definition of

Success. Section 2.3: Factors for Success defines the factors for success that arose out of case study

analysis. The research instruments used to study the cases are provided in Section 2.4: Research

Instruments.

The federal and provincial government departments were selected for analysis as actors in

Northern Ontario based on their regulatory role and involvement with First Nations. The mining

industry actors analyzed in Northern Ontario were selected on activity in the region, including

companies, organizations, and interest groups.

To determine the Corporate Social Responsibility (CSR) of mining companies, twenty-seven

senior mining companies under the Ontario Mining Association were reviewed. This was done

through analyzing websites and annual reports to determine if the CSR and commitment to health,

environment and safety was noted in the companies’ communications and reports.

Following the discussion of the methodology, the limitations of the research and the format

of the report are provided.

2.1 Case Study Selection

The cases were selected on the following criteria:

• Cases must be considered successful

As the goal of the project is to identify possible application of lessons learned in

Northern Ontario, the cases under review must satisfy the definition of success set out in

Section 2.3: Definition of Success.


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• Cases must be on land with Aboriginal claims

Traditional indigenous land is defined as land governed either by a land claim or treaty,

or land to which the Aboriginal group involved lays claim based on historic traditional use. This

criterion was developed specifically to identify cases on land that has historical and cultural

implications for Aboriginal people.

• There must be an agreement in place

The project only concerns factors for success of the Agreements. As such, it is essential

that an Agreement has already been negotiated and implemented in order to evaluate the

factors of success that led to negotiation and implementation.

2.2 Definition of Success

For the purposes of this report, success is defined by both provisions of the agreements and

implementation of the agreements. Each is discussed separately below. It should be noted that it is

difficult to quantitatively define what is meant by the success of provision and implementation

clauses as it is difficult to know what Aboriginal groups value the most, and different groups may

exhibit different preferences (O’Faircheallaigh 2008). As such, the researchers have synthesized

success for this project along the following criteria:

Provisions of the Agreement

Employment Provisions

Employment provisions are an essential part of Mining Agreements. Success in this case

maximizes Aboriginal employment by limiting cultural hurdles for Aboriginal peoples, subsiding

transportation to the workplace, and providing training and apprenticeship programs.

Financial Provisions

Financial provisions are should provide for Aboriginal communities to hold equity interests

or fixed cash amounts as well as provisions for compensation to individuals who suffer losses due

to mining operations. Resource revenue sharing components are also essential measures of

success.

Environmental Provisions

Environmental provisions should include commitment from the mining company to explore

alternatives to particularly environmentally damaging processes and to consult Aboriginal


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communities fully of potential negative environmental impacts. It should also include mechanisms

for Aboriginal communities to claim damages for environmental harms, and independent

monitoring systems for Aboriginal communities to perform environmental monitoring themselves

(Sosa and Keenan 2001).

Social-Cultural Provisions

Social- cultural provisions, such as prohibiting access to hunting grounds, burial and sacred

sites by non-Aboriginals should be included (O’ Faircheallaigh 2008). Success is much more than

providing money and requires the respect and meaningful integration of Aboriginal peoples into

the process.

Implementation

Communication

In regards to the successful implementation of Agreements, regular and open

communication between the involved parties is integral. There should be a Co-ordination or

Management Committee created to act as a liaison between the community and the mining

company.

Dispute Resolutions

As well, mechanisms to resolve disputes must be included in the Agreement. Dispute

resolution mechanisms must be clearly delineated, and financial means must be provided to the

Aboriginal group in the event of the need for judicial resolution (Sosa and Keenan 2001).

2.3 Factors of Success

Factors of success were determined through case study analysis. While each case may have

unique factors that contributed to its success, the following six factors were identified as the most

important conditions for successful agreements. The factors are divided according to the three

stakeholders: Aboriginal communities, the mining firms, and government.

Aboriginal Community

1) Aboriginal communities have developed strong capacity, including access to resources and

financial assistance

Capacity is defined as a combination of the following components: financial resources,

size of group, stable government, and knowledge and experience with negotiation processes


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that enhance an aboriginal group’s ability to gain beneficial provisions in agreements. It is

important that the Aboriginal community has the access to various documents that inform their

rights and these documents can be easily understood by the community in order to ensure full

knowledge of the Agreement and its processes.

2) There is an established claim to the territory, either through land claims or treaties or

traditional claim to land

The negotiation position of the Aboriginal group is strengthened if there is an

established land claim or treaty, or if clear traditional land use is established. If there is an

existing land claim, treaty, or if traditional rights of the Aboriginal group are generally well-

respected, the mining firm will also be obligated to enter into an agreement with the group.

Furthermore, established claims to the territory reduce ambiguity both for the Aboriginal group

and mining firm in the negotiation of Agreements.

Mining Firm

3) The mining firm has sufficient economic incentive to reach a mining agreement

The size of the mine deposit will affect the industry’s interest. A large deposit increases

the financial incentives of the firm.

4) The mining firm engages in Corporate Social Responsibility (CSR)

CSR may lead to improved reputation, attraction of investors, and social license.

Company policies regarding working with Aboriginal communities also contribute to successful

negotiation of mining agreements.

Government

5) There are regulations in place that govern the operation of the mining firms

Government rules and regulations are essential in the administration of natural

resources and for Aboriginal communities. The presence of strong legislation clarifies the

operating parameters of mining companies in relation to Aboriginal communities and defines

the obligations of resource extraction on Aboriginal land.

6) Government facilitates Aboriginal involvement

The role of the government can be varied in relation to Aboriginal people and mining

agreements but when the government provides resources for Aboriginal communities the


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changes for success increase. These resources can be toolkits to facilitate knowledge, financial

support, and fiduciary representation in negotiations.

2.2 Research Instruments

The research instruments used by the team include review of secondary and primary

documents and semi-structured interviews. These methods are explained in further detail below.

2.2.1 Secondary Literature

The research team reviewed the existing literature on mining agreements as well as on the

state of mining and its impacts on Aboriginal communities. For each case study, secondary

documents provided background information. The literature reviewed was very current, with the

majority of the documents written in the late 1990’s and up to 2008. The earliest document

reviewed dates from 1980. This is indicative of the increasing relevance of this topic and the

prevalence of mining activity and its impacts on Aboriginal lands. The literature is overwhelmingly

written by academics, although other voices are noted such as non-governmental organizations

and Aboriginal activists. In some cases popular media such as newspapers provided an Aboriginal

view, although this perspective was also provided by scholars. The writing of NGOs, such as Mining

Watch, is prevalent in the literature as well. The perspective of industry was gleaned through

company reports and political economists intimate with the Canadian resource issues.

2.2.2 Primary Documents

Primary documents such as Socio-Economic Agreements, Environmental Assessments, and

other agreements between government, the mining company and the Aboriginal groups were

analyzed for each case study. Case studies involving certain IBAs could not be analyzed by

agreement as they are confidential documents unavailable to public scrutiny. In this case,

surrounding documents such as Memorandums of Understanding, government statutes, and

company reports were used to analyze the agreements.

Newspaper articles were relied upon to determine the emotional and political climate

surrounding the case when primary interviews were unavailable. Government documents, treaties

and land claims were also analyzed. For the Northern Ontario section, primary documents such as

government reports, statutes, bills, industry annual reports, memos, speeches and newspaper

articles were the primary data source.


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2.2.3 Interviews

Semi-structured interviews were conducted with relevant stakeholders. The interviews

were semi-structured in order to allow for a fluid dynamic of questions between the researcher and

the participant. The researchers were only able to obtain a select number of interviews for the

project. They are listed below:

Participants

1) Scott Alexander, Director of Aboriginal Affairs, Government of the Northwest Territories;

Tara Naugler, formerly with Industry, Tourism and Investment, Government of Northwest

Territories; and Hugh Richardson, Executive Director, Devolution

2) Gilles Bisson, MPP Timmons-James Bay (NDP)

3) Maureen Carter-Whitney, Research Director for the Canadian Institute for Environmental

Law and Policy.

4) Colin Chambers, Crown Land Use Planning Policy Advisor, Ministry of Natural Resources

5) Deborah McGregor, Associate Professor, Geography and Aboriginal Studies, University of

Toronto

6) Lee Nehring, Vice-President Sustainability, Xstrata Nickel

2.4 Limitations

The limitations of the study included the difficulty with which interviews were obtained.

Over forty requests were sent to relevant stakeholders; however, there was very limited response.

The researchers also acknowledge the deficient voice of Aboriginal groups in this project. This is

due in part to the nature of conducting interviews with members of Aboriginal communities, as

well as the timeframe for conducting the interviews in this project.

Another limitation is the confidential nature of Impact Benefit Agreements. In the absence

of the actual document, it is difficult to fully analyze the success of these agreements. It is also

unknown if and how the agreements are enforced, as these agreements are not only unavailable to

the researchers, but to the government and the communities themselves. Therefore, no public

scrutiny is afforded for these agreements.

2.5 Format of the Report


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The case studies are introduced in Section 3.0: Relevant Examples of Mining Agreements

from Around the World. For each case, a chronology, a description of the agreements, and analysis

of the successes and short comings of the case, and factors that lead to success are discussed.

Section 3.8: Examples of Resource Revenue Sharing Provisions, provides examples of resource

revenue sharing provisions found in mining agreements. A summary of the most important factors

that contributed to the case study outcomes and an analysis of the most successful case by each

factor are provided in Section 3.9: Summary of Factors that Contributed to Case-Study Outcomes.

After introduction of the cases and the factors for success, the report then explores the

applicability in Northern Ontario. In particular, the relevant government departments and mining

firms are examined. Thus, the Section 4.0: Mining on Aboriginal Lands in Northern Ontario,

discusses the key government and mining firm stakeholders in Northern Ontario and outlines their

role in regards to mining and Aboriginal lands.

In Section 5.0: Applicability of Successful Case-Study Outcomes in Northern Ontario, lessons

learned the case studies were then applied to Northern Ontario to determine the best possible

negotiation strategy for Aboriginal groups in this region. This section will provide analysis on how

the factors that lead to success in the case studies can be applied in Northern Ontario.

Finally, Section 6.0: Recommendations, provides specific guidance for action for

Klippensteins, Barristers and Solicitors to move forward in their negotiations for successful

agreements between mining companies and Aboriginal groups in Northern Ontario.

3.0 Relevant Examples of Mining Agreements from Around the World The six cases consist of the following:

1. Voiseys Bay Nickel Mine, Labrador, Canada

2. Paix des Braves Agreement, Québec, Canada

3. Northwest Alaskan Native Association, Alaska, United States

4. Raglan Nickel Mine, Quebec, Canada

5. Yandicoogina Iron Ore Mine, Australia

6. Snap Lake De Beers Diamond Mine, Northwest Territories, Canada

In addition, an overview of Maori rights in resource extraction activities in New Zealand will be

provided.


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3.1 Voiseys Bay Nickel Mine, Labrador, Canada

3.1.1 Chronology

1993: The Labrador Inuit Association (LIA) rejects a land settlement that includes the Voiseys Bay

region; months later Archean Inc. prospectors discover a nickel deposit at Voiseys Bay.

1996: Inco purchases the mining rights of Voiseys Bay at a price of $4.6 billion.

1997: A Memorandum of Understanding is signed between the Innu Nation, LIA, Voiseys Bay Nickel

Company (VBNC), the Government of Canada, and the Government of Newfoundland and

Labrador.

1998: Environmental Assessment is carried out and completed.

1999: EA Panel releases its decision approving the Voiseys Bay project but requiring two IBAs of

VBNC, one for the Innu Nation and one for the LIA

2002: Memorandum of Understanding concerning the Voiseys Bay Project is signed between the

Innu Nation and the Government of Newfoundland and Labrador.

2002: The Voiseys Bay Development Agreement is signed between Vale Inco Newfoundland and

Labrador and the Government of Newfoundland and Labrador.

Between 2002 and 2005: Two IBAs, one with the Innu Nation and the other with the Labrador Inuit

Association, are negotiated and implemented.

2005: Construction completed on mine and production begins.

2007: Vale purchases Inco creating Vale Inco and the VBNC becomes Vale Inco Newfoundland and

Labrador Ltd. (VINL).

3.1.2 Relevant Agreements

Table 3 - The Voisey Bay Impact and Benefits Agreements

Name: The Voisey Bay Impact- Benefit Agreements

Date: Unknown but sometime between 2002-2005

Type: Impact and Benefits Agreement

Signatories: Labrador Inuit Association and Voiseys Bay Nickel

Mine; Innu Nation and Voiseys Bay Nickel Mine

Accessibility: Publicly unavailable


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Due to the confidentiality of the Voiseys Bay Development Agreement, the surrounding

documents such as the memorandum of understanding (MOU), the EA, as well as the EA Review

Panel (1999) have been the source documents for this case study.

The Memorandum of Understanding on Environmental Assessment of the Proposed Voiseys

Bay Mining Development 1997 (MOU 1997) set out the scope and terms of reference for the EA of

Voiseys Bay. The terms were accepted by the parties involved including the Innu Nation, Labrador

Inuit Association, the Government of Newfoundland and Labrador and the Government of Canada.

None of these terms required an IBA or resource revenue sharing. However, during public hearings,

popular opinion from Aboriginal stakeholders was to have an IBA and to settle the land claim to the

land prior to construction (Cleghorn 2009).

VBNC prepared a report on impacts of the project and submitted it to an Environmental

Panel (referred to hereafter as the Panel) set up by the Government of Newfoundland and

Labrador. In the Voiseys Bay Mine and Mill Environmental Assessment Panel Report (EAPR 1999) it

was agreed that an IBA was required and conceded that IBA negotiations would be more effective

if the land claim was settled, but also that the IBA process could and should proceed prior land

claim settlement.

The Panel went further and analyzed the possibilities of land claims and IBA negotiation in

Section 4 of the report. The section states that the Governments of Newfoundland and Canada

took no position on the matter and left the decision to the Panel. The Innu and Inuit argued that

they could have no consent to the use of their lands without a land claim (EAPR 1999, s. 4). VBNC

argued that the failure to secure a land claim should not infringe its ability to develop the land

(Ibid).

The Panel analyzed resource sharing as well. They deemed it a relationship unique to

Governments and Aboriginals. The understanding was that resource royalties could be paid to the

Aboriginal organizations only from the government, and that resource sharing could not occur

between resource extraction companies and Aboriginal organizations. The reasoning was that

resource extraction companies should only provide monetary compensation to mitigate an impact

(EAPR 1999, s. 4). The Panel decided in the end that an IBA was required. Resulting from this

process are what are known as the Voiseys Bay IBAs, both of which are not publicly available.


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3.1.3 Identified Successes and Shortcomings

There are two IBAs that have been negotiated and implemented for the Voiseys Bay Nickel

Mine. One is held between the Innu Nation and VBNC, and other is held between the LIA and

VBNC. However, because of the confidential nature of the Agreements they are unavailable for

public scrutiny. Thus, identification of components of success and shortcomings is based on

surrounding documents.


The Agreements under review are confidential documents. Therefore, the employment

provisions of the Agreements are unknown. However, Clause 5.1(b) of the MOU required Vale Inco

to have preference of Innu peoples for employment at Voiseys Bay.


A point may be inferred from the creation of the Tasiujatsoak Trust in 2003. At least $100

000 in funds have been made payable to the trust every year from VINL (Nunatsiavit 2009). The

trust was established by the LIA to administrate and invest the money received.

Section 3.1 of the MOU isolates the revenue sharing obligation of the Province of

Newfoundland and Labrador. In this case the agreement isolated 5% of Government revenue from

the project to be redirected to the Innu Nation. The Memorandum continues to then describe the

requirements of the IBA outlined in Section 5. However, there is no mention of resource sharing in

this Memorandum.

Part 5 of the MOU also includes a clause at 5.5 which sets out the requirements of future

IBAs for the Innu Nation. This particular clause has important ramifications for future negotiations

but it is vague and does not include any resource sharing components.


Environmental provisions are set out by the EA conducted and approved in 1999. It is

unknown whether there are further provisions pertaining to the environment in the IBAs.

Socio-Cultural Provisions

The Agreements under review are confidential documents. Therefore, the social-cultural

provisions of the Agreements are unknown.


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3.1.4 Factors for Success

Firms have Sufficient Economic Incentive to Reach a Mining Agreement

Voiseys Bay is located on what is believed to be one of the largest nickel reserves in Canada

(Cleghorn 1999) and provided significant economic incentive to VBNC to reach an agreement. In

this particular case, the company was prepared to wait almost a decade before any production

began.

The Aboriginal groups hold a RRSA with the Government of Newfoundland and Labrador. It

is unclear why the Government would enter an RRSA with the groups but not require Vale Inco to

do so. Despite this, Vale Inco has created the Tasiujatsoak Trust and records of at least $100 000

being paid annually into it (Nunasiavut 2009). Therefore, there is evidence that the possible

revenue from the project was sufficient to mitigate the length of time and complications of

negotiation of the IBAs.

Regulations are in Place to Govern the Operation of the Mining Firms

The Memorandum of Understanding (2002) required the Government to introduce an EA

for any new projects on the site. Despite this, the government of Newfoundland and Labrador

ignored this clause and allowed the construction of an airstrip on site by Vale Inco (Cleghorn 1999,

Innes 1997). The LIA and Innu Nation eventually brought this to the courts. The Supreme Court of

Newfoundland and Labrador eventually decided that an EA was required and that the Government

was not fulfilling its part of the agreement. Litigation in this particular instance was successful to

upholding the best interests of Aboriginal people.

3.2 Paix des Braves Agreement, Quebec, Canada

3.2.1 Chronology

1971: Premier Bourassa announces plans to develop hydroelectricity in northern Quebec.

Traditional Cree homelands are affected.

1973: The Quebec Association of Indians win an injunction in court to halt the project until an

agreement can be reached; this agreement is later overturned by the Court of Appeal and

construction continued but so did negotiations for an agreement


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1974: An Agreement-in-Principle is signed between Canada, Quebec, Hydro-Quebec, the Cree, and

the Northern Quebec Inuit Association.

1975: The James Bay and Northern Quebec Agreement (JBNQA) is concluded between the Cree and

Inuit of Northern Quebec and the Quebec government; it grants Cree and Inuit environmental

protections, social protections, and financial compensation.

1978: The Northeastern Quebec Agreement is concluded between the Naskapi and Quebec

government. The agreement allows the Naskapi to be included as a party of the original JBNQA,

and grants the Naskapi the same protection and benefits as the Cree.

1986: Quebec decides to implement the second phase of their plan to develop hydroelectricity,

constructing a dam on the Great Whale River. Cree opposition begins.

1994: The Cree win a major court battle against the Quebec government in the Supreme Court.

New York withdraws from a contract to purchase electricity from Quebec. Quebec shelves the

second phase of the project indefinitely.

2001: Quebec makes an offer to settle any outstanding obligations in the JBNQA.

2002: The Paix des Braves Agreement is signed; it is designed to address outstanding obligations in

the JBNQA.


Table 4 - Le Paix des Braves

Name: Paix des Braves

Date: 2002

Type: Resource Revenue Sharing Agreement

Signatories: The Government of Quebec and The Cree

Communities of North Western Quebec

Accessibility: Publicly Accessible

The Paix des Braves Agreement represents one of the more successful examples of resource

revenue sharing in the case studies presented in this report. The agreement contains generous

financial provisions, granting the Cree an indexed $70 million CAD payment annually.

Shortcomings, however, do exist. The implementation mechanisms were found to be somewhat


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weak. While communication channels between the top level of government and the Cree chief was

unobstructed, no clear mechanism exists to resolve disputes should any appear.

The emergence of Paix des Braves, as the successor to the James Bay and Northern Quebec

Agreement (JBNQA), can be traced back to 1994. The Cree had successfully pressured New York to

withdraw a contract to purchase electricity through high profile political action. They had also won

a costly Supreme Court battle against the Quebec government. In 2001, the Quebec government

finally offered to settle all outstanding conflicts with the Cree. Quebec’s decision to settle was

based on a several factors: the resources and financial capability of the Cree, the lack of a

previously concluded treaty, Cree negotiating unity, and the strength of Cree leadership. These

factors are examined in detail below in section 3.2.4.


Provisions


The agreement states that Quebec will encourage enterprises operating within traditional

territory to employ James Bay Aboriginals and provide contracts to Cree enterprises. In the case of

forestry activities, enterprises are required to disclose to the government and the Cree Regional

Authority the number of Crees employed and the number of contracts awarded to Cree businesses

enterprises. Quebec will also facilitate and encourage forums and discussions between the Crees

and the industry to review employment and partnership opportunities. The agreement provides for

the creation of the Cree Development Corporation. Its intended goals are to promote job creation

and business development for local communities.


The Quebec government will pay the Cree $70 million (CAD) at a minimum, per year, until

2052 (REFERENCE). If the value of hydroelectricity or other mining activities were to increase, the

Cree would be awarded a proportional surplus. For instance, if the value of production were to

increase 10%, as measured by a five-year moving average, the payment that year will increase by a

proportional 10%. The annual payment is paid to the Crees in quarterly installments; installments

are made by electronic banking transfer. Annual payments are also exempt from any form of

taxation by Quebec.


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The agreement also stipulates that the Crees will use the annual payments for economic

and community development, including support for Cree traditional activities and the creation of a

Heritage Fund for the purposes of cultural and heritage protection (REFERENCE). The communities

have the freedom to allocate their annual payments to an Aboriginal enterprise, Band or to any

trust, foundations or funds whose beneficiaries include Crees.

The Crees must also submit an annual report disclosing how annual payments were used. If

they do not comply, the Quebec government will bring the matter to the dispute resolution

mechanisms set out in the agreement. If dispute resolution mechanisms fail, the Quebec

government will seek to suspend the payments through a court order. Payments will be instituted

retroactively, without interest, once annual reports have been received.


The agreement contains few environmental protection provisions. One of these pertains to

the protection of forested areas of wildlife interest (REFERENCE). Specific management standards

will be applied to maintain forest cover and the habitat of important wildlife species in traditional

trap lines. Firewood will not be harvested within an area of seventy-five hectares surrounding each

permanent Cree camp.

