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Aboriginal economic development by two Cariboo-Chilcotin forestry joint ventures Boyd, Jeremiah Joe 2006

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ABORIGINAL ECONOMIC DEVELOPMENT B Y T W O CAR1BOO-CHILCOTIN F O R E S T R Y JOINT V E N T U R E S  by JEREMIAH JOE B O Y D B . S . F , The University o f British Columbia, 2002  A THESIS S U B M I T T E D IN P A R T I A L F U L F I L M E N T OF THE REQUIREMENTS F O R THE D E G R E E OF M A S T E R OF SCIENCE  in T H E F A C U L T Y OF G R A D U A T E STUDIES (Forestry)  THE UNIVERSITY OF BRITISH C O L U M B I A July 2006 © Jeremiah Joe Boyd, 2006  Abstract This thesis w i l l examine Aboriginal Economic Development ( A E D ) i n two CaribooChilcotin communities involved in forestry joint ventures. In particular, the thesis w i l l reveal how each forestry joint venture (JV) keeps politics from over-running the business, and how each aboriginal community defines the success o f their forestry J V . A E D is different from mainstream economic development, in that it involves an aboriginal community/nation achieving self-reliance through business, while not compromising their traditional culture, values, or language. A E D can be seen as a vehicle to lead aboriginal communities towards self-reliance. A J V is one o f many options to move the A E D vehicle. Both J V ' s examined in this thesis contribute to A E D in different ways. The Ecolink J V has not been very profitable but has 100% aboriginal employment even in management positions. In contrast, the West Chilcotin Forest Products J V is highly profitable but has 30-40% aboriginal employment and only one aboriginal employee in a management position. So which business is successful? Most interviewees chose profitability, employment, or both as indicators for success o f their forestry J V . However, success is defined differently for each aboriginal community as a whole, so this research adapts the A E D framework to each aboriginal community. M u c h o f the literature states that in order for aboriginal businesses to succeed, politics should be minimized from the business, meaning the elected chief and councilors should not be directly involved with the business. Each J V had their own way but'they did it with an elected chief and councilor sitting on the Board o f Directors level since inception. Not all components o f A E D were completely fulfilled by the two forestry J V ' s studied. Most notably, the preservation o f traditional culture, values, and language was lacking and neither aboriginal community had gained additional control over forest management decisions on their asserted traditional territory. A n aboriginal community/nation needs some degree o f control over their traditional territory in order to truly fulfill A E D . This thesis concludes that forestry J V ' s can contribute to A E D b y helping to build aboriginal capacity needed for self- reliance but J V ' s should not be seen as a political opportunity to gain more control.  11  Table of Contents Abstract Table of Contents List of Tables....... List of Figures List of Abbreviations Acknowledgements Dedication Chapter 1: Introduction  ii iii vi vii viii ix x 1  1.1 Research Approach and Rationale  7  Chapter 2: Research Methodology  10  2.1 Case Study Rationale 2.2 Aboriginal Research 2.3 Case Study Methodology 2.3.1 Development o f Questionnaires 2.3.2 Research Site and Scope 2.3.3 Initial Contact and Approval. 2.3.4 Field Process 2.3.5 Interview Process 2.3.6 Documentation 2.3.7 Direct Observation 2.4 Benefit and risks o f case study methodology  10 11 12 12 13 14 15 16 18 20 20  '.  Chapter 3: Aboriginal Economic Development and Joint Ventures 3.1 Aboriginal Economic Development 3.2 Economic Development spectrum 3.3 Defining a Joint Venture 3.3.1 Business Definition 3.3.2 Legal Definition 3.3.3 Joint Venture Definition for the Thesis 3.4 Aboriginal Joint Venture Literature 3.5 Aboriginal Economic Development Framework  Chapter 4: Ecolink Forest Services Ltd  23  ; <  23 28 32 32 35 36 37 45  48  4.1 Esketemc First Nation 4.1.1 Community Statistics and Demographics 4.1.2 Political Environment 4.1.3 Forestry development 4.1.4 Forest Management hiitiatives 4.2 Ecolink History 4.3 Aboriginal Economic Development Framework 4.3.1 Business structure 4.3.2 Profitability 4.3.3 Employment 4.3.4 Aboriginal Capacity 4.3.4.a: Education and Training 4.3.4.b: Work Experience  iii  48 ...48 49 50 51 54 56 56 56 57 61 61 62  4.3.4. c: Financial Capacity 63 4.3.5 Preservation o f Traditional culture, values, and language 63 4.3.6 Forest Management Decisions and Control over their asserted traditional territory 63 4.3.7 Community Support 64 4.4 Factors for not letting politics overrun their business 65 4.4.1 Leadership 65 4.4.2 Community Support 66 4.4.3 Employees 66 4.4.4 Families within the E F N '. 67 4.5 Definitions o f Success for the Joint venture 67  Chapter 5: West Chilcotin Forest Products Ltd  69  5.1 Ulkatcho First Nation 69 5.1.1 Community Statistics and Demographics 69 5.1.2 Political Environment 70 5.1.3 Forestry Development 70 5.2 W C F P History 72 5.3 Aboriginal Economic Development Framework 75 5.3.1 Business Structure ,. 75 5.3.2 Profitability : 77 5.3.3 Employment 78 5.3.4 Aboriginal Capacity 78 5.3.4.a: Education and Training 78 5.3.4.b: W o r k Experience 79 5.3.4.c: Financial Capacity 80 5.3.5 Preservation o f Traditional culture, values, and language 80 5.3.6 Forest Management Decisions and Control over their Asserted traditional territory 80 5.3.7 Community Support , 81 5.4 W C F P Factors for not letting the politics overrun their business 82 5.4.1 Number o f shareholders 82 5.4.2 Shareholders Agreement 82 5.4.3 Profitability 83 5.4.4 Loyal Employees 84 5.5 . Definitions o f Success for the joint venture 84  Chapter 6: Comparative Results and Discussion. 6.1 H o w are these forestry joint ventures contributing to Aboriginal Economic Development in their communities?.'. 6.1.1 Business Structure 6.1.2 Profitability 6.1.3 Employment ; 6.1.4 Aboriginal Capacity 6.1.4.a: Education and Training 6.1.4.b: W o r k experience 6.1.4.c: Financial capacity 6.1.6 Preservation o f traditional culture, values, and language  iv  85 85 87 87 88 89 89 90 91 92  6.1.7 Forest management decisions and Control over their asserted traditional territory 92 6.1.8 Community Support 94 6.1.9 Summary o f the ability o f the Ecolink and W C F P to fulfill A E D i n the E F N and U F N communities 95 6.2 H o w are these forestry joint ventures involving aboriginal communities preventing politics from overrunning the business? 97 6.3 What do aboriginal and non-aboriginal participants define as success for the forestry joint venture? 99  Chapter 7: Conclusions and Recommendations 7.1 Conclusions and Recommendations 7.2 Contributions made by the Research 7.3 Suggestions for Future Research  References Appendix 1 Appendix 2  103  •>  103 112 114  117 125 131  List of Tables Table 1. List o f all signed F R A ' s and Direct Awards by B C First Nation bands up to February 19, 2006 . 5 Table 2. Comparison of joint venture business definitions compared to Reiter and Shishler's joint venture definition 34 Table 3. Esketemc First Nation band membership in 2005 49 Table 4. Ecolink's revenues from 1990. to 1998 1 57 Table 5. Ecolink Employment from 1990-1998 58 Table 6. Ulkatcho First Nation band membership in 2005 70 Table 7. A E D Framework applied to both joint ventures. 85 Table 8. Definitions for Success for either the Ecolink or W C F P joint venture 100 ;  vi  List of Figures Figure 1. Cariboo-Chilcotin M a p Figure 2. Interviewee Profile Figure 3. Economic Development Spectrum  vii  List of Abbreviations AAC ABC ACOA AED ARM BC BCR BOD CAT CBCA CED CEO CF CFPA CJ'V EFN FNDI FNS FRA HRM INAC IOG ISO JOA JVC JVP MOU MPB NAFA RCAP SFM SLA TSA TUS UBC UFN USA WCB WCFP WFFP YKW  /  Allowable Annual Cut Aboriginal Business Canada Atlantic Canada Opportunities Agency Aboriginal Economic Development A l k a l i Resources Management British Columbia Band Council Resolution Board o f Directors Chilcotin-Anahim Tatla Canadian Business Corporations A c t Community Economic Development Chief Executive Officer Community Futures Community Forest Pilot Agreement Contractual Joint Venture Esketemc First Nation First Nations Development Institute First Nations Summit Forest and Range Agreement Human Resources Manager Indian and Northern Affairs o f Canada Institute on Governance International Standards Association Joint Operating Agreement Joint Venture Corporation Joint Venture Partnership Memorandum o f Understanding Mountain Pine Beetle National Aboriginal Forestry Association Royal Commission on Aboriginal Peoples Sustainable Forest Management Softwood Lumber Agreement Timber Supply Area Traditional Use Study University o f British Columbia Ulkatcho First Nation United States o f America Workers Compensation Board West Chilcotin Forest Products West Fraser Forest Products Y u n K a Whu'ten Holdings  viii  Acknowledgements I would like to thank my parents and siblings for their continuous support, love, and encouragement throughout my academic career. Thanks to everyone who has guided and assisted me throughout m y social and academic life to date. To my people and land o f the Tsilhqot'in Nation and the friends and families o f the Alexis Creek First Nation; anyway, I hope this thesis inspires and empowers more aboriginal people to embark on further educational and training opportunities in all sectors. Y o u can do it because I did it. A special thanks to m y aboriginal supervisor Dr. Ronald Trosper for his guidance, support, knowledge, and patience for m y research and on contemporary issues affecting aboriginal people. Thanks also for the contributions from m y two committee members Dr. Gary B u l l and Dr. George Hoberg and how they both knew I had the potential to embark on this educational opportunity. I would like to thank the Sustainable Forest Management Network Centre for Excellence's research project titled "First Nations and Sustainable Forestry: histitutional Conditions for Success." for funding m y research. Thanks especially towards Peggy Smith, Dr. Harry Nelson, Sarah A l l e n , W i l l i a m Nikolakis, Katja Pecarevic, and H o l l y Mabee. Most importantly, I would like to say "Sechanalya", which means thank you in the Tsilhqot'in language, to both aboriginal communities and joint ventures because i f it was not for their permission, support, and knowledgeable contributions this research would not have occurred. First, the Esketemc First Nation and Ecolink in particular to Chief Dave Belleau, Marie Beck, Jack Wynja, James Paul, and Larry Paul. Second, the Ulkatcho First Nation and West Chilcotin Forest Products in particular to Stephen James, Laurie Vaughan, and Bonnie Gilbert. Thanks to all o f my interviewees and I enjoyed your hospitality and how you all shared your life experiences with me.  ix  Dedication / dedicate this thesis to my great grandmother Margaret Boyd because of her undying faith and love that anchored my family. She will always be remembered and be in the hearts of my family and by the people of the Cariboo-Chilcotin who knew her.  x  Chapter 1: Introduction This section will introduce the concept o f aboriginal joint ventures in the forest sector, and explain the historical, legal, and policy context for their development in Canada, and in British Columbia ( B C ) in particular since the case studies are located there. A joint venture is any business venture where an agreement is made between two or more companies (who remain separate entities) to engage in ongoing collaboration to pool complementary assets and/or skills for a common goal (i.e. profit) (Reiter and Shishler 1999:227). Both partners benefit from the joint venture relationship, contributing different assets to the business that would otherwise be unavailable to either partner on its own. The aboriginal partner brings legal rights to the land and timber to the table, and the nonaboriginal partner brings capacity and forestry experience to the table. Joint ventures involving aboriginal communities are not uncommon in Canada, considering more than 80% o f all aboriginal communities reside in timber productive zones 1  (Hickey and Nelson 2005:1-30). A 2005 research project on business ventures involving aboriginal communities entitled "First Nations and Sustainable Forestry: Institutional 2  Conditions for Success" found seventeen forestry joint ventures in their national survey (Trosper et al. 2005:1-30). Earlier i n the same year, another national study on aboriginal forestry collaborations found that the joint venture was the most popular type o f forestry business venture chosen by survey respondents for employment and profitability purposes (although this survey only found 12 joint ventures in existence) (Hickey and Nelson 2005:130). A 2004 study on aboriginal forestry commissioned by the Institute on Governance (IOG) found that aboriginal participants had different opinions on the value o f joint ventures. Some believed the business form was good for building an economic base for their aboriginal community but others felt the forestry joint venture was too much o f a financial risk and not conducive to capacity building within the aboriginal community (Graham and Wilson 2004:1-44). Although forestry joint ventures involving aboriginal communities are common, there is much to learn about this type o f business alliance, since the political environment in Canada has been conducive to their development.  ' In Canada Aboriginal is a term that identifies First Nation, Inuit, and Metis people. This paper will use this term as much as possible. " In this paper First Nation will refer to a status Indian or band as defined by the Indian Act.  1  Each partner in the joint venture has different incentives for entering into the business relationship. The main incentive for aboriginal people in Canada is the ongoing policies and legislation brought forth by provincial governments that favor natural resource extraction initiatives in First Nations' traditional territories undermining their aboriginal rights and title. Although these aboriginal rights and title are protected under section 35 o f the Constitution Act o f 1982, the provincial governments continue to undermine this fact by not adequately consulting and accommodating the interests o f aboriginal communities affected by these natural resource extraction projects. Furthermore, the aboriginal communities want to participate in the forest sector and this comes as no surprise since most live i n productive timber areas and they want to improve on their unemployment rates, which are three times higher than the national average (Graham and Wilson 2004:l-44;Parsons and Prest 2003, 79:779-784) In the past few years, several key court decisions have prompted some change in provincial forest policy. These court decisions have been the end results o f First Nations led blockades o f forestry operations, to protect their claims to ownership o f the land throughout the province o f B C . These legal developments have created incentives for the forest industry to get involved in joint ventures with aboriginal communities. O n November 18, 2004, the Supreme Court o f Canada (Supreme Court) ruled in favor o f the Haida Nation, stating that the Haida were not adequately consulted by the provincial government regarding forest tenure within their traditional territory that infringed on their aboriginal rights and title. This case was also the first time a third party (Weyerhaeuser- one o f the largest forest companies in Canada) was considered to have the duty to consult aboriginal communities. The provincial government and Weyerhaeuser appealed the decision because they felt they did not have any duty to consult and accommodate the Haida Nation until the inherent scope and content o f their aboriginal right was finalized. The Supreme Court rejected the provincial government's appeal; Weyerhaeuser, however, was detennined not to have a duty to consult. The Supreme Court declared that the duty to consult and accommodate occurs when the provincial government is aware o f the existence o f Aboriginal interests to the land and is trying to conduct something that w i l l adversely affect that interest (Haida Nation and Guujaaw, Province o f B C (Ministry o f Forests), and Weyerhaeuser 2004:1-35).  2  Weyerhaeuser, like all forest companies, is caught in the midst o f the clash between aboriginal people's fight for their inherent title and rights to their land that is reaffirmed by section 35 o f the Constitution Act and the federal and provincial governments who continually try to test the limits o f their fiduciary duty. Provincial governments implement forest management policies that ignore precedents set by the courts affirming Aboriginal rights to forest lands (including Aboriginal Title which is a form o f ownership). Despite this ongoing clash, forest companies have and are still trying to recognize the interests o f aboriginal communities residing within their areas o f operation even i f the provincial government (who has constitutional jurisdiction over the land and its management) does not deem it as a requirement for securing forest tenure. This on-going clash between First Nations and provincial governments creates uncertainty for the forest industry, which creates a major disincentive for commercial investment in the B C forest sector. In M a r c h 2003, the B C government responded to the Haida decision with its "Forestry Revitalization Plan" to make forestry more sustainable and competitive in the marketplace. The "Forestry Revitalization Plan" creates certainty for B C ' s forest companies 3  by allowing First Nations to participate alongside them through forest licenses, forest revenue sharing, or both. The provincial government made this possible by taking back 20% o f its total forest tenure from 28 major forest companies. B C ' s First Nations have been 4  offered 8% o f the 20% take back but those urban First Nations (those with no productive forests or range land) or those in finalized treaties (the Nisga'a Nation is the only treaty that has been finalized through the modem B C treaty process to date) cannot apply. A s the former Minister o f Forests stated at a First Nation forestry conference i n 2004 "The First Nations Although this Plan responds in part to First Nations interests in the forest land base, it was mainly created due to pressure from other provinces to end the Softwood Lumber dispute between Canada and the USA. Despite BC's forestry reform the Americans still continue to impose a countervailing and anti-dumping duty on all Canadian lumber exported into the USA and the duties paid so far have reached over $5 billion since the expiration of the Softwood Lumber Agreement (SLA) back in 2002. Currently, the Americans have reduced the duties in half but they still maintain that Canadian forest companies are still being unfairly subsidized by the provincial governments and both sides still have not discussed what should happen to the duties collected to date and negotiations are now at a stand still (BC Ministry of Forests and Range website 2005). Until this SLA dispute ends Canadian forest companies will continue to pay the duties imposed on their lumber and they will since their main marketplace is the USA. The BC government acknowledges this fact and hopes their forestry reform will create certainty for the remaining forest companies.. ^ 3  Approximately 10% of the forest licenses will be offered to small businesses through an open market system which in turn will set the prices for stumpage to be paid to the BC government. Stumpage is the price paid to the BC government by the forestry businesses because 95% of all land is public owned and in the care of the province. 4  3  population in the province is about 4%. In areas where forestry activity predominates, that population increases up to 8 %. First Nations comprise 8% o f the total population in those areas. That is how we came up with that number" (Pacific Business & L a w Institute 2004). To help implement its Revitalization Plan, the provincial government has offered all 198 First Nation bands i n B C the opportunity to enter into one o f two types o f interim measures agreements: a Direct A w a r d (forest tenure) or a Forest and Range Agreement (includes forest tenure and revenue sharing). Both options include a declaration that both parties w i l l work together to address consultation and to workout a interim workable accommodation for any infringements on aboriginal interests or proven aboriginal rights that result from the forest/range development activities occurring within that First Nation's asserted traditional territory (Graham and Wilson 2004:1-44;National Aboriginal Forestry Association 2003:1 -78). In addition, both types o f agreements w i l l provide certainty to third party operators, without inhibiting the First Nation bands from asserting their aboriginal rights and title as set out i n section 25 and 35 o f Canada's Constitution Act. The Forest and Range Agreement ( F R A ) option includes a revenue sharing component, in which the amount of revenue to be shared is decided by the provincial government, rather than negotiated with the First Nation. The provincial government made it no secret that a per capita formula would be used to determine the amount o f timber volume and revenue that would be awarded to each First Nation who chooses either a Direct A w a r d or an F R A . However a few First Nations did manage to be awarded more timber volume than the policy dictated.  5  The revenue sharing component i n all F R A ' s did adhere to the provincial government's non-negotiable per-capita formula, despite the disproportionately large revenues being profited by the provincial government from stumpage paid by forest companies operating within the asserted traditional territories o f all First Nations who signed F R A ' s . According to the information made public by the B C government on its website (where copies o f all signed F R A ' s are posted), each First Nation band w i l l get about $2,500 in revenues and about 230 m o f timber per band member. Most F R A ' s have a 5 year term. In contrast, for a Direct Award, First Nation bands get about 260 m o f timber per band member  BC's largest band the Cowichan Tribes on Vancouver Island opted to receive an additional year of forest revenue (six years" instead of five years) and a extra $2 million because they did not want the forest license associated with the FRA, they are the only ones to ask for this (BC Ministry of Aboriginal Affairs website 2005). 5  4  over a 3, 5, or 10 year term ( B C Ministry o f Aboriginal Affairs website 2005). The timber volumes used to honor all signed interim measure agreements w i l l come from undercut timber volume from other forest licenses, or from increases made to allowable annual cut ( A A C ) to mitigate the Mountain Pine Beetle ( M P B ) epidemic, and recent fire damage in the B C interior. In the F R A ' s and Direct awards, First Nations have no control over what type o f forest licenses the province deems to be economical for them, nor what land and timber is allotted to them. Even given the above drawbacks to the Forest Revitalization Plan from a First Nations perspective, this forest policy was still able to entice B C ' s First Nations to participate in the forest sector. Just over half (100 out o f 198 bands) o f B C ' s First Nations signed either a F R A or a Direct Award. Table 1 shows the distribution and characteristics o f agreements signed up to February 19, 2006. Table 1. List of all signed F R A ' s and Direct Awards by B C First Nation bands up to February 19, 2006. Numbei of (R\'s:  ,  '  '  M.inhe. otDIu-ct . Total Number of.Agreem«its\igned: ^ D . . ^ Number of Hist Nations in BC 1 ,«,t> Processwho.signeil: ' .Number of Fust Nations not' uTBC Treaty Process who^signed:,/ j, Total Number of First-NatiorfBands.vvho signe I0l.1l 1 ores. ReNcm.es bch.g sua, ed <«>): • 1  67 26 93 76 24 100 $116,300,547.00 17,593,215  Source: B C Ministry o f Aboriginal Affairs website.2005 "Agreements with First Nations." The number o f F R A ' s signed is nearly three times the amount o f Direct Awards signed because o f the revenue sharing component. B C has its own treaty process to resolve First Nations and Canada's conflicting claims to land ownership, and 76% (76 out o f 100 First Nation bands) o f all First Nation bands who signed a F R A or a Direct A w a r d are in differing stages o f this six stage process. Nearly half or 50.5% (100 out o f 198 bands) o f B C ' s First Nation bands have signed a direct award or F R A . The provincial government has 6  committed a total o f $135 million in forest revenue to help First Nations participate in the forest sector ( B C Provincial Government website 2004). Since there is $116 million in revenues already been awarded through existing F R A ' s , this leaves only $19 million more to Although, these 100 First Nation bands who have signed a FRA it does not mean they have the nonreplaceable forest license to begin operating since the province has to determine what one will be awarded to them. This causes some of these First Nations to wait for their forest license longer then some. 6  5  be spent on the remaining 98 First Nation bands. The 17,593,215 m shown i n Table 1.0 is 3  higher than the Revitalization Plan's proposed 5.6 million m A A C or 8% o f the province's A A C to be allocated to First Nations. Additional timber was available for F R A ' s and Direct Awards because o f uplifts in the A A C due to the M P B epidemic and forest fires in the B C interior. The numbers shown above reveal the eagerness for First Nations to be involved i n the forest sector since the signing o f the first Direct A w a r d back i n September o f 2002, allowing for the development o f many new aboriginal forestry businesses in the province. Table 1 shows that, through entering into F R A ' s and Direct A w a r d agreements, almost half o f B C ' s First Nation bands are entering into forest sector business ventures. Some First Nations have opted not to develop their own forestry business, but rather to pay harvesting contractors to log the awarded timber volume for them at cost. For those who want to start their own businesses, there are different business types available. A First Nations prior experience in the forest sector or the lack thereof is a major factor determining whether they decide to start their own business, or whether to work with an industry partner in a joint venture. Since many First Nations in B C have little experience in the forest sector, they have opted for joint ventures with established companies in the industry. Although the exact number o f aboriginal forestry joint ventures i n Canada is unknown , some research has been done to explore the reasons why these business ventures 7  involving aboriginal communities exist. The findings o f this research are summarized as follows. First is the uncertainty arising from the fact that forest companies have forest tenures within the asserted traditional territories o f First Nations that do not have a formalized treaty with the government, as stated earlier i n this chapter. Second, a joint venture allows the forest company to get unimpeded access to the timber fiber and to obtain a good corporate image with the local communities residing within their forest tenure (Brubacher 1998, 74:353358;National Aboriginal Forestry Association 2000:1-85). Joint ventures allow the aboriginal partner to build capacity at the technical and managerial level, to create training and employment opportunities for community members, and to help build an economic base that w i l l be required to fully assert their self-govemance when it comes (Bourgeois 2002:3338;Brubacher 1998, 74:353-358;Ferrazi 1989, 9:15-32;Findlay 1999:l-9;Fraser 2001:155;Lewis and Hatton 1992:1-72;Whiting 2001:1-139). However, it is a common assertion in  7  Surveys to date have given conflicting results, due to low response rates.  6  the literature that forestry joint ventures favor the mainstream mode o f forest management, benefiting the forest licensees more than the aboriginal partner. If this is the case, then the true goals of Aboriginal Economic Development ( A E D ) are not being realized by forestry joint ventures that involve aboriginal communities. This thesis looks at whether this common assertion holds true in B C , using two forestry joint ventures as case studies, to determine how and whether these business ventures are contributing to Aboriginal Economic Development ( A E D ) in each community.  1.1 Research Approach and Rationale This thesis is going to analyze two forestry joint ventures involving aboriginal communities to see i f forestry joint ventures i n general can fulfill the goals o f A E D that are deemed to be important and beneficial to aboriginal communities across Canada. I w i l l attempt to answer the following three research questions: 1. H o w are these forestry joint ventures involving aboriginal communities providing Aboriginal Economic Development? 2.  H o w are these forestry joint ventures involving aboriginal communities preventing politics from overrunning the business?  3.  H o w do the aboriginal participants define success for the forestry joint venture?  The first research question is very important because there are not enough examples o f how businesses involving aboriginal communities can help to fulfill the goals o f A E D , and to see what limitations exist. Joint ventures can help to bridge the gap between the aboriginal community and outside investors, who may contribute to fulfilling the goals o f A E D . The concept o f A E D is very similar to Community Economic Development ( C E D ) and some / !  studies claim that they are the same thing. I disagree that C E D is the same as A E D , because A E D involves two very important aspects which make economic development for aboriginal communities very different from C E D in mainstream society. These two necessary concerns of A E D , are first, the continued assertion o f aboriginal title and rights; and second, the preservation o f traditional culture, values, and language. Processes and tools for A E D that are successful in one community may not necessarily be successful in another, because o f the diversity in traditional values, culture, and language amongst aboriginal communities is so 7  great (Gandz 1999, 64:30-34). Therefore, the level o f success o f case study businesses i n producing A E D in their communities cannot be generalized to other aboriginal businesses without considering the cultural and socioeconomic context o f the communities involved. L i k e the first research question the second one is very important because a lot o f business ventures involving aboriginal communities dissolve because o f on-reserve politics that can interfere with business operations from the grassroots through to band council levels. The Indian Act is an assimilative tool still used today to structure the governance for most o f Canada's 630 First Nation bands that perpetuates nepotism and despotism at the chief and council level. Although there are some First Nations who have exhibited genuine self rule, there are a lot who still operate under the Indian Act. The Indian Act is responsible for allowing business opportunities to be lost by First Nations due to the Indian and Northern Affairs o f Canada's ( I N A C ) slow regulatory process, which doesn't allow First Nations to keep up with the fast paced business environment. Despite the federal government attempts to streamline the Indian Act, it is still ten times harder to create wealth on First Nation reserves than in the mainstream Canadian society. The Indian Act also contributes to the practical impossibility for any aboriginal community to keep politics from entering their business venture. However, the best companies use tactics to not allow politics to overrun their business operations or decisions (Public Policy Forum 2005:1-20). Although, these tactics for not allowing politics to overrun the business can be reiterated, they cannot be generalized for all aboriginal communities. This is why this research question, like the first one, needs to be explored with more business examples. There is no one-size fits all approach.  (  The third research question w i l l reveal how both aboriginal participants define as success for the joint venture. Interview respondents for this research question are either affiliated with the joint venture, or its presence is felt in their community. Although generalizations have been made,.based on previous studies about why aboriginal and nonaboriginal companies become involved in joint ventures, this question hopes to uncover how  Previous research in this area has used the term "separation of politics from business" (Cornell & Kalt 1992,1998). I do not like this term, as I don't think it's realistically possible to keep business and politics separate in small aboriginal communities, and in cases where there are strong leaders in the elected council that are supportive of the business, it can be beneficial for them to be involved in the business. However, I agree that businesses need to adopt strategies to prevent local politics from negatively interfering with their operations, therefore 1 use the term "preventing politics from overrunning the business".  8  8  aboriginal partners measure business success i n the contemporary world, i n the context o f A E D . The results o f this research may help other aboriginal communities who are i n the early stages o f developing a joint venture or other forestry company, and want to define success for their respective business venture to ensure that they achieve the goals o f A E D . K n o w i n g what people define as success is important considering there are more and more business alliances amongst aboriginal and non-aboriginal people. The remainder o f the thesis is structured as follows to answer these three main research questions. First, the research methodology used in both case studies is articulated in Chapter 2. Chapter 3 reviews the literature on A E D , specifically addressing the components that make A E D distinct from other approaches o f economic development, and describing the differing views on A E D from a generalist to a community specific view. Chapter 3 also presents the difficulties with defining joint ventures and the current research gap on joint ventures involving aboriginal communities, and explains the A E D framework that I w i l l use on the two case studies. This framework was modified from Robert Anderson and K y l e Whiting's work capturing the main components o f A E D . The framework is applied to show how A E D is presented by two forestry joint ventures involving aboriginal communities: The Ecolink joint venture involving the Esketemc First Nation, and the West Chilcotin Forest Products joint venture involving the Ulkatcho First Nation. The case study communities and businesses are profiled in Chapters 4 and 5 using the A E D framework described in Chapter 3. In Chapter 6, the results o f the three research questions w i l l be discussed for each forestry joint venture, showing the diversity between the two ventures. Chapter 7 w i l l highlight the main results from both forestry joint ventures involving aboriginal communities, draw recommendations on A E D and joint ventures involving aboriginal communities, discuss the contributions made by this research, and suggest related future research topics.  9  Chapter 2: Research Methodology This chapter serves to show the rationale for using case studies for this research, and the challenges with performing case studies. It also discusses the challenges and special methods needed to performing research with forestry joint ventures involving aboriginal communities. The chapter w i l l end with the benefits and risks I encountered while using the case study as a research design for aboriginal research.  2.1 Case Study Rationale Since there are relatively few examples o f forestry joint ventures involving aboriginal communities from the academic literature, the case study research design was chosen to help unveil the contextual conditions that may help to better understand the participating joint ventures in m y study. Case studies are the preferred research method when "how" and " w h y " questions are posed, and where the researcher has no control over the contextual events o f the contemporary phenomenon being studied (Creswell 1998:1-403;Yin 2003, 3:1-179). Case study research designs can be based on qualitative and quantitative evidence without just focusing on one philosophical belief ( Y i n 2003, 3:1-179). The strength o f this research design is that two case studies w i l l be thoroughly researched and compared instead o f just one case study. These two case studies o f forestry businesses which have different numbers o f shareholders w i l l help to expand the joint venture literature involving aboriginal communities. Another important point that w i l l add to the strength o f this research project, is that it is linked to a national quantitative survey on forestry businesses in aboriginal communities funded by the Sustainable Forest Management Network- to be referred to in this thesis as the S F M Project ,1 w i l l use the quantitative results 9  of this survey for m y two case study businesses, meaning the combination o f qualitative and quantitative approaches or mixed methodology w i l l be implemented (Tashakkori and Teddlie 1998:1-185). Both the case study research design and mixed methodology utilize multiple sources of evidence, namely interviews, direct observation, and documentation; this is called The National Project is "First Nations and Sustainable Forestry: Institutional Conditions for Success" funded by the SFM Network. See http://www.forestry.ubc.ca/fnconditions/ for details.  9  10  triangulation (Miles and Huberman 1994, 2:l-338;Stake 1995:l-175;Tashakkori and Teddlie 1998:1-185). This process w i l l be explained i n detail in section 2.3 (subsections 5-7).  2.2 Aboriginal  Research  Aboriginal research is an ongoing challenge since each aboriginal community is so diverse, but three main issues were addressed which are applicable to all communities. These were: 1) protection o f the interviewees, 2) protection o f the aboriginal community, and 3) ensuring that the research gives something back to the people o f each community. Aboriginal research should be conducted in an ethical matter more stringent than the university standards. Although I did obey and conduct my research on human subjects according to the university's standards for research ethics, it was not enough for my two case studies and for the national S F M Project ( U B C Board o f Governors 2002:1-5). 1 did have m y interviewees sign and date an informed consent form adhering to the university's policies. However, the S F M Project team (involving myself) concluded that the research also required an informed consent form for the aboriginal community and for the business, in addition to the individual informed consent forms. The main rationale being that each joint venture was a part o f the aboriginal community's economic, social, cultural, and traditional values, as much as the community encompasses the business (see appendix 1 for all three informed consent forms). The business and aboriginal community informed consent forms were very similar to the individual infonned consent forms. They provide the business and the aboriginal community the option to pull out o f m y research and the S F M Project at their own discretion without penalty, and the option to have their community name or business name published in project reports. M a n y aboriginal communities have experienced an " i n and out" research approach done by mainstream academic institutions, that provides benefits to the researcher(s), but not to the community (Battiste and Henderson 2000:l-324;Smith 1999:1-208). A l l aboriginal research (research involving aboriginal people regardless o f the ethnicity o f the researcher (s)) should give something back to the participating community or to aboriginal people in general. The S F M Project and my case study research w i l l provide summative results o f our findings to each participant for their review and records. A l s o the S F M Project hosted a workshop to reveal the survey results with all aboriginal communities who were interested,  11  including the ones that participated in the study. This S F M Project workshop evaluated and discusses the findings from the research to produce a how-to manual for establishing aboriginal businesses. The existing research gap in joint ventures involving aboriginal Communities, and how to effectively manage one provides a great rationale for conducting m y research for the benefit o f aboriginal communities who want to choose this popular aboriginal business model i n the natural resource sector.  