Natural Resources Committee on May 7th, 2019

[The Vice-Chair, Conservative, Shannon Stubbs]

Good afternoon.

Today we will resume the committee's study of international best practices for engaging with indigenous communities regarding major energy projects. It will be our final meeting for this study.

I want to welcome all of the witnesses joining us today. We are again joined by Robert Beamish from Anokasan Capital by video conference, and Raylene Whitford from Canative Energy. Ms. Whitford is joined by her colleague, Chris Karamea Insley. We'll go to each of them for their 10-minute opening round and then follow that with our usual rounds of questions from the parties.

Mr. Beamish, the floor is yours.

[Robert Beamish, Director, Anokasan Capital]

Thank you very much for having me back again.

My name is Robert Beamish, and I am the co-founder and director of Anokasan Capital. I'll keep the introduction brief, as I was introduced previously.

We specialize in securing investment from east Asia for projects in indigenous communities in Canada. I'll be speaking about best practices from an international perspective and the perspective of indigenous communities within Canada.

These best practices are quite similar to the ones I mentioned in my previous presentation, but this time I plan to go into a little more detail on their value and why they are what they are.

I will start with the first one, which is to start with understanding. It is so important in relation to engaging with communities to not only allocate time, but also to budget for the understanding and needs-analysis process. If it's in the budget, it can be tracked and it can be delivered, and...finding out if there's alignment between community members and government for certain project developments. The more alignment you have, the more knowledge you can have of a community, and that will only help as the project develops and the negotiations continue to develop.

In a lot of communities there seems to be a process where people and individuals who go through the communities are very transient, coming for a time to learn or volunteer, and then ending up leaving. Over time, it can be an emotionally extractive process when you share your story, your culture, what things mean to you and your way of life and world view, and then people leave. Then more people come, and it's another process of sharing and leaving. This can also happen from the business perspective. In order to be successful, there needs to be that longer-term commitment from all partners.

Understanding goes to more than just project requirements; it's also understanding what the community's development goals are, what their history is, how they want to develop and where they are in that development process.

The next best practice would be communication alignment, and this relates to providing the platform for concerns to be voiced. If one isn't provided, then one will be created. It's about having regular intervals for communication, not only for dispute resolution, but also for an open floor to provide community members with feedback and details on the development of the project.

As different communication styles need different approaches in order to get all of the information out, you need to have set intervals, whether they be bi-weekly or monthly, to discuss the project's development as it relates not only to community members, but also to project leaders and stakeholders. Having these scheduled interviews allows the time for different people to process that information and perform the different types of analysis that they find valid.

For example, there was a geothermal project that was being worked on. It was in line with the values of the community. It was a renewable energy project, and it had education and employment opportunities included. When the project started to go forward, the machinery that was being brought to the community resembled classic oil rig machinery. When community members saw this, they said, “This isn't in line with what we thought we were getting into.” There wasn't a platform to provide information or dispute resolution, so one was created, and there was a process for this. There ended up being a team that went around to educate community members about what the machinery of a renewable energy project looks like, how it would change and what it would look like in terms of phases. They had to add this as an additional stage in their development process in order to ease the social unrest.

If there had been a platform for that open, free flow of information for community members to ask questions and provide feedback, that could have been avoided.

The next point would be cultural alignment. This one relates to the differences in cultures. Our differences can only bring us together once we understand how they separate us. It's about being proactive in understanding the protocols associated with the land, the land's relationship with that community, and what it means not only in terms of protocols and what should be done while on the land but also what it means in terms of the relationship with the land and why.

As well, a very important practice that we implement is a cultural bias awareness practice where we're self-aware of our own cultural biases. We do this because usually we're working with investors from the Asia-Pacific region, specifically China, but also with indigenous communities. We ourselves have our own cultural biases that we come in with. If we're aware of those, we can understand how our cultural biases are affecting how we're trying to do business, how we're going into this situation, how the cultural biases of the different partners at the table may be affected, and how they're going into doing business.

