III. Future Uncertainties with Indigenous- Industry Agreements

While the role of Indigenous-Industry Agreements in shaping relationships may itself imply departure from some narrower conceptions of certainty, the legal environment in which Indigenous-Industry Agreements are located may also pose larger future uncertainties concerning the legal standing of such agreements in the first place. Here, we explore some of these potential uncertainties, identifying sources in contract law principles and in aspects of the evolving landscape of Indigenous rights jurisprudence more generally.

To be clear, though, attention to the relationship-building aspects of Indigenous-Industry Agreements directs us towards a broader conception of certainty than that with which some might first begin. In a fascinating piece on certainty in the common law, John Linarelli draws a distinction between two types of legal certainty that are arguably preferred, respectively, in the United Kingdom and the United States. These are legal certainty in a conceptual sense and legal certainty in an instrumental sense, with the American conception having focussed in particular on economic efficiency.36 The law can be predictable on either version of certainty, with conceptual certainty allowing those predictions based on concepts within the law itself and instrumental certainty allowing those predictions based on the instrumental values the law advances and an analysis, in the American context, of what future legal rules will best achieve economic efficiency. While the latter approach may leave more possibilities open, it does not render prediction impossible.

The certainty achieved by an Indigenous-Industry Agreement will not always be a conceptual certainty that locks in precise legal commitments on every dimension within the agreement. It may nonetheless offer a form of instrumental certainty, not in this context directed solely at economic efficiency but directed towards the value of maintaining the relationship between a resource company and a community. Terms of the Indigenous-Industry Agreement may achieve certainty through more complex mechanisms than would fit with the narrower conception of certainty some would employ.

That said, different terms of the agreement that are meant to offer conceptual and/or relational certainty may still be subjected to broader uncertainties from the legal environment in which Indigenous-Industry Agreements are located. In particular, without a different choice of law clause, Indigenous-Industry Agreements will be subjected to the proper law of the contract. That will normally be the national/provincial/territorial law. The legal uncertainties embedded within the respective contract law jurisprudence of these jurisdictions become embedded into the agreement itself.37

Canadian contract law could conceivably identify a number of circumstances in which an Indigenous-Industry Agreement could be subjected to a later legal challenge, although these may not arise so much from contract law on its own as from the interfaces between contract law and Indigenous rights law. For example, there would be contract law issues if a particular agreement were be procured through coercion or bad faith. A vivid example of “illegitimate” agreements can be found in parts of Latin America where many similar agreements are extracted by coercion, duress, or gross power imbalance.38 However, IBAs in Canada more typically arise from negotiations between sophisticated parties. This is aided by funding schemes that provide communities with means to employ professional counsel during the process. The high standards to void an agreement for duress will not arise often, even in the context of arguments about the precarious economic position of many Indigenous communities.

Some might wonder whether broader uncertainties in contract law will make their way into the IBA context. For example, in Bhasin v. Hrynew, the Supreme Court of Canada recently enunciated a new organizing principle of good faith which in turn gives rise to a more specific duty of honest performance.39 The general duty of good faith operates irrespective of the intentions of the parties and therefore cannot be excluded by terms on any agreement—including an IBA.40 However, again, there are high thresholds for these principles to permit an effective challenge to an Indigenous-Industry Agreement. The test for the duty of honest performance could be conceptualized as a two-step process. The first step is to establish that a party lied or knowingly misled another—not merely a failure to disclose.41 The second element is to establish that the dishonest act was directly and intimately connected to the dishonest party’s contractual performance.42 However, this principle would not be likely to apply in respect of systemic features of the IBA process, and all of these considerations are in any case within the control of the negotiating proponent and thus do not represent an uncertainty for it.

More challenging for proponents, though, may be situations where broader doctrines of Canadian Aboriginal law or Indigenous rights law have the potential to raise contract law issues in the context of an Indigenous-Industry Agreement. Such situations might arise, for instance, where there are problems in the way in which a community has signed on to an agreement, there are arguments about which representative(s) were able to negotiate the agreement, or there are arguments that representatives of a community have agreed to something going beyond what the community is legally permitted to do.

First, to the extent that Canadian Aboriginal law prescribes aspects of contract formation with Indigenous communities, notably with First Nations operating under the Indian Act,4* it may contain elements that could raise issues. While lower courts have read an implied power to contract with bands, this contractual power is subject to s 2(3)(b) of the Indian Act which states that “a power conferred on the council of a band shall be deemed not to be exercised unless it is exercised pursuant to the consent of a majority of the councillors of the band present at a meeting of the council duly convened.”44 Judicial consideration of this provision has highlighted that it can have complicating effects where, for example, band councillors sign off on a decision but have not done so through a duly constituted meeting.45 The effects for a band that were to deal with a particular issue through traditional protocol remain untested.

Second, there will in some instances be disputes about whether a band council government is the appropriate representation for purposes of a First Nations community’s entry into an Indigenous-Industry Agreement.46 One might highlight here situations like those involving disputes between elected Indian Act governments and hereditary or other traditional governments.47 To the extent that the law has not resolved which government has legal authority on behalf of a community, there is potential legal uncertainty for proponents who enter into negotiations with communities that have such internal disputes.48

Third, there could be further uncertainties given the way that Indigenous rights law has developed thus far, notably in so far as the Canadian courts have suggested that there may be limits on the scope of the authority of present representatives of a community to agree to certain uses of land where these uses would reduce the value of the land for future generations of the community.49 The judicially imposed inherent limits on the use of Aboriginal title land have become relatively uncertain, meaning that it is not clear whether communities can enter into agreements for certain types of resource development at all.50

This last situation may appear to be an artefact of a particular phase of development of Canada’s approach to Indigenous rights law,51 and indeed it may turn out to be the case that Canadian courts in future find constructive approaches that avoid uncertain restrictions on Indigenous communities’ permitted uses of their own lands. But one challenge that will not change is that an Indigenous-Industry Agreement is usually meant to endure over a significant period of time. It thus needs to take account not just of present law but of future law as well. Something like the scope of application and content of the Free, Prior, and Informed Consent (FPIC) norm in international law has been subjected to significant flux over recent decades. Today, there continue to be different possible reads on what the meaning of the FPIC norm is.52 An Indigenous-Industry Agreement reached today needs to take account of different ways such a norm might evolve, including ways that the concept of FPIC as developed by some future point might be used to challenge a particular Indigenous-Industry Agreement. The making of Indigenous-Industry Agreements must actually operate in a context of some very challenging uncertainties indeed.

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