IMPACT AND BENEFIT AGREEMENTS Presented to: Economic Developers’ Association of Canada Cynthia Westaway Counsel, Aboriginal Law Practice Leader October 2, 2012 Borden Ladner Gervais LLP, Ottawa

Strategies – Key Success Factors Impact and Benefit Agreement Understand a new legal environment Substantial costs paid by industry under a new legal environment Implications for industry Applications for industry

Strategies – Key Success Factors Impact and Benefit Agreement Understand a new legal environment Duties of the Crown to consult and accommodate Its duty to justify an infringement of an existing and recognized aboriginal or treaty right (Sparrow test) Its duty if consultation and accommodation in circumstances of claimed but unproven aboriginal rights (Haida Nation test) Its duty of consultation and accommodation in circumstances where the crown exercises a discretion under a treaty (Mikisew case) Duties of a third party where: Knows (or should have known) government has not consulted with aboriginal communities in circumstances where government owed a duty Is aware of a strong claim for aboriginal rights or title to area involved in resource extraction May not be sufficient to claim that Crown licensed/authorized activity to relieve from liability Obligation of the third party developer under modern treaties Many of the modern treaties contain a provision requiring a third party developer to enter into IBA in certain defined circumstances or to compensate for loss of harvesting property and income

Strategies – Key Success Factors Impact and Benefit Agreement Substantial costs for failure to fulfill such duties As a result of litigation initiated by the Deh Cho First Nation of the NWT alleging that Canada had failed to consult it properly regarding the Mackenzie Gas Pipeline, the Deh Cho received a settlement agreement providing $5 million in settlement funds, $15 million in economic development funds and other important funds. Hydro-Quebec enters into multi-million $ agreements with aboriginal communities affected by its projects and refuses to proceed with such projects unless such agreement is reached.

Strategies – Key Success Factors Impact and Benefit Agreement Implications for industry Examine closely the impacts of projects on aboriginal claims or rights Consider direct negotiation of an IBA Engage the Crown early in the consultative process Well position yourself to avoid court challenge and strengthen your defense

Strategies – Key Success Factors Application in Industry Mining industry now regularly enters into IBA arrangements for new mining facilities Major hydro developers are regularly entering into IBA with aboriginal groups Canadian Association of Petroleum Producers created its industry practices - - Developing Effective Working Relationship with Aboriginal Communities

Strategies – Key Success Factors Improve Capacities of Aboriginal Community Workforce Capacity Business Opportunities Community capacity Stewardship

Strategies – Key Success Factors Build workforce capacity Employment opportunities and prospects Local hiring: broaden recruiting pool to include local community Education and training: establish mentoring program and on- the-job training for aboriginal people Aboriginal awareness at workplace Deliver diversity training sessions at all levels of the corporation Encourage local involvement by offering community experts and elders a role or reaching out to aboriginal students and other youth programs

Strategies – Key Success Factors Corporate commitment to accommodation Contribute to economic development Establish clear principles of corporate governance in structuring business arrangements with aboriginal communities Ensure aboriginal business or joint venture has strong management capacity Match your business opportunities with aboriginal business ventures by local procurement Include aboriginal businesses and other community groups in potential economic benefits

Strategies – Key Success Factors Corporate commitment to accommodation Foster aboriginal relations and establish trusts Develop community profiles and customize approach to involvement Identify existing and asserted aboriginal or treaty rights Conduct traditional use studies Understand level of capacities and expectations of aboriginal community Enter into framework agreements or cooperation protocols Ensure priorities for both aboriginal communities and industry are addressed Work out a measure of stability and continuity in operations Partnership with other business, educational institutions, governments and NGOs

Strategies – Key Success Factors Corporate commitment to accommodation Encourage stewardship of aboriginal people Lead in initiating traditional use studies Participate in environmental monitoring and management Resource management studies Ecological management studies Fish and wildlife management studies

Conclusion A new legal environment resulted from the duties of consultation and accommodation set out by the SCC in the Haida Nation, Taku River and Mikisew cases Take an “ integrated business risk management approach ” to manage the uncertainty of “ shifting sands ” Engage Inuit and the Crown in early stage Do your own due diligence to assess aboriginal rights and titles Understand your philosophical commitment Obtain early and ongoing legal advice

Thank you. Cynthia Westaway