Negotiation of Agreements

Preparing for Negotiations

Irrespective of what type of agreement a First Nation community contemplates entering into, there are a few preliminary tasks that can help prepare for negotiations, including:

  1. Gathering adequate information;
  2. Developing negotiation strategies and identifying negotiators;
  3. Signing negotiation protocols (including funding agreements); and
  4. Determining minimum agreement content requirements.
Step 1: Gather adequate information

Prior to entering into negotiations, First Nations should obtain information relating to what is being proposed, who is proposing it, and what impacts are likely to result from the proposed activities.

Normally, the proponent will be able to provide information about the proposed activity. This information should be presented in a clear manner that is easy to understand.80 Because this information is prepared by proponents with a vested interest in ensuring the project is approved, it should not be considered unbiased. Therefore, First Nations may wish to perform an independent review of any technical information provided by the proponent. Ideally, the proponent should provide funding for the First Nation to carry out this independent review.

The proponent should also provide background information about itself. However, First Nations should conduct their own due diligence to find out more about the proponent. 81 Relevant information may include details about the proponent, including its:82

  • size, number of employees, ownership structure, headquarters location, profit margins and reputation in the industry;
  • status and commercial objectives in the mining sector (e.g. whether it is a junior company looking for a short-term opportunity or a larger mining company looking to create long-term relationships);
  • representatives, including whether they are authorized to negotiate and sign agreements; and
  • social and environmental track record, including their track record with other indigenous communities and First Nations.

Finally, it is important to determine the potential impacts of the proposed activities. Often, it is impossible to predict the impacts of an activity without conducting social, economic and environmental baseline studies. These studies could help determine: 83

  • the current state of the environment, resources and habitat and the potential impacts on them;
  • the potential impacts on aboriginal rights, title and interests;
  • the community’s long-term interests (based on its interests, priorities and opportunities);
  • the benefits for the proponent that the First Nations community can bring to the negotiation table (for example, existing buildings, land, community skills, trades, businesses, etc.); and
  • the benefits that the First Nations community expects from the proposed development (for example, training, jobs, a share of profits, etc.).

Unfortunately, these studies can be very costly and First Nations often lack the financial or technical resources necessary to undertake their own studies. To address this problem, many First Nations are negotiating provisions into their agreements to secure funds to conduct baseline studies and to ensure that the communities either set or have input on the terms of reference for these studies. Some agreements specify studies and data that need to be compiled over and above the minimum requirements set out by regulators.

Step 2: Develop Negotiation Strategy

Prior to entering into negotiations, First Nations should consider developing internal negotiation strategies. These strategies can help ensure that important benefits to the community are adequately captured in the agreements and can help avoid or minimize internal conflicts over negotiation processes and procedures. Negotiation strategies can, for example, identify: 84

  • leverage (for example, how much delay may be caused to a project or regulatory process if the First Nation is not fully supportive and involved);
  • minimum and maximum benefits that will be sought;
  • important benefits that the First Nation can offer;
  • levels of protection that the other party will be asked to uphold; and
  • measures and targets for the delivery of benefits.

Negotiation strategies should also identify the First Nations’ appointed representative(s). In addition, efforts should be adopted to ensure that negotiators are capable, representative, accountable, and have access to a support team of technical specialists. Furthermore, their mandate, roles and responsibilities should be clearly determined in advance of negotiations,85 including the extent of their decision-making authority. To avoid conflicts of interest, representatives responsible for negotiating economic agreements with proponents should not be the same as those who have responsibilities in the Environmental Assessment process.86

Step 3: Develop Negotiation Protocol with other Parties

Finally, First Nations may wish to enter into negotiation protocols (sometimes referred to as memoranda of understanding) with the other parties. Negotiation protocols are short agreements that set out the identity of the authorized representatives of each party; the procedures and timelines to guide the negotiation; and appropriate dispute resolution procedures.87

Some negotiation protocols require that the dispute be referred to arbitration if an agreement cannot be reached by the parties within a reasonable amount of time. This is practiced in Australia, under the ‘right to negotiate’ process.88 If the negotiation parties (the State, proponent and the native title party) are unable to negotiate an access agreement within six months, despite ‘good faith’ negotiations taking place,89 any negotiation party may request the National Native Title Tribunal (NNTT) to make a determination that the tenement not be granted, the tenement be granted, or the tenement be granted subject to conditions to complied with by any of the parties.90 Prior to requesting such a determination, the parties can ask the NNTT to mediate during negotiations to assist them to reach agreement.91

