Indigenous Engagement: Mitigating Future Regulatory Uncertainty

With the proposed enhancement of Indigenous peoples’ role in several decision-making processes, building strong, positive, mutually beneficial relationships with potentially affected Indigenous peoples may mitigate risks to mining projects in Canada. Even though the specific requirements arising from these processes have not been determined, mining companies may prevent and resolve costly, time-consuming disputes through the approach described below to engagement with Indigenous people.

The return on investment in building such relationships may be most apparent during exploration and mine development. However, such relationships may also significantly mitigate risks during mine operations or even mine closure.

Of course, the notion that relationships with Indigenous peoples are important is not a new one; this concept is a fundamental component of the Mining Association of Canada’s Towards Sustainable Mining initiative. Thus, this article highlights several recent developments occurring in Canada, as well as describes an approach to mitigate associated risks.

Uncertainty Amid Recent Developments

Significant uncertainty for future mining projects in Canada is being created by the following three key developments.

  1. Implementing UNDRIP: The implementation of the United Nations Declaration of the Rights of Indigenous Peoples (UNDRIP)—including through Bill C-262 and otherwise—may significantly affect future mining in Canada. UNDRIP includes a requirement that states will consult and cooperate with Indigenous peoples to obtain their free and informed consent prior to the approval of any project affecting their lands and other resources. A key aspect will be how the concept of “free, prior and informed consent” is defined and operationalized in the Canadian context.
  2. Canada’s Recognition and Implementation of Rights Framework: While the contents of this framework are being determined through engagement with Indigenous peoples, the federal government has indicated the framework, as a starting point, should include new legislation and policy that will make the recognition and implementation of rights the basis for all relations between Indigenous peoples and the federal government in the future.1 Given the government’s practice of delegating to proponents procedural aspects of engaging with Indigenous peoples, this framework may ultimately affect mine proponents.
  3. Canada’s Proposed Impact Assessment Act: Its combination of a broader consideration of project impacts and mechanisms that may practically result in even longer decision-making processes than under the Canadian Environmental Assessment Act, 2012 may result in contentious mining projects in Canada not being commercially viable under the proposed Act.

The Consequence of Clashes

The implementation of some or all of these decision-making processes is expected to result in projects with Indigenous peoples’ support having a much higher chance of obtaining a timely, positive outcome. Projects that are subject to disputes with Indigenous peoples may encounter, among other things, necessary permits not being issued, the issuance of such permits being challenged and/or delays with respect to the project schedule.

In addition, such disputes may detrimentally affect a project’s financing, whether in the form of project financing or streaming arrangements. Ultimately, the financing impediment is often tied to the uncertainty regarding whether the project will operate (as financially modeled) and if so, when. Further, such disputes may also pose reputational concerns for financing parties.

While these decision-making processes will unfortunately take at least a few years to develop a proven track record and most mining projects cannot afford such a delay, the good news is that action now can mitigate many of the associated risks.

Understanding is a Key Component

A sophisticated understanding of the rights and context of an Indigenous people potentially affected by a proposed project, is often necessary for developing a durable relationship. Like any lasting relationship, it must be mutually beneficial. Without understanding an Indigenous people’s rights, history, culture, way of life and current circumstances, a respectful, strong, and mutually beneficial relationship is unlikely to develop.

Seek Partnerships

To reap the ultimate level of benefits, such relationships must reach the level of a true partnership, where mutual benefit and accommodation of each other’s interests occurs. Developing relationships to that level takes a sustained investment of time, money and effort. However, such a relationship can ultimately be the difference between a project proceeding or going sideways when a future engagement requirement or issue arises that was not initially contemplated—and thus, not previously addressed.

Constructive Dialogue

Genuine dialogue regarding the desires, needs and constraints of potentially affected Indigenous peoples and a proponent is far more likely to identify any potentially acceptable options than a typical, commercial bartering approach. Without such a dialogue, it seems increasingly unlikely that projects—especially contentious ones—will achieve the support of potentially affected Indigenous peoples and thereby prevent protracted disputes and related litigation.

Even if support is achieved, new future requirements arising under the developing decision-making processes typically pose a greater risk to an arrangement struck by bartering than one developed through a principled dialogue.

Not surprisingly, where a dispute arises and a principled dialogue has occurred, such a dispute is often quicker and less costly to resolve than other disputes, since a mutually acceptable framework for such dialogue exists and the parties have experience with it. Moreover, the level of respect and trust necessary to resolve a dispute through negotiation either already exists or is typically easier to establish than in other circumstances.

However, even in the context of a seemingly intractable dispute and without a history of constructive, principled dialogue between the parties – such dialogue can still sometimes avoid continued litigation – while creating a better basis for future dealings among the parties.

Future Success

While the specific requirements under the developing decision-making processes have not been determined, the associated risks can now largely be mitigated. Regardless of what approach has been taken to date in connection with a particular mine, significant value may be derived from considering the rights and background context of any potentially affected Indigenous peoples. Building durable relationships by engaging in constructive, principled dialogue will only benefit a mine project, no matter what stage it is at.

This article was originally published in the Fall 2018 issue of Canadian Mining Magazine. To read the full magazine, visit www.canadianminingmagazine.com.

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1 Government of Canada, News Release “Government of Canada to create Recognition and Implementation of Rights Framework” (14, February 2018), online: https://pm.gc.ca/eng/news/2018/02/14/government-canada-create-recognition-and-implementation-rights-framework.

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This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

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