Voisey's Bay Mine and Mill Environmental Assessment Panel Report

4.1 Background

The Memorandum of Understanding (MOU) authorized the Panel to consider "submissions regarding the relationship between the Undertaking and land claims negotiations." The Panel therefore indicated in its guidelines that it would consider "whether proceeding with the Undertaking prior to the negotiation of a land claims agreement with an affected Aboriginal party would jeopardize, impair, or limit those negotiations."

The Labrador Inuit Association (LIA) and the Innu Nation told the Panel that doing so would indeed have that effect. They further asserted that

• key social, economic and environmental mitigation measures can only be delivered through land claims agreements and through impact and benefit agreements (IBAs), and that such measures are therefore inextricably linked to those agreements;
• their interests in IBA negotiations are adversely affected because the negotiations are occurring outside the context of land claims agreements; and
• their consent would be required before project authorization, and that such consent could be achieved through land claims agreements and IBAs.

LIA and the Innu Nation stated that the Project should not be authorized before each group has reached a land claims agreement - at minimum, a ratified agreement in principle with secure interim measures - with the governments of Canada and the Province. In addition, they stated that IBA negotiations should be finished and an agreement ratified before the Project is authorized, and that the agreement should be in place before construction begins.

Many Inuit, Innu and organizations also strongly supported these conclusions and conditions.

VBNC stated that, although it supports the principle of a negotiated land claims agreement, it is not a party to these negotiations. The company feels that its right to pursue its interests should not depend on completion of an agreement. VBNC is negotiating IBAs with LIA and the Innu Nation, but regards these as discretionary arrangements that should not hold up the Project.

Canada and Newfoundland provided some information on the status of land claims negotiations but took no position on the matter.

4.2 Land Claims

In keeping with the MOU, the Panel stated in its guidelines that it would not (and it does not) "make findings or recommendations regarding ... the existence or substance of Aboriginal rights." However, after those guidelines were issued, the Supreme Court of Canada rendered a judgement (Delgamuukw v. British Columbia) that provides specific guidance on the consequences of Aboriginal title and rights. Both LIA and the Innu Nation referred to this judgement in arguing that their consent is required. The Panel feels obliged to consider the current implications of Aboriginal title in relation to consent, to consider what form such consent might take and to make recommendations on the delivery of key mitigation measures.

The Panel therefore considered the following three questions.

• If Aboriginal title exists in the area, what are its consequences for project authorization?
• What would a land claims agreement likely include?
• How would land claims negotiations be adversely affected if the Project were authorized to proceed prior to a settlement?

These appear to be matters of some uncertainty, and the Panel's observations on them are not intended to be either determinations of legal fact or legal interpretations.

4.2.1 Consequences of Aboriginal Title

According to the Supreme Court in Delgamuukw, Aboriginal title encompasses "the right to exclusive use and occupation of land," and "the right to choose to what uses land can be put." Aboriginal title also encompasses mineral rights, and such lands may be used in certain non-traditional ways. The concept therefore has an economic component. Aboriginal rights, which among other things can include the right to engage in specific traditional practices in specific places, can exist without title. However, these rights are not necessarily exclusive.

Aboriginal rights and title are not absolute. They may be infringed for legislative objectives that are "compelling and substantial." These can include mineral developments such as the VBNC Project. Governments have fiduciary obligations to Aboriginal people, however, and the Delgamuukw judgement sets out certain tests that governments must meet to justify infringing on Aboriginal rights and title. These tests include ensuring

• Aboriginal participation in resource development;
• consultation and, in some cases, full Aboriginal consent; and
• fair compensation.

Performance requirements for these tests are not described in detail. Both the first and third requirements arise from the economic component of title. They involve both legal and economic principles, which the Supreme Court acknowledged to be complex and which it did not describe in detail in its judgement. However, the principle of participation is said to involve both the process and the result of resource allocation.

