November 2010

Voices from Industry

Breaking new ground in B.C. Aboriginal relations

By By Zoë Younger, vice-president, corporate affairs, Mining Association of British Columbia

Zoe YoungerBritish Columbia’s mining sector is on the cusp of a renaissance. Several new mines have opened or are in construction, while other major projects are in final stages of regulatory approval. Driven by the demand from emerging markets, strong commodity prices have spurred a renewed interest in the province’s major commodities — steelmaking coal, copper, gold and molybdenum. If all goes well, the sector is poised to grow by some 30 per cent in the next five years.

B.C.’s renaissance is clearly driven by its greatest strengths: a solid geoscience database, low-cost power, skilled labour, good infrastructure and one of the most competitive tax jurisdictions in North America. The province is also known for some significant challenges — perhaps the greatest of these is navigating the quagmire of Aboriginal issues. However, there is now growing optimism that we are headed in a new and positive direction in this area due to some bold new initiatives by industry and the province.

British Columbia is different from the rest of Canada. Land claims here remain largely unsettled. The courts continue to rule on the nature and extent of Aboriginal rights, and with each decision, new expectations are created on all sides about the nature of Aboriginal interests and the mechanisms and depth of consultation required from governments and industry.

First Nations in B.C. have long asserted that Aboriginal title, which is claimed the province over (and some due to overlapping claims), means that First Nations are in a position to decide on the kinds of activities that take place on the land and collect a share of the revenues generated by the development of the resources. Disagreements with both levels of government on these issues have been the root cause of many confrontations, lengthy delays and lost opportunities, with industry often the “ham in the sandwich,” left trying to advance projects through direct negotiations with First Nations communities.

The concept of having First Nations benefit directly from resource developments in their traditional territories has been evolving over the last decade. This year, for the first time, groundbreaking resource revenue-sharing agreements have been concluded between the province and three First Nations communities involving two new mining projects: the Tk’emlups and Skeetchestn Indian Bands (New Afton) and the McLeod Lake Indian Band (Mt. Milligan). Through these agreements, the province will share a portion of the mineral tax paid by the mines with these First Nations.

In the first agreement between the province and Skeetchestn Indian Bands, the two participating First Nations will share 37.5 per cent of the mineral tax in connection with the New Afton Mine. The province estimates the financial benefit to be $30 million for the two communities over the life of the mine (expected to be 12 years). The McLeod Lake agreement is linked to the Mt. Milligan project and provides for 15 per cent revenue sharing for the band, worth approximately $35 million to the McLeod Lake Band over the life of the mine. Negotiations with other bands for other new mines or major mine expansions are in progress.

There is no legal requirement for the province (or industry, for that matter) to share revenues, nor does the new revenue-sharing policy affirm or deny rights and title claims. However, revenue sharing is a meaningful way to build relationships and align the economic interest of government, proponents and the participating Aboriginal communities in the success of a mining project. Environmental issues, jobs, training and community benefits will continue to be at the forefront of negotiations between companies and communities, but government-to-government revenue-sharing agreements will set a new stage for successful and collaborative negotiations.

Industry is optimistic about the positive influence these agreements will have on Aboriginal relations and the competitiveness of the B.C. mining sector with other jurisdictions. The province is showing the rest of the country, and indeed the world, that relationships that have been riddled with conflict and confrontation in the past can be redefined based on respect, collaboration and a common interest in the socio-economic well-being of communities.

It is hoped that as more agreements of this kind are concluded, Aboriginal community support for mining will increase and that to First Nations, as much as non-Aboriginal communities, building a mine in an area will come to represent the socio-economic healing and growth that is desperately needed in so many communities.

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