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Impact Benefit Agreements

Although the constitutional duty of consultation lies with the Crown, often the duty arises in situations where the federal or provincial government authorizes a company to engage in an economic activity that has a potential effect on s.35 rights. The courts have sometimes ordered companies to participate in consultation as part of judicial review or injunction applications (Homalco, Platinex). The companies have an interest in ensuring that the Crown fulfills its consultation duty. To prevent any conflict or delay in their project they often provide some or all of the accommodation negotiated with the First Nation. This avoids confrontation, enables the project to proceed, addresses the First Nation's concerns and secures some economic benefits through Impact Benefit Agreements.

Negotiating Impact Benefits Agreements

The role of an impact benefit agreement (IBA) is, in part, to establish a formal relationship between a developer and the First Nation; to mitigate or reduce the impact of development on s.35 rights; to secure economic benefits and to meet the legal requirement for consultation and accommodation. These agreements may take the form of Memorandum of Understandings, Participation Agreements, Cooperation Agreements, Access Agreements, Socio-Economic Monitoring Agreements, Environmental Agreements, as well as others.

Before entering into negotiation with a company the Chief and Council and members should;

  • Discuss the impact of the company's activity on their rights, their community and their traditional territory.
  • Develop and obtain a negotiation mandate from their community which sets out the First Nation's position and priorities.
  • Before proceeding to negotiate the IBA, perhaps enter into a MOU that sets out the rules to be followed in the negotiations, identifies negotiators and sets out how communications will be conducted.
  • If multiple First Nations are involved, a negotiation protocol might be agreed upon which clarifies out how the parties will cooperate.
  • Identify how negotiation costs, as well as costs for legal and expert advice will be covered.

The content of an IBA varies depending on the position of the parties, the impact and nature of the development, the duration and location of the project and the expectations and needs of the First Nation. Early IBAs focused on employment opportunities but recent ones include environmental restrictions, dispute resolution, revenue sharing and cultural programs. IBAs include some of the following:

  • Preamble - identifies the parties and states the purposes and objectives of the agreement, the minimization of impacts and may stipulate that in return for the benefits the First Nation will not oppose the project from proceeding.
  • Employment – involving the hiring and training of First Nation people, maximizing their participation, monitoring their participation and prioritizing their participation.
  • Economic development and business opportunities – promoting First Nation businesses that provide the company with goods and services, priority in contracts, joint venture arrangements, training on the tendering process and assisting First Nation businesses to secure financing.
  • Financial provisions – other than employment these might include royalty sharing and equity interests in the project.
  • Monitoring impacts and mitigation measures – this may include environmental protection, impact assessments and mitigation and enforcement measures.
  • Social and cultural issues – identifies how the company's operations will minimize social and cultural impacts such as on their hunting and fishing activities and archaeological and burial sites.
  • Implementation and enforcement provisions – since IBAs are contracts their provisions need to be monitored and enforced. Dispute resolution mechanisms are often included.

Some issues and concerns to be aware of;

  • If there are a number of communities negotiating separate IBA's there may be a need to sort out competing interests and avoid any hard feelings.
  • Due to confidentiality provisions in most IBAs there is difficulty in obtaining acceptable copies of effective agreements.
  • Some agreements don't contemplate the premature closure of the company's operation.
  • IBAs should anticipate changes in the companies operation.
  • There is sometimes a conflict between the company's employment needs, based on training and qualifications, and the employment expectations of the First Nation. If possible, skill development and education should precede the company's operations.
  • Since IBA negotiations could last for years there are often financial and human resource costs that have to be anticipated and factored into the negotiations.

For more information on Impact Benefit Agreements, see:

To learn more, contact Knoll & Co. Law Corporation.