Aug '13

The right to privacy

Who benefits from confidential impact and benefit agreements?

By Andrew Livingstone

While not a legal requirement, the confidentiality of impact and benefit agreements (IBAs) between mining companies and aboriginal groups in Canada is the status quo. Although some of the details of the deals are made public – namely, job creation and training opportunities for community members and contracts available for aboriginal-owned companies – there is disagreement over whether payments made to aboriginal groups by mining companies should be revealed.

Management at Agnico-Eagle Mines Ltd. thinks these terms should be made public. Currently negotiating an agreement with Inuit in Nunavut for its Meliadine project – the second planned gold mine in the Kivalliq region after the company opened its Meadowbank project near Baker Lake in 2010 – the company wants the final agreement out in the open. Portions of its first agreement are public, but not the financial terms. (Terms are nearly always disclosed internally to First Nations members before an agreement is approved.)

“We want to have this thing public so people know what is going on, and where the money goes and how much money,” Louise Grondin, the company’s senior vice-president for sustainability, told The Globe and Mail in early June.

Indeed, companies like Agnico-Eagle have compelling reasons for making the agreements public. Such disclosure lets investors know where and how companies are spending their money and improves transparency between companies and First Nations organizations.

However, it could become problematic for First Nations negotiators if agreements become public knowledge and are used for reference purposes at future bargaining tables, said Shawn Batise, executive director of the Wabun Tribal Council. The council represents six First Nations in the Timmins, Ontario region, and has signed multiple IBAs in the past decade. Batise said there is no cookie-cutter approach to negotiating an agreement, and while he might wish it could be that easy, such an approach would not benefit First Nations across the country.

For one, the project impacts are ­different in each case. Batise explained that where “the impacts are low in a particular instance, and we negotiated something that’s acceptable to the community and the company,” those benefits would be suited only to that specific project. And those same benefits may not be relatable to other projects, due to the individual needs of each company and the impact the development will have on the community.

“Every time we sit down, it’s a different story,” Batise said. But if companies developing a project were able to access previous agreements and make comparisons between the one being proposed and a previous venture, it could create issues. Essentially, First Nations and companies could start off on different pages in terms of what a fair agreement should be, and agreements could become difficult to reach.

For this reason, confidentiality in IBAs needs to be maintained for aboriginal groups, agrees Paul Wilson, a British Columbia-based lawyer who works with companies and aboriginal groups to reach agreements, both small and large. Wilson said payments made by a company to a First Nations group do not legally have to be kept confidential, but in most cases it is left up to the First Nations to decide whether to do so. “And they usually decide to,” he said, adding that to First Nations, an IBA is a business deal. “They don’t want people being privy to what they believe should be something only they and the companies know. They view it as their business and no one else’s. There’s no compelling need to make it public.”

Confidentiality in agreements may actually suit both sides in negotiations, despite claims from companies and First Nations that the other wants confidentiality, said Ben Bradshaw, founder of the IBA Research Network and professor at the University of Guelph. “The practice of maintaining confidentiality around the financial terms of IBAs persists because it appears to work to the benefit of both industry and community signatories,” he said. “Industry signatories suggest that aboriginal signatories want confidentiality to avoid clawbacks of government program funds, and aboriginal signatories suggest that industry signatories want confidentiality to avoid ever-rising expectations from project to project,” he said.

Bradshaw admits he has had more conversations about the topic in the past few weeks than he had in the past five years and suggests this topic ­may fall within Prime Minister Stephen Harper’s recently announced ­commitment to mandatory reporting ­requirements for payments extractive com­panies make to governments. Still, he said, “We are seeing no evidence of one signatory group loudly calling for disclosure against the wishes of the other – at least for now.”

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