How energy companies woo First Nations on controversial projects

Pansy Wright-Simms, a member of the Gitxsan Nation in northwestern British Columbia, first learned of the offer this fall.

She came home to find a copy of a government contract with hereditary chiefs of the Gitxsan Nation regarding TransCanada’s contentious pipeline proposal to bring liquefied natural gas to an export terminal on nearby Lelu Island. Some of her neighbours found the document in their mailboxes, too.

Further south, on the archipelago of Haida Gwaii off British Columbia’s coast, another offer to hereditary chiefs was making the rounds — this time from Enbridge, the energy giant that had pushed for approval of a new crude oil pipeline: Northern Gateway.

The documents, each offering big money to the chiefs in exchange for support of the pipelines, sent ripples of shock through the respective communities that had been battling the projects for years.

VICE News obtained the confidential documents that provide new details about how Enbridge and British Columbia wooed First Nations members into supporting pipelines, even as communities hardened their opposition.

The revelations come at an especially crucial juncture for pipeline politics in Canada. On Tuesday, Prime Minister Justin Trudeau announced his government is approving two major projects — Kinder Morgan’s TransMountain and Enbridge’s Line 3 — in the face of stiff opposition from environmental groups and Indigenous communities. Although the project at the centre of Haida concerns — Northern Gateway — was officially rejected by Trudeau this week, the term sheet sent to hereditary chiefs outlines the steps being taken behind the scenes to secure local buy in.

Northern Gateway did not respond to VICE News’ request for comment. British Columbia’s Ministry of Aboriginal Affairs, however, told us they believed they negotiated with the right people, and that TransCanada’s natural gas pipeline would bring “positive, sweeping changes for many communities and First Nations in the North.”

The pipelines amount to some of the most ambitious projects from two of North America’s largest energy infrastructure companies. They are desperately trying to build infrastructure to move Albertan oil and natural gas to the Pacific coast and, eventually, to the Chinese market. To do so, pipeline companies need buy-in from Indigenous communities who live on, and have right to, the land. And that has not been easy.

Experts say the deals they have struck are perfectly legal ways to engage with Indigenous communities. But the nations affected by the projects feel Enbridge and the British Columbia government went behind their backs. A groundswell of people from Gitxsan and Haida Gwaii say the unelected hereditary chiefs don’t speak for them — and they think they are being “paid off” in exchange for their support of pipelines. In their eyes, that doesn’t amount to consent.

Across the continent, First Nations democratically elect councils to represent them, and in British Columbia, many First Nations also have unelected hereditary chiefs, who are appointed by clan matriarchs. While the council represents the entire nation, hereditary chiefs each represent their family clan.

The Enbridge document that surfaced in the Haida Nation and obtained by VICE News is unsigned. Dated June 2015, the “term sheet” is a proposed contract between Northern Gateway Pipelines Ltd. and hereditary chiefs of Old Massett, Haida Gwaii.

In it, Northern Gateway offers the chiefs $90,000 for “cultural activities” and $10,000 for “the setting up of any corporate structures,” to use at their discretion, payable within 30 days. The company also offers the chance to negotiate up to $5 million in “sole-source goods and/or services work” with its supply chain — “on terms similar to those presently being negotiated with terrestrial Aboriginal communities who were ‘late signers’ in 2011.”

The term sheet states that if the chiefs are willing to sign a “definitive agreement,” they agree to sign a letter of support for the pipeline, and publicly speak in favour of it.

It’s unclear whether the document is a draft or a final copy, but it does say it’s “non-binding” — other than a confidentiality clause that commits the chiefs to secrecy about its contents.

Northern Gateway is also offering emergency response if a ship carrying oil is about to run aground. There would be contract work available in operating the boats and offices for marine rescue operations, and work from surveys and studies, and some of that “income stream would be available to the hereditary chiefs.”

The money, according to the term sheet, could be used for social housing, a community centre, traditional language programs, investment in local business and more.

Because there are no signatures on the term sheet, it’s unclear whether hereditary chiefs ever accepted the offer.

Northern Gateway didn’t respond to VICE News’ request for information about the document. Discourse Media also obtained and published the document, and did not hear back from the company when they requested comment.

The Gitxsan deal, on the other hand, offers a lot more money.

According to the contract, which was signed by hereditary chiefs and made public by BC’s Ministry of Aboriginal Relations and Reconciliation last week (after VICE News inquired about it), the provincial government offered $5.8 million for the hereditary chiefs’ support of TransCanada’s natural gas pipeline through the nation’s territory, in two installments paid to the Gitxsan Development Corporation, subject to a number of conditions.

“The Province will provide to Gitxsan Development Corporation, on behalf and for the benefit of the Gitxsan Nation, a project payment of $5,810,000.00 for the Natural Gas Pipeline Project in accordance with section 3.2 (payment schedule) and subject to 6.1 (conditions precedent to funding).”