Socio-cultural Provisions

Provisions in the agreement do not mention socio-cultural protection. As part of the

agreement’s financial provisions, the agreement stipulates that annual financial payments are

allowed to be allocated to a Cree Heritage Fund for the purposes of heritage and cultural

preservation (REFERENCE).

Implementation

Communication

Successful communication is seen between the government and Aboriginal group (Oblin

2007). The agreement is recognized as a nation-to-nation agreement. The implication is that Cree

negotiators, instead of going through lower level bureaucrats, have direct access to the premier

and his staff (Oblin 2007). Indeed, a Standing Liaison Committee was created to liaise with the

Crees.


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Dispute Resolution

Though the agreement provides for conflict resolution mechanisms that include Crees and

Quebec representation through the establishment of a Standing Liaison Committee, the success of

this mechanism is ambiguous. The two parties agree to use litigation as a last resort in principle.

When asked what would happen if the Standing Liaison Committee fails to settle disputes between

the Cree and government, Cree Chief Ted Moses replied vaguely (Oblin 2007). Moses did not

mention any concrete method that would settle disputes that would avoid the use of litigation.


Aboriginal Group Has Developed Strong Capacity

Unity within the Aboriginal group during negotiations contributes to strong capacity as it

strengthens the voice of the community and increases the size of the group. There were some

initial setbacks concerning Cree unity in the Paix des Braves case. Chief Ted Moses expressed that

because of the stalemate between the Council of the Cree as a whole and the Quebec government,

some Cree communities took to negotiating with the government on their own. Moses claimed

that by uniting together as one community, the Crees were able to strengthen their negotiating

position vis-à-vis the Quebec government (Oblin 2007).

Strong top-level leadership was found to contribute to a high level of capacity as well. Chief

Moses, in a written op-ed piece in the Cree publication Nature (2001), expressed his support for

the agreement. Moses found that some members of the community did not trust the Quebec

government, and were strongly against signing the agreement. Other members of the community

did not understand the agreement, or how it was different from the previous JBNQA. Moses

attributed part of the success to how quickly he was able to push through and garner support for

the signing of the agreement.

Capacity also played a significant role in the ability of the Crees to enter into numerous and

sustained court battles. Moses also attributes their success to the numerous and costly court

battles the Crees fought with the Quebec government at both the provincial and federal level.

Moses, in another article published in the Cree publication Nature, claimed that the Crees had

exhausted over ten million dollars in fighting such court battles. The Paix des Braves agreement


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itself contains a list of outstanding legal conflicts between the Cree and the Quebec government.

The agreement lists a total of sixteen cases undergoing litigation at the time of signing.

The Lack of a Previous Land Treaty

In almost all other cases, the non-existence of previous treaties between the Aboriginal

group and the government was a barrier to a successful agreement. Kulchyski’s (2004) research

suggests that, at least of the Crees, the lack of a previous treaty significantly contributed to the

success of this case.

Kulchyski (2004) makes a comparison between the Quebec Cree and the Cree in Manitoba.

The latter had signed an agreement with the Manitoba government in 1908, in which land

ownership was transferred to the Manitoba government. Kulchyski (2004) claims that because the

Quebecois Cree never negotiated a treaty with the Quebec government, the status of the

ownership of the land was much more ambiguous. Kulchyski (2004) goes on to claim that had the

Manitoba Cree not signed their treaty in 1908, the Manitoba government may have been forced to

offer them generous benefits, such as the benefits the Paix des Braves agreement confers, when

they pushed ahead with their own development projects on traditional Manitoba Cree land. Based

on Kulchyski’s research, we conclude that the non-existence of a previous land treaty negotiated

between the Cree and Quebec is a factor for success.

Political Action in the Form of Protests that Generated Large Media Attention

Chief Moses, in an interview with Oblin (2007), expressed that political action, in the form

of public protests, had a great effect. Moses attributed the reason of New York withdrawing from a

contract to purchase electricity from Quebec to their highly publicized protests. Indeed, their

protests drew high attention from popular newspapers including the New York Times (1992),

Washington Post (1994), Boston Globe (1990), and the L.A. Times (1992).

3.3 North West Alaskan Native Association, Alaska, United States

3.3.1 Chronology

1867: Alaska is purchased by the United States from Russia; Alaskan Natives were not consulted

and therefore in their opinion did not cede land rights. This is an argument that Alaska Natives use

throughout the next 100 years against the Alaska state government when development on

traditional Native lands occurs (Linxwiler 2007).


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1884: The Organic Act of 1884 is enacted, giving Congress sole power to make decisions regarding

Native title; this allocates final authority to state governments and local authorities regarding

Native issues (Brown et al 2004).

1959-1966: After Alaska attains statehood, there is a rush to develop its natural resources. This

results in threats to Native health and subsistence lifestyle. Native organizations are formed in

order to protect their claim to the land.

1967: A land-freeze on development is declared in response to the overwhelming number of land

claims. Secretary of the Interior, Stewart L. Udall, hopes this development freeze will bring Alaskan

Natives to the bargaining table (Zellen 2008).

1967-1970: The Oil Industry joins Native Associations to resolve land issues so that mineral

development can begin in Alaska.

1971: Alaska Native Claims Settlement Act of 1971 (ANCSA) is enacted, extinguishing all Native title

in Alaska with the exception of 40 million acres of land which was to be allotted to the bulk of the

Alaska Natives, and provided $962.5 million in compensation to be allotted over several years.

Native regional associations are enlisted as corporations in order to administer the funds to their

communities and invest them in areas such as socioeconomic development and cultural

institutions. The Northwest Alaskan Native Association (NANA) was one of these corporations.

1970-1980: NANA takes advantage of its location next to a source of oil and is able to gain

concessions from oil mining companies. At the same time prospectors and geologists working for

Cominco begin staking the area after initial zinc ores found (1975-1980) (NANA Regional

Corporation, 2008).

1974: The NANA Development Corporation (NDC) is established in order to deal with resource

development on NANA lands.

1980: After coming to an agreement to develop lands amongst NANA shareholders, NANA

exercises its right under the public land allotment system in ANCSA to take ownership of a 120-

square-mile parcel where the zinc was found.

1982-1986: Negotiations are held between Cominco and NANA.

1996: Another discovery is made at the Red Dog mine; the amount of zinc and lead at that location

is discovered to be the highest in the world.


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1996-2004: In addition to hiring over 1000 shareholders (1/3 of all Borough residents not including

contractors), Teck-Cominco gave 52 full college scholarships to NANA shareholders from 1996-2004

(McDowell Group, 2006). In 2004 the mine generated $46 million in wages (ibid).


Table 5 - The Teck-Cominco and NANA Agreements

Name: Teck-Cominco and NANA agreements

Date: 1982 & 1986

Type: Impact and Benefit Agreements

Signatories: Teck-Cominco and NANA t

Accessibility: Publicly unavailable

Much of what made these agreements possible stems from favorable provisions in the

Alaska Native Claims Settlement Act of 1971 and NANA’s own capabilities. The Alaska Native Claims

Settlement Act of 1971 contained the first provisions for legal ownership of the land for NANA

shareholders. The Act’s land-allotment system allowed NANA to choose from a wide range of

available public lands. In 1980, after prospectors had been surveying for five years and NANA had

discussed the pros and cons of exploration amongst their village communities, NANA chose a 120

square mile area to be ceded to them which included the zinc deposit where the mine would be

(NANA Corporation 2008). The agreements themselves were not available for public viewing but

some mechanisms of the agreement have become known through documents written by NANA

and industry members.

In terms of the time leading up to official negotiations, the community was given sufficient

time to consult with members and to define a position before negotiations began. The NANA

business administration has had a reputation of being accountable to its shareholders since NANA’s

inception (NANA shareholder report 2007). Due to this high level of accountability, it can be

inferred that there was adequate consultation between leaders and members of the community.

In accordance with Native wealth-sharing principles and under ANCSA stipulations, NANA

shares 50% of the proceeds of Red Dog Mine with other Native corporations. This ensures the

economic viability of all regional and village corporations (NANA shareholder report 2007). Many

Native regional and village corporations benefited from the fact that ANCSA outlined that wealth


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was to be redistributed amongst all regional and village corporations so as to equitably distribute

economic development through resource extraction. This is outlined in section 7(i). Another

important aspect was that native corporations owned the subsurface rights to all 40 million acres

that was ceded to them and thus had final say as to the outcome of their lands.

Furthermore, there is evidence of a general attitude of co-operation to achieve common

goals in Native businesses in the region. For example, when financial troubles were too large for

one corporation or village group, NANA bought its stocks at a decreased value and helped these

organizations regain financial stability (NANA shareholder report 2007). This contributes to the

economic health of the region as a whole.

Section 14 (f) of ANCSA provided that villages must be able to “consent to the exploration,

development, or removal of minerals from these lands within the Native village boundaries to

regional (Native) corporations or other entities” (Alaska Native Claims Settlement Title 43 Chapter

33). This appears to have allowed for the protection of autonomy over resource rights of smaller

groups of Native villages from larger corporations therefore providing legal basis for negotiation

and co-operation amongst Native groups. This also seems to have given Native groups a fair

amount of bargaining power when negotiating with resource developers.

The ANCSA agreement was hastily put together by Congress because of the realization that

the U.S. government needed to settle land claims in Alaska before economic development

relatively free of turmoil could begin (Linxwiller 2007). As Alaska was a new state trying to establish

itself, the economic necessity of settling claims appears to have been a driving factor in settling

claims for Alaska Natives. As a result many clauses were poorly thought out.


Provisions


Native shareholder preference for hiring has resulted in the employment of over 1000

NANA members and the ownership of 11% of all industry in Alaska making the mine second in

levels of Native employment only to the oil industry in Alaska (McDowell Group; Linxwiller 2006;

2007). The company has a senior administrative level made up of 15% Native ethnicity and the

company has expressed its dedication to make the mine 100% NANA shareholder owned. The


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results of Native corporations adapting to ANCSA decades after its passage, is the overall success in

adapting to a western capitalist model while keeping many cultural values of subsistence lifestyles

intact. This was very much the case in NANA’s situation.

As one report cites, the success of Native corporations under the imposition of ANCSA

comes in the form of billions of dollars in assets, and millions of dollars in scholarships given to the

native community for educational advancement (McDowell Group 2006).

One decision that may have backfired on NANA was the senior management decision not to

allow Cominco to build settlements in the mine area (Brown et al 2004). Workers currently have to

fly in and out after two or four week work shifts and this has been cited as a grievance by many of

the mine’s employees (ibid).


In terms of financial stipulations in the IBA agreed upon between NANA and Teck Cominco,

a revenue-sharing scheme lays out that 4.5% per year of net profit royalties are to be paid to NANA

shareholders. This is to increase over several years to 25% of the mine’s net profits and an increase

in that amount by 1% per year until they own 50% of mine’s profits. Teck Cominco has paid $ 90.1

million to NANA in royalties since the agreements were signed in 1982 and 1986 (McDowell Group

2006).


Many environmental issues are present in this case despite mechanisms built in to the IBA

to create an environmental regulatory process. For example, many local residents fear that picking

berries near the tailings paths may be dangerous due to high levels of zinc and lead in the

immediate area (Brown et al 2004). Another issue of concern is a decrease in levels of whale

population, as noticed by hunters (ibid).


Protection of Traditional Knowledge was incorporated into corporate and logistical planning

and shipments were coordinated so as not to disturb patterns of traditional hunting seasons during

animal migration. Recreational facilities and other services at the mine, as well as two- week work

shifts to accommodate family life, were included to preserve social and cultural dynamics (NANA

Regional Corporation 2008).


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An important strategic stance was taken by one of NANA’s presidents in the 1980s to

protect the social and cultural status of the community. Teck Cominco proposed the establishment

of a town closer to the mine which would result in the workforce being able to work longer and

become permanently established. It would have meant that families would have had to move to

the region in order to work, and resulted in an economic center built solely around the mining

industry.

This was cause for concern as mining is a temporary industry. Furthermore, it would have

resulted in cultural disruption in the community (Kizia 1985). The President of NANA did not

support the proposal. The decision not to establish a town closer to the mine shows the prudence

of NANA management and how important human resources and capacity are for ensuring the well-

being of Native stakeholders in mining negotiations.

Cultural subsistence practices were assured through work with the federal government in

order to attain protected lands to be used for subsistence purposes. NANA worked with the federal

government to gain roughly 13 million acres for subsistence uses in National parks (Brown et al

2004).

Implementation

Communication

Section 14 (f) of ANCSA provided that villages must be able to “consent to the exploration,

development, or removal of minerals from these lands within the Native village boundaries to

regional (Native) corporations or other entities” (Alaska Native Claims Settlement Act 1971). This

appears to have allowed for the protection of autonomy over resource rights of smaller groups of

Native villages from larger corporations therefore providing legal basis for negotiation and co-

operation amongst Native groups. This also seems to have given Native groups a fair amount of

bargaining power when negotiating with resource developers.

ANCSA was established by Congress in order to end the land-freeze that had been in place

and begin development. Many ANCSA shareholders expressed that they had not been given

enough time to consider the impact of the stipulations of ANCSA, but influential leaders such as

Willie Hensley and other Native lobbyists in Washington were pressed into agreeing without much

consultation with Native communities (Brown et al 2004; Ervin 1981). It is also argued that those


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who represented the Native communities in Washington were groups of Native urban educated

elites and therefore were biased in terms of the stipulations they favored (ibid). This is evident in

the problems that were faced by Native villages where costs for land selection, litigation,

consulting, auditing and record-keeping were expected to be assumed by all villages and regional

corporations regardless of size or capacity and the short term of twenty years for the land base to

be protected against property seizures due to debt (Linxwiler 2007; Brown et al 2004; Ervin 1981).

This caused many corporations to go into debt and initiated legal battles until amendments to

ANCSA were made in 1992.

In order to gain more control and protection over their land in light of these inherent

problems in ANCSA, NANA developed its own set of land use planning policies that were enacted

into law in 1990. They were approved by NANA's Board of Directors on March 22 1983, revised on

August 8, 1990, and remain in effect until amended by Resolution of the Board (NANA Corporation

Land Use Policies 2003). The policies were developed over a period of several years following a

number of meetings held in villages, discussions and study by the NANA Board of Directors, and

consultation with the Region's other major land managers (ibid). Teck Cominco is subject to these

policies and must abide by them throughout the mineral development process and reclamation

stage. NANA has its own land development department and issues permits to outsiders and Native

shareholders.

After the discovery of zinc deposits in the mid 1970’s, NANA’s administration consulted

thoroughly with its shareholders in terms of benefits and risks to mining (NANA shareholder report

2007). In 1980, the board of directors, with the general agreement of its shareholders, laid claim to

a 120 square kilometer piece of land where geologists had confirmed the extensive presence of

zinc and won the fee title of it under ANCSA’s land allotment provisions in sections 11 and 12 (ibid).

By 1982, discussions with Teck Corporation (later to be renamed Teck-Cominco after a company

merger) had commenced and terms were agreed upon by 1986. These negotiations although NANA

claims were held in consultation with the community, are unavailable for public scrutiny.

Dispute Resolution

As the IBA is considered a confidential document, the dispute resolution mechanisms were

unavailable for review.


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3.3.4 Factors Leading to Success

Aboriginal Communities have Developed Strong Capacity

The NANA leadership was very experienced in handling business ventures and organizing

their shareholders. The Management of NANA’s goals and financial assets through ministries such

as NANA regional corporation and NANA Development Corporation (NDC) lead to a balance

between accommodation of cultural sustainability and regional social assistance (NANA regional

corporation’s responsibilities) with corporate and fiscal management and upcoming business

opportunities (NDC’s responsibilities) (NANA shareholder report 2007).

This balance is reflected in the settled terms of agreement with Teck Company with regards

to a number of accomplishments: a majority of Native shareholder employment and training; the

establishment of scholarship and apprenticeship programs at the mine; an established royalty

scheme where 4.5% per year of net profits would be given to NANA until Teck was able to recover

the amount invested (in 2007) in mine development at which point NANA receives 25% of the

mine’s net profits and an increase in that amount by 1% per year until they own 50% of mine’s

profits (McDowell Group; NANA shareholder report, 2006, 2007).

NANA was also able to work with the state and federal governments to ensure that

parklands could be used for subsistence purposes. The granting of 13 million acres of land in the

federal park system to NANA members for subsistence purposes seems to have been due in large

part to the clout and capacity to negotiate such terms. This process took years of negotiation and

human and financial resources, all of which NANA had access to and utilized effectively.

NANA also had financial capacity. Economic diversification was central to the philosophy of

NANA’s Native business leaders. NANA invested in and hired shareholders for mineral extraction

related industries such as security systems, waste management companies, hotels and hospitality,

exploration ventures, waste and environmental services and so on (NANA shareholder report

2007). This enabled NANA to secure profits even when some industries were doing poorly. These

profits were redirected into higher salaries, bursaries and economic and social outreach initiatives

that continued to build NANA’s capacity (Brown et al 2004; NANA shareholder report 2004; 2007).

There is an Established Claim to the Territory


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Under the land conveyance provisions of ANCSA, NANA was able to select land that was

being prospected for its zinc deposits. NANA also held the surface and sub-surface rights to the

land. This was granted due to the clout that NANA had with which to lobby government.

Section 14.f of ANCSA also gives Native corporations sub-surface title to the lands and thus

the ability to withhold consent to mineral development or dictate the rules a company must abide

by. This is part of what gave NANA the negotiating power to establish the favorable tenets and

clauses in the 1982 and 1986 agreements.

Aboriginal title to the land surrounding the mine and its subsurface deposits meant

Cominco had both the financial incentive and the legal obligation to abide by the terms set by

NANA.

The Firm has Sufficient Economic Incentive to Reach a Mining Agreement

The size of the Firm (Cominco being a large consortium) and the size of the deposit (largest

in the world) indicate that Cominco was able and willing to invest the amount of human and

financial resources in order to meet the terms set-out by NANA.

NANA was also located next to a source of oil therefore it was able to gain concessions from

oil mining companies to hire NANA shareholders in negotiations. It is also located on the largest

Zinc deposit in the world. This was what sparked the favorable terms towards the Natives of NANA

by Teck Company in the mid 1980s (Linxwiler; 2007).

3.4 Raglan Nickel Mine, Nunavik, Quebec

3.4.1 Chronology

1971: Hydro Quebec announces its hydro electric plan for the James Bay region which includes

large areas claimed by Aboriginal peoples; negotiations progress to deal with the land claims issue

begin.

1975: The James Bay and Northern Quebec Agreement (JBNQA) formulates the most

comprehensive Aboriginal relations statute in Quebec history giving Aboriginal peoples and their

land certain protections.

1993: Environmental Impact Study is completed by Roche on behalf of Falconbridge for the

construction of a mine at the Raglan site; negotiations begin with Inuit in the region as required by

the JBNQA.


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1995: The Raglan Agreement is signed by the Makivik Development Corporation and Falconbridge;

construction begins.

1997: Construction is completed and production begins at the Raglan Mine.

2002: The Agreement in Principle Concerning the Nunavik Marine Region (ACNMR) is signed to

govern all the lands of the Nunavik region.

2006: Xstrata buys out Falconbridge creating Xstrata Nickel.


Table 6 - The Raglan Agreement

Name: The Raglan Agreement

Date: 1995

Type: Resource Revenue Sharing

Signatories: Makivik Corporation and Société Minière

Accessibility: Publicly Accessible

This 319 page document assembled the final contractual obligations of the parties

concerned. The Raglan Agreement is a resource revenue sharing agreement which includes

important economic obligations from the Société Minière. As the primary agreement in this case it

is analyzed further in section 3.4.3.

The James Bay and Northern Quebec Agreement was signed in 1975 and is an important

precursor to the Raglan Agreement. The 454 page agreement was brought forward in 1975

between the Provincial government and Aboriginal communities in the regions concerned. As there

were existing treaty rights over the land in question, the Quebec government set out to define the

ways it would interact with these communities and protect their sovereignty.

The JBNQA established three categories of land which are administratively different. In the

case of the Raglan Mine, the lands concerned were category III lands, the least protected category.

According to the JBNQA, the land where the Raglan Mine is located is not considered exclusive

Aboriginal land. Rather, the land is accessible as all other public land in the province and subject to

resource appropriation according to the limits set out in Section 22. However, as a category under

the agreement, it required particular obligations from companies and the Quebec government in


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regards to resource extraction, namely those in Section 22.2.4 including protection of hunting

lands, protection of people, participating of the Crees, and mitigation of effects among others.

Further to this, s. 23.2.4(h) outlines the requirement for an impact assessment from any

development on the land. S. 22.2.4 (i) also outlines the obligation to mitigate negative impacts of

development on lands governed by the agreement.

As a result of the sections mentioned above, there was a clear path for Falconbridge to take

in the process of construction of the mine. An Environmental Assessment (EA) was conducted and

Falconbridge was obligated to mitigate all negative impacts identified in the EA according to

requirements under the JBNQA. As part of the ongoing process, Falconbridge successfully achieved

the Raglan Agreement signed in 1995 with the Makivik Corporation.

The Agreement in Principle Concerning the Nunavik Marine Region (ACNMR) 2002 was

negotiated after the Raglan Agreement but it is worth mentioning in the context of resource

sharing agreements. The Nunavik region roughly outlines the Northern coast of Quebec and

includes mostly Inuit peoples. The Agreement itself is a type of resource sharing agreement with

two important components.

The first is found under article 13 which limits the intrusion of non-Aboriginal people into

the lands of the Nunavik Inuit. In particular, article 13.5 outlines the limits by which land can be

expropriated. In the event of expropriation, a suitable medium of equal value must be exchanged.

It is unclear how these clauses would stand up to scrutiny by the courts and whether the clauses

define a limit which excludes staking of the land by resource extraction companies.


Provisions


Section 5 of the Raglan Agreement contains the employment clauses of the Agreement. In

particular the Agreement requires Société Minière to include Inuit people in the workforce

providing both on-site and off-site training. These clauses include provisions for “Hiring Priority” (s.

5.3.4) and “Discrimination” (s. 5.5.3).



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The Raglan Mine is an example of a well-functioning resource sharing agreement. In 2006

Xstrata Nickel presented the Makivik Corporation with $9.2 million as per the Raglan Agreement

followed in 2007 with $16.7 (NRCAN 2009a). The most recent data shows that in 2008 the value

doubled to $32.6 million (Xstrata 2009).