2.3 Case Study Methodology 2.3 A Development of Questionnaires Because I had commitments as a research assistant for the S F M Project, their research questions had to be addressed within the two case studies as well, but this was not a problem because they mirrored the research questions I wanted answered. The S F M project's scope was to identify the institutional determinants o f success for forestry businesses involving aboriginal communities. This research project wanted the opinions o f people who are involved with aboriginal communities forestry business ventures (Trosper, Nelson, Hoberg, and Smith 2005:1-30). Their main research questions were similar to my research questions. The S F M Project addressed their research questions by conducting a national survey via telephone and by using participating case studies from across the country. This two tier research methodology involved developing a survey and case study questionnaire that was implemented and answered by all participating aboriginal businesses (see appendix 2 for survey and case study questionnaires). The survey questionnaire was composed o f quantitative and qualitative questions about the business structure, community, and indicators o f success o f the business relationship. The survey questionnaire had to be short enough for the telephone interviewees to answer in a reasonably short time, so it is not as comprehensive as the case study questionnaire. The case study questionnaire was used as a guide for m y interviews during m y research period. The case study questionnaire mainly had open ended questions to uncover areas that would not be found through the telephone survey. I used the case study questionnaire as a tool to help answer my three research questions, since it posed related questions about the aboriginal community and business. In addition to the S F M project  12  questionnaire, I elaborated by evaluating interviewees responses and asking more detailed questions about certain key phenomenon uncovered during the research period that may affect the joint venture's performance, efficiency, or the business's history.  2.3.2 Research Site and Scope The geographical scope o f the thesis w i l l be within the Cariboo-Chilcotin region in B C ' s interior. The Cariboo-Chilcotin is in the central interior o f B C where both o f my case studies reside. In fact, I am a local resident o f the Cariboo-Chilcotin, which helped me to entice the two joint ventures to be a part o f m y research. The Cariboo-Chilcotin stretches to the north to Quesnel from its south end in Clinton. The communities o f Ocean Falls and Horsefly mark the west and east ends o f the Cariboo-Chilcotin region. (See map in Figure 1 below.) Figure 1. C a r i b o o - C h i l c o t i n M a p .  The Cariboo-Chilcotin region is dominated by the Sub-Boreal Pine-Spruce biogeoclimatic zone  10  ( B C term for classifying its diverse forests), which is mainly made up o f Lodgepole  pine {Pinus contorta var. latifolia) with some hybrid spruce. There is also Douglas-fir that grows in the region but it is not as prominent. A n important issue that is currently impacting all forestry operations in this region is the Mountain Pine Beetle epidemic. Lodgepole pine is  A biogeoclimatic zone is a BC term for classifying its diverse forests. A detailed explanation of this classification system can be found on the BC Ministry of Forests website: http://www.for.gov.bcxa/hfd/library/documents/treebook/biogeo/biogeo.htm 10  13  the main host for the Mountain Pine Beetle ( M P B ) which has a history o f infestation in the region. The current M P B epidemic is much worse than ever before within the CaribooChilcotin. For instance, i f the current M P B epidemic rate continues, forest analysts believe that 80% o f all merchantable Lodgepole pine w i l l be killed by 2013 i f there is no severe cold weather (-20 degrees Celsius i n the Fall or -40 degrees Celsius i n the late winter) to retard their growth rates. The Cariboo-Chilcotin and other M P B infected regions have not had any cold winters since the early 1980's. The provincial government increased harvest levels (i.e. A A C ) in these M P B regions to salvage the infected Lodgepole Pine trees that remain economical now, but i f left standing, w i l l soon become unmerchantable timber ( B C Ministry of Forests and Range 2005:1-20). The two main forest companies who hold most o f the forest tenure within the Cariboo-Chilcotin are Tolko Industries (Tolko) and West Fraser Forest Products ( W F F P ) . Both case studies reside and operate within the confines o f the M P B epidemic so their continued existence hinges on a cold winter. Although the industrial shareholders i n both joint ventures studied have other areas o f operation, the scope o f the case studies will be restricted to the business operations and the aboriginal community associated with the joint venture.  2.3.3 Initial Contact and Approval On December o f 2004, initial contact occurred with Ecolink via telephone with two o f its representatives and a meeting was set up at that business's location. The two Ecolink representatives and I attended the meeting in which I answered all their questions and helped to alleviate their concerns with the amount o f information I would need and what I would do with it. Considering Ecolink was a private company, I reassured them that the information I needed would come from the interviewees only and not from the business records (i.e. financial statements). Most importantly, all interviewee information would not be disclosed to anyone including other company employees, and that the strictest confidentiality would be upheld according to m y university's ethical research guidelines on human subjects ( U B C Board o f Governors 2002:1-5). After I answered their questions, a verbal agreement was made for Ecolink to be a part o f m y research and o f the S F M Project as well.  14  In February o f 2005, initial contact for the West Chilcotin Forest Products ( W C F P ) joint venture occurred during an aboriginal forestry conference i n B C when I met the aboriginal board member for this business. After discussing m y research objectives and the S F M Project's research objectives with her, she agreed and accepted on behalf o f her aboriginal community to allow me to commence my research on W C F P . The week after the forestry conference, I contacted the W C F P manager via telephone and he also agreed that W C F P would be happy to be involved with my research project. This acquisition o f W C F P as a case study occurred right after I made a decision to drop a past case study from my own community due to personal reasons, as discussed i n section 2.4.  2.3.4 Field Process Although an informal approval to perform my research happened in late December o f 2004 and in February o f 2005 for both case studies, fieldwork did not commence until March 7, 2005 with Ecolink and A p r i l 9, 2005 with the W C F P joint venture. A s stated earlier i n the chapter, an informed consent form was developed to get informed consent from the aboriginal communities and from their respective forestry business ventures. Both businesses signed and dated the business informed consent form during m y fieldwork and each one chose to have their business's name publicly listed. I only managed to get one aboriginal community to sign and date the community informed consent form during m y  fieldwork,  because the elected chief o f the other aboriginal community was too busy to sign it but he gave me oral consent to perform my research within his community. One week's  fieldwork  happened with each case study involving personal interviews with willing and available interviewees at their own residence or worksite. A report summarizing the interview was sent to them by E-mail or by mail after m y first fieldwork period, giving each o f them time to make correction or additions to the report. A l l o w i n g my interviewees to have the time to review and make the necessary corrections/additions to the interview summary report I sent them proved to be an effective research strategy because about twelve interviewees did make changes and felt more satisfied-with their participation once they had that control. • O n September 29, 2005, a second fieldwork trip was performed to tour each o f the joint venture's operations and to meet some o f the employees. A t this time, the revised interview summary reports from each participant were collected. This second research trip  15  allowed me to directly observe the operations o f both case studies. In the end, I spent about one and half weeks in the field for each o f the two case studies.  2.3.5 Interview Process In total, 25 interviewees participated in the research (twelve from one and thirteen from the other case study). A profile o f the interviewees is represented in Figure 2 below. Interviewee respondents included key forest industry members, community members, and employees o f either joint venture. Figure 2. Interviewee Profile  Gender  Ethnicity  Non  Aboriginal  Female  Employee  Aboriginal  Industry  Community member  Male  Gender M a l e = 18 Female = 7  J o b Function  Ethnicity Aboriginal = 20 Non-Aboriginal = 5  J o b Function Industry = 5 Community member = 12 Employee = 8  More men were interviewed than women, probably because forestry employs more men than women. A l l seven women were o f aboriginal ancestry and five o f them were in management positions. I interviewed twenty aboriginal respondents compared to the five non-aboriginal respondents. Twelve aboriginal community members (six from each community) were interviewed from both case studies and they were people who did not have any direct affiliation (employment or shareholder) with either business venture. Only five industry interviewees were available for m y research as many potential industry interviewees declined  16  to participate since they were too busy. Eight employee interviewees participated in my research and they came from all levels (employee to management positions) within both joint ventures. M y research is different from past aboriginal research in this field that interviewed only management level and key role players o f the business, since I included community and employee respondents as well. Considering the limited timeframe, the low availability o f interviewees, and the financial constraints o f this research, I believe I have obtained an adequate sample size to allow for some inductive and deductive reasoning. The same interview process was utilized for all interviewee respondents, adhering to U B C ' s policy for conducting research on human subjects ( U B C Board o f Governors 2002:15). The following steps were followed prior to each interview: 1.  Explain the research project's purpose and how the interviews w i l l contribute to the research. Let the interviewees know I w i l l be the only one conducting the research i n their community/business operations.  2.  Explain my methodology and how I will handle the interview information. Most importantly, how the interview information w i l l be confidential and exclusive to me and the interviewee only. A l l interviewee information w i l l be coded and stored in a locked cabinet for seven years free from being accessed or identified by anyone. The numbered list for the interviewee information w i l l be kept by me only and all information w i l l be destroyed after seven years.  3.  Inform interviewees that their participation in my research is voluntary and they can pull out at anytime during or after the interview without any penalty. A l s o they can stop the interview process at anytime to ask more questions or i f they feel some questions are too sensitive for them to answer.  4.  Hand them the informed consent form that outlines the research purpose, methodology, and contact information (principal investigator's, university research subject information line, and m y own contact information).  5. Once all interviewees had time to read the informed consent form I asked them i f they had anymore questions. 6. Once they were answered I then asked them to circle in the informed consent form the option to tape record the interview or not, and i f they wanted their name to be publicly listed in the list o f interviewees section o f the research. Interestingly, 20 out of 25 respondents chose to be tape recorded and this greatly helped because many people directly affiliated with the joint venture provided much information on the business. Five interviewee respondents chose not to be tape recorded so notes from, their interviews were handwritten. There were three interviewee respondents who did  17  not want their names to be publicly listed in the list o f interviewees section because they did not want, to be identified by anyone from their community. 7. Once these two options were circled, the interviewee was asked to sign, date, and write down their contact information. Each interviewee kept a copy o f the informed consent form. Once these 7 steps were complete, we were ready to begin the interview.  The interviews lasted about half an hour to two hours depending on the number o f questions being asked and the time it took the interviewees to answer them. A l l interviewee recordings were coded (no names to identify the interviewee) and I have the only copy o f the coding list. The interview summary reports were also numbered, corresponding to the same coding list in my care. I typed out an interview summary report for each handwritten and taped recorded interview. This confidential document was then sent to the interviewee by mail or E-mail for their review, along with a letter (by mail) or message (by E-mail) reiterating the important points from the informed consent form regarding confidentiality o f the interview information. In fact, three interviewees did need this clarification once again because they had forgotten about this aspect o f the research process. This review process was useful to help clarify some facts that I may have misinterpreted or missed during the interview.  2.3.6 Documentation The pertinent documentation I found on both case studies involved high level management plans, interim measures agreements, court cases, and journal articles. I was not allowed access to either o f the two joint venture's shareholders agreements because they were deemed highly confidential and not available to anyone but the shareholders and appointed board members. Being appreciative for both case studies active participation in m y research, I acknowledged their concern and did not pursue this matter any further. However, both representatives from each forestry joint venture did assure me that the shareholders agreement was registered under the B C Corporations A c t , so the general characteristics o f each agreement would be similar in accordance with the requirements o f this act (2004, S B C 2002: Chapter 57). The B C Corporations A c t entails the capacity and powers, location o f  18  office, list o f shareholders, and other pertinent information but the fine details o f the limited/general partnership are left up to the shareholders. The W C F P joint venture's pertinent documents were the Carrier Lumber case file, Anahim Lake Roundtable Plan, and some related articles done on the business venture which affirmed the dynamic community relationship between all three shareholders (Brubacher 1998, 74:353-358;Stirling 2005, 10). The Anahim Lake Roundtable is a sub-regional plan for the Cariboo-Chilcotin region endorsed by a l l major stakeholders residing within the Ulkatcho First Nation's ( U F N ) traditional territory. Such stakeholders include the U F N and W C F P who have endorsed and continue to implement the objectives in this community based land use plan for their operations in the region (Ministry o f Sustainable Forestry Management website 2001). The Carrier Lumber case file helped to clarify the interviewee responses on relevant events that took place before the origination of W C F P , such as the U F N ' s blockade on Carrier Lumber's operations i n Anahim Lake. The provincial government and Carrier Lumber tried to mitigate the U F N ' s environmental concerns over their traditional territory. In the end, the provincial government awarded the U F N a forest license knowing there was going to be a business alliance between the U F N , C A T Resources, and Carrier Lumber ( B C Ministry o f Forests website 2005;Carrier Lumber and Province o f B C (Minister o f Forests) 1999:1-219). Ecolink's pertinent documents helped me to understand and to reaffirm the interviewee's responses about why the joint venture was formed and its goals and vision. The employee handbook and traditional organizational chart given to me by the silviculture supervisor defined the values, people, and vision and mission statements o f the business (Ecolink Forest Services L t d 1997). A l l this information reaffirmed the views on Ecolink expressed through my interviewees as an aboriginal business employing and training Esketemc First Nation (EFN) band members while remaining competitive and respecting the land and its resources. A l s o the interim measures agreement called the F R A was signed by the E F N and this reaffirmed their initiative to build an economic base while negotiating a treaty ( B C Ministry of Forests website 2004:1-15).  19  2.3.7 Direct Observation Direct observation is one o f many techniques for triangulation to verify a researcher's sources, and this was done for both case studies (Tashakkori and Teddlie 1998:l-185;Yin 2003, 3:1-179). I spent two days directly observing the W C F P operations led by the Quality Control Supervisor during my first research trip and the General Manager on the second trip. 1 spent a day directly observing Ecolink's logging operations led by the managerial team but I did not directly observe Ecolink's silviculture division because they were not operational at the time due to limited silvicultural contracts being tendered in their area. The direct observation o f operations for both case study businesses helped me to understand the high production environment in which the employees operated. Also, I visited the communities while conducting my personal interviews and spoke informally with the local residents and this helped me to understand the community context prior to and during my fieldwork.  2.4 Benefit and risks of case study methodology The one benefit encountered with case study methodology was the ability to be seen as the outsider by the business and community i f you have no family, political, or business ties. The two risks for using case study research is the removal o f informed consent, and the limited variation i n the data. Each o f these issues is discussed below. The biggest benefit for using another community rather than your own for research is the ability to be seen as an "outsider." Although I have a myriad o f benefits from m y research this was the most important one for me, as the aboriginal researcher. The most prominent aboriginal academics like to encourage aboriginal researchers to do aboriginal research and on their own community i f possible, since they w i l l be more attuned to the culture and traditions o f aboriginal people than a non-aboriginal researcher (Battiste and Henderson 2000: l-324;Smith 1999:1-208). I agree with the latter statement that there should be more aboriginal researchers doing aboriginal research, but I disagree with the statement that they should do research on their own communities. I was stress free and happy to perform m y research within both aboriginal communities, because I was seen as an outsider who had no political or business interest in their community.  20  Of course, there is no way for me to prove this, but I do believe that being an aboriginal person did help my own and the SFM Project's research to quickly identify the social, political, and cultural norms quite common within most aboriginal communities. Now I do not know how a non-aboriginal researcher would perform, but because I am aboriginal, I found it very easy to analyze the aboriginal communities in my research, and to very quickly see what the big picture was politically and socially. Being able to quickly identify the problems with either' aboriginal community helped me to focus on the research objectives and not to be overwhelmed with new knowledge that may plague a non-aboriginal researcher who has no experience with aboriginal people. This is not to say that a non-aboriginal researcher would not have had the same results as I had, nor does it mean that a nonaboriginal researcher who has experience with aboriginal people would have done better or worse. However, based on my experience, I believe that an aboriginal researcher should not use their own community for their research unless they know there will be no problems, keeping in mind that some problems cannot be foreseen. Acquiring several case studies for research is an arduous task, and there are many unpredictable factors that may cause a given business or community to withdraw from the research at any point in the process. Political or social developments can cause business instability overnight, which may also affect the ability of a business to participate in a research project. This happened with the case study I had acquired from my own community. The political environment was very unstable because of a newly elected council, affecting the working enviromnent of the employees of this aboriginal business, and resulting in the dismissal of my parents from its operations. Because of this, I made the decision to drop my own community's joint venture from my research, because a researcher must remain objective and natural during the research period, and the new political situation's effect on my family would have made it impossible for me to remain objective in my analysis of this business case. Even if I had continued to use my community as a case study, there would still have been the chance for them to remove themselves from my research, even against my own wishes. By using the case study methodology a researcher puts himself/herself at the risk of losing their case studies during the research process following ethical research guidelines of informed consent, but withdrawal from the research has to be an option for case study  21  participants in order to be respectful o f the community/communities participating (Association of-Canadian Universities for Northern Studies 1998;Battiste and Henderson 2000:l-324;Royal Commission on Aboriginal Peoples 1996a;Smith 1999:1-208). I recommend not using your own community for your research project, so that you w i l l not encounter the problems I have dealt with. Luckily, my social skills and networking helped to acquire a replacement case study. One other problem with the case study methodology is the risk o f limited variation in the data collected using the survey and case study questionnaires, compared to the actual variation from case to case according to contextual conditions o f the joint venture and the community. The danger is that the survey and case study questionnaire may not address the contextual conditions o f the business and the community before the research. On-reserve development might contribute to the demise or success o f the business, and both questiomiaires cannot capture everything within either community. In this research, the following two methods were used to try to limit this risk o f limited variation. First, the case study questionnaire was used as a guide, and additional questions were asked to follow up on particular issues o f interest that arose in initial responses. Second, informal observation through discussions with community members and company employees during site visits allowed for the capture o f additional contextual data.  22  Chapter 3: Aboriginal Economic Development and Joint Ventures 3.1 Aboriginal Economic  Development  Aboriginal economic development ( A E D ) is a vehicle towards self-reliance for all aboriginal communities, whether they want to achieve self-governance or not. The question is how can it be done effectively? The answer is not as simple as people think it is because aboriginal communities within Canada are so diverse i n their traditional values, culture, and languages that are so important for them. This section w i l l briefly describe mainstream economic development approaches, highlight how they differ from A E D , and explain why A E D is the preferred framework for economic development in aboriginal communities. Afterwards, issues with the application o f A E D in Canada w i l l be discussed. In the last half o f the twentieth century the federal government used the mainstream "top down" economic development approach through its policies and programs to improve the economic situation in rural communities. This "top down approach" was to infuse external capital and build infrastructure into rural communities, believing that this capital would remain within the community creating employment for all. The government believed these successful rural communities would attract external business and rural people from other communities as well. The government chose particular rural communities- called growth centers- as the epicenters for economic growth. Not only did they believe these growth centers would be economically successful, but also that their wealth would spread around the region. The government still maintains control over the capital and services provided to these rural communities through generic programs like the Community Futures program (CF) and the Atlantic Canada Opportunities Agency ( A C O A ) to name a few. This mainstream approach allows the government to have power over development, i n contrast to the new "bottom up approach" towards economic development-called community economic development ( C E D ) , which empowers local community members to have control over development within their community and region, while the government provides the financial and technical support (Sveinbjornsdottir 2001). Community Economic Development (CED) refers to a particular form o f regional development, in which local resources play a principal role. The main objective o f C E D is  23  self-reliance and the fulfillment through local control o f long-term community social, cultural, economic and political needs. Principles o f C E D required for successful development are entrepreneurial spirit, local control, community support, planned process, and the holistic approach. Although this does not guarantee success for any particular community any o f these principles on its own can improve the chances for successful development in small ways, compared to the mainstream economic development approach still used today by the government o f Canada (Sveinbjornsdottir 2001). A detailed discussion o f C E D is out o f the scope o f this thesis, since it is a vast research subject on its own, but it is mentioned here because it is one way to help economic development to occur within aboriginal communities, but C E D is different from A E D , which is the preferred method, and hence the focus o f this thesis. A E D includes two factors that are missing from the C E D model. First, A E D promotes the continued assertion o f aboriginal rights and title by the aboriginal community/nation over their traditional territory, because having more control over the natural resources in their traditional territories w i l l create more certainty for businesses within and outside the community/nation. A n aboriginal community/nation needs an established economic base in order to implement self-governance when it becomes a reality in the near future. Second, A E D incorporates the importance o f sustaining aboriginal traditional culture, values and languages, which are important elements for ensuring sustainable economic development in aboriginal communities. Therefore, A E D is abetter framework than C E D because; A E D is culture specific, and able to help reach selfdetermination for everything within the aboriginal coimnunity/nation's territory i n a holistic way, whereas C E D only applies to parcels o f land that still fall under federal or provincial governmental authority. A E D works towards the same primary goals and vision for any aboriginal community, and those are self-reliance and self-governance over their traditional territory. The main inhibitor to successful A E D in Canada is the limited or non-existent control that aboriginal communities have over natural resource development occurring within their traditional territories. In 1996, the Royal Commission on Aboriginal Peoples ( R C A P ) recommended that aboriginal peoples must have control over their own lands and resources in order to obtain economic self-reliance leading to self-governance. R C A P participants  24  agree that the transformation o f aboriginal economies from dependence on government transfers to self-reliance is required for the development o f self-governance. Past, federal economic development programs used a 'one-size fits a l l ' approach for all aboriginal communities, although these communities were quite diverse from one to the next. R C A P distinguished four distinct aboriginal economies i n Canada, which were the First Nation reserves, rural Metis communities, urban aboriginal, and the northern economies which demonstrates the problem with using a homogenous economic development approach on aboriginal people. The mainstream economic development approach is still being implemented through governmental funding programs. The true concept o f A E D w i l l not be fulfilled until control is given to aboriginal communities oyer the development and resources within their asserted traditional lands (Royal Commission on Aboriginal Peoples 1996b). A s stated.above, the most important factor impeding A E D in Canada is the failure to relinquish governmental control over the lands and resources that have belonged to aboriginal communities/nations since time immemorial (Alfred 1999;Anderson 1999;Cornell et al. 2005:l-42;Cornell and Kalt 1992:l-59;Cornell and Kalt 1998, 22:187-214;Fraser 2001:l-55;Groenfeldt 2003, 35:917-929;Public Policy Forum 2005:l-20;Royal Commission on Aboriginal Peoples 1996b;Salway Black 1994:l-27;Think Tank on First Nations Wealth Creation 2003:1-116;Whiting 2001:l-139;Wuttunee 2000:l-236;Wuttunee 2004:1-199). According to the Harvard Project on American Indian Economic Development (Harvard Project), control over a tribe's lands and resources is essential for successful economic development, because they found through their extensive research that economic development within aboriginal communities was a political problem, rather than an economic problem as previously thought. The business environment within aboriginal communities is uncertain and unattractive for outside investors i f the aboriginal community has no control or capable institutions in place to manage lands within its borders. A 2003 interview study on four aboriginal communities in Atlantic Canada revealed that aboriginal communities who had some control over some o f their natural resources did create economic benefits, not only to themselves but to the surrounding communities as well. The most successful tribal businesses described in this study were based in communities that had political control and decisive authority over all economic development that occurs over their land/reserve, whereas the least successful businesses were located in communities that remained under the  25  paternalistic federal government resource management regime (Atlantic Canada Opportunities Agency 2003:1-83). Gaining control and authority over land and resources is a common goal for fully implementing A E D within any aboriginal community. Although control over all economic development projects occurring within a particular aboriginal community's asserted territory is a main goal, A E D cannot be based on economics alone. The economic benefits an aboriginal community can obtain from having shared/veto decision making authority over their land base cannot compromise their own traditional culture, values, and language (Alfred 1999;Gandz 1999, 64:30-34;Newhouse 2000, 1:55-61;Newhouse 2001, 2:75-82;Public Policy Forum 2005:l-20;Royal Commission on Aboriginal Peoples 1996b;Salway Black 1994:1-27;Vvliiting 2001:l-139;Wuttunee 2000:l-236;Wuttunee 2004:1-199). Like many aboriginal scholars, I believe that traditional culture, values, and language are the attributes that make aboriginal communities distinct from each other and from the rest o f the world, aiid economics should not compromise any one o f these attributes. If a particular business, project, or initiative compromises or even jeopardizes the traditional culture, values, and language o f an aboriginal community it is not AED. M a n y aboriginal communities want to be involved in A E D through business ventures or agreements like joint ventures, impact benefit agreements, partnerships, and contract arrangements with outside investors. Aboriginal academic David Newhouse calls this insurgence by aboriginal communities "capitalism with a red face", in which the traditional values and culture o f all aboriginal people are sustained/enhanced while the business f -  •  competes in the dominant capitalist society. H e also believes that i f these successful aboriginal businesses can compete in the mainstream society without compromising their aboriginal community's culture or traditional values, such business development is not wrong. Aboriginal communities want to build an economic base leading to self-reliance, and this cannot be done without participating in the capitalist world. A s Newhouse points out, there are few aboriginal people who do not want to actively participate in the capitalist world (Newhouse 2000, 1:55-61 ;Newhouse 2001, 2:75-82). A r e joint ventures or partnerships the right business ventures to implement A E D ? Or should aboriginal people take the alternative road o f accepting Impact Benefit Agreements or contracts that do not offer the same opportunities for training and experience o f with working  26  with non-aboriginal people? There are so many ways to implement AED and so few examples of it in practice, but joint ventures seem to be the dominant vehicle chosen for AED in the natural resource sector throughout Canada. Since it is a popular type of business venture, it is necessary to evaluate if joint venture businesses can fulfill the elements of AED. Before focusing on the joint venture literature, the next section will reveal the differing approaches to AED.  27  3.2 Economic Development  spectrum  A i l economic development spectrum includes all possible approaches, ranging from the mainstream "top down" economic development approach to the "bottom up" economic development approaches o f A E D . Figure 3 below shows the economic development spectrum with a focus on Aboriginal Economic Development ( A E D ) .  Figure 3. Economic Development Spectrum  Mainstream Economic Development  Top Down Approach  Community Economic Development (CED)  Harvard Project's A E D approach  Anderson's 8 Characteristics of A E D  FNDI's community specific A E D  Bottoms Up Approach (Community control)  The mainstream "top down" approach for economic development is on the one end of the economic development spectrum and this is the approach consistently used by industry and government organizations. The "bottom up" approaches presented have increasing levels o f community control, as presented in Figure 3. C E D is presented in this economic development spectrum to show that it belongs in the bottoms up approach for economic development but it in no way means that C E D has the least amount o f community control because a aboriginal community might prefer this approach. The Harvard Project uses a general economic development approach for all aboriginal communities, Anderson's approach based on eight characteristics o f A E D provides for some adaptation to community circumstances, and the First Nations Development Institute (FNDI) approach provides maximum community control with their aboriginal community specific approach for economic development. Each o f these approaches is described below. The Harvard Project research team takes a generalist view o f A E D that can be applied to all aboriginal communities. They found through their research o f hundreds o f Native American businesses that the most successful businesses had governments with self rule and capable institutions o f self-governance that matched their culture and traditions. The Harvard  28  Project concludes that economic development is a political problem within aboriginal communities/nations rather than an economic one. Ultimately, all aboriginal communities or nations want to have self rule over their lands, resources, administration, and judicial systems; the Harvard Project provides some examples o f Native American tribes who have achieved some degree o f control over development. Successful businesses i n these tribes had some degree o f control coupled with culturally matched institutions. Although culture is deemed important by the Harvard Project, they keep that important part community specific. In the end, the Harvard Project affirms that a stable political environment created when an aboriginal community has self rule,-combined with capable institutions matching their culture, w i l l attract outside investors (Cornell, Jorgensen, Kalt, and Spilde 2005:1-42;Cornell and Kalt 1992:1-59). The Harvard Project is based on research done in the United States, and its conclusions would not necessarily hold true in Canada where the political and social context for aboriginal communities is much different. The Think Tank on First Nations Wealth and Creation (Think Tank), initiated and sponsored by the Skeena Native Development Society (an aboriginal organization from the west coast o f B C ) , proposed that First Nation communities must have self-governance with effective institutions, control over their own lands and resources, and entrepreneurial thinking in order to produce economic development (Think Tank on First Nations Wealth Creation 2003:1-116). Their first two points agree with the Harvard Project research findings, but apply to the Canadian context. The Think Tank also finds that the creation o f entrepreneurs who come up with effective businesses on reserve w i l l promote economic development, through reducing transaction costs; however they conclude that the Indian Act and related lack o f self-autonomy are the barriers that have to me removed. The Think Tank does a good job with its findings but is too focused on aboriginal communities that have selfgovernance (i.e. Nisga'a), considering that most First Nation communities in Canada still have to work under the federal government's imposed framework (the Indian Act) to create economic development (Think Tank on First Nations Wealth Creation 2003:1-116). The First Nations Development Institute (FNDI) and its fellow advocate Wanda Wuttunee believe the traditional and cultural values o f any aboriginal community are more important than profits and employment, which are always the main measures for success i n mainstream economic development initiatives. F N D I is a national Native American  29  economic development organization working with participating tribes and Native Americans by creating an economic environment that focuses on the 'cultural D N A ' o f the community, which is comprised o f the values, goals, and priorities tailor made to a community, society, or culture. F N D I uses the "Elements o f Development" framework for measuring community success, which is based on the Native American worldview o f development consisting o f four quadrants forming a circle. These four quadrants are kinship, assets, personal efficacy, and spirituality; twelve other elements fall within these four quadrants. The sixteen elements of the framework can help to create goals or standards and also to formulate measures or indicators that mirror the values and priorities o f the First Nations community (Salway Black 1994:1-27). F N D I and Wuttunee are in favor o f creating an economic environment that builds on local resources while recognizing the culture and indigenous knowledge o f the First Nations community. A l s o , their approach stresses that this development has to occur within the community, meaning it has to come from the people not from outsiders. In the end, F N D I are adamant that First Nations communities should be the ones to determine their own measures o f development that does not harm the ecology o f their lands and resources. F N D I uses the Elements o f Development framework to evaluate how a business is doing from the community's measures rather than western society's measures o f profit and employment. Wanda Wuttunee uses F N D I ' s "Elements o f Development" framework to evaluate eight aboriginal communities across Canada. Wuttunee and F N D I believe that the "Elements of Development" framework, although complex, does offer new ways o f measuring economic indicators and values proposed and developed by the grassroots - people from the community- not by outside experts. One o f Wuttunee's research objectives was to examine i f aboriginal wisdom has a place in economic development theory, using eight aboriginal communities as case studies. She concludes that such wisdom does have a place since it is the moral fabric o f aboriginal people (Wuttunee 2000:1-236). Wuttunee's book, Living Rhythms, uses the F N D I framework to examine eight aboriginal communities/companies ranging from urban to rural communities, and in the end these cases studies show that aboriginal wisdom is present in any community economic development initiative (Wuttunee 2004:1-199). Robert Anderson's eight characteristics o f A E D are particularly relevant to this thesis research, because he is in the middle o f the A E D spectrum and he focuses on how business  30  alliances with outside investors can help any aboriginal community towards being selfreliance (Anderson 1999). Anderson argues aboriginal people want to compete in the capitalist world through business alliances with anyone but on their aboriginal terms and conditions. Anderson's framework was developed to demonstrate how aboriginal communities/nations can compete i n capitalist society without compromising other community needs. Robert Anderson's approach is right in the middle o f the spectrum o f the bottoms up approaches, because it does try to generalize for aboriginal communities or nations. H i s work also encourages aboriginal communities/nations to get into mutually beneficial arrangements such as joint ventures or partnerships with mainstream society. The Harvard Project approach doesn't allow for as much adaptability to community context as Anderson's does, whereas the.FNDI approach focuses on development within the community, rather than joint initiatives with non-aboriginal partners. Another facet o f Anderson's approach that makes it particularly relevant to this thesis is its focus on the use o f business ventures as solutions for A E D , especially aboriginal joint venture businesses such as those created by the Meadow Lake Tribal Council in Saskatchewan (Anderson 1997). This thesis w i l l draw on Anderson's eight principles for the purposes and processes o f A E D to help develop a framework to answer the three research questions presented i n section 1.1 Anderson's 8 principles are as follows:  /.  