Aboriginal Relations Key to Northern Pipe Development

As pipeline planners head north into regions where the population is primarily - and sometimes exclusively - aboriginal, Canada's National Energy Board is laying out a formula for turning touchy relations into business relationships: Make deals, not regulations.

In a decision involving Enbridge Pipelines Inc. and the Federation of Saskatchewan Indian Nations, the NEB sent all sides a message by rejecting an attempt to make it an aboriginal-rights enforcement agency. In approving a C$140-million (US$93-million) project in Alberta and Saskatchewan known as Terrace Phase II, the board agreed to monitor progress on carrying out a native benefits commitment by the company.

But the NEB rejected a request by the Indian federation to enforce its demands as formal conditions on the approval that would have to be fulfilled before construction could proceed. The NEB said it "recognizes the importance of participation in pipeline projects by aboriginal people who may be affected and encourages the development of meaningful partnerships between board-regulated companies and aboriginal groups." But the Indian federation was told it went too far with a demand for Enbridge to craft a "general aboriginal policy" that would, in the words of the natives' lawyer, "be utilized for future purposes and future projects as they affect the First Nations of Saskatchewan and Alberta."

The board said Enbridge behaved well by holding extensive consultation on the Terrace project with natives in the areas involved in east-central Alberta and western Saskatchewan. The community relations effort produced mutual letters of commitment in March. The company agreed to finance "capacity building initiatives" or programs enabling native workers and contracting businesses to participate in construction, and to address concerns over possible disruptions of traditional aboriginal territory.

The board suggested that, in Canada, such understandings can be legally enforced in the same way as business contracts. "While the parties may choose to enter into a more formal agreement to address the details...the commitments that are directly related to the construction and operation of the facilities are clear and unambiguous. The resolution of any dispute that may arise from the letter of commitments would, in the opinion of the board, fall within the purview of a court of competent jurisdiction."

The evolving doctrine effectively makes the board available as a mediation service, willing to help extend or enforce agreements once pipeline builders and natives have made efforts to establish relatonships. The NEB stressed that its role in native-industry relations depends on the degree of success that the two sides have in reaching agreements. Intervention only takes place to the extent that efforts to make deals fall short, or that agreements are incomplete.

While the Enbridge ruling involved a 43,000-barrel-per-day expansion of an oil line, the NEB made it plain that the doctrine applies equally to natural gas projects. The board pointed to its peacemaking efforts on the gas side in recent cases involving the Sable Offshore Energy Project, Maritimes & Northeast Pipeline and Alliance Pipeline. In the SOEP and MNP cases on Canada's East Coast, the NEB reminded industry and natives that it "imposed conditions requiring a company to submit written protocols or enter into negotiations where consultation with aboriginal people was not carried out in a timely manner or where affected First Nations and a company had disagreed on a number of significant matters."

In the Alliance case, the mediation role grew out of the number of different groups involved and the length of the pipeline construction project from northern British Columbia to Chicago. The board recalled it "imposed conditions requiring a company to monitor the success of its commitments to First Nations and Metis where participation in the project by those groups was considered to be important and where memoranda of understanding had not been completed with all aboriginal persons along the route." In the Arctic, the NEB and northern authorities have reached an agreement on approaches to anticipated gas pipeline proposals that echoes the theme of co-operative native relations emerging elsewhere in Canada.

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