Later, the corporation will receive an additional $1.2 million. The province also promised to pay $10 million per year “to Gitxsan Nation and other Eligible First Nations” as long as the pipeline is transporting natural gas.

In exchange, the Gitxsan nation — “as represented by the Gitxsan Hereditary Chiefs and the Gitxsan Development Corporation” — will provide letters of support when British Columbia asks for them, won’t oppose the project in court, and won’t “participate in any acts that frustrate, delay, stop or otherwise physically impede” the project. In fact, the chiefs agree to “assist the province in seeking to resolve any action that may be taken by any member that is inconsistent with this agreement.”

The document was signed by a handful of Gitxsan hereditary chiefs between December 2014 and October 2016.

Under a section titled “representations and warranties,” the hereditary chiefs each assert that they have the legal authority to enter into the agreement, and that they have “taken all necessary actions and has obtained all necessary approvals to enter into this agreement.”

By signing, the Gitxsan Development Corporation asserts “it has the legal power, capacity and authority to enter into this agreement for and on behalf of itself and Gitxsan.”

A spokesperson from British Columbia’s Ministry of Aboriginal Affairs said the government had provided the opportunity for consultation on the project to Gitxsan hereditary chiefs because their clan territories “could potentially be directly affected by the project.”

“In the absence of a single entity that represents the Gitxsan Nation, the province determined it had a valid natural gas pipeline benefits agreement based on the signatures of 12 directly affected Gitxsan hereditary chiefs, nine additional hereditary chiefs, and the Gitxsan Development Corporation, all acting on behalf of the Gitxsan Nation,” the statement read. “The government has no role in determining who is a recognized hereditary chief or representative for a house group. The province relies on information provided by Gitxsan hereditary chiefs and on previous engagements to identify the appropriate house leaders and representatives to engage in negotiations.”

Despite that, when the deal between Gitxsan and the government of British Columbia leaked, a group of outraged Gitxsan members confronted the chiefs at a Gitxsan Treaty Society meeting on October 18. Community members demanded to know why they signed the contract without consulting them first.

Wright-Simms, the woman who found the agreement in her mailbox, was at that meeting. She said the hereditary chiefs admitted at the meeting that they signed the deal.

She believes the chiefs were “paid off.”

“Everyone was absolutely livid that this was going on within our territory and nobody knew about it,” she said. “It’s not the whole nation that is benefitting from their signature on those lines, but it is the whole nation that will be disrupted by any pipeline on our territory.”

At that meeting, she pointed a question directly at the chief who signed on behalf of her clan.

“I asked him if he is prepared to move me from the territory because I’m not going to move for anybody.”

She noted that other nations also fought the liquefied natural gas project and pipeline, including members of Lax Kw’alaams and the Haida Nation, who are worried about the project’s environmental effects.

“We’ve kicked them in the teeth,” she said of other nations who oppose it.

It’s not the first time a deal like this has blown up in the Gitxsan Nation.

In 2011, the Gitxsan Treaty Society, which is a group of Gitxsan hereditary chiefs, signed a $7 million deal with Enbridge’s Northern Gateway that gave it a stake in the pipeline. But when news of the deal broke in December of that year, Gitxsan protesters nailed the doors of the society’s office shut in outrage. Days later, 42 of 51 Gitxsan hereditary chiefs penned a letter saying the society did not represent the Gitxsan Nation.

At the time, Northern Gateway’s communication manager said, “We are comfortable that we are speaking to the right people, and that they have the authority to negotiate this type of arrangement.” But weeks later, the Gitxsan Treaty Society backtracked, voting overwhelmingly to abandon the deal with Enbridge.

The Haida Nation, too, reacted with outrage to Enbridge’s offer to its hereditary chiefs.

Two hereditary chiefs who supported Northern Gateway were stripped of their titles during a potlatch (a traditional ceremony) attended by 500 people this summer, and another hereditary chief was impeached through a letter posted on Facebook.

Haida Nation President Peter Lantin told VICE News he had seen the document he thinks it is “predatory.”

“It’s a very sneaky and underhanded way to go about trying to portray that social license that they need,” said Lantin of Enbridge’s tactics.

In a letter dated March 31, 2016, the Council of the Haida Nation, an elected council, wrote to its members: “We are now seeing Enbridge and other pipeline interests attempting to buy off individuals in our nations and communities along the proposed pipeline route, in an attempt to engineer the perception of a ‘social license.’

“Many of our people have received offers and a few have taken the money or ‘jobs’ to work among our people to further the corporate agenda,” the letter continued. “This tactic is common practice and a sorry part of the colonial legacy.”