The next point would be the “four Es”, namely, employment, equity, education and the environment. These four Es affect every community in some way, some on a greater scale than others. We're proactively seeking these out in the “understanding” stage—for example, finding out the employment requirements, the expected equity in projects, the environmental concerns and the education for members, whether that be in training or literacy education. Looking for these and looking for ways to tailor these four Es to communities is an excellent way to proceed as a better partner, but likely these four Es are affecting communities in different ways. Whether they're all at the same time or one is greater than the other, integrating these into projects as opposed to leaving them as concessions is a much better way to start building a relationship.

A segue into the next one is information alignment. What gets measured gets delivered. When these Es can be measured, whether they're by literacy tests prior to a project starting, during the project start, during the training being implemented, or after the project or training has been completed, you are able to mark the improvements in literacy or education or as they relate to skills development. If these items are being measured, then they can also be delivered. Project requirements are measured and delivered upon and timelines are measured, but just as project requirements are measured, these social development requirements should be measured as well. Many communities are lacking in information when it comes to this area. It can be difficult to provide policy and create policy around where the community should go next if this information around literacy rates or around environmental contamination is not available. This information that you can provide to a community is value added to the community in their continued development as well.

I know that this is the last meeting on this topic of best practices, but I think it is very important to heed these best practices. A lot of them are not being implemented. There are challenges to implementing these practices, but the challenge that comes with these practices is also the great reward that comes from implementing them. Understanding these communities and understanding the individuals we'll work with on these projects will change how projects can be developed and how relationships can be developed, and it will affect mutual prosperity going forward. As we know from the different meetings that have been held on this topic, there are so many of these practices. I can only think of the ones that have been mentioned during the two presentations that I'm a part of. They will likely take effort, money and time to implement. They will take understanding and sacrifice in order to develop and be useful going forward, but it will be for the mutual benefit of all the people of this generation and the ones that follow.

I do thank you for your time on this. I'm looking forward to your questions.

[The Vice-Chair, Conservative, Shannon Stubbs]

Thank you, Mr. Beamish. You're right on time. That's better than most of us in the House of Commons on a daily basis.

Now we will go to our next witness.

Ms. Whitford, together, you and your colleague can split your time.

[Raylene Whitford, Director, Canative Energy]

Thank you, everybody. It's a pleasure to appear in front of you again.

I'm calling in from Rotorua in New Zealand. I'm here with Chris Karamea Insley, who is one of the advisers to Canative Energy.

I requested to appear again before the standing committee just because this is a topic that I feel very, very strongly about. This is my life's work, and it has been my career to date so far. I'm an indigenous finance professional. I have worked internationally in the energy sector since I began my career. I spent three years in Ecuador working in social development with Ecuadorian indigenous communities that had been impacted by the energy sector.

As for what I'd like to share with you, I'll just touch base on the three points I raised previously and then bring up another two that I think are very important. It's echoed in what I'm seeing here in New Zealand as well.

The first point I brought up was diversification. It's really important that these communities are not completely dependent on income streams generated from the energy industry.

It's also really important that they have a long-term plan in place. At some point, I saw some Ecuadorian communities that were looking into the future, but some are very nearsighted, and it's very difficult to engage with a major capital project if you are looking only at what is right in front of you.

The third point is building capabilities. Last time, I spoke about the education aspect, the literacy, etc.

I think this next point echoes Robert Beamish's point about energy literacy. What is energy literacy? Basically, it's providing the education and the awareness of what the industry is. What do these capital projects look like? What is the terminology being used? What is the machinery that they're going to see coming through their community? This is really important. It's really difficult to engage with something if you don't know what's going to happen, especially in these communities. They're very tightly knit, so they get a lot of their information from their neighbours and their families. Sometimes the messages change. Sometimes they're coloured a bit by people's ontologies, so it's really important that the government promote energy literacy within these communities so they're able to engage effectively.

The last point is the prioritization of youth voices. What I've seen is the polar opposite of what happens in the energy industry. In the energy industry, it's usually the oldest, loudest voice at the table that's prioritized in the boardroom, whereas in the communities that I've seen operating effectively in their space, they're actually bringing children and youth into the room and asking them for their opinion because they are the leaders of the next generation. They're engaging with these individuals with the expectation of empowering them and engaging them in the conversation to be able to move this forward.

With that, I'll hand it over to Chris. He'll tell you a bit more about what's going on in New Zealand.

[Chris Karamea Insley, Advisor, Canative Energy]

Thank you, Raylene.