A predominately collective approach, centered on the individual First N a t i o n / o r the purposes of:  2. The attainment o f economic self-sufficiency as a necessary condition for the realization o f self-governance at the First Nation level. 3. The improvement o f the socioeconomic circumstances o f the people o f the First Nations. 4. The preservation and strengthening o f traditional cultures, values, and languages. Involving the following  processes:  5. Create and own businesses to exercise control over the economic development process.  31  6. Create businesses that can complete profitability over the long run in the global economy, to build the economy necessary to support self-government and improve socioeconomic conditions. 7. Form alliances and joint ventures among themselves and with non-First Nations partners to create businesses that can compete profitably i n the global economy. 8. Build the capacity for economic development through (i) education, training and institution building, and (ii) the realization o f treaty and aboriginal rights and title to land, resources, and self-government (Anderson 1997:1-299). Anderson's principles for A E D as stated above apply to the case studies examined in this thesis, most notably points 5-8 which focus on business ventures and their contributions to aboriginal communities. Section 7 i n particular applies to this thesis because both case studies are joint venture businesses  3.3 Defining a Joint Venture A s mentioned above, this thesis w i l l be evaluating i f forestry joint ventures involving aboriginal communities fulfill A E D as described by Anderson. It is first necessary to show how hard it is to define a joint venture i n the business and legal worlds, and to provide a definition that w i l l be used for this thesis.  3.3.1 Business Definition Finding a definition for the term 'joint venture' is an easy task, but finding a definition that is consistently used in the business world is a difficult challenge. It is especially difficult because globalization has torn down the traditional barriers o f doing business worldwide; markets now have few barriers between countries. The joint venture is a commonly used business form to compete in this new business paradigm and different countries have their own definition for what constitutes a joint venture. According to the business world, a phrase to describe a joint venture is "it captures the strategy for collaboration amongst parent companies". Thus, in the business world a joint venture "encompasses any business venture where there is an agreement between two or more parent firms (who remain separate entities) to engage in ongoing collaboration to pool complementary assets and/or skills for a common  32  goal" (Reiter and Shishler 1999:227). This means a business w i l l not be classified as a joint venture unless it has all o f the 5 following features, which are: Ongoing collaboration, Shared participation i n decision making, Parent firms who remain separate entities, A combination as opposed to an exchange o f assets; and, Complementary assets (Reiter and Shishler 1999, 19). Aboriginal Business Canada ( A B C ) , a federal lending program o f Industry Canada helping aboriginal people to start up business ventures through financing capital and providing business support services, defines a joint venture to be two or-more people/businesses joining together to become a single business enterprise (Aboriginal Business Canada website 2005). A B C w i l l not lend capital to a joint venture unless it shows through a signed joint venture agreement from all parties that the aboriginal partner has sufficient participation in the planning and future management o f the business and that the non-aboriginal partner has sufficient business skills. The stipulation that A B C w i l l not fund any joint ventures made with aboriginal communities without a joint venture agreement, is a good and important feature that w i l l be discussed later on i n the chapter. In 2000, a joint study by between the National Aboriginal Forestry Association ( N A F A ) and the Institute on Governance (IOG) revealed that there are  five  business partnership types  used between aboriginal peoples and the forest sector, namely: -  Joint Ventures, Cooperative business arrangements, Forest services contracting, Socio-economic partnerships, A n d forest management planning (National Aboriginal Forestry Association 2000:185).  The study describes each o f the partnership types with examples, with the intention o f revealing what types are happening in the forest sector, rather than defining the partnership arrangements. Nonetheless, this study gives a general definition on a joint venture, which is any partnership in which the ownership o f the business enterprise is shared between an aboriginal and non-aboriginal partner, each making a tangible non-monetary contribution to  33  the business such as human capital, business expertise, and access to timber supply (National Aboriginal Forestry Association 2000:1-85). Robert Anderson defines a joint venture to be a contractual arrangement made between two or more investors to share control, decision making, profits, and losses o f a particular business purpose or project. The investors retain title to the assets they brought into the joint venture (Anderson 1999). A s demonstrated in this section, the definition for joint ventures is not consistent. Table 2 distinguishes Reiter and Shishler's classic business definition for joint venture compared to the other definitions mentioned in this section. Table 2. Comparison of joint venture business definitions compared to Reiter and Shishler's joint venture definition.  V ? ^4?i*t*Y  .  1  •  H„ .„ h  Anderson's J , W Ongoing Collaboration Shared Participation i n Decision Making Parent Finns Remaining Separate Entities A combination o f assets rather than exchanged  Yes  Yes  Yes '  Yes  Yes  Yes  Yes  No  Yes  No  No  No  None o f the other three joint venture definitions include Reiter and Shishler's "combination of assets rather than exchanged assets" criteria in their definitions for a joint venture. This is an important distinction between the joint venture definitions mentioned above because the main reason investors get involved in joint ventures is to pool their assets to meet the purpose of the business/project alliance. If an aboriginal community or forest company can exchange their assets between them without any ongoing collaboration than there is no need to form a joint venture. The assets involved in an aboriginal forestry business venture can be nontangible, so a mere exchange is not likely. This is the reason why this research w i l l apply Reiter and Shishler's joint venture definition.  34  3.3.2 Legal Definition The legal world is just as bad or even worse for providing a consistent definition of a "joint venture" because of litigation matters that can result from its misclassification/classification. The term joint-venture is not even recognized in some countries in Europe. So the legal world has classified joint ventures into partnerships, corporations, or contract relationships. The business definition for joint venture may be too loose for lawyers to apply depending on the country, so tying in the relationship types listed in the latter statement helps to better define the business relationship. Partners in a joint venture are sometimes unclear themselves on what their legal relationship is. For example, there have been cases in which the partners thought they were in a contract joint venture but instead they were in a partnership, and in some countries a joint venture is classified as a subset of a partnership (Reiter and Shishler 1999:227). However, the track record for defining joint ventures as businesses in the legal world is not adequate and still manages to challenge the courts because each country has left the door open for this matter. Canadian lawyers Reiter and Shishler categorize joint ventures into the following legal arrangements: Joint Venture Corporation ( J V C ) , Joint Venture Partnership (JVP), and Contractual Joint Venture ( C J V ) . Since a J V C is a corporation, it shares the same rights, powers, and privileges as a person, meaning it can sue or be sued, and the business can acquire other businesses. Most importantly, the shareholders of the J V C have limited liability so they cannot be sued over incurring debts made by the business. In fact, the number of J V C ' s is known and recorded because the business must incorporate itself through the process set out by the Canadian Business Corporations A c t ( C B C A ) , but this information is available to the government only. The J V P is governed by the applicable provincial partnership legislation, which outlines the general partnership structure, and the partners negotiate the fine details of the partnership. A J V P is not like a corporation, so the liabilities for each partner w i l l be determined by the amount of their investment into the partnership and i f they are either a general or limited partner. A general partner has unlimited liabilities to the debts and objectives of the partnership, while a limited partner has less liabilities to the partnership depending on the amount of investment. In fact, a J V P or partnership must have a general and limited partner in order to be termed a limited partnership. A general partnership  35  is when all partners have the same amount o f liabilities i n the business venture. A C J V does not create a separate legal entity and it does not adhere to any applicable partnership legislation because the partners involved want the arrangement to be private with no disclosure to the public (Reiter and Shishler 1999:227). When comparing the three joint venture models, on a spectrum o f increasing liability, the less liable more stringent J V C would be on one end, the J V P in the middle, and the more liable but less stringent C J V at the other end o f the spectrum. A s the above discussion shows, defining the joint venture from a business and legal perspective is a daunting task that can easily lead to misinterpretation by the partners involved and by people i n general. Such misinterpretation has occurred i n many aboriginal forest based companies who claim to be in joint ventures but are really in partnerships. Joint venture definitions in the business and legal world vary in their preciseness.  3.3.3 Joint Venture Definition for the Thesis This thesis w i l l use Reiter and Shishler's joint venture definition stated earlier as "any business venture in which there is agreement between two or more parent firms (who remain separate entities) to engage in ongoing collaboration amongst parent companies to pool complementary assets and/or skills for a common goal" (Reiter and Shishler 1999:227). These complementary assets are pooled among the parties, not exchanged. This thesis w i l l further classify a joint venture into an informal or formal relationship by whether there is a negotiated agreement amongst all parties. In order for a joint venture to be formal,- it has to have a shareholders agreement. The joint ventures w i l l also be classified according to their legal form, to see o f either joint venture is a corporation ( J V C ) , partnership (JVP), or contractual agreement (CJV) to provide some contemporary examples. If it has neither a negotiated agreement, nor a shareholders agreement, it w i l l be classified as an informal joint venture because all three types o f legal forms require formal agreements stipulating the roles and responsibilities o f all parties involved with the joint venture. A Memorandum o f Understanding ( M O U ) agreement or its equivalent between an aboriginal community and a forest company is an example o f another type o f agreement that may be signed to form a joint venture. Timber harvesting agreements are another type o f agreement that can be signed by all parties, but harvesting agreements are really a contractual  36  arrangement for a guaranteed service rather than a joint venture. In the end, the joint venture as defined above w i l l be classified as either formal (with a legal agreement) or informal (not having a legal agreement).  3.4 Aboriginal Joint Venture Literature This section w i l l summarize the literature that is available on aboriginal joint ventures in the forest sector in Canada, as it applies to my three research questions regarding contributions to A E D , keeping politics from overrunning business decisions, and defining success. Because joint ventures have no public reporting requirements even i f they are formal, this makes it very difficult to know how many exist in the forest sector. Nonetheless, there have been studies that have attempted to count them. In 2000, N A P A in collaboration with the Institute on Governance (IOG) found i n their study o f aboriginal forestry businesses that there were fourteen aboriginal forestry joint ventures (nine in B C , three in S K , and two in Q C ) nationally, but there was no research done to see i f any had formal shareholder type agreements (National Aboriginal Forestry Association 2000:1-85). K y l e Whiting revealed i n his thesis that out o f eleven potential aboriginal forestry joint ventures in northern B C , four o f them had a formal joint venture with a Joint Operating Agreement (JOA),"which is a legally binding document negotiated between all partners that is similar to a shareholder's agreement (Whiting 2001:1 -139). Anderson details in his research that there were 59 non-agricultural aboriginal joint ventures in Saskatchewan, but he does not state how many o f them were involved in the forest sector (Anderson 1997:1 -299). In 2002-03, the N A F A study on aboriginal-held forest tenures across Canada revealed that there were 23 joint ventures nationally (nineteen in B C , three i n S K ) but again no research was done to see i f these were formal or informal joint venture arrangements (National Aboriginal Forestry Association 2003:1-78). What is quite apparent in the examples above is how many proposed J V ' s there are in B C , and this comes as no surprise because o f the vast natural resources within the province and the current provincial forest legislation allowing First Nation communities some access to forest licenses through the Forest Revitalization • Plan described in Chapter 1.  37  In the past, the main research paradigm focused on joint ventures established between companies from developed countries. W e l l known scholar J. Peter K i l l i n g affirms that joint ventures must have a dominant management structure (i.e. one shareholder manages the joint venture) instead o f a shared management structure (all shareholders have equal management control) because a shared structure is more difficult to manage and it can affect the financial bottom line. He believes that any foreign company (i.e. developed country company) should retain its dominant control and management in the joint venture by choosing a local partner whose contributions are not significant at all. In some cases the joint venture was started because o f foreign policies, rather than stakeholder needing to pool their assets or •information with another. In fact, 77% o f all managers o f a dominant parent joint venture who participated in K i l l i n g ' s survey declared that their business was doing satisfactory or better. However, he had only thirteen dominant parent joint ventures and only 37 joint ventures in total, which is a small sample size ( K i l l i n g 1982, 60:120-127;Killing 1983:79). In the end, he acknowledges that the biggest limitation to his research was that it dealt with joint ventures involving developed countries not on developing countries. However, joint ventures regardless o f origin should be only temporary business solutions for all parties because the knowledge and assets that each shareholder requires from one another can be acquired over a finite time period, after which the incentive for being in business no longer exists. Paul Beamish discovered in his comparative research that there is definitely a difference between joint ventures dealing with developed countries and joint ventures dealing with developing countries. H i s research results on joint ventures i n developing countries involving a multinational company and a local partner reveal that there has to be equal ownership and management between the partners. Beamish also found that the successful developing country joint ventures in his survey looked for local knowledge and management from the local partner, while the management elite o f the unsuccessful joint ventures only looked for the support and contributions from their local partner that were necessary to satisfy the governmental requirements to keep the business going i n that country. Beamish advocates that joint ventures in developing countries can be successful i f there is shared decision making authority, and i f the multinational executives o f the foreign company look to the local partner for their local knowledge, culture, and political knowledge o f their country and i f the joint venture uses local management (Beamish 1985, 20:13-19;Beamish 1988;Lane  38  and Beamish 1990, 30:87-102). Beamish's research findings are very applicable to joint ventures involving aboriginal communities in Canada. The existing literature on joint ventures involving aboriginal communities in Canada has been based on generalized descriptions and prescriptions of a few contemporary examples (Aboriginal Business Canada website 2005;Bourgeois 2002:33-38;Chelsea 1999;Findlay 1999: l-9;First Nations Forestry Program 2003:229;La Pointe 1997;National Aboriginal Forestry Association 2000:l-85;Rpss and Smith 2000:1-88). Acknowledgement of all shareholder contributions and the importance of building trust are the main components of a successful joint venture, but it is up to the shareholders to-find this happy medium (Ellis 1993:l-16;Ferrazi 1989, 9:15-32;Joy 1999). Forestry joint ventures involving aboriginal communities are seen as vehicles for providing local employment and training while the forest industry shareholder gets unimpeded access to the timber supply. While this ongoing collaboration occurs, there is also the sharing of risks and the significant tax advantages that an aboriginal partner can share directly or indirectly with the non-aboriginal partner by choosing the joint venture business structure (Insight Press 1999;Native Investment & Trade Association 1996;Native Investment & Trade Association 1997). Generalized descriptions and prescriptions dominate the joint venture literature, but there are only a few case study examples from the forest sector, thus a research gap exists, which this thesis will help to fill. The joint venture literature advocates the importance of having a negotiated shareholders agreement or its equivalent because this will help sustain the working relationship until the joint venture's dissolution. In cases where the aboriginal partner is involved in long term land claims disputes or negotiations, the shareholders agreement can include a "without prejudice" clause stating that it will not infringe on the aboriginal title and rights of the aboriginal shareholder involved (Findlay 1999:1-9). Also, the shareholders agreement has to clearly express each shareholder's equity and management control, the dissolution/buy out option, and the legal format such as a corporation, limited partnership, or a general partnership (Lewis and Hatton 1992:1-72). These agreements can take six months or more to complete amongst all partners, with negotiations over the equity structure and technology transfer components being the most difficult. A clear buy out or other exit mechanism must be stated in the shareholders agreement so that it is not done in an ad hoc  39  way (Miller et al. 1996:1-25). A good example o f the importance o f such a clause is Iisaak Forest Resources L t d (Iisaak) - a forestry joint venture between the Nuu-Chah-Nulth First Nations and the forest company giant Weyerhaeuser. The aboriginal shareholder o f Iisaak took advantage o f the buy-out option in their negotiated shareholders agreement, and now the business is owned by the aboriginal communities in their area o f operations, which is located within Clayoquot Sound, the most contentious forest region i n B C on the west coast o f Vancouver Island. In Doug Brubacher's article, he uses his own analytical framework (which is the identification o f the partners, context, objectives, accountability, contribution, and risks to the joint venture) for assessing the West Chilcotin Forest Products ( W C F P ) joint venture (Brubacher 1998, 74:353-358). His analytical framework is used to portray how the aboriginal partner wanted to get access into the forest sector while being profitable and meeting the socioeconomic objectives o f their community. The forest industry partner wanted unimpeded access to the timber supply and for the joint venture to be profitable. Although Brubacher uses only one case study example, it was unique because it was between an aboriginal community, non-aboriginal community, and an outside forest company. Conveniently, the same case study w i l l be used in this thesis, allowing for a comparison o f what was examined then to how the situation has evolved now. Brubacher generalizes from his single case study to suggest future problems that can occur with other joint ventures involving an aboriginal community. He does not provide other case study examples, thus his study contains no replication. Up to this point, the aboriginal joint venture literature has been outdated and not as comprehensive in focus, (including the two major contributions to the field which w i l l be discussed below). Although the experiences o f past and current joint ventures involving aboriginal communities should not go unnoticed, there remains a need for further research. Two key research contributions on joint ventures involving aboriginal communities come from K y l e Whiting and Sarah Jane Fraser. Both studies provided more than descriptive research and opened the door to more aboriginal research on business ventures. K y l e Whiting's thesis looks at four aboriginal forestry joint ventures in B C and determines these business ventures can contribute to the capacity building component o f A E D . He found through his four case studies that joint ventures do not provide all the  40  requirements to fulfill A E D . Instead joint ventures involving aboriginal communities are primarily a vehicle to reach economic goals as opposed to cultural ones. For example, crosscultural training and traditional First Nations activities are non-existent within his four case studies; also, the advanced training/education or managerial promotion for aboriginal people was minimal. The most successful case studies in his research were the ones that included more capacity building components i n the business. In the end, forestry joint ventures introduce aspects o f A E D through capacity building; but to fully realize the potential for A E D offered by the joint venture, the mutual benefits must be appreciated by all partners involved, encouraging them to implement more capacity building components (Whiting 2001:1-139). Sarah Jane Fraser also examines four joint ventures made between the Membertou First Nation and N o v a Scotia businesses in an effort to increase economic development for the aboriginal community. She used the metropolis/hinterland theory  11  to predict that these  joint ventures would bring limited economic benefits to aboriginal communities causing resource exploitation and other effects. After examining each joint venture involving the Membertou Development Corporation, she found that joint ventures were not capacitybuilding ventures but rather profit making businesses i n which all partners used each other for economic gain. Thus, she concludes that a joint venture can be an appropriate model for economic development for an aboriginal community, once they know what their contributions w i l l be and what hazards can occur prior to the business inception (Fraser 2001:l-55;Fraser 2002, 3:40-44). Powers o f negotiation during joint venture talks w i l l determine the level o f capacity building components an aboriginal community w i l l get. Meaning an aboriginal community must demand capacity building components during the pre-joint venture negotiations. However, Fraser applies C E D in her research instead o f the A E D framework, because it conforms to the metropolis hinterland theory. Her approach is not ideal, because not all components o f C E D conform to aboriginal issues. For instance, the preservation o f traditional culture, values, and language is a significant component o f A E D that is missing from the C E D model.  Metropolis/hinterland theory: a theory that the metropolis areas will generate more of the wealth and power but the regional communities will just continue to be a staples economy. 11  41  Neither Whiting, nor Fraser examines the issues of how the aboriginal community can prevent politics from overrunning business decisions, or how participants define success for their joint venture. However, success of a joint venture involving an aboriginal community may depend on these two factors. In addition, Whiting focuses on the capacity building components of AED only, while Fraser applies the CED approach rather than AED since it conforms to her paper's theoretical framework. Therefore, neither one address AED as a whole the way Anderson attempted to do in his research with the Saskatchewan First Nation. AED is a goal for any aboriginal community and it should be treated separately. This is what my main research question addresses. The process of AED is as distinct as each aboriginal community, and I hope to address its importance through the analysis of my two case study joint ventures. All pertinent aboriginal literature on any social or economic initiative will in some way discuss and show how counterproductive a business or program can be if politics overruns the decision-making process. In Canada, the main culprit is the federal government's Indian Act, which is a catalyst for allowing the politics to overrun an aboriginal community business creating an unattractive environment for outside investors. The main reason is that the Indian Act dictates an election system used to elect the chief and council for a First Nations band that cultivates nepotism and despotism amongst band members. The Indian Act stipulates that there shall be one elected councilor per one hundred band members, and this is ludicrous because it increases the number of band members as councilors as the population grows. Another problem with the Indian Act's electoral regulations is that it requires elected councilors to be on-reserve residents, so off-reserve band members cannot be nominated leaving them more excluded from community issues that may affect their own family who may be on-reserve residents . Thus, only on-reserve band 12  members can run for the councilor but anyone can run for chief. Also, an on-reserve band member can be nominated for a councilor and chief position at the same time so his/her position is secured for another term through two elected positions. These are only some of the reasons that politics can easily overrun business decisions in an aboriginal community  The 2001 Statistics Canada Survey states that about 47% of all aboriginal people live on-reserve compared to the 53% who live off reserve. 12  42  operating under the Indian Act. However, the First Nation band now has the ability to change this through implementing a custom elections system. The first method that is commonly cited for First Nation bands to prevent politics from overrunning business is developing their own custom elections. The federal government's department o f Indian and Northern Affairs Canada ( I N A C ) responsible for the Indian Act has allowed First Nation bands to develop their own election system for chief and council, which can help create an attractive business environment for outside investors. Under custom elections, the First Nation band can extend the two year terms for chief and council and stagger elections for councilor positions. The customs election also can allow off-reserve band members to run for council. These are just a few examples o f changes that can be made to the electoral system by First Nation bands adopting custom elections. However, I N A C does make the final decision on whether the custom election system developed by the First Nation band is adequate but no information is made public to determine how many they refuse to accept and for what reasons. Generally, First Nation bands can alter the present Indian Act election system to produce an attractive environment for investors. Extending and staggering the terms o f office for chief and council can create more stability and predictability, and allow for the retention o f experienced councilors who have become accustomed to their position (Wormian 1994). The present two year term is too short for the elected chief and council because by the time they are accustomed to their position, re-election is right around the comer. This short two year term is also conducive to high changeover rates and less mentorship amongst councilors. The second commonly reiterated method o f not allowing the politics to overrun the aboriginal business venture is not allowing the chief or council to be involved in the day-today operations o f the business. The chief and council should be working on the strategic goals o f their community rather than on business operations, because this leads to successful sustainable development (Cornell and Kalt 1992:1-59). The Harvard Project found in their research that tribal businesses who had no elected chief or councilors involved in daily business operations had a 400% greater chance o f being profitable than those that had the chief and council involved at the board o f directors level, or otherwise involved in daily business decisions (Cornell and Kalt 1998, 22:187-214). However, does this trend hold true amongst aboriginal businesses in Canada? I would say to an extent, yes it is does, but since  43  there are more diverse aboriginal communities i n remote regions o f Canada, this answer w i l l have to be determined through more case study examples. Another commonly used tactic by a First Nation band or nation to not let the politics to overrun the business is to set up a development corporation run preferably by a qualified Chief Executive Officer (CEO) or its equivalent. The primary role o f a development corporation is to manage all business ventures owned by the aboriginal community or nation. The development corporation acts as the business arm for the aboriginal community/nation, so that elected aboriginal politicians can focus on short term and strategic issues for the community. The C E O or equivalent is appointed by the development corporation's board o f directors (BOD) who are also elected or appointed by the aboriginal community/nation. The development corporation's B O D is the barrier between the community and the appointed C E O (Cameron 1992:61-90). The organizational structure for development corporations is community/nation specific, so a one-size-fits-all approach w i l l not work for all aboriginal communities. However, a development corporation is one approach that can help aboriginal community/ nation to achieve its economic development initiatives from political interference. In the end, there is no one-size-fits-all approach for not allowing the politics to overrun the business since each aboriginal community is different from the next. Rather, each aboriginal community/nation should try to come up with unique strategies that fit its needs, when trying to figure out how to keep politics from overrunning the business. A n aboriginal community/nation has to simply look at how the omnipresent Indian Act limits their ability to achieve A E D or to develop successful business and go from there. The challenge is for aboriginal communities to implement these rhetorical solutions for not allowing the politics to overrun the business. The last research question o f this thesis asks all aboriginal interviewee respondents how they define success for their joint venture. This has not been asked i n the current joint venture literature involving aboriginal communities, but it is important because the aboriginal community must know i f any potential business venture does alter their present traditional culture, values, or language. The aboriginal community may define successful economic development as businesses that strengthen cultural institutions, or they may define success as profitable businesses that provide employment for the community and dividends to fund  44  traditional, cultural, or language event/ceremonies (Public Policy Forum 2005:1 -20). K n o w i n g their definitions for success prior to being involved with a joint venture may help the aboriginal community/nation to evaluate and change their political environment to an environment that w i l l attract investors. The A E D framework shown in the next section may help an aboriginal community/nation to define their own measures for success.  3.5 Aboriginal Economic Development  Framework  This section will, explain the A E D framework that was applied to help answer my three research questions. This framework was developed by combining elements from other A E D frameworks in the literature that were relevant to aboriginal joint ventures. It draws mainly on Anderson and Whiting's work, as these were most applicable to this thesis, as they also discussed joint venture businesses in the context o f aboriginal economic development, and their frameworks can be adapted to each community context. This framework has the following seven main elements: 1. Business structure 2. Profitability 3. Employment 4. Aboriginal Capacity a) Education and Training b) Work Experience c) Financial Capacity 5. Preservation of Traditional culture, values, and language. 6. Forest Management Decisions and Control over their asserted traditional territory. 7. Community Support  r  The business structure may lead to the politics not overrunning the business, may improve the business's success, and may aid to fulfilling all components o f A E D . The business structure w i l l reveal how the corporate governance w i l l be handled leading to its affects on profitability and employment. Profitability and employment are needed in order 13  to sustain the business over unforeseen events. In fact, these two factors are seen as the main  Profit is the excess of total revenues over total expenses incurred in the business. I hope to obtain access to the financial statements of each joint venture to determine if they made a profit. If not, I will have to rely on each joint venture's CEO or equivalent's answer. 13  45  measures for success in mainstream economic development and are also important to a degree in A E D . Aboriginal capacity was further divided into education and training, work experience, and financial capacity. The education and training subcomponent can be measured in either joint venture by the educational and training opportunities offered by the business through programs such as apprenticing and scholarships. The work experience achieved by aboriginal employees in either joint venture is a necessity for capacity building. This is especially important for logging and sawmilling operations, which have a "learning by doing" approach associated with most positions. The third part o f aboriginal capacity as the term is applied i n this framework is the financial  capacity o f the aboriginal community to contribute to  business start up costs such as business planning, and the financial capacity o f the joint venture to pay for capacity-building initiatives within joint venture. Aboriginal capacity is important for building an economic base within any aboriginal community and it's important for achieving self-governance.  The preservation of traditional culture, values, and language for the aboriginal partner in either joint venture w i l l help to truly fulfill the component o f A E D that distinguishes it from C E D (Anderson 1999;Gandz 1999, 64:30-34). A n example o f a traditional or cultural value can be a fishing site that is integral for one or more aboriginal communities. This thesis w i l l not define traditional or cultural values for an aboriginal community because each one is so diverse from one to the next. I expect each aboriginal community to point out any that they feel has been compromised or destroyed. Furthermore, the effects o f the joint venture on the aboriginal partner's role in forest management decisions and control over its asserted traditional territory w i l l be examined. It is considered to be a major inhibitor for the success o f A E D i f the aboriginal partner has no control or shared decision making authority over their land base and resources (Royal Commission on Aboriginal Peoples 1996b). Community support for the business leads to a stable business environment without political interference from non-elected band members, allowing the business to flourish. This is the kind o f environment that is required to prevent politics from overrunning any aboriginal business. Community w i l l be defined as the boundaries o f the reserve for both  46  aboriginal communities involved in my case studies, since the on-reserve band members are more prone to being influenced by the business activities than off-reserve band members. The A E D framework explained above will be used to compare and contrast two forestry joint ventures in BC, and to determine if they are helping to fulfill A E D in the case study communities, in accordance with my research questions (see section 1.1). Although the components of the framework are all inter-related to some degree, they will be examined separately to allow an organized analysis of the case study results.  47  Chapter 4: Ecolink Forest Services Ltd This chapter w i l l first present some background on the Esketemc First Nation ( E F N ) , including their demographics, governance, and history o f forestry development, which are important contextual factors for the case study. This general context information is followed by a discussion o f how the Ecolink Forest Services Ltd (Ecolink) joint venture originated. The chapter w i l l end with the results o f the Ecolink case study organized according to the Aboriginal Economic Development ( A E D ) framework presented in Chapter 3 (section 3.5).  4.1 Esketemc First Nation 4.1.1 Community Statistics and Demographics A l k a l i Lake is situated in the Cariboo-Chilcotin region which is located in the central interior o f B C . A l k a l i Lake (called "Esk'et" by the locals) is a rural aboriginal community situated 50 k m southeast o f Williams Lake- the nearest town (Johnson 1986:1-57). A l k a l i Lake Indian Band is one o f seventeen bands comprising the Secwepemc (The People) Nation (Secwepemc Cultural and Education Society website 2005). The Secwepemc Nation (Shuswap) traditional territory stretches from the east o f the R o c k y Mountains to the west of the Fraser River, and it is bounded i n the north by the upper Fraser River and i n the south by the Arrow Lakes. The Shuswap traditional territory is just over 100,000 square kilometers and the current population is about 8,000 members. The Shuswap language is called Secwepemctsin (language o f the Shuswap) which falls under the Interior Salish subgroup o f the Salishan language (George Manuel Institute website 2004). A l k a l i Lake is comprised o f 19 reserves with a total size o f 3,931.8 hectares and the main community is situated on Indian Reserve #1, which is called Esk'et which means "white ground" in Secwepemc because o f the white alkali deposits that are left on the ground when the lake dries up or recedes (Esketemc First Nations website 2002). The A l k a l i Lake Indian Band is now called the Esketemc First Nation (EFN) and it has 411 on-reserve and 309 off-reserve band members for a total membership-of 720. Table 3 presents a breakdown of E F N band members by gender and residency from 2005.  