Section 7 of the Raglan Agreement is the actual resource revenue sharing portion of the

Agreement. Sections 7.2.1 and 7.2.2 outline minimum payments from the Société. All of these

payments are made to the Makivik Development Corporation. Section 7.2.3 describes the most

important component of the resource revenue sharing clauses – the allocation of profit sharing.

The Raglan Agreement guarantees the allocation of 4.5% of the Annual Operating Cash Flow

(outlined in sections 7.2.3(1)) payable directly to the Makivik Corporation.


The Raglan Agreement does not include specific reference to particular environmental

damages that may result from the mine. However, it does refer to the Environmental Impact

Statement (EIS) prepared as a requirement of the JBNQA.


The Raglan Agreement attempts to provide equitable measures to Aboriginal workers in

order to foster a good relationship. S. 5.5.6 requires storage for “country food” in living quarters.

The most important section is 5.5.2 “Encouragement of Social Harmony” which includes provisions

for Inuit art, music, sports and language classes.

Implementation

Communication

Despite the agency empowering the Aboriginal people through legislation, there is little

evidence of wide spread community participation. Although the agreement has provided benefits

to the community, there was no evidence that the Makivik Corporation addressed the wider

community in creation of the agreement. The development corporation worked on behalf of the

people and was successful. However, due to the private nature of the negotiations themselves, it is

unclear if the corporation actually brought forward the concerns of the people. However, being a

publicly available document, the Raglan Agreement (1995) can be subjected to public scrutiny.

Dispute Resolution


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The Raglan Agreement established what is known as the Raglan Committee. As the

administrative body of the Raglan Agreement, Section 8 describes the purpose of the Committee,

which is to foster the continued cooperation of the Inuit people of the region and the Société

Minière. The Committee is parity based with three members from the Société and three from the

Inuit. Together the members form an important administrative and dialogic body. Research shows

that the Committee works best when the relationship is strained because the dialogue and lines of

communication remain open (Nehring, personal communication, March 26th 2009).


There are Regulations in Place that Govern the Operations of the Mining Firms

The Government of Quebec also played an important role in the entire process. Despite not

being an active participant in this particular case, the legislation introduced over a 30 year period

created a legal standing for Aboriginals to base their negotiation platforms on. The JBNQA and the

ACNMR are examples of good legislation working on behalf of Aboriginal peoples. Successful

negotiations are better off with clear standards outlined in legislation. Certainty works best for all

the parties involved (Nehring, personal communication, March 26th 2009). Mining companies are

better able to attract investment and Aboriginal communities have stronger negotiating positions.

The important contextual factors of success for the Raglan mine include the James Bay and

Northern Quebec Agreement as well as the considerable organization of the Makivik Development

Corporation. With the implementation of the two agreements, the Nunavik Inuit have a breadth of

beneficial obligations from resource extraction companies operating on their lands and the Quebec

government. Agreements work well when there is certainty: investors, communities, and the

mining companies all seek certainty and clarity in order to function (Nehring, personal

communication, March 26th 2009). Past agreements outline the playing field and identify actions

that need to be taken. This allows mines to negotiate meaningful agreements, to attract

investment, and to provide clear benefits to Aboriginal communities in the area.

Public Scrutiny

The chance for public scrutiny of the agreement indicates a sense of responsibility in the

proceedings. Analysis by the researchers has led to evidence that the agreement is being upheld

and the annual revenue sharing payments are the clearest evidence of this. Furthermore, the


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Raglan Committee remains a consistent venue for Aboriginal voices to be heard for the lifetime of

the mine.

3.5 Yandicoogina Iron Ore Mine Project, Australia

3.5.1 Chronology

1992: Hamersley Iron Pty Ltd, a wholly owned subsidiary of an international mining company called

Rio Tinto, established an Aboriginal Training and Liaison (ATAL) unit to improve the relations with

the local communities and increase Aboriginal employment in the industry.

1992: On June 3, a landmark court case, Mabo v Queensland (No.2), called the "Mabo Decision" is

ruled on by the High Court of Australia. This case recognizes Aboriginal rights to their land in the

form of "Native Title", and sets the stage for the negotiation of Yandi Land Use Agreement.

1994: On January 1, the Native Title Act 1993 is enacted as the result of Mabo Decision, which

recognizes and protects Aboriginal rights in Australia.

1994 – Early 1995: Leon Davis, Managing Director of Rio Tinto, initiates changes in the company’s

relations with Aboriginal groups. He welcomes the Mabo Decision and accepts the Native Title Act.

He also creates the position of Vice President Aboriginal Relations.

1994 – 1995: Hamersley Iron Pty Limited becomes interested in developing the Yandicoogina Mine

Project.

1996: On January 1, the Yandicoogina Negotiations Protocol & Confidential Deed is signed between

Hamersley Iron Pty Limited and the Gumala Aboriginal Corporation.

1996: The Gumala Aboriginal Corporation is created to represent the interests of Niapiali, Bunjima

and Innawonga Aboriginal language groups of the Pilbara region of Western Australia.

1996: On January 1, the Yandicoogina Mine Mediation Memorandum of Understanding is signed

between Hamersley Iron Pty Ltd and the Gumala Aboriginal Corporation.

1996: On January 1, the Yandicoogina Tripartite Agreement is signed between Hamersley Iron Pty

Ltd, the Gumala Aboriginal Corporation and the State of Western Australia. The Agreement ratifies,

under native title process, the Yandicoogina Memorandum of Understanding.

1996: The negotiation for Yandi Land Use Agreement starts between Hamersley Iron Pty Ltd and

the Gumala Aboriginal Corporation.


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1996: On October 22, the Iron Ore (Yandicoogina) Agreement Act 1996 is concluded between the

Government, Hamersley Iron-Yandi Pty Limited and Hamersley Iron Pty Limited.

1997: On March 1, the negotiation for the Yandi Land Use Agreement is concluded.

2007: $530 million US is spent on the expansion of Yandicoogina Mine project and production

increased from 36 million tonnes per annum to 52 million tonnes.


Table 7 - The Yandicoogina Tripartite Agreement

Name: Yandicoogina Tripartite Agreement

Date: 1996

Type: Tripartite Agreement

Signatories: Hamersley Iron Pty Ltd, Gumala Aboriginal

Corporation, and Government of Western Australia

Accessibility: Publicly Unavailable

The Yandicoogina Mine Mediation Memorandum of Understanding (YMMMOU) 1996 was

signed by Hamersley Iron Pty Ltd, the Gumala Aboriginal Corporation and the State of Western

Australia. The YMMMOU governs the negotiations of the Yandicoogina Tripartite Agreement. It

was created during the process of negotiation and is not legally binding. It covers five aspects:

employment opportunities, training, community assistance, financial advice and land tenure. As

the result of the YMMMOU, Hamersley agreed to pay $60 million Australian to Gumala Corporation

over the next 20 years.

The Iron Ore (Yandicoogina) Agreement Act 1996 is an agreement signed between

Hamersley Iron Pty Ltd and the State of Western Australia. This Act ratifies and authorizes the

implementation of the establishment and operation of an iron ore mine in the Pilbara region (Iron

Ore Agreement Act 1996). It deals with the mining lease and the establishment of the mining

operation in the Pilbara region. The provisions within the Agreement strictly follow the Native Title

Act 1993, the Aboriginal Heritage Act 1972 and other relevant regulations. There are no clauses

prohibiting Aboriginal parties from opposing a project during the government licensing or

environmental assessment process. The Native Title Act and the Aboriginal Heritage Act protect

Aboriginal rights and their interests in the land (Human Rights and Equal Opportunity Commission


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1998). Any matters arise out of laws relating to native title or due to claims or objection lodged

under laws relating to native title may result in termination of this agreement.

Table 8 - The Yandi Regional Land Use Agreement

Name: Yandi Regional Land Use Agreement

Date: 1997

Type: Regional Land Use Agreement

Signatories: Hamersley Iron Pty Ltd and the Gumala Aboriginal

Corporation

Accessibility: Publicly Unavailable

The Yandi Regional Land Use Agreement concerns construction and associated

infrastructure of the Hamersley’s iron mine. It covers an area of 26,000 square kilometres in the

Central Pilbara region. There are approximately one hundred individuals who are signatories to the

agreement.

3.5.3 Identified Success and Shortcoming

As the Yandi Regional Land Use Agreement and the Yandicoogina Tripartite Agreement are

confidential documents, supporting documents and articles were used to determine the success of

the provisions and implementation of the agreements.

Provisions


In the Yandicoogina Mine Mediation Memorandum of Understanding 1996, there are

employment provisions for Aboriginal employment opportunities and training. Rio Tinto has

approximately 600 indigenous employees, and about 300 employees are from the Pilbara region,

where the Yandicoogina Mine is located (Iggulden 2008).


During the negotiation of Yandicoogina mine project, Hamersley provided funding directly

to the Gumala Aboriginal Corporation to hire their own consultants and lawyers, as well as to

facilitate community meetings. The agreement commits Hamersley to assist Gumala Aboriginal

Corporation and local Aboriginal communities financially in an amount of $60 million (Australian)

for employment creation, training, business and community development over the next twenty


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years. However, payments to the Gumala Aboriginal Corporation are capped at $3 million a year

(ATNS 2007).


Environmental provisions are set out by the Yandicoogina Environmental Management

Program that addresses possible direct and indirect impacts on subterranean fauna associated with

the portion of Marillana Creek and other nearby systems that will be affected by the mining

operations (Humphreys 2006).

Social-Cultural Provisions

Within the agreement, there is a comprehensive framework for protecting Aboriginal

heritage and culture, and promoting the economic development of local Aboriginal communities

(Senior 1998). While the details of the agreement are unknown, there are programs in place that

mitigate the social-cultural impacts of the mine. For instance, ATAL established a range of programs

to increase Aboriginal participation in the company and maintain their traditional links with the

land. The programs focus on five key areas: job skill training, small business development,

education, cross-cultural development and preservation of Aboriginal culture and heritage (Pilbara

Iron 2006).

The program runs educational programs, pre-employment training programs, and

scholarships for students (ibid). There are training programs such as the Gumala Mirnuwarni and

Work Experience Programme, where the programs provide educational support and mentoring for

secondary school students within the Pilbara region (Rio Tinto 2007). Hamersley also provides

community infrastructure and maintenance support in the area and it engages regular consultation

with the local community to receive feedback (Pilbara Iron 2006).

Implementation

Communication

The Yandicoogina Negotiations Protocol & Confidential Deed 1996 is a framework

agreement signed by Hamersley Iron Pty Ltd and the Gumala Aboriginal Corporation. This

document sets out the protocols and describes the principles and procedures that governed

negotiation of the Yandi Regional Land Use Agreement. The agreement seeks to achieve long-term


42 | P a g e

benefits and security to both parties. This agreement binds both parties to adhere to the process

of negotiation rather than to substantive issues.

The negotiation process was conducted in a private manner to prevent outside

intervention. All members attending the negotiation sessions were required to sign a

confidentiality agreement. Therefore, the only public statements on negotiation were made by a

mediator in joint press releases (Senior 1998).

The Gumala Aboriginal Corporation consists of an Aboriginal chairman and eighteen

governing bodies with six elected representatives from each group to serve on the committee

(Senior 1998). A team of ten was selected for the negotiation of this agreement that consistently

reported back to the committee and then informed the communities. Within this team, a lawyer

and two consultants, one with experience in Aboriginal affairs and another with experience in the

iron ore industry, were recruited.

Hamersley has four representatives involved in the negotiation process, two executives and

two lawyers, who are under strict instructions to keep a low profile, with their main role being to

observe and to advise (ibid).

Dispute Resolution

According to the provisions of the agreement, an independent facilitator and a mediator are

to be appointed during the dispute resolution process. Both the facilitator and the mediator must

be deemed accepted by the Aboriginal community and Hamersley. In the case of a dispute, a

protocol would be drafted by the mediator which would set out the ground rules for the

negotiation (Senior 1998). The two basic principles of the protocol are that: a) both parties should

explore the long-term benefits and security; and b) the negotiation should be conducted in good

faith to build upon the mutual trust and goodwill that had already been established (ibid).

An initial position paper was developed by the Gumala Aboriginal Corporation and delivered

to Hamersley prior to the negotiations to avoid disputes. The less controversial issues were dealt

with first and signed off when the agreement was reached. This strategy involved a series of stages

of negotiation and consultation from easily resolved issues to the final land use agreement. It

familiarized everyone with the process and built trust between the two parties (Senior 1998).


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3.5.4 Factors for success


One of the factors that lead to the success of Yandi Land Use Agreement is that the

Aboriginal community possessed strong capacity. Three Aboriginal language groups (Innawonga,

Bunjima and Niapili) were affected by this Agreement and they are the native title claimants of the

land. These groups worked together to protect their similar interests in heritage and land

preservation, and formed the Gumala Aboriginal Corporation when the negotiations began. This

aboriginal organization is a transparent and collaborative Aboriginal governing body. The

formation of the Gumala Aboriginal Corporation unified the views and ideas of the affected

aboriginal communities (Senior 1998).

The Aboriginal groups in this case had access to resources and financial assistance, as well

access to meeting spaces to facilitate community debates and meetings. Hamersley Iron Pty Ltd

provided funding directly to the Gumala Aboriginal Corporation during the negotiation, and the

Gumala Aboriginal Corporation was able to administer the funding without interference (ibid).

Hamersley is to provide $60 million Australian to the Gumala Aboriginal Corporation over the next

20 years as per the Memorandum of Understanding (1996).

The government furthered its support by signing the Yandicoogina Tripartite Agreement

1996, to ensure Hamersley keep the State government fully informed regarding the progress of the

negotiation and to provide funding for Aboriginal employment, training and retention. However,

there was no financial assistance for aboriginal groups during the negotiation of the agreement

from the government (Senior 1998).

There is an Established Claim to the Territory

Western Australia has the largest area of determined native title and has the biggest claim

in Australia (National Native Title Tribunal 2008). The land in these communities is protected under

the Native Title Act 1993 as part of the Gumala Aboriginal Corporation. The Native Title Act

recognizes that some Aboriginal people have rights and interests in their land and it includes the

rights to live in the area, access the area for traditional purpose, and to gather resources for daily

life (National Native Title Tribunal 2008). This protection of traditional land use provides the

Aboriginal groups with a claim to their land which strengthens their negotiating position in the

Agreement process (Senior, 1998).


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The Mining Firm had Sufficient Economic Incentive to Reach an Agreement

There was a strong economic incentive for the mining company to operate in the area, and

thus to enter into Agreements with affected Aboriginal groups. The Yandicoogina Iron Ore Mine

can produce 52 million tonnes of ore per annum. It is the largest mine in the Pilbara region of

Australia (Rio Tinto 2009). Mr. Robert Wilson, the Chairman of the mining corporation stated that

“the Yandicoogina mine will secure Hamersley Iron’s long term future in an increasingly

competitive global market. It will develop a large scale, high grade iron ore deposit, highly sought

after by Asian steel mills because of its low impurities (1997, September 17; Business Wire)." That

the potential mineral deposit in this Pilbara region can generate a large profit was a major incentive

for Hamersley Iron Pty Ltd to negotiate with local Aboriginal groups (Senior 1998).

The Mining Firm Engages in Corporate Social Responsibility

Rio Tinto is known as a best practice mining company in regards to CSR and sustainable

development policy (Ethical Corporation Newsdesk 2001). It works in partnership with local

communities, and local management is required to integrate this approach into their operating

responsibilities (ibid). The company microfinance the local communities in their operations, and

Yandicoogina mine region benefits from this policy. When Robert Wilson, Chairman of Rio Tinto

was asked if he ``believes there is a business case for CSR`` in an interview with the Ethical

Corporation Magazine, he answered ``…we are taking a leading role in the Global Mining Imitative

and are engaged in a whole process of extensive dialogue with non-corporate stakeholders such as

NGOs and local communities. We are trying to define ways in which our industry as a whole, not

just Rio Tinto, can actually handle some of the issues surrounding our business more effectively in

the future than we have done in the past” (ibid).

Hamersley Iron Pty Ltd is one of the operational companies owned by Rio Tinto Ltd.

Hamersley Iron Pty Ltd is engaged in corporate social responsibility due to the policy and support

from Rio Tinto Ltd (Senior 1998). Rio Tinto Ltd recognized the importance of working with

Aboriginal communities. It initiated a series of changes in the Aboriginal and community

relationship through company’s operation in order to improve its reputation between 1994 to early

1995.


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An Aboriginal Training and Liaison unit was established in 1992 at Hamersley Iron Pty Ltd for

the purpose of increasing the aboriginal participation in the company and supporting the

preservation of their heritage and culture (Pilbara Iron 2006). An example that indicates Hamersley

Iron Pty Ltd’s initiative to support Aboriginal employment and participation is the establishment of

three new joint-venture businesses in the Aboriginal communities close to where the Yandicoogina

mine operation is located (Indigenous Support Service 2001). These businesses provide services to

Hamersley Iron Pty Ltd and assist in the development of the Yandicoogina mine. The ATAL enabled

the needs of the Aboriginal stakeholders to be met by introducing programs to address similar

heritage and local economy problems (International Council on Metals and the Environment 1999).

There are Regulations in Place that Govern the Operation of the Mining Firms

The Australian government introduced the Native Title Act in 1993, which recognizes that

some people have rights and interests in their land that come from traditional laws and customs.

The Native Title Act protects Aboriginal rights and their interests in the land. Hamersley Iron Pty

Ltd mining operation is also regulated by the Iron Ore (Yandicoogina) Agreement Act 1996, which

ratifies and authorises the implementation of the mine project (Iron Ore Agreement Act 1996). It is

an agreement that the State contracts with Hamersley Iron Pty Ltd in the form of a written

agreement which regulates mining operations. This ratification ensured that its provisions override

any inconsistent provisions under the general mining legislation (ibid).

Strong Community Involvement

There was strong community involvement in the negotiation process of the agreement. The

three Aboriginal groups involved (the Niapiali, Bunjima and Innawonga) worked together, and they

selected their own representative and created a team to negotiate with the mining industry. The

team informed the communities about the content of the negotiations and the agreement (Senior

1998). The negotiation received the support from the elders during the process. Dr. Clive Senior

(1998), both the facilitator and the mediator in the Yandicoogina process, stated that “without

their support no agreement could be reached.” He defined “elders” as “individuals who were

generally recognised by their own group as deserving the description and the respect which it

confers” (Senior 1998). However, the number of elders had diminished as a series of community

meetings progressed due to the use of language during these meetings and the pace of discussion


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(ibid). Senior (1998) suggested that if a council of elders was formed to deal with cultural heritage

issues, it would have had “a better-defined status and a more specific purpose within the process”.

Although the Gumala Corporation is the voice of the local communities, the power that elders hold

in the Aboriginal communities cannot be ignored during the process.

3.6 Snap Lake De Beers Diamond Mine Project, Northwest Territories

3.6.1 Chronology

1900: The Crown enters into Treaty #8 with the ancestors of the Akaitcho Territory Dene First

Nations (which represents The Yellowknives Dene First Nation (Dettah), the Yellowknives Dene First

Nation (Nlido), and the Lutsel K’e Dene Band).

1921: On 22 August, the Crown enters into Treaty #11 with the ancestors of the Tlicho First Nation

and the North Slave Métis.

1996: The North Slave Métis Alliance (NSMA) is formed with an objective to negotiate a land and

resource agreement and move toward self-government. As of 2009 they do not hold, nor are they

in negotiations for, a self-government agreement.

2000: The Snap Lake underground diamond mine project is bought by DeBeers.

2000: On 7 January, the Tlicho First Nation enters into an Agreement in Principle with the

Government of Northwest Territories (GNWT) and Canada for its land claim and self-government.

2000: On 25 July, the Akaitcho Territory Dene First Nations enters into a Framework Agreement

with the GNWT and Canada to begin negotiations for a land claim agreement. While negotiations

have proceeded with an Interim Measures Agreement signed on 28 June 2001 and Interim Land

Withdrawal Protocol established in 2005 and subsequent withdrawals of Crown land, the Akaitcho

have yet to establish an agreement for land claim and self government.

2002: DeBeers enters into a Memorandum of Understanding with NSMA, the Lutsel K’e Dene, and

the Dogrib Treaty 11 Council in 2002 to provide a framework for IBA negotiations.

2003: On 25 August, the Tlicho Agreement for self-government is signed. This gives the Tlicho the

ability to pass and enforce laws, own resources, collect taxes, take over lands and protect wildlife

and resources.

2003: Mackenzie Valley Environmental Impact Review Board (MVEIRB) gives its report on the

Environmental Assessment. MVEIRB is a co-management board responsible for the environmental


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assessment process in the Mackenzie valley. Half of the members of the board are appointed by

federal and territorial representatives and the other half are appointed by Aboriginal groups.

2005: The Tlicho Land Claims and Self-Government Act are signed.

2005: Construction begins on the Snap Lake diamond mine.

2006: The Socio-Economic Agreement (SEA) is signed between DeBeers Canada Mining Inc, the

GNWT, Dogrib Treaty 11 council, Yellowknives Dene First Nation, Lutsel K’e Dene Band, and the

North Slave Métis Alliance.

2005-2007: DeBeers signs individual IBAs with the Tlicho Government (March 2006), the Lutsel K’e

Dene Band (June 2007), the Yellowknives Dene First Nation (November 2005), and the North Slave

Métis Alliance (August 2006).

2008: The mine reached commercial production, and is expected to produce 1.4 million carats per

year.


Table 9 - Snap Lake Socio Economic Agreement

Name: Snap Lake Socio- Economic Agreement

Date: 1997

Type: Socio-Economic Agreement

Signatories: DeBeers Canada Inc, The Government of Northwest

Territories and Dogrib Treaty 11 council, Yellowknives

Dene First Nation, Lutsel K’e Dene Band, and the North

Slave Métis Alliance

Accessibility: Publicly Available

A Memorandum of Understanding was established between the North Slave Métis Alliance

(NSMA), the Lutsel K’e Dene, and the Dogrib Treaty 11 Council in 2002 which provided the

framework for impact and benefits agreement negotiations. The Mackenzie Valley Environmental

Impact Review Board (MVEIRB) EA process required that an SEA be negotiated between the GNWT,

the impacted Aboriginal communities, and De Beers. As the SEA arises directly out of the EA

process, which the communities were involved in, it can be inferred that the communities did have

sufficient negotiation times before the signing of the IBA’s between 2005 and 2007. However, it is

unclear what the ratification and community consultation process for these agreements was.


