This article would make some sort of sense if the proposed deal recognized the ownership of the Haisla, and if they were to be paying taxes, rent, and more in the way of revenue sharing that actually represents the Haisla as the eternal owners of this territory. It does not do any of that. It is more in the model of typical land grabs with shady councils of bought and paid for corruption. It is no accident that this Indian At government has been unable o get Alcan to follow through on promises to the Vilage of decades ago, but is still prepared to destroy more land for crumbs yet again; crumbs that may never even get to the village's people.
--M
Aug 2007
Source: Oilweek Magazine
http://www.oilweek.com/articles.asp?ID=454
A leap of faith
The Haisla First Nation and Kitimat LNG Inc. have forged a groundbreaking agreement that others are using as a model
Andrea W. Lorenz
The members of the Haisla First Nation have a vision of their future. No longer do they intend to live with over 50 per cent unemployment. No longer will they accept menial jobs at the huge industrial complexes across from their reserve. No longer will they allow themselves to be viewed as second-class citizens. They intend to be masters of their fate.
An hour’s drive west of Kitamaat Village by powerboat lies a pristine beach called Bish Cove. This spot on British Columbia’s northwest coast is the site of the future liquefied natural gas terminal planned by Kitimat LNG Inc., a project agreed on between KLNG and the Haisla in a precedent-setting deal.
KLNG proposes to build a $500-million terminal and regasification complex. Liquefied natural gas will be shipped from producers in places like Australia, Indonesia, and Malaysia. Once it arrives at the Bish Cove terminal, it will be converted from a liquid back into a gaseous state and transported by a yet-to-be-built pipeline to the Athabasca oilsands projects and to markets along the U.S. West Coast.
When it starts operating, the terminal will have the capacity to process one billion cubic feet of natural gas per day. Tankers with up to 250,000 cubic metres capacity will steam up the Douglas Channel, bringing four to five shipments of LNG a month to the all-season deepwater port. Facilities will include two tanks with 6.8 billion cubic feet of storage capacity. A 14-kilometre lateral pipeline will deliver gas to the planned Pacific Trail Pipeline.
The KLNG/Haisla deal is emblematic of the realization by Canada’s aboriginal leaders that they now wield unprecedented leverage over the fate of projects like the Mackenzie Gas Project, the Gateway Pipeline, and a raft of others competing for their approval.
Aboriginal bands can provide investors and planners with what they want most aside from profits—certainty—or they can hold projects hostage. They can demonstrate their support to the government, thereby fast-tracking the regulatory process, or they can oppose and obfuscate, eventually frustrating impatient foreign investors into withdrawing their support.
The proponents
Galveston LNG Inc., of which Kitimat LNG is a subsidiary, is run by a small group of entrepreneurs, four of whom knew each other from their days as Duke Energy marketers. In the late 1990s, they decided to hitch their company to the LNG star and to begin looking for a terminal location. It had to be a deepwater port, and it had to have a community willing to say yes to construction of liquefied natural gas facilities on its doorstep.
By the time Galveston’s executive team began their search, communities up and down both coasts of the United States and Canada had rejected enticing proposals from the mightiest multinational corporations. Competition for the right site was so fierce that Galveston’s founders—who had had their sights set on Kitimat from the beginning—threw their competitors off the scent by naming their first company after the Texas coast city whose residents were being wooed by several companies.
Located at the inland end of the Douglas Channel, Kitimat harbour lies within a wide, sheltered fjord. After studying the area carefully, Galveston’s team of chief executive officer Alfred Sorensen, co-founder Thom Dawson (now LNG Impel president), vice-president of risk management Dale Dixon, and KLNG president, Rosemary Boulton pinpointed the spot where they wanted to build the terminal. It was called Emsley Cove.
When they approached the Haisla, Chief Steve Wilson and his team told them that while his band members were supportive of the project, they preferred that the terminal be built at a different site called Bish Cove.
Councillor Keith Nyce, one of the band’s chief negotiators, escorted Oilweek’s photographer and associate editor by powerboat to see both sites.
Bish Cove is a peaceful, sandy beach lapped by sparkling channel waters. Barely visible among the firs is a small opening leading to a road. As we chug towards the place where the terminal will be built, Captain Dennis Robinson’s depth finder reads 100 feet.
About ten minutes further west lies Emsley Cove. The depth finder reads 135 feet. The project’s environmental assessment report shows that each site offers its own advantages and suffers from its own disadvantages. KLNG, however, had one overriding reason for preferring Emsley Cove—it wasn’t on Haisla land.
“KLNG strongly preferred the original site,” councillor Ellis Ross, also a lead negotiator, says. Nyce explains, “A lot of people think that building on reserve land is like building in a foreign country where people can rip up the agreement.” Ross then confided, “We heard that Enbridge said, ‘Why would they [KLNG] sign such an agreement?’”
For the Haisla, however, there was no question. “Basically, if the project’s built on reserve land, we can tax using our own law,” Nyce says. “That cuts everybody else out of the picture.”
When it came to arguing their case, the Haisla had a significant advantage: two companies had previously conducted engineering studies of the Bish Cove site for an LNG terminal and had concluded that it was satisfactory.
They also knew that the Galveston team was in a hurry to scoop their competitors. KLNG’s Boulton and her team were eager to fast-track the environmental review, to begin courting suppliers, and to secure so-called “first-mover” advantage. If the Haisla refused to support the project, it could be mired in delays.
