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Why First Nation chiefs sign Trans Mountain pipeline deals

While Kinder Morgan equates benefit agreements to consent, chiefs say they are not.

by Hilary Beaumont
May 3 2018, 6:02pm

The Liberal government has less than one month to guarantee Kinder Morgan a path for the Trans Mountain pipeline through B.C., where the project faces a wall of opposition from municipalities, the provincial government, eco-activists and some First Nations.

Government officials are exploring every available option, including new legislation, financially backing the project, deploying the army to keep protesters away from construction, and even approaching First Nations who have signed benefit agreements to ask them if they are interested in an equity stake in the pipeline.

Under pressure from reporters and opposition members, Prime Minister Justin Trudeau and natural resources minister Jim Carr keep pointing consultations with 118 Indigenous communities (which have been criticized as being insufficient), and $300 million in mutual benefit agreements between the company and 43 Indigenous groups — 33 in B.C. and 10 in Alberta — as indication that First Nations support the project.

Mutual benefit agreements are secret contracts that usually involve annual payments, environmental protection and economic opportunities such as procurement and job training provided to First Nations by governments or companies in exchange for their promise to “not oppose” the project, chiefs who signed them tell VICE News.

Both the government and Houston-based Kinder Morgan, the company behind the Trans Mountain pipeline, are legally required to engage with First Nations. A June 2016 federal court decision that rejected the National Energy Board’s approval of another pipeline through B.C., Enbridge’s Northern Gateway, ruled the federal government must adequately consult First Nations before building major projects on their traditional territory. Trans Mountain, meanwhile, has a legal obligation as a regulated company under the National Energy Board’s jurisdiction to engage with communities that can point to Aboriginal land title, which is particularly true in B.C., where few treaties exist.

The company points to benefit agreements as proof there is significant support, even consent, from Indigenous communities along the route. “Where our project will cross First Nation reserve lands, we have received their expressed consent,” the company says.

There are complex reasons for negotiating and signing these deals, several chiefs told VICE News, and they do not necessarily equate to support, or consent, for the project to go forward.

Some did so because they believed the project will go ahead anyway, so they might as well get some economic benefits from it. Others say these benefits can help them build capacity in their communities over the long term, and it’s patronizing to assume Kinder Morgan is taking advantage of them. Chiefs also point to ongoing effects of colonization, land dispossession and residential schools as root causes of deep poverty in many First Nation communities — a reality that makes it difficult to say no to these deals.

What do the agreements say?

Only band councils and Kinder Morgan know for sure what’s in the benefit agreements.

The deals often include non-disclosure clauses, chiefs who signed them told VICE News, making it hard to know the exact terms. Kinder Morgan negotiates directly with band councils, so each deal is different.

The company says the agreements give a First Nation’s “expressed consent,” but chiefs who signed them tell VICE News the deals do no such thing. Instead, according to Ernie Crey, Chief of the Cheam First Nation with territory near Chilliwack, B.C. who signed a deal with the company, the agreements state the chief and council will “not oppose” the pipeline, allowing community members to retain their rights to protest the project if they want to.

In exchange, the deals include a cash component; usually an annual sum over a number of years.

Industry representatives usually start negotiations by asking, “How many moose or caribou are we affecting?” or “Tell us how we’re affecting your berry patches?” according to a report from the ministerial panel for the Trans Mountain Expansion project. Then they use those numbers to calculate a baseline sum for the agreement.

But these deals usually have more than a cash component. Crey said Cheam’s deal also promised the Nation a role in procurement, partnerships with companies and environmental protection, including oil spill response.

According to the consolidated financial statements of Tk'emlúps te Secwe̓pemc, or the Kamloops Indian Band, the band council received just over $3 million in 2016 in exchange for signing a mutual benefit agreement with Kinder Morgan. It’s not clear if that was a one-time or annual payment.

The former chief of Whispering Pines Indian Band, one of the first to sign an agreement with Kinder Morgan, has publicly said their benefit agreement was worth between $10 and $20 million over 20 years, according to Kamloops This Week. Other benefits included pensions for elders and support for youth programs.

Why did chiefs sign these deals?

A range of reasons.

Robert Joseph, chief of Ditidaht, a First Nation on the west coast of Vancouver Island, says his First Nation received a sum of money, along with an oil spill response plan, for signing a benefit agreement.

“Fighting is futile”

Joseph told VICE News his community does not want the pipeline expansion built because they fear increased oil tanker traffic. But they signed the agreement with Kinder Morgan because they believed the project was a done deal, and they wanted it in writing that the company would clean up any oil spills.

“It’s quite simple, actually,” Joseph told VICE News. “We agreed not to oppose the pipeline because our first priority has to be to protect our resources, and if we oppose the pipeline, we’re sitting ducks.”

“Fighting is futile,” he added.

Environmentalists are concerned that oil spills will pollute the B.C. Coast (Flickr)

The deal he signed did not provide consent for the pipeline to go forward, he said. “No, obviously it’s not. It’s an agreement not to oppose. It wasn’t saying, yeah, you have consent to come into our territory.”

“I don’t think it was a good agreement,” he continued. “We have to take what we can. Because for us it’s not just rhetoric.”