The requirement for full consent is specified "particularly when provinces enact hunting and fishing regulations in relation to Aboriginal lands." The Innu Nation submitted that this means anything, including the Project, that affects fish and wildlife in the area, but the Panel is not persuaded that this is a plain reading of Delgamuukw. The Panel understands Delgamuukw to mean that formal consent on the part of Aboriginal title holders is not legally required for the Project to proceed, although there are sound political and moral reasons for governments to obtain their consent.

The Crown is obliged to consult because it has the capacity to grant land and resource tenures. The Panel understands that, in light of recent court judgements, governments must take consultation seriously, and that the environmental assessment process is held to the same high standards. If the lands in question are subject to Aboriginal title, the Panel must therefore give due consideration to matters presented to it by title holders.

If the foregoing is now the law of the land, there are significant consequences for Project approval. The rights described would be constitutionally protected, and the obligations described would be constitutionally required. The Crown's obligations would be legal, not merely political. The Panel would need to consider the effect of these legal facts on the authorization and environmental aspects of the project, in the same way it considers the effect of any other applicable federal or provincial legislation.

Under policy established many years before the Delgamuukw judgement, Canada acknowledged an obligation to negotiate comprehensive claims agreements in areas where Aboriginal title is unceded or unextinguished. In accepting a claim for negotiation, Canada does not admit legal liability and does not acknowledge title. Canada and the provinces have taken the position that claims agreements need not precede resource development on those lands. Both LIA and the Innu Nation observed that Canada and the Province do not formally recognize and act in accordance with Aboriginal title before ratifying a final claims agreement.

The Delgamuukw decision specifies, with much greater clarity, the Crown's obligations with respect to granting or permitting third party rights on Aboriginal title lands. The effects of Delgamuukw appear to include the following.

• The Crown cannot dispose of land or resource rights, or permit development activity, on Aboriginal title lands unless it has met its obligations with respect to participation, consultation and compensation.
• The Crown must meet these obligations before development begins, rather than merely undertaking to negotiate a claims agreement at some unspecified future date. Injunctions have been granted to First Nations in British Columbia when these conditions have not been met.
• The Crown's traditional position that development can proceed on Aboriginal title land in advance of arrangements for participation, consultation and compensation, if not also consent, is no longer tenable.

In the context of land claims negotiations, interim measures to protect the interests of Aboriginal title holders are no longer discretionary; they are mandatory.

While the Supreme Court did not decide that land claims agreements are required before resource development can begin, the judgement stated that, where Aboriginal title exists, "the Crown is under a moral, if not a legal, duty to enter into and conduct those negotiations in good faith."

The Panel considers that a land claims agreement is the most effective and efficient way of implementing the Crown's obligations, because it provides both the substance of these obligations and an institutional framework for implementing them.

Delgamuukw provides explicit guidance for determining whether Aboriginal title actually exists for the lands that VBNC seeks to occupy or for any lands that the Project might affect. That determination is not part of the Panel's mandate. The Panel merely notes that Canada has accepted for negotiation two claims that include part or all of these lands. These are the claims of LIA and the Innu Nation, both currently under negotiation. Canada is also negotiating a claim by the Makivik (Inuit of Quebec) with respect to an area of land and sea north of Hebron (approximately 58° N). The Labrador Métis Nation (LMN) has submitted a claim to an area of "south and central Labrador" whose actual geographic limits were not communicated to the Panel. The LMN advised the Panel that the Department of Justice Canada rejected this claim in a draft response that the Minister of Indian and Northern Affairs has neither accepted nor rejected.

4.2.2 Likely Contents of a Land Claims Agreement

Canada's policy on negotiating land claims agreements provides for transfer of title to selected lands, hunting and fishing rights, resource revenue sharing and Aboriginal involvement in environmental management, both onshore and offshore. However, final agreements are not identical, and these core elements can be modified to meet local circumstances and objectives, which may include balancing Aboriginal rights and title with those of the Crown and of existing third party interests.

