Over the last several years, First Nations and Industry have been negotiating what are commonly referred to as Impact-Benefit Agreements or “IBAs.” These agreements can deal with any number of items including financial benefits, contracting, skills and employment, and consultation. One of the many reasons why First Nations and Industry enter into these agreements is to seek to provide some sort of “certainty” for industrial development. However, to be clear, the negotiation of IBAs is not always the preferred option for First Nations. In a number of cases, industrial development – alone or with other projects – can have significant negative impacts on the rights of First Nations.
Negotiations require a great deal of give and take and compromise. If the parties are successful, IBAs will form the basis of a cooperative future relationship. To achieve this, an IBA must be drafted toward the future – the signing of an IBA is often the beginning, or a new beginning of a relationship. The parties to an IBA must therefore adjust their behaviour from being positional and focused on regulatory record building to a new, more cooperative relationship.
While the focus on cooperation sounds great in theory, the real challenge in creating a successful IBA comes down to this question: how do the Parties work together to ensure that the processes and benefits negotiated in the IBA actually come into being?
In our experience, it is important for the Parties to an IBA to develop structures and processes during negotiations that will ensure the IBA’s successful implementation once the ink is dry on the agreement.
While every negotiation is different, the following are some key issues to consider during negotiations that will assist the Parties in translating their intentions into on the ground reality.
- Funding: Does the agreement have yearly implementation funding? This is critical to the success of an IBA, as there is a need to fund the work of committees under the agreement, to hire one or more administrative positions to “police” the agreement (ensure that tasks are being done, time lines and reporting are being followed etc.), to produce work plans and flow charts to ensure that the work assigned to committees is completed. Implementation can often live or die based on whether the Parties have set aside sufficient money for the implementation work to be done.
- Implementation Plan: Does the IBA require an initial implementation plan and yearly plans thereafter? Such plans are critical to the success of an IBA as they set out the work that needs to be done in the following one or more years, and provide direction to the Parties generally. A well-drafted implementation plan can set goals and targets to allow the Parties to judge whether or not they are actually achieving their goals. Those plans should relate to the Parties’ priorities under the IBA and to the longer-term goals of the First Nation.
- Staffing: Some IBAs have one or more committees (Leadership, Contracting and Employment, Environmental/Consultation). When thinking ahead to implementation, consider:
- Who will be on the committees? Do they have sufficient knowledge of the IBA, sufficient expertise to sit on a particular committee? Are they to be paid and from what source of funds? Should they have an employment contract setting out roles and expectations?
- How will work be coordinated as between committees in an IBA? Across a number of IBAs? Between different departments of a First Nation? It is critical that all branches of a First Nation – Leadership, business, administrative – are aware of what the IBAs are trying to accomplish and how they fit into the larger goals and planning within a First Nation. It is also important to ensure that members of committees receive training on an ongoing basis about the goals of the IBA, cultural issues and related matters.
- How will committees understand their work and goals? Many IBAs require that committees draft terms of reference. This task must be taken seriously as committees must have clear guidance as to what they are supposed to do and how to measure their success. Another item to consider, particularly where an IBA requires ongoing collection and use of Indigenous Knowledge, is whether a First Nation may wish to set up an IK Committee and, if so, how participation will be funded.
- Use of IBA Funds: It is important to establish clear reporting requirements in terms of how IBA funds may be used, where any restrictions are placed on funds. Reporting relates both to the Parties to an IBA and to the First Nation Leadership and community. Some IBAs may have trusts while others do not. Annual implementation plans can assist in dealing with reporting requirements and financial reporting templates can be very useful.
- Reporting and Community Engagement: A number of reporting requirements may apply to IBAs. Depending on the type of IBA, it may be necessary to report to a leadership committee, Chief and Council, or to the First Nation community. Again, reporting templates can make this job easier. An IBA may also require community meetings such as for project updates or other matters. In these cases think ahead to:
- What the meeting schedule should look like,
- The degree of information that can be disclosed (are there confidentiality clauses to consider?), and
- Who pays for such meetings (most IBAs require companies to continue paying for these meetings where it is the company that requests interface with the community).
- Environmental/Consultation: A carefully drafted environmental/consultation provision can allow for the Parties to step in where government is absent. There is great room for creativity here in terms of ensuring that First Nations have much more say in critical issues – access, monitoring, and reclamation, to name some examples – than they would through regulatory processes alone. Some of the key issues around environmental/consultation, in addition to staffing (see above) are:
- What are the triggers for consultation?
- How is this different from the issues that are dealt with in the regulatory context without an agreement?
- How do the parties move from conflict to cooperation?
- How will consultation be funded – there are various models, but the Parties need to ensure that First Nations having funding both to staff consultation offices and “keep the lights on”, as well as specific funding (depending on consultation triggers) to review applications and to hire outside experts when needed.
Funding to do consultation, even under an IBA, should not come from the financial benefits that the agreement may provide. Paying consultation fees in an IBA cannot be treated as some sort of accommodation measure which the First Nation should pay for out of the financial benefits that the IBA is supposed to deliver. The parties need to consider training for post-IBA consultation, systems for documenting and addressing concerns, the inclusion of IK processes, updating IK (and funding for this), particularly on multi-year or multi-phased developments and other matters.
- Dispute Resolution: These provisions are often an afterthought to an IBA and this is problematic and risky. The parties need to spend considerable time in drafting dispute resolution clauses, dealing with issues such as:
- Which issues go to dispute resolution?
- Are there different levels of DR and should different kinds of disputes end at different levels?
- How is DR paid for?
- What scope should the person deciding the dispute have to fashion remedies and what expertise should that person have?
- To what extent do the parties want to adopt provincial or other arbitration rules (where an IBA provides for arbitration)?
There are many dispute resolution issues and failing to think about these issues may cause problems later on. As one specific example, if arbitration rules call for written evidence, this may prejudice First Nations where the dispute requires the provision of oral history testimony.
As can be seen, there are many issues to consider in implementation of IBAs. The Parties need to be flexible in drafting and implementing IBAs, particularly when an agreement may contemplate a relationship over several decades.