Good afternoon, Madam Chair, and thank you for the opportunity to speak and share some of the experiences from us, as Maori people down in New Zealand.

My background is that I similarly trained in finance and economics in New Zealand, and also in the U.S. My work experience has been largely concentrated in the natural resources area. I've spent a lot of time working in forestry, including in the U.S. and in Canada—in British Columbia—so I have some experience there. Like Raylene, it's been my life's work in terms of driving Maori and, in turn, indigenous development among the likes of Robert, Raylene and others.

What I want to do is sort of share with you, members of the committee, a little bit about New Zealand, a little bit about Maori, and what makes sense for governments of the world to embrace—the challenges and the opportunities, and the opportunities are big.

As a population, we have around six million people, so we're small in New Zealand. Of that, there are around 600,000 Maori people. If you trace back through time, we as Maori people have shared, if you like, the same challenges that we see among the indigenous first nations people of Canada and elsewhere around the world—like Australia—in terms of high unemployment, all the bad things.

I'm going to echo some of the points that Robert and Raylene have made. It makes sense for governments to try to understand how to work collectively together with indigenous people. From the New Zealand experience, around 30 to 40 years ago, a piece of work was done to measure what the economic size of the Maori economy was within New Zealand. They measured it at around about $30 billion—New Zealand dollars—at that point in time. I might add that interest is concentrated in the natural resources: farming, forestry and fishing, and energy to an extent.

That same piece of work was remeasured, redone, in the last 12 months. The Maori economy today is around $50 billion. If you do the numbers, you'll see that the Maori economy is growing at a compound annual growth rate of around 15% to 20% year-on-year, while the rest of the New Zealand economy is growing at around 2% to 3%. That's triggered a lot of activity and thinking within New Zealand governments that the Maori economy has become a cornerstone of the success of the New Zealand economy in terms of some of the things that Maori are doing. It makes sense; that is the point.

In terms of best practice, again I'm going to echo the points that Raylene and Robert have made. From a government policy point of view, if you understand.... I believe from my assessment in Canada, with the kind of natural resources our first nations folks are involved in, there is enormous potential for that to be grown for first nations and for the economy of Canada, if some of the lessons that we've certainly learned along the way might be transferred.

The first point is that it takes time. I know you're challenged by the short-term electoral cycles, which we have in New Zealand too. It's hard to plan long term when you're up against that challenge, but I make the point that it takes time. I'm echoing, again, other points that Raylene has made. To build capability within communities, to build trust within communities, that all takes time.

Invest in young people. Heavily invest in young people and bring them forward, and that's when you'll really start to see the lessons and the potential start to be realized.

I'm really going to make a pause at this point, but I'd also say that whatever you do, it's worth the effort and don't drop the ball in terms of thinking about long-term plans and policy.

I'll pause there.

[The Vice-Chair, Conservative, Shannon Stubbs]

You do have two minutes, if there are any additional comments you want to add.

[Chris Karamea Insley]

Okay, thank you. I will go on from those best practice points to one other point that I think is really important and that we've certainly come to appreciate. It's a point that has been echoed around the world. That is not only to take a long-term view—and when I say “long-term”, I mean potentially generations, not five to ten years; but 30 to 50 years and beyond—but then also to think about policy that is integrative.

What do I mean by that? It's driven and underpinned by realizing the economics that we've all been trained in. There has to be a return on investment for all of the different parties, including government, the private sector, and the local communities. But absolutely, alongside that—and this is the stuff that we've learned in New Zealand that really starts to resonate with indigenous communities—think about how you grow people and about the social drivers. When you're thinking about getting alongside communities, go to them.

We have in New Zealand this thing that we've termed the “aunty test”. It's often the hardest test to pass, when you're in a meeting in the community, because one of the aunties will stand up and say to you, “Yes, we know all of those NPV numbers and those return on investment numbers, but what are you going to do to grow our people? Where are the jobs for our people? ”

You have, then, to tick the economics; you have to tick driving, and I would argue that the social driver is probably one of the pre-eminent drivers; and then also the environmental drivers. There is a fourth one; that's the cultural drivers. Long=term, you need to integrate all of those different value drivers into your thinking and the way you think about policy.

I'll pause there.