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News releases from DeBeers reference community ratification procedures occurring, but do

not specify the process, and the communities were unavailable for comment. There is some

concern that ratification processes are not transparent, and as community members are not

permitted to review the IBA documents, it is unclear how ratification occurs at the community level

(McGregor, personal communication 18 February 2009). The SEA, however, is available for review.


Provisions


The employment provisions of the Snap Lake SEA are clearly laid out, and including a hiring

policy that gives preference to First Nation candidates and provides for training and other methods

for maximizing First Nations employment in sections 4.5.1 and 4.6. Section 3.5 establishes that

these provisions are also imposed on the contractors and subcontractors as well. Section 4

establishes training and apprenticeship programs for Aboriginal peoples, as well as educational

opportunities in primary and secondary schools. As well, some provisions such as section 3.6.2 are

included to limit the cultural hurdles that Aboriginals may face in the work place. Section 3.6.3

provides subsidized air transportation from the communities to the worksite and pick up sites were

expanded to ten communities in 2007 (Snap Lake Socio-Economic Report 2007).

The company is required to calculate and report Aboriginal participation in the workforce,

and publishes this information in annual reports. While there are provisions to help First Nations

employees find work when the mine closes, section 4.11.1 which governs this is extremely

ambiguous and unspecific, stating only that the company will “…ease employees transition to new

jobs upon closure”.

Some employment provisions that would contribute to a more successful agreement are

absent. For example, provisions to ensure that First Nations employees are the least affected by

layoffs, clear definitions of procedures for employee evaluation and advancement, and the

establishment of an Aboriginal employment coordinator to act as a liaison between the company

and First Nation employees are not included (Sosa and Keenan 2001).



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Economic Development and Business Opportunity Provisions of this agreement include

DeBeers giving priority to Aboriginal businesses when awarding contracts for goods and services

required and facilitation of educational processes and other means to help Aboriginal companies

when bidding for contracts which are described in section 5.4. Furthermore, the DeBeers NWT

Business Registry provides a list of Aboriginal businesses to the company, and a list of goods and

services that the project is predicted to need during its lifetime is outlined to help the community

identify business opportunities. These commitments are outlined in section 5.4 as well as the Snap

Lake Socio-Economic Report 2007. While a section establishes the creation of a Manager of

Business Development, this position should be held for an Aboriginal community member.

In regards to cost provisions of the Agreement, ideally there should be funds provided to

the community by the company to cover travel costs, legal and environmental expertise, and

information distribution among community members (Sosa and Keenan 2001). This SEA does not

provide for that. As well, there should be clear specification of how costs associated with

implementation and enforcement will be paid for (Sosa and Keenan 2001). While the Snap Lake

SEA clearly establishes how the monitoring agency will be paid for, specific cost breakdowns for the

items set out in the provisions are not established. It is unknown whether the IBA provides clauses

pertaining to costs.


The environmental protection provisions are included in the EA process. The Snap Lake

Mine is governed by the MVEIRB. This report was issued in 2003 and approved development of the

Snap Lake Mine.

Social and Cultural Provisions

In Section 6, the Snap Lake SEA outlines its social and cultural provisions. Provisions

requiring the company to provide social programs such as counseling services are included (Clause

6.1.2), and clause 4.10 specifically promotes the economic participation of women by providing

scholarships and training and promoting women in the mining workforce. However, this SEA does

not recognize that women are most often the most adversely affected group by mining (Sosa and

Keenan 2001), and does not make provisions to address those impacts. The SEA should be

commended for the inclusion of a clause providing two Aboriginal community liaison personnel


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who are preferably from the Aboriginal community (Clause 6.1.3). However, for an SEA to be

considered successful in social and cultural provisions, there should be a general prohibition of all

access to Aboriginal lands, hunting grounds and burial and sacred sites by non-Aboriginals, and

provisions for the development of programs and committees to monitor social and cultural impacts

of the mine should be included (Sosa and Keenan 2001). The Snap Lake SEA does not contain such

provisions. Section 7 contains clauses pertaining to promoting cultural preservation and

understanding.

A point of concern in the Snap Lake SEA is that there are no clauses addressing the

premature closure of the mine, nor any clauses addressing what would occur in the event of the

sale of the mine (Sosa and Keenan 2001). This raises concerns that the Agreement may be

shortsighted.

Implementation

Communication

The Snap Lake SEA contains clauses for the creation of the DeBeers Socio-Economic

Monitoring Agency. This agency contains representatives from DeBeers, the GNWT, and from each

Aboriginal community involved. Reports are generated annually. The most recent available report

is from 2007. There seems to be a lack of community involvement in the monitoring and

enforcement of the agreement. As well, as the IBA is a confidential document, it is unknown how

provisions are implemented and enforced as community members and government do not have

knowledge of the clauses contained in the IBA.

Dispute Resolution

The sections relating to the De Beer’s Socio- Economic Monitoring Agency also describe

dispute resolution mechanisms. However, it is important that the language of the agreement is not

ambiguous, and that it is as specific as possible (Sosa and Keenan 2001). This reduces uncertainties

in implementing the provisions of the Agreement. The Snap Lake SEA does contain ambiguous

language, often stating that the company “shall use best efforts” (see sections 3.3, 3.4.1, 4.2, 4.5.2,

5.2.2, 5.3.3, 5.3.2) or that the company will “take all reasonable steps” (see section 3.4.3). As well,

the SEA is often unspecific. It states, for example, in section 3.6.1 that northern benefits packages

will be given to provide incentives to employees who live in the North, but does not specify what


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the package will entail. As well, section 3.6.2 states that the company will “develop work schedules

to accommodate traditional pursuits of Aboriginal employees in balance with operational

requirements of the project, but does not state how this will be achieved.



A factor that has led to success in the Snap Lake case is that the agreements have been

negotiated with Aboriginal groups that have strong capacity. Experience with negotiating IBAs and

knowledge of the processes contributes to the success of the agreement, as groups that have

negotiated agreements before of have access to information regarding how to do so will be more

successful in their negotiations. The Tlicho, Yellowknives Dene, Lutsel K’e, and NSMA all had

previous experience with IBA negotiations. These groups were also involved in the BHP Etaki mine,

and learnt many lessons arising from those negotiations. The Lutsel K’e established their own

negotiators and consultation process, and employs community based monitoring following the

outcomes of the BHP experience (Weitzner 2006).

Another dimension of capacity is the governing body of the Aboriginal community. If the

governance is stable and functional, if there is active community debate, and if the government is

transparent and collaborative, capacity is increased and thus the chances for successful

negotiations from the community perspective are increased. The Tlicho gained self government in

2003. They now have the power to pass and enforce laws, enter into contracts, hold resources,

enforce taxes, manage rights and benefits, and they hold both surface and subsurface rights. This

is the first example of a combined land claim and self government agreement and significantly

increases the negotiating position of the Tlicho. It is difficult to know the status of stability and

open governance in the affected communities as interviews with community residents were not

obtained.

There is an Established Claim to the Territory in Question

Another factor that contributed to success was the Aboriginal groups claim to the land.

While the Yellowknives Dene First Nation and the Lutsel K’e do not currently hold an established

land claim, they were in direct negotiations with the government of the Northwest Territories for a


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land claim and self-government before the communities entered into IBA and SEA negotiations

with DeBeers.

The lands in question are also covered by Treaty #8. DeBeers entered into agreements with

these groups understanding the political strength of First Nations claim to the land. As mentioned,

the Tlicho Government was established in 2003 giving this group a firm negotiating position with

DeBeers. The NSMA does not have the same claims to land, however, this group derives its

capacity from the strength of the alliance it has formed to strengthen Métis political and cultural

identity. This alliance has an economic division, called Metcor, which is responsible for the

development of employment and business opportunities for the Métis people

(www.metcor.nsma.net). The establishment of the NSMA in 1996 has created a forum for political

strength for the Métis in this region.

The Mining Firm Engages in Corporate Social Responsibility

DeBeers has an Environmental policy, a Community policy and a Northwest Business policy

that govern its relationship with Aboriginal communities (www.debeers.com). The community

policy statement, entitled “Working with Aboriginal Communities”, acknowledges the rights of

Aboriginal communities in respect to the land and stresses the importance of consultation and

communication.

The NWT Business Policy provides guideline for the promotion and development of

Northern and Aboriginal businesses and establishes that both DeBeers and its contractors will

promote and assist Aboriginal business. As DeBeers refused interview requests and Aboriginal

groups were unavailable, it is unknown how these policies play out in practice, however, the

framework for a solid working relationship has been established by DeBeers. It is in the interest of

the company to enter into IBAs with First Nations communities and it can help gain community and

public support and mitigate possible backlash to the project (Alexander et al, personal

communication, 5 February 2009). IBAs seem to allow companies to move forward with their

project, which is why they may enter them (McGregor, personal communication, 18 February

2009). Thus, the desire for social license to conduct business in the region presents itself as a factor

for success in Snap Lake.


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There Are Regulations in Place that Govern the Operation of the Mining Firms

A further factor for success identified in the Snap Lake case is the regulatory climate

governing mining projects. The mining company must conduct EAs and enter in SEAs in order to

move forward with the project (Alexander, Richardson, and Naugler, personal communication, 5

February 2009). Thus, the government has an ability to regulate the activity of the mine through

the EA and SEA process. The government has a further role to play in the implementation of SEAs in

their position as monitors of the agreement.

The administrative body governing the EA process in the NWT is considered an example of

EA best practices (Gailbraith et al 2007). The Mackenzie Valley Environmental Impact Review Board

is highly transparent, with every document associated with each of its projects available on line,

including all communication between proponents, government and Aboriginal groups. It has three

approval stages: preliminary screening, the EA, and an Environmental Impact Review, which

provides a more detailed examination of concerns raised in the EA.

The Government Facilitates Aboriginal Involvement

While the government does not have any involvement with the IBAs themselves, if their

role is such that it facilitates Aboriginal involvement by acting in an advisory role as well as acting as

a resource to assist the community, chances are higher for successful agreements. In this instance,

the devolution of powers from the federal level to Northwest Territories facilitates increasing

Aboriginal capacity.

In 2004, the Northwest Territories Land and Resources Devolution Framework Agreement

was signed. This agreement “will enhance the ability of the territorial and Aboriginal governments

to serve the interests of their constituents, increase their self-sufficiency, and promote the

effective, efficient and coordinated development of the natural resources of the Northwest

Territories” (Framework Agreement 2004). This will promote a government to government

relationship, with the Aboriginal communities being land owners and resource developers

themselves. While the IBAs will not be affected by devolution, this process may strengthen the

negotiation position of Aboriginal communities.


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3.7 Maori Rights in Resource Extraction Activities, New Zealand

3.7.1 Chronology

1840: The Treaty of Waitangi is signed. This is considered the founding document of New Zealand,

and establishes the relationship between the Crown and the Maori.

1937: The Petroleum Act is created, assigning all rights to oil and petroleum to the Crown.

1975: The Treaty of Waitangi Act and the Waitangi Tribunal are created in response to widespread

unrest regarding the state of Maori rights and Treaty of Waitangi breaches

1989: Maori use the Treaty of Waitangi to prevent the Crown from selling forestry assets

1997: Taranki hapu Ngati Te Whiti enter into partnership with Greymouth Petroleum

2004: Government passes the controversial Foreshore and Seabed Act, which contravenes Maori

rights to the foreshore and seabed established under the Treaty of Waitangi

2005: UN Committee on the Elimination of Racial Discrimination issues a report stating the

Foreshore and Seabed Act is discriminatory against the Maori. The New Zealand government does

not take any action.

2008: John Key of the National Party is elected as Prime Minister and establishes a committee

dedicated to resolving Treaty of Waitangi settlements by 2014

2008: The Central North Island Forestry Agreement is signed

2008: The Crown enters its first agreement under the Foreshore and Seabed Act with the Nga Hapu

o Ngati Poru


The New Zealand case study has been analyzed differently than the other case studies.

Instead of providing one in depth study for evaluation, three cases from different resource

extraction activities will be presented in order to establish the current state of Maori rights in New

Zealand. These areas are forestry, foreshore and seabed, and oil and gas resources. Before

discussing the agreements to these cases, an overview of Maori rights must be given to provide

context.

Overarching all Maori rights is the Treaty of Waitangi (1840). This is often referred to as the

founding document of New Zealand. It establishes that the Maori will give all up all sovereignty to

the Queen of England, and also “guarantees the full exclusive and undisturbed possession of


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[Maori] Lands and Estates Forest Fisheries and other properties…” (Article 2). It should be noted

that the treaty was written both in English and Maori, and there are some differences in the texts.

Most notably, the Maori text suggests that they were giving the Queen the right of government,

not giving up their sovereignty, and that the Maori believed that there would be a partnership and

would share power (Ministry for Culture and Heritage 2007).

Almost immediately after the Treaty was established, land seizures and breaches of the

Treaty occurred and were widespread. This continued for the next century or so, and in 1975 the

Treaty of Waitangi Act and the Waitangi Tribunal were established in response to the widespread

unrest regarding the state of Maori rights and Treaty breaches. The role of the Tribunal includes

inquiring into and making recommendations upon any claim submitted to the Tribunal, examining

and reporting on any proposed legislation, and making recommendations to government

(www.waitangi-tribunal.govt.nz).

The agreements governing the cases under review are the Central North Island (CNI)

Forestry Agreement, the Foreshore and Seabed Deed of Agreement between the Crown and the

Nga hapu o Ngati Porou, and the relationship between Taranki hapu Ngati Te Whiti and Greymouth

Petroleum. The agreement governing this relationship is considered confidential and thus is not

available for analysis.

Central North Island (CNI) Forestry Agreement

In 2008, an historic agreement between the Maori and the Crown was reached in regards to

forests. The Crown transferred ownership of 435 000 acres of forest to Maori, which will be

governed by seven iwi (tribes). They are known as the Collective. The agreement is called the

Central North Island (CNI) Forest Agreement. The Collective holds 90% control and the Crown will

hold 10% interest for six years (Agreement in Principle, 2008).

The Agreement does transfer land to the Maori, but also contains clauses that reserve the

Crown’s right to resources found on that land. For example, in section 7.3.4 b, it is stated that this

Agreement does not impede sections 10 or 11 of the Crown Minerals Act, which give all rights to

petroleum, gold, silver, and uranium to the Crown (10) and vest all ownership of minerals to the

Crown (11). Thus the Maori do not have complete autonomy in managing their land, nor the rights

to the resources found on their land.


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This Deed of Settlement settles all the historical CNI forest land claims indicated in section

2.1 but this does not impede the negotiation of future settlements with each member of the

collective, nor will it affect any other redress that members may receive as part of those future

settlements described in section 2.13.5. This speaks to the success of the settlement, as it clearly

establishes the scope of the agreement as well as moves forward in good faith for future

agreements.

Foreshore and Seabed Deed of Agreement between the Crown and the Nga hapu o Ngati Porou

In 2004 the government passed the Foreshore and Seabed Act, which is extremely

controversial. It granted full ownership of the foreshore and seabed to the Crown in perpetuity,

overriding Maori claims and contravening the Treaty of Waitangi. Despite Waitangi Tribunal

recommendations (Waitangi Tribunal 2004), an UN report stating that the Act is discriminatory

(CERD 2005) and widespread Maori outcry (NZPA 2008), the Act still stands. In August 2008 the

Crown entered into its first Agreement under the Act with the Nga Hapu o Ngati Porou.

The Waitangi Tribunal issued a report in 2004, entitled ‘Report on the Crown’s Foreshore

and Seabed Policy’. This report concludes that the policy breaches the Treaty of Waitangi. Thus it is

unclear why the Ngati Porou would choose to enter the Agreement, especially as they say in the

Agreement that they do not agree with the Act in Background sections M and Q. It may be because

according to section 9.2, any hapu who do not ratify the agreement will not have their claims

resolved and will not be entitled to the limited rights accorded to hapu through the Deed of

Agreement.

A particularly contentious section in the Agreement is 7.1, which states that the Ngati hapu

o Ngati Porou agree that “the agreements set out in this deed…resolve the territorial customary

rights claims and customary rights order claims of the Nga hapu of Ngati Porou”. This is of concern

because the Act governing this agreement contravenes the Treaty of Waitangi and removes Ngati

Porou claims to ownership of the foreshore and seabed. Furthermore, their avenues for arguing

this are limited as the Act removes the ability of the Maori to go to the High Court or the Maori

land court for “definition and declaration of their legal rights in the foreshore and seabed”

(Waitangi Tribunal 2004).


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Taranki hapu Ngati Te Whiti and Greymouth Petroleum

The Crown owns all rights to oil and petroleum under the Petroleum Act of 1937, and the

Maori are not contesting this through the Treaty of Waitangi. While they may have claim under the

treaty, iwi are choosing to enter bilateral agreements with industry. This may be because that

requires a significant amount of investment for little gain (Waikato News 2008). In 1997, the

Taranaki hapu Ngati Te Whiti entered into a joint venture partnership with Geosphere, which in

2000 was sold to Greymouth Petroleum. This partnership gives the Ngati Te Whiti a 2% interest in a

project. This is managed by the Ngati Te Whiti Hapu Society.

The agreement states that Greymouth will contribute all of the costs associated with

exploring for oil and gas, and in the event of a commercial find, will recover those costs before

Ngati te Whiti receives its 2% share of any oil and gas revenues (Port Taranki 2006). The proceeds

the hapu receives are managed by the Ngati Te Whiti Hapu Society, and thus must go to a

charitable purpose such as education and health in the Maori community (Humphreys 2007). In

2007, the joint venture struck oil, estimated to produce approximately two hundred barrels per

day, and approximately $100 million over twenty years (Humphreys 2007). The joint venture

document is unavailable for review.

3.7.3 Factors that Lead to Success of Failure

Central North Island Forestry Agreement

The Maori were able to use the Treaty of Waitangi to stop the Crown from selling forestry

assets in 1989, and to establish this agreement in 2008. Thus the Treaty supported Maori goals.

This Agreement settles Treaty of Waitangi claims for this group and gives them autonomy over this

land. Furthermore, the Crown is transferring $223 million in rentals accumulated since 1989 and

the Maori will receive approximately $13 million in rentals per annum (Sarich 2008). This will

provide further resources for Maori autonomy.

As stated, the government tried to sell forestry assets in 1989 but was constrained by the

Treaty of Waitangi. It is in Crown interests to resolve claims in order to maintain good relationships

with Maori.

The role of the Waitangi Tribunal was integral to the success of this Agreement, as in 2006

the Crown attempted an agreement with the Affiliate Te Arawa Trust in which the Crown would


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obtain rents. However, a 2007 report by the Tribunal found that this contravened fiduciary

responsibilities of the Crown to the Maori and the plan was abandoned (Deed of Settlement 2008).

The CNI Forestry Agreement is considered a very successful agreement by the government

and indigenous groups involved. The Government and the Collective worked together with mutual

respect and willingness. There is transparency in the Agreement and in the community ratification

process. As previously mentioned, there is some concern regarding the clause that retains mineral

rights on the CNI land to the Crown, and the fact that this agreement is not a living document to

accommodate changes should resource rights become an issue in the future may be considered a

shortcoming.

Foreshore and Seabed Deed of Agreement between the Crown and the Nga hapu o Ngati Porou

This Agreement is not an example of successful resource sharing agreements. As the

Agreement was entered into under the Foreshore and Seabed Act which contravenes the Treaty of

Waitangi, any agreement entered into under the Act cannot be considered a success.

The Maori were significantly constrained by the Foreshore and Seabed Act 2004 which

contravened their rights under the Treaty of Waitangi. Furthermore, the government prevented

Maori from declaring customary land titles through the courts (Waitangi Tribunal 2004). It was in

the interests of Ngati Poru to enter into an agreement with the Crown to protect what rights they

could, and to secure as much access as possible, but it can be asserted that they have fewer rights

to the land under the agreement than what they are entitled to under the Treaty of Waitangi.

The Government passed the Foreshore and Seabed Act despite widespread resistance. The

UN Committee on the Elimination of Racial Discrimination issued a report in 2005 stating that the

Act was discriminatory against the Maori, which should have influenced the government; however

no changes were made to the Act in response to this report. The Deed of Agreement reiterates

government jurisdiction over the foreshore and seabed and while it does allow for consultation and

recommendations from the Maori, it does not require the Crown to act with Maori interests in

mind unless there are established territorial customary rights (Deed of Agreement 2008).

The political leaders of the time of the Act were not inclined to improve relations with the

Maori. Helen Clark, who was the Prime Minister at the time, did not give priority to Maori rights


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(Misa 2009, BBC News 2003). Political will to push the Act and disregard Maori rights may have

been a contributing factor for the failure of this agreement to provide equitable rights to Maori.

Taranki hapu Ngati Te Whiti and Greymouth Petroleum

The Tarnaki hapu Ngati Te Whiti have a 2% interest in an exploration license held by

Greymouth Petroleum. As mentioned, in this agreement Greymouth assumes all costs associated

with exploring and in the event of a commercial find the Maori will receive 2% after Greymouth

recovers the costs of the project (Waitako News 2008). While the Maori do not have ownership of

the oil, they gain financially from the agreement, and this translates into social benefits for the

community.

The Ngati Te Whiti has considerable organizational capacity. They are represented on the

Taranki Regional Council, which consists of publicly elected councilors and whose goal is to ensure

Taranaki’s resources are sustainably managed. They work with the community to inform, educate

and motivate members (www.trc.govt.nz). The Ngati Te Whiti’s access to this resource, as well as

the Ngati Te Whiti Hapu Society, contributes to their capacity and thus their ability to negotiate.

Social license may be a driving factor for the company in this agreement. The lands that

contain oil and petroleum in New Zealand are often located within Maori regions, and in order to

facilitate these projects it is often in the interest of companies to work with affected communities.

