Ways of maximizing Impact and Benefit Agreements (IBA): focusing on the before and after of negotiations

Transcription

1 Ways of maximizing Impact and Benefit Agreements (IBA): focusing on the before and after of negotiations Presented at Quebec Mines Presented by: The Impact and Benefit Agreement (IBA) Expertise Center of the FNQLSDI November 22, 2017

2 Goal of the presentation To help communities maximize benefits of IBAs

3 OUTLINE What is an impact and benefit agreement? Current state of affairs in the mining industry When to negotiate, the importance of good timing? How to maximize benefits through strategic planning? How to maximize benefits through proper implementation?

4 I. What is an IBA?

5 What is an Impact and Benefit Agreement? What are IBAs? Their purpose? Commercial agreements negotiated directly between resource developers and First Nation communities, without government interference or any regulatory requirements. Enhanced impact mitigation and a series of benefits to the First Nation in exchange for community acceptance of a project.

6 Which sectors have IBAs? IBAs can arise in various industries where a proponent seeks to develop a project The resource extractive sector (Mining industry) Oil and gas (pipeline projects on aboriginal territories) Forestry projects Resource development projects (Solar or wind) NOTE: The presentation will focus on IBAs in the mining industry but most recommendations can be adapted to other scenarios

7 Broader legal context Recognition in Domestic Law Duty to consult based on aboriginal rights Principles articulate in Supreme Court of Canada cases (Haida Nation, Tsilhqot in Nation) Widespread litigation has been a valuable tool to enhance negotiations International Law Free, prior and informed consent

8 II. Current state of affairs in the mining industry

9 Canadian Mining facts (2015) $92 billion in exports $56 billion to GDP $43 billion in mineral production $1.7 billion in exploration expenditures Source: NRCAN Mining Sector Performance Report

10 Facts in Quebec (2015) $7.7 billion mineral production value $220 million in exploration expenditures 100, 610 jobs Source: NRCAN Mining Sector Performance Report

11 III. When to negotiate, the importance of good timing

12 Steps to project maturity Step 1 Analyze the project and the broader environment Step 2 Negotiate preliminary agreements (MOUs) Step 3 Preparing for IBA negotiations: establishing position Step 4 Conducting negotiations and reaching agreements Step 5 Implementing agreements and maintaining relationships 12

13 Mining Life Cycle Claim staking Permits acquisition Preliminary assessment of resources Environmental models Economic feasibility study Investment plan and financing Preliminary assessment of resources Mine and infrastructure design Environmental Assessment Design of climate change impacts and mitigation measures More permits and approvals Monitoring of impacts Local business Training Social ramifications Mine construction and engineering EA compliance Local business Skills training Monitoring impacts Implementing closure plant Rehabilitation Monitoring impacts Concept Exploration Feasibility study Development Construction Mine Production Closure 1 to 3 yrs 3 to 7 yrs 2 to 5 yrs 3 to 7 yrs 2 to 4 yrs 5 to 50 yrs 2 to 10 yrs Where IBA negotiations typically occur

14 Mining Life Cycle Claim staking Permits acquisition Preliminary assessment of resources Environmental models Economic feasibility study Investment plan and financing Preliminary assessment of resources Mine and infrastructure design Environmental Assessment Design of climate change impacts and mitigation measures More permits and approvals Monitoring of impacts Local business Training Social ramifications Mine construction and engineering EA compliance Local business Skills training Monitoring impacts Implementing closure plant Rehabilitation Monitoring impacts Concept Exploration Feasibility study Development Construction Mine Production Closure 1 to 3 yrs 3 to 7 yrs 2 to 5 yrs 3 to 7 yrs 2 to 4 yrs Training and employment Preferential treatment of community business in construction phase Financial benefits Mitigation of environmental impacts 5 to 50 yrs 2 to 10 yrs IBA BENEFITS

15 Mining Life Cycle Claim staking Permits acquisition Preliminary assessment of resources Environmental models Economic feasibility study Investment plan and financing Preliminary assessment of resources Mine and infrastructure design Environmental Assessment Design of climate change impacts and mitigation measures More permits and approvals Monitoring of impacts Local business Training Social ramifications Mine construction and engineering EA compliance Local business Skills training Monitoring impacts Implementing closure plant Rehabilitation Monitoring impacts Concept Exploration Feasibility study Development Construction Mine Production Closure 1 to 3 yrs 3 to 7 yrs 2 to 5 yrs 3 to 7 yrs 2 to 4 yrs 5 to 50 yrs 2 to 10 yrs Negotiation of preliminary agreements IBA negotiations Implementation

16 Mining Life Cycle Claim staking Permits acquisition Preliminary assessment of resources Environmental models Economic feasibility study Investment plan and financing Preliminary assessment of resources Mine and infrastructure design Environmental Assessment Design of climate change impacts and mitigation measures More permits and approvals Monitoring of impacts Local business Training Social ramifications Mine construction and engineering EA compliance Local business Skills training Monitoring impacts Implementing closure plant Rehabilitation Monitoring impacts Concept Exploration Feasibility study Development Construction Mine Production Closure 1 to 3 yrs 3 to 7 yrs 2 to 5 yrs 3 to 7 yrs 2 to 4 yrs Influence over project design and operation Preferential treatment of community business in exploration phase (ex: drilling, GIS, soil sampling) Employment Preferential treatment of community business in exploration phase (ex: drilling, GIS, soil sampling) Potential investment into project as shareholder Additional time to participate in environmental and social studies Training and employment Preferential treatment of community business in construction phase Financial benefits Mitigation of environmental impacts 5 to 50 yrs 2 to 10 yrs IBA BENEFITS

