First Nation business influencers offer guidance to corporate Canada on how to champion Reconciliation and make project deals work
When First Nations don’t have the capacity to join in on infrastructure and resource projects in a meaningful way, “there’s a tendency to say, no.”
“Then nobody will benefit,” said Geordie Hungerford, CEO of the First Nations Financial Management Board, in assessing why a major development project in Canada won’t get out of the starting block.
That was one of the takeaways from a panel discussion held this week by the Anishnawbe Business Professional Association on the ways to create the right conditions for equitable partnerships between Indigenous communities and corporate Canada.
Much of the conversation revolved around government and industry’s commitment to adopting the principles of the United Nations Declaration on the Rights of Indigenous People (UNDRIP), Free, Prior and Informed Consent (FPIC), and the Truth and Reconciliation Commission’s (TRC) call of action #92, the latter directing corporate Canada to adopt UNDRIP.
What constitutes “meaningful” and “equitable” partnerships is an elusive thing to define, said lawyer Cherie Brant, a partner with Borden Ladner & Gervais LLP.
But if it’s one based on economics, that relationship will eventually founder if the economics aren’t working.
“It’s really how well the parties get to a place where both are happy with the partnership,” said Brant.
Tabatha Bull, president-CEO of the Canadian Council for Aboriginal Business (CCAB), looks upon successful project partnerships as ones that allow communities to get involved in the decision making process before and during the operation of a project but also with long-term gains and benefits in mind.
“How are we ensuring that jobs that were created stay in the territory once that project is over?”
Hungerford finds equitable relationships begin with First Nations’ involvement at the earliest stage of business planning for a development. It requires First Nations being capable and ready to act on opportunities with its members prepared to take on specific roles.
That’s the essence of Free, Prior and Informed Consent.
“It’s really about walking together than walking separately,” Hungerford said
Governments and business must realize that not all First Nations have the tools to partner, he said.
Some need assistance in developing their administrative and governance know-how to properly evaluate opportunities, understand business deals, and get access to affordable capital to participate as an equal partner. Government pathways must be developed to do just that, he said.
Hungerford pointed to the First Nations Major Projects Coalition as one organization that has done a great job across Canada in offering that help.
What will take on greater importance with First Nations are potential corporate partners who are actually credible in living up to their ESG (environmental, society and governance) commitments. Can they demonstrate that they conduct their business in a socially conscious way?
Brant added there are enough signals out there, through Canada’s Reconciliation movement, for companies to raise the bar to ensure equitable commercial partnerships are developed.
“It’s really the implementation that is the super challenging part.”
There’s no template to follow for a workable partnership, Brant said. But First Nations must push for outcomes that are meaningful for their communities, and those can only be measured on a project-by-project basis. The focus should be on how companies and First Nations can advance projects as equals rather than project proponents seeking consent from communities.
Brant sees the capacity for First Nations to partner as growing and anticipates at some point these business deals will be done on the basis of them making good commercial sense.
To create the conditions for more equitable partnerships, Bull calls for early engagement and more room being built into the planning process timeframe on major infrastructure projects, as with a transmission line running through a First Nation territory.
That provides communities with ample time to ramp up capacity, access financing, conduct their own community engagement, and select an industry partner, if necessary.
In reflecting on partnerships that worked, Hungerford looked at last year’s landmark $1-billion Clearwater deal involving the Mi’kmaq Nations in Nova Scotia teaming up with Premium Brands to buy North American seafood giant Clearwater, partially backstopped by the First Nations Finance Authority.
The transaction quelled a volatile fishing industry dispute and instantly made the Mi’kmaq a major seafood player on Canada’s East Coast.
He admired the ability for the Mi’kmaq to select a good partner, bring together seven First Nations, raise money through various channels, “and just go for it,” with all the parties now sitting at the boardroom table as equals.
On making the principles of UNDRIP and FPIC become more mainstream, Hungerford said securities regulators and accounting standards will ultimately write the rules of disclosure on ESG.
If done properly, that’ll let the markets and First Nations know whether or not project developers are fulfilling the Truth and Reconciliation Commission’s Call to Action.
Once one regulator gets onside, the rest will follow the standard, Hungerford said.
The BC Securities Commission is first on board as that province passed the Declaration on the Rights of Indigenous Peoples Act in 2019, a piece of legislation that requires provincial laws to comply with UNDRIP.
In explaining FPIC, Bull recalled the words of former senator Murray Sinclair that this tool is not a veto but an obligation on behalf of resource companies.
“What is FPIC? It’s really about how do you get to a point where we all agree that this is the best project for both partners, versus continue to push until the community consents to the project.”
The language in partnership agreements needs to be structured that way, Bull said.
She mentioned there’s been considerable progress made across Canada and those good partnerships need to be celebrated and spotlighted.
Brant finds many companies are already having internal discussions on incorporating Reconciliation principles and standards as corporate policy.
“There are companies that are saying better to be 50 per cent part of a project than zero per cent of no project.”
Hungerford said legal and consulting firms like Deloitte have created their own Reconciliation action plan. “If you write it down and sign it, you’re more likely to go through that exercise.”
That led to a discussion for Indigenous representation on corporate boards.
Beyond employee cultural awareness training, Bull said corporations must find room for Indigenous representatives in the boardroom. There are a plethora of capable leaders out there, she said, but at times only a handful of people at the community level get tapped for boards.
“If you say you can’t find one, leave a chair empty until you do, so you are constantly reminded in every board meeting that you still have work to do.”
CCAB wants to do its part to promote board diversity by developing a list of available candidates who can provide companies with an Indigenous world view.
These corporations, Bull said, must be committed to creating an environment where Indigenous voices can be heard and where they feel welcomed to speak.
Brant, who serves on boards for Hydro One and TD Bank, noted the handful of corporate recruiting firms who look for boardroom candidates must be educated on the breadth of Indigenous talent that’s available. But rather than just fill a token seat, the candidates they put forward must be experienced, passionate and can provide direction.
Hungerford offered that Corporate Canada shouldn’t overlook people with unconventional backgrounds, mentioning leaders of tribal councils – often steering multi-million-dollar government and business entities – who can bring a “phenomenal perspective” and unique skills to the corporate table.
In looking to the future, Bull said she looks forward to the day when communities generate their own wealth and invest those revenues back into their communities and various projects, either with partners or on their own.
Brant emphasizes that partnerships add much value in elevating communities’ standard of living. But there must be a balance achieved. First Nations should develop the ability to borrow and conduct commercial transactions while not giving up their lands and heritage.
She envisions First Nations developing a level of comfort in making investments outside their territories and establishing a diverse base of businesses beyond just band-owned corporations that offer employment to everyone.
“It can be economic resilience for everyone in the community where we build our own credit and we become our own economies.”