The establishment of a relationship between the Maori and the company contributed to the

successful negotiations of this agreement. Willingness on the part of both the Maori and the

company to work together has resulted in benefits for both sides.

The confidential nature of the Agreement is a shortcoming. As the Agreement was

unavailable for review, it is difficult to known what any other shortcomings may be. The

government does not hold any influence over the agreement, as it is bilateral between the Ngati Te

Whiti and Greymouth Petroleum, and it is assumed that this agreement is fairly static.

Summary

These cases indicate that Maori rights to land resource vary widely across sectors. While

rights were firmly established by the Treaty of Waitangi, they were continuously eroded in the

century following the Treaty. The current state of Maori relations with government appears

promising. The November 2008 election resulted in John Key of the National Party being instated


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as Prime Minister. He has established a committee dedicated to resolving Treaty of Waitangi

settlements, and his party is committed to settling all claims by 2014 (Travett 2009). The National

Party also seems to have a good relationship with the Maori Party (Misa 2009).

However, there is still legislation that limits the rights of Maori, most notably the Foreshore

and Seabed Act, and government participation is lacking in the oil and gas sector. An interesting

contradiction in New Zealand is how the Treaty of Waitangi was used to successfully transfer

ownership of forests to Maori iwi, but was completely contravened in the Foreshore and Seabed

Act. It also may have been contravened through the Petroleum Act of 1937, which gave the Crown

ownership of all petroleum resources.

3.8 Examples of Resource Revenue Sharing Provisions

This section provides examples of resource revenue sharing clauses that may be contained

in mining agreements. Examples are taken from the Raglan Mine Agreement, agreements

pertaining to the NANA case in Alaska, and the Paix des Braves Agreement. For each case, the

provisions are provided, followed by a brief summary and analysis of those provisions.

3.8.1 Raglan Mine

Resource Revenue Sharing Components of the the Raglan Agreement 1995

Section 5.1: Payment

In consideration of:

(a) Ensuring that Inuit Beneficiaries, in particular Inuit Beneficiaries of Salluit and Kangiqsujuaq,

derive direct economic benefits from the Raglan Project;

(b) Compensating Inuit Beneficiaries of Nunavik, in particular, Inuit Beneficiaries of Salluit and

Kangiqsujujuaq, for the foreseen impacts of the Raglan Project, taking into account their level of

significance following mitigation, the whole as described in Annex 4.2 hereof;

(c) Securing the support of the Inuit Parties for the development and operation of the Raglan

Project as described herein;


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Summary and Analysis of Section 5.1: Payment

These opening provisions indicate the meaningful acknowledgement of Aboriginal peoples and the

communities in the process. These revenue provisions are indicative of relationship building and

not simply the transfer of money from the mine to the communities.

Section 5.1 Money Transfers

There shall be three allocations of Money Transfers as follows;

Section 5.1.1 Guaranteed First Allocation

The Guaranteed First Allocation shall be as follows:

(a) An amount of $1 000 000 payable within thirty (30) days following the later date of the decision

of the Board of Directors of Société Minière to proceed with the Raglan Project, or the date of

receipt by Société Minière of the authorization from the Ministère de l’Environnment et de la

Faune (Minister of Environment and Wildlife), Quebec, to proceed with the Raglan Project;

(b)An amount of $1 000 000 payable within thirty (30) days of the commencement of Commercial

Production;

(c)An amount of $300 000 per year for a period of (5) years commencing in the First Year of

Commercial Production and terminating in the fifth (5th) year following the First Year of Commercial

Production, such amount to be payable on the 1st day of April each year;

(d) An amount of $500 000 per year for a period of give (5) years commencing in the sixth (6th) year

following the First Year of Commercial Production and terminating in the tenth (10th) year following

the First Year of Commercial Production, such amount to be payable on the 1st day of April of each

year;

(e) An amount of $800 000 per year for a period of give (5) years commencing in the eleventh (11th)

year following the First Year of Commercial Production. Such amount to be payable on the 1st day

of April of each year; and

(f) An amount of $800 000 per year for each year of Commercial Production following the

termination of payments pursuant to paragraph (e) above, and each such year thereafter. Such

amount to be payable on the 1st day of April of each year of Commercial Production.

Section 7.2.2 Guaranteed Second Allocation


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The Guaranteed Second Allocation shall be an amount of $275 000 per year for each year of

Commercial Production commencing in the First Year of Commercial Production and each such year

thereafter, such amount to be payable on the 1st day of April each year of Commercial Production.

Summary and Analysis of Section 5.2: Money Transfers and Section 7.2.2: Guaranteed Second

Allocation

These provisions outline the base money transfers of the Raglan Agreement. The provisions

follow a chronological order with smaller initial payments that increase to a maximum of $800 000

by the eleventh (11th) year of operation. Evidence shown from payments to the Makivik

Corporation indicates that Xstrata Nickel is complying with these resource revenue sharing

provisions.

Section 5.2.2 Profit Sharing Allocation

The Profit Sharing Allocation shall be an amount equivalent to four and one half percent (4.5%) of

the Annual Operating Cash Flow from the Raglan Project as hereinafter determine and payable as

follows:

Summary and Analysis of Section 5.2.2: Profit Sharing Allocation

This provision is the actual resource revenue sharing component of the agreement. The

subsection 7.2.3(1) includes a long list of values that contribute to the Annual Operating Cash Flow.

As proven by yearly payments from Xstrata Nickel to the Makivik Corporation, this section of the

agreement appears to be working.

3.8.2 Northwest Alaska Native Association

Resource Revenue Sharing Components in the Red Dog Mine Agreements 1982, 1986

This impact and benefit agreement is unavailable for scrutiny however the financial provisions are

publicly available and are:

4.5% per year of Teck’s net profit royalties are to be paid to NANA shareholders. This value is to

increase by 1% per year until NANA shareholders own 50% of the mine.

Summary and Analysis of financial provisions of the Red Dog Mine Agreements


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The financial provisions through a fixed net profit that gradually increases over several years

show that Teck and NANA have committed to a long-term business relationship which provides fair

and substantial funding to NANA in return for Teck’s use of the lands for profit. With the help of

this money NANA has become one of the most economically successful Native Regional

Corporation in Alaska and has re-invested this money into the Alaskan Native community through

the building of educational and cultural facilities, training programs, investments in diverse

businesses and financial assistance to other regional corporations through revenue sharing

stipulations that will be discussed below.

Resource Revenue Sharing Components in the Alaska Native Claims Settlement Act (ANCSA) 1971

Section 7(i)

Regional corporations' must share 70% of all revenues received from timber and subsurface

resources with all other regional corporations. Revenues from the sale of sand, rock and gravel are

exempt from 7(i) revenue sharing.

Summary and Analysis of Section 7(i): ANCSA 1971

All sources verify that this provision was what helped many Native village corporations and

smaller entities that did not have the human and financial capacity or valuable land to be able to

hold on to their land shares. Had this provision not been in place, many large Native corporations

would simply be able to keep all of their revenues while other regions may have had to sell their

lands when the 20 year protection scheme was supposed to end in 1991.

Subsection 1605: Alaska Native Fund

(a) Establishment in Treasury; deposits into Fund of general fund, interest, and revenue sharing

moneys

There is hereby established in the United States Treasury an Alaska Native Fund into which the

following moneys shall be deposited:

(1) $462,500,000 from the general fund of the Treasury, which are authorized to be appropriated

according to the following schedule:

(A) $12,500,000 during the fiscal year in which this chapter becomes effective;


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(B) $50,000,000 during the second fiscal year;

(C) $70,000,000 during each of the third, fourth, and fifth fiscal years;

(D) $40,000,000 during the period beginning July 1, 1976, and ending September 30, 1976; and

(E) $30,000,000 during each of the next five fiscal years, for transfer to the Alaska Native Fund in

the fourth quarter of each fiscal year.

(2) Four percent interest per annum, which is authorized to be appropriated, on any amount

authorized to be appropriated by this paragraph that is not appropriated within six months after

the fiscal year in which payable.

(3) $500,000,000 pursuant to the revenue sharing provisions of section 1608 of this title.

(c) Distribution of Fund moneys among organized Regional Corporations; basis as relative

number of Native enrollees in each region; reserve for payment of attorney and other fees;

retention of share in Fund until organization of corporation

After completion of the roll prepared pursuant to section 1604 of this title, all money in the Fund,

except money reserved as provided in section 1619 of this title for the payment of attorney and

other fees, shall be distributed at the end of each three months of the fiscal year among the

Regional Corporations organized pursuant to section 1606 of this title on the basis of the relative

numbers of Natives enrolled in each region. The share of a Regional Corporation that has not been

organized shall be retained in the Fund until the Regional Corporation is organized.

Summary and Analysis of Subsection 1605: Alaska Native Fund

Subsection 1605 of ANCSA outlines how the roughly $1 billion (USD) given over several

years to Alaska Native regional corporations and shareholders in compensation for the hundreds of

millions of acres of land ceded to the state was to be divided. All the monies went into the newly

established U.S. treasury Alaska Native Fund and were distributed according to the various

schemes to the thirteen regional corporations with the intention that these corporations would

begin to establish small businesses and increase the economic viability of the land. Many regional

corporations were made up of administrators were not used to a capitalist economic structure This

lack of experience led many Alaska Native corporations into legal trouble because of poor business

practices and account management. Some scholars attributed this lack of foresight to the hastiness


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of congress to reach an agreement so that development could begin on the Trans-Alaskan Pipeline

(Linxwiler et al. 2007).

Subsection 1608: Revenue Sharing

(b) Interim payments into Alaska Native Fund based on percentage of gross value of produced or

removed minerals and of rentals and bonuses; time of payment

With respect to conditional leases and sales of minerals heretofore or hereafter made pursuant to

section 6(g) of the Alaska Statehood Act, and with respect to mineral leases of the United States

that are or may be subsumed by the State under section 6(h) of the Alaska Statehood Act, until

such time as the provisions of subsection (c) of this section become operative the State shall pay

into the Alaska Native Fund from the royalties, rentals, and bonuses hereafter received by the State

(1) A royalty of 2 per centum upon the gross value (as such gross value is determined for royalty

purposes under such leases or sales) of such minerals produced or removed from such lands, and

(2) 2 per centum of all rentals and bonuses under such leases or sales, excluding bonuses received

by the State at the September 1969 sale of minerals from tentatively approved lands and excluding

rentals received pursuant to such sale before December 18, 1971. Such payment shall be made

within sixty days from the date the revenues are received by the State.


(c) Patents; royalties: reservation of percentage of gross value of produced or removed minerals

and of rentals and bonuses from disposition of minerals

Each patent hereafter issued to the State under the Alaska Statehood Act, including a patent of

lands heretofore selected and tentatively approved, shall reserve for the benefit of the Natives, and

for payment into the Alaska Native Fund,

(1) a royalty of 2 per centum upon the gross value (as such gross value is determined for royalty

purposes under any disposition by the State) of the minerals thereafter produced or removed from

such lands, and

(2) 2 per centum of all revenues thereafter derived by the State from rentals and bonuses from the

disposition of such minerals.



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(d) Distribution of bonuses, rentals, and royalties from Federal disposition of minerals in public

lands; payments into Alaska Native Fund based on percentage of gross value of produced

minerals and of rentals and bonuses; Federal and State share calculation on remaining balance

All bonuses, rentals, and royalties received by the United States after December 18, 1971, from the

disposition by it of such minerals in public lands in Alaska shall be distributed as provided in the

Alaska Statehood Act, except that prior to calculating the shares of the State and the United States

as set forth in such Act,

(1) a royalty of 2 per centum upon the gross value of such minerals produced (as such gross value is

determined for royalty purposes under the sale or lease), and

(2) 2 per centum of all rentals and bonuses shall be deducted and paid into the Alaska Native Fund.

The respective shares of the State and the United States shall be calculated on the remaining

balance.


(e) Federal enforcement; State underpayment: deductions from grants-in-aid or other Federal

assistance equal to underpayment and deposit of such amount in Fund

The provisions of this section shall be enforceable by the United States for the benefit of the

Natives, and in the event of default by the State in making the payments required, in addition to

any other remedies provided by law, there shall be deducted annually by the Secretary of the

Treasury from any grant-in-aid or from any other sums payable to the State under any provision of

Federal law an amount equal to any such underpayment, which amount shall be deposited in the

Fund.


(f) Oil and gas revenues; amount payable equal to Federal or State royalties in cash or kind

Revenues received by the United States or the State as compensation for estimated drainage of oil

or gas shall, for the purposes of this section, be regarded as revenues from the disposition of oil

and gas. In the event the United States or the State elects to take royalties in kind, there shall be

paid into the Fund on account thereof an amount equal to the royalties that would have been paid

into the Fund under the provisions of this section had the royalty been taken in cash.



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(g) Alaska Native Fund payments; cessation; reimbursement for advance payments

The payments required by this section shall continue only until a sum of $500,000,000 has been

paid into the Alaska Native Fund less the total of advance payments paid into the Alaska Native

Fund pursuant to section 407 of the Trans-Alaska Pipeline Authorization Act. Thereafter, payments

which would otherwise go into the Alaska Native Fund will be made to the United States Treasury

as reimbursement for the advance payments authorized by section 407 of the Trans-Alaskan

Pipeline Authorization Act. The provisions of this section shall no longer apply, and the reservation

required in patents under this section shall be of no further force and effect, after a total sum of

$500,000,000 has been paid to the Alaska Native Fund and to the United States Treasury pursuant

to this subsection.

Summary and Analysis Subsection 1608: Revenue Sharing

Subsection 1608 of ANCSA outlines how the state share’s its mineral revenue from public

lands, from oil or other types of development, in the form of royalties. 2% in the form of royalties

for most types of mineral development was to be deposited into the Alaska Native Fund annually

until $500,000,000 was paid to the fund. This money adds to the roughly $460,000,000 that was to

be paid in annual increments to regional corporations out of the state’s treasury. Of particular

importance is the long term nature of these annual payments and the federal provision to ensure

the state of Alaska paid what was owed in case of payment default in (e).

Resource Revenue Sharing Components in the NANA Regional Corporate Land Use Policy

Minerals: Shareholder Mining

1. Once a program is developed, each village will decide which of its surrounding lands may be

opened to mining by individual shareholders. In cases where there is an overlap between villages,

either village can veto mining on that tract of land.

3. If mining is allowed, mineral rights will not be sold, rather mining leases with NANA will be

issued, and NANA, as required by 7(i), will take a percentage of the value of the minerals mined as

a royalty.


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Summary and Analysis of NANA Regional Corporate Land Use Policies: Minerals: Shareholder

Mining Section 1&3

Section 1 of Shareholder Mining ensures that there is a democratic process in place to deal

with dissenting views to mineral development. In this way decisions can only be made by

consensus as any village has the right to veto another’s decision to mine provided it affects their

land allotment.

Section 3 of Shareholder Mining is largely a result of ANCSA’s section 7 (i) requirements. As

a result of these revenue-sharing provisions, roughly 50% of the mining revenues at the Red Dog

mine are distributed to regional Native corporations yearly (NANA shareholder report 2007).

The fact that mineral rights are not sold and royalties are paid yearly indicates that there is

no one-time payment and that mining companies have to pay Alaska Native shareholders in the

NANA region for the duration of the mine’s life. This is reflected in the terms of the agreement: a

4.5% royalty paid until capital costs are recovered and thereafter a 1% increase in that amount until

50% of the mine is owned by NANA’s shareholders.

The combination of both ANCSA and NANA revenue-sharing policies ensures that the

company does not violate its long-term responsibilities to its shareholders. This is reflected in the

long-term cooperation that has been a result of NANA and Teck’s relationship where millions are

paid from mine profits in support of scholarships, school improvements, transportation costs,

counseling fees and environmental assessments that comply with Alaska Native perspectives.

3.8.3 Paix des Braves

Resource Revenue Sharing Components of the Agreement Concerning A New Relationship Between

Le Gouvernement Du Quebec and the Crees of Quebec (Paix des Braves)

Chapter 7 – Financial Provisions

General Provisions

7.1 For the period from April 1st, 2002 to March 31st, 2052, Québec shall pay to the Recipient of

Funding, on behalf of the James Bay Creeps, an annual amount so that the James Bay Crees may

assume for that period the obligations of Québec, Hydro-Québec and la Société d’énergie de la Baie

James to the Crees under the provisions of the James Bay and Northern Québec Agreement set

forth in section 6.3 of this Agreement and concerning Economic and Community development.


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7.2 The said annual payment from Québec shall be in the amounts determined pursuant to sections

7.3 to 7.14 hereof and shall be paid by Québec to the Recipient of Funding.

Funding Amounts and Indexation Formula

7.3 This annual payment from Québec for the first three (3) Financial Years shall be as follows:

a) for the 2002-2003 Financial Year: twenty-three million dollars ($23 million);

b) for the 2003-2004 Financial Year: forty-six million dollars ($46 million);

c) for the 2004-2005 Financial Year: seventy million dollars ($70 million).

7.4 For each subsequent Financial Year between April 1st, 2005 and March 31st,

2052, the annual payment from Québec shall be the greater of the two (2) following amounts

a) seventy million dollars ($70 million); or

b) an amount corresponding to the indexed value of the amount of seventy million dollars ($70

million) as of the 2005-2006 Financial Year in accordance with the formula described herein that

reflects the evolution of the value of hydroelectric production, mining exploitation production and

forestry harvest production in the Territory.

7.5 An indexation factor will be determined for each Financial Year by comparing to a reference

Base established in conformity with section 7.6 the average yearly value of hydroelectric

production, mining exploitation and forestry harvest in the Territory in the five year period (moving

average) ending on December 31st of the calendar year which precedes the Financial Year for

which the indexation factor should apply. This indexation factor will be applied to the basic amount

of seventy million dollars ($70 million) in order to determine an indexed value for the payment to

be made for that Financial Year. The basic formula to calculate the indexed value of seventy million

dollars ($70 million) is as follows:

7.6 The reference Base in the formula set out in section 7.5 is established as follows. The sum value

of production in the hydroelectric, forestry and mining sectors is first determined for the fixed


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reference period from January 1st, 1999 to December 31st, 2003. From this sum is deducted the

yearly maximum production value and the yearly minimum production value for that same

reference period. The average of the resultant three year period will serve as the Base reference

value for the indexation formula applicable to each Financial Year. The following formula illustrates

this calculation:

Where:

a) Production represents the total value of hydroelectric production, mining exploitation and

forestry harvest in the Territory for the fixed period of January 1st, 1999 to December 31st, 2003;

b) Production t = PHydroelectricity t + PForestry t + PMining t.

7.7 For the purposes of sections 7.5 and 7.6:

a) PHydroelectricity represents the total value of hydroelectric production in the Territory in a

calendar year and determined in accordance with the actual production as measured by Hydro-

Québec or its successors at each of its power plants or generating facilities operating in the

Territory and priced according to the average sale price of electricity (domestic and export) in

Canada and the United States of America realized by Hydro-Québec for that period.

For these purposes:

For each calendar year, hydroelectric production volume shall be the sum of the volumes measured

by the generator meter readings at each of the concerned power plants less the sum of station

service meter readings. The resultant Production Net of Station Services

Consumption shall be the applicable production volume subject to the average price.


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The average price applicable to the production volume shall be determined as the Total Revenue

from all sales of electricity in Canada and the United States of America in the concerned calendar

year divided by the Total Sales of electricity (in volume) in Canada and the United States of America

in that same year.

b) PMining represents the sum of the total value of mining exploitation extraction shipments in a

calendar year for each mine operating in the Territory as reported to le Gouvernement du Québec

for the purposes of mining royalties. The shipment values are established by determining the actual

shipment quantities or volumes priced according to the actual prices realized by the producers for

the product extracted.

c) PForestry represents the sum of the total value of all unprocessed wood shipments harvested

from the Territory in a calendar year and determined by the actual shipment volumes for the

Territory for that year priced according to the average price for Québec unprocessed wood

shipments (public and private forestry) for the relevant calendar year. The unprocessed wood

shipment volumes for a calendar year shall be determined by le Gouvernement du Québec by

reference to the forestry register. The average price for Québec shipments in a calendar year shall

be determined by dividing the total value of unprocessed wood shipments for all of Québec for

that year, as reported by Statistics Canada, by the total volumes of wood harvested in Québec in

that year.

7.8 An indexation factor will be derived in accordance with the formula set out in section 7.5 by

dividing by the reference Base established pursuant to section 7.6 the average annual production

value of the five (5) calendar year period ending on December 31st of the calendar year preceding

the Financial Year for which the indexation factor applies. An indexation factor will be derived for

each Financial Year in accordance with the average annual production values of the successive five

(5) year periods (moving average). It is understood that the Base is fixed since it refers to the

reference period of January 1st, 1999 to December 31st, 2003.


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7.9 In further accordance with the formula set out in section 7.5, the indexation factor resulting

from the calculation described in section 7.8 will be thereafter multiplied by the base amount of

seventy million dollars ($70 million) in order to calculate the annual payment from Québec for the

Financial Year for which the calculation of the indexed value is performed.

7.10 To illustrate, for the first Financial Year of indexation, that is, the 2005- 2006 Financial Year,

the payment will be calculated as follows if the amount of the payment exceeds seventy million

dollars ($70 million):

Estimates, Revisions and Adjustments

7.11 Before December 31st of each year, Québec shall prepare an estimate of the indexed amount

for the subsequent Financial Year based on the best information then available concerning

production volumes and prices in each of the concerned sectors (hydroelectricity, mining and

forestry). At this same date, Québec will revise its prior estimates for the indexed amounts paid for

the current Financial Year and for the previous Financial Years taking into account the real

production volumes data and price data then available for each of these sectors. This estimate and

these revisions will be the subject of discussions with the Recipient of Funding during the month of

December of each year.

7.12 The estimated data will be replaced as soon as real data are available for each concerned

sector (hydroelectricity, mining and forestry). These replacements of data will be carried out as the

real data become available for each of the concerned sectors.

7.13 In the case where the replacement of estimated data by real data results in a readjustment of

the indexation factor for one or more given Financial Years with a consequential revision of the


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annual payment for this or these Financial Years, the payment for the Financial Year which follows

immediately the revision will be adjusted by an equivalent amount in order to fully reflect the

required retroactive payment or withholding for each of the concerned Financial Years.

