Monday, July 28, 2014
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Ottawa to force energy companies to report payments made to native bands


OTTAWA — The Globe and Mail

The federal government is proposing measures that would require mining and oil companies to report all payments made to native band councils and their corporations as part of Ottawa’s push for greater transparency among aboriginal governments.

Officials from Natural Resources Canada are consulting with industry, non-governmental organizations and aboriginal communities over plans to require mandatory reporting of all payments made by resource companies to foreign and domestic governments. Unlike similar regulations in the United States and Europe, the federal rules would include aboriginal governments and their corporations.

The demand for mandatory resource-revenue reporting comes amid a concerted effort by the Conservative government to increase financial disclosure from aboriginal communities to combat concerns over mismanagement and corruption. In a high-profile case last week, the Nishnawbe-Aski Police Service charged the former co-manager of the remote Attawapiskat Reserve in Northern Ontario – who is also the common-law spouse of chief Theresa Spence – with two counts of fraud and theft after the band council conducted its own investigation.

Ottawa says it wants provincial securities regulators to implement the mandatory reporting requirement to ensure consistency with U.S. and EU approaches. But if the provincial bodies don’t respond, legislation will be introduced in September and take effect a year from now, Natural Resources Canada said in a recently released discussion paper.

At last summer’s G8 meeting in Britain, Prime Minister Stephen Harper announced his government would require mandatory reporting of all payments to governments from resource companies, part of a global push to reduce corruption and ensure communities benefit from resource development.

The Mining Association of Canada and the Prospectors and Developers Association of Canada have led the effort on mandatory revenue reporting. Prior to Mr. Harper’s G8 announcement, they issued a report that recommended the regime be administered through securities commissions. Working with non-governmental organizations, the industry associations have urged governments to move quickly to adopt new rules, and then take more time to consult with aboriginal leaders before including them in the requirements.

“We continue to have a lot of questions about the inclusion of First Nations in this,” mining association president Pierre Gratton said in an interview. “We continue to encourage Natural Resources Canada to consult extensively with First Nations before proceeding on this.

“In principle, industry would be supportive of the transparency, but these are commercial agreements between companies and bands … and we want to make sure the steps taken don’t compromise the relationships we have or our ability to build future relationships.”

Mining companies have more than 250 benefit agreements with aboriginal communities across Canada, while the oil industry also signed impact benefit agreements with First Nations. As well, industry often employs aboriginal-owned companies to provide services like trucking, construction and hospitality. Mr. Gratton said some of his members worry that the disclosure of contractual agreements would undermine the competitiveness of those aboriginal businesses, which are band-owned and in some cases generate hundreds of millions of dollars in revenue.

Natural Resources Minister Greg Rickford – who was appointed last month – was not available for comment. Instead, the department provided written answers to questions submitted by e-mail.

“The mandatory reporting regime will mean a level playing field for companies operating domestically and abroad, enhanced investment certainty and reinforcing the integrity of Canadian extractive companies,” department officials said when asked why Ottawa is including aboriginal councils and corporations.

Officials from the Assembly of First Nations were also unavailable for comment.

Former AFN national chief Phil Fontaine said aboriginal communities already face a heavy reporting burden on revenue received from Ottawa, and are accountable to their band members for revenue generated by their business interests.

“On the own-source revenue, those are monies that belong to First Nations that have community-owned enterprises and businesses,” he said. “They’re accountable to their community; they’re not accountable to government for this.”

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