Based on LIA's submissions of November 2 and 3, the LIA land claims agreement will resemble the Nunavut Final Agreement in key respects. The Panel assumes, for the purposes of this discussion, that those submissions reflect the likely outcome of an agreement.

The following key elements of the LIA land claim pertain to this environmental assessment:

• selection of lands in surface title, exceeding 20 percent of the Labrador Inuit Settlement Area, which will cover the entire north coast of Labrador;
• priority subsistence harvesting rights, and co-management with respect to wildlife, fisheries and environmental assessment, throughout both the Settlement Area and a substantial marine area extending to the 12 mile limit;
• resource royalty sharing on both Labrador Inuit lands and Crown lands (this would include revenues from the VBNC Project);
• a cash transfer;
• compulsory IBAs on major developments throughout the Settlement Area; and
• wildlife compensation provisions.

The Innu Nation appears to be negotiating similar general provisions, although details may vary.

IBAs include measures to minimize adverse effects of major development activities on land claims agreement beneficiaries, and to enhance positive effects. Prospective resource developers must negotiate an IBA (in all cases with the surface title holder and in some cases anywhere in the settlement region) before beginning a project. Land claims agreements typically include particular provisions to compensate beneficiaries for adverse effects on wildlife harvesting, in the context of IBAs. Section 4.2.3 provides further details on how IBAs work in other claims.

Resource revenue provisions ensure that land claims agreement beneficiaries obtain a set share of the royalties flowing to governments from development activity, regardless of where the activity occurs in the Settlement Area.

From this brief account, it is evident that key elements of a land claims agreement ensure that governments meet their legal obligations to provide for participation, consultation and compensation. The Panel makes no comment on the appropriateness or desirability of any particular approach to or component of a land claims settlement. The only purpose of this discussion is to identify the most likely outcomes of negotiations and the ways prior authorization might adversely affect those outcomes, based on recent experience.

4.2.3 Potential Adverse Effects on Land Claims Negotiations

If a project were authorized to proceed before a land claim was settled, how might that adversely affect land claims negotiations? Both LIA and the Innu Nation argued that the land claims agreements they are currently negotiating would be compromised if the Project were authorized to proceed before they settled those claims. Specific concerns included co-management, resource royalty sharing and IBAs.

Concerns Related to Co-Management

If co-management provisions of a land claims agreement were in effect, LIA and the Innu Nation would have a direct and non-discretionary relationship with the regulatory agencies involved in this project. This cannot be achieved through IBA negotiations. Through the MOU, LIA and the Innu Nation established significant cooperation with governments regarding the present environmental assessment of the project. The Province has also made a discretionary commitment to enable LIA and the Innu Nation to review permits associated with the Project. As both LIA and the Innu Nation have pointed out, without a land claims agreement, there is no provision to continue these arrangements during the environmental management phase of this Project, or to co-manage any other development that might occur on Aboriginal title lands.

Resource Royalty Sharing and Other Financial Considerations

The proposed Inuit land claims agreement calls for LIA to receive three percent of provincial resource royalties from the Project. This does not appear to depend on the selection of the claim block as Inuit land. Under a final agreement, the Province would collect resource revenues and remit a portion of them to the beneficiaries.

The Innu Nation indicated that it could not negotiate a resource royalty share on the Project through its land claim if the project is approved before the claim is settled, as it is the Innu Nation's understanding that "existing" projects would not be subject to the provisions of its agreement. The Innu Nation also asserted that, without a land claims agreement, IBA payments would be subject to taxation.

If compensation, in the form of rent revenues, is not provided through a land claims agreement or an IBA before the Project starts, the Innu Nation and LIA will not obtain financial resources with which they can address their own concerns according to their own priorities.

Resource revenue sharing and cash transfers constitute compensation for past, present or future use of resources, and for any damages caused by resource development. The Crown provides this compensation directly, normally through a land claims agreement, as a consequence of its fiduciary obligations. The only direct "compensation" that developers provide relates to damages resulting from accidental or unintended consequences of activities that the Crown has authorized.