7.14 The annual payment for a given Financial Year shall be definitive and shall no longer be the

object of revisions three (3) years after all the estimated data for this Financial Year will have been

replaced by the available real data.

Audit

7.15 At the latest December 31st of each year, Québec will provide a written notice to the

Recipient of Funding of its estimate of its annual payment for the subsequent Financial Year and of

all its revised estimates of annual payments for the current and previous Financial Years. This

notice will include detailed explanations and base reference documentation as to the method and

data used to make this estimate and these revisions.

7.16 The Recipient of Funding may proceed to audit the indexed value of any payment in any

Financial Year. Such an audit may be carried out once a year at the discretion of the Recipient of

Funding and may concern the current Financial Year or any or all of the five (5) Financial Years

preceding the audit. Québec shall facilitate such audit by providing access by the auditors to all the

data and calculations and other information reasonably required to carry out the audit subject,

when appropriate, to reasonable confidentiality undertakings from the auditors.

7.17 In the event that Québec and the Recipient of Funding do not agree on a final determination

as to Québec’s annual payment for a given Financial Year, the matter may be submitted to the

dispute resolution mechanisms set out in this Agreement.

Quarterly Installments

7.18 The annual payment from Québec for each Financial Year will be paid to the Recipient of

Funding in four (4) equal installments on the first Business Day of the months of April, July, October


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and January of that Financial Year. These installments shall be made by means of direct electronic

banking transfer to the account designated for this purpose by the Recipient of Funding or by any

other means acceptable to both Québec and to the Recipient of Funding.

7.19 Should any installment of the annual payment from Québec not be paid in full at the

appropriate date, the amount outstanding shall bear interest at an annual rate determined on a

daily basis and equal to the average prime rate of the chartered banks operating in Québec.

Taxation and Seizure Exemptions

7.20 The annual payment from Québec will be exempt from any form of taxation, charge, fee or

levy by Québec and will not be subject to privilege or any other charge, or to attachment, levy or

seizure.

Summary and Analysis of Chapter 7 Sections 7.1-7.20: General Provisions, Funding Amounts and

Indexation Formula, Estimates, Revisions and Adjustments, Audit, Quarterly Installments,

Taxation and Seizure Exemptions

The sections above set out the terms under which revenue will be split between the

government. The revenue-sharing system in place is neither based on periodic transfers of fixed

cash amounts, nor is it entirely based on splitting revenues on a percentage basis. The system is a

hybrid of the two: the Crees will receive, at a minimum, 70 million dollars annually; should revenue

from hydroelectricity, mining, or forestry exceed expectations, the Crees will receive a proportional

bonus. For instance, if the revenue from production were to increase 5%, as measured by a five-

year moving average, the payment that year will increase by a proportional 5%.

Unlike some other agreements in the case studies under analysis, precise and specific

language is used in these provisions. The provisions clearly delineate the process of estimating

proportional bonuses, the process of auditing such estimates, in addition to how often instalments

are paid, and whether interest is owed on late payments.

Recipient of Funding


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7.21 The James Bay Crees, acting through the Recipient of Funding, will use this annual payment

from Québec for the economic and community development of the James Bay Crees in accordance

with the priorities and means which the James Bay Crees, acting through the Recipient of Funding,

shall deem appropriate, including support for Cree traditional activities and the creation of a

Heritage Fund for the benefit of the James Bay Crees and Cree Bands.

7.22 For these purposes, the Recipient of Funding may allocate or distribute the annual payment

from Québec and any revenues derived therefrom at its discretion and for a specific purpose or for

general purposes to any Cree Enterprise, any Cree Band or to any trust, foundation or fund whose

beneficiaries include Crees or Cree Bands or Cree Enterprises or any combination thereof.

Annual Reports

7.23 The Recipient of Funding shall submit to Québec on an annual basis, in the six (6) months

following the close of each Financial Year, an annual report and audited financial statements,

describing its activities and the use of the annual payment from Québec.

7.24 If this annual report and these audited financial statements are not submitted by the Recipient

of Funding within this time frame, Québec may submit the matter to the dispute resolution

mechanisms set out in this Agreement and, failing resolution through this means, may seek a court

order allowing it to suspend subsequent payments pending the submission of said annual report

and audited financial statements. The suspended payments will however be re-instituted

retroactively, without interest, as soon as these report and audited financial statements have been

submitted by the Recipient of Funding.

Capital Payments

7.25 The annual payments from Québec constitute capital payments paid to the benefit of the

James Bay Crees and Cree Bands pursuant to the JBNQA for community and economic

development purposes.


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Summary and Analysis of Chapter 7 Sections 7.21-7.25: Recipient of Funding, Annual Reports and

Capital Payments

The sections above delineate the circumstances under which payments will be stopped, in

addition to what the funds may be used for. The freedom given to the Crees with regard to how

funds may be spent is fairly large: they may allocate funds to any Cree Enterprise or Band at their

discretion for any general purposes. The Crees, however, are required to submit an annual report

to the Quebec government detailing how the funds were used.

3.9 Summary of Factors that contributed to Case-Study Outcomes

A summary of the most important factors that contributed to case study outcomes is presented

below in Table 1. Please refer to Section 2.3 for in depth definitions of factors.

Table 10 - Summary of Factors of Success

Y = Yes, N = No

Actors Factors

that Lead

to Success

Snap

Lake

SEA

Voiseys

Bay IBA

Paix des

Braves

NANA

Agreement

Yandi Land

Use

Agreement

Raglan

Agreement

Aboriginal

Aboriginal

communities

have strong

capacity

Y Y Y Y Y Y

There is an

established

claim to the

territory

Y N Y Y Y Y

Mining

Company

Firms have

sufficient

economic

incentive

Y Y Y Y Y Y

Firms engage

in corporate

social

responsibility

Y Y Y Y Y Y

Actors

Factors

that Lead

to Success

Snap

Lake

SEA

Voiseys

Bay IBA

Paix des

Braves

NANA

Agreement

Yandi Land

Use

Agreement

Raglan

Agreement

Government

There are

regulations

in place that

govern the

Y Y Y Y Y N


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operation of

mining firms

on Aboriginal

lands

The

Government

facilitates

Aboriginal

involvement

Y Y N Y N Y

3.9.1 Most Successful Case by Each Factor

Table 11 - Most Successful Case by Each Factor

Factor Case

Aboriginal Communities have developed strong

capacity

Paix des Braves Case

NANA Alaska Case

There is an Established Claim to the Territory NANA Alaska Case

Firms have Sufficient Economic Incentive to

Reach a Mining Agreement

NANA Alaska Case

Voisey Bay Case

Firms Engage in Corporate Social Responsibility Yandicoogina Australia Case

There are Regulations in Place that Govern the

Operation of the Mining Firm

Snap Lake Case

Government Facilitates Aboriginal Involvement Snap Lake Case

1) Aboriginal communities have developed a strong capacity, including access to resources

and financial assistance

NANA

A major contributing factor to the passing of the Alaska Native Claims Settlement

Act (ANSCA 1971) was the presence of organized Native associations such as the Alaska

Native Brotherhood and the cooperation that these associations had with each other. The

media campaigns and litigation organized by urban educated individuals such as Willie

Hensley were crucial to the realization of a revenue-sharing regime that put Native

subsistence livelihood and cultural practices before economic development. The awareness

that was raised through these efforts and the potential to lobby the government to initiate


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a land-freeze contributed to a decision to grant Alaska Natives large land allotment with

subsurface rights and revenue-sharing. In NANA’s case, the sound business decisions made

by the board of directors and the balancing of cultural and economic goals can be seen in

the creation of the NANA Development Corporation and the NANA Regional Corporation.

This led to sustained economic development and the ability to litigate and negotiate with

Teck Cominco. This capacity also gained favorable land concessions from the government.

Economic diversification was realized by the large amount of capital and prudent planners

available to NANA. This capacity is also reflected in the extensive community negotiations

and planning around NANA’s corporate land use planning policies.

Paix des Braves

Capacity contributed to two factors for success in the Paix des Braves case: political

action, and sustained court battles. The Crees had demonstrated publicly in New York,

generating media attention for their position. Cree Chief Ted Moses attributed these

protests to the decision of New York State in withdrawing from a contract to purchase

electricity from Quebec. The Crees also had the funds to fight numerous and sustained

court battles with the Quebec government. Cree Chief Moses claimed that the Crees

exhausted over ten million dollars in fighting court battles. Had such funds not been

available to the Crees, the Quebec government may not have been as pressured to

conclude an agreement favourable to the Crees.

2) There is an established claim to the territory

NANA

Sections 11 and 12 of ANCSA ensure that sub-surface minerals are the sole property

of Regional and Village corporations after the land is allotted. After this important provision

was won by NANA, the Aboriginal community could request or refuse mineral development

on its own. This is probably the most significant factor in NANA’s success since Teck did not

own sub-surface rights and were in a significantly weaker bargaining position than NANA.


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This was re-affirmed in the establishment of NANA’s permitting office for land use under

their corporate land-use management policy.

3) The mining firm has sufficient economic incentive to reach a mining agreement

NANA

Teck Corporation realized the bargaining power of NANA mainly due to the fact that

the Aboriginals had exclusive rights to sub-surface resources. Also, NANA had the capacity

to hire lawyers and consultants to litigate in order to gain fair concessions. The size of the

firm also ensured that they could accommodate Alaska Native interests such as the

initialization of EAs that had significant NANA shareholder input, transportation costs,

mining facility services such as counseling and healthcare, job training and apprenticeships,

and scholarships and royalties. The extent of the profit that could be made from the size of

the deposit ensured that Teck was willing to invest in NANA shareholder demands over a

long period of time in order to gain long-term financial benefits.

Voiseys Bay

In 1993 a nickel deposit was discovered at Voiseys Bay. At the time of purchase by

Inco (which would become Vale Inco in 2007) in 1996, the deposit was considered one of

the largest in the world (Arctic Circle 2009). Construction was not completed until 2005;

therefore twelve years passed between the discovery of the deposit and production of ore.

Throughout this period there were numerous agreements between the Aboriginal peoples

in the region, Inco, and the government of Newfoundland and Labrador. 1997 also saw the

start of negotiations between the Labrador Inuit Association (LIA), and the Innu Nation and

Inco. However, it was not until 2002 that a firm agreement to proceed with the project was

reached.

Sometime between 2002 and 2005 Inco negotiated two IBAs, one with the LIA and

one with the Innu Nation. Again, construction was not completed until 2005. During this

time, the dialogue continued and all parties involved attempted to make the project work.

However, the cost associated with the negotiations accrued over the twelve year duration.


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Clearly, there was significant financial motivation for Inco to continue to work and negotiate

for twelve years without production. As such, Voiseys Bay demonstrates the importance of

the financial motivation of the firm to the success of agreements.

4) Firms engage in Corporate Social Responsibility (CSR)

Yandicoogina

The Yandi Land Agreement demonstrates the importance of CSR for successful

negotiation of mining agreements. Using a bottom-up approach, Hamersley Iron Pty Ltd, a

wholly owned subsidiary of the international mining company Rio Tinto, established an

Aboriginal Training and Liaison Unit (ATAL) to improve their relationship with the local

communities and increase Aboriginal employment in the Pilbara region in Australia. They

also employed a top-down approach, including senior management support and developing

a positive relationship with the local community and Aboriginal people.

Rio Tinto believed that its success depended on a reputation for corporate

responsibility, and it set out policies to manage the economic, social and environmental

effects of its operations (Rio Tinto 2008). Hamersley initiated the contact with the

communities regarding to the mine project by approaching to various Aboriginal Chiefs, and

they supported Aboriginal self-determination during the negotiation process.

5) There are regulations in place that govern the operation of the firms

Snap Lake

The regulatory climate surrounding mining in the Northwest Territories is important

in terms of Snap Lake’s success. In the NWT, the Mackenzie Valley Environmental Impact

Review Board (MVEIRB) is the regulatory body governing the EA process. It is known as a

best practice EA process (Gailbraith et al 2007), and was created in 1998 as an independent

administrative tribunal. It is highly transparent, with every document associated with each

of its projects available on line, including all communication between proponents,

government and Aboriginal groups. It has three approval stages: preliminary screening, the

EA, and an Environmental Impact Review, which provides a more detailed examination of

concerns raised in the EA.


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Further arising out of the EA process is the requirement to enter into SEAs. The

government is a signatory to the Snap Lake SEA and is responsible, in conjunction with

DeBeers, for the monitoring of the agreement. Thus, the government has an ability to

regulate the activity of the mine through the EA and SEA process.

6) Government facilitates Aboriginal involvement

Snap Lake

The previously discussed MVEIRB arose out of the Mackenzie Valley Resource

Management Act created by the federal government in 1998. It is a co-management board,

meaning that Aboriginal land claim organizations nominate half of the review board

members. It was designed in order to give the Aboriginal people of the Mackenzie Valley a

higher level of involvement in resource development and management.

Government facilitation of Aboriginal involvement is also seen through the

processes of devolution and the creation of Aboriginal self-governments, such as the Tlicho

Government. This increased the ability of the Tlicho community to act of their own behalf in

negotiations. This could be further strengthened in the future. As previously mentioned, in

2004, the Northwest Territories Land and Resources Devolution Framework Agreement was

signed. This agreement “will enhance the ability of the territorial and Aboriginal

governments to serve the interests of their constituents, increase their self-sufficiency, and

promote the effective, efficient and coordinated development of the natural resources of

the Northwest Territories” (Framework Agreement 2004). This will promote a government

to government relationship, with the Aboriginal communities being land owners and

resource developers themselves.

4.0 Mining on Aboriginal Lands in Northern Ontario The main stakeholders for mining in Northern Ontario include the federal government, the

provincial government, and mining companies. Their role in regards to mining and Aboriginal lands

will be discussed below.

4.1 Federal Departments

Indian Affairs and Northern Affairs Canada


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Indian and Northern Affairs Canada (DINAC) is responsible for "implementing the federal

government's obligations" to the Aboriginal people of Canada. This includes honoring treaty and

land claim agreements between Aboriginal tribes and the Canadian government. INAC is just one of

many departments in the government and has no authority to "compel other government

departments to comply with their responsibilities". The INAC also lacks the funding that it needs to

fully implement treaties and agreements.

The Senate Committee Report (2008) found that INAC only focuses on implementing the

"letter of the treaties' implementation plans but not the spirit". INAC officials, according to the

same report, have stated that it is not INAC's responsibility to achieve the basic goals of

agreements. The 2007 Report of the Auditor General of Canada concurs, concluding that the

Department of Indian Affairs have been implementing treaty obligations in such a way that legal

risk to the federal government are minimized.

Two reasons explain why the INAC functions the way that it does. Michael Wernick, Deputy

Minister of the INAC, when testifying to the Senate, claimed that there is a tendency to simply

conclude an agreement, and once "the cameras have been shut off, [people] do not spend as much

time on implementation issues" (2008). Wernick also claims that the high turnover rate of deputy

ministers is an "obstacle to implementation and follow-through" (2008). Officials from the Office of

the Auditor-General concur, claiming that a lot more attention focuses on short-term, well-

publicized activities, while longer-term goals and objectives do not receive as much attention and

publicity.

Environment Canada

Environment Canada preserves and enhances the quality of the environment. They manage

the environmental assessment process in mining projects. Federal and provincial laws require that

some form of environmental assessment must be conducted for mining projects “due to the nature

of regulatory authorizations required by [such] projects”. Important permits include ones related to

water use, construction and mine development.

Development Permits (Mining Kit 2006)


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• Water Use: Provincial agencies control water discharge criteria. Guidelines are based on

those provided by the Canadian Council of Ministers of the Environment (CCME), a council

comprised of ministers of environment from the federal, provincial and territorial levels of

government.

• Mine Construction: Construction permits and explosive permits are required to be issued

for buildings and mine construction.

• Mine Development: Authorization is required from provincial departments for excavation

activities.

Environmental Assessment Process

The federal environmental assessment process is used to show that “environmental impacts

are understood and can be mitigated” (Mining Kit 2006). The traditional knowledge of Aboriginal

people is made use of in such assessments (Mining Kit 2006). For instance, traditional knowledge is

used to determine environmental effects, to evaluate the severity of such effects, and to choose

optimal ways of mitigation. Public consultation in the federal assessment process is mandatory

(Mining Kit 2006).

Natural Resources Canada

Natural Resources Canada (NRCAN) promotes sustainable development in mining at the

federal level. NRCAN also provides advice on matters related to mineral and metal resources.

NRCAN cooperates with other federal departments to ensure that “strategies that impact on the

[mining] industry are consistent with sustainable development [and] have a balanced impact on

stakeholders” (NRCAN 2009b). The Minerals and Metals Sector (MMS), in particular, implement the

Minerals and Metals Policy (NRCAN 2009b).

Minerals and Metals Policy

Under the Minerals and Metals Policy, MMS encourages partnerships and dialogue between

the government, Aboriginal groups and the mining industry (NRCAN 2009b). MMS also “generates

[information and tools] for capacity-building” in Aboriginal communities (NRCAN 2009b). Indeed,

the MMS website contains the following “information products” designed for Aboriginal


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communities, although it is unclear how much of an effect such information products have had on

Aboriginal capacity building:

Information Bulletins on Aboriginal Participation in Mining – These are information bulletins

containing information on Aboriginal participation in mining. The bulletins include a listing of

Aboriginal employment opportunities (NRCAN 2009b).

Working Together – This is a checklist for mining companies operating near Aboriginal

communities. The document offers “practical advice [on] all stages of the mining sequence” and on

how to build communication and dialogue with Aboriginal groups (NRCAN 2009b).

Aboriginal Communities and Mining Activities Map – This is an interactive map that provides

information on mining projects involving Aboriginal communities. It is designed for stakeholders to

“identify opportunities” to collaborate on mining development (NRCAN 2009b).

Aboriginal Engagement in the Mining and Energy Sectors – This document contains a series of case

studies on Aboriginal mining issues. The document presents sixteen successful examples of

Aboriginal-industry-government partnerships (NRCAN 2009b).

Mining Information Kit for Aboriginal Communities – This document is a general primer on the

mining sequence, covering the exploration process, mine construction and development, and mine

closures. More significantly, the document includes environmental and social impacts that may be

felt by Aboriginal communities involved in mining development (NRCAN 2009b).

Aboriginal Agreements Map – This is a map that presents aboriginal agreements geographically

(NRCAN 2009b).

Interaction between Federal Departments


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Interaction between the different departments and offices within the federal government is

complex and multi-faceted. On the whole, while the federal government has been effective at

concluding agreements, they are much less effective at implementing them (Auditor-General 2007,

Senate 2008, and Land Claims Coalition 2009). Aboriginal groups stated that the federal

government has made continued efforts to "minimize, frustrate, and even extinguish the rights

[that Aboriginal groups] expected would flow from their treaties" in a report from the Senate

Standing Committee on Aboriginal Affairs (Senate 2008). The Senate Committee report also

mentions how the structure of the departments themselves reflects the government attitude on

implementation; while there is an interdepartmental committee responsible for concluding

agreements, implementation, auditing and review are left to the discretion of Department of

Indian Affairs and Northern Development (2008).

Responsibilities regarding the implementation of treaties are split amongst different

departments. For instance, The Land Claims Coalition, in a policy document, has stated that

implementation deals with "issues that cross departmental boundaries, and [financing] does not

always fit neatly within the [government's] departmental budgetary system" (2009).

While agreements are supposedly treaties with the Crown, Aboriginal groups often have to

consult with individual departments to "ensure that obligations are being met" (2008). The Land

Claims Coalition, in their 2009 report, gave an example: while fishing rights issues are referred to

Fisheries and Oceans Canada, site clean-up issues are referred to the Department of Defense. The

Auditor-General claims that there is no standard procedure or strategy to deal with

implementation (2007). Other departments view the DIAND as the sole department responsible for

issues relating to implementation (Senate 2008).

There is also interaction between the federal government and the Ontario provincial

government in respect to mining. Natural Resources Canada and Indian and Northern Affairs

Canada, sometimes in partnership with MNDM and other provincial ministries have dedicated

some financial resources, in an ad hoc manner, to address poverty issues and education in order to

appease Aboriginal communities (ibid). The Ontario government has from time to time invested in

important socio-economic capacity building projects in Northern Ontario that have strived to

include First Nations peoples in the mining industry.


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4.2 Provincial Departments

Ontario currently has no legislation in place to ensure that revenue sharing, either from

royalties or any other mechanism, takes place between mining companies and First Nations

communities. The process is currently a private one which outlines responsibilities for both the

First Nation band and the mining company in question through the use of Impact Benefit

Agreements. These private contracts are usually not open to public scrutiny and the government

has limited roles in regulating them. There seems to be little coordination or clearly defined roles

as to the responsibilities of different ministries and levels of government although the province,

according to Quershy (2006), strongly encourages mining companies to pursue IBAs and sometimes

plays an advisory role in these negotiations.

There has been growing academic literature and evidence that treaties entered into by both

the province and the government of Canada and First Nations peoples have been undermined by

governments and therefore may need to be re-asserted (Bisson, personal communication Feb 9,

2009; Mae 1996). Many have stipulated that the understanding of First Nations when treaties were

entered into was that resources would be shared but the title of sub-surface rights would belong to

First Nations and in return for this sharing, investments would be made into First Nations

communities in the form of educational investments, royalties and tangible goods (ibid). Thus,

numerous First Nations representatives have argued that the provincial and federal governments

have never honored the treaty agreements and that they should either be re-negotiated or that

First Nations have the right to bring these governments to court.

This may explain in part why the government of Ontario and Canada seem so laissez-faire in

its dealings with First Nations and mining companies. The reasons the Ontario government does

not establish clear rules and responsibilities may include: a) it has no jurisdiction over the rights of

First Nations and must therefore involve the federal government; b)it perceives a risk in developing

a regime of revenue sharing and established sub-surface land rights because of the potential for

investors to avoid a jurisdiction with higher regulation; and c) any attempts at a regulatory

framework would likely lead to a lengthy process of treaty re-negotiations to cede mineral rights to

First Nations, thus investors may conduct their business elsewhere to avoid wait-times in Ontario.

