THE NEGOTIATION

Negotiations started in early 1995. TH’s negotiating team comprised three outside consultants and four representatives of the First Nation. Two of the latter were responsible for ensuring the wishes of the First Nation community were presented at the negotiating table. In turn they would circulate information to the community about the negotiations. There was also a land claims representative who ensured that the negotiations reflected TH’s environmental and land claims concerns.

TH entered negotiations with clear and tangible goals. They needed Loki to understand that the First Nation wanted to play a significant role in the economic activities that would take place on their traditional lands. Early in negotiations, TH Chief and Council made it clear that protection of the environment was the number one priority.

In a large community meeting, TH members and the negotiating team developed agenda items to be pursued in an agreementAgreement: any explicit, signed document that is negotiated and includes mutual concessions or limitations placed on both sides. Examples are Negotiation AgreementsNegotiation Agreement: an early agreement in the mining process, likely to occur in the Exploration StageExploration Stage: the whole range of activity from searching for and developing mineral deposits., which would outline the basis of the relationship between the Aboriginal group and the mining company and how the relationship will evolve if the mine moves forward. , Exploration Cooperation Benefit Agreements, Socio-Economic Participation AgreementsSocio-Economic Participation Agreements (SEPAs): private, confidential contracts between Aboriginal communities and resource developers, like mining companies. SEPAs specify how the communities that will be affected by the development of a resource will also benefit from that development. Many SEPAs include terms about the employment and training of Aboriginal people, compensationCompensation: something (such as money) given or received as payment or reparation (as for a service or loss or injury). payments, protection of the environment, and profit-sharing. SEPAs are often called Impact Benefits Agreements (IBAs) and Cooperation Benefit Agreements (CBAs), and other names. The Aboriginal Mining Guide calls them all SEPAs.. with Loki. TH made a proposal to Loki that called more for a partnership than just an agreement with the company. At the same time, TH launched an in-depth Due DiligenceDue Diligence: a financial and technical investigation to determine whether an investmentInvestment: the purchase of a financial product or other item of value with an expectation of favourable future returns. Generally, “investment” means the deliberate use of money in order to make more money. is sound. Each party to a business agreement uses Due Diligence to ascertain the actual quantity and quality of the assets which the others claim they can contribute. on the company. The Due Diligence included reviewing company and shareholder structure, Board members, a Bankable Feasibility StudyBankable Feasibility Study: a comprehensive analysis of a project's economics that banks and other financial institutions can use to make investment or lending decisions., investmentInvestment: the purchase of a financial product or other item of value with an expectation of favourable future returns. Generally, “investment” means the deliberate use of money in order to make more money. strategies, and financing and geological reports.

As the negotiations proceeded TH realized that the mining company was not willing to negotiate any agenda item that might imply an actual working relationship. For example, Loki refused to discuss the possibility of TH holding in trustTrust: a legal arrangement in which an individual (the trustor) gives fiduciary control of property to a person or institution (the trustee) for the benefit of beneficiaries. the mining company’s reclamation money, even though the arrangement would have been very favorable to the company. TH recognized that getting a significant agreement with the company was going to be more arduous than expected. Thus, they had to re-evaluate their strategy.

The Equity Issue

Like many resource-based companies at that time, Loki did not understand Aboriginal rights. It did not believe that it needed to address the concerns of First Nations in order to proceed with the development of a mine. Negotiations actually broke down when Loki reneged on an earlier agreement to put equity participation on the negotiation agenda.

Additionally Loki was not forthcoming with access to information important to completing the Due Diligence. When Loki would summarize the progress of the negotiations, its write-up did not always reflect what the parties had agreed upon. Loki even lobbied federal, territorial, and municipal politicians for their support in circumventing or placating TH’s “unreasonable” concerns.

TH had always sought to build a relationship of trust and cooperation with Loki so that the company could succeed with the Brewery Creek mine and so that TH members would realize economic benefits .Since the latter aspect was not acceptable to the company, there was no reason Loki should enjoy the former. TH and Loki found themselves at an impasse.

TH informed the Minister of Indian and Northern Affairs Canada (INAC) that the First Nation would not support the development of the mine and would do whatever was necessary to ensure that it would not proceed. TH had also engaged a world class team to help in the environmental assessmentEnvironmental Assessment: a written report, compiled prior to a production decision that examines the effects that proposed mining activities will have on the natural surroundings.. The First Nation was forcing major design modifications to the mine development to make the leaching process more environmentally sound. These actions caused an outcry both in the region and across Yukon. Nonetheless, it brought Loki grudgingly back to the table.