17 Mining Life cycle EA approval Permit approvals Concept Exploration Feasibility study Development Construction Mine Production Closure 1 to 3 yrs 3 to 7 yrs 2 to 5 yrs 3 to 7 yrs 2 to 4 yrs 5 to 50 yrs 2 to 10 yrs

18 How to maximize benefits through proper timing Monitor Land Negotiate MOUs Stay Informed Stay informed of prospective projects on traditional lands A mining policy or land-use plan can help ensure you are consulted early on in the mining cycle Negotiate exploration agreements or Memorandums of Understanding (MOU) as earliest as possible These should include employment and contracting benefits while in the exploration phase Review and gain understanding of project scope early on and secure funding from proponents to hire experts when required

19 IV. How to maximize benefits through strategic planning

20 Vision Have a clear short-term and long-term vision of what you want from IBA negotiations This includes establishing what you are not willing to accept (ex: uranium) KNOW WHERE YOU ARE GOING Roadmap Establish a roadmap to move towards your end vision You should have clear goals that are eventually articulated within the MOUs and IBA itself Data Gather any required data and analyse data

21 Planning employment/training Assessment of potential employees Know the number of local hires in your community and know their skillsets Assessment of required training Analyze the training that would best benefit the community Determine the number of scholarships that are required over the next decades

22 Planning business Assessment of First Nation business Business planning; summarize and assess current and potential business Assessment of community entrepreneurs Know who they are and their relevant experience Assessment of Joint Venture partners Know who they are and their reputation and motives Assess for the impacted families

23 Fixed payments Royalities on outputs Royalties on volume Payment: Find a hybrid approach Royalties on profit Equity

24 Plan a corporate structure to maximize financial windfalls Have a strategy in place to manage new monies flowing in from IBA negotiations If necessary, plan a corporate structure to maximize finances and ensure good management

25 Planning a corporate structure based on: Sound tax considerations that maximize benefits Good governance practices that separate the political from the economic Liability issues to make sure that First Nation monies are always secure Funds for future generations Consideration of transparency measures

26 Example of an IBA corporate structure FIRST NATION TRUST FUND Economic Development Corporation Master Limited Partnership Not-for-profit Corporation First Nation Enterprise First Nation Enterprise Businesses owned by at least 90% by the First Nation and with economic acitivicties located on reserve Joint Venture Joint Venture Joint Ventures with third parties, the Coentreprises avec des tiers non membres de la communauté et dont les activités se déroulent hors du territoire de la réserve Youth organizations Elders Individual businesses A Not-for-profit organization that benefits the whole of the community for cultural and social projects

27 TRUST FUND INVESTMENTS NOT-FOR-PROFIT ORGANIZATION A portion of the Trust funds finance cultural and social projects that benefit the community members TRUST FUND Fund for Future Generations Funds for Economic Development A portion of the Trust funds are invested into projects that will promote economic growth for the First Nation Economic Development Band-Owned Corporation

28 Governance structure of the Trust Fund Trust Trustees Member of the FN Band Council member External member FIRST NATION Beneficiaries Economic Development Corporation NOT-FOR-PROFIT ORGANIZATION

29 Economic Development Corporation FIRST NATION Governance : Chief and council elected by member Tax : 0% Economic Development Corporation Band Corporation Band Corporation Band Corporation Governance : Managed by a Board of Directors elected by the Band counsil Imposition : 0% (if on reserve and owned at 90% by the First Nation) Governance: Board of Directors that is held accountable to the EcDev corporation. Tax: 0% (if on reserve and owned by EcDev corporation)

30 V. Maximization through proper implementation

31 Steps to project maturity Step 1 Analyze the project and the broader environment Step 2 Negotiate preliminary agreements (MOUs) Step 3 Preparing for IBA negotiations: establishing position Step 4 Conducting negotiations and reaching agreements Step 5 Implementing agreements and maintaining relationships 31

32 Implementation Benefits do not flow automatically when an agreement is signed Planning, action, and commitment of resources is required to bring the agreements to life

33 Factors that lead to successful implementation 1) Clear goals Precision and clarity in the agreement itself, consider having it summarized for comprehension 2) Institutional structure for implementation New structures, such as an implementation committee specifically tasked with implementation will be necessary to drive the agreement forward 3) Clear allocation of responsibilities State who is responsible for doing what and have deadlines 4) Adequate resources Negotiate funds for implementation (for staff, training and experts)

34 5) Monitoring Ensure regular reporting of data and a list of performance indicators to track progress 6) Review mechanism 7) Capacity for amendment Periodic review of the agreement, including funds An IBA is a living document and should be dynamic, adapting to needs of both parties

35 Thank you! Questions or comments? Institut de développement durable des Premières Nations du Québec et du Labrador (IDDPNQL) 250, Place Chef Michel-Laveau, bureau 201 Wendake (Québec) G0A 4V0 Téléphone: (418) Télécopieur: (418)