These problems seem to be inevitable in the future, especially with the advent of some new

innovations in Ontario and across Canada that will be explained in the next section.


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Ontario Ministry of Northern Development and Mines

The Ministry of Northern Development and Mines have the mandate to facilitate mining

investment in Northern Ontario and to enforce the Mining Act. The Ministry of Northern

Development and Mines has policies in place in order to guide negotiations but they have proven

to be unclear and inconsistent. The Ministry advises companies to consult with First Nations but

there is no mechanism to alert companies when they are treading on traditional lands and which

Nation to consult (Quershy 2006). There is also no direction as to what measures should be taken

to facilitate negotiations and how conflicts should be resolved (ibid). The Ministry does offer its

assistance by designating a neutral liaison if one is requested by companies or First Nations but

they can only offer advice and have no decision making powers (ibid).

MNDM has invested in several aboriginal training organizations such as mining technical

training courses for aboriginal youth at Confederation College (MNDM 2007). However, these types

of initiatives are ad hoc and cannot help to ameliorate the economic and social situation of

Aboriginals in the long run. According to Quershy (2006) these efforts also side-step the issues of

rights to land and power. Most First Nations bar access to mining companies because they are

negotiating a land-claim, because treaty obligations have not been fulfilled, or because they want

to co-manage lands with the government (ibid). The central question that is being ignored by the

government is long-standing treaty violations and uncertainty over title to land. This title to land

gives the First Nation the power to refuse mineral development or accept it on its own terms.

Ontario Mining Act

The Mining Act guarantees free access to anyone staking a claim and prospecting on any

piece of crown land under the ‘free entry’ system. Much of the land in Northern Ontario north of

50 degrees is crown land (Chambers, personal communication, Feb 6 2009). There is no

requirement to negotiate impact benefit agreements between First Nations and mining companies

or any other type of agreement under the Mining Act.

Since 2002, mining companies have had to consult with First Nations groups where land

claims have been asserted but not yet settled (Ontario Mining Act 1990). This also applies in the


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Mining Act to any activity taking place on land outside proven claims but which disrupts the

claimed land in its vicinity (ibid). The Ontario Mining Act and its provision of free-entry mining have

led to many uncertainties concerning mining companies and First Nations that inhabit mineral rich

lands. This is best argued in Quershy’s (2006) work on how the government’s free-entry system and

lack of clear responsibilities has fostered investor uncertainty with regards to mineral

development.

The original goal of the free-entry system was to induce firms to invest heavily in the

province. However, due to the lack of consideration for First Nations, free-entry has created a

“‘policy vacuum’ around when and how First Nations can intervene in decision-making” (Quershy

2006). The mining firm’s fear of First Nation opposition at the advanced stages of mining and the

absence of regulations outlining the responsibilities of First Nations and mining companies is

“precisely what leads most companies to steer clear of land-title disputes” and in worst case

scenarios, diverts investment away from these places (ibid).

Mining and exploration companies lack any authority to address First Nation grievances and

“the multi-party nature of political negotiations creates an unpredictability that is intolerable at the

exploration stage” because of the short timeframe and large, potential returns of investments that

exploration has to accommodate for (ibid). This also supports Timmins MPP Gilles Bisson’s (NDP)

statement that while many First Nations want economic development, the lack of a process and

unclear entitlements to sub-surface mineral rights has the potential to make negotiations between

both companies and First Nations time-consuming and fraught with hostility (2009).

Another issue arising from the lack of a legal framework governing IBAs is that regardless of

what junior companies promise to First Nations groups in terms of job creation and royalties, the

terms of a contract must be renegotiated once the junior company sells its assets to senior

company (Quershy 2006). This creates unpredictability for the First Nation groups working with

junior mining companies. Although CSR seems to be the governance approach employed by

companies in Ontario and the rest of Canada, there are no standards that govern CSR or regulations

guaranteeing that these policies are adhered to. This leaves junior mining companies, explorers and

First Nations in an uncertain situation. The incident with Platinex and the KI tribe in Attawapiskat

shows the potential political instability that can arise from uncertainty.


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An important result of the institutional uncertainty has been seen with the Platinex mine on

KI tribe lands in Attawapiskat. Eight First Nations who were governed under Treaty 9 unilaterally

declared moratoriums on mineral exploration (ibid). In Feb 2006 after the moratorium was

announced Platinex Inc. attempted to drill despite warnings from the KI First Nation that they

would not allow them to do so. The community erected a blockade. Platinex decided that drilling

could not continue and abandoned their drilling site after a few days (ibid). They then launched a

$10 billion lawsuit against the First Nation group for thwarting their efforts. KI launched a

counterclaim and a third party claim against the Ontario government for failing to uphold its duty

to ensure consultation with the First Nation had taken place as well as a constitutional challenge to

the Mining Act (ibid). From this incident it is demonstrated how the lack of process for revenue

sharing or consultation has led to instability in Ontario’s North and as well as to financially

detrimental litigation for both parties.

Recent Developments

Staking Technology

In recent years the government of Ontario, as part of its 2006 Mineral Development

Strategy, introduced geoscience mapping. This technology, also referred to as electronic map

staking, has the potential to eliminate the need for prospectors to be present on the ground. This

could affect the consultation process, and has the potential to undermine the Mining Act which

currently states that mining companies have to consult with First Nations before staking and

exploring land claimed by First Nations whether the claims are proven or unproven (Quershy 2006).

This technology has been a recent trend in other provinces and some consultants for the Ministry

of Northern Development and Mines have advocated for its use in Northern Ontario (Rosehart

2008).

As the Northwest corner of Ontario has been relatively untouched since the early 1990’s,

there has been an emphasis placed on its development through technologies such as geoscience

mapping. Although many First Nations want economic development in order to improve the

conditions of their reserves and to increase opportunities, they are divided as to how the benefits

should be distributed and divided, and whether mining brings net benefits when environmental


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and cultural costs are considered (Bisson, personal communication Feb 9 2009). The use of this new

technology may significantly undermine these concerns by potentially eliminating the consultation

process.

Revenue Sharing

The ad hoc involvement of both provincial and federal levels of government as well as the

absence of clear rules and responsibilities of parties involved in the negotiation process over

mineral development in Ontario law has led to hostility and investor uncertainty in Ontario. In

2004, a solution to this was proposed.

The decision to introduce the concept of revenue sharing into provincial law was finally

agreed upon by a number of previously ideologically divided First Nation representatives in 2004 in

cooperation with Mr. Gilles Bisson. Timmins-James Bay representative Mr. Gilles Bisson tabled Bill

97 which was eventually shelved for future consideration by the Standing Committee on Finance

and Economic Affairs. The notion was intended to force government to accept the concept of

revenue sharing and negotiate with First Nations on the particulars of what revenue sharing

included (Bisson, personal communication Feb 9 2009). It included stipulations on when

negotiations would commence (90 days after bill passes); how long the parties would be allowed to

negotiate before a neutral arbitrator would be appointed to make a decision (3 years); who would

be invited as stakeholders from outside the government and First Nation realm and that traditional

lands (lands that were traditionally traveled across or made use of by a First Nation) would be

included in revenue sharing and not just reserve lands (Bill 97, First Nations Resource Revenue

Sharing Act, 2004).

Bisson has stated the importance of a bilateral negotiation between the provincial

governments as well as the importance of negotiation funds to be made available by the provincial

to First Nations (Bisson, personal communication Feb 9 2009). First Nations groups had asked

Bisson not to include industry in the negotiations under Bill 97 unless both government and First

Nations agreed that it would be beneficial (ibid). This was ultimately an issue over which historical

land use stipulations under treaties needed to be clarified and if necessary, re-negotiated (ibid). As

the major mining companies wanted responsibilities for how to conduct negotiations with First

Nations clearly laid out, and an end to costly litigation in order to begin development, they agreed


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that as long as agreement was made and clear responsibilities were set-out they would not be

involved in negotiations over land claims and treaty issues (ibid).

In terms of how junior companies would be involved, the process seems to be slightly more

difficult. Due to the high risk of operation failure, expenses for facilitating aboriginal involvement

should not have to be shouldered by junior companies and explorers (Bisson, personal

communication Feb 9 2009). Although Bisson has suggested that juniors have the right to stake a

claim, under a new revenue sharing regime they would have to consult with the First Nation prior

to doing so and provide plans on the potential risks and benefits of the procedures because of the

volatility and uncertainty of the exploration process (ibid). In the future, the provincial government

would have to fund First Nations that have high mineral potential on their traditional lands for job

training in the exploration process and legal stipulations would ensure that they receive

employment preference (ibid).

According to Gilles Bisson, the Liberal government defeated this notion because they

wanted a round-table process that included all potential stakeholders (environmental groups,

mining industry, public, municipalities and so on) rather than just First Nations and the Government

of Ontario (Bisson, personal communication Feb 9 2009). According to Bisson, this round-table

approach involves too many stakeholders and the potential for people to insert themselves for

political motives (ibid). A decision on how to proceed with revenue-sharing would be impossible to

come to if all these actors were inserted into the negotiations. The purpose is to come to a

definition of revenue sharing and its stipulations in legislation in a reasonable period of time in

order for First Nations to start reaping the benefits of mineral developments while also retaining

the right to refuse development should it hinder their traditional land base (ibid).

According to Bisson, provincial governments generally do not want to involve themselves in

negotiations that would potentially undermine the interests of private landowners, municipalities,

environmental groups and other stakeholders which is why the multilateral roundtable approach

with all these stakeholders is preferred by governments (ibid).

Revenue sharing on traditional lands is hard to implement as many different sectors of the

province now occupy these lands (for example, municipalities, cottagers and industry). It seems

unlikely that a provincial government would ever risk making an unpopular decision to agree to a


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revenue-sharing agreement with First Nations without first engaging the multiple stakeholders

involved outside of these two parties. At the same time, involving these stakeholders may mean

that a decision is never reached. A possible alternative could be an amendment to Bill 97 where all

potential stakeholders would be engaged but after a period of three years a neutral arbitrator

would be appointed to facilitate the decision.

Ontario Ministry of Aboriginal Affairs

As Gilles Bisson has made clear, the negotiation capacity of First Nations needs to be

enhanced by government funds in order for a fair negotiating process to take place between the

province and First Nations (2009). The potential for capacity building for First Nations in

negotiations with the government has been marginally enhanced by the creation of the Ministry of

Aboriginal Affairs in 2008.

The Ministry of Aboriginal Affairs has the mandate to act as a liaison between other

Ministries and agencies and First Nations groups (Ministry of Aboriginal Affairs 2008). They also

fund First Nations groups in order to increase consultation and negotiation capacity. The Ministry

of Aboriginal Affairs also assists First Nations in land claim disputes (ibid).

The creation of the Ministry of Aboriginal Affairs also established a trust called the New

Relationship Fund. First Nations can apply to receive money for capacity building on consultation

issues. The fund is reported to be a modest $25 million investment over a two year span (Benzie,

2008).

Despite the modest nature of the investment, this may still be a useful avenue for First

Nations to utilize as the pressures for mineral development are exerted more and more upon them

and government leadership in terms of regulations or clear responsibilities is lacking.

4.3 Mining Industry in Ontario

Mining Firms

There are twenty-seven major mining firms operating in Ontario. Please refer to Table 2 in

Section 1.2.2 for a list of these firms. The following discusses mining firms operating in this region.

Generally, risks and uncertainties involved in operation affect the performance and

achievement of a corporation. Time and efficiency are important drivers of profits but the time


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delay between the discovery of a deposit and actual production can pose significant financial risk to

the company. The required negotiations, environmental assessments, consultations, explorations,

testing, construction, and administration, which occur between discovery and production, are

costly projects with significant risk.

There are a number of factors that can affect costs and construction schedules (as listed in

several annual reports), such as: availability of labor, power, transportation, commodities and

infrastructure; changes in input commodity prices and labor costs; fluctuations in currency

exchange rates; availability and terms of financing; difficulty of estimating construction costs over a

period of years; delays in obtaining environmental or other government permits; weather and

severe climate impacts; and potential delays related to social and community issues.

Other operating risks such as the existence of foreign investment, the level and

effectiveness of future capital expenditure, reliability of performance of existing capital assets,

change in the capital markets, and fluctuation in foreign exchange rates and tax rates all have

impacts on the financial performance of the mining industry. For example, currency fluctuations

affect the costs of mining corporations. These fluctuations may have serious effects on the finances

of a mining firm.

Corporate Culture

Mining companies operate on a hierarchical decision-making model that emphasizes quick

decision-making and responsiveness. Their interests are to improve profitability by strengthening

their position in the market and enhancing value. The basic motivation of the mining company is

profit. All mining companies who are registered OMA members list improving financial

performance as their top priority in their annual reports.

Mining companies typically increase their profit by increasing the production of their

various mines by either increasing the number of projects or extending the life expectancy of

current mine sites. They will implement cost control measures, monitoring programs, technological

innovations, and ensure that production costs are at a minimum.

Junior Mining Companies

Junior mining companies primarily depend upon unpredictable investment and


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organizational resources for profit. Warhurst and Noronha (2000) state that “for small mining

companies especially, all of the available resources may be tied up in carrying out routine

operations.” These financial constraints result in limited resources available for junior mining

companies to practice sustainable development or to consult with the local community. In

addition, junior mining companies also face inter-firm pressure within junior-senior mining

company relationships. This was pointed out in Davidson-Welling’s (2001) study, where senior

companies attempted to impose better environmental practices on junior companies without

consideration for the financial caabilities.

Nevertheless, a resource company has various options when it comes to the development

of a project. Negotiation when land claims are uncertain is not always the first choice due to the

timing, expediency and corporate policy of the company. The company can directly initiate a

consultation with affected communities, it can rely on local Aboriginal organizations to carry out

consultation in the community through meetings, or it can take on the “problem census” approach

by using independent professionals to identify Aboriginals needs and issues of concern.

Ontario Mining Association (OMA)

One of the most powerful mining organizations in Ontario is the Ontario Mining

Association. The OMA is a not-for-profit corporation that acts as an umbrella organization for

mineral resource related companies that have either corporate offices or project sites in Ontario. It

is interesting to note that the majority of the executive members of the OMA are former

government workers.

There are currently sixty (60) members registered with the OMA, and fifty-seven (57) of

these members are engaged in exploration, mineral production and processing (OMA 2005).

However, not all OMA members are mining producers. Twenty –eight (28) members are mine

producing companies, and the remainders are mine consulting firms, contractor providers,

suppliers and equipment lenders. There are five functions of the OMA:

1) To inform government of industry issues and the implications of government policy and

legislation for the mining industry


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2) To notify member companies of legislative, policy and regulatory matters affecting the

mining industry

3) To promote the mining industry to the government and public

4) To provide training and education services to its members and the public

5) To provide opportunities for members to exchange information and ideas on matters of

common interest and concern

The purpose of the OMA is “to support and improve the competitiveness of the mining

sector in the province while representing companies engaged in the environmentally responsible

exploration, production and processing of minerals in Ontario”(OMA 2005). However, in Davidson-

Welling’s study (2001), the author suggested that the OMA and similar producer associations are

unable or unwilling to lead industry-level environmental change. As one of the senior mining

companies explained in Davidson-Welling’s interview, these associations provide “legal help, but

not technical help.”

Corporate Social Responsibility

46% of OMA member companies have a section called "corporate social responsibility" on

their website. On one mining company’s website, the link to corporate responsibility cannot be

found, although this section is stated on the Site Map.

75% of OMA member companies addressed the importance of integrating safety, health

and environment (SHE) related performance in their practices. These companies believe that

improving workplace safety will help to reduce employee injury rates, and that it can enhance the

corporate governance system by focusing on continuous improvement and adoption of best

practices. Also, much of the literature discussing corporate environmental performance is based

on an assumption that firms will adopt technology that is proven best to meet their specific goals.

46% of OMA members have recognized the importance of sustainable development in its

operation through ethical conduct, community involvement and carbon management. Data

suggests as well that there is some adoption of sustainable development practices. Several authors

(Davidson-Welling 2001; Warhurst and Noronha 2000; Crowson 1997) also demonstrate that


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innovative firms are more likely to adopt sustainable design under the assumption that (a) they can

overcome the barriers to technology innovation, and (b) they are capable of influencing the

adoption of environmental innovations. This does not, however, suggest that the existence of

corporate policy will guarantee compliance from the companies. It simply shows a general trend of

sustainable management in the company.

Prospectors & Developers Association of Canada (PDAC)

PDAC is a not-for-profit association that represents the interests of Canadian mineral

exploration and development industry. It has 6000 individual members (including prospectors,

developers, geoscientists, consultants, mining executives, and students, as well as those involved in

the drilling, financial, investment, legal and other support fields) and 950 corporate members

(including senior, mid-size and junior mining companies and organizations providing services to the

mineral industry) (PDAC 2008a).

Members of PDAC have opportunities to receive updates on recent developments in the

field and to participate in relevant workshops. Alex Davidson, Executive Vice President in

Exploration and Corporate Development at Barrick Gold says as a member testimonial on the PDAC

website:

“PDAC is recognized as one of the leading mineral industry associations in the

world and membership in this organization supports all the advocacy efforts that

champion development and sustainability of the industry. Barrick is a long term and

active corporate member of the PDAC and a proud sponsor of some of the

organization’s excellent programs such as the annual convention, annual Student-

Industry Mineral Exploration workshop and Mining Matters” (PDAC 2008a).

PDAC also came up a 5-year of strategic plan that was approved in July 2007 with the goal of

providing leadership and contributing to the development and delivery of programs that will help

to address the human need for mineral extraction over the next 10 to 15 years (PDAC 2008b). The

plan is as follows:

1) Directing the Future of the PDAC in a Globalizing Industry

Goal To expand PDAC`s role as the world`s premier association representing

individuals and companies in the mineral exploration and developmental


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sector

Objective 1 Define the role of PDAC to the exploration and development sectors in

Canada and abroad.

a) To increase staff in the International Affairs Committee

b) To understand the member views of PDAC through existing

research

c) To determine roles of mining industry organizations through gap

analysis and market studies

d) To create values for PDACs and its members

Objective 2 Increase the domestic and international membership

a) Identify key target audience and markets for increasing

membership

b) Explore business opportunities base on a marketing plan

c) Explore partnership opportunities with other associations

d) Develop a list of benefits to attract new members

Objective 3 Increase international delegate attendance at the convention

a) Hire a consultant to review international marketing strategy

b) Conduct cost-benefit analysis of simultaneous translation

c) Hire contractor to facilitate planning and activities

d) Survey exhibitors immediately following the convention

Objective 4 Promote Canada as an attractive place to explore and as a centre of

excellence in financing, exploration, development, mining and education

a) Branding Canada as the country for exploration, development

and financing

b) Establish communication strategy to promote Canada

Objective 5 Strive to improve the political, social and regulatory environments in

which the Canadian exploration and development sector works

a) Define the focus of international advocacy efforts

b) Promote the use of PDAC to help members with the political,

social and regulatory challenges

c) Collaborate with relevant organizations on these issues to

improve overall effectiveness

2) Attracting new people to the exploration sector

Goal To provide leadership and contribute to the development and delivery of

programs that will help to address the human resource needs of the

Canadian mineral exploration industry over the next 10 – 15 years.


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Objective 1 Assess the nature and scope of the human resource needs of the

exploration sector over the next 10 – 15 years

a) Form a Human Resource Development Committee

b) Conduct research to determine the future human resource needs

in the exploration sector

Objective 2 Plan, develop and implement programs to create awareness and attract

people to the sector

a) Use the PDAC Mining Matters charitable foundation for

the awareness plan

b) Review existing programs and identify strengths,

weakness and gaps

c) Develop a comprehensive, integrated awareness plan

based on b)

Objective 3 Plan, develop and implement programs to ensure students receive

training and education

a) Work with post-secondary geosciences departments,

government agencies and other appropriate institution in

developing an approach to training and education

b) Develop a systematic approach to assess the current

approaches

c) Provide field training and experience to students

d) Inform the educational community of the results of the

research and, plan and advocate for their engagement

and support for implementation of the plan

3) Formulating a PDAC corporate social responsibility strategy for the membership

Goal To provide leadership, guidance and tools to the Canadian exploration and

development sector that will enable it to meet current and future CSR

expectations related to environment, social and economic priorities and to

continually improve performance.

Objective 1 Design and implement a CSR framework for the Canadian exploration

and developmental sector

a) Establish CSR steering committee to drive and guide the CSR

process

b) Develop a detailed CSR framework include a fast track version

and comprehensive version and a plan for implementation

c) Develop CSR principles

d) Develop a communication plan

e) Develop further elements of CSR framework include performance

indicators, reporting and verification


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Objective 2 Advocate for policies and practices that address the sector’s needs and

contribute to maintaining its social license to operate

a) Formulate PDAC response to the federal government Round

Table report

b) Participate in the CSR Roundtable, implementation and

continuous improvement process

c) Consider the role of PDAC with respect to engaging with NGOs

d) Formulate position on key CSR issues

Objective 3 Monitor and report on CSR developments that affect the industry

a) Create capacity within PDAC to monitor and report on CSR

developments

4) Maximizing the exploration land base and ensuring mineral tenure and land access

Goal To maximize the land base available in Canada open for mineral

exploration and development and minimize the impediments to carrying

out exploration activities on Crown Land in an efficient and timely

manner.