Concerns Related to IBAs#

Although VBNC is negotiating IBAs with LIA and the Innu Nation, it regards these as discretionary arrangements that do not have to be completed before the Project starts. If land claims agreements were already in place, IBAs would be non-discretionary and the Project could not proceed without them. Wildlife compensation would also be non-discretionary.

The Innu Nation argues that lack of a land claims agreement puts it at a disadvantage in its negotiations with VBNC, because that lack makes IBAs discretionary. LIA argues that an IBA negotiated within the framework of a land claims agreement differs from one negotiated outside of that framework, without clearly specifying the nature of that difference.

The Panel notes, however, the following provisions of the Nunavut Final Agreement (and similar agreements), which make IBAs less open-ended in the context of a settled land claim.

• Benefits shall not place an excessive burden on the proponent and undermine the viability of the Project.
• Matters considered appropriate for negotiation are defined. Although not necessarily inclusive, the list does not include equity participation, or revenue capture as rent or compensation. It should be noted that the parties to the current IBA negotiations could negotiate any of the items in Schedule 26-1 to the Nunavut Final Agreement.
• It is assumed that IBAs are concluded after environmental reviews and project approval, because they must be consistent with the terms and conditions of both.

Negotiations normally begin at least 180 days before a project starts, and there are provisions for both voluntary and compulsory arbitration, as early as 60 days after the negotiations begin.

As a general principle, IBAs cannot be used to stop or delay an approved project. The Panel is not aware of any case where the beneficiaries of a land claim have attempted to do so.

The Panel believes that a land claims agreement would provide greater certainty with respect to IBAs, as both the Innu Nation and LIA have observed. However, such an agreement would also give a developer greater certainty. VBNC stated that the prospects of successfully negotiating an IBA would be better if matters normally related to land claims agreements were kept separate. The Panel agrees.

The Panel is not persuaded that negotiating an IBA within the framework of a land claims agreement necessarily results in a more advantageous IBA for the beneficiaries. A land claims agreement would simply make it mandatory to negotiate an IBA before a project starts. The next section discusses this issue further.

Neither LIA nor the Innu Nation specifically argued that its land selection might be jeopardized. Although the Province offered the claim block to LIA before minerals were discovered on it, the land claim appears to provide for both resource revenue sharing and an IBA, whether these lands eventually fall under Inuit surface title or not. As long as this is so, and as long as the claim provides for environmental co-management, LIA would not be adversely affected if the Project began before land was selected and confirmed. Similarly, if the final agreements include adequate provision for wildlife compensation, and if current restrictions on employee harvesting are maintained (see Chapter 14, Aboriginal Land Use), Innu and Inuit harvesting rights would not be adversely affected.

There are also some more general considerations. The Innu Nation argued that the practical effect of Aboriginal title and rights would be diminished if governments could continue to authorize major developments on Aboriginal title land without concluding a land claims agreement and without penalty. LIA asserted that the integrity of the negotiation process itself would be undermined.

Both the Innu Nation and LIA have asserted that redress and remedies are available to them through the courts, and the foregoing analysis suggests that they may be correct. However, litigation would entail substantial cost and take a long time. The plaintiffs would have to prove their Aboriginal title, according to the tests outlined in Delgamuukw, and other parties might intervene with different claims. The Panel does not speculate on the outcome, but a court might come to conclusions regarding titles and rights to specific lands that differ from those currently accepted by Indian and Northern Affairs Canada for negotiating purposes.

LIA and the Innu Nation noted, and the Panel concurs, that legal action would create a prolonged period of uncertainty for all concerned. It would also constitute a major setback to the goodwill and cooperation established among the parties to date, and to whatever progress has been achieved in negotiations and discretionary arrangements. Legal action would subject the VBNC Project, even if authorized, to uncertainties in implementation, and severely diminish prospects for successfully delivering key social, economic and environmental mitigation in a cooperative manner. The Panel cannot recommend a course that could effectively negate the benefits of the project to Inuit, Innu and, ultimately, VBNC.

