From modest beginnings as a social media campaign, Idle No More quickly grew into a national aboriginal uprising, with protests and blockades across the country.

While the movement has certainly raised awareness, there’s been little media coverage of specific aboriginal concerns, notably revenue sharing in the mining and oil and gas sectors.

It’s an issue that resonates with Canadian investors, considering our resource-heavy investment landscape. The TSX and the TSX Venture Exchanges are home to nearly 60% of the world’s public mining companies and 35% of the world’s public oil and gas companies. Most Canadians have exposure to the energy sector through pension funds and domestic equity-based mutual funds.

And if revenue sharing and land ownership rights aren’t addressed through friendly negotiations, protests such as those against Enbridge’s Northern Gateway pipeline could stall numerous resource projects.

“Anything that brings these issues to [wide] attention and the overall situation of aboriginal people to the fore likely ends up in a discussion on revenue sharing,” says Ramsey Hart, program coordinator with MiningWatch Canada.

Hart says many native communities are in dire economic straits “largely because they’ve been dispossessed of the resources that might otherwise provide economic opportunities.”

He adds, “Idle No More is raising the issues we’ve been concerned about and raising ourselves, but in a higher-profile way. Hopefully it’s making people more aware and hopefully people will consider these issues next time they go to the ballot box.”

Bob Walker, vice president, ESG Services at NEI Investments, parent of Ethical Funds, says the investment firm has been engaging companies on native issues since 2004. On Idle No More: “This is something we’ve been anticipating for quite some time,” he says.

“It’s hard not to notice the disconnect between the living conditions we enjoy in the south and the living conditions on many of Canada’s reserves and in aboriginal communities,” Walker says. “That disconnect is not sustainable; it was just a matter of time before we began to see the kinds of protests and blockades we are seeing now.”

He adds, “The frustration on the part of First Nations communities is justified and predictable. We would encourage the government and companies to adopt policies and programs to address the very real concerns that we see in native communities across this country.”

Outstanding issues should be worked out through negotiation and dialogue, he says, as well as pilot projects and the establishment of best practices.

“This is not just a matter of justice; it’s also a matter of social licence to operate. Due to constitutional and treaty obligations, and because of a series of legal decisions, aboriginal communities have the ability to stop resource extraction projects in their tracks.”

Ethical Funds’ efforts toward dialogue have focused on the concept of free, prior and informed consent (FPIC) on all resource extraction projects.

“Our focus is on what companies can do, and at that level we are seeing real progress,” he says. “We are looking to keep the conversation alive and broaden it in Canada around FPIC.”

Hart recognizes the emerging standard of FPIC, but notes it hasn’t been widely adopted by the industry. “They acknowledge the requirement to consult but accepting that First Nations have the right to say no is something different. In terms of a real clear requirement for revenue sharing either on the part of government or companies, that’s all over the map.”

Without the co-operation of native communities, many extraction projects in Canada could halt, making resource investment more risky. Adding to the risk is the possibility of Idle No More-related blockades at major resource projects such as the oilsands, which could impact Canada’s reputation, particularly among foreign investors.

Read: the case studies

Case study: Free, prior and informed consent in Canada

Farrell Creek shale gas – Talisman Energy

Talisman Energy has natural gas interests at Farrell Creek near Hudson’s Hope, B.C. In 2010, the company applied to pipe water from the traditional territory of the West Moberly First Nation.

The provincial government and the B.C. Oil and Gas Commission did not require FPIC for the project to proceed, but did call for consultation with the WMFN.

Talisman has a defined FPIC requirement on its projects, based on a policy adopted in 2011. However, the WMFN says its concerns over water use on its territory have not been addressed.

Source: Boreal Leadership Council report, Free, Prior and Informed Consent in Canada (Sep. 2012)

Case study

Victor Mine – De Beers Canada

The Victor Diamond Mine is located in northern Ontario on the traditional territory of the Attawapiskat First Nation. De Beers’ policy, specific to Canada, requires free, prior, and informed consultation (as opposed to consent) before mining exploration begins.

De Beers’ policy states a project must have aboriginal community support before initiating mining operations where they will have a substantial impact on community interests.

The Attawapiskat First Nation also agreed to an impact and benefit agreement (IBA) with De Beers. There have been conflicts since the signing of the IBA, including a petition circulated for revisiting the IBA, and two blockades in 2009 and 2011. There have also been challenges with the implementation of the IBA, in particular meeting employment guarantees. De Beers says it has spent more than $300 million on native-run businesses providing mine services. Native leaders have called for a bigger slice of revenue from the diamond mine.

Attawapiskat made headlines last year amid unsafe housing conditions and allegations of financial mismanagement.

Source: Boreal Leadership Council, Free, Prior and Informed Consent in Canada (Sep. 2012)

Case study

Matoush uranium mine project – Strateco resources

The Matoush uranium mine project is located in the Otish Mountains of Quebec on the traditional lands of the Mistissini Cree First Nation.

The James Bay and Northern Quebec Agreement (JBNQA) governs the process for engagement of the Cree on development projects in the region.

Quebec takes the position that the JBNQA requires consultation, while the Cree position is that consent is required for development.

Strateco Resources has no specific policy on FPIC; however, its sustainable development policy says it tries to generate “social acceptability” for its projects through information sessions, meetings, advertising and media coverage.

Source: Boreal Leadership Council, Free, Prior and Informed Consent in Canada (Sep. 2012)

Doug Watt is an Ottawa-based financial writer specializing in sustainable investment.