With the decline of the fishing and lumber industries, there are few job opportunities on Haida Gwaii, Lantin said, and Northern Gateway’s offer is “preying on that.”

“[Northern Gateway is] preying on people’s needs, which is the way they live their life,” Lantin continued. “So part of me feels bad about this whole situation because it feels predatory.”

It’s not only about money, though. Northern Gateway also offered the hereditary chiefs of Haida Gwaii the chance to protect their precious coast with tugboats that could quickly respond to oil spills or ships adrift offshore.

“This is all in the wake of the lessons of the Simushir,” one impeached hereditary chief Roy Jones Jr. told the Haida Gwaii Observer in July 2015 when asked why he accepted the job of community consultation representative for Northern Gateway.

He was referring to an incident in 2014 when the Simushir, a cargo ship carrying hundreds of tonnes of fuel, lost power and nearly ran aground on their island. It took almost 40 hours before a tugboat finally arrived to tow it to safety.

“Simushir showed us that we are totally unprotected. Northern Gateway is offering solutions,” said Jones, who did not return repeated calls from VICE News. Jones had previously testified before the National Energy Board that he was fervently against the pipeline.

Another impeached hereditary chief, Carmen Goertzen, echoed the importance of being able to respond quickly to ships adrift off the coast.

“We want some Marine rescue here so we don’t have a spill on our beaches, which are pristine,” he told VICE News in August. “And our seafood and our livelihood and our whole way of life would be ruined by that.”

On its website, Northern Gateway admits it has fallen short.

“From the beginning, Northern Gateway should have done a better job of building relationships with First Nations and Metis communities, particularly on the west coast of British Columbia,” it states.“While we had the right intentions, we could have done a better job listening and fostering these critical relationships and developing our plans together as true partners.”

The company says it is now building “a true partnership” with First Nations. “We know that this is the most important part of the project and must be done right rather than be driven by a construction schedule,” its website says.

The company seems quite sure that it’s on the right track now, however, writing that “support for the project is growing” with 31 Indigenous nations signed on as Aboriginal Equity Partners (AEP). VICE News reached out to some of the equity partners listed on the company’s site but did not hear back.

As in any community, Indigenous views on pipelines aren’t aligned, and some groups believe resource development and energy projects can improve circumstances for First Nations. But they say their support can’t be bought so easily.

“It’s a very touchy subject these days,” says Stephen Buffalo, President of the Indian Resource Council, when asked about pipelines through Indigenous territory. Ultimately, though, he believes the benefits outweigh the risks.

While he knows pipelines can leak, he said Canada has high environmental standards. And the benefits of pipelines are huge, with revenues building new houses, schools, and hockey rinks on struggling reserves.

But he says there is a proper way for energy companies to engage with First Nations.

“It really comes down to relationship,” he says.

Communities need to be involved in every aspect of a pipeline proposal from the beginning, he explained. They need to be part of the construction and monitoring of the pipeline. And they need to see significant revenue from the project, and have an equity stake in it.

“Those are the three areas that are key,” he said.

“Gone are the days of getting beads and blankets upfront,” he said with a chuckle, referencing European explorers who historically brought gifts to Indigenous people in exchange for access to their land and resources.

Benefit agreements are extremely common, perfectly legal strategies for energy companies negotiating with Indigenous communities, says Ken Coates, director of the International Centre for Northern Governance and Development at the University of Saskatchewan. And he says First Nations communities have struck many deals with oil, gas and pipeline companies. “Even in the most controversial areas — including the Northern Gateway and Kinder-Morgan pipelines — companies have reached agreements with First Nations, typically providing job training, employment, business ventures and community benefits,” Coates wrote in the report, prepared for the Indian Resource Council.

Term sheets — like the one prepared for the Haida nation — are offered in the early stages of negotiations, Coates said in an interview, and they’re often confidential. “There are actually a fair number of these kinds of things that are around,” he said.

And for struggling reserves, he argues, these deals can be a way out of poverty.

“These are communities that are hurting,” Coates said, pointing to poor housing and other issues on reserves. “There are a ton of reasons to be concerned. And for these communities, I don’t notice many other companies heading up there and saying, we’re going to put our manufacturing plant there to create jobs for people.”

But that doesn’t mean that the deals are altruistic. Coates says the agreements are both predatory and beneficial.

“For some people there is a path to accommodation, and for other people, due to concerns about climate change or bitumen or the pipeline project itself, there isn’t one. That’s exactly what the nature of the thing is. And the question is, on balance, at the end of the day after all the conversations, where do people line up?”

Despite all that, Lantin says there is nothing Enbridge could do at this point to change his mind on Northern Gateway.

“There’s so much distaste in our mouths with this company and this project that it’s an absolute no. And I think the best thing to do is for the government to shut it down, end that conversation and we can move on in our lives.”