[The Vice-Chair, Conservative, Shannon Stubbs]

Again that's perfect timing. Thank you very much for your testimony.

We'll go to our government colleagues with our first seven-minute round of questions, starting with David.

[David Graham, Liberal, Laurentides—Labelle, QC]

I'm going to start with Mr. Beamish.

You mentioned an example or a situation in which a project was started and oil rig equipment arrived and the project was not what they were expecting.

Is there a feeling that our projects are being obfuscated or not being explained legitimately in these negotiations with these communities around the world?

[Robert Beamish]

That one could be related to exactly what Raylene was talking about, a case in which information could be derived from your neighbour in a close-knit community and not necessarily from the project's negotiations and what was discussed exclusively in the boardroom. That relates to disseminating information from the boardroom to the community's members at the individual level.

I have colleagues who work in that space, and they literally go knocking on the doors of community members to talk about what these ongoing developments will look like and how the project will affect the community—what the machinery will look like, what the different development stages will look like. That goes to educating the entire community, not just the project leads and the people who will be working on the physical project.

[David Graham, Liberal, Laurentides—Labelle, QC]

My next question is for all of you

You have been here before. Is there anything in previous testimony over the course of this study that you wanted to rebut or answer or challenge? This is the last day of witnesses, so if a point has been made that you think is utter wrong, now is a good time to point it out, either of you.

[Raylene Whitford]

I'll go first.

I don't think there is anything in any of the evidence I've heard, either in my previous session or in what I've heard through listening online to the other sessions.

What really drove me to connect with the committee is that I feel that sometimes it's difficult to have a purely international view. I know we're meant to be relating to the Canadian context, but it felt, most certainly in our session, that the conversation turned to some legacy issues in Canada and wasn't purely international. I would encourage the committee to keep that international hat on and really look at what's happening around the world.

As well, I really think it's important to acknowledge the youth aspect. What I'm seeing in Ecuador, and what I'm seeing in Canada as well, is the engagement and empowerment of young indigenous people. This is one reason I'm returning to Canada later this year to work. It's really inspiring and it's really great to see this, but it's very risky.

If this generation of youth become disengaged, or disenchanted with the energy industry and the way the government is treating them and operators are engaging with them, they can completely turn the other way and can most definitely stop the projects in their communities. It's really important to understand that their voices are prioritized and respected within these communities and that it not be as hierarchical as what we see in the energy industry.

To me that's one of the polar opposites I see between communities and the way the industry operates: it's the treatment and recognition of the voice of youth.

[David Graham, Liberal, Laurentides—Labelle, QC]

When we're talking about youth and ensuring the engagement of youth, what resonates with the next generation? What brings them to the table to say, “That's a really good idea; we have to work on this”, as opposed to, “My God, that's a horrible thought”?

What are the lines or explanations that work the best to keep them engaged?

[Raylene Whitford]

What you see at conferences focused on a specific subject—as I've seen in New Zealand—is that the first session is with the youth, who are encouraged to present their ideas and to lead the conference, in a way. I think that's really important.

For example, in one community I saw in Ecuador, there were two individuals who left the community and went to the city to be educated as lawyers. They were very open to activity in the sector. It was in the mining sector, not oil and gas sector, but these mining projects were still major capital projects with long lives. Over the time I spent in Ecuador, I saw them very quickly disengage, just with the way the government was treating them and the way their voices were very quickly pushed aside. The elders of the community were the only ones who were engaging with them.

It's really important to let the youth feel included and involved, and also to listen to their opinions. What you often see, and least with Robert's and my generation, is that we're more open-minded and more international. We have a valid opinion as well, which could be aligned to the sector.

[Chris Karamea Insley]

Could I build on that point, David?

[David Graham, Liberal, Laurentides—Labelle, QC]

Sure.

[Chris Karamea Insley]

From a New Zealand perspective, growing our youth has been, in my view, a cornerstone of the kind of economic growth we've seen achieved in New Zealand. What I mean by that is that a lot of our Maori companies and businesses across all of the different sectors offer scholarships every year to our youth. Over the last 15 to 20 years, we've seen a massive wave of highly educated youth going out through the university systems of New Zealand and the world. The point is really that all of those said youth are highly motivated to return home and contribute the knowledge, skill and expertise they have accumulated both through work and through learning around the world. They have a yearning to make a contribution back into their communities.

