INVEST IN THE PRE-NEGOTATION PHASE AND OPTIMIZE THE CONDUCT AND SUCCESS OF YOUR NEGOTIATIONS M tre Jean M. Gagné, Senior Partner Thursday, April 3, 2008.

INVEST IN THE PRE-NEGOTATION PHASE AND OPTIMIZE THE

CONDUCT AND SUCCESS OF YOUR NEGOTIATIONS

Mtre Jean M. Gagné, Senior PartnerThursday, April 3, 2008

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BACKGROUND

• Developing good business relations that will support a lasting partnership is one of the key aspects to consider in any project (be it mining, forestry, hydro-electric, etc.) that directly or indirectly involves native communities.

• Negotiations with these communities cannot be approached, conducted or concluded in the same manner as with “non-aboriginal” parties;

• Investing time, energy and money in the pre-negotiation phases therefore becomes imperative in order to facilitate and optimize the entire process.

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PRESENTATION SUMMARY

• The goal of this presentation is to give an overview of the main steps that precede the onset of formal discussions with native communities:

1. Conduct good prior research and a complete due diligence;

2. Earn the trust of and secure commitments from the parties early on in the process;

3. Delineate the boundaries of the discussion from the very beginning;

4. Identify and understand the roles and powers of the parties, interveners and other stakeholders; and

5. Identify the major orientation governing the pre-negotiations;

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RESEARCH AND DUE DILIGENCE

• The first step is to conduct prior research on and a due diligence of the native communities at issue.

• The goals of this step are to:

identify the other projects underway and any agreements reached relating to the communities at issue, including a history of the negotiations or implementation thereof;

identify and learn about those you will be dealing with, i.e.: the workforce and its qualifications, economic development corporations, government structures, local businesses, etc.

define the orientations that will serve as guides before, during and after the discussions; and

provide for discussion leadership.

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• Prior research and due diligence can be performed on legal, cultural, political and socio-economic aspects.

• Determining what legal framework applies will help you pinpoint:

constitutional considerations;

principal legislation and agreements;

land claims processes underway on the territory (or territories) contemplated by the project.

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• Two important constitutional laws should be considered. These are:

1. The British North America Act, 1867: distributes powers and allocates legislative jurisdictions among the federal Parliament and provincial legislatures;

2. The Constitution Act, 1982: introduces a series of new rules that apply to native communities.

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• Under the British North America Act, 1867, the federal Parliament has exclusive jurisdiction to legislate over Indians and the lands reserved for Indians;

• The provinces, for their part, have exclusive jurisdiction to legislate such matters as:

the administration and sale of public land belonging to them;

local works and enterprises;

purely local or private matters within the province;

prospecting, development and management for and of non-renewable natural resources within their territory;

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• The Constitution Act, 1982, for its part:

recognizes and confirms existing aboriginal or treaty rights of the aboriginal peoples of Canada;

specifies that the definition of “aboriginal peoples of Canada” includes “Indians”, “Inuit” and “Métis” peoples;

• The coming into force of this legislation has had two major consequences:

1. Section 35(3) offers constitutional protection for all of the aboriginal peoples’ rights (past, present and future) that exist by way of agreements such as the James Bay and Northern Québec Agreement and the Northeastern Québec Agreement; and

2. This is the first time that the Canadian constitution enacts the recognition of explicit rights benefiting native communities;

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• Several laws and agreements specifically govern native communities, notably at the federal level:

Indian Act;

Cree-Naskapi (of Québec) Act;

Agreement Concerning a New Relationship Between the Government of Canada and the Cree of Eeyou Istchee;

• The effect of these laws include:

preserving the exclusive jurisdiction of federal authorities over several matters;

granting band councils certain regulatory powers over health, traffic and public safety, for example.

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• At the provincial level (Québec), the following laws and agreements are noteworthy:

Act respecting Cree, Inuit and Naskapi native persons;

James Bay and Northern Québec Agreement (the “JBNQA”);

Agreement concerning a new agreement between the Gouvernement du Québec and the Crees of Québec (the “Paix des Braves”);

Partnership Agreement on Economic and Community Development in Nunavik.

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• The sections of the JBNQA which merit attention are:

Section 22 – Environment and Future Development Below the 55th Parallel;

Section 23 – Environment and Future Development North of the 55th Parallel; and

Section 28 – Economic and Social Development – Crees.

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• Moreover, various examination processes that ensure protection of the environment and social settings can have an impact, especially those conducted by:

At the provincial level (Québec):

– COMEX; and

– COMEV;

At the federal level:

– COFEX;

• It is important to have a firm grasp of their composition (representatives – native communities).

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• The JBNQA, for instance, has the effect of regulating the organization, reorganization, proper administration and planned development of certain territories in the province of Québec by implanting administrative and governmental structures and programs aimed specifically at the Cree and Inuit.

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• The Paix des Braves seeks to apply and specify some of the provisions of the JBNQA that were a source of dispute and conflict.

• The Paix des Braves effectively:

regulates certain disputes and conflicts through financial compensation and the assumption of certain responsibilities provided for in the JBNQA regarding economic and community development; and

sets forth various measures favouring the development of mining, forestry and hydro-electric resources within the territory at issue.