48  Table 3. Esketemc First Nation b a n d membership in 2005. '  Residency  Males on-reserve  215  Females on-reserve  196  Males off-reserve  153  Females off-reserve  156  '.Total B a n d member's V;  Another important demographic is that there are 37 E F N band members over 65 years o f age and 198 band members under the age o f 18. Thus the total available workforce o f E F N is 485 band.members.  4.1.2 Political Environment The E F N is governed by the Indian Act but it is trying to formalize a treaty through the B C Treaty process. The B C Treaty process is a tripartite process amongst participating B C First Nation bands and both the provincial and federal governments. The intent o f the B C Treaty process is to finalize treaties addressing First Nations land claims within B C . T o date, only one modern treaty has been finalized - with the N i s g a ' a Nation i n northwestern B C . Although, the N i s g a ' a Nation finalized a treaty with both governments it was not negotiated under the B C Treaty process . On December 16, 1993, the E F N filed a "statement o f intent" 14  to negotiate a treaty with both B C and the federal government (a tripartite agreement) and they are now. in stage 4 o f the 6 stage process, the agreement i n principle stage, which forms, a basis for a final treaty. Forty two out o f the fifty five First Nation bands involved in the B C Treaty Process are in stage 4. Only five First Nation bands are in stage 5, meaning that their agreement in principle has been ratified by the band membership, and negotiations to finalize a treaty are in progress ( B C Treaty Commission website 2005). A n extensive discussion o f the B C Treaty Process is beyond the scope o f this thesis, but it is important to note the dissention amongst B C aboriginal communities/nations over this government led process,  In most of Canada, treaties were signed in the early colonial period (1800s-early 1900s), but for most of the province of BC, no treaties were negotiated, and land ownership remains under dispute between First Nations and the governments of Canada and BC. Court cases won by First Nations proponents in the 1970s through the 1990s have affirmed First Nations rights and title to lands and resources in their traditional territories. These Court decisions have lead to the establishment of the BC Treaty Process in 1992. 14  49  most notably at the political organization level. There are two main aboriginal political organizations representing B C ' s Indian bands: the U n i o n o f B C Indian Chiefs ( U B C I C ) which is an organization comprising Indian bands who strongly oppose the B C Treaty Process, and the First Nations Summit (FNS) which is an organization comprising Indian bands who are proactively supportive o f the treaty process. Although a great deal o f discussion can be done on the aboriginal politics i n B C , what is important is the fact the 5  E F N , as a member o f the F N S is very proactive on asserting its aboriginal rights and title over its traditional territory through the B C Treaty Process. The E F N ' s governance has always been dictated by the Indian Act; therefore, the chief and council have the" conventional two year term i n office. The hereditary chiefs are 1  acknowledged in the E F N but they do not have a formal decision-making role. The E F N also has a Council o f Elders, but they have an advisory role, rather than the formal decisionmaking role-of the elected chief and council. There have been three E F N band members in the last two decades who have been chief, so the changeover rate is not as high as the short two year term suggests. According to a few E F N interviewees, the current chief and council are focused on economic development initiatives within the community, and are doing a good job o f letting on-reserve businesses operate.  4.1.3 Forestry development The E F N band members had logging and silviculture experience prior to their joint venture's inception. In the mid 1900's, small mills operated around the interior, harvesting primarily white pine and Douglas-fir, and leaving Lodgepole pine because it was too small and not valuable at the time (Drushka 1999:1-304). The following quote from an experienced retired logger from the E F N gives a good idea o f the early history o f logging in the region. "I was 17 or 18 years old when I started in horse logging and I was the cross cutter for a small m i l l . In those days we cut the big Douglas-fir trees and I was making $1 per tree. W e could cut down and load 30-38 truckloads a day because the Douglas-fir was huge. A l s o you can put 12 logs on a sleigh for horse logging"(Dick 2005). He was operating logging equipment and even working in silviculture right up to his retirement in 2000 leaving h i m with 55 years of forestry experience. He managed to be an employee for all o f the E F N ' s forestry businesses.  50  During the 1980's, the E F N purchased a sawmill and started a logging company, A l k a l i Logging, which employed E F N band members and non-aboriginals to run both operations. The following quote from W i l l i a m Chelsea Sr.- a past E F N chief and experienced logger explains the problems that the E F N experienced with these initiatives: "we (The E F N ) made a big mistake when we purchased through a bank loan a new skidder and loader for A l k a l i Logging's operations without having any timber agreement/contract with the local mills. A l s o we purchased a sawmill without a guaranteed timber supply for its operations and it remained operational for only three months because of this error. This put both A l k a l i Logging and the sawmill in debt and I wish we did not take the advice from our nonaboriginal economic development advisor at the time, because he did not know anything and he was a crook. W e learned a very expensive lesson"(Chelsea 2005b). Although A l k a l i Logging and the band's sawmill went bankrupt and ceased to exist, in the minds of the E F N it w i l l never be forgotten because of the expensive lesson they learned and they will remember it when it comes to any future business opportunities within the forest sector.  4.1.4 Forest Management Initiatives Being involved in the B C Treaty Process has not hampered the E F N ' s ability to be proactive on securing different types of forest tenure and forestry agreements within its traditional territory. In fact, the E F N has a treaty staff that makes sure all economic development initiatives within their territory do not infringe on any treaty related issues still being discussed or negotiated. Currently, the E F N has a community forestry license, a woodlot license, a Forest and Range Agreement ( F R A ) , and a timber contract license from its joint venture partner Tolko. Each of these w i l l be discussed below in more detail. On February 16, 2001, the E F N formally received a Community Forest Pilot Agreement ( C F P A ) from the provincial government to see if they would be able to handle and administer this forest agreement on their own for five years. The C F P A consists of 25,000 hectares of land (90 % crown land and 10% reserve land) with an Allowable Annual Cut ( A A C ) of 22,000 m over five years within the E F N ' s traditional territory ( B C Ministry 3  of Forests 2004:1-9). On December 14, 2004, the provincial government extended the E F N ' s C F P A to 25 years, making E F N the second applicant to get an extended term after the five year pilot process. Currently, the E F N is the only First Nation holding a long term C F P A in  51  the province ( B C Ministry o f Forests website 2004). This C F P A provides local employment in silviculture, logging, and management planning for a few E F N band members because the A A C , not the availability o f workers, determines the amount o f work. The C F P A is managed by the E F N ' s forest company A l k a l i Resources Management ( A R M ) , formerly Esketemc Forest Products Ltd. The E F N wanted their aboriginal forestry joint venture Ecolink to be separate from all o f their other forest licenses because they did not want the forest industry partner to be involved with any o f their own forest license decisions. This separation o f business entities on reserve is indicative o f how the E F N wants to become more self reliant by doing forest management planning on their own with help from independent professionals. A R M has a non-aboriginal forester on staff working with qualified E F N band members and they are responsible for meeting all o f the silvi cultural, harvesting, and administrative duties required to maintain the E F N ' s forest licenses. The E F N band manager states " A R M has a five member Board o f Directors ( B O D ) that does not include any elected representatives from the E F N . T w o members are non-aboriginals and both have extensive business and forestry expertise (one used to be a woodlands manager and the other is a retired government employee) and the other three are the E F N education coordinator, the E F N forest entrepreneur, and myself. The past chief and council passed a Band Council Resolution ( B C R ) to have the A R M B O D like this based on the recommendations from myself and a soon to be hired professional forester. W e wanted a diverse B O D without any elected representatives and it has worked for A R M " ( C h e l s e a 2005a). Another reason why the A R M was established was because the E F N administration did not have the human resources to adequately handle the C F P A and other forest licenses while trying to adhere to other community objectives. Currently, A R M looks after all o f the E F N referrals and they work directly with the band and also with the band's treaty branch (staff hired to work at the E F N treaty table i n the B C Treaty Process). On A p r i l 14, 2004, the E F N signed a F R A which consists o f a non-renewable forest license commitment and revenue sharing component offered to them from the provincial government. The E F N band manager states "we signed the F R A right up to the last minute even when we had ten months to look at it. I made sure the chief and council made a decision because I wanted an answer because we needed the money and timber for employment  52  opportunities. W e used the money for our band programs and it has helped us out a lot" (Chelsea 2005a). A n F R A can have a term o f three to five years and a per capita formula is used for the amount o f timber volume and revenue allocated to First Nations who sign a F R A . The E F N under its F R A w i l l get 38, 293 m per annum (196,465 m in total) and 3  3  $354,291.00 ($1,771,455.00 i n total) per annum for five years ( B C Ministry o f Forests website 2004:1-15). The derived provincial government formula for both components o f the F R A works out to $500 per band member and 40-50 m per band member annually using the 3  Indian and Northern Affairs o f Canada ( I N A C ) census data for the First Nation band (Pacific Business & L a w Institute 2004). This formula is consistent with what the E F N got in timber volume and in revenue sharing money i n their F R A . The E F N is one o f 86 First Nation bands who have signed either a F R A or a direct award (these agreements are described in Chapter 1). Meaning, 100 out of 198 B C Indian Bands or 50.5% o f all B C Indian Bands have agreed to sign a provincial forestry agreement. Unlike most First Nations who have signed the F R A without prior forestry harvesting experience, the E F N do have the experience. First Nations who have signed a F R A will not make a huge profit from harvesting the negotiated timber volume i f they do not have their own forestry business to do it. A l s o the First Nations eager to start their own logging company to harvest their F R A volume should not expect to make a huge profit because the timber volume is not large enough. Further, the methods o f logging required to harvest the F R A volume such as helicopter logging or cable logging might be too sophisticated for a First Nations to do on their own and they may need to hire contractors to do the work for them. Some First Nations who have signed a F R A hire independent contractors to harvest their volume for them. The common consensus among First Nations who signed the F R A ' s was that it was risky to enter the forest sector. The E F N ' s decision also considered risks, but they were better off than most First Nations because they had their own forestry business to harvest their F R A volume. In fact, the E F N elected chief and some councilors felt the F R A was a good option for the community to pursue because they had the necessary capacity in place tb meet the administrative and harvesting requirements. In 2003, the E F N obtained a three year project worth $339,400 through the B C Economic Measures Fund which is a provincial government initiative to allow First Nations to participate in the natural resource sector. This three year project w i l l help to share  53  infonnation and improve the consultation process between the E F N and anyone who has forest development and operational plans residing within the E F N ' s asserted traditional territory. This funding allowed the E F N to hire a forestry professional and some E F N band members to be involved with the planning and administrative process (Treaty Negotiations Office website 2003). This project makes sense for the E F N considering that most o f my interviewees expect to be involved with forest management i n their territory. The project is ongoing and the staff is still being employed under the fund.  4.2 Ecolink History Talks focusing on wanting their own sawmill took place between the E F N elected chief and council and Lignum L t d (Lignum) throughout the m i d 1980's. The two parties built a relationship. Lignum was a family owned medium sized sawmill based out o f Williams Lake and its timber supply area (TSA) was within the E F N ' s asserted traditional territory. Lignum's management knew that it needed certainty over access to its timber supply, and that in order to get certainty; they needed to work with aboriginal communities within their T S A . In order to have unimpeded access to timber fiber, Lignum knew it needed community support, and the joint venture model was a good option to gain it. According to Lignum representative B i l l Bourgeois, they made sure their joint venture relationship started out small, was First Nation initiated, equally split i n equity and control, built capacity within the aboriginal community, and there was a buy out option after five years exclusive to the First Nation's partner. This is consistent with Lignum's objectives for all o f their joint ventureswhich are to build a positive relationship, to contribute to community stability, and to make a profit (Bourgeois 2002:33-38). W i t h these issues in mind both partners talked more after the demise o f the E F N ' s sawmill and logging company. After the demise o f the sawmill and A l k a l i Logging due to mismanagement and lack of timber supply, the newly elected chief and council were very hesitant to embark on any business opportunities for awhile. According to the E F N Chief at the time "I was hesitant at first to get into another forestry business because we did get in debt with the sawmill which put the band administration into third party receivership"(Chelsea 2005b). The E F N C h i e f s brother and other band members urged him to talk to Lignum and he did. Both partners  54  acknowledged their goals and wanted to start the business relationship out small, so a silviculture company was chosen as the first small step. In August o f 1990, the shareholder agreement was signed, formally creating Ecolink, and the silviculture crews started working that summer. Each partner had to contribute $25,000 to make Ecolink legal. The E F N obtained their share from their administration funding. The E F N Chief states " W e needed the capital to get Ecolink started so I borrowed $25,000 from the E F N ' s social services program and I got it passed through council. I hoped that the next E F N council would understand why I did it. In the end, the E F N understood my decision to use the social services money to get Ecolink started"(Chelsea 2005b). This method o f acquiring start-up capital used by the past E F N Chief is not uncommon. In the end, Ecolink was worth the financial risk for the E F N because the business quickly paid off its loan from the band's social services program. The E F N did need Lignum to help them acquire a bank loan to pay for the equipment and supplies for Ecolink's first inaugural season. Ecolink's forest industry partner has changed due to the consolidation o f forest companies happening throughout the country. Lignum was first bought out by Riverside Forest Products (Riverside) in early 2004. Riverside was a corporation situated out o f the Okanagan and had its operations i n Williams Lake just under a decade so they were not new (see map- Figure 1). In late 2004, privately owned Tolko Industries L t d (Tolko) from the Okanagan bought out Riverside after competing with another forest company for the purchase. W i t h the acquisition o f Riverside, Tolko is now the 5 largest softwood lumber th  producer i n Canada producing 2,074 million board feet per annum (Logging and Sawmilling Journal website 2005). Forest consolidation continues to be the cost effective way for surviving forestry conglomerates in Canada to compete on the international stage. The next three sections (4.3-4.5) present the results corresponding to each o f my three research questions.  55  4.3 Aboriginal Economic Development Framework This section shows how Ecolink contributes to Aboriginal Economic Development for the Esketemc First Nation ( E F N ) community, organized according to the seven components o f the framework presented i n section 3.5.  4.3.1 Business structure Ecolink is a formal joint venture as defined in chapter 3 because it has a formal shareholder's agreement negotiated by both partners. Although I did not have access to this private document I was told that it was registered with the B C Corporations A c t making it a Joint Venture Corporation (JVC). Therefore, Ecolink shares all the same powers and liabilities as a legal person making the both the E F N and Lignum not liable to the business. The latter statement helps to reduce the liabilities to each shareholder i f some business decisions are incorrect leading to the dissolution o f Ecolink. A l s o , I was told that the shareholder's agreement stipulates the equity shares were to be split equally between both shareholders and there was a buyout clause after five years exclusive to the E F N , not Tolko. Each shareholder has three representatives on the Ecolink Board o f Directors ( B O D ) and the E F N can appoint anyone from their community to sit on the board. However, as yet, only the E F N chief and one councilor and two Tolko representatives sit on the B O D and a third E F N board member has not been selected since the takeover. ^  Ecolink has a supervisor for the silviculture division, and another for the logging  division. They also have an employee manual for all o f its employees with their job descriptions laid out. Ecolink's mission and vision statements are also clearly articulated in their employee handbook.  4.3.2 Profitability Ecolink has enjoyed early success through its profits due to the company's experienced workforce and its strategy o f capitalizing on provincial government forest subsidy programs. In fact, Ecolink was so profitable in its first 4 years that they were able to buy a used skidder and a front end loader with their profits. Being profitable helped the  56  company diversify into logging in its 5 year o f operation. Table 4 illustrates the revenues 1  generated from Ecolink from its inception to 1998.  Table 4. Ecolink's revenues from 1990 to 1998.  • • im< «•< ( «, Silviculture , - Logging Reveiuu 'V.^vtuue "Total Revenue', l^ear*. $ 219,309.00 1990 $ 219,309.00 $ 532,065.00 $ 532,065.00 1991 $ 551,460.00 1992 $ 551,460.00 $ 846,926.00 S 846,926.00 ' 1993 $ 365,389.00 $ 1,087,841.00 1994 S 722,452.00 $ 1,684,705.00 $ 1,005,586.00 $ 679,119.00 1995 $ 2,015,994.00 $ 1,164,122.00 $ 851,872.00 1996 $ 772,051.00' $ 2,132,258.00 $ 1,360,207.00 1997 $ 2,584,019.00 $ 1,586,361.00 $ 992,658.00 1998 S3';661',0'89.00V' Total - '. $ 7,988;488.00 ^ 'fl  f  1 ^'  r  $ $ $ $ $ $ $ $ $  70,554.00 204,387.00 186,063.00 311,189.00 433,606.00 377,462.00 498,761.00 490,060.00 610,417.00  s^iliioll  _e\pense,{.%) !'out"ofeTotal / • ; Revenue S \«Wagesyi 164,951.00 75 fft 7/$ 335,494.00 63 $ 385,159.00 70 $ 559,538.00 66 $ 659,253.00 61 $ 945,128.00 56 52 $1,044,081.00 59 $1,261,998.00 57 $1,473,654.00 ¥  wmmmmm  mrniim  Source: Chelsea, W i l l i a m Sr. 1999. Ecolink: Building Block for the Future. Paper presented at Structuring Aboriginal Participation in Forestry Ventures, 25 1999. Although Table 4 above does not include the profit o f the joint venture but what it does illustrate is that on average 59% o f the total revenues go to wage expenses. This statistic fits with Ecolink's goals o f profitability and employment. It is important to note that I had no access to the most current financial statements since Ecolink is a privately owned company but a logging company should expect a 5-20 % profit margin according to the Tolko joint venture administrator. Ecolink has broke even since she assumed control over the business's finances two years ago. Before 2002 Ecolink was i n a deficit (Beck 2003).  4.3.3 Employment One o f Ecolink's goals from the outset was to employ E F N ' s own people, and it has done that since its inception. Ecolink efficiently utilized provincial government programsmost notably Forest Renewal B C ( F R B C ) for training and to obtain silviculture contract work all over the Cariboo-Chilcotin. This government subsidy helped them hire more o f their  Asset is an economic resource for the benefit of the future such as cash, equipment, land, and buildings to name a few (Horngren et al. 2005, 6:1-653). 15  57  own community members, as well as aboriginal people from other communities. Table 5 shows the employment levels achieved from inception to .1998 (Chelsea 1999).  Table 5. Ecolink Employment from 1990-1998. ~ I NumbeVjOl employees „v\ no . ^rPercent^o^emplojees muaiiud lolal NumbeKol who remained w.orkuu; ' out ottotaL'empIovees ,H <>} .working,tor, the'/ vpeoplehired-pcr' Cm »^4ryear.r5:»'(!^? *\,t hired.forIthe\ear • • Wr; 120 13 1990 15 100 25 1991 25 . 36 1992 25 70 58 60 1993 35 71 1994 50 70 80 81 1995 65 87 78 90 1996 100 88 1997 88 87 100 115 1998 J  l  JV  ?  53^«f Source: Chelsea, W i l l i a m Sr. 1999. Ecolink: Building Block for the Future. Paper presented at Structuring Aboriginal Participation in Forestry Ventures, 25 1999. The table above shows the increase i n retention among Ecolink employees since the company's inception. Ecolink's success came through its profits and this in turn created more employment and training opportunities for its employees. Ecolink from inception to 1998 had an average employee retention o f 61%, which reveals that silviculture work is not for everyone. However, in 1994/95 the company used its profits to diversify into logging. Table 5 does not separate the amount o f logging employees from the silviculture employees, which is included in the far left column results. Ecolink's silviculture division did hire mostly aboriginal workers and most o f them came from the E F N . Although Ecolink operated all over the Cariboo-Chilcotin, they always made sure to hire as many E F N people as they could. In fact, a former Ecolink silviculture employee states "In the ten years I worked with Ecolink, we only had trouble employing E F N band members who did not want to work, so we would hire aboriginal people from neighboring bands to work for us and this was successful for Ecolink. W e always had people on standby when Ecolink was running and they would be ready for us when we needed their services" (Paul 2005). A l l o f the interviewees who used to work i n silviculture for Ecolink always talked about how they loved working for the company and how it made them feel  58  proud to be a part o f it. It was evident that the positive work environment set up by the past and present Ecolink management staff was the key for this positive attitude among the silviculture division staff. Ecolink hires 23-28 employees during peak times during the logging and silviculture seasons. Ecolink hires a minimum o f eleven full time employees in the silviculture division and ten fulltime employees in the logging division. Currently, Ecolink has an office administrator who handles the company's book keeping; she is being trained by the Tolko Joint Venture Administrator. Most o f the logging and silviculture employees are fulltime seasonal staff depending on favorable working conditions or contract opportunities. In fact, the Ecolink logging supervisor, silviculture supervisor, and the Ecolink office administrator have fulltime status year round. The Tolko Joint Venture Administrator who is in charge o f Ecolink's finances and management is not on the company's payroll but on the payroll o f the forest industry partner. She is the only employee not on Ecolink's payroll. Most importantly, about 70% o f Ecolink employees are from the E F N , which is consistent with E F N ' s employment goal for the joint venture. The E F N knew it had a young and experienced workforce in silviculture and this available workforce helped to form the company and to reach the community's goal o f hiring local band members. Since its inception, Ecolink's silviculture division has always been made up o f E F N band members, and it still has 100% E F N silviculture crews. In 1995, Ecolink diversified into logging, employing experienced personnel from outside their community at the beginning. To this day Ecolink had employed E F N band members to operate the skidder and processor and subcontracted out the other logging positions. Ecolink owns all o f its logging equipment, which consists o f a skidder, two danglehead processors, a top head loader, and a feller buncher. Ecolink only has one brand new logging machine (dangle-head processor) and the rest are used machines. Currently, there are five E F N band members and five Chilcotin Nation employees in the Ecolink logging division; thus the division is operated by aboriginal people. Although some advocates in the E F N do not want outside aboriginal people working in their company, the E F N has hired outside aboriginal employees with extensive logging experience. The logging supervisor is from the Chilcotin Nation, which is the E F N ' s western neighbor. According to the logging supervisor "we can do 125,000 m with the logging crew we have in an optimal logging 3  59  season with minimal downtime" and he also goes on to say that Ecolink's goal should be 100,000 m because i f they obtain more volume it would mean more logging equipment and 3  overhead (Wynja 2005). Thus, Ecolink's logging division has always relied on external experience and this is evident with the hiring o f outside aboriginal people. Ecolink has achieved its goal o f local employment with 16 out o f 23.(70%) positions held by E F N band members. Including both the silviculture and logging division, Ecolink has a 100% aboriginal payroll. The E F N has fulfilled the A E D employment component since all aboriginal business ventures want all available positions to be filled by aboriginal people. The success o f Ecolink is the employees. Most o f my interviewees can be quoted in saying "Ecolink's success is as good as the hard work o f its employees." According to the  1  Tolko logging supervisor " N o aboriginal joint venture is going to be successful without the hard work o f the employees in the day-to-day operations. I mean you can have a good board o f directors level for business but you need the employees to make it successful" (Mooney 2005). According to the Ecolink logging and silviculture supervisors, the "employees make me look good" and both are proud o f their employees growth and training. Although there may have been past employees who did try to bring politics into the business or tried to do other harmful things to the joint venture, the current staff is committed to the joint venture's success. Another important factor in Ecolink's success with local employment is that Ecolink has its own employee procedure manual with requirements based on past employee problems like drinking and driving or doing illegal drugs on the job. This manual helps to keep events or concerns in writing so that problems can be quickly resolved, or that the firm is prepared should litigation occur.  60  4.3.4 Aboriginal Capacity The aboriginal capacity o f the E F N through Ecolink w i l l be discussed under its three subcomponents according to the A E D framework: which are education and training, work experience, and financial capacity.  4.3.4.a: Education and Training The Ecolink joint venture has not funded any E F N band member to pursue any diploma or degree from a post secondary institution. However, Ecolink is planning to fund their own office administrator to upgrade her book keeping skills so she can do the company's books without supervision. Ecolink has funded and trained most o f the E F N band members in all aspects o f silviculture. A former Ecolink employee who worked with the company since inception states "I was glad Ecolink paid for the training needed to do everything in silviculture because 1 can use it anywhere. Ecolink gave us the opportunity to learn everything about our jobs and I walked away with a supervisory training ticket. Five o f us hold that ticket from a course taken at the local university and Ecolink paid us when we finished it, supplied a vehicle to get there and back, and paid for the course. Ecolink gave everyone the opportunity to learn about everything i n silviculture besides tree spacing and always paid for the training" (Paul 2005). Although Ecolink itself did not fund anyone to embark on a diploma or degree, the E F N has done so with two E F N band members, working towards community education goals. One is embarking on a forestry diploma while the other one is pursuing a forestry degree from a post secondary institution. It is not known i f either one w i l l be coming home to work, but the opportunities are there. There are ten E F N band members holding a postsecondary diploma or degree, and two o f them hold management positions in the community. Three E F N band members have degrees in business, education, and social work. What is hoped by most E F N interviewees is for more educated band members because they w i l l be the community's future leaders.  61  4.3.4. b: Work Experience A l l Ecolink employees have to adhere and be trained in all pertinent requirements set out by the Workers Compensation Board ( W C B ) and contract employers. Usually, this means the Ecolink employees must have basic First A i d and Fire Suppression training. A s stated earlier, Ecolink has funded and trained all o f their employees in all aspects o f silviculture. Ecolink can rely on hiring E F N band members to perform most silvicultural duties since the work experience is there. There are only a few experienced E F N logging operators within Ecolink. There were some Ecolink silviculture employees who moved over to the logging division and got trained through experience. In the end, Ecolink has trained a lot o f E F N band members in silviculture but not too much in logging due to the limited number o f positions available. Logging is more computerized, leaving fewer positions available for anyone to train into. In the past, logging equipment was more mechanical and less computerized so there needed to be more human labor, but now the human labor required is less due to the computerization o f logging equipment. Due to the M P B epidemic, harvesting has increased and legitimate logging contractors such as Ecolink have to maintain or exceed their current production levels in order to secure a long term business relationship with their contract employers (local sawmills). While maintaining their current production levels, logging contractors must have efficient log quality standards meeting their employer requirements. B C is known as the lowest cost producer o f lumber in Canada and the country's sawmills want to maintain this standard in order to compete in the global forest sector. Thus, a logging contractor such as Ecolink must rely on experienced logging operators to achieve this benchmark needed to secure their long term business relationship with the local sawmills. These ongoing production demands leave very little opportunity to train new logging operators from the E F N . This is the case for all logging contractors, not just Ecolink. However, the Tolko joint venture administrator states "I believe a goal for any aboriginal business should be succession planning. Managing your operation at a level equitable enough to hire new employees for training can occur"(Beck 2003). The managerial training in Ecolink is happening slowly within its operations. Both Ecolink's logging and silviculture supervisors are still too new to their positions to offer any training to other potential candidates. The forest industry partner has been insightful i n  62  assisting and training them through practical experience. Most notably, Tolko's joint venture administrator, who is o f aboriginal ancestry, has been insightful in helping them both to become accustomed and trained in their management positions. She is also learning about their culture and experiences through their close working relationship. A s noted earlier, the MPB  epidemic may contribute to the demise o f continued managerial training within  Ecolink, because it threatens the company's future timber supply required to sustain its annual operations. 4.3.4. c: Financial  Capacity  Ecolink does not have the financial capacity to include capacity building programs for E F N band members in its business operations. A s stated earlier, Ecolink cannot currently train more logging operators since the business has to meet its expected A A C ,  and requires  experienced loggers to do so while remaining profitable. Both Ecolink managers are still new to their positions, so training a successor is not an option. Ecolink is making a profit for the first time in the last four years and the plan is for the profits to be reinvested into the business allowing for expansion or purchase o f new equipment, rather than investing i n educational training.  4.3.5 Preservation of Traditional culture, values, and language Ecolink has used some o f its profits i n the past to fund Christmas parties and band administration programs. According to one interviewee, they used Ecolink profits one year to fund their annual pow wow. Also the E F N has their entire spiritual, cultural, or heritage sites protected from natural resource development within Ecolink's operating areas. In the end, the joint venture has helped minimally to preserve the traditional culture, values, and language o f the  EFN.  4.3.6 Forest Management Decisions and Control over their asserted traditional territory The  forest industry partner for Ecolink does not try to impede on spiritual, cultural, or  heritage areas deemed important to the E F N .  These areas are protected by the E F N ' s  community forest area, as they have control over the development and management within its boundaries. O n the other hand, the E F N has no control over forest management decisions  63  made outside their community forest area, because they do not hold the forest licenses for these areas - like their forest industry partner Tolko. In the end, Ecolink is a subcontractor for Tolko and they do not have any control over the forest management activities within their asserted traditional territory. I define control as the E F N having access to information at the strategic and operational levels for all cut blocks within their asserted traditional territory. The most common statement heard from E F N and Ecolink employees during m y research was that the joint venture seems to get the less economical cut blocks within their own territory and this is due to the E F N having no control over what areas they are assigned to work on, since Ecolink is a contractor from Tolko, the tenure holder.  4.3.7 Community Support Community support for Ecolink was evident since all nine E F N interviewees (excluding two outside aboriginal interviewees involved with the joint venture) approved of the joint venture so far. This chapter has shown how proactive the E F N is on forestry development while asserting their aboriginal rights and title over their traditional territory. Ecolink has helped provide some Aboriginal Economic Development in the E F N community. It has also contributed by being a catalyst for other developments i n the forest sector. Apart from the Ecolink joint venture, the E F N have acquired a variety o f forest licenses helping the community to gain experience and training within the forest sector. A n important factor contributing to Ecolink's success was that the E F N made sure to start small when establishing Ecolink because o f failures with past forestry business that started out big. Ecolink was a catalyst for the E F N ' s acquisition o f the F R A and the community forest. These forest tenures led to the establishment o f A R M which handles the forest licenses exclusively for the E F N . Although Ecolink could harvest the E F N ' s forest licenses, the E F N chooses not to use Ecolink, but rather to rely on their own forest entrepreneurs. This approach is building an economic base for the E F N .  64  4.4 Factors for not letting politics overrun their business There are four factors in the Ecolink case which prevent politics from overrunning its business. These are the elected chief, community support, hard working employees, and family within the Esketemc First Nation. Each o f these four factors are discussed below.  4.4.1 Leadership The elected chief for any aboriginal community can prevent the politics from overrunning any o f the band's business arrangements because he/she is the leader and spokesperson. The elected c h i e f s influence can be wielded both ways, sometimes resulting in the demise o f a business venture involving his/her people. Ecolink has been fortunate to have past and present elected chiefs who did not negatively influence the business's operations. This is not to say that the chief never disagreed with the business i n his political role, but it did not affect business decisions to the extent that either shareholder contemplated dissolving the joint venture relationship. In fact, the past E F N chief fired his own two siblings and three other E F N band members at once from their jobs at Ecolink, and this sent a message to his community that Ecolink w i l l not tolerate drugs or alcohol on the job and that the business w i l l be run like a business. The E F N chief was a board member for Ecolink. His effective leadership and hard stance helped the Ecolink manager and employees to fulfill their roles and responsibilities free from interference from band politics, and to know that they w i l l be rewarded for their hard work. The current E F N chief was also instrumental for Ecolink's logging success by giving the Ecolink logging supervisor the permission to run the logging any way he wanted. A s the Ecolink logging supervisor states "The E F N Chief told me from the start that Ecolink is a business and he told me 1 had his support for running it like one. The chief and council left me alone and let me run the logging side on m y own"(Wynja 2005). This Ecolink supervisor is an outside aboriginal employee so he did not have the community ties like a local and this might have affected his success as well. Hiring non-local manager's helps the business  65  because this non-local employee does not live in the area affected by the local (on-reserve) politics. Once the logging manager had the E F N c h i e f s support, he turned the logging division around and made it into a team environment built around aboriginal employees. Ecolink's logging division was 5 out o f all Tolko's logging contractors, and this is huge th  achievement considering they did it with used logging equipment.'However, this may not have happened i f the E F N chief had not given the Ecolink logging supervisor the support he needed to turn the logging division into a legitimate logging contractor.  4.4.2 Community Support The community support along with the political support from the elected chief and council helps Ecolink to remain focused on business decisions not political ones. Community support for the business is related to support from the elected chief and council, since they need support from their community to remain in office. Most o f m y interviewees supported Ecolink and some stated that the community supports the business. Determining the level o f community support through a larger community survey was beyond the scope o f this research due to funding and time constraints. However, there has been no uprising against Ecolink from the community that has interfered with business decisions or led to a shut down of operations. A l s o , family segregation that was identified but not proven in the E F N might be a b i g reason contributing to the community support for Ecolink. Kinship may contribute to community support and i f this is the case then more research has to be done on the issue. The issue o f kinship and family segregation is discussed in section 4.4.4.  