What Canada can learn from the World (Bank)

Canada, and its past 40 years of legal cases wrestling with Aboriginal land rights, has something to contribute to the global conversation on sustainable land use and reducing poverty. I don’t mean that Canada has something to brag about – on the contrary.  But within the country’s borders there are strong examples about the right way and the wrong way to approach development impacting Aboriginal lands, and these experiences may prove useful for those struggling with similar issues.

In March, I had the pleasure of exploring these issues while speaking at the annual Land and Poverty conference hosted by the World Bank in Washington D.C. (my paper is here).  The theme for this year was ‘Linking Land Tenure and Use for Shared Prosperity.’ Flowing from this, a main thrust of the conference was how to incorporate non-colonial conceptions of land into sustainable land-use planning policy that successfully reduces poverty.

This discussion is a timely one. The World Bank recently convened a working group to establish an Indigenous Peoples Advisory Council, in response to criticism that the Bank has yet to bring its policies in line with the United Nations Declaration on the Rights of Indigenous Peoples (“UNDRIP”). The World Bank also recently released new draft safeguards for indigenous people impacted by resource developments within their traditional territory.

While not above reproach, the draft safeguards are praiseworthy in that, for the first time, the Bank will require ‘free, prior, and informed consent’ (“FPIC”) be obtained from impacted indigenous groups before projects the Bank is involved with can proceed.  In moving towards full implementation of UNDRIP, the adoption of FPIC by the Bank also brings its policies in line with those of its private arm, the International Finance Corporation (“IFC”), and the Equator Principles governing the IFC’s associated lenders (constituting an overwhelming majority of the lenders involved in project finance in developing countries).

Why is this important?  Well for one thing, it demonstrates that the standards governing development impacting indigenous people are now progressing faster in the developing world than here in Canada. In Canada, consent from Aboriginal groups is only a legal requirement once Aboriginal title has been proven.  But more importantly, the Bank’s revised stance on FPIC acknowledges that achieving the certainty of “consent” is of far more practical value than a determination that “consultation has been adequate” for proponents of development seeking to reduce project risk on lands subject to indigenous rights claims.

Two domestic case studies currently stand out in support of this proposition.  The first is the continued approach to inter-provincial pipeline development in Canada. The Trans Mountain pipeline expansion project is a particularly good example. A project of Kinder Morgan with major economic, social and environmental implications, the Trans Mountain expansion project has no doubt been aided by sweeping amendments to the National Energy Board Act hidden in a giant omnibus bill that shortened the hearing process, limited those entitled to appear before the board, and removed the board’s authority to approve such projects and handed it to a federal minister.  Notwithstanding a legal regime where consultation and accommodation are required, the thunderous opposition and handful of lawsuits filed by Aboriginal communities against the project demonstrates this current “adequate consultation” process simply isn’t good enough. With a substantially similar response facing Enbridge Inc., with their stalled Northern Gateway Pipeline Project, and TransCanada Corp.’s proposed Energy East Project heading down the same track, one has to conclude that a new way forward is the only way forward.

Compare these recent pipeline experiences with an environment conducive to obtaining Aboriginal consent created by Ontario’s Green Energy Act and associated Aboriginal Loan Guarantee Program for renewable energy and transmission projects in the province. These policy instruments have largely continued despite the transition from a fixed-price Feed-in-Tariff Program to the competitively-priced LRP Program, and provide:

• funding to explore commercial partnerships and general project assessment;
• priority application points and generation price adders tied to proportionate Aboriginal project ownership; and
• a loan guarantee program that lowers borrowing cost and reduces participation risk for Aboriginal communities seeking to purchase an equity stake in these projects.

Like federal pipeline projects, renewable power developments in Ontario have been no stranger to controversy.  But unlike them, a number of these provincially regulated projects have overcome the hurdles of the planning stage by encouraging Aboriginal ownership, giving communities a meaningful say in the planning of the project, and consequently reached commercial operation.  Indeed, the Ontario Financing Authority reports that the Aboriginal Loan Guarantee Program has “leveraged $130 million in approved loan guarantees supporting the investments of eight First Nation communities, representing over 10,000 Aboriginal people, in four projects that have invested over $2.8 billion in the province.”  The proof is in the pudding: the 2014 Ontario Budget announced the expansion of the ALGP envelope to a total of $650 million.

A standard of “consent” decreases project risk because it replaces an “adequate consultation” process that favours procedure over substance.  Documenting meetings, delivering project information, appointing Aboriginal liaisons and negotiators with no corporate authority are development processes that seek to evidence consultation rather than substantively achieve it.  While ensuring project information makes its way to a First Nation’s office, in the absence of the community’s capability and resources to review, sift through, or obtain expert independent advice on such information, the actual exercise in drawing out legitimate concerns of impacted groups and making the necessary design changes to a project is lost.

FPIC, on the other hand, instead demands that the benefits of development not simply be assumed, but rather be justifiable and clearly demonstrable from the perspective of the Aboriginal community as it currently stands.

The benefits of creating an environment conducive to obtaining Aboriginal consent will be clear from the uptake by Aboriginal groups and the ability of projects to engage meaningfully with Aboriginal communities and, ultimately, move forward in a respectful and practical way.

From a risk mitigation perspective, seeking a standard of “consent” rather than “adequate consultation” is a no brainer.  And it’s also now a world standard. It’s time for Canada to catch up.

By Oliver MacLaren