Demands from First Nations for “access” payments from exploration companies are not legal, according to the B.C. government.
According to the Association of Mineral Exploration (AME), a number of junior exploration companies and their suppliers and contractors have been approached by First Nations demanding “access” payments for permitted exploration activities on Crown land. It has not identified the First Nations alleged to have been engaged in the practice.
“Unfortunately, these demands are often conveyed under a threat of inciting work interruptions if payments are not provided,” the AME states in a brief.
“Many of these payment demands are not in support of any mutually beneficial quid pro quo business benefits, or potential capacity building arrangements or existing agreements between companies and First Nations.”
According to the AME, its members have reported that a common demand is for a percentage of an exploration budget.
“For suppliers or contractors the demand is typically some percentage of the gross billing of a supplier, without any consideration or provision of a service.”
In some cases, there may be overlapping territorial claims, which means there may be demands for payments from more than one tribal group for the same exploration work.
As the AME points out, exploration is not a revenue generating business. Only those exploration activities that identify recoverable mineral deposits ever turn into operating mines.
Once they are at the development stage, it’s common for mining companies to sign mutual benefit agreements with First Nations. But at the exploration stage, there is typically no revenue being generated to share.
In response to the AME’s concerns, John Rustad, minister of Aboriginal Relations and Reconciliation, has written to the AME to clarify the legality of such demands. As far as the province is concerned, they're not legal. Companies with exploration permits on Crown land are not obliged to pay First Nations for access to Crown land.
While the government encourages resource companies to consult and engage with First Nations, that doesn’t mean that have to pay access fees on Crown land.
“To be clear, the province maintains full jurisdiction on Crown lands, and does not view First Nation governments as possessing the authority to require companies to make access payments in return for being allowed to work in their respective territories,” Rustad writes in a letter to AME president Gavin Dirom.
Robin Junger, a lawyer specializing in aboriginal and environmental law with McMillan LLP, said the demand for access payments from exploration companies is something that has been going on in B.C. for some time now.
“The province has in past been reluctant to wade in but has now done so clearly and publicly and its position is legally correct, clear and commendable,” he said.