4.4.3 Employees Ecolink, like all businesses has had its share o f employees who test the company's organizational structure. If either supervisors or managers are weak, this can allow politics to overrun the business. The current Ecolink management staff has dealt with this and has fired these "bad apple employees" without objection from the board o f directors. Getting rid o f these troublesome employees helps to send a message to others that no insubordination or illegal acts w i l l be tolerated in the business. For example, the past E F N chief who fired his 2 brothers and 3 other E F N band members for committing an illegal act. Therefore, getting rid  66  of the bad employees helps to build a positive relationship with the ones who want to be there. Performance incentives like bonuses have been used i n the past to reward Ecolink employees for their efforts.  4.4.4 Families within the E F N During the research period, it became evident that families within the E F N were segregated into band programs or band businesses, and this segregation may contribute to Ecolink's success and longevity. The research identified, but did not prove that this family segregation was intentional. However, I would speculate that the E F N family segregation into band programs or businesses was not a coincidence, because there might have been a general consensus among the dominant families that this is how the community infrastructure should be set up. In fact, the dominant E F N family running Ecolink might have had informal permission from the community to do in the past and this may have been understood by the past and current E F N chiefs (i.e. 4 E F N chiefs during Ecolink's life span) who have not stopped this family from having most o f the jobs within Ecolink during their tenure as chief. These E F N chiefs had the opportunity to use their political power to get them out, but they did not do so. When I asked my E F N interviewees about this, they said this is how it works in any aboriginal community. This is an important finding and more research needs to be done on how kinship can play a role in all business ventures involving aboriginal communities. This issue is discussed in more detail in chapter 7.  4.5 Definitions of Success for the Joint venture. Interviewees for the Ecolink joint venture mentioned various factors that were important to them in defining success o f the business. Only responses from aboriginal interviewees are presented here, to protect non-aboriginal respondents' confidentiality, since they could be easily identified due to the small sample size. The most commonly mentioned factor was profitability- mentioned by 4 o f 11 interviewees. The second most common factors were employment and ownership, mentioned by 2 interviewees each. The remaining factors, which were mentioned by 1  67  interviewee each, are as follows: Independent and competitive business, creating opportunities for your people, and experience working with a business you're proud of.  68  Chapter 5: West Chilcotin Forest Products Ltd This chapter w i l l first present some background on the Ulkatcho First Nation ( U F N ) , including their demographics, governance, and history o f forestry development, which are important contextual factors for the case study. The next section w i l l show how the West Chilcotin Forest Products L t d ( W C F P ) joint venture originated. The chapter w i l l end with the results o f the W C F P case study organized according to the Aboriginal Economic Development ( A E D ) framework presented i n Chapter 3 (section 3.5).  5.1 Ulkatcho First Nation 5.1.1 Community Statistics and Demographics Anahim Lake is. situated in the Cariboo-Chilcotin region which is located in the central interior o f B C . Anahim Lake is 328 k m west o f the nearest town, Williams Lake, on the western edge o f the Chilcotin Plateau. The U F N is the main aboriginal community; it is one o f twelve bands that make up the Carrier Nation. Ulkatcho means "Fat o f the L a n d " in the Carrier language which is in the Athabaskan language family group. The U F N is also called "Ulkatchot'en", which means "People o f the Ulkatcho." The U F N ' s main language is Carrier but they have strong relational ties with their aboriginal neighbors from thewest (Nuxalk Nation) and the east (Tsilhqot'in Nation). In fact, some U F N band members have strong Tsilhqot'in family ties and can speak the Tsilhqot'in language as well as Carrier (Birchwater 1991 :l-28;Birchwater 1994:1-42). The U F N is made up o f 21 reserves totaling 3,245.7 hectares and most o f the band members reside on Squinas reserve #2 adjacent to Anahim Lake (Indian and Northern Affairs Canada website 2005). The U F N has 540 band members on-reserve and 368 off-reserve, for a total band member population o f 908. See table 6 for a breakdown o f Ulkatcho band members by residency i n 2005.  69  Table 6. U l k a t c h o F i r s t N a t i o n b a n d membership i n 2005.  x^mmmm  » N u n i « f  B»nlFinm^||P  On-reserve  540  Off-reserve  368  Total Band mcmlurs  There are 60 U F N band members over 55 years o f age and 235 band members who are the under the age o f 18 leaving a workforce o f 613 U F N band members.  5.1.2 Political Environment The U F N ' s political organization adheres to rules and regulations o f the Indian Act but has its own customs election system for its chief and council. A l l U F N band members elect a chief and 7 councilors. The U F N decided that each o f the seven major families w i l l have a seat on council and the majority winner represents his/her family. However, the U F N still uses the two year term in office for their elected chief and council. A s one U F N band member states "I think our family election system is better than the I N A C election system but it still has its drawbacks. The one drawback is how they are funding it but you also can get more input into it than the conventional I N A C election system" (Capoose 2005). She means there is more flexibility to produce election bylaws and this was the case when a bylaw was passed that prohibited outside aboriginal people from running for chief and council. There is no flexibility under the current Indian Act to approve such a bylaw. The U F N held an election for chief and council during m y research fieldwork. The U F N is not involved in the B C Treaty Process like the E F N .  5.1.3 Forestry Development In 1984, the U F N formed Chunta Resources L t d (Chunta) in order to start a joint venture with a group o f outside investors called Buffalohead. The two potential partners wanted to build a sawmill in Anahim Lake, and approached the Minister o f Forests to obtain a forest license for the region, fn 1990, this joint venture proposal was not pursued further by the U F N because o f the death o f Chief Jimmy Stillas who was and still is considered the best U F N chief ever. In honor o f his prolific leadership, the U F N built the ' C h i e f Jimmy Stillas  70  Learning Center' and in addition to the education center, this building has expanded to house the Natural Resources Center which w i l l be discussed below. Chief Jimmy Stillas played a pivotal role in the negotiations o f the Buffalohead joint venture proposal and he was also instrumental in his efforts to build a relationship with the provincial government. Since his passing, the trust has not been there to pursue the Buffalo head joint venture proposal (Vaughan 2005). Chunta continued on with its forest company by expanding into silviculture, logging, and archaeology. However, Chunta had too many supervisors and the mismanagement o f the logging machines led to a growing deficit. In 1986, Chunta had to liquidate some o f its assets by selling some to U F N band members who worked with Chunta. A s the former Y u n K a Whu'ten Holdings L t d ( Y K W ) manager states : "Chunta did have a lot o f logging 1 6  equipment and we sold them off to U F N band members with buy out agreements. Chunta does co-ops with U F N band members when they see an opportunity that makes sense. The U F N band members just work and Chunta does all the business dealings and management for a fee. Currently, there are four U F N contractors. One has a skidder, another has a logging tavck, another with a processor, and another with a feller buncher" (Vaughan 2005). These U F N entrepreneurs contract themselves out to W C F P mainly. Currently, Chunta still provides the same services for the U F N under the control o f Y K W . A l s o Chunta owns a lumber and logging truck. Chunta also diversified into log home building. A s the former Y K W manager states "we sold five or six cabins but nothing bigger yet" (Vaughan 2005). In 2001, the Natural Resource Center ( N R C ) was formed by the U F N to respond to the concerns o f U F N band members over wildlife issues caused by increased logging in the region. N o w the N R C handles the huge task o f handling all o f the U F N ' s referrals. According to the former Y K W manager "people are not aware o f anything until the ribbons go up in their area, then they are scrambling to see what it is happening" (Vaughan 2005). Also they handle the fishing and wildlife management issues within the U F N . They have a manager and a conservation/fisheries technician who are both U F N band members.  As will be explained in the next section on WCFP History, Yun Ka Whu'ten Holdings Ltd (YKW) was formed to be a holding company for all of WCFP's forest licenses. Yun Ka Whu'ten in the Carrier language means "People of the Land". 16  71  5.2 WCFP History The U F N has been very proactive on asserting their aboriginal rights and title within their traditional territory. The U F N was notable for their defiance to the harvesting methods used by the logging companies operating within their traditional territory by blockading the main forest company in the region Carrier Lumber Ltd (Carrier Lumber). Carrier Lumber is a medium sized privately owned sawmill situated outside o f Prince George, B C . In 1983, the provincial government offered a 5 million m forest license to be harvested over ten years to 3  control the Mountain Pine Beetle ( M P B ) epidemic that infiltrated the Cariboo-Chilcotin region. Carrier Lumber was the only serious bidder and obtained the M P B forest license on December 9, 1983. Carrier Lumber set up small modular saw mills within their timber supply areas ( T S A ) and started the timber extraction. Carrier Lumber had a large portable sawmill and a planer m i l l established in Anahim Lake and it was operational for about four to five years before the U F N roadblock lead to the forest license cancellation (Carrier Lumber and Province o f B C (Minister o f Forests) 1999:1-219). On July 17, 1989, the U F N blockaded the construction o f a bridge leading into the Beef Creek Trail region, to protest the harvesting being done by Carrier Lumber. Carrier Lumber obeyed the U F N demands to stay out o f the Beef Creek Trail region until the provincial government solved the standoff. Meanwhile, the U F N with professional assistance offered an alternative forest development plan for the Beef Creek Trail region that was "holistic" in approach, which included a 20% first pass Volume restriction and a cut block size maximum o f 20 hectares. The U F N plan was rejected by the provincial government and by Carrier Lumber because it was deemed uneconomical and it did not conform to provincial forest policy. The Beef Creek Trail region remained off limits for Carrier Lumber but they continued their timber extraction from other areas within the region, until they encountered a blockade by another aboriginal community (Carrier Lumber and Province o f B C (Minister o f Forests) 1999:1-219). On M a y 7, 1992, band members o f the Nemiah Valley Indian Band from the Tsilhqot'in Nation road blocked Carrier Lumber to prevent harvest within the Brittany Triangle. The Nemiah Valley Indian Band did not want any logging to occur within  72  the Brittany Triangle and to this day there has been no logging i n this area. These two First Nation groups' protests led the provincial government to try to reconcile and negotiate with them both. O n March 31, 1993, the Ministry o f Forests cancelled Carrier Lumber's forest license in the Cariboo-Chilcotin. In the end, Carrier Lumber was only able to harvest 2,447,050 m out o f the 5,000,000 m forest license and they felt that the provincial 3  3  government had no right to cancel their forest license, because they had followed their obligations thoroughly (Carrier Lumber and Province o f B C (Minister o f Forests) 1999:1 219). Carrier Lumber was not going to back down and took the provincial government to court to argue for wrongful cancellation o f their forest license. O n July 29, 1999, the B C Supreme Court ruled in favor o f Carrier Lumber. The government's initial response was to appeal the decision, but eventually, the provincial government dropped its appeal and on M a y 27, 2002, the Ministry o f Forests and Carrier Lumber agreed to a settlement o f $30 m i l l i o n dollars, two parcels o f land bought by the Ministry o f Forests from B C R a i l , and a 1,500,000 m forest license to be harvested over five years- free from any provincial 3  government tax ( B C Ministry o f Forests website 2005). This case is a good example o f the uncertain business environment that exists for logging companies such as Carrier Lumber in B C , created by the provincial government's reluctance to address aboriginal rights and title over crown land. During this standoff, Carrier Lumber and the provincial government knew they had to build a relationship with the. U F N and the local non-aboriginal community i n order to continue harvesting i n the region. Carrier Lumber tried to negotiate a joint venture with the Nemiah Valley Indian Band, but the two sides could not agree on anything that would work for them both (Carrier Lumber and Province o f B C (Minister o f Forests) 1999:1-219). Carrier Lumber was not the only one trying to negotiate a joint venture with the Nemiah Valley Indian Band, but all proponents failed to get a joint venture started because this community did not want to be involved in logging. However, Carrier Lumber did entice the U F N to negotiate on a joint venture arrangement. Talks between the U F N , C A T Resources (the non-aboriginal community partnerdescribed in section 5.3 below), and Carrier Lumber began in late 1993. W C F P interviewees were vague on how the three shareholders started negotiating together and there was some  73  disagreement on who initiated the joint venture. The U F N interviewees were adamant that they initiated the possibility o f developing a business relationship with Carrier Lumber with support from the provincial government because o f their blockade at Beef Creek Trail. According to one U F N interviewee "the minister o f forests told us a forest license w i l l not be issued in their region unless the U F N were involved" (Dester 2005). Non-aboriginal interviewees declared that the joint venture would not have happened without the nonaboriginal community's support. A s noted earlier, the U F N almost had a deal with an outside business partner called Buffalohead but that fell through when the U F N chief passed away from a snowmobile accident (Vaughan 2005). In December 1994, all three shareholders negotiated a shareholder's agreement to formalize the W C F P joint venture, and operations began in January, 1995. Each partner contributed $500,000 for the startup business costs and expenses. Carrier Lumber loaned the start up capital to the U F N with interest until they could pay it off through the joint venture's dividends. Both C A T Resources and the U F N bought the sawmill, planer m i l l , and land from Carrier Lumber through a devised formula that would garnish part o f the business's revenue until it was fully paid off. I was not able.to find out how much W C F P paid Carrier Lumber to take over their operations in Anahim Lake. > Band owned Y K W was formed to be a holding company for all o f W C F P ' s forest licenses. The U F N made sure the forest licenses were to be in their name and according to one U F N interviewee: "The Ministry o f Forests was there for any questions we had on the obligations and liabilities for being a forest license holder because it was new for us and we did not want to lose a forest license like Carrier Lumber did in the past" (Dester 2005). Currently, Y K W holds five non-replaceable forest licenses for the sole benefit o f W C F P with a combined A A C o f 330,000 m . Since these forest licenses are non-replaceable, the 3  expiration date and A A C for each is different, as the former Y K W manager states: "with all these forest licenses it can be an administrative nightmare. The provincial government should just give us one forest license instead o f all these non-replaceable forest licenses that reside within our'traditional territory. Silviculture agreements and other things have to be tracked for all these forest licenses and it is tedious work" (Vaughan 2005). Regardless, this Y K W manager and other U F N people that have held her position i n the past have learned through experience the pros and cons o f being a forest license holder in B C .  74  5.3 Aboriginal Economic Development Framework This section shows how West Chilcotin Forest Products ( W C F P ) contributes to Aboriginal Economic Development for the Ulkatcho First Nation ( U F N ) community, organized according to the 6 components o f the framework presented in section 3.5.  5.3.1 Business Structure W C F P has a unique business structure because it has an aboriginal community, a nonaboriginal community, and a forest company as shareholders in the joint venture. Both aboriginal and non-aboriginal communities have a Board o f Directors ( B O D ) for their respective companies formed for the W C F P joint venture. Chilcotin-Anahim-Tatla ( C A T ) Resources is a privately owned business made up o f 49 local investors from the Anahim Lake and Tatla timber supply region, with a seven member B O D . Y u n K a Whu'ten Holdings Ltd ( Y K W ) is a private holdings company owned by the U F N with a five member B O D . Each company appoints two members from their B O D to sit on the six member W C F P B O D . The third shareholder, Carrier Lumber Ltd (Carrier Lumber), is a family and privately owned sawmill. Carrier Lumber's owner and manager have been on the W C F P B O D since its inception. W C F P ' s six member B O D is responsible for all o f its business decisions, but the board o f directors representing both C A T Resources and Y K W have only annual terms, leading to a high changeover rate. However, local politics have not overrun the business since the W C F P ' s B O D have not had a deadlock on any money decisions since its inception. These decisions require a five to one vote in order to be ratified. A l l other business decisions need a 4 to 2 vote. These voting margins prevent the business's decisions from being overrun by politics. The W C F P business structure is clearly laid out in the shareholder's agreement signed by all three partners making the business a formal joint venture. According to the W C F P general manager, the shareholder's agreement was a well crafted document that cost about $200,000-300,000 in legal fees. H e also told me that W C F P is registered with the B C Corporations A c t making it a corporation. Thus, W C F P is a J V C meaning the shareholders o f the company are not liable for their business decisions because the business has the same legal rights and powers as a person. W C F P can be sued or sue others like a person can.  ;75  Although I did not have access to the confidential W C F P shareholders agreement, I was told that it stipulated the business goals o f being profitable while employing future generations o f local people. The shareholder agreement has a dispute resolution mechanism that has never been used. Most importantly, the shareholder agreement states all three partners have equal dividends (33 1/3 each) and control over W C F P . This shareholders agreement is still used today by the W C F P B O D . The W C F P general manager is a local resident o f the area who is independent o f the forest industry partner, but has a stake in C A T Resources through his family. This has contributed to the success o f W C F P because he is committed to the business's success. A s he states: " W C F P wants to remain profitable so future generations can have employment opportunities through the joint venture. W C F P w i l l be a long-term sustainable forest company for all three shareholders" (James 2005). W C F P has a sawmill and a planer m i l l division. The sawmill runs two shifts annually, whereas the planer m i l l utilizes one shift annually, and a second planer shift works for about 6 months. W C F P manufacturers lumber for the Japanese and U S A markets. The Americans are their main export market. W C F P ' s end products include Stud Grade 2 x 4's and 2 x 6's and a number o f other different lengths and grades ( W C F P website 2005). According to the W C F P general manager " W C F P started out doing 140,000 m in its first year, 240,000 m in 3  3  3  3  its second year, and on average 300,000 m thereafter. N o w we are doing 350,000 m this year alone" (James 2005). W C F P ' s mills can produce 80 million board feet a year composed mainly o f Lodgepole Pine (90%) and some spruce and Douglas-fir. The A A C for this sawmill is modest, considering they still use the same old equipment with a few upgrades such as a new optimizer edger and lumber stackers. The planer m i l l has used the same equipment since it was built, but it has added a new electronic controlled tray sorting system. W C F P also air dries its own lumber, which takes about 3-6 months to fully dry. W C F P would like to have a kiln dryer like its competitors, but they cannot afford it since they pay about 15% more on energy costs and they also have to truck their product since the nearest railroad is 300 kilometers away. W C F P is also International Standards Association (ISO) 14001 certified, meaning its operations adhere to an environmental management system for its products, activities, and services. W C F P has managed to remain competitive since its  76  inception, despite a weak lumber market, the unresolved softwood lumber dispute, the rising Canadian dollar, and rising fuel costs.  5.3.2 Profitability W C F P has been profitable since its inception and this was reiterated by the board members who sit on the B O D . Although I had no access to financial statements, it was confirmed through all three partners that W C F P paid off all o f its biggest liabilities in two and a half years. The U F N also managed to pay off the loan given to them by Carrier Lumber which was used to start the joint venture. The quickness o f paying off its liabilities shows how profitable the company has become. The W C F P general manager told me how W C F P went from $ 10-12 million to $20-30 million i n total revenues and on average W C F P has a profit margin o f 10- 30%, which is divided equally amongst all three shareholders. The profit margin has been a lot smaller now than in the past for the shareholders. Y K W receives the U F N dividends from W C F P and uses them to fund business entrepreneurs, the elders program, the youth program, and many other band administration programs and infrastructure. According to the former Y K W manager: "the U F N gets on average $500,000 to $1 million dollars annually from their share o f W C F P dividends, but this has been diminishing due to the weak lumber market" (Vaughan 2005). Being profitable has its consequences and problems. One common statement heard from interviewees was that the U F N dividends should be allocated to all band members because they do not see any o f the profits. Furthermore, through observation and from m y U F N interviewees, there seems to be dissention on a per capita formula for W C F P dividends. Being profitable has led to mistrust amongst the U F N members over the financial management and allocation o f W C F P dividends by their own people. This mistrust has led to a changeover in Y K W staff during m y research fieldwork. The Y K W manager and office employees quit for their own reasons. However, W C F P ' s profitability has created employment within and outside the m i l l and people's social lives have improved from it as well.  77  5.3.3 Employment W C F P has managed to sustain its overhead since inception, proving it wants to create sustainable employment for the local communities. Spin-off benefits in the contracting side have benefited aboriginal and non-aboriginal people from the local area as well. Currently, there are 80 fulltime jobs i n the mill and about 60-70 jobs on the contracting side. This does not include other businesses within the region that benefit from W C F P ' s existence. There are eleven full-time truckers for W C F P . Furthermore, all three partners made an informal agreement (not written down) to have 50-50 employment amongst the aboriginal and nonaboriginal communities within the mill and through its contracts (Hoist 2005;James 2005;Vaughan 2005). Although there is only about 30-35% aboriginal employment within the m i l l , there is 50% aboriginal employment on the contract side. It seems that the aboriginal employment within the m i l l is very cyclical, and at one time they did reach 50%, but like all mills the changeover rate can be quite high during some years because some workers regardless o f ethnicity cannot handle doing the same job for very long. The latter statement was expressed by the W C F P general manager referring to people who have moved on to another line o f work or quit because they cannot stand doing the m i l l job any longer regardless o f the money they make. In the end, he states "the people you see working in the m i l l are capable o f working in this repetitive environment because they can stand to do this type o f work for their own reasons" (James 2005). In the end, W C F P has fulfilled its goal o f providing local employment for both the aboriginal and non-aboriginal communities.  5.3.4 Aboriginal Capacity 5.3.4.a: Education  and  Training  W C F P has an apprenticing program for electricians and millwrights that local people have successfully completed, but these have primarily not been U F N band members. Only one U F N band member has successfully completed the apprenticing program, and he is an electrician. There have been no aboriginal employees i n supervisory positions within W C F P since its inception; this bothered most U F N given that some U F N  interviewees who felt there should be some,  employees have worked in the m i l l for a long time.  78  Outside the joint venture, the U F N is encouraging its band members to further their education through post secondary institutions. Currently, there are eight Ulkatcho band members who have or w i l l obtain a degree from a post secondary institution. The three closest students w i l l have bachelor degrees in the political sciences, arts, and in the social work field. The U F N band member who is pursuing the Political Science degree is going to finish this year, but it is not known i f she is going to work for her community. There are also four Ulkatcho band members who have diplomas in electrical, automotive repair, social service, and community economic development. O n the forestry side, three Ulkatcho band members are embarking on forestry diplomas and one o f them graduated this year. According to interviewees this U F N forest diploma graduate has decided to continue on to get a forestry . degree. It is not known i f he w i l l come back to work for his community when he completes the forestry degree.  5.3.4.b: Work Experience During m y research period, a common theme reiterated from my interviewees was how most U F N band members w i l l not accept managerial positions i n the community or within W C F P because they do not like the responsibilities, and they do not want to be alienated from their friends and family. A n example o f this fear that U F N band members have o f being in managerial positions can be seen through a U F N forestry student who preferred being in a lesser role working for Y K W ' s silviculture division, even though her training qualified her to take on a more responsible position. According to the non-aboriginal Y K W silviculture manager, some U F N people do not understand that they need education and training for any management position. He really wants this U F N forestry student to learn how to fill his position, because he feels she can do it (Shortreed 2005). The problem is how to encourage educated band members to remain working with the community in management positions. Currently, W C F P has a Human Resources Manager ( H R M ) position filled by a U F N band member at the managerial level. This position has been filled by an outside aboriginal and a U F N band member in the past. This H R M job description was very broad and it did not focus on the aboriginal employees exclusively but on all W C F P employees. This H R M position and the Y K W manager position are the only two managerial positions filled by U F N band members. The new H R M told me she was going to go back to school, so this position  79  w i l l once again be available in the fall. A l s o there is a new Y K W YKW  staff. This changeover i n Y K W  manager and some new  and W C F P staff is a business reality for any venture,  and as the W C F P manager said "people just move on for their own reasons" (James 2005). 5.3.4.c: Financial  Capacity  The W C F P joint venture has given the U F N the financial capacity to employ its own band members in managerial and technical positions elsewhere in the community, such as YKW.  A l s o W C F P has the financial capacity to fund an apprenticing program for the local  people o f Anahim Lake to pursue.  5.3.5 Preservation of Traditional culture, values, and language The preservation o f traditional culture, values, and language o f the U F N  occurred  through band administration programs funded by W C F P dividends. These huge W C F P dividends built a new church and a new community center for the U F N .  A l s o , W C F P profits  help to fund the elders program, the youth program, and many other band programs. This shows that the U F N have used W C F P profits to help contribute to preserving their traditional values, culture, and language.  5.3.6 Forest Management Decisions and Control over their Asserted traditional territory . * The U F N have learned through experience how to administer provincial forest licenses from start to finish. Y K W  was formed to hold and administer all o f the forest  licenses for W C F P exclusively. Y K W  is responsible for obeying and fulfilling all the  provincial silviculture and administrative requirements for all five o f its non-replaceable forest licenses with a total o f 330,000 m per year. However, the U F N has very little strategic 3  authority over forest management decisions within their traditional territory, since W C F P ' s forest management plans must comply with the terms o f their forest licenses issued by the province. The provincial government has control over all forest licenses being issued within the U F N ' s traditional territory and there is nothing W C F P ' s shareholders can do about it. It is at the provincial government level where the U F N  wants equal strategic authority over their  asserted traditional territory. In the end, the W C F P joint venture does not give the U F N much control over their land base  80  The UFN has participated in the higher level management plans in their region, but to them it was a planning exercise with little consequence. The UFN through YKW has done a wildlife management plan, a Traditional Use Study (TUS), and other related plans. 5 . 3 . 7 Community Support  There is definitely community supportfromthe aboriginal and non-aboriginal communities for WCFP, but there are a few people who disapprove of the business. Among my interviewees, the majority supported the business. In fact, only two out of eight UFN interviewees disapproved of the joint venture. Although I did not attend the latest WCFP community meeting, a UFN band member told me it went well and she said the community support seemed to be there. This chapter has served to address the amount of forestry development that has occurred within the UFN due to the WCFP joint venture. Most importantly, the chapter explains how the joint venture originated and evolved into the business it is today, despite the Carrier Lumber case against the provincial government. Despite the profitability of WCFP there is still high unemployment within the UFN community revealing that the business cannot provide opportunities for everyone. The UFN does have the work experience and financial capacity to do most forestry jobs, but there are not enough UFN band members with the education or training for senior management level jobs. In fairness, there are champions from the UFN who work for the UFN directly or indirectly for all band administration and on-reserve businesses, but their physical and mental limits are stretched thin. The UFN could use more band members to help fill certain positions in the community and in WCFP. This undue pressure on these few champions socially and mentally may also comefromthe split amongst UFN community members who want a per capita formula for WCFP dividends. In the end, WCFP has worked successfully business wise since it involves two communities and a forest company. This chapter has demonstrated that the WCFP venture has contributed in many ways to Aboriginal Economic Development for the UFN community, although it could do better in .certain areas such as providing employment and management training to UFN members. .  81  5.4 WCFP Factors for not letting the politics overrun their business W C F P was predicted to make a profit by the S F M Project's model and it did make one. This is because W C F P has a strong business structure that is responsible for not allowing the politics to overrun the business. The relevant factors o f their business structure are the three shareholders, and the well structured shareholders agreement. Also the profitability o f the business and its loyal employees has contributed to the business' ability to keep the politics at bay. These four factors that prevent local politics from interfering with W C F P ' s business decisions and operations are explained below.  5.4.1 Number of shareholders W C F P ' s main strength that prevents politics from overrunning the business is the fact that they have three shareholders as oppose to the usual two shareholder joint venture. A l s o , the fact that two o f the three shareholders represent the aboriginal and-non-aboriginal communities makes the joint venture relationship unique. A l l three shareholders keep each other in check since serious business decisions such as reinvestment opportunities can inhibit each o f them from receiving a dividend for a year. Nonetheless, the third shareholder creates a stronger business environment, instead the political environment that can exist between two shareholders who sit on opposite sides o f the fence, since the third shareholder can switch sides. A s one interviewee states "there is never a dull moment at the W C F P B O D level because some shareholders may surprise you when it comes to certain business decisions"(Vaughan 2005). A l s o the shareholder C A T Resources has direct family ties with the business region so they are not an outside investor like the other shareholder Carrier Lumber.  5.4.2 Shareholders Agreement Interviewees considered that having a well structured shareholder's agreement contributed to not letting politics overrun the business for W C F P . Although I did not have access to the W C F P shareholder's agreement, I was told by the general manager that it is  82  used once in a while. W C F P is registered as a corporation, so the shareholder's agreement w i l l have the taxation and liability clauses similar to what is stated in the B C Corporations Act because those two parts cannot be altered or customized. The rest can be filled in by the shareholder's agreement negotiated by all parties, h i fact, by registering as a corporation, a business venture has no choice but to negotiate through a shareholder's agreement, because i f they enact their own bylaws to outline their powers and responsibilities under the B C Corporations Act, it is harder to amend them. Therefore, most business ventures only have standard form by-laws (i.e. location o f office, number o f directors) under the B C Corporation A c t and the powers and responsibilities o f the partners is stated within the shareholder's agreement. Thus, a shareholder's agreement helps to declare what the roles and responsibilities are for the partners, the powers and duties o f the W C F P B O D , and most importantly the distribution o f the company's shares. Although politics w i l l inevitably interact with the business, the shareholder's agreement helps to minimize or clarify any misinterpretations that could be made by members o f the W C F P B O D . The shareholder's agreement helps all parties to clarify their legal roles and limitations, and details that can be easily forgotten. This is especially important given the high turnover among the Board from the U F N and C A T Resources representatives. W C F P ' s B O D structure prevents politics from overrunning the business. A 5-1 vote is required for all money decisions and a 4-2 vote for any other business decisions. Therefore, no two members o f the W C F P B O D can stop or seize a business decision due to politics, because it w i l l be passed without their support. Politics is present at the W C F P B O D level, but the voting rules ensure that it does not compromise any business decisions, and the company's success is testament to this. Therefore, this voting procedure at the B O D level is one option for aboriginal business ventures to minimize politics in the business, depending on the number o f shareholders.  5.4.3 Profitability Profitability helps to prevent politics from overrunning the business because everyone in the community is satisfied with the dividends, employment, and other direct spin off benefits from the business. Although W C F P w i l l not disclose its financial information, it was  83  quite apparent from m y interview respondents that the profits made from the joint venture were huge. M a k i n g money helps the business to sustain its overhead and to maintain its equipment in order to compete in the global market. A common statement heard through some W C F P interviewees was "no one wants to mess with the goose that is laying the golden eggs".  5.4.4 Loyal Employees W C F P would not be as successful without its loyal employees from all o f its operations, and they contribute to not allowing politics to overrun the business. W C F P has a core group o f employees who have remained with the business since its inception. Four W C F P interviewees who worked with the company since its inception stated that they are too busy to talk about politics, and they love to work because it pays well. W C F P has a high changeover rate, so these core employees help the business to maintain its operations.  5.5. Definitions of Success for the joint venture. Interviewees for the W C F P joint venture mentioned various factors that were important to them in defining success for the business. Only responses from aboriginal interviewees are presented here, to protect non-aboriginal respondents' confidentiality, since they could be easily identified due to the small sample size. A l l 9 aboriginal interviewees were from the U F N but there were only 8 who did answer research question three. The one U F N interviewee was not able to be reached for further comment. The most commonly mentioned factor was employment- mentioned by 4 o f 8 interviewees. The remaining factors which were mentioned by 1 interviewee each include profitability, joint venture structure, and aboriginal management control.  84  Chapter 6: Comparative Results and Discussion In this chapter, I w i l l compare and contrast the two case study results for m y three research questions. I w i l l also discuss these results i n the context o f recent provincial policy developments affecting First Nations i n the forest sector. I w i l l first discuss whether the joint ventures meet the elements o f the A E D framework presented in Chapter 3 (3.5). I w i l l then discuss how the case study ventures managed to keep politics from overrunning the business. Lastly, I discuss how m y aboriginal interviewee respondents define "success" for their joint venture.  6.1 How are these forestry joint ventures contributing to Aboriginal Economic Development in their communities? Both joint ventures strengths and weaknesses can be illustrated by this paper's A E D framework which is comprised o f the seven components shown in Table 7 below. Table 7. A E D F r a m e w o r k applied to both joint ventures. %^'A^^FKame^oKki€<pmp.on'en'|5&& Business Structure  X  Profitability  X  Employment  X X  A b o r i g i n a l C a p a c i t y : a) E d u c a t i o n and t r a i n i n g b) W o r k experience  X X  c) F i n a n c i a l capacity  X  Preservation of t r a d i t i o n a l culture, values, a n d language  -  X  Forest management decisions a n d C o n t r o l over their asserted traditional territory Community Support  Yes  Yes  Results for the case studies were presented in Chapter 4 for Ecolink and Chapter 5 for WCFP. Although presenting the results in three separate chapters creates some repetition, it was important for each case study to have its own chapter, as I promised to do it this way early in the research process when the businesses agreed to participate as case studies. 