Royal Dutch Shell PLC paid more than $7.8-million (U.S.) in fees last year to five First Nations in Alberta, including some vocal opponents of oil sands expansion, the company revealed in its first filing under Britain's publish-what-you-pay regulations.
As part of a global anti-corruption initiative, Shell outlined its payments of royalties, taxes and fees to national, regional and local governments around the world – including First Nations in Canada. Shell, BP PLC and other British-registered extractive companies released their payment lists for the first time this year, while companies listed on exchanges in Canada and the United States will have to follow suit in the coming years.
All told, Shell paid $21.8-billion in taxes and fees to governments, including $4.9-billion in Nigeria and $4.4-billion in Malaysia. It remitted $150-million to various Canadian governments, with 80 per cent of the revenue going to Alberta.
BP said it also made payments to First Nations in Alberta, but the individual amounts fell below the £86,000 ($125,000 Canadian) threshold for reporting.
Canadian resource companies will have to report what they pay this year to foreign and domestic governments, but Ottawa provided a two-year reprieve for reporting payments to First Nations in order to allow time for consultations. In an e-mailed statement, Natural Resources Canada said the consultations are now under way, and that the government remains committed to the transparency policy.
Aboriginal leaders have resisted the publication of business arrangements between resource companies and bands.
Two years ago, the Assembly of First Nations passed a resolution condemning the plan, saying payments to aboriginal communities by resource companies are the result of "private, commercial agreements that contain sensitive, confidential information." Forcing the publication of payments would jeopardize relations between industry and First Nations and undermine what support there is for development, the AFN warned.
"The fear is the [federal government] will identify it as own-source funding and bands will be penalized" by having federal payments clawed back, Craig Makinaw, the AFN's regional chief in Alberta, said in an interview on Tuesday. "You're trying to move ahead, but you get penalized for it, so it makes it tougher on the bands."
Shell supports the global effort on transparency, as well as the consultations being held by Natural Resources Canada to include aboriginal communities, company spokesman Cameron Yost said, adding that its inclusion of those payments in its 2016 report is in keeping with the British law.
"Some Canadian indigenous groups would be considered as governments under these regulations, and as a result, Shell was required to report those payments," Mr. Yost said.
Shell paid $3.9-million (U.S.) in fees into a trust account for the Woodland Cree First Nation, which in 2007 sought a halt to the company's Carmon Creek oil sands project – though band leaders later described it as a "significant economic opportunity" for the community. Shell announced last November that it was halting work on the Carmon Creek project, which is near Peace River, Alta.
The company paid $2.1-million – also into a trust account – to Fort McKay First Nation, which is based in the hamlet 50 kilometres north of Fort McMurray and is surrounded by oil sands mines. Fort McKay expected to earn $30-million (Canadian) last year from its band-owned businesses that primarily work for the oil industry, and from impact benefit agreements with companies.
Shell also paid a total of $1.15-million in fees to the Mikisew Cree First Nation, based in Fort Chipewyan, 225 kilometres down river from Fort McMurray. The Cree band recently warned that expanding oil sands development was threatening Wood Buffalo National Park, which is listed as a UNESCO World Heritage Site.
Despite concerns raised by aboriginal leaders, there is no indication that Ottawa will remove from the legislation the requirement to report such payments, said Claire Woodside, director of Publish What You Pay-Canada.
The U.S. Securities and Exchange Commission published its final rules at the end of June. It exempts companies from reporting payments to U.S. states and local governments, including tribal councils, but does require reporting of payments to foreign aboriginal governments, said Calgary lawyer Anthony Cole, a partner at Dentons LLP.