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The Globe and Mail

Developers struggle to balance exploration with native consultations

Glenn Nolan, president of the Prospectors &Developers Association of Canada, knows the importance of consulting native communities – he’s a past chief of the Missanabie Cree.

Brent Linton/The Globe and Mail

As the first aboriginal president of the Prospectors & Developers Association of Canada, Glenn Nolan has a unique understanding of the resource sector's increasingly onerous duty to consult with first nations when developing mining or energy projects.

Mr. Nolan is vice-president of NorOnt Resources Ltd., one of the leading companies developing the mineral deposits in northern Ontario's Ring of Fire district. He knows how critical it is, in a hyper-competitive industry, for mining companies to be able to move swiftly and secretively in establishing claims to promising tracts of land.

But as a former chief of the Missanabie Cree from northeastern Ontario, he is also acutely aware of the potential for resource development to help lift Canada's first nations out of crushing poverty, and the need for a respectful partnership between industry, government and the indigenous people.

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"We've been saying all along to our [Prospectors & Developers Association] members that the best strategy is to go in at the earliest opportunity and talk to the community," Mr. Nolan said. "And that means as soon as you've secured the land tenure."

Today, as political tensions boil between some native chiefs and protesters on one side, and federal and provincial governments on the other, mining and energy companies often find themselves in the middle, trying to reach agreement with increasingly demanding communities that are aggrieved by the past – and often present – failures to take their interests into account.

The industry and governments are being driven by the courts to consult early and accommodate the concerns that aboriginal communities may have with proposed developments. Last month, a Yukon appeal court overturned the territory's mining claims system, setting a new benchmark under which governments can't transfer land titles – be they mining claims or oil and gas leases – without triggering the duty to consult.

Now first nations leaders – whether protesters or elected chiefs – are increasingly insisting that the provinces consult them before oil and gas leases or mining claims are registered.

The appeals court, composed of three British Columbia justices, appears to have created a new obligation on governments to consult with first nations before taking any regulatory action that would affect their interests on traditional territory, said Sam Adkins, a lawyer with McCarthy Tétrault in Vancouver.

And provinces have been inclined to hand off the consultation duty to individual companies as they pursue specific projects.

The increased consultation requirement could put mining and oil and gas companies at a disadvantage in the early stages of exploration, when they are trying to determine whether a lease holds promise and whether to go after adjacent properties.

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"It's very important to get to get those rights on an easy and efficient and confidential way – you don't want to advertise to the world that you have potentially found a great area before you solidify your rights," Mr. Adkins said.

Often, aboriginal communities will demand payments even though the exploration property is just as likely to yield nothing of value as to strike pay dirt, he added.

Provinces are already struggling with the consultation process, and with the role of industry in carrying it out. The Alberta government last fall issued a discussion paper in which it promised to centralize its consultation effort and relieve some of the burden from industry.

But that proposal has run into opposition from first nations leaders who say it puts too much power in the hands of bureaucrats.

The oil and gas leasing process is a "dynamic and quick changing thing," said David Pryce, vice-president of the Canadian Association of Petroleum Producers.

"So we would look for timeliness, in terms of the turnout from when we're asking for land to be posted to when we actually would lease it."

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Despite concerns about delays and uncertainty, many companies are already working closely with local aboriginal communities to hammer out benefits agreements and, increasingly, partnerships for development. The mining industry has some 180 deals with first nations in place across the country, PDAC's Mr. Nolan said.

He added that Canada is early in the game of reaching a workable partnership between government, industry and first nations – likening the situation to 20 years ago when the companies began developing their capacity to deal with increasing environmental demands.

"There are a number of companies out there that are doing a tremendous job on communicating with communities, not just on the project but on the opportunities that are available, and working with government on training programs and business development programs," he said. "But many companies don't have that capacity."

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