The promise of jobs and training
On a bright July evening, members of the Haisla First Nation stroll to the dock at Kitamaat Village to watch fishing boats pull in and to help unload tubs of salmon and haddock. Children and dogs chase each other up and down the dock and in and out of the water at the little beach nearby. This idyllic spot embraced by the Coast Mountains has been the home of the Haisla for thousands of years.
Directly across the bay looms a grey megastructure spouting a plume of emissions. For the past 54 years, Alcan’s smelter, along with Methanex’s methanol project and Eurocan’s pulp and paper mill, have been the mirror by which the Haisla have defined their self-image and their world view.
With three industrial complexes a 20-minute drive from the village, how is it possible that there is 50 per cent unemployment among working age Haisla men and women?
Alcan employs 68,000 workers in 61 countries. At Kitimat, the company employs 1,500 who last year produced 245,000 tons of aluminum.
In the 1970s, when Alcan’s aluminum smelter was working at full capacity, members of the Haisla found ready employment. Band members could even work part-time and return to their traditional occupation of fishing.
However, as computers entered the picture and the industry became more mechanized, Haisla members found themselves increasingly marginalized. The company began to fill jobs with new immigrants from eastern Europe and Asia. “Today our involvement in the local industries is basically nil,” Ross says.
Colleen Nyce, Alcan’s manager for corporate affairs and community relations (and a distant relative of Keith), says that in recent years “it has been more difficult to place Haisla back in the project than other members of the community. Hiring standards have probably tightened up.”
Councillor Nyce explains, “It wasn’t always this way. In the 1970s, it was a workers’ market. Now so many people are looking for work, they’ve been able to pick and choose and to raise their minimum standards.” With little income and minimal opportunities for on-site training, young band members have been snared in a cycle of despair.
Still, Alcan has been willing to help. The company recently offered to hire Haisla members for jobs at the smelter if they could pass a competency exam. Twenty-five band members with Grade 12 certificates took the test. Only two passed.
Even though the Kitimat LNG project is not due to begin operating for another half decade, how could Haisla members even think of being employed on the project if they could not pass a Grade 12 competency exam?
Everyone realized the situation was untenable. With her company’s support, Colleen spearheaded a training initiative.
“Alcan felt we just didn’t want to turn our backs,” she says. “The Haisla had been asking for years for capacity development. We met with the leaders and discussed how to rectify the issue.”
The result was a $150,000, six-month job readiness program designed to upgrade participants’ basic skills and to prepare them to apply not only to Alcan, but for jobs that will come open as soon as other planned projects come on line.
Haisla council members are currently reviewing half a dozen industrial development proposals, most of which include jobs and training components for the First Nation. These do not come for free, Chief Wilson has made clear to his people.
“We’ve told our people we’ll negotiate jobs and training, but we are not going to negotiate that companies reduce their employment standards,” councillor Nyce says.
By now, the first group of 27 students has graduated, and a second program is already underway. “The first program was popular enough that they had to run it a second time,” Alcan’s Nyce says.
Learning the art of negotiating
We meet councillors Ross and Nyce at the Kitimat Valley Institute, where they have been discussing details of the environmental assessment with government officials. Ross emerges to greet us. Dressed in a jacket and tie, he looks every inch the urbane businessman.
Ross and Nyce take their cues from Chief Wilson, who was elected in 2001. The chief’s vision of prosperity for his people is their compass. Not a micromanager, he has delegated day-to-day work to his trusted cohorts, encouraging them to develop their negotiating skills.
Wilson and his team cut their teeth in the art of negotiating during long hours of wrangling with Eurocan over compensation for polluting the Kitimat River. Effluent discharged by the pulp mill has killed many fish species and tainted those that survived, in particular the Oolichan, which is prized by the Haisla for its oil.
They eventually hammered out an agreement with Eurocan that not only provided the band with monetary compensation, but requires that the company monitor the rivers until 2017 or when the fish population has returned to health. “That was our training ground,” says Nyce. “Eurocan is now really committed to environmental controls.”
The deal
Haisla leaders realize that with the KLNG deal they have scored an important victory—a five per cent equity share in a multi-million-dollar project. They will collect taxes equivalent to the amount the British Columbia Assessment Authority levies on similar industrial developments on Crown land.
“We wouldn’t expect them to pay anything more than they would pay on Crown land,” says Nyce, adding the contribution could be as much as $14 million a year after start-up.
For a band of 1,580 members, it will be a golden windfall. “It’s a nice problem to have,” Nyce acknowledges. “That’s why we’re stressing high levels of education, so that the money’s not squandered and it’s basically protected from the political animals.”
KLNG and the Haisla hope to start operating in 2010. Their biggest challenge now is securing gas suppliers. LNG producers across the globe are being wooed by companies, which, like KLNG, are trying to persuade them to sign long-term contracts.
The Haisla are eager to help in the process, and they recently demonstrated their commitment by hosting a delegation on a tour of the site.
One expectation of the agreement is that the Haisla will take the lead on negotiating contract work such as tugboat and barge services. They have already signed such an agreement with Seaspan.
When the first projects were constructed, the Haisla were merely onlookers. Now they are consulted on every aspect that affects their future. With a five per cent equity stake, they see themselves as partners with a vested interest in KLNG’s success.
The Haisla team foresees a future in which they will win something no other aboriginal people has achieved—positions on the executive team of a multinational petroleum company.
“We plan to eventually fill the full-time positions provided by KLNG,” Nyce says. “When we envision employment, we’re not talking about guards and cleaners and cooks. We’re talking about people at the management level—so it’s something meaningful.”
For the Haisla, the project represents the antithesis of their previous dealings with industry. “KLNG including us at the business level is actually history in the making for us,” Ross says.
