Today, it is clear that Indigenous communities around the world are no longer happy to be positioned as stakeholders in transactional style relationships with mining companies. Traditional land rights holders are keen to establish a new type of agreement with all entities that participate in their environment, mining companies included.

More than an ESG issue

It is due to this connection with the land that Indigenous engagement has been lumped in with mining companies’ environmental, social and governance (ESG) agendas. While increased collaboration with Indigenous communities offers many ESG opportunities, it is important to examine how a better underlying relationship could benefit all functions within mining companies as well as traditional landowners.

Social licence to operate ties into investment, project risk and the environmental component of project permitting, as well as regulatory and legislative functions for mining project proposals in many jurisdictions. Issues such as decarbonization and natural resource management, securing diverse talent and even leadership are all areas where Indigenous peoples can help mining companies to better understand and fulfil their responsibilities as stewards of the land.

Governments keen to sustain industry investment are slowly evolving their processes and legislation to reflect the need for greater consultation with, and ownership by, Indigenous peoples. For example, in Canada, modern treaties are now being negotiated between First Nations and the Crown that cover a range of rights for Indigenous people with respect to land, water and resource development, and include incorporating principles from the United Nations Declaration on the Rights of Indigenous Peoples Act (UNDRIP).

Progress through partnerships

There is enormous potential for the mining industry to work collaboratively with Indigenous peoples in different countries to advance their business strategies and goals. But, before this can happen, a new paradigm for Indigenous involvement in mining must be established. It is likely that we’ll see a shift away from standard impact benefit agreements in large development projects to economic and equity partnership models built upon communication, mutual trust and respect. This will take time and investment, as well as a shift in governance.

In September 2021, Suncor set an example of how a partnership approach could be successfully incorporated into future mining projects. The company announced the signing of agreements with eight Indigenous communities, including three First Nations and five Métis communities, in the regional municipality of Wood Buffalo near Fort McMurray, to acquire TC Energy’s 15 per cent equity interest in the Northern Courier Pipeline Limited Partnership. This asset has a value of approximately $1.3 billion and will provide long-term, stable revenues for the communities for years to come.

Related: Why Canada is uniquely positioned to take a global leadership role in the clean energy transition

Push for greater inclusion in standards

Today, the adoption of ESG standards has become a basic requirement for most large companies and investment funds. In the US, ESG compliant funds now top US$40 trillion, and, in Canada, this figure is roughly $3.6 trillion. These figures are expected to grow at a rate of 15 per cent per year.

While their application should ensure best practices in social endeavours, many leading ESG standards, like those established by the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB), contain only minor references to Indigenous issues.

For example, the GRI 411: Rights of Indigenous Peoples standard only acknowledges an “incident” to have occurred if the affected party launches a legal challenge. Rather than aiding the journey towards reconciliation, this sends the message to communities that the only way to get a corporate board’s attention is through litigation.

SASB standards reference UNDRIP but fail to provide substantial guidance on how to solidify those rights in a company’s operations or procedures.

Mining companies should consider lobbying for the evolution of these standards in cooperation with traditional landowners so that they better reflect the interests of both parties in a way that promotes and fosters reconciliation.

Lay the foundation for mutual economic and social prosperity

Mining companies can proactively work towards better relations with Indigenous communities by considering these further actions:

» Re-examine current ESG frameworks, which have been developed to be easily auditable. While these are helpful from an audit or compliance perspective, they often do not adequately capture the importance of meaningful consultation. Companies can supplement standard metrics with systems that record qualitative data, such as the number and diversity of their Indigenous employees, whether they have Indigenous people on boards or committees, the number of Indigenous businesses that participate in their procurement and supply chains, and financial support or donations provided to Indigenous projects.

» Look for opportunities that align with the local community’s own long-term goals and priorities. To make projects truly sustainable, the planning process must incorporate the entire mine lifecycle and beyond to ensure the site continues to represent value rather than a liability from a local community perspective after extraction finishes. Where opportunities arise for a community to benefit from mining infrastructure such as a road, rail line or energy facility, discussions should begin as far in advance as possible to determine whether they align with the community’s aspirations and ensure the development will not compete with other interests.

» Ensure engagement is done in a culturally appropriate manner. Information should be provided to communities in a way that is culturally appropriate, and in their Indigenous language so that they can make informed decisions around consent.

» Secure diverse governance. Creating seats for Indigenous representatives on boards and in other positions of power within mining companies will give communities greater confidence in the purpose and direction of mining projects. It will also provide them a central role in decision-making processes, including those related to mitigating environmental and social impacts.

There is a global awakening under way regarding Indigenous issues. While there are some common themes among the different countries, there is no universal blueprint for how community-mining company relationships and roles should be structured. Mining companies must therefore build flexibility into their planning, and come to discussions willing to listen, learn and act upon their findings.

Jason Rasevych is national leader Indigenous services for Deloitte Canada and a Ginoogaming  First Nation member.