CPABC Industry Update Summer 2014 - Page 24

Rewriting the Rules of Engagement (cont’d) plant on HFN-owned land exemplifies this new approach to engagement. Larger, more complex LNG projects in development, such as in Kitimat, have also involved the negotiation of forward-looking agreements with multiple First Nations. Before long, these practices may well become standard procedure. This new approach means companies who want to develop resources on First Nations land must look at a more extensive “benefits package” that will: E  • mploy local workers in lasting and meaningful positions; S • upport local education and training initiatives over the long term; S • upport First Nations’ capacity to engage; O •  ffer procurement opportunities; S • hare financial benefits or offer equity participation; B  • ecome involved in community development programs; and M of •  easure the impactthe their presence on the longterm well-being of community by establishing per formance metrics, measuring them, and benchmarking that performance over time. Several of these measures, such as employing local residents and investing in community programs, are not new. However, the availability of equity participation and the measurement of performance metrics in regards to community well-being are fresh initiatives. Another new strategy, developed by Deloitte and First Nations communities, is the re-establishment of traditional forms of decision-making through community trust structures. These trusts put control of the wealth that can result from settled land claims, impact benefit agreements, or significant business revenue into the hands of the communities instead of banks, as has traditionally been the case. Investment decisions are made by trustees chosen by and from community members, not by corporate trustees with no stake in the development of the community. Updating Approaches These new approaches represent a major shift in how the energy industry will do business in future. Companies and page 24 | I N D U S T R Y U P D AT E First Nations must be ready to follow this new approach to resource development, as will the professionals who support them. New measures will need to be considered, such as: • Developing forward-thinking engagement strategies; U communities’ priorities •  nderstandingdesired outcomes; and building consensus on C the •  apacity-building by First Nations throughalign establishment of governance structures that with traditional decision-making processes to ensure community needs can be met; E • stablishing First Nations community development performance measures; C • onducting investment assessments to track actual outcomes against set goals; and T • imely and effective communication and disclosure on performance. Well-planned engagement strategies should embrace core business processes that enable higher returns on investment and provide a sense of long-term certainty. An engagement-minded dealmaker will always look for a winning scenario for the key stakeholders, facilitating good conditions for successful business outcomes. While the new “rules of engagement” may seem to require a significant amount of effort, especially in a highly competitive environment, the benefits they produce are worth it. In the end, authentic engagement between stakeholders in a resource project provides secure, significant, and long-term economic benefits for all parties — and that’s good news for everyone. Kasia Sell is a manager in Deloitte’s Sustainability and Climate Change practice who consults on a variety of strategy, risk, and assurance projects related to social, economic, and environmental issues. Henry Stoch is a partner in Deloitte’s Enterprise Risk group and leads the Western Canadian Sustainability and Climate Change practice. He has spent his entire career in the energy and resources sector, both in industry and consulting, focused on solving complex social, economic, and environmental issues at many of the most significant companies across North, Central, and South America.