4.2.4 Alternative Measures

Are there alternative methods to ensure that the Crown's fiduciary obligations to Aboriginal title holders are met, short of negotiating a land claims agreement? The Panel considers that negotiated, project-specific agreements, relating to such matters as IBAs and environmental management regimes, could serve this purpose (see Chapter 17, Environmental Management). However, the Panel cautions that, if such agreements are reached only on a project-by-project basis, there is a risk of developing a hodge-podge of overlapping and perhaps inconsistent arrangements that would create extra costs. Negotiating a final agreement from which the appropriate arrangements would naturally flow is very likely a simpler and more efficient approach, which would also create a clearer and more secure environment for potential developers. It also puts the onus for clarifying issues of land and resource tenures precisely where it belongs: with the governments that grant them rather than the developers who seek them.

If alternative arrangements to land claims agreements are to be effective, they must be implemented as though they were binding interim measures related to such agreements. At the very least, these arrangements would continue the ad hoc measures already agreed to by the Province and Canada in good faith, specifically the MOU that established the present review, and the involvement of LIA and the Innu Nation in reviewing permit applications.

Although existing claims policy "provides that appropriate interim measures may be established to protect the interests of a claimant group while its claim is being negotiated," both the Innu Nation and LIA indicated that the two governments have resisted formal interim measures to provide for control over developments such as the VBNC Project. Both groups also noted that agreements in principle are not legally binding, and that what has been negotiated to that point is not protected until formal ratification by all parties takes place and implementing legislation is passed. They asserted that the Province will only consider substantive and binding measures after an agreement in principle is ratified, and characterized the positions of the two governments as "unalterable."

Both LIA and the Innu Nation expressed a willingness to accept an agreement in principle, rather than a final agreement, as a condition of consent, as long as the agreement in principle included effective and binding interim measures. They stated, and the Panel acknowledges, that they were taking some risk in doing so.

The co-management arrangements recommended by the Innu Nation and LIA as a "second-best" solution could be put in place without an agreement in principle, using agreements that address the continuing review, approval and environmental management of the VBNC project (as outlined in Chapter 17). If such agreements reflect the key elements of land claims agreements described above, they might fulfill governments' fiduciary obligations.

4.2.5 Recommended Approach

The Panel considers that proceeding by way of either land claims agreements or alternative binding measures is essential if "durable and equitable benefits" are to be achieved. This is an important element of sustainability assurance and is, therefore, sound public policy. The Panel heard a long and consistent history of disregard of Inuit and Innu rights and interests, of continuing encroachment on Inuit and Innu land, and of progressive restriction of Inuit and Innu activities. But the Panel also heard of more recent government attempts to establish trust and a new way of doing things. The Project gives Canada and the Province an historic opportunity, which should not be lost. The Panel believes there is time to act and to do things right.

Early resolution of the land claims situation in the project area will benefit VBNC and any other developer that may seek resource rights in the area, because it would clarify procedures and outcomes and provide a clear means and a greater likelihood of obtaining the cooperation of the Innu and the Inuit. Since the co-management provisions of land claims agreements define the relationship of the beneficiaries to various regulatory agencies of government, they clarify environmental management of any particular project.

The Panel concludes that, even if LIA and the Innu Nation have Aboriginal title and rights in the Voisey's Bay area that would be infringed by the Project, governments do not require their formal consent in order to authorize the Project. However, such infringement cannot occur without the participation, consultation and compensation of the Aboriginal people represented by those organizations. Consequently, Canada and the Province cannot authorize the Project until they have met their obligations to encourage the participation of these groups, to consult with them and to compensate them.