1 strongly believe that the importance of giving back to the community through aboriginal research sometimes requires adapting the research products accordingly. 17  85  The " X " within Table 7 denotes which joint venture was stronger in each o f the seven components o f this paper's A E D framework. W C F P ' s business structure is stronger because they have three shareholders compared to Ecolink's two and they also have a stringent voting structure for business decisions. Ecolink is stronger in the employment component because they currently have 100% aboriginal employees compared to W C F P ' s 30-40% aboriginal employees hired; and there are more E F N band members employed in the Ecolink joint venture compared to the number o f U F N band members employed with W C F P . In the A E D framework, aboriginal capacity was subdivided into three subcomponents which are education and training, work experience, and financial capacity. Even though only one U F N band member has completed the apprenticing program with W C F P , the fact that this is an educational option makes this business stronger than Ecolink in the education and training subcomponent o f aboriginal capacity. Ecolink has more managerial capacity and more band members trained in supervisory positions than W C F P , making Ecolink stronger in the work experience subcomponent o f aboriginal capacity. A lack o f financing capital seems to hinder aboriginal capacity initiatives, and the availability o f capital for such initiatives depends on the business's profitability. W C F P , being a larger business venture, has more financial capacity than Ecolink does. A s a result, W C F P has accomplished more aboriginal capacity building than Ecolink has due to the financial contributions W C F P has made to the U F N . W C F P is more profitable than Ecolink, which allows the business to contribute more to the preservation o f the U F N ' s traditional culture, values, and language. A l s o W C F P allows the U F N a little more control over forest management decisions than Ecolink has because the U F N have access to viewing the proposed cut blocks and have obtained the experience o f managing a forest license. Both joint ventures through m y interviewees have community support denoted by "yes" in the above table but the level or measure o f it is unknown, so I cannot say i f one is stronger than the other. Table 7 is for illustrative purposes only, and it in no way concludes that either joint venture is better than the other because it is stronger in more areas within the A E D framework. The joint ventures are different i n terms o f the type o f business, and the number o f shareholders- which are important distinctions. Another important difference is that W C F P is a larger business, with triple the amount o f revenues and workforce compared to Ecolink,  86  and larger businesses naturally create more o f an economic impact in the region. The ways that the joint ventures fulfilled each component o f the A E D framework is discussed below.  6.1.1 Business Structure Both Ecolink and W C F P are joint venture corporations ( J V C ) with stringent shareholders agreements to keep the shareholders together. This structure reduces the liabilities o f all shareholders. W C F P has a better business structure than Ecolink because it has a stringent B O D structure W satisfy three shareholders compared to Ecolink's two. W C F P needs a 5 to 1 vote from its six member board for all money decisions and a 4 to 2 vote for any other business decisions. Ecolink used to have a six member board, but since the takeover there has only been 4 board members (two from each shareholder) deciding the business affairs o f the company. A majority vote is used to decide on any Ecolink business decisions but the W C F P joint venture has more stringent voting procedures. This stringent voting procedure on the W C F P board o f directors protects the business from being overrun by politics in spite o f high changeover rates amongst the C A T Resources and Y K W appointed board members.  6.1.2 Profitability W C F P is by far the more profitable o f the two aboriginal joint ventures. According to the former Y K W manager, "the U F N gets about $500,000 to $1 million i n annual dividends from the W C F P joint venture" and she goes on to say "we knew there was to be more money made in sawmills than in logging" and she was right considering the dividends received by her coimnunity were larger than those received by the Ecolink joint venture (Vaughan 2005). Ecolink was profitable in its first 5 years helping them to diversify into logging, but poor management decisions later on put the company in debt; as a result, they are still trying to recover and have only recently started making a profit again. Thus, the E F N does not rely on Ecolink for financial gain. W C F P has been very profitable for the U F N and this money is used for most o f the band's various programs and it also helps to employ U F N band members in silviculture and harvesting. W C F P has managed to make a profit since inception according to my interviewees who sit on the W C F P B O D but there were years when they did reinvest  87  their dividends back into the business rather than putting them towards community development.  6.1.3 Employment The employment results must be shown in two parts which are local employment and aboriginal employment. A s stated i n Chapter 3, W C F P is a community joint venture, so local employment means employing both the local aboriginal and non-aboriginal community members. Both joint ventures have a goal o f hiring as many local professionals and employees from the region as possible. W C F P ' s management continues to employ local community members and as the general manager states: " W C F P w i l l continue to exist and create employment for the people o f Anahim Lake and surrounding areas" (James 2005). A s a matter o f fact, W C F P has sustained its overhead since its inception 10 years ago. Ecolink fulfills the employment component o f the A E D framework because they employ a 100% aboriginal workforce. Ecolink represents the E F N community and has a primary goal of providing employment for aboriginal people. During its first five years o f operation, Ecolink has hired about 80 people per year within its silviculture operations utilizing all available E F N band members and adding outside aboriginal people. Although Ecolink has experienced a decline in silviculture work due to a lack o f available contracts being tendered in the region, the logging division has its employees working fulltime. Ecolink's logging division is operated by aboriginal employees (5 E F N and 5 Chilcotin employees). If the silviculture division was operational with 2 crews, Ecolink would have employed an additional 10 E F N band members. Currently, Ecolink has aboriginal people filling all available positions within its company. W C F P shareholders made an informal agreement (not written) during negotiations that there would be 50-50 aboriginal and non-aboriginal employment within its operations and associated contract work. The contract work for W C F P has achieved the equal split amongst aboriginal and non-aboriginal communities. However, W C F P has only 30-40% aboriginal employees and only half o f them come from the U F N (15%-20%) but this was not always the case. According to interviewees, more U F N band members were employed within W C F P at the beginning o f the company's operations. W C F P ' s business has a high changeover rate because some employees cannot handle the stress and repetition o f their job  88  regardless o f ethnicity. This can be said o f the Ecolink joint venture as well. According to the W C F P manager: "we have a small core o f local employees who have been with the company since inception while there are others who are still new" (James 2005). In fact, all o f m y W C F P interviewees have been with the company since inception and they agreed that not everyone can handle working, within W C F P because they have seen people come and go. Both joint ventures have exhibited through experience, that i n order for their business to be sustainable, they have to hire outside help i f no local people are available or i f a reduction in overhead is required. A s the current W C F P treasurer and board member states: "The company now needs a computer electrician and we w i l l be looking for outside expertise since no one in the area is qualified" (Hoist 2005). Although outside hiring may seem undesirable, the option has to remain available in order for the business to meet its financial bottom line.  6.1.4 Aboriginal Capacity Aboriginal capacity is the ability o f a community to have the necessary human resources through education and training and through work experience to fill all o f its community development initiatives. A l s o , an aboriginal community needs financial capacity to meet community development goals. Overall, the W C F P joint venture contributed more aboriginal capacity to the U F N than the Ecolink joint venture contributed to the E F N . 6.1.4.a: Education and Training W C F P is stronger in the education and training subcomponent o f aboriginal capacity than Ecolink because it has a millwright and electrician apprenticing program offered to its employees and local people. Although some local people have successfully completed both programs, only one U F N band member completed the electrician apprenticing program to date. According to the W C F P general manager: " the company also has 5 bursary programs for the local high school students" (James 2005). Ecolink has not funded any E F N band members through apprenticing, diploma, or degree programs, but they want to help fund their office administrator to complete a bookkeeping diploma. She would be the first to be funded by Ecolink to go to school. However, outside o f the joint ventures, some U F N and E F N band members are pursuing a forestry diploma or degree, funded exclusively by the band. In the  89  end, W C F P has used its business's success to entice and recruit local community members to get a diploma or higher and this helps to build an economic base for everyone i n the region. 6.1.4.b: Work experience Ecolink has provided work experience for the E F N on the silviculture side but not on the logging side. The E F N has a very experienced and technically trained silviculture workforce who can fill any available silviculture positions. However, there are very few technically trained or experienced E F N band members who can immediately be productive at any o f Ecolink's logging positions. Those E F N band members who could be productive at any o f the Ecolink logging positions are not available because they either have their own logging business or work for someone else. A person needs the training and experience to operate logging equipment safely and this training takes awhile. Ecolink would have to hire from outside the E F N i f no one from the community can operate at or near the current production levels. The U F N has not had sufficient work experience within W C F P ' s operations because only 15-20% o f all W C F P employees are U F N band members. The U F N band members currently employed within W C F P are not i n supervisory positions, according to U F N interviewees. Although most have positions under the supervisor, and are extremely valuable employees, there is no one from the U F N who has even been trained or experienced being a W C F P supervisor. A l s o , because only one U F N band member has successfully completed a trade's diploma, U F N has very little technical capacity at the millwright and electrician levels. Even the outside aboriginal W C F P employees do not have the technical capacity in the operation. The Ecolink joint venture has more aboriginal managerial capacity than the W C F P joint venture. Ecolink has two aboriginal people i n management positions within its operations compared to W C F P ' s one. However, all aboriginal people i n management positions from either joint venture are far from truly fulfilling their roles and responsibilities, since they are still learning their positions through experience. Although only a few direct / managerial positions are filled by both joint ventures, the managerial capacity that has been developed can be seen within the respective aboriginal communities. The U F N has been able to employ U F N band members for the Y K W manager position. The E F N has hired a band  90  member to manage A R M and she used to manage Ecolink. Some managerial capacity is being built within both joint ventures and within the aboriginal communities but more work is needed on a succession plan to train potential band members. The M P B infestation threatening the existence o f both businesses and the lack o f qualified aboriginal people to fill these management positions makes any succession planning efforts difficult. Until more is known about how long M P B infected trees can remain economical, management succession planning efforts have to be put on hold for both joint ventures. The lack o f qualified aboriginal people to fill these management opportunities is due to low post secondary enrolment in both aboriginal communities and this is another problem that needs to be examined. In both aboriginal communities, some potentially capable people did not want to be in management positions within the joint venture or within the band's businesses because they feared losing respect from their own people. A s the former Y K W manager states: "Management is a tough position because you can be isolated from your own community. I mean 1 walk into a community event or business and m y own people w i l l be quiet towards me. It can be lonely but you need those positions filled by our own people" and she explains how just having two more managerial type people can make a difference in sustaining the business (Vaughan 2005). O f course, one has to respect a person's wishes for not embarking on something they do not want to do, but one person's resistance should not be generalized to apply to all band members. In order for the aboriginal community to gain control over the joint ventures they are involved with the technical and managerial capacity has to be there along with succession planning for future candidates within the community. This reluctance of some aboriginal people to take on managerial positions needs further research and may be a key issue for obtaining the work experience that is needed.  6.1.4.C: Financial capacity W C F P provides more financial capacity to the U F N due to its silviculture trust fund, silviculture administration fee, and contract opportunities offered to the U F N . W C F P pays into a silviculture trust fund that is administered by the U F N and the provincial government to cover all silviculture contract work needed for the joint venture's forest license obligations. A l s o the W C F P pays the Y K W staff a silviculture fee for administering and meeting all the company's forest license obligations. Both o f these fees are costs to the joint  91  venture so they are not considered to be part of either shareholder's dividends. Lastly, the WCFP contracts are split between both aboriginal and non-aboriginal communities giving a lot of financial capacity to the forest entrepreneurs in the region. 6.1.6 Preservation of traditional culture, values, and language  Of the two joint ventures, WCFP has contributed more to cultural and traditional events and programs than Ecolink has due to the high dividends being madefromthe business. The UFN uses its WCFP dividends to fund the elders and youth fund. WCFP dividends have contributed to cultural and educational initiatives within the UFN. For example, the UFN built a $1.3 million dollar community centre and a brand new church with its WCFP dividends. Social, cultural, and sporting events take place in the community centre shared by both aboriginal and non-aboriginal communities. The EFN has used some of the profitsfromEcolink to help fund cultural events such as the community's pow wow and the band's social programs; but Ecolink has not contributed funds to EFN activities at the level of consistency that WCFP has achieved. 6.1.7 Forest management decisions and Control over their asserted traditional territory  WCFP has enabled the UFN to see the economic benefits that can come from the timber resources within its traditional territory, through its involvement at the BOD level. The UFN has access to harvesting contract work that will be performed by the WCFP contractors, so this level of information helps them have some control over which contractors will harvest what areas. Also the UFN through its holdings company YKW obtains the experience of managing a forest license. By comparison, Ecolink has not provided the EFN with a similar level of control over the EFN's traditional territory. Ecolink contracts from its forest industry partner who has the forest management authority over the timber supply area. In both cases, however, the aboriginal community does not have control over the type and amount of harvesting, because the forest licenses require that forest management conforms to BC provincial forest legislation and policies. Both aboriginal communities have expressed that First Nations need more control over their land at the government level. Both aboriginal communities have been trying to make more forest management decisions over their  92  traditional territory through other forest management planning initiatives. But making these strategic plans equivalent to the province's Forest Stewardship Plan is challenging. The two aboriginal communities sit on opposite sides o f the fence when it pertains to the F R A introduced by the provincial government to entice First Nation communities to participate in the forest sector. The F R A stipulates ongoing forest activities can take place in the participating First Nations asserted traditional territory and continuous consultation must occur over all strategic and operational forestry plans. However, the F R A stipulates the First Nation has been fully accommodated economically. The provincial government has a derived per capita formula ($500 per band member per annum) to offer all band members o f the participating First Nations. This per capita formula is non-negotiable and it is consistent in all signed F R A ' s to date. The U F N did not sign a F R A because they felt their aboriginal rights and title to the land cannot be traded for economic gain. The E F N signed a F R A because they needed the economic benefits provided through the agreement to fund their band programs and they needed the forest license to employ their forest entrepreneurs. According to an E F N band member involved with the F R A negotiations: "me and a councilor argued over the F R A because he did not want to sign it because he thought it would extinguish our aboriginal rights and title. I told h i m he was wrong because i f it does we can pull out at anytime. I wanted the F R A because it provided some funding for band administration and other programs because i f we did not have it 1 would have had to lay off some s t a f f (Chelsea 2005a). This band member believes she was correct because there is an option to pull out o f the F R A at anytime. The E F N decision is a good example o f the limited choices many aboriginal communities face when trying to properly administer their own programs with very few resources. In contrast, the U F N might have objected to the F R A because they did not really need the forest license opportunity due to the myriad o f forest licenses they have already, and also due to the dividends received from the W C F P joint venture that help its band administration programs already. If this is the case, it suggests that poorer aboriginal communities w i l l sign F R A agreements because o f financial need, while less poor aboriginal communities do not need the revenue as much would not be expected to sign. A l s o , the U F N ' s main reason not to sign the F R A was that their aboriginal rights and title should not be traded away for  93  economic gain. It is reasonable to speculate that the U F N may have signed an F R A i f they did not have the W C F P joint venture.  6.1.8 Community Support  n  Both joint ventures have community support and this is an important requirement for all shareholders o f either joint venture. One joint venture's community support might be stronger but we can't tell since we had no quantifiable measure to determine this. However, there was no stoppage o f business activities for either joint venture, which indicates that community support is there for each joint venture. Another problem was my definition o f community not being simply 'the area within the boundaries o f the reserve and traditional territory where immediate impacts (social, economic, etc') but something more inside the community was happening amongst the people that this research could not capture due to time and funding constraints. In fact, A r a n Agrawal and Clark Gibson argue that assumptions of community, being small sizes, territory dependent, homogenous, and having shared norms is incomplete because o f actors within a community can influence decisions and the possibility o f alliances at multiple levels o f politics (Agrawal and Gibson 1999, 27:629-649). A s stated above there was community support and interviewees expressed how important certain community members had the power to make sound business decisions for their respective communities. These band members are called champions and have the power to persuade political and business decisions for the community. A l s o families within aboriginal communities can influence the political and business environments, making it an unattractive environment for anyone unless there is a truce amongst them. Although this is all speculative, both aboriginal communities did have the above traits o f family segregation and active key role players or champions in the community. There is community support for the joint ventures in both communities, but further research needs to be done to see how community dynamics can affect the level o f support. A community strategic plan could be used as a tool to provide a measure o f community support because this would entail consultation from the community.  94  6.1.9 Summary of the ability of the Ecolink and W C F P to fulfill A E D in the E F N and UFN communities Neither joint venture is able to fill all the goals o f A E D for the aboriginal community involved, however both joint ventures act as vehicles toward achieving A E D . The A E D process is too large to be fulfilled by a joint venture business alone. The preservation o f traditional culture, values, and language, and the control over forest management decisions within the aboriginal communities' asserted traditional territory go beyond the business realm. A l s o , the aboriginal capacity required to build self-reliance within either aboriginal community was not sufficiently created by either joint venture. A E D results should be measured by these important components, because the primary goal o f A E D is aboriginal community self-reliance, which w i l l be needed i f the community wants self-governance or some form o f control within their territory. Once self-governance is achieved the aboriginal community/nation must have the human and financial resources needed to properly administer the institutions needed for self-governance. A n analysis of A E D in the community can help an aboriginal community to see how close they are to selfreliance. It's important to look at all components o f the A E D framework to have a useful result. Both joint venture case studies give the aboriginal community minimal control over forest management decisions and cutting rights. Ecolink is a silviculture/harvesting contractor for its forest industry partner so this role is limited to a contractual relationship. The U F N also have minimal control over forest management decisions since these decisions are being made by W C F P through the business's higher level forest management plans (i.e. Forest Stewardship Plan). Both aboriginal communities have gained experience with administering provincial forest licenses, but the joint ventures have not changed their status of having minimal control over strategic management decisions occurring within their territories. A good example is the limited First Nation involvement in most but not all high level forest management plans in B C . The aboriginal capacity is lacking in both joint ventures because the businesses are not willing to take a financial risk. In total, three managerial positions are filled by aboriginal  95  people in both joint ventures, but neither joint venture is ready to train anyone else. WCFP has one technically trained UFN band member who utilized the electrician apprenticing program offered by the business. Ecolink cannot train anymore people unless it becomes profitable like it was in the early years; however, even though WCFP is profitable, there are still no aboriginal people in supervisory positions and this may be related to the business's financial performance. One reason mentioned by interviewees of why there are no aboriginal employees in supervisory positions within WCFP's operations is because aboriginal employees do not want such positions because of the huge responsibilities and related alienation from their own community members. One WCFP aboriginal employee begs to differ by saying he has never been offered such a supervisor opportunity, even though he has been there since the beginning. The Ecolink BOD still elects to train both its logging and silviculture supervisors all year, even when the business is barely meeting itsfinancialbottom line. On the contrary, WCFP has exceeded its financial bottom line since inception', but there have never been aboriginal employees in supervisory positions in over a decade of operations. Although forestry joint ventures may not have the high technical/managerial capacity opportunities seen in other sectors, a risk is associated with these training opportunities regardless of the business venture. WCFP has not taken that risk but Ecolink has even when it impedes on the business's financial bottom line. My case study results show that joint venture business operations do not address the preservation of traditional culture, values, and language. No cross cultural training was offered to anyone from either joint venture. However the joint ventures have made some cultural contributions to their communities. There are community and sporting events sponsored by both joint ventures. In fact, because WCFP was more profitable, more of the UFN's dividends helped the band build a church and community center and fund the youth and elders programs. Both joint ventures were established with the understanding that all traditional, spiritual, and cultural sites will be protected for the aboriginal partner within the business's area of operations, and this has been upheld. This research has shown that joint ventures involving aboriginal communities do not fulfill all components of AED, but they are a vehicle to keep the aboriginal community/nation moving towards the ultimate goal of self-reliance which is needed in  96  conjunction with self-governance. A joint venture should be seen as a means to an end, not an end in itself. Joint ventures are business solutions that can help to create a stable business environment. In fact, joint ventures occur when assets need to be borrowed and a business relationship has to occur because neither shareholder could obtain the required assets alone. Joint ventures should be formed for the purposes stated above, and aboriginal communities must recognize that joint ventures are only part o f a broader aboriginal economic development strategy.  6.2 How are these forestry joint ventures involving aboriginal communities preventing politics from overrunning the business? The interference o f local politics into business decision-making is seen as a common problem for sustaining business ventures involving aboriginal communities. A s shown in the results presented for Ecolink in Chapter 4 (section 4.4) and W C F P in Chapter 5 (section 5.4), both joint ventures exhibited differing factors that prevent politics from overrunning the business. Although both businesses succeeded i n keeping politics from interfering with their operations, they did respect the local political issues as well, leading to the conclusion that although politics w i l l often interfere with businesses in small communities, it does not necessarily compromise the financial bottom line. Although both joint ventures exhibited their own ways o f not letting the politics overrun the business- there is one important factor shared by both, which was the shareholders agreement. A l l aboriginal business ventures involving outside investors should have a formal shareholder agreement or its equivalent detailing the equity breakdown, management control, dispute resolution mechanism, shared business relationship goals, and capacity building components for the aboriginal community involved. Both joint ventures had a formal shareholders agreement that stipulated all these elements, minus the capacity building component. Aboriginal communities involved in joint venture negotiations should ensure that capacity building components are written into the shareholders agreement; such as total number o f managerial and employee positions to be made available to its band  97  members and training opportunities to be provided. Shared goals should also be negotiated so that shareholders can look back at the agreement to see what was agreed upon when future business decisions come to a deadlock. The shareholders agreement helps to shape the business relationship right up to its dissolution. Having a board of directors ( B O D ) without any elected chief and council is seen as a goal for any business venture involving an aboriginal community, but limiting the number of elected representatives is a more realistic goal. Both case study joint ventures have a chief or councilor sitting on the B O D and sometimes a band member was appointed with the chief. Appointing qualified band members that have business or management training to the joint venture B O D w i l l help alleviate the pressures that may be set on the business by having the elected chief or council members on the B O D , and allow the B O D to keep focused on the business. Although this was not done on a consistent basis in the case study joint ventures, it did have its place within both joint ventures during their early years. Thus, having an elected representative on the B O D of a joint venture should not be seen as a bad thing since it was quite common in both of my case studies, the goal should be to have more qualified band members sitting on the B O D as well. Staggered terms within the aboriginal community's governance and on the joint venture B O D level w i l l help to prevent politics from overrunning the business. Board members and elected councilors who have adjusted to their job descriptions or portfolios can be more beneficial to their community or community's business i f they are sitting for more than one term. This allows a succession plan for other potential candidates while not compromising the community's governance or business decisions. Political influence from newly elected councilors or board members may subside when they are guided and mentored by the current councilor or board member. Although staggered terms are not a guarantee for any aboriginal business's success, it w i l l help the aboriginal community towards self-reliance more so than the current I N A C two year term for chief and council. However, a system is only as good as the people who implement and use it. There is no guarantee that any one system will prevent politics from overrunning the business. W C F P ' s business structure helps to not allow politics to overrun the business, but Ecolink's does not. Ecolink's business structure is unstable because they have a chief and council sitting on the B O D and the E F N still uses the current I N A C two year term for chief and  98  council. However, despite all o f this, Ecolink is profitable and this is due to the community leaders and community support. Having these two components can keep the politics down, but for how long? Having a solid business structure w i l l help to prevent bad people from ruining the whole business. Both joint ventures offer five vital components for not allowing the politics to overrun the business. These are as follows: 1) to change to a customs election with staggered terms, 2) no elected chief or council on the B O D , 3) well structured shareholders agreement with stated goals and capacity building components, 4) community leaders (i.e. chief, councilors, champions), and 5) community support from the grassroots people.  6.3 What do aboriginal and non-aboriginal participants define as success for the forestry joint venture? This research question was chosen because there is definitely a research gap filled with broad generalizations o f what either non-aboriginal or aboriginal persons define as success for a business. Non-aboriginal persons tend to focus on profitability and employment factors, but there is little research on how aboriginal people define business success. Conflicting opinions on what is defined as success for any business can change or affect the business relationship amongst all partners. Some aboriginal people define success for an aboriginal business as being profitable while adhering to or not infringing on its traditional and cultural values. Most advocates feel that any business has to be profitable in order to afford to build aboriginal capacity and to sustain/increase the business's overhead. Thus, the definition for success has to be known from either partner regardless o f ethnicity to see i f this conflicts with the business at all. Table 8 below is for illustrative purposes only, because a larger sample size would be needed for the data to be representative o f the communities. Although this is a small sample size, the 19 interviewees (one aboriginal interview was not available for further comment) are important people and the spread o f opinion among them is interesting and worth repeating. Table 8 reveals the results o f all definitions for success for the Ecolink or W C F P joint venture provided by the interviewees. I separated the aboriginal interviewee answers according to the joint venture they were associated with, but the non-aboriginal interviewee  99  answers were not separated to protect respondents' confidentiality, since they could be easily identified due to the small sample size. Table 8. Definitions for Success for either the Ecolink or W C F P joint venture.  • w- Definition for Success Profitability Employment Profitability & Employment Ownership No Success JV Structure Aboriginal Management Control Local Employment & Business Alliance Independent & Competitive business Creating opportunities for your people Experience working with a business you're proud of  Aboriginal Interviewees^ - , fronvEcolink JRV * , Jl 4  1819  i 4  2 2 . 1 1 1  1 1 1  g M » 6 S a f l n l ^ | i M S ^ S  Approximately 61 % (11 out o f 18) o f all aboriginal interviews define profitability, employment, or both as success for the joint venture they are either directly or indirectly involved with. The aboriginal respondents' reasons for 'profitability and employment' were simply because each business needs to make money in order to create employment and training opportunities. According to an aboriginal elder, "you need to make money to create jobs"(Dick 2005). These definitions o f success were consistent with the profitability and employment goals in both joint venture's mission and vision statements. The Ecolink aboriginal interviewees were the only ones to mention 'aboriginal ownership' as success for their joint venture. 100% aboriginal ownership was not defined as success by any aboriginal interviewees i n the W C F P joint venture. The possible reasons for Although 5 non-aboriginal participants were also interviewed, it was decided to present only responses from aboriginal interviewees here for 2 reasons. 1) to protect the confidentiality of the non-aboriginal participants, since individuals could easily be identified from the data due to the small sample size, and 2) there has been a lot of research on defining successful business in non-aboriginal communities, and it is generally known that profitability and employment are usually considered to be the most important success factors for non-aboriginal business ventures. The interviewees were asked for their definitions of success in an open-ended question. These categories were developed from an analysis of interview response data; they were not pre-determined categories that interviewees could choose from. 19  100  this not being defined as success by U F N interviewees could be that the joint venture involves three shareholders compared to Ecolink's two shareholders, and that the U F N interviewees know how capital intensive the lumber manufacturing business is. Also, Ecolink has a buyout clause in the shareholders agreement that is still on the table for the E F N to capitalize on, but they do not have the money yet. Both shareholders o f Ecolink realize the joint venture is there for the E F N to buy and own. Regardless o f the reasons aboriginal ownership was a prevalent factor defining success o f the joint venture for the E F N community. Employment was considered an important factor to demonstrate success b y most aboriginal interviewees. W C F P was considered to be lacking i n aboriginal employment b y several interviewees. Only one aboriginal interviewee did not consider the W C F P joint venture to be a success since there is not enough aboriginal employment. W C F P shareholders all agreed (but did not write down) that there w i l l be 50% aboriginal employment within its operations, but there is only 15-20% U F N band member employment. This interviewee said it is supposed to be 50% U F N band member employment not aboriginal employment since there is about 15-20% outside aboriginal employment in W C F P ' s operations. Another U F N interviewee also reiterated how few U F N employees are employed in W C F P operations and no U F N supervisors and managers in the business. Although there was one U F N band member in a management position, he felt there should be at least one U F N supervisor, since there are U F N employees who have been with the business since inception. Thus, he defined more 'aboriginal management control' as success for W C F P . One U F N interviewee defined W C F P ' s 'joint venture structure'' as success. This came as no surprise, since W C F P ' s joint venture structure was the more successful o f the two case studies for preventing politics from overrunning the business since it has three shareholders and a stringent voting procedure on the company's B O D . This structure has prevented the stalling o f any business decisions due to politics. Both past and present E F N chiefs defined 'creating opportunities for your people'  and 'developing the experience working with a business you 're proud of as success for the Ecolink joint venture. These two measures seem odd compared to the rest stated above i n Table 8, but they make sense i n the minds o f two community leaders who wanted to create a business environment for their band members.  101  The majority o f interviewees responding for Ecolink defined success as 100% aboriginal ownership, and this is still a community goal. Most U F N interviewees defined aboriginal employment as success for W C F P due to the agreed upon 50% aboriginal employment within the operations. Currently, there's less than 50% aboriginal employment W C F P and the E F N has no capital to buyout Ecolink's industrial partner (Tolko), but these are the main definitions for success from the interviewees.  102  Chapter 7: Conclusions and Recommendations  7.1 Conclusions  and Recommendations  This chapter presents the main conclusions and recommendations arising from the two forestry joint ventures involving two aboriginal communities in the Cariboo-Chilcotin region of BC. The main goal of this thesis was to determine if either joint venture provides Aboriginal Economic Development (AED) for the respective aboriginal community; and, if so, to describe how each business venture did it. The second research question examined was how each joint venture prevents politics from overrunning the business. The last research question examines what aboriginal participants define as success for their respective joint venture. For each research question, a discussion of the case study results is presented in the context of the most relevant AED and indigenous joint venture literature, and recommendations for how to set up forest sector joint ventures in aboriginal communities are made based on the results. The chapter ends with conclusions arising from the case study research, and a discussion of the practical and research contributions made by this thesis. Finally, some suggestions for future research in this field will be presented. As explained in Chapter 1, First Nations in British Columbia are becoming increasingly involved in the forest sector through joint ventures or other business ventures. BC's recent forest policy and legislation related to its Forest Renewal Plan has enticed First Nations to enter into the forest sector through the awarding of forest licenses, non-negotiable forest revenues, or both. There is a need to determine how these forest-sector businesses are working for First Nations communities. This thesis provided an analysis of two forest-sector joint ventures between aboriginal communities and non-aboriginal partners to determine whether and how these businesses are providing AED for the aboriginal communities involved. AED is a vehicle for aboriginal communities to achieve self-reliance without relying on governmental support. This is a difficult challenge for most communities and the existing literature provides different approaches towards successful aboriginal economic development, but with the same visions of self-reliance. 