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• The Paix des Braves also provides that the Québec government will encourage and facilitate:

the participation of the James Bay Cree in forestry, hydro-electric and mining projects by means of partnerships, jobs and contracts;

the execution of agreements between developers and the Cree regarding remedial measures, jobs and contracts associated with all future mining activities within the territory, including exploration;

the participation of the James Bay Cree in mineral exploration activities within the territory through the Cree Mineral Exploration Board.

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• The main objectives of the Cree Mineral Exploration Board are to:

assist the Cree in accessing mineral exploration opportunities;

facilitate the development of mineral exploration activities by Cree enterprises;

help and encourage the Cree and Cree enterprises to access regular Québec funding programs and other mineral exploration activity incentives;

act as an entry mechanism for offers of services presented by the Cree and Cree enterprises in the field of mineral exploration.

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• The principle that emanates from these agreements is that government authorities have expressed a desire to promote native community involvement in the development of natural resources, regardless of the native community at issue.

• An analysis of these laws and agreements helps to identify the powers and rights of the native communities and territories within which these laws and agreements apply.

• This analysis also helps to provide for processes that are ancillary to negotiations (environment, roads, etc.).

• An examination of pending disputes also gives a good idea of the situation and claims of the communities at issue.

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• Verifying with such government authorities as the Department of Indian Affairs and Northern Development (federal) and the Aboriginal Affairs Secretariat (Québec) can also shed light on various legal situations or claims that prevail on the territory or territories contemplated by the project.

• Verifications can also help identify the guides or policies that were adopted by a given native community regarding the processing of all kinds of projects on the territory or territories at issue.

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• Analysis of the socio-cultural context and the demographics of the territory will help you identify:

traditional practices and activities, such as hunting and fishing;

the role of Tallymen in relation to traplines and other issues;

the impact on the communities’ way of life;

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• An analysis of the political and administrative context will, among other things, allow you to develop participation mechanisms for:

project developers;

the native communities at issue;

Crown corporations and government authorities (ex: Hydro-Québec, the Société de Développement de la Baie-James, RCMs, municipalities, etc.);

administrative tribunals and aboriginal policy-makers, including their respective officers and officials (ex.: band councils, the Grand Council of the Crees, local development companies, the Cree Trapper’s Association, Makivik Corporation, etc.);

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Native undertakings (preliminary inventory);

Suppliers;

Native policies on employment, economic development, environment, etc.;

The role that native communities play in the environmental review process (ex: COMEX, COMEV et COFEX) and their concerns.

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TRUST AND COMMITMENT

• During the pre-negotiation phase, native communities must be given the opportunity to meet with the various interveners involved in order to communicate what they think of the project, to explain their cultural and socio-economic values and to suggest a means of participating in the project.

• It is important to adopt a team approach (native communities – developer) in order to develop an agreement.

• One way that native communities can express their values and secure a commitment from the project developer that it will honour these values is to adopt a joint mission statement.

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• A mission statement can contain the following:

Commitment from the interveners and their respective officers to ensure that a project will have a positive impact on the communities at issue;

Promotion of team work based on the values of passion, integrity, honesty, respect, patience, etc.;

Maximisation of exploration, development, operation and expansion of a project;

Development of practices that favour sustainable development;

Description of the native communities affected, their organisation, concerns, needs, resources, etc.

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• Another way of establishing trust and commitment is to describe, in a document known as a “team memorandum”, the process, rules and manner in which the agreement will be developed.

• Adoption of a mission statement and team memorandum will facilitate the discussion process and help create bonds of trust between the various interveners, including the native communities as such.

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• The means that will be used to involve the communities can be contemplated by preliminary and/or final agreements such as those described a little further on.

• The time spent adopting a mission statement or team memorandum, negotiating prior agreements or establishing the bases for a final agreement is an excellent opportunity to develop and establish a relationship of trust between the various parties before formal discussions begin.

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• Another way for communities to express their values and secure a project developer’s commitment to honour those values is to hold meetings and consultations in the communities at issue.

• These allow community members to:

meet with the developer’s representatives; and

learn about the project’s:

– developer;

– description and targeted territory;

– main phases;

– deadlines.

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DELINEATING DISCUSSIONS

• Another important step is to circumscribe the scope of discussions from the very beginning.

• The goal of this step is to avoid long and costly digressions, perhaps even negotiation failures and the imperilment of the project in question.

• To circumscribe the scope of discussions, we suggest adding prior agreements (letters of intent, memoranda of understanding) to the formal process leading up to negotiations and the execution of preliminary and final agreements.

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• Once a prior agreement is entered into, a discussion team is created and the mission statement and team memorandum are developed.

• There are two types of prior agreements: consultation and negotiation.

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• Prior agreements can contemplate a number of general matters, including:

Identification of the targeted communities and prior agreements relating to the communities or their traditional practices that need to be considered;

Establishment of relations with the communities at issue and presentation of the project;

Access to the site (roads, airlifts, sea lanes);

Protocols associated with various issues, such as fishing and hunting;

The services of a native community resource person to act as liaison officer;

Services that allow the pursuit of exploration and site development work;

The conduct of baseline studies (mining, environmental, etc.).