The Panel concludes that proceeding with the Project before the Inuit and Innu land claims are settled or before equivalent measures are put in place would adversely affect land claims negotiations concerning environmental co-management and resource revenue sharing, and possibly those concerning IBAs.

The Panel believes that land claims agreements are the most effective and efficient way for governments to meet their obligations related to participation, consultation and compensation, although there does not appear to be a legal duty to conclude such arrangements. The Panel notes that alternative arrangements outside of, or leading to, land claims settlements could also allow governments to meet their obligations. However, the Panel believes that, to ensure that the Project has durable and equitable benefits, these other arrangements should leave the Inuit and the Innu no worse off than they would be had they concluded land claims agreements.

The Panel believes that settling land claims is the preferable route to take. However, the Panel recognizes that factors entirely extraneous to the Project could delay the settlement of one or both land claims indefinitely. If that happens, then alternative equivalent measures, as described in Chapter 17, must be put in place.

Recommendation 3

The Panel recommends that Canada and the Province conclude and ratify land claims agreements in principle with the Inuit of Labrador, represented by LIA, and with the Innu of Labrador, represented by the Innu Nation, before issuing any project authorizations. The agreements in principle should include binding and enforceable interim measures for co-management to provide a bridge between the end of this environmental assessment and the full operation of the co-management elements of the agreements. This will require Canada and the Province to amend their approaches to claims negotiations to ensure that the required interim measures are put in place as an integral part of an agreement in principle.

Failing that, the Panel recommends that, before issuing any project authorizations, Canada and the Province negotiate equivalent alternative measures with LIA and the Innu Nation, as outlined in Chapter 17. Such measures must provide for Inuit and Innu participation, consultation and compensation in respect of the Project, in keeping with the fiduciary obligations of Canada and the Province.

The Panel considers the arrangements proposed in Chapter 17, including the proposed Environmental Advisory Board (EAB), to be equivalent to and consistent with land claims provisions for environmental management. The Panel therefore believes that the proposed EAB, referred to in subsequent chapters, could exist within or outside of the framework of a final land claims agreement.

The Panel recognizes that VBNC also has rights and interests that could be adversely affected if governments did not fulfill their obligations to Aboriginal title holders quickly. The Panel recognizes that VBNC lawfully applied for exploration rights, which the Province granted. It is the responsibility of the Crown to ensure that the rights and titles it grants to third parties are clear and unencumbered. To minimize the adverse effects of this recommendation on VBNC, the panel believes that Recommendation 3 can be implemented while VBNC is planning the Project and applying for permits. This would facilitate the start of construction once final authorization is given.

Recommendation 4

The Panel recommends that, whichever option in Recommendation 3 is adopted, as long as the arrangements are legally binding and enforceable, conditional authorization be given that would provide VBNC with satisfactory assurance to plan the Project and apply for permits while negotiations continue. This would allow both processes to occur concurrently rather than consecutively. However, actual construction should not be authorized to proceed until the conditions of Recommendation 3 have been fulfilled.

4.3 Impact Benefit Agreements (IBAs)

This section describes how IBAs mitigate project effects to help governments meet their obligations related to participation, consultation and compensation. It also discusses the relationship of IBAs to land claims agreements in that respect. The specific manner in which IBAs may mitigate or enhance project effects is discussed elsewhere.

While IBAs are typically an integral part of a land claims agreement, they can also occur outside that context. Mining companies and Aboriginal people across northern Canada and Alaska have negotiated a number of such agreements. IBAs have become more comprehensive, addressing not only employment and business opportunities but also social and cultural issues, and providing financial benefits. For example, the Whitehorse Mining Initiative Accord - negotiated by the mining industry, government, labour unions, Aboriginal people and the environmental community - does not refer explicitly to IBAs. However, many of the accord's recommendations for improving relations between Aboriginal people and the mining industry are negotiated through IBAs.