103  A review of the A E D literature revealed that there is a spectrum from the generalist A E D work advocated by the Harvard Project on American Indian Economic Development (Harvard Project) to the aboriginal community specific work advocated by the First Nation Development Institute (FNDI) in terms of what is required for successful A E D . The Harvard Project generalized for all aboriginal communities by stating that obtaining self rule and creating self governing institutions matching the culture of the aboriginal community will promote successful aboriginal economic development. On the other hand, FNDI advocates that each aboriginal community should have its own measures for success towards A E D and that a generalist approach is flawed. FNDI uses the Elements of Development framework to evaluate how a business is doing from the community's measures not western society's measure. Robert Anderson's eight characteristics of A E D were most applicable to my case study research, because he is in the middle of both ends of the A E D spectrum and he focuses on how business alliances with outside investors can help any aboriginal community towards becoming self reliant (Anderson 1999). Anderson argues that aboriginal people want to compete in the capitalist world through business alliances with anyone, but they want to do it on their aboriginal terms and conditions. A l l the approaches presented in the literature can be applied towards A E D . The aboriginal community/nation must choose or define for itself, its preferred approach that will lead it towards self-reliance. For the main research question, this research concludes that neither joint venture fulfills all components of A E D for their respective aboriginal communities. A E D is a vehicle for building an economic base for aboriginal communities leading towards self-reliance. A joint venture is one of many tools to make the self-reliance vehicle move. The Royal Commission on Aboriginal Peoples (RCAP) concludes that aboriginal communities need an economic base to truly fulfill their self-governance and if there is no economic base than the whole self-governance is a practice in futility (Royal Commission on Aboriginal Peoples 1996b). WCFP and Ecolink have shown that one business despite it being a joint venture cannot fulfill all components of A E D for the respective aboriginal communities. The biggest A E D component lacking was the limited control an aboriginal community/nation has over their traditional territory when involved with a joint venture. The preservation of traditional culture, values, and language and the aboriginal capacity components were also lacking in both joint ventures, but not to the extent of the lack of  104  control. This is a major drawback, because previous studies have concluded that the biggest weakness for the ability of joint ventures to' contribute to A E D is the minimal control given to aboriginal shareholders over strategic management decisions within the business's operational area and their broader traditional territories. A E D cannot be realized without giving aboriginal communities some degree o f control over the natural resources within their traditional territories, rather than continuing to apply the centralized resource management solutions passed down from federal and provincial governments(Atlantic Canada Opportunities Agency 2003:1-83;Gandz 1999, 64:30-34;Public Policy Forum 2005:120;Royal Commission on Aboriginal Peoples 1996b) The case study results also affirm that joint ventures do not fit the cultural component of A E D . Whiting's research on four B C forestry joint ventures involving aboriginal communities also discovered lack o f fit with culture. Both Ecolink and W C F P did not fulfill the preservation o f traditional culture, values, and language component o f A E D because there were no traditional values or culture being practiced within each business's operations. Neither business offered cross-cultural training for employees. However, even though the business operations themselves did not enhance traditional values, culture, or language in the communities, the businesses did provide cultural benefits by providing funds for cultural events or programs in the E F N and U F N communities. Joint ventures are aboriginal capacity building options but the aboriginal community/nation has to be assertive on the matter. For example, Ecolink has two aboriginal employees training in managerial positions within its business and the business still trains silviculture supervisors. W C F P only has one aboriginal employee training i n a managerial position but no aboriginal supervisors even when there were potential aboriginal supervisors working as employees within the joint venture. The Ecolink B O D made sure to employ aboriginal people in all positions within the company even i f it may affect the profitability o f the business. Although I was given a reason by some W C F P interviewees that U F N band members do not want the pressure o f being in a supervisory position, other U F N interviewees contradicted this, because as experienced employees o f W C F P , they have never been given the opportunity to prove themselves. Cultural clash between employees from different cultures can be one impediment to trying to produce aboriginal capacity within a joint venture but not giving aboriginal people opportunities within the business is another  105  impediment that has to be resolved early in the business. W C F P now has recently promoted a long time U F N employee into a supervisory position, and this recognition was a long time coming for h i m and his community. In the end, both joint ventures do show that the business can contribute to the capacity within an aboriginal community in a small or a big way, but the aboriginal shareholders must be assertive. This has to come from either the community leadership or champions. Aboriginal communities must assess their own capacity before embarking on any development project. They must look at their own human and financial capacity and determine i f there is a market for their business service or product to decide i f the 20 development project/ business venture is worth pursuing for their aboriginal community . Unfortunately, the need to improve socioeconomic conditions by increasing employment levels puts pressure on aboriginal communities to jump at any business opportunity, rather than taking the time to complete an economic development plan or business plan (Public Policy Forum 2005:1-20). This economic development or business plan does not have to be comprehensive, but failing to plan creates missed opportunities in a business venture involving outside investors. However, joint ventures allow the outside investor to supply the technical and managerial capacity, depending on the business service, while aboriginal communities train their band members. Such training w i l l take time and aboriginal communities should not expect immediate results especially in logging or in sawmilling, since employees need to learn by experience. Creating educational opportunities through the joint venture may help entice aboriginal band members to obtain further schooling and help to build the aboriginal capacity within the community. One U F N interviewee expresses the importance o f having more trained and educated U F N band members in her community as follows: " D o not get stuck in one demographic because they are the loudest. Keep going after all the U F N people because 2 or 3 U F N band members can make a difference within W C F P or any forestry business or organization"(Vaughan 2005). Using this philosophy, W C F P has an electrician and millwright apprenticing program offered to the U F N community and its employees. However, only one U F N band member has completed the apprenticing program offered by Marketing was not discussed in length in this thesis but it is an important requirement for determining the feasibility of any business venture or development project.  106  W C F P , a huge step for all local employees. Another strategy for improving capacity through education is for an aboriginal community to set up an educational trust fund in which a small part of the joint venture's profits go towards the trust fund. This education trust fund can be seen as a sunk cost that is permanent so future generations o f band members can have the educational opportunities even when the business has dissolved. Another area to create more capacity is to sustain aboriginal employment within the business involving aboriginal communities through job sharing and community awareness initiatives. W C F P has a tough time sustaining the agreed upon 50% aboriginal employment within its operations. Although the 50% aboriginal employment goal was informal and not written down, all three shareholders have kept their word. Other natural resource sectors have tried job sharing and this is something W C F P is considering to implement . Future joint 21  ventures should also create more community awareness and provide cross cultural training to all employees. The use o f community meetings/forums and newsletters can create more community awareness since the public can easily misinterpret information about the joint venture. Monthly tours o f the joint venture operations should be done to allow local people to see the operations first hand. W C F P runs an annual forestry day and is a huge success, allowing the local community access to the operations. Such tours are something all joint ventures involving aboriginal communities should do. These community awareness initiatives allow people to see what the employees do, thus building respect for these employees' roles in the business. A s stated earlier, the case studies affirmed the findings o f previous research that joint ventures do not directly help aboriginal communities to obtain control over natural resources within their traditional territory because forestry joint ventures operating on government tendered forest licenses must conform to provincial forest policy and legislation. Because Ecolink is a logging/silviculture contractor, its employer has control over where the joint venture can harvest. W C F P has control over the end product, but the, business conforms to the province's forest license obligations. Both the U F N and E F N have no control over the harvesting in their traditional territory outside o f their protected areas. A l s o the U F N has to administer all W C F P ' s forest licenses issued by the provincial government. Provincial  For example, hiring two people to share their hours for an 80 hour or longer pay period so the company has no loss man days per shift and both employees can have time for traditional activities like fishing, hunting, etc. 21  107  policies and legislation control each aboriginal community's land base. Joint ventures do not help aboriginal people to gain any more control than they had before the business's inception. R C A P and other advocates feel the provincial government has to allow some degree of control to aboriginal communities because the contemporary methods are not working or showing improved results (Royal Commission on Aboriginal Peoples 1996b). In the end, aboriginal communities should not expect more control over their land base through joint ventures involving outside investors. More control over natural resources occurring within an aboriginal community's land base has to happen at the provincial government level with support from the federal government not at the business level. i  The second research question dealt with the separation o f the business from political interference. Previous research has shown that local politics can affect the success o f business ventures in aboriginal communities (Cornell & Kalt 1992, 1998). Both case studies exhibited their own methods for preventing politics from overrunning the business, with some similarities and differences. First, both joint ventures had a shareholders' agreement which stipulates the terms and conditions o f all shareholders such as equity breakdown, shared control, dispute resolution mechanisms, and shared goals or vision for the business. Not having any formalized agreement can lead to future conflict since a joint venture relationship relies on trust and mutual respect from all shareholders (Miller, Glen, Jaspersen, and Karmokolias 1996:1-25). This trust and mutual respect can change overnight, and a formalized agreement can help shareholders to remember why they are i n business when they look at the negotiated details i n the document. Having the dividend breakdown, control structure, dispute resolution mechanism, and other clauses in the formal agreement helps all shareholders to feel comfortable with what was negotiated and to look back on the lifespan o f the joint venture. Also both joint ventures were either profitable or employing local people and these factors can help to prevent politics from overrunning the business. When businesses involving aboriginal communities are not making a profit or are not employing enough band members, this creates an environment for the politics to overrun the business. Both joint ventures exhibited early success in their first three years o f existence, and the profits made improved the employees' and the community's morale and sense o f pride in themselves due  108  to the business's success. This improved community morale and pride is the kind o f atmosphere that is worth capturing early i n the business's existence i f possible. The third research question addressed how all 18 (one could not be reached for further comment) aboriginal interviewee respondents defined success for their joint venture. However, the research question focused on success from the point o f view o f the business, rather than success from the point o f view o f the community. Each interviewee's answers may have been different i f it was focused on success for the community or aboriginal nation. Plus, with my relatively low sample size, these answers should not be generalized for either aboriginal community or for aboriginal communities in general. Nonetheless, all 18 interviewee responses are important because they come from important people within either community ranging from key role players to grass roots people. Profitability and employment were the two most common answers for defining success for either joint venture. In fact, 61% (11 out o f 18) o f all aboriginal interviewees defined profitability, employment, or both as success factors for either joint venture. In 2005, a national survey on aboriginal forestry collaborations also found that profitability and employment were high on the list for most survey participants (Hickey and Nelson 2005:1-30). Preserving traditional values, culture, and language did not come up as a factor in interviewees' definitions for success, but this was likely because the interview question focused on the joint venture, not on the aboriginal community as a whole. The answers might have been different with another focus, but this paper attempted to respond to the doubts about forestry joint ventures involving aboriginal communities in British Columbia that was evident in a 2004 study by the Institute on Governance (Graham and W i l s o n 2004). A n important contrast between the case studies was that most E F N interviewees defined profitability as success for Ecolink, whereas most U F N interviewees defined employment as success for W C F P . This is interesting, because Ecolink is performing better in its aboriginal employment goals than W C F P , with all aboriginal employees and managers but their profit margin is small. Whereas, W C F P has only 15-20% U F N employment but the business is highly profitable. Different factors were important in defining success o f the venture for each community because o f the following reasons. The E F N knows it does not have the financial capital to buyout its forest industry partner, so Ecolink needs to make a profit to make the buyout a reality. The U F N knows it cannot buyout its two other  109  shareholders like the E F N because the buyout was never an option amongst the three shareholders. However, the U F N wants what was promised to them by their shareholders, which was 50% U F N employment within W C F P ' s operations. U F N interviewees were adamant that non-local aboriginal employees in W C F P did not fulfill this promise to them. Thus, the interviewees' definitions for success are related to the histories o f both joint ventures. A profitable business with less aboriginal employment, or a business making less profit with more aboriginal employment are two o f a myriad o f contemporary examples for success an aboriginal community/nation can choose from. Sometimes profitability and employment goals cannot be reached at the same rate, and trade offs have to be made between the two goals. In all fairness, W C F P is as a community joint venture involving the aboriginal and non-aboriginal communities, and there was a promise to provide 50-50 employment between both communities and this contributes to the aboriginal employment challenge for this business. Ecolink has a higher proportion o f band members (70%) employed than W C F P (20-25%); also, Ecolink has trained more aboriginal employees into managerial and supervisory positions than W C F P has to date. O n the contrary, W C F P is more profitable than Ecolink and has continued to be for a decade and this has allowed the U F N to use their dividends from W C F P to build community programs and infrastructure. This shows that both employment and profitability provided by the business can bring benefits to the community as a whole. A n aboriginal community/nation must identify their own goals and define their own measures for success o f any business venture they enter into. Both case study joint ventures revealed alternative definitions for success, and neither one is the wrong approach. ln the end, all aboriginal communities/nations must identify their own goals and visions and have measures for them. They can do this through economic development plans, community plans, Traditional Use Studies, or business plans. A formal shareholders agreement stating the business's shared vision and goals w i l l make it easier to evaluate the business or community's strategic direction throughout the business's existence. Memorandums o f Understanding ( M O U ) are useful to provide strategic direction, but clearly negotiated business goals and a vision for the business venture help to keep all parties in line. The plan or vision does not have to be a major undertaking, something as small as two pages  110  can suffice, because most aboriginal communities can quickly identify their own human and financial capacity needs. However, the elected chief and council must consult with their band members on identifying the community's goals and vision and to decide on measures for success as early as possible in the business planning or joint venture negotiation process.  Ill  7.2 Contributions made by the Research This research w i l l contribute to informing students, forest industry representatives, government representatives, non-aboriginal communities, and, most importantly, aboriginal communities who want to promote A E D in their communities through business ventures. Both joint venture case studies have contributed to A E D i n different ways throughout their existence, according to their type o f business, and their difference in the number o f shareholders involved. Significantly, both the Esketemc First Nation and the Ulkatcho First Nation have been proactive in economic development efforts and in asserting their aboriginal rights and title to their land. Both are examples o f aboriginal communities building an economic base through their own forestry entrepreneurs and businesses while continuing to assert their aboriginal rights and title over their traditional territory. Both Ecolink and W C F P ' s continued existence as viable businesses contribute to the A E D o f their respective aboriginal communities and the current aboriginal forest sector. Ecolink is 15 years old and W C F P is 10 years old making them older than most case studies involving aboriginal communities within the A E D and aboriginal joint venture literature. In fact, the average lifespan for a joint venture is 3.5 years and even less in the technological industry sector, so both joint ventures continued existence is a testament to their success (Reiter and Shishler 1999:227). However, both joint ventures reside within the area o f the Mountain Pine Beetle ( M P B ) epidemic so their future timber supply is being threatened. Each joint venture's continued existence w i l l depend on its response to this natural threat. A l s o both joint ventures contribute to future aboriginal forestry businesses by their different business services. Ecolink is a harvesting/silviculture contractor and W C F P is a manufacturer o f lumber (sawmill and planer mill). This difference in either joint venture's service contributes to aboriginal communities wanting to know what type of forestry business service they either can afford or conforms to their community's goals or vision. This can be seen in the differing employment levels and dividends shown i n chapters 4 and 5. A l s o W C F P is more capital intensive compared to Ecolink so it is a very high risk endeavor; i n fact, the E F N did buy a sawmill in the past but it quickly went bankrupt putting the band into third party management. The E F N recovered, but learned from their early sawmill and logging failures to start out small in the Ecolink joint venture by being a silviculture  112  company first, then diversifying into logging later on. In the end, Ecolink is less capital intensive due to its status as a contractor, compared to W C F P which as a sawmill, requires more infrastructure and equipment, and has to find mostly foreign buyers for their lumber. Also the W C F P joint venture breaks the usual two shareholder joint venture structure by having three shareholders; a non-aboriginal community, an aboriginal community, and a  r non-local forest company. W C F P ' s three shareholder joint venture reveals how an aboriginal and non-aboriginal community can work together through a business alliance to create local employment and opportunities for them both. W C F P has also split their downstream benefits, such as trucking and other contract work, equally amongst both communities o f Anahim Lake since its inception. In fact, W C F P ' s forest industry partner, Carrier Lumber, has a similar three shareholder sawmill joint venture with the Cheslatta Carrier Nation and a group o f local investors in northern B C . This Cheslatta Forest Products joint venture is five years old, surpassing the average age o f 3.5 years when a joint venture usually dissolves, proving that this three way joint venture model can work i n other communities besides Anahim Lake (Stirling 2002, 7). A n important contribution o f my research, which was not specifically addressed in the research questions o f this thesis but which arose from the contextual information obtained during the case study field research, was the importance o f family institutions within joint ventures involving aboriginal communities. It was found that one o f the joint venture's employees mostly came from one family, and their work effort and punctuality kept them in these positions. This is not to say that there is no one else from the aboriginal community who could do their positions, but this is a forestry family. This family's ancestors and relatives prided themselves on their forestry abilities and this was transferred down to their children. The youngest employee o f this joint venture was from this family and he is flourishing in his new position. This shows that an aboriginal community's traditional values and culture can break down the borders o f business theory when it pertains to informal aboriginal family institutions. Aboriginal scholars might classify aboriginal family institutions as aboriginal wisdom, and how aboriginal people must use it to keep their values and culture intact in the capitalist world (Newhouse 2000, 1:55-61 ;Wuttunee 2000:1 -236). Aboriginal communities must not forget their aboriginal wisdom because it does have a place in A E D regardless o f what the western society says. Aboriginal families segregated into  113  certain band owned departments or businesses are not a bad thing, when this system can work for the benefit of the aboriginal community's goal towards self-reliance. Research grounded in western society's business theory may quickly conclude that a forestry business hiring members from only one family was suffering from nepotism, but in aboriginal communities this may be acceptable or in fact recommended i f it fits with the community's traditional culture, which is often tied to kinship and informal family institutions. Segregating qualified families into certain community functions- although it might be seen as nepotism by western society- is not necessarily a bad thing. Some aboriginal communities are more extreme than most in this regard, such as the matrilineal aboriginal groups. Kinship relationships can have positive effects on businesses in aboriginal communities, because supervisors or managers can more easily order their own kin around, and this may help to entice more potential aboriginal candidates to pursue high management positions, knowing their relatives are working there. Aboriginal communities know more about kinship traditions and norms within their own reserves and can try to make it work for their benefit in business ventures. Although this kinship strategy may not work for all aboriginal communities, informal family institutions are an important thing to consider when analyzing the success of businesses in aboriginal communities. It is important to recognize that segregation of roles and responsibilities by family may be intentional and desirable. Researchers should not dismiss such findings as problematic within the business because aboriginal people need more positive role models in the grassroots community and in the political and business arenas to help them on the road to self-reliance. There are political and business elites in the capitalist world who hire their own so this is nothing new. Family segregation into band programs or businesses-may work or help other aboriginal communities to gain economic development more easily amongst band members. Currently, the FNDI advocates have recognized kinship as an element in A E D and it is an aboriginal community/nation specific.  7.3 Suggestions for Future Research As more collaborations between aboriginal communities and the forest sector continue to occur, more research has to be done using this paper's A E D framework on other businesses involving aboriginal communities. Furthermore, the paper's framework affirms  114  that aboriginal communities must define their own criteria and indicators for successful AED. More community based research should be done on the socio-economic impacts felt in the local aboriginal and non-aboriginal communities from businesses like Ecolink and W C F P . This thesis identified the reasons for the success o f both joint ventures, but it did not show the negative impacts o f the business ventures on the aboriginal and non-aboriginal communities involved. Some interviewees discussed at length the social and educational problems within their community, and the joint venture was blamed for these problems. More extensive research on the socio-economic conditions felt by the communities w i l l help to show what areas need to be addressed during future joint venture negotiations. A n understanding o f community dynamics may help to improve the longevity o f the business ventures. A l s o , community based research w i l l help to discover certain political and business actors or families within the aboriginal community who can contribute to or bind the success of any business on-reserve(Agrawal and Gibson 1999, 27:629-649). These key role players or families can have a big influence on anything deemed important for the community's well being - as seen.in the Ecolink joint venture. This factor was uncovered but not researched extensively due to budgeting and time constraints. According to E F N interviewees, there is family segregation in the band departments. The current literature does not contain extensive research on how kinship or key role players can have a significant impact on community decisions (Savoie 2000:1-143). More research in this area w i l l help to prove the significance of key role players and families i n an aboriginal community's structure and dynamics. Another important question that remains to be addressed significantly in the literature is: Do capacity building clauses in the shareholders agreement or equivalent create more opportunities for aboriginal communities involved in joint ventures or partnerships? A well known case in British Columbia- Iisaak Forest Resources- had capacity building components in their joint venture agreement such as management and staffing, contracting opportunities for its band members, and targets for aboriginal employment and training (Findlay 1999:1-9). Iisaak is no longer a joint venture since the aboriginal shareholders bought out the forest industry partner. However, it is unknown to what extent these capacity building components in the shareholders agreement helped this aboriginal community to make this buyout happen.  115  D i d the existence o f these components i n the agreement ensure that qualified human resources and financial capacity were created in the aboriginal communities through the joint ventures operations? Interviewees from the Ecolink and W C F P joint ventures felt that there should have been capacity building components in their shareholders' agreements, and this is an issue that future research should address. Extensive research is being done on value added opportunities for communities in the B C interior whose timber resource is affected by the Mountain Pine Beetle ( M P B ) epidemic. Since there is no way to stop the M P B by human methods, considerable attention should be placed on value added options for the infected M P B wood. If there are no viable business options for the M P B wood, then employment opportunities outside o f forestry must be found for these communities who are used to a staples economy. Forestry in Canada is primarily a staples economy and i f there are no alternative solutions found through research or other means, the M P B epidemic could be the demise o f forestry dependent communities, and this will have a major impact on aboriginal people, because 80% o f all aboriginal communities reside in commercial forested areas in Canada.  116  References Business Corporations Act. S B C 2002: Chapter 57. 2004. 9-15-2005. 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Negotiating Successful  Logging and Sawmilling Journal website.2005 "Canada's Top 30 Softwood Lumber Producers - 2004." Accessed on:2006. Available from http ://www. forestnet. com/archives/March 05/dominant producers .htm. Miles, Matthew B . and Michael A . Huberman. 1994. Qualitative Data Analysis: sourcebook. Thousand Oaks, California: Sage Publications.  an expanded  Miller, Robert R., Jack D . Glen, Frederick Z . Jaspersen, and Yannis Karmokolias.1996 "International Joint Ventures in Developing Countries: Happy Marriages?" Washington, D C , Accessed on:2005. Available from http://wwwwds.worldbank.org/servlet/WDSContentServer/WDSP/IB/1996/06/01/000009265 39 70311123716/Rendered/PDF/multi page.pdf. Ministry o f Sustainable Forestry Management website.2001 "Anaham Round Table Sustainable Resource Management Plan." Accessed on:2006. Available from http://srmwww.gov.bc.ca/car/planning/art/srp_index.html#t'op. Mooney, Jerry. 2005. "Interview by Author." 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"Interview with Author." Tape Recorded. Anahim Lake, B C . Smith, Linda Tuhiwai. 1999. Decolonizing Methodologies: Research and Indigenous Peoples. N e w York, N Y : Zed Books. Stake, Robert E . 1995. The Art of Case Study Research. Thousand Oaks, California: Sage Publications. Stirling, Jim. 2002. Seeing the Benefits. Logging and Sawmilling Journal 7, no. 4. 2005. A Successful Combination. Logging and Sawmilling Journal 10, no. 9. Sveinbjornsdottir, E m i l i a Dagny. 2001. Community Economic Development i n Newfoundland: A comparitive study o f the Isthmus o f A v a l o n and the Bonavista Headland. Master o f Arts. Memorial University of Newfoundland. Tashakkori, Abbas and Charles Teddlie. 1998. Mixed Methodology: Combining Qualitative and Quantitative Approaches. Thousand Oaks, California: Sage Publications. Think Tank on First Nations Wealth Creation. 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Available from http://www.wcforestproducts. com/index.html. Whiting, K y l e . 2001. Indigenous-Industry Partnerships and Capacity Building for Aboriginal Economic Development: The Case o f Forest Industry Joint Ventures in North Central British Columbia. Master o f Arts in International Studies. University o f Northern British Columbia. Wormian, Robin. 1994. A n Economic Development Officer's Perspective. Paper presented at Seperating First Nations Politics from Business, at Vancouver, B C , 7 1994. Wuttunee, Wanda. 2000. Economic Development in Selected Aboriginal Communities: Lessons i n Strength, Resilience, and Celebration. Doctor o f Philosophy i n the Interdisciplinary Program. University of Manitoba. 2004. Living Rhythms: Lessons in Aboriginal Economic Resilience Montreal, Q C : McGill-Queen's University Press.  and Vision.  Wynja, Jack. 3-11-2005. "Interview with Author." Tape Recorded. Williams Lake, B C . Y i n , Robert K . 2003. Case Study Research: California: Sage Publications.  Design and Methods. Thousand Oaks,  124  Appendix 1 CASE STUDY INFORMED CONSENT FORM Individual FIRST NATIONS AND SUSTAINABLE FORESTRY: INSTITUTIONAL CONDITIONS FOR SUCCESS A U n i v e r s i t y of B r i t i s h C o l u m b i a a n d L a k e h e a d U n i v e r s i t y r e s e a r c h g r o u p , h e a d e d by Dr. R o n a l d T r o s p e r , p r i n c i p a l i n v e s t i g a t o r , in c o o p e r a t i o n w i t h Dr. G e o r g e H o b e r g , P e g g y S m i t h , Dr. C a s e y v a n K o o t e n , a n d Dr. Ilan V e r t i n s k y h a v e a r e s e a r c h project on " F i r s t N a t i o n s a n d S u s t a i n a b l e F o r e s t r y : I n s t i t u t i o n a l C o n d i t i o n s for S u c c e s s . " T h e y h a v e invited y o u r First N a t i o n a n d its f o r e s t b u s i n e s s to b e c o m e a c a s e s t u d y p a r t i c i p a n t in this r e s e a r c h . A s a g r a d u a t e s t u d e n t i n v o l v e d in c o n d u c t i n g this r e s e a r c h , I will a l s o be d e v e l o p i n g m y t h e s i s as a s m a l l e r portion of the l a r g e r r e s e a r c h s t u d y . My t h e s i s will be t e n t a t i v e l y titled " T w o A b o r i g i n a l f o r e s t r y j o i n t v e n t u r e s in t h e C a r i b o o - C h i l c o t i n . " W e are n o w f o l l o w i n g up to a s k , in k e e p i n g w i t h o u r R e s e a r c h E t h i c s g u i d e l i n e s , for y o u r f o r m a l c o n s e n t to p a r t i c i p a t e in o u r s t u d y .  Purpose T h e p u r p o s e of t h i s r e s e a r c h project t h r o u g h s u r v e y s a n d c a s e s t u d i e s is to help identify w h a t c o n t r i b u t e s to or h i n d e r s t h e s u c c e s s of f o r e s t - b a s e d b u s i n e s s e s i n v o l v i n g First N a t i o n s . W e w o u l d like to e x p l o r e the n a t u r e of y o u r f o r e s t - b a s e d b u s i n e s s ( e s ) / r e l a t i o n s h i p a n d its p e r f o r m a n c e . T h e i n f o r m a t i o n g e n e r a t e d f r o m t h e i n t e r v i e w s a b o u t t h e f o r e s t r y b u s i n e s s will be i n c l u d e d in a c a s e s t u d y report t h a t will help to a n s w e r the f a c t o r s t h a t c o n t r i b u t e or h i n d e r t h e s u c c e s s of f o r e s t - b a s e d b u s i n e s s e s i n v o l v i n g First N a t i o n s . A l s o t h e i n f o r m a t i o n f r o m t h e i n t e r v i e w s will be used in m y t h e s i s in partial f u l f i l l m e n t of a M a s t e r s d e g r e e f r o m t h e F a c u l t y of F o r e s t r y at U B C . W e feel t h a t y o u r k n o w l e d g e a b o u t y o u r c o m m u n i t y , t h e f o r e s t b u s i n e s s b e i n g r e s e a r c h e d , or both will c o n t r i b u t e g r e a t l y to o u r r e s e a r c h .  Methods I will be t h e o n l y o n e a d m i n i s t e r i n g the c a s e s t u d y i n t e r v i e w s w i t h i n the c o m m u n i t y a n d f o r e s t b u s i n e s s . T h e i n t e r v i e w s will t a k e at least a n h o u r or m o r e to c o m p l e t e . I will c o v e r v a r i o u s t h e m e s s u c h a s t h e c o m m u n i t y ' s b a c k g r o u n d , t h e c o m m u n i t y ' s well b e i n g , t h e forest b u s i n e s s c h a r a c t e r i s t i c s a n d p e r f o r m a n c e , t h e v i s i o n of the f o r e s t b u s i n e s s r e l a t i o n s h i p , t h e role of t h e f o r e s t i n d u s t r y , t h e role of t h e p r o v i n c i a l and f e d e r a l g o v e r n m e n t s , a n d the f a c t o r s u n i q u e to y o u r f o r e s t b u s i n e s s a n d c o m m u n i t y . W i t h y o u r p e r m i s s i o n , the i n t e r v i e w will be r e c o r d e d on a u d i o t a p e to allow for a c c u r a c y in r e s p o n s e s . H o w e v e r , if y o u d e c i d e not to be a u d i o t a p e d t h e n I will use h a n d w r i t t e n n o t e s t h r o u g h o u t t h e i n t e r v i e w . I will w r i t e up a n i n t e r v i e w report t h a t will be s u b m i t t e d to y o u for f u r t h e r r e v i s i o n or a c c u r a c y . T h e i n t e r v i e w report I s e n d y o u will be s e e n by o n l y y o u a n d will r e m a i n c o n f i d e n t i a l . T h e final c a s e s t u d y r e p o r t , i n c o r p o r a t i n g y o u r r e v i s i o n s for a c c u r a c y , will be s h a r e d w i t h the r e s e a r c h t e a m a n d i n c l u d e d in p u b l i c a t i o n s . T h e c a s e s t u d y f i n d i n g s will be p u b l i s h e d in t h e M a s t e r s t h e s i s a n d in p u b l i c a t i o n s p r o d u c e d for t h e r e s e a r c h project.  Contact If y o u h a v e a n y q u e s t i o n s or d e s i r e f u r t h e r i n f o r m a t i o n a b o u t this s t u d y , p l e a s e c o n t a c t Dr. R o n a l d T r o s p e r , p r i n c i p a l i n v e s t i g a t o r by t e l e p h o n e at or by e - m a i l at  125  You should also feel free to ask any questions about the procedure at any time during or after the interview. The UBC researcher's name is Jeremy Boyd and he can be contacted by telephone at 604-822-9505, or by e-mail at iibovd(g)interchanqe.ubc.ca. I f y o u h a v e a n y c o n c e r n s a b o u t y o u r rights or t r e a t m e n t a s a c a s e s t u d y p a r t i c i p a n t in this r e s e a r c h s t u d y , y o u m a y c o n t a c t the R e s e a r c h S u b j e c t I n f o r m a t i o n Line in t h e U B C Office of R e s e a r c h S e r v i c e s at the U n i v e r s j t y of B r i t i s h C o l u m b i a at ( 6 0 4 ) 8 2 2 - 8 5 9 8 .  Consent My s i g n a t u r e i n d i c a t e s t h a t I h a v e a g r e e d to p a r t i c i p a t e in t h e s t u d y by Dr. R o n a l d T r o s p e r , p r i n c i p a l i n v e s t i g a t o r , Dr. G e o r g e H o b e r g , P e g g y S m i t h , Dr. C a s e y v a n K o o t e n , a n d Dr. Ilan V e r t i n s k y , c o - i n v e s t i g a t o r s on " F i r s t N a t i o n s a n d S u s t a i n a b l e F o r e s t r y : I n s t i t u t i o n a l C o n d i t i o n s for S u c c e s s " a n d t h e s u p p l e m e n t a r y M a s t e r s t h e s i s s t u d y by J e r e m y B o y d , M S c C a n d i d a t e for t h e F a c u l t y of F o r e s t r y at U B C . My c o n s e n t is g r a n t e d on t h e u n d e r s t a n d i n g t h a t : 1. 2. 3. 4. 5. 6. 7. 8.  I a m v o l u n t a r i l y p a r t i c i p a t i n g a n d m a y w i t h d r a w at a n y t i m e f r o m t h e s t u d y without penalty. T h e i n f o r m a t i o n I p r o v i d e will r e m a i n c o n f i d e n t i a l a n d no r e s p o n s e s will be a s s o c i a t e d d i r e c t l y with m y n a m e to e n s u r e m y a n o n y m i t y . T h e d a t a will be s e c u r e l y s t o r e d at the U n i v e r s i t y of B r i t i s h C o l u m b i a for a period of s e v e n (7) y e a r s . T h e p u r p o s e a n d m e t h o d s of the s t u d y h a v e b e e n e x p l a i n e d to m e . I will r e c e i v e a c o p y of t h e i n t e r v i e w report u p o n r e q u e s t at a n y t i m e d u r i n g or after t h e r e s e a r c h . I a g r e e / d o not a g r e e (circle o n e ) to be r e c o r d e d on a u d i o t a p e . I a g r e e / do not a g r e e (circle o n e ) for n a m e to be p u b l i c l y listed u n d e r t h e list of i n t e r v i e w e e s s e c t i o n in t h e r e s e a r c h a n d t h e s i s . I will be a b l e to a c c e s s r e s e a r c h r e s u l t s t h r o u g h the p r o j e c t w e b s i t e at http://www.forestry.ubc.ca/fnconditions.  