Objective 1 Promote greater aboriginal participation through community

engagement in grassroots exploration. It envisions community

consultation would begin at the early stage of exploration and achieve a

direct participation by aboriginal peoples in the mineral industry.

a) Hire a staff for Aboriginal Affairs, and Lands and Regulations

b) Initiate research project on government resource revenue

sharing models

c) Attract more aboriginal members to the Association and the

Convention

d) Develop educational products on the importance of mining

e) Improve public awareness and media relations

f) Develop workshop on successful Aboriginal community

engagement for delivery at convention and other regional

meetings

g) Develop a consultation protocol between Aboriginal groups and

other industry associations

Objective 2 Advocate for a land use planning system to maximize the land

availability for mineral exploration and development, and provide

security and certainty of mineral title

a) Produce TV documentaries for public broadcast and educate the

general public on the importance of mining

b) Develop and advocate for a universal map staking policy on a


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`first come basis` which protects the confidentiality, mineral title

and tenure of the claimant. The policy will be subject to

appropriate consultation and consultation with landowners.

c) Support Jim Prentice, Minister of DIAND for a federal,

independent land claims body with a mandate to prioritize the

settlement of mineral claims in areas of high mineral potential

within 5 years of submission

d) Encourage government to establish surface rights tribunals for

expedient settlement of disputes and avoiding the courts

e) Support the federal government’s pledge to review provincial

regulatory policies through utilizing Industry-Government

Overview Committee

f) Ensure that land use planning processes are informed by credible

and reliable information in relation to geo-science, conservation

and traditional knowledge

g) Review active land use planning processes and invite the

organizations together to participate in a workshop to identify

and prioritize common issues and set common goals

Ontario Prospectors Association

OPA started in 1987 as the Ontario Mineral Exploration Federation, where they were

involved in the creation of the new Mining Act in Ontario. In December 1994, the name was

changed to the Ontario Prospector Association (OPA 2007). The stated goals of the OPA are: to be

an effective lobby group on government, taxation, land access and environmental policies; to

provide a channel of network that connects buyers and sellers in exploration and development;

and to promote prospector development initiatives that support grassroots exploration (OPA

2007).

OPA is the umbrella association for all the prospector associations in Ontario, and these

associations are listed in tables below. Members in any of the following associations will also be

members of the OPA. Individuals who are affiliated with the Prospectors and Developers

Association of Canada, the Ontario Mining Association, the Association of Professional geoscientists

of Ontario, and any other association which are approved by the board of directors of the OPA can

also be admitted as members (OPA 2002).

I.

Northwestern Ontario Prospectors Association (NOPA)

Objective To represent and further the interests, serve the needs, and support


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the aspirations of the individual prospectors in Northwestern Ontario

(NOPA 2008)

Membership

Benefit

Includes both NOPA and OPA membership

Access to Prospecting Fund, Effective Lobbying for Industry and

Individual Explorations, Industry News & Information, Social Events,

Access to Provincial Symposia, Advertise Properties & Services In Print

& Internet, Newsletters (NOPA 2008)

II. Northern Prospectors Association (NPA)

Objective It is dedicated to Canadian prospecting and mining. The goal of the

organization is to enhance the economic viability and the quality of life

enjoyed in northern Ontario (NPA 2007). It is a strong voice for the

industry and the community in both Ottawa and Toronto (NPA 2007).

Membership

Benefit

Most members are prospectors and geologists who work in the

Kirkland Lake area. It includes both NOPA and OPA membership.

Access to monthly newsletter published in association with the OPA,

industry news and information, social events, and provincial symposia

(NPA 2007).

III. Boreal Prospectors Association (BPA)

Objective To provide a forum in which its members can discuss and address the

many unique geographical, governmental and cultural challenges

facing prospectors and exploration companies in northern Ontario.

To engage and support individual northern prospectors and to facilitate

community-industry interaction by encouraging capacity building and

mutual understanding.

To represent and further the interests of its members in order to

promote a sustainable mineral industry in Northern Ontario.

Membership

Benefit

Provide networking opportunities between members and public and by

actively providing information on education, training, employment and

the business of mineral exploration.

IV. Porcupine Prospectors and Developers Association (PPDA)

Objective A lobby group representing the interests of mineral explorationists in

the Porcupine District of Northeastern Ontario.

Promotes mineral exploration in the region by hosting the

Northeastern Ontario Mines and Minerals Symposium every other


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year.

Membership

Benefit

Individuals affiliated with the prospecting community, the junior

exploration/mining sector, the major exploration/mining sector and

numerous service industries.

V. Sudbury Prospectors & Developers Association (SPDA)

Objective Not for profit organization dedicated to protecting the interests of

explorationists and junior mining companies conducting business in the

Sudbury District of Ontario, Canada.

To protect the right to explore and extract mineral commodities from

the ground.

Membership

Benefit

Representatives from the prospecting community, the junior

exploration/mining sector, the major exploration/mining sector, and a

number of service industries.

Include both OPA and SPDA membership and members receive

newsletters, symposia, information, and assistance from the OPA

regarding land access, claims, and assessment work.

VI. Sault and District Prospectors Association (SDPA)

Objective To support and promote: prospecting, mineral exploration, mining and

the science of geology throughout the Sault Ste. Marie region and

Ontario.

Membership

Benefit

Members come from a range of backgrounds: prospectors, geologists,

mineral collectors, engineers, and teachers.

Include both OPA and SPDA membership and members receive the

Ontario Prospector Magazine, access to the member-only section in

OPA web site, mineral properties listed on the OPA website and various

activities.

VII. Southern Ontario Prospectors Association (SOPA)

Objective To provide a source of information to the membership with respect to

prospecting and mineral exploration.

To integrate the prospector's interests with professional mining

people, including geologists, mining engineers, and mining companies.

To make representations on behalf of prospecting, exploration, mineral

collecting, and mining industries to all levels of government, and all

tribunals and boards affecting the prospecting, exploration, mineral


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collecting, and mining industries.

To work to preserve and promote prospecting as a profitable and

viable profession, and to achieve this in any way the membership

deems proper.

Membership

Benefit

Members include prospectors, geologists, mineral collectors and others

in the mining industry of Southern Ontario.

Table 6: Mining Associations of Ontario

The Ontario Exploration Corporation (OEC)

The Ontario Exploration Corporation (OEC) was established to help generate investment on

lands with high potential (OPA 2007). Financial assistance is provided for the companies in

exchange for a royalty in the mining lands. The maximum financial support is $10,000 per applicant

for a 1.0% royalty per property, second funding of $25,000 for an additional 0.25% royalty and so

forth for continuing exploration projects (OEC 2008).

Mining Association of Canada (MAC)

MAC was originally known as the Canadian Metal Mining Association. It is a national

organization that is comprised of companies engaged in mineral exploration, mining, smelting,

refining and semi-fabrication (MAC 2009). The members of the association contribute to the

majority of mineral output in Canada (MAC 2009). The functions of the association are:

• To promote the interests of the industry nationally and internationally

• To work with governments on policies affecting minerals

• To inform the public and to promote cooperation between member firms to solve common

problems

Membership is open to all firms in mining and related businesses. However, the association

lacks members from small operators, exploration companies, and firms in related businesses (MAC

2009).

The Association renewed its strategic plan in 2007 – 2011, in which the focus was on helping

to build a strong, sustainable, internationally competitive mining, minerals and metals industry

with broad national support. Seven areas are identified as the focus for the strategic plan; they are

as stated in the Annual Report (MAC 2007):


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1. Towards Sustainable Mining – A strong social licence to operate in Canada and around the

world.

2. Human Capacity/Resources – A mining industry that has access to a pool of skilled labour at

all levels (management, trades, etc.) throughout the country (in particular the North)

sufficient to meet all industry requirements.

3. Economic Competitiveness – An improved international competitive position for Canadian

mining, minerals and metal production by promoting favourable public policy and industry

practices.

4. Climate Change and Clean Air – A mining industry that proactively addresses climate change

and clean air in a manner that is responsive to both broad societal concerns and continued

industry competitiveness.

5. Aboriginal Relations – A mining industry that has broad-based Aboriginal support for, and

participation in, its activities.

6. Regulatory Efficiency – An industry backed by a regulatory system that provides certainty,

clarity and timeliness and that is cost-effective and based on sound science and sound

economic, environmental and social policy.

7. Environment and Sustainability – An industry committed to continual environmental

improvement and the development and implementation of best practices.

Analysis

The prospector mining associations under the leadership of PDAC are pushing for the

government to enter into resource revenue sharing with Aboriginal peoples (PDAC 2009). PDAC

believes that if the government shared a portion of revenues that mining companies already pay

with aboriginal peoples, it will provide benefits for all stakeholders in Canada (PDAC 2007).

PDAC is currently taking a collaborative approach with government, Aboriginal groups and

industries to analyze existing resource revenue sharing formulas and to develop models that can be

implemented in jurisdictions (PDAC 2007). PDAC is also advocate for a formation of federal,

independent land claims body to support Jim Prentice, Minister of DIAND (ibid). This land claims


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body has a mandate to prioritize the settlement of mineral claims in areas of high mineral potential

within 5 years of submission and to ensure development of relevant legislation and regulations in

settled land claims areas (ibid). PDAC uses two methods to achieve such action: a) prioritize the

issue at the Industry-Government Overview Committee and through lobbying efforts on the

Parliament Hill; and b) utilize a media campaign to emphasize their support on the idea, including

native press and publications (ibid).

Mining associations such as OMA and MAC strongly believe that mining provides economic

benefits to the country and the local economy. OMA works in cooperation with Ontario MNDM,

and academic institutions and consulting companies to produce reports on the economic

contribution of the mining industry in Ontario. These reports also discuss the importance of mining

in the province, the country, and international trade. The OMA believes the mining industry can

bring prosperity to local economies by creating employment opportunities (OMA 2005).

The study by Dungan and Murphy (2007) demonstrated that for a mine with an annual

production of $270 million, federal government royalties were about $34 million, and almost one

half of this amount is from personal income tax collection. The provincial government will receive

approximately $33 million in royalties, and $8 million is collected through personal income tax

(Dungan and Murphy 2007). The local governments will receive approximately $11 million in

revenue and $8 million will remain in the local mining area (ibid). In total, all levels of the

government will receive $83 million from one mine site (ibid). Similarly, in the same study, it

showed that during the mine development phase, all levels of government will see increase in

revenues of $49 million (ibid).

There are currently 41 mineral sites in production in Ontario (Government of Ontario 2003);

if every mineral site contributes $83 million to the government each year according to the study,

the government will receive in total approximately $3 403 million in revenue. If the government

can redistribute the revenue to the affected communities and assume on average, each community

will receive approximately $1 million per year and there are only 41 affected communities in

Ontario. The government will only be sharing 1.2% of the total revenue with the affected

communities. This could be one of the reasons that PDAC strives for government resource revenue

sharing with the Aboriginal communities.


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5.0 Applicability of Successful Case-Study Outcomes in Northern Ontario This section will provide analysis on whether the factors that lead to success in the case

studies can be applied in Northern Ontario. Factors pertaining to Aboriginal communities have not

been included as requested by Klippensteins Barristers and Solicitors. Therefore, the following four

factors are discussed:

1. That the firm has sufficient economic incentive to reach an agreement.

2. That the firm engages in social corporate responsibility.

3. That Government regulations are in place that governs the operation of mining

companies.

4. That the government has a role in facilitating Aboriginal involvement.

Applicability of Factor: That the firm has sufficient economic incentive to reach a resource

sharing agreement

Evidence from the NANA, Raglan and Voiseys Bay mine agreements exemplify that the size

of the firms in operation often determines the amount of time and financial resources they can

dedicate to addressing issues that affect First Nations. Large firms often have more resources at

their disposal to be able to accommodate First Nations and often consider CSR standards and

maintaining a good public image a normal cost of doing business (Bisson, personal communication,

9 Feb 2009). Under the OMA there are 27 senior mining firms operating in Ontario therefore this

may be a potential avenue for First Nations to exploit.

Senior mining companies prefer to accommodate the needs of First Nations rather than to

engage in expensive and time consuming law-suits over rights to land (Quershy 2006). Large firms

want to avoid litigation as much as possible because large amounts of money have already been

invested by the time they take over a junior operation (ibid).

If the size of the deposit is large, the firm is likely to be even more committed to settling

issues with First Nations because more is at stake. This is the case with the NANA Agreement. In

Ontario, approximately $9 billion were made from mining in 2008 (Rosehart 2008) which indicates

the fact that large mineral deposits are likely to be found in the undeveloped areas of the North.

Aboriginal communities in Ontario can use this to their advantage by engaging in media campaigns

and pushing for land-title through the courts if their capacity allows them to do so.


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Although recent geoscience staking technology can be viewed as a threat in terms of its

ability to bypass the consultation process, if First Nations collaborate with the Ministry of Northern

Development and Mines, they may be able to acquire knowledge of the potential mineral value of

their lands therefore giving them more bargaining power when they are approached by senior

firms.

The economic incentive for investment of the mining company was a relevant factor for

success determined from the case studies, especially with respect to Snap Lake, Paix de Braves, the

Raglan Mine and the Alaska Native Claims Settlement Act. If academics and other officials such as

Gilles Bisson are correct about investor certainty being low in Ontario due to a lack of a legislative

system to deal with First Nation claims to land, First Nations groups may be able to induce either

the courts to settle land rights grievances or the government of Ontario and the Federal

government to take action and enact policies that provide clear rights and responsibilities to mining

and Aboriginal stakeholders.

Based on the aforementioned evidence the factors of firm size, ability, and willingness to

provide financial resources to First Nations in order to improve relations and secure a long-term

profit are applicable in Ontario.

Applicability of Factor: That the firm engages in Corporate Social Responsibility

The engagement of firms in CSR is well noted in both the NANA and the Yandi case studies

and contributed to favorable outcomes for Aboriginal peoples in both cases. An example of this

can be found from Hamersley Iron Pty Ltd’s initiative to support Aboriginal employment and

participation in the establishment of three new joint-venture businesses in the aboriginal

communities close to by. These businesses provided services to Hamersley Iron Pty Ltd and

assisted in the development of the Yandicoogina mine.

Also, the Aboriginal Training and Liaison unit (ATAL) enabled the needs of the Aboriginal

stakeholders to be met by introducing programs to address heritage and local economic problems.

This was done because of the need to improve the company’s international image. In regards to

NANA, the company has established a subsistence committee that can veto developments if they

are not in line with NANA’s principles at the Red Dog Mine and the company also maintains a goal


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of training Alaska Natives so that it will one day be 100% Native owned (Brown et al. 2004). In

Northern Ontario, the situation is different as will be related below.

Firms such as De Beers in Northern Ontario and in the Northwest Territories have been

cited as trying to improve their images through CSR. Roughly 75% of mining firms under the OMA

had reported practicing some sort of corporate social responsibility. Judging by the mandate of

many of various Ontario mining prospectors associations, firms under the Ontario Boreal

Prospectors Association may be the most inclined to sustainable mining practices and realizing

opportunities for First Nations communities.

Although De Beers has invested time and financial commitments in improving relations

with First Nations in the Attawapiskat area after their poor international (South Africa) public

relations record (Bisson, personal communication, 9, Feb 2009) it is unclear as to how firms are

committing themselves to actually improving their practices. If firms in Northern Ontario can be

persuaded that commitment to CSR is a fiscally sound policy, this factor can be applied in Northern

Ontario.

Applicability of Factor: That Government regulations are in place that governs the operation of

mining companies.

In all case studies, Memoranda of Understanding and the presence of environmental

assessment provisions seem to be major factors in the establishment of good relations between

stakeholders and a first step in good negotiations. In Ontario, a Memorandum of Understanding

has been signed between the Ministry of Northern Development and Mines and the Ontario

Mining Association in an effort to clean up abandoned mine sites (MNDM 2006).

Government regulations and other mechanisms that regulate royalty structures,

environmental requirements, employment preference and training are ad hoc in Ontario and

concerns many overlapping statutes and departmental jurisdictions. This makes the situation

difficult for both mining companies and Aboriginal communities.

Agreements between the provincial government, mining companies and First Nations

groups or between First Nations groups and government are generally lacking in Ontario with the

exception of the forestry industry, where the ministry of Natural Resources has begun negotiations


109 | P a g e

with First Nations groups in the Grassy Narrows district to establish land use policies on co-

managing Boreal Forest resources (Ministry of Natural Resources 2008).

The absence of the federal government in regulation is particularly troubling. The federal

Department of Natural Resources deals mainly with petroleum and delegates many of the other

mineral development responsibilities to the provinces. In addition, DIAND does not have the

financial or human capacity to enforce many of the treaties that are in place. Its main funding goes

to infrastructure renewal projects on reserves.

The structure of these agencies also demonstrates that federal departments are unable to

safeguard Aboriginal rights effectively. One senate report mentioned how the structures of the

departments themselves reflect the government's attitude on implementation: while there is an

interdepartmental committee responsible for concluding agreements, implementation, auditing

and review are left to the discretion of Department of Indian Affairs and Northern Development

(Senate 2008). This means that in terms of this factor, government oversight over mining

companies and the enforcement of treaty rights is relatively non-applicable and First Nations have

little recourse to take against provincial, federal or mining actors other than that which can be

gained from litigation.

Applicability of Factor: That the Government Facilitates Aboriginal Involvement

In order to be able to negotiate a claim or to gain consultation, the First Nations community

needs financial and organizational capacity and expertise, which is not present in all communities in

Ontario. From the case studies, it was determined that government support and facilitation of

Aboriginal capacity, including funding, is a major determinant of success. The presence of trust

funds and annual payments with complex financial provisions that are long term in nature are

present in the Paix des Braves, NANA and Raglan agreements. The provision of funds accounting for

fluctuating market prices in the Raglan agreement, as well as the establishment of the Alaska

Native Fund, are examples of government funding that compensates for land use as well as

facilitates Aboriginal involvement in the development of these lands.

In Ontario the situation is different but looks as if it may improve due to recent

developments. The ad hoc and modest nature of both federal and provincial funding schemes with


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regards to Aboriginal socio-economic development and consultation capacity building have

significant benefits for First Nations groups in Ontario. The Ministry of Aboriginal Affairs in future

years may be become strengthened in its mandate as one of its tenets is to provide consultation

capacity. This factor may have more applicability in Ontario in the future than it does at present

with the establishment of the Ministry of Aboriginal Affairs and its New Relationship Fund that

provides resources for First Nations who are trying to build consultation capacity. However, as this

fund is a relatively recent phenomenon, it is difficult to analyze its potential utility in the province.

6.0 Recommendations

• Klippenstein’s is advised to ensure that royalty provisions such as those found in the Alaska

Native Claims Settlement Act 1971(ANCSA), the Raglan Agreement and the Paix des Braves

Agreement are included in a revenue sharing agreement between a client(s) and an outside

stakeholder(s). These royalty provisions ensure that an increase in value of a resource is

accounted for in yearly royalty payments and provisions are in place to ensure that

government or firms eventually pay if they must default payment temporarily. Provisions on

how money can be spent through auditing are also present in all these agreements and

should also be considered when negotiating on behalf of a client(s).

• Klippenstein’s is advised to ensure that timelines are set out in the negotiation of a revenue

sharing agreement between a client(s) and outside stakeholders and if negotiations fail,

ensure that an outside arbitrator previously agreed to by all stakeholders is appointed to

settle the matter. This is a provision in Ontario’s Bill 97 and in the Yandi Agreement in

Australia.

• Klippenstein’s is advised to encourage clients to pool resources with other likeminded First

Nations and form Native regional corporations such as the Crees in the Paix des Braves case

study and NANA Regional Corporation. These corporations have significantly improved

capacity to negotiate, litigate and publicize efforts to begin a revenue sharing regime as

demonstrated by the Paix des Braves and NANA cases. Doing so would also ensure that


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Klippenstein’s is strengthened through collaboration with other First Nation’s legal

representatives.

• Klippenstein’s is advised to ensure that future revenue sharing schemes negotiated

between their client(s) and government or firms allocate money in trust funds for First

Nations to hire lawyers and consultants. There should be no limitations on whom the

Aboriginal groups hire, or on how much of the fund is spent on these services. The Alaska

Native Fund and Iron Hammersley Pty Ltd’s Fund in Australia are good examples of this. The

New Relationship Fund also has provisions for the hiring of consultation in order to build

consulting capacity.

• Klippenstein’s is advised to ensure that revenue sharing agreements negotiated between a

client(s) and another stakeholder(s) include the stipulation that any mining agreement

negotiated has an EA process similar to that of the Mackenzie Valley Environmental Review

Board (MVERB) in the Snap Lake Agreement as this is widely considered to be a best

practice standard. Klippenstein’s should ensure that government agencies sign on to the

agreement and that civil servants are appointed to assess the impacts of a project instead of

personnel from the firm in order to ensure accountability and transparency in the process.

• Klippenstein’s is advised to pursue litigation against the Department of Indian Affairs and

Northern Development (DIAND) for not providing the resources to other government

agencies in order to ensure that treaty obligations are being fulfilled. Klippenstein’s is

advised to use Deputy Minister Michael Wernick’s 2008 testimony as mentioned in the

section on Federal Departments as a starting point for legal action. They can then push for a

new capacity and consultation fund to be put in place as part of a solution to DIAND’s

shortcoming citing examples such as Ontario’s New Relationship Fund and the New

Relationship Trust in British Columbia.

• Klippensteins is advised to pressure mining companies to make agreements publicly

accessible. This will allow for public scrutiny, greater transparency, and stronger


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implementation of the agreements. The researchers cannot emphasize the importance of

this recommendation enough.

• Klippensteins is advised to make use of the New Relationship Fund and the resources of the

Ministry of Aboriginal Affairs to build negotiating capacity. Klippensteins is advised to assist

their clients in the initial planning phase for core consultation capacity building projects in

order for these communities to be eligible for funding under the New Relationship Fund

over the next year. Funding ends in 2010 therefore it is recommended that this resource be

investigated and utilized as soon as possible.

• Klippensteins is advised to counsel their clients to enter into agreements that involve the

community, the government and industry, as opposed to bilateral agreements between the

community and the mining company. When the government is involved and bound by an

agreement, the agreement is better enforced because they are more transparent. Trilateral

agreements also result in the agreements being publicly accessible.

• Klippensteins is advised to ensure the creation of an oversight committee in RRSAs.

Experience has shown that the Committees are extremely helpful when the relationship

between the mining company and aboriginal community is stressed. We further advise that

the membership of the community has equal representation for Aboriginal groups such as

the parity based Raglan Agreement.

• Klippensteins is advised to use the federal environmental assessment process as a tool to

bring about resource revenue sharing agreements. This can be achieved by actively

intervening in the scoping process to demand an RRSA be negotiated as a requirement of

proceeding with the mining project. Within the scoping process, there are community

hearings which could be used as an avenue to include RRSAs. Voiseys Bay is an example of

public intervention in the EA process resulting in an IBA.


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env 420 - final report - april 21st, 2009

Documents

innis college

new college

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university college

northern ontario brian

department of history

sarry zheng centre

environment sarry zheng