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• More specifically, a consultation agreement:

establishes the procedures that will govern how the government authorities will consult and accommodate native communities;

establishes the protocols governing exchanges between the various interveners, specifically regarding the tenor of information transmitted and deadlines allotted;

provides financial support for the collection and review of information required by various interveners; and

makes a preliminary and purely informational introduction of the benefits and rights that native communities may enjoy within the context of the project’s development as a condition precedent to the conclusion of a final agreement.

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• The two types of “negotiation” agreements that can pave the way to the formal negotiation of a final agreement are the letter of offer and letter of intent;

• A letter of offer:

allows the parties to identify the main elements they are willing to negotiate and the undertakings they are amenable to contracting;

is not binding on the parties; and

is nonetheless of significant importance because it entrenches the bases of the letter of intent and, incidentally, the final agreement.

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• A letter of intent:

details the undertakings set out in the letter of offer that were retained by the parties for negotiation;

submits a wider selection of elements for negotiation;

identifies the preliminary financial obligations;

identifies the information that will be required;

proposes the creation of a joint committee; and

identifies the principles underlying the parties’ conduct.

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• Contrary to a letter of offer, some provisions of a letter of intent can be binding on the parties and impose obligations on such topics as:

the confidentiality of information exchanged during the negotiation of the final agreement;

the dissemination of press releases and advertising of the project;

the legislation that will govern the letter of intent and final agreement; or

the negotiation timetable.

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PARTIES’ ROLES AND POWERS

• Understanding the roles and powers of the various interveners and stakeholders is another essential step that precedes the conclusion of an operational or final agreement.

• For example, properly establish who will be a party to the agreement and who will have the authority to approve the contents of the final agreement.

• Good knowledge of the parties and stakeholders will help you anticipate the main steps to follow and determine what preliminary and final agreements to enter into with each of the parties and stakeholders, if necessary.

• To that end, meetings must be held between the persons in authority, both at the level of the developers and the communities at issue;

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PRE-NEGOTIATION ORIENTATIONS

• The last major pre-negotiation step consists of drawing up the major directions that will govern the discussions.

• These major directions will be determined using the data and information gathered during the previous steps.

• The parties and goals of the final agreement will then be established.

• The parties to the final agreement might then include:

the native communities directly impacted by the project; and/or

the native communities indirectly impacted by the project; and/or

the native political offices and administrative tribunals that have authority over the native territory or territories at issue.

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• The scope of the final agreement could include:

a technical description of the project;

the environmental impacts;

training, recruiting and employment;

the involvement of native businesses;

the financial considerations;

dispute resolution;

management of the site and operations; and

ancillary clauses.

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• It is preferable to begin discussions at the time of your first significant implementation interventions of the project.

• In other words, “better sooner than later.”

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CONCLUSION

• By following all of these steps, you will:

reduce implementation delays;

optimize your chances of successful discussions;

ensure a certain longevity for decisions made;

avoid delays in obtaining the requisite authorizations;

make sure that agreements are negotiated in good faith; and

promote the development of a long-term relationship;

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FASKEN MARTINEAU – FIRM PROFILE

• Fasken Martineau is a large international firm.

• We specialize in commercial law and litigation and have over 650 lawyers in Canada, the United Kingdom, and South Africa.

• Fasken Martineau has expertise in all areas of economic activity and public administration.

• Aboriginal affairs and mining law are two sectors where Fasken Martineau has leading-edge expertise.

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INTERNATIONAL MINING LAW GROUP

• In its 2008 edition, the International Who’s Who of Mining Lawyers ranked Fasken Martineau as the top global law firm for its expertise in mining for the fourth year in a row.

• All told, our firm has more than 150 years of national and international experience in the mining industry.

• Fasken Martineau is the only law firm in the world to have offices in all major financial centres of the mining sector – Toronto, Vancouver, London and Johannesburg.

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ABORIGINAL AFFAIRS – OFFERING SOLUTIONS

• Fasken Martineau’s Aboriginal Affairs group is particularly well qualified to offer solutions to the complex aboriginal issues faced by their government, aboriginal and industry clients.

• Fasken Martineau has one of the largest number of aboriginal law specialists in Canada, with over 20 lawyers across the country.

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NATURAL RESOURCES AND ABORIGINAL AFFAIRS LEGAL TEAM – QUÉBEC CITY OFFICE

Mtre Jean M. Gagné Mtre Martin R. Gagné(418) 640-2010 (418) [email protected] [email protected]

Mtre Ianny Xénopoulos Mtre Christopher Gauthier

(418) 640-2020 (418) [email protected] [email protected]

INVEST IN THE PRE-NEGOTATION PHASE AND OPTIMIZE THE CONDUCT AND SUCCESS OF YOUR NEGOTIATIONS M tre Jean M. Gagné, Senior Partner Thursday, April 3, 2008.

Documents

native communities

diligenceprior research

good prior research

diligencethe constitution

british north america

federal parliament

exclusive jurisdiction

prenegotiation phases