As is the case with the NNTT, arbitration bodies can act as neutral third-parties to mediate the process with the goal of reaching a mutually-agreeable decision or, where negotiations fail, make a binding decision taking into account various factors. In the case of the NNTT, these factors include the effect of the exploration/mining activities on the enjoyment of registered native title rights and interests and the “way of life, culture and traditions” of the native title parties.92

As participation in negotiations can be costly, some negotiation protocols address who will provide First Nations with the technical, legal and financial resources to participate effectively in the negotiations. These funding agreements are often required in First Nations’ resource policies as a pre-requisite to that First Nations’ participation in negotiations.93 Limited funding may also be obtained from the federal government, which recognizes the need to provide First Nations with financial assistance to enable them to enter into various types of negotiations with proponents.94

Step 4: Identify Minimum Content of Agreement

The final content of Exploration Agreements, Impact Benefit Agreements, and Accommodation Agreements will ultimately depend on the project-specific negotiations. While this paper does not purport to provide legal advice regarding the terms and conditions of various types of agreements, First Nations may wish to consider including provisions relating to the following:

  • The purpose, principles and objectives of the parties with regard to the proposed mining activity, as early agreement on these provisions helps set the stage for negotiating the rest of the agreement and may be useful to interpret the contract should a dispute arise in the future;95
  • Protocols for communication and translation, information exchange and on-going liaison, implementation funding mechanisms, and dispute resolution processes;96
  • Types of activities covered by the agreement;
  • Terms of permissible entry onto traditional territory;
  • Measures to avoid and mitigate environmental harm, and protect First Nations’ land-use practices and rights;
  • Financial assistance, benefits and compensation for impacts on land-use activities and interests;97
  • First Nations’ rights to monitor and inspect activities covered by the agreement;98
  • Parties’ obligation to re-negotiate where a mining activity is significantly changed or expanded;99
  • Commitments to negotiate (and fund) additional agreements at later stages of the mining-cycle;
  • Ability to bind future mine owners and operators to the agreement;
  • First Nations’ ability to discuss the content of the agreement versus requirements to keep it, or particular sections of the agreement, confidential (such as potentially sensitive compensation provisions or issues of cultural significance);100 (On one hand, confidentiality provisions may result in mistrust and misunderstandings about the agreement amongst community members.101 On the other hand, First Nations may prefer not to publically disclose the contents of agreements which would make them accessible to the provincial and federal government.102 One option is provided by the state of Queensland (Australia)’s approach. That approach operates under a ‘dual deed’ system in cases where the right to negotiate applies to the grant of a tenement.103 Basically, the native title parties, the proponent and the Queensland government enter a tri-partite deed that shows evidence of the proponent’s negotiation of an agreement with the native title parties regarding grant of the relevant tenement, however, the ‘substance’ of the deal (such as compensation payments) is in a confidential ancillary agreement between the proponent and the native title parties, which is not disclosed to the government.104)
  • First Nations’ ability to continue to participate in the regulatory process after signing the agreement; (Notably, in Nunavut, laws prohibit agreements from preventing First Nations from freely participating in regulatory proceedings relating to proposed projects.105)
  • Recognition that the terms of the agreement do not “derogate or abrogate from any Aboriginal rights, titles, claims, or interests”;106
  • First Nations’ right to refuse to support the proposed project after further studies and negotiations have been carried out (for example, a First Nations’ negotiation of an access agreement for exploration activities should not automatically indicate their consent to any subsequent related development107); and
  • Terms of departure and termination clauses.

As mentioned above, each agreement will differ according to the parties involved, the stage of the mining life cycle the project has reached at the time negotiations take place, and the nature of the proposed activity (e.g. extent of ground disturbance involved, the proposed duration of activities, and the potential impact on cultural heritage or sites of significance). Nevertheless, minimum content requirements can be useful to guide agreement negotiations. Many First Nations have incorporated such minimum content requirements into their resource policies to help ensure that important matters are not accidentally overlooked or not given appropriate weight in negotiations.108

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