Outside of the land claims context described in the previous section, there is no prescribed form or substance for IBAs, and they are evolving in both contexts. IBAs are bilateral agreements between private parties, so details of their negotiation and their contents may not be public knowledge. However, both LIA and the Innu Nation stated that they would subject their IBAs to formal ratification votes. To do this, they will have to make the substance of the agreements public, with the possible exception of certain proprietary information.

In 1995, VBNC entered into IBA negotiations on a discretionary basis, with both the Innu and the Inuit. These negotiations began before a land claim was settled, before environmental review and before project approval, in direct contrast to the provisions of land claims agreements. While VBNC's initiative is to its credit, there have been difficulties.

By November 1998, IBA negotiations had progressed substantially in most areas but were still incomplete. LIA advised the Panel that, at that time, there were no ongoing negotiations and no process for continuing them. The Innu Nation and VBNC jointly advised the Panel that they had reached tentative agreement on many issues and that negotiations were ongoing. Participants said that several factors were making it difficult to successfully conclude these IBAs.

For example, both the Inuit and the Innu have been seeking to negotiate direct compensation from VBNC itself, quite apart from what might be provided for in a land claims agreement. VBNC has stated that it does not intend, through the IBAs, to assume what are normally government responsibilities. It also expressed concern that confusion about what properly belongs to land claims, as opposed to IBAs, has impeded successful negotiations. The Panel agrees with VBNC's views, and considers this a strong reason for concluding a land claims agreement and then completing IBA negotiations within that context. The Panel believes that if governments clarified their responsibilities before IBA negotiations took place, this would benefit both VBNC and the Aboriginal parties.

VBNC also considered the legal provisions sought by the LIA an obstacle. The Panel was not informed of the details of these provisions and offers no opinion on this matter.

Both LIA and the Innu Nation asserted that uncertainties in the Project description have hindered negotiations, because their objectives might vary under different project conditions. The Panel notes that, under existing land claims agreements, IBA negotiations would follow environmental review and project approval. Again, this shows why it would be better to conclude a land claims agreement as soon as possible, and then to conclude IBA negotiations in that context.

Finally, all of the parties concerned have said that they do not want a time limit imposed on negotiations. The Panel observes that such time limits are mandatory under land claims, and that the Minister of Indian and Northern Affairs imposed a time limit in the case of the Northwest Territories Diamonds Project. The Panel believes that a time limit with provision for dispute resolution is desirable in this case, if authorization would otherwise be forthcoming.

LIA has stated that there is no substitute for an IBA and no alternative to an IBA. The Innu Nation asserts that governments cannot impose the detailed provisions of an IBA as terms and conditions for approving the Project. VBNC itself designated IBAs as the means by which certain potentially adverse effects will be mitigated and beneficial effects enhanced. For all of these reasons, the Panel cannot recommend that the Project proceed before formal conclusion of IBA negotiations.

The Panel recognizes that there have been certain barriers to concluding IBA negotiations, as described above. The Panel believes that the best way to remove those barriers is to resolve the land claims question, and then to conclude IBA negotiations within the more precise and restricted framework of land claims agreements. Concluding IBAs within a land claims agreement framework would ensure that the IBAs do not include the program or financial elements of a land claims agreement, which are normally provided by governments. Such an approach would remove current uncertainties about overlapping provisions of IBAs negotiated with LIA and the Innu Nation, which VBNC indicated were a further difficulty. It would also address the concerns expressed by VBNC, LIA and the Innu Nation, and would avoid any possibility of adverse effects on the land claims themselves, as described in Section 4.2.3.

Recommendation 5

The Panel recommends that Canada and the Province issue no Project authorizations until LIA and the Innu Nation have each concluded Impact Benefit Agreements (IBAs) with VBNC. Whether these occur inside or outside the context of a settled land claims agreement, IBA negotiations should be concluded within an agreed time frame, or, if necessary, the Minister authorizing the Project should impose a time frame. The negotiating framework should also include provision for dispute resolution, including the use of compulsory arbitration if required.