Oil from tanker spills has washed up on their beaches before. If you dig in the sand, there’s still a line from the last oil spill, he said. “The cleanup is never complete.”

Another reason his community signed is that they don’t have money to fight the project. “We’re not Tsleil Waututh, that’s for sure,” he said, referring to the coastal First Nation that is leading the court battle against Trans Mountain. “Those guys have a lot more money than us. ...We don’t have a big stick.”

"There you go chief! So you support our pipeline, right?”

Other B.C. First Nations are perfectly happy to take Kinder Morgan’s money and other benefits.

The reserve lands of the Cheam First Nation are perched on the banks of the Fraser River. The pipeline expansion won’t go through their reserve but it will cut through their traditional territory.

Chief Ernie Crey says his band council signed a benefit agreement just over a year ago after months of protracted negotiations.

He says some reports have portrayed the agreement as if Ian Anderson, President of Kinder Morgan Canada, “drove up onto our reserve, found me, rolled down his window, handed me a cheque and said, ‘There you go chief! So you support our pipeline, right?’”

“Nothing could be further from the truth,” he says with a chuckle.

Crey says the council entered into the deal because “we have a strong interest in any development within our traditional land.”

He sees the benefit agreement as a “springboard” to other economic opportunities.

It offers training and jobs, which will continue to help the community long after the pipeline is built. And the council wants to invest the new revenue into other areas, including medical marijuana production.

He laughs at the assumption that Kinder Morgan is taking advantage of his First Nation.

“We’re adults, we can stand on our own two feet, we can rise to our full height as an Indigenous community, thank you very much.”

To sign or not to sign?

The current pipeline and the proposed expansion runs through the reserve land of the Lower Nicola Band in the interior of southern B.C. The community of 1,300 people, one of 15 communities in the Nlaka’pamux nation, is negotiating with Kinder Morgan, but hasn’t yet decided whether to sign a benefit agreement.

While Crey says Cheam did not hold a referendum on whether to sign an agreement, Lower Nicola Band Chief Aaron Sam Sumexheltza said the council allowed the community to vote on the issue.

Only 187 of 964 eligible voters did so. Ultimately, 111 people voted in favour while 75 voted against. One ballot was spoiled.

“As chief of my community, I felt that it was important not to impose my personal views on the pipeline, and that’s one of the reasons we had a referendum,” Sumexheltza told VICE News.

"Like many Indigenous communities, we have higher unemployment rates than the rest of Canada"

He said some members told him they didn’t support the new pipeline, but they voted to sign because they believed it was “something that’s going to happen anyway, and they might as well get the benefits they can from the project.”

That referendum is non-binding, though, and the band council will decide in the next few months whether to sign or not. It will come down to whether the company adequately addresses concerns over the environment, land and cultural heritage, the chief said.

“If the project actually goes ahead, we don’t want to miss out when it comes to jobs and contracting opportunities, because like many Indigenous communities, we have higher unemployment rates than the rest of Canada and it’s important that if it goes ahead, we’re able to benefit.”

His community’s poverty is a direct result of “colonization, displacement of Indigenous communities from their traditional lands and being put on Indian reserves,” he explained, adding that intergenerational trauma from residential school also plays a role.

“Those are issues that most First Nation communities are still dealing with today in 2018.”

He said signing a benefit agreement does not mean the company has consent to cross the territory of the Nlaka’pamux nation.

“The pipeline goes through our reserve, but it also goes through our traditional territory, our Aboriginal title lands,” he explained. “And those lands don’t just belong to the band, it belongs to the whole nation. When it comes to consent, if we sign an agreement, it doesn’t necessarily mean we consent to the entire expansion or the project. Even if we sign ... all of our traditional territory is not owned only by the Lower Nicola Band — there are 15 Nlaka’pamux bands who assert title on those lands.”

One of those bands, Cold Water, is actively opposing the project in the Federal Court of Appeal.

'Consent is given freely and without coercion'

With Kinder Morgan’s deadline of May 31 fast approaching, opposition members slammed natural resources minister Jim Carr on Monday over reports the government “rigged” the project’s approval. In his retort, Carr pointed to consultations, Indigenous monitoring committees, and yes, mutual benefit agreements.

But NDP MP Romeo Saganash hit back: “The government continues to reiterate that its most important relationship is with Aboriginal peoples, but increasingly, we realize that this is just a facade. All indications are that the government had already made its decision on Kinder Morgan before the bogus consultations with the Aboriginal communities.”

When VICE News asked him to expand on his comments, Saganash pointed to the UN Declaration on the Rights of Indigenous People, something Trudeau has promised to implement, but hasn’t yet. It states that Indigenous people have the right to free, prior and informed consent when it comes to projects on their land.

It means “consent is given freely and without coercion,” Saganash told VICE News in an email. “While money can be attached to the agreement, consent must be there regardless of the money promised.”

“When Chiefs are coerced into signing agreements to assure environmental protection based on the understanding that their rights to consultation and consent will be denied that is not FPIC,” he said. “This is a strategy to reduce harm and offer some protection to their lands and waterways [which] is completely different than consent.”