That raises another challenge when they come back, because you have to create the opening for them to come back to. That means driving concurrently the economic activity. You cradle a new opportunity and you welcome them back in. That's really what starts to accelerate the development, not just for those communities and those families, but for communities and the nation.

[David Graham, Liberal, Laurentides—Labelle, QC]

Thank you. I think my time is well past up. I appreciate that.

[The Vice-Chair, Conservative, Shannon Stubbs]

Perfect.

For our next seven-minute round, Jamie, you have the floor.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

I appreciate the opportunity to ask our witnesses some questions on this very important study.

To Chris, to continue on that thought, when talking about indigenous youth and engagement and that type of theme, in a lot of cases—and this can even be discussed outside first nation communities—there seems to be a bit of a disconnect between companies requiring certain skills from the newer workers and the younger workers trying to determine whether or not they actually want to get into that trade. Skilled trades come to mind in a lot of cases.

How did New Zealand deal with that? Here in Canada, I think there is an issue.

[Chris Karamea Insley]

Yes, Jamie, I'll answer that on two levels.

Firstly, in New Zealand, the Maori community has become highly active politically. For example, of our 122 members of parliament in New Zealand, we have 18 Maori members from across the political spectrum. In my view, we've been very sophisticated about how to leverage, as Maori people, that influence within government towards skills training programs for the particular needs of Maori communities. And we have a lot of those unfolding right now in some of these different sectors.

The second part of the answer is that, within our own Maori businesses, we are actively encouraging our youth to go off and get trained at university and in the trades. I think it has to happen at both levels. It's not just a government responsibility; it's a responsibility of government in partnership with business and with the families and communities.

For me, it really comes back to building that trust with those communities. In my view, the success is not through a government-driven, top-down approach only; it has to come from communities to drive that up.

I trust that makes sense.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Yes, it does.

Does anyone want to add anything more before I get on to my next topic?

Mr. Beamish.

[Robert Beamish]

I think Chris summarized that well.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Okay, perfect.

This can be open for anybody.

On indigenous consultation, I'll mention a project that some of you are familiar with, the Eagle Spirit pipeline. I note that so far today we've talked about consultation with regard to projects, but what about the legislation that impacts these projects like the Eagle Spirit pipeline that some of you are familiar with? For example, 35 first nations want to build that indigenous-owned Eagle Spirit pipeline corridor from Fort McMurray, Alberta to the northwest B.C. coast near Prince Rupert. These first nations complained bitterly about the failure of consultation on Bill C-48, which will forever ban the export of crude oil off the northwest coast of B.C.

Now, with respect to Bill C-69, the proposed legislation on impact assessments, we are finding out that many of these Canadian companies, like TransCanada—which recently dropped “Canada” from its name—are focusing investments on other international jurisdictions like the U.S. As investment flees, projects are being cancelled and jobs are being lost, and particularly hard hit are those indigenous jobs.

Indian Oil and Gas Canada, which regulates oil production on first nations lands, has a policy of charging a higher royalty for oil produced on reserve lands than the royalties charged on crown land in B.C., Alberta and Saskatchewan.

As investment departs Canada, capital exits indigenous lands first. According to the IOGC itself, new first nations' leases are down 95% over the last four years.

In your opinion, do governments owe a duty to consult on legislation like Bill C-48 and Bill C-69, the no more pipelines bill, that directly affect indigenous interests, or is it only a physical shovels-in-the-ground type of project that requires consultation?

That was a very long preamble.

[Raylene Whitford]

If I may start, first of all, in the spirit of the topic of the committee, I'm going to leave aside the Eagle Spirit pipeline specifics and answer your question directly. Should indigenous peoples be consulted in the creation and development of policy as well as when they put shovels in the ground? Absolutely.

I would encourage the committee to consider indigenous communities as an operator would consider their joint venture partner. Indigenous communities need to have the same rights, the same level of opinion and the same engagement as, for example, Shell would have with BP if they were partnering on an asset in the North Sea. Those two joint venture partners have equal voices when it comes to canvassing the government in developing policy and changing the existing policies. Absolutely. It's only at that point that you will begin to build trust with the indigenous communities.

Thank you.