PDAC Wabun Tribal Council

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Amanda Nichols
7 years ago
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1 PDAC 2016 Wabun Tribal Council

2 Wabun Tribal Council represents five First Nations in North Eastern Ontario Geographic area that covers Timmins Wabun acts as an advisor to the communities in several key areas including: Health, Education, Finance/administration, Technical services and; Economic Development

4 Wabun First Nations have approximately 30 resource development agreements in place Memorandums Exploration Agreements Impact and benefits Agreements Resource Stewardship Agreements Renewable Energy partnerships

5 Resource Development Agreements are not optional. Each new and each existing project within the Wabun First Nation territories will require some form of Agreement between the company looking to develop the resource and the First Nation on whose territory the resource is located. Resource exploitation companies understand that they are operating on First Nations territories & agree that First Nation must be accommodated. General agreement by Resource Developers to maximize business opportunities for the First Nation(s) whose territorial interests are impacted. Business Opportunities always described in a schedule or section of an IBA/MOU or other formal Agreement between the FNs and industry

6 Aurico Gold Lakeshore Gold Hydro Mega Services Inc. Gold Corp IamGold Probe Mines Osisko

7 Desire to be involved in all aspects of the project including: Planning Construction Servicing Closure

8 Collectively the First Nations & the companies see business opportunities to service the project as a win win If a development company can patronize a First Nations business it can claim to have accommodated - financially and otherwise the First Nations interest. This is described as an ancillary form of accommodation - the project WILL need to procure goods and services, the expenditure is guaranteed. The Company/project has also committed to accommodate the First Nations interests financially so; If the Project can accommodate utilizing expenditures it knows it will have to make regardless of Aboriginal commitments the expenditure in many cases can be seen as cost neutral.

9 Resource Development Agreements can often provide First Nation businesses with specific advantages, again, as a form of compensation for the impact to the First Nations Aboriginal & Treaty Rights This could include: Set aside contracts Bid preferences to companies that demonstrate Aboriginal participation in their tenders Evaluation of tenders that require bidders to describe Aboriginal Engagement Negotiated Contracts

10 Business advantages First Nations have negotiated with resource development companies are real and they are substantial. As a private sector business looking to maximize opportunity in servicing the mining industry; IT IS TO YOUR ADVANTAGE TO FIND AN ABORIGINAL PARTNER

11 Joint Ventures Commission Relationships Equity Partners Sole Proprietors Entrepreneurial

12 Partnering with a First Nation will often mean signing agreements with its business arm whose task it is to manage the First Nations enterprises. Separating business from politics Isolating liability Consistent approaches to partnerships Maximum community participation in First Nation owned businesses Each First Nation citizen of a given community becomes a shareholder in the First Nation investment vehicle Many First Nations describe that Joint Ventures with existing private sector companies will be done by their collectively owned Limited Partnerships or Community Development Corporations.

13 The best way for a First Nation and its private sector partner to maximize the Aboriginal benefit prescribed in Resource Development Agreements is to create an entity which is majority owned by the First Nation. Typically a 51% FN- 49% PS ownership structure. The Private Sector company would serve as the operating partner and would recover operating expenses before distributing dividends/profit to the shared entity. Joint Venture Agreements of this nature require considerable time and effort. Potential First Nation partners must be prepared to absorb business development costs. Legal fees and financial due diligence by the First Nation are common costs. First Nations must be allowed to examine the balance sheets of private sector partners before the partnerships are created as the FNs will seek out, as any good business will, companies that offer maximum benefit. Operating partners will describe in detail an annual management fee that will be deducted before profit is disbursed. The fee must be justified by the private sector and agreed to by the First Nation.

14 First Nations will offer exclusivity to their private sector partners in entering a 51% - 49% Joint Venture. First Nations will represent the joint venture companies interests at resource development operations where they have Agreements. First Nation Impact and Benefit Agreements include a monitoring component that ensures commitments are met. This includes items under the business schedule. First Nations will clarify with their resource development partners circumstances where their business enterprises must be engaged through process described earlier for example; set aside/negotiated contracts First Nations are often part of the tender evaluation process. Access to untapped labor force including the ability to provide training resources through programs designed to assist Aboriginal men and women obtain employment in resource development sectors

15 Commonly set aside a percentage of revenue based on gross value of specific contract opportunities. Employment and Training Quicker form of venture often applied in advance of the Joint Venture model as a placeholder while the venture is built. Less effective in leveraging Aboriginal Resource Development Agreement business commitments.

16 More typical in renewable energy projects where First Nations are included as owners of the development. Likely to become more prevalent as First Nations obtain financial resources from its other Joint Ventures Capital will become available for communities to buy into new and existing companies.

17 Each form of First Nations Joint Ventures includes a provision that its members businesses will be absorbed into any Joint Venture opportunity. For example: A small civil construction company locally owned will ALWAYS have their equipment subcontracted by the community development corporation Joint venture before the private sector partner can mobilize similar equipment. The equipment must be wholly owned by the First Nation citizen.

18 First Nations do not force partnerships but rather, focus on companies that take the time to engage companies that approach the with opportunities. As a company find out what First Nations are part of a resource development Agreement. The Development proponent will share this information with you. Better yet Call First Nations directly. Each has economic development practitioners that can provide advice on how to and who to approach about partnering.

20 It is in your companies best interest to include First Nations in your business plan. Mining companies, Renewable Energy developers and the forest industry have all reconciled to include advantages for First Nation business. First Nations are looking for good partners who are willing to promote businesses as partners. They have become business savvy and you will be impressed by their level of understanding in developing an entity that will benefit all stakeholders.

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