Interviewee Signature  Date  I n t e r v i e w e e N a m e ( P l e a s e Print)  Interviewer Name  Please provide your contact information below:  Organization: Address: City: Province:  Postal C o d e :  Email:  126  CASE STUDY INFORMED CONSENT FORM First Nation FIRST NATIONS AND SUSTAINABLE FORESTRY: INSTITUTIONAL CONDITIONS FOR SUCCESS A U n i v e r s i t y of B r i t i s h C o l u m b i a a n d L a k e h e a d U n i v e r s i t y r e s e a r c h g r o u p , h e a d e d by Dr. R o n a l d T r o s p e r , p r i n c i p a l i n v e s t i g a t o r , in c o o p e r a t i o n w i t h Dr. G e o r g e H o b e r g , P e g g y S m i t h , Dr. C a s e y v a n K o o t e n , a n d Dr. Ilan V e r t i n s k y h a v e a r e s e a r c h project on " F i r s t N a t i o n s a n d S u s t a i n a b l e F o r e s t r y : I n s t i t u t i o n a l C o n d i t i o n s for S u c c e s s . " A s a g r a d u a t e s t u d e n t i n v o l v e d in c o n d u c t i n g this r e s e a r c h , I will a l s o be d e v e l o p i n g m y t h e s i s as a s m a l l e r p o r t i o n of t h e l a r g e r r e s e a r c h s t u d y . M y t h e s i s will be t e n t a t i v e l y titled " T w o A b o r i g i n a l f o r e s t r y j o i n t v e n t u r e s in t h e C a r i b o o - C h i l c o t i n . " T h e y w o u l d like to invite y o u r First N a t i o n to b e c o m e a c a s e s t u d y p a r t i c i p a n t in this r e s e a r c h . W e a r e in a period of rapid c h a n g e in t h e r e l a t i o n s h i p b e t w e e n First N a t i o n s , i n d u s t r y , a n d the p r o v i n c i a l a n d f e d e r a l g o v e r n m e n t s in the f o r e s t s e c t o r . First N a t i o n c o m m u n i t i e s a r e e n t e r i n g b u s i n e s s in the forest s e c t o r t h r o u g h c o - m a n a g e m e n t agreements, interim measure a g r e e m e n t s , partnerships, joint ventures and other a r r a n g e m e n t s . T h i s r e s e a r c h project is e v a l u a t i n g w h a t f a c t o r s a r e i m p o r t a n t a n d w h a t role policy c a n do to a c h i e v e helpful o u t c o m e s for all parties i n v o l v e d in First N a t i o n s f o r e s t r y e n t e r p r i s e s of all t y p e s .  Purpose Y o u r First N a t i o n is invited to be a c a s e s t u d y p a r t i c i p a n t to help identify w h a t c o n t r i b u t e s to or h i n d e r s the s u c c e s s of First N a t i o n forest b u s i n e s s a r r a n g e m e n t s . W e w o u l d like to e x p l o r e t h e n a t u r e of y o u r First N a t i o n f o r e s t r y b u s i n e s s a g r e e m e n t a n d its p e r f o r m a n c e . Y o u r p a r t i c i p a t i o n in this r e s e a r c h project is e n t i r e l y v o l u n t a r i l y a n d y o u m a y s e l e c t t h e d e g r e e to w h i c h y o u r p a r t i c i p a t i o n is p u b l i c l y r e c o g n i z e d . T h e c h o i c e s a r e as f o l l o w s : to be fully r e c o g n i z e d in all p u b l i c a t i o n s a n d in the m a s t e r s t h e s i s ; not to be r e c o g n i z e d but to be listed as o n e of t h e c o m p a n i e s p a r t i c i p a t i n g , or not to be r e c o g n i z e d or listed a n d to h a v e i d e n t i f y i n g facts s u p p r e s s e d .  Methods O n e U B C r e s e a r c h e r will a d m i n i s t e r the c a s e s t u d y i n t e r v i e w s w i t h i n y o u r forest c o m p a n y . T h e i n t e r v i e w s will t a k e at least an h o u r or m o r e to c o m p l e t e . T h e U B C r e s e a r c h e r will c o v e r v a r i o u s t h e m e s s u c h as the c o m m u n i t y ' s b a c k g r o u n d , the c o m m u n i t y ' s well b e i n g , the forest b u s i n e s s c h a r a c t e r i s t i c s a n d p e r f o r m a n c e , t h e v i s i o n of the f o r e s t b u s i n e s s r e l a t i o n s h i p , the role of the f o r e s t i n d u s t r y , the role of the p r o v i n c i a l a n d f e d e r a l g o v e r n m e n t s , a n d t h e f a c t o r s u n i q u e to y o u r forest b u s i n e s s . T h e i n t e r v i e w e r will w r i t e up a c a s e s t u d y report on t h a t will be s u b m i t t e d to y o u for r e v i e w a n d c o m m e n t for a c c u r a c y a n d for c o m p l i a n c e w i t h the level of c o n f i d e n t i a l i t y y o u select.  Contact If y o u h a v e a n y q u e s t i o n s or d e s i r e f u r t h e r i n f o r m a t i o n a b o u t this s t u d y , p l e a s e c o n t a c t Dr. R o n a l d T r o s p e r by t e l e p h o n e at .. or by e - m a i l at  You should also feel free to ask any questions about the procedure at any time during or after the case study. The researcher's name is Jeremy Boyd and he can be contacted by telephone a t or by e-mail at :  127  If y o u h a v e a n y c o n c e r n s a b o u t y o u r rights or t r e a t m e n t a s a c a s e s t u d y p a r t i c i p a n t in this r e s e a r c h s t u d y , y o u m a y c o n t a c t the R e s e a r c h S u b j e c t I n f o r m a t i o n Line in the U B C Office of R e s e a r c h S e r v i c e s at t h e U n i v e r s i t y of B r i t i s h C o l u m b i a at ( 6 0 4 ) 822-8598. Consent  My s i g n a t u r e i n d i c a t e s t h a t I h a v e a g r e e d to p a r t i c i p a t e in the s t u d y by Dr. R o n a l d T r o s p e r , principal i n v e s t i g a t o r , Dr. G e o r g e H o b e r g , P e g g y S m i t h , Dr. C a s e y v a n K o o t e n , a n d Dr. Ilan V e r t i n s k y , c o - i n v e s t i g a t o r s on " F i r s t N a t i o n s a n d S u s t a i n a b l e F o r e s t r y : I n s t i t u t i o n a l C o n d i t i o n s for S u c c e s s " a n d the s u p p l e m e n t a r y M a s t e r s t h e s i s s t u d y by J e r e m y B o y d , M S c C a n d i d a t e for the F a c u l t y of F o r e s t r y at U B C . My c o n s e n t is g r a n t e d on the u n d e r s t a n d i n g t h a t : 1. 2.  T h e First N a t i o n m a y w i t h d r a w at a n y t i m e f r o m the s t u d y . If d e s i r e d , t h e d a t a the First N a i t o n p r o v i d e s will be kept c o n f i d e n t i a l a n d d o c u m e n t e d so t h a t no i n d i v i d u a l c o m m u n i t i e s , b u s i n e s s e s or r e s p o n s e s c a n be identified. 3. T h e d a t a will be s e c u r e l y s t o r e d at the U n i v e r s i t y of British C o l u m b i a for a period of s e v e n (7) y e a r s , a n d t h a t a c o p y of m y First N a t i o n ' s i n t e r v i e w n o t e s m a y be r e q u e s t e d f r o m the r e s e a r c h e r s . 4 . T h e p u r p o s e a n d m e t h o d s of the s t u d y h a v e b e e n e x p l a i n e d to m e . 5. I a g r e e / d o not a g r e e (circle o n e ) : a. to be fully r e c o g n i z e d in all p u b l i c a t i o n s a n d in the m a s t e r s t h e s i s , b. not to be r e c o g n i z e d but to be listed as o n e of the c o m p a n i e s p a r t i c i p a t i n g , or c.  not to be r e c o g n i z e d or listed a n d to h a v e i d e n t i f y i n g facts s u p p r e s s e d  First N a t i o n R e p r e s e n t a t i v e S i g n a t u r e  Date  First N a t i o n R e p r e s e n t a t i v e N a m e ( P l e a s e Print)  Interviewer Name  Please provide your contact information  below:  Organization: Address: City: Province:  Postal Code:  Email:  128  CASE STUDY INFORMED CONSENT FORM Business Venture FIRST NATIONS AND SUSTAINABLE FORESTRY: INSTITUTIONAL CONDITIONS FOR SUCCESS A U n i v e r s i t y of B r i t i s h C o l u m b i a a n d L a k e h e a d U n i v e r s i t y r e s e a r c h g r o u p , h e a d e d by Dr. R o n a l d T r o s p e r , p r i n c i p a l i n v e s t i g a t o r , in c o o p e r a t i o n w i t h Dr. G e o r g e H o b e r g , P e g g y S m i t h , Dr. C a s e y v a n K o o t e n , a n d Dr. Ilan V e r t i n s k y h a v e a r e s e a r c h project on " F i r s t N a t i o n s a n d S u s t a i n a b l e F o r e s t r y : I n s t i t u t i o n a l C o n d i t i o n s for S u c c e s s . " A s a g r a d u a t e s t u d e n t i n v o l v e d in c o n d u c t i n g this r e s e a r c h , I will a l s o be d e v e l o p i n g m y t h e s i s as a s m a l l e r portion of t h e l a r g e r r e s e a r c h s t u d y . My t h e s i s will be t e n t a t i v e l y titled " T w o A b o r i g i n a l f o r e s t r y j o i n t v e n t u r e s in the C a r i b o o - C h i l c o t i n . " W e w o u l d like to invite y o u r First N a t i o n f o r e s t b u s i n e s s p a r t n e r s h i p to b e c o m e a c a s e s t u d y p a r t i c i p a n t in this r e s e a r c h a n d in m y t h e s i s w h i c h is in partial f u l f i l l m e n t of a M a s t e r s d e g r e e f r o m t h e f a c u l t y of F o r e s t r y at U B C . W e a r e in a period of rapid c h a n g e in t h e r e l a t i o n s h i p b e t w e e n First N a t i o n s , i n d u s t r y , a n d the p r o v i n c i a l a n d f e d e r a l g o v e r n m e n t s in t h e forest s e c t o r . First N a t i o n c o m m u n i t i e s are e n t e r i n g b u s i n e s s in t h e f o r e s t s e c t o r t h r o u g h c o - m a n a g e m e n t agreements, interim measure a g r e e m e n t s , partnerships, joint ventures and other a r r a n g e m e n t s . T h i s r e s e a r c h project is e v a l u a t i n g w h a t f a c t o r s are i m p o r t a n t a n d w h a t role policy c a n do to a c h i e v e helpful o u t c o m e s for all parties i n v o l v e d in First N a t i o n s f o r e s t r y e n t e r p r i s e s of all t y p e s .  Purpose Y o u r First N a t i o n f o r e s t b u s i n e s s p a r t n e r s h i p is invited to be a c a s e s t u d y p a r t i c i p a n t to help identify w h a t c o n t r i b u t e s to or h i n d e r s t h e s u c c e s s of First N a t i o n forest b u s i n e s s a r r a n g e m e n t s . W e w o u l d like to e x p l o r e t h e n a t u r e of y o u r First N a t i o n f o r e s t r y b u s i n e s s a g r e e m e n t a n d its p e r f o r m a n c e . Y o u r p a r t i c i p a t i o n in this r e s e a r c h project is e n t i r e l y v o l u n t a r i l y and y o u m a y s e l e c t t h e d e g r e e to w h i c h y o u r p a r t i c i p a t i o n is publicly r e c o g n i z e d . T h e c h o i c e s are a s f o l l o w s c o n c e r n i n g the all p u b l i c a t i o n s a n d in the m a s t e r s t h e s i s : to be fully r e c o g n i z e d in all p u b l i c a t i o n s ; not to be r e c o g n i z e d but to be listed a s o n e of t h e c o m p a n i e s p a r t i c i p a t i n g , or not to be r e c o g n i z e d or listed a n d to h a v e i d e n t i f y i n g facts s u p p r e s s e d .  Methods O n e U B C r e s e a r c h e r will a d m i n i s t e r the c a s e s t u d y i n t e r v i e w s w i t h i n y o u r forest c o m p a n y . T h e i n t e r v i e w s will t a k e at least a n h o u r or m o r e to c o m p l e t e . T h e U B C r e s e a r c h e r will c o v e r v a r i o u s t h e m e s s u c h as the c o m m u n i t y ' s b a c k g r o u n d , the c o m m u n i t y ' s well b e i n g , t h e f o r e s t b u s i n e s s c h a r a c t e r i s t i c s a n d p e r f o r m a n c e , the v i s i o n of the f o r e s t b u s i n e s s r e l a t i o n s h i p , the role of t h e f o r e s t i n d u s t r y , the role of the p r o v i n c i a l a n d f e d e r a l g o v e r n m e n t s , a n d t h e f a c t o r s u n i q u e to y o u r forest b u s i n e s s . T h e i n t e r v i e w e r will w r i t e up a c a s e s t u d y report b a s e d on t h e i n t e r v i e w s c o n d u c t e d w h i c h will be s u b m i t t e d to y o u for r e v i e w a n d c o m m e n t for a c c u r a c y a n d for c o m p l i a n c e w i t h the level of c o n f i d e n t i a l i t y y o u s e l e c t .  Contact If y o u h a v e a n y q u e s t i o n s or d e s i r e f u r t h e r i n f o r m a t i o n a b o u t this s t u d y , p l e a s e c o n t a c t Dr. R o n a l d T r o s p e r by t e l e p h o n e at \ or by e - m a i l at  You should also feel free to ask any questions about the procedure at any time during or after the case study. The researcher's name is Jeremy Boyd  129  or by e-mail at  and he can be contacted by telephone at  If y o u h a v e a n y c o n c e r n s a b o u t y o u r rights or t r e a t m e n t a s a c a s e s t u d y p a r t i c i p a n t in this r e s e a r c h s t u d y , y o u m a y c o n t a c t the R e s e a r c h S u b j e c t I n f o r m a t i o n Line in the U B C Office of R e s e a r c h S e r v i c e s at the U n i v e r s i t y of B r i t i s h C o l u m b i a at ( 6 0 4 ) 822-8598.  Consent My s i g n a t u r e i n d i c a t e s t h a t I h a v e a g r e e d to p a r t i c i p a t e in the s t u d y by Dr. R o n a l d T r o s p e r , p r i n c i p a l i n v e s t i g a t o r , Dr. G e o r g e H o b e r g , P e g g y S m i t h , Dr. C a s e y v a n K o o t e n , a n d Dr. Ilan V e r t i n s k y , c o - i n v e s t i g a t o r s on " F i r s t N a t i o n s a n d S u s t a i n a b l e F o r e s t r y : I n s t i t u t i o n a l C o n d i t i o n s for S u c c e s s " a n d the s u p p l e m e n t a r y M a s t e r s t h e s i s s t u d y by J e r e m y B o y d , M S c C a n d i d a t e for the F a c u l t y of F o r e s t r y at U B C . My c o n s e n t is g r a n t e d on the u n d e r s t a n d i n g t h a t : 1. 2.  T h e c o m p a n y m a y w i t h d r a w at a n y t i m e f r o m the s t u d y . If d e s i r e d , the d a t a the c o m p a n y p r o v i d e s will be k e p t c o n f i d e n t i a l and d o c u m e n t e d so t h a t no i n d i v i d u a l c o m m u n i t i e s , b u s i n e s s e s or r e s p o n s e s c a n be identified. 3. T h e d a t a will be s e c u r e l y s t o r e d at the U n i v e r s i t y of British C o l u m b i a for a period of s e v e n (7) y e a r s , a n d t h a t a c o p y of m y c o m p a n y ' s i n t e r v i e w notes m a y be r e q u e s t e d f r o m the r e s e a r c h e r s . 4. T h e p u r p o s e a n d m e t h o d s of the s t u d y h a v e b e e n e x p l a i n e d to m e . 5. I a g r e e / d o not a g r e e ( c h e c k o n e ) : d . to be fully r e c o g n i z e d in all p u b l i c a t i o n s a n d in the m a s t e r s t h e s i s , e. not to be r e c o g n i z e d but to be listed a s o n e of t h e c o m p a n i e s p a r t i c i p a t i n g , or f.  not to be r e c o g n i z e d or listed a n d to h a v e identifying facts s u p p r e s s e d .  Company Representative Signature  Date  Company Representative Name ( P l e a s e Print)  Interviewer  Please p r o v i d e y o u r c o n t a c t i n f o r m a t i o n  below:  Organization: Address; City: Province:  Postal Code:  Email:  130  Name  Appendix 2 Survey Questionnaire Date of Interview: Start time: 1.  a) Is the business  . (insert name of business from  still in operation? database)  • YES (go to 2 b) • NO (go to 2 c) b) if yes, update contact information below (unless already given on consent form) '  Interviewer fill in information from Database where available & confirm/ update. Company Name Manager Address Telephone Fax E-mail Website c) If no, Do you know w h y not?  2. Has your band/ First Nation been involved in any forestry related business ventures prior to this one? • Yes • N o  131  IF CONT A CTING FIRST NA TION BAND OFFICE, NOT B USINESS DIRECTL Y, THE SUR VEY ENDS AFTER PART 1. ASK IF THERE ARE OTHER FORESTRY RELATED BUSINESSES IN THE COMMUNITY AND GET CONT A CT IN FORMA TION.  1. a) What is your primary business activity? (e.g. logging, silviculture...)  b) Axe any o f the following activities also a component o f your business?  (list & check all) (if they contract it out = yes- still responsible for it) •  a) Logging  What end product? (what are logs/fibre used for):_ • b) Silviculture (e.g. planting, spacing)  •  c) Management planning (forest management: e.g. planning, G I S , inventory)  •  d) Non-timber harvesting or manufacturing- What  products?  .  .  •  e) Support activities for forestry (i.e. road construction) Describe:  •  f) Forest product trucking  •  g) W o o d product Manufacturing What type?: • •  •  1 pulp and paper / • dimensional lumber/ 3 value added  h) Other (describe)  132  2. a) From the following list, please indicate with yes or no, what factors were important in creating your business? [check all that apply] • • • • • •  a) Land claim or treaty settlement b) First Nation-initiated c) Industry-initiated d) Individual entrepreneur e) Conflict resolution (boycott, blockade) f) Other (please specify)  b) Please describe the events that lead to the creation o f the business: (i.e. describe the situation that resulted in your business forming.)  3. a) What year was the business established? b) H o w long has the business been operational? 4.  a) IF logging business What is the annual volume o f timber harvested? (could be your average, or what you harvested in 2003) average / volume harvested i n 2003 (circle)  b) Under what type o f agreement is the volume accessed? • 1) license or tenure • 2) harvesting contract • 3) employment contract (e.g. agreement to hire an aboriginal logging crew) c) What is the term / duration o f agreement? d) Is the agreement renewable?  133  years  e) W h o holds the agreement? •  1) First Nation/ Band (EDO may admin on behalf of the band)  •  2) Tribal Council  •  3) Economic Development Corporation (a legal entity owned by band but not directly)  •  4) First Nation business  •  5) Joint with First Nations partners  •  6) Individual member o f the First Nation  •  7) Joint with Non-First Nations partners  •  8) Non-First Nations business  •  9) Other describe :  5. a) What were your total annual sales revenues or fees for the most recent fiscal year? (e.g. fees billed for silviculture work/ other services vs. sales revenues for product) $  •  b) If you're not comfortable giving a figure, please choose from the following categories: • • • • • •  1)<$ 100,000 2) $100,000-$499,999 3) $500,000 - $999,999 4) $1 million - $1.99 million 5) $ 2 m i l l i o n - $ 1 0 million 6)>$10 million  6. a) A r e you satisfied with the profit record this business has established to date? • Yes • No Please explain: -  b) Taking all o f that into consideration, did the business make a profit last year?  134  •  Yes  • No  b) Would you mind sharing with us your profit rate as a percentage o f your revenue? (% o f your revenues that is profit) Positive percentage: Negative percentage:  % .  %  7. H o w would you describe the change in revenues, employment, and First Nations employment over the past 3 years ? (Substitute over the life of the business, if in operation less than 3 years) For each, please choose from grown, no change, or declined.  1-Grown 2-No Change a) Revenues b) Employment c) First Nations Employment  • • •  • • •  3-Declined  • • •  8. a) On average, over the past 3 years (substitute over the life of the business if not in operation for 3 years), has the business been profitable? • Yes • No b) if Yes- how have profits changed? • • •  1-Grown 2-No Change 3- Declined  c) if no- how have losses changed? • 1 -Grown • 2-No Change • 3-Declined 9. a) What is the total number o f employees in the business? _ _ _ _ _ _ _ _ _ # o f Full Time employees? # o f Part Time employees? # o f Seasonal employees? _ _ _ _ _ _ _ _ _ b) What •  (i.e. year round PT) (i-e. FT for season)  % or number o f employees are First Nations members? # o f Full Time employees?  135  # o f Part Time employees? # df Seasonal employees? 10. a) Is the business reliant on external sources o f funding (from government or partner) to maintain operations? L J Y e s • N o b) What is the source(s) o f funding?  c) W o u l d you have to close i f you lost this funding? • Y e s • N o  P A R T 3: Busih&YT>pc. O w n e r s h i p s Control «  ' \VW$'V?/'  ' - / M  Introduction: In this section we will ask questions\aboutihe ownership and/, mahagemeht structur<eyo£thefoujHne^ 1. What type of business is this (from the following categories)? l  ; | '  • • •  • •  • .nfr,-. -'^ V ; , 1  1) Sole Proprietorship 2) Joint venture (partners create a new company or business to which they have contributed capital or other resources) 3) Partnership agreement (partners agree to pursue new or multiple business opportunities together and pool resources but don 'tform a new company) 4) Contracting (one party agrees to utilize another for specific tasks i.e. silviculture, hauling, logging). 5) Other. Please Describe: ;  2. W h i c h o f the following categories best describes the Legal ownership o f your business? 1) Sole proprietorship (single  owner/operator)  2) General partnership (each partner is jointly and severally liable for debts = both partners on the hook for all debts) identify partners:  3) Limited partnership (liability limited to amount invested; limited partner has no participation in management of partnership) identify partners:  136  4) Corporation  (no personal liability)  Identify shareholders and indicate whether individuals or communities:  5) Cooperative (controlled by members) Identify m e m b e r s : _ 6) Not-for-profit corporation (This would cover First Nations organizations like N A P A , for example, which might go into a consulting business in order to cover operating costs.)  Describe structure:  7) Other - Describe structure:  3. H o w is the First Nation's ownership o f the business held? •  1) Directly through the Band  rj  2) Directly through the Tribal-council  •  3) Through a Development Corporation  •  4) Other- Describe:  137  4. a) If the business is a Joint Venture, partnership or contracting business: Is there a formal legal agreement? (i.e. something that contains obligations for both parties) • Y e s DNo  If YES: b) If a Joint Venture, what equity does each partner hold? % First Nations % Industry % Other c) If a partnership, what share o f the profits/ losses does each partner hold? % First Nations % Industry % Other d) If contracting, does the agreement create obligations for the parties? (i.e. % wood from First Nation etc..) • Y e s • N o Describe:  5. a) IF JV or partnership: From the following list, what kind o f assets are contributed by each partner? (check all that apply) (template: For  , who  FN  contributed?) a) Natural resources (land, timber) b) Tenure c) Human resources (workforce, expertise) d) Financial assets (cash, loans) e) Material capital (Machinery, buildings) f) Other- Describe:  (  138  • • • • • •  Ind  • • • • • •  b) IF contributing land: What is the ownership o f the land contributed by the First Nations? 1) reserve land . 2) claim settlement/ treaty land 3) fee simple 4) aboriginal title/ traditional territory 5) other: describe 6. a) What is the long term capital investment in the business? (value o f equipment/ assets - not including standing inventory) $ b)  • • • • • •  If you're not comfortable giving a figure, please choose from the following categories: 1)<$100,000 2) $100,000-$499,999 3) $500,000 - $999,999 4) $ 1 million - $ 1.99 million 5) $ 2 m i l l i o n - $ 1 0 million 6)>$10 million  7. IF the business involves some kind of JV or partnership: W h i c h description best describes the control o f the business? •  a) Equal control (each party has equal say)  rj  b) Dominant control (one party exercises most o f the control)  •  c) Joint control (each party has control over specific parts)  r__  d) Independent control (the parties use outside management)  8. a) Is there a board o f directors for the business?  •  Yes  •  No  b) IF YES, how many seats total, and how many are held by First Nations representatives? i) #  First Nations  ii) #  Total  c) W h o occupies those seats? • • •  1) elected officials (Chief or Council) 2) other First Nations members 3) combination  d) D o any independent third parties sit on the board? •  139  Yes  •  No  9. W h o is the senior management person (e.g. C E O / President / Manager- head honcho) o f your business? •  1) First Nation elected official  •  2) other First Nation member  •  3) Member o f the industry partner (if JV or partnership)  •  4) Shared (describe:  •  5) Third party  )  10. Who provides the management staff for the business? •  1) First Nation members  •  2) Industry partner members  •  3) Shared (describe:  •  4) Third party  _)  11. If there are supervisory positions, who fills those positions? •  1) First Nation members  •  2) Industry partner members (If JV or partnership)  •  3) Shared (describe:  •  4) Third Party  "strongly disgree" to 5 "strongly agree".  a) The First Nations partners are involved i n day to day decision- making. b) The First Nations partners are involved in determining the strategic plan and objectives. c) There is a communications strategy to keep community members informed o f what is happening (e.g. Monthly meeting, company reps come, etc.). d) There are clear lines o f authority and people know whom to approach to resolve problems. 13. a) A r e there written rules or a procedure to resolve conflict between parties? (if there's some sort of long term relationship - even contracting)  140  5- Strongly Agree  whether you agree or disagree on a scale from 1-  4 - Agree  together. For each statement in this list, please state  3 - Neutral  operation o f the business and how partners work  2 - Disagree  12. If Parntership/ J V : These questions ask about the  1 - Strongly Disagree  )  •  Yes  b) IF • • •  •  No  YES, Do these rules rely on: 1) a person 2) a formal procedure 3) a third party  c) Have these rules been used?  •  Yes  •  d) If yes, in your opinion, were they effective?  No  •  Yes  •  No  14. How much influence does your First Nation have over the policy environment within which the business operates? (i.e. the set of rules set by governments) that influence or constrain forest management and forest business activities- such as rules on land use, forest practices, and forest management.). Please choose from the following categories: •  1) No Influence  • 2) A Little Influence • 3) Moderate Influence • 4) Significant Influence  •  5) Complete Control  15. IF some degree of influence: What form does that influence take?  j—j 1) Self-government (explain what form--treaty, interim measures agreement, land claim settlement & describe legislation governing arrangement (eg. Indian Act or alternatives to the Indian Act like the First Nations Land Management Act, Sechelt Self Govt Act, Westbank Self Govt Act;  ii) form: iii)  legislation:  O 2) Co-management (a formal agreement with provincial or territorial government) • 3) Consultation with other governments 16. a) Does the business have set objectives in place?  • Yes  • No  b) Ifyes, how are these business objectives set? • T) Process • 2) Protocol • 3) Mediator • 4) Other: (Describe  141  c) What are the business's objectives? (Please list or describe):  4: I PART<4  GOALS  &;.OB1FCTIVES & THEIR  RFI '\TIVF:IMPORTANTF ^ 1  v  .4,'/-'  1. List the top 3 most important economic activities i n your community?  (Such asfisheries,mining, forestry, high tech sector, tourism...) 1)  '  2) 3)  \  ;  :  \ '  142  '  •  v  2. What things do you consider important in evaluating the success of your business? Please list the top 3 i n order o f importance: 1) _ 2) _ 3) .  3. I w i l l list some objectives that are important to some communities as priorities for development planning. Please rate the importance o f each objective to the business as expressed by the community, (on a scale from 1 "not at all important" to 5 "very important") (i.e.what do you perceive the community has as important goals for your business) a) Employment (Jobs for community embers) b) Alleviating poverty  e  e ©  B  CS  o  a.  u © a.  eS  L.  CS  > ©  ©  z  z  © © c  CS  s  © a.  S  Z  T  © fi.  £  > I  c) Increasing First Nation's / Band's income d) Increasing income o f individual First Nation members' households e) Training and skills development f) Reducing dependence on Canadian or Provincial governments g) Protecting Aboriginal and Treaty rights h) Increasing voice in local forest management planning i) Protecting environmental values j) Strengthening First Nations culture and values k) Other (please list): Other 1: Other 2: Other 3: 4. If partnership / JV: Please indicate whether you agree or disagree with the following statement: (from 1- strongly disagree to 5-strongly agree). Referring to  143  the objectives in the last question that you stated were important for your community:  • • • • • 5.  "These objectives were clearly understood in the negotiations establishing the business. " 1. 2. 3. 4. 5.  Strongly Disagree Disagree Neutral Agree Strongly Agree  a) Has your community undertaken an economic development plan? •Yes • No b) If Yes, do you have a copy?  • YES  • NO  c) If Yes: who could I ask to get a copy? 6. There are some additional activities that a business may carry out that are also thought to enhance the likelihood o f success. Please indicate with Yes or N o , whether your business is active i n any o f the following areas. a) Does the business offer any job or skills-training or mentoring designed specifically for First Nations employees? b) Does the business offer any training or education for its management designed specifically for First Nations? c) Is cross-cultural training offered for workers? d) Does the business contribute funds to community development?  (e.g. housing) e) Does the business provide funds for education o f First Nations members? (e.g. scholarships) f) Does the business deliver any cultural benefits?  (Contribution to ceremonies, etc.) g) Has the business contributed to the development o f management expertise within the First Nation? If yes, how many management positions are held by First Nations members i n your business today?: i) # o f positions held by F N : ii) Total # o f mgt. positions:  144  Ye s  No  h) Can you think o f any other important activities that we didn't list? (If Yes, Please List in order o f importance.) Other activity 1: Other activity 2: Other activity 3:  7. In your opinion, what leads to a successful relationship with a non-Aboriginal company? (Please List the top 3 things in order o f importance.) 1)  :  2)  : ;  3)  :  :  :  8. a) D o you think that your First Nation's relationship with the non-Aboriginal forestry industry has improved or deteriorated i n the past five years? (substitute  over the life of the business if not in operation for at least 5 years) • • •  1. Improved .2. N o change 3. Deteriorated  b) To what do you attribute this improvement or deterioration?  9. If partnership or JV: Please indicate i f you agree with the following statement: (on a scale from 1- strongly disagree to 5- strongly agree.)  • • • • •  " / trust the partner to work in the best interests of the business. " 1. 2. 3. 4. 5.  Strongly Disagree Disagree Neutral Agree Strongly Agree  10. If partnership or JV: H o w has your level o f trust in the partner changed since the arrangement first started?  145  • 1. Increased •  2. Remained the same  •  3. Decreased  11. a) If partnership or JV: Has your relationship with your partner improved since its beginnings? • Yes • N o b) W h y do you think this is the case?  P A R T 5: POLITIC \I, O R ( i W I Z A T I O N O F Y O U R C O M M I M T Y  •Iff M I W Introduction: In this section we will ask questions about the political orgaiii/aii<;ii ol the communis in which \our business operates. (If interviewee is not.a member ul the  First .Xation, may need to ash for someone else to interview for these questional  1. a) D o you feel able to answer questions about the political organization o f your First Nations community? • Yes • N o b) If not, who could we ask the questions for this section? (it would only take a few minutes) 2. What rules specify how your First Nation/Tribal Council is governed? • 1) the Indian A c t • 2) a self-government Agreement (if ratified, a copy should be available  on  the DIAND website) •  /  (explain how this works with the Indian Act; have you developed a constitution under this agreement? is a copy available? we can then see legally how issues such as conflict of interest, public notification, etc. are dealt with)  3) traditional governance system  • 4) other (explain—there may be combinations o f traditional and Indian A c t systems).  3. a) H o w is your elected government chosen? • 1) Through Indian A c t Regulations  (section 78 of the IA states that the term of office of the Chief & Council is 2 years.)  146  _  • b)  2) Through Custom Elections  If Custom  Elections:  i) A r e terms staggered? (i.e. not all Chief & Councillors come up for election at the same time)  •  Yes  •  No  ii) What legal agreement specifies the Custom Elections?  4. What is the term of office for Chief and Council?  years  5. H o w long has the current Chief been in place?.  years  6. Do the Chief and Council play a significant role in the day- to-day operations of the business? • Yes • No  147  7. a) Does your Nation have hereditary chiefs? • Yes • No If so, how important are Hereditary Chiefs in political processes? (on a scale from 1- not important to 5- very important) • • • • •  1 Not important 2 O f little Importance 3 Somewhat Important 4 Important 5 Very important  b) D o Hereditary Cheifs have a formal role in decision-making processes •'in the community? • Yes • No  c) H o w important are Elders in political processes? (on a scale from 1- very important to 5- not important) • • • • •  1 Not important 2 O f little Importance 3 Somewhat Important 4 Important 5 Very important  d) D o Elders have a formal role in decision-making processes in the community (i.e. elders' committee)? • Yes • No  8. a) Have Chief and Council ever been removed from office before their term was over? •  Yes  •  No  b) If yes, why?  148  9. a) Has your band ever been under third party management? (e.g. federal government inserted a company like KPMG to do their finances- due to negative audit etc..) •  Yes  • No  b) If yes, why?  •_  1. a) One final question, do you have future plans for the business? •  1) Expansion in size  •  2) Diversify (become active in more areas: products/ services)  •  3) Stay the same  b) Please explain how you see your business evolving in the future:  2. a) If Partnership/JV: D o you know who I could speak to from your industry partner? W e are hoping to survey someone from both sides. •  Yes • N o  b) If Y , get contact information: Name Phone  149  3. Thank you very much for your participation. A r e there any important factors that you think we missed in this survey, or anything you would like to add? a) b)  •  Yes  •  No  List/ explain  .  4. a) Would you like to receive a summary o f our results? •  Yes  •  No.  b) When we send you the summary, would you like a copy o f the survey I just completed with you? •  Yes  •  Length o f Interview:  No  minutes  Interviewer Comments:  150  Case Study Questionnaire T H E M E ONE: COMMUNITY BACKGROUND Discussion Topic Prompt Questions A) C O M M U N I T Y DESCRIPTION • Geography o Exact location o Official size o f reserve land base (hectares) o Location o f traditional territory o Size o f traditional territory (hectares) o Approximate distance to next Aboriginal community o Approximate distance to non-Aboriginal community o Approximate distance to non-Aboriginal large urban centre •  Population o On-reserve o Off-reserve o Youth o Elders o Male vs. Female o Has the population o f your community increased, decreased, or remained steady over the past 20 years (approximately)? What social, economic, and ecological factors do you feel have contributed to this?  •  Education o What is the state or nature o f education attainment within your community? o Percentage o f population without a high school degree o Percentage o f population with a high school degree o Percentage o f population with a University education o Percentage o f population with a college diploma/trades certificate b Percentage o f population with a diploma, certificate or University degree in a forestry program or related field o What factors do you feel have contributed to the nature and degree o f educational levels within your community?  •  Economic Conditions o What is the primary economic activity i n your community? Secondary, Tertiary? o Overall, what are the economic conditions or state o f the economy within your community? o What key factors do you feel contribute to these economic conditions within your community? o H o w significant is forestry as a whole to economic and employment conditions within your community? O R H o w dependent is your community on the forest sector for a source o f livelihood?  151  o o  Have the economic conditions within your community increased, decreased or remained steady over the past 20 years? Explain why or why not? Have there been efforts to improve the economic conditions within your community? Explain what has been done?  •  Community Health Conditions o Overall, what is the state o f physical and emotional health among members o f your community? o Has there been an increase or decrease in the health conditions o f individuals within your community over the last 20 years? o What are the major social, economic, environmental and cultural factors (internal or external) that you feel have contributed to the state o f community physical and emotional health?  •  Socio-cultural Environment o Explain the degree o f interaction your community has with local nonAboriginal communities? o Explain the degree o f interaction your community has with other First Nation communities? o Is there a strong cultural presence within your community? Explain? o Does your involvement in forestry aid in revitalizing and sustaining traditional Aboriginal culture within your community? Explain?  B ) C O M M U N I T Y P O L I T I C A L O R G A N I Z A T I O N (SR Part 5) • Overall, could you describe the nature o f politics and the political environment within your community? (i.e.-high levels o f conflict, no conflict) •  What factors, both internal and' external, do you feel contribute most to the nature o f politics in your community?  •  The Chief and Council D O E S / D O E S N O T (circle one) play a significant role in day-to-day business operations within the community (SR Part 5 #6). Explain how their role or lack thereof affects the community's political environment/business environment.  •  Hereditary Chiefs are (SR Part 5 #7a) in political processes within your community. Explain? What is their specific role in your community's political environment? H o w has their involvement or lack thereof affected the political performance within your community?  •  Hereditary Chiefs D O / D O N O T (circle one) have a formal role in decisionmaking processes within the community (SR Part 5 #7c). If so, explain why and how they are organized? If no, explain why? Elders are (SR Part 5 #7b) in political processes • within your community. Explain? What is their specific role in the community's  •  152  political environment? H o w has their involvement or lack thereof affected the political performance within your community? •  Elders D O / D O N O T (circle one) have a formal role i n decision-making processes within the community (SR Part 5 #7d). If so, explain why and how they organize themselves? If no, explain why?  •  Does your community have conflict resolution mechanisms in place? Explain the process (written, formal, traditional, informal)? If so, who is involved in this process? If not, explain why and how your community deals with conflict?  •  Are politics often a problem when dealing with conflict i n your community? Explain? If so, what are the impacts o f "unfair dispute resolution" on the community?  C) SOCIO-ECONOMIC D E V E L O P M E N T : C O M M U N I T Y C H A L L E N G E S A N D DESIRED CHANGES • Identify and describe barriers encountered with respect to undertaking forestbased economic development within your community? What are the barriers to increasing your community's involvement? •  If possible, how did your community attempt to overcome these obstacles?  •  Identify and describe any changes for the future that your coimnunity would like to see with respect to forest-based economic development activities or initiatives?  T H E M E T W O : BUSINESS C H A R A C T E R I S T I C S A N D P E R F O R M A N C E  Discussion Topic Prompt Questions A) ORIGIN A N D D E V E L O P M E N T OF B U S I N E S S / P A R T N E R S H I P • In your survey response, you noted that ; was/were the major factors important i n creating your business or partnership (SR Part 2 #2). Describe in detail the chronological events that lead to the creation o f your business. B) S T R U C T U R E O F T H E B U S I N E S S , • Elements o f the Business/Partnership Arrangement  o  (If the business is a Joint venture, partnership or contracting business) (SR  Part 3 #1) Y o u r  survey response indicates there IS/IS N O T a formal legal agreement that contains obligations for both parties (SR Part 3 #4a). Explain. W h y did the partners choose or not choose to use a formal legal agreement to govern the business? o  (If a JV or partnership Refer to Part 3 #4b,C of survey to see % equity/profit share) Identify and describe the factors that determined the  percentage o f equity or profit-share that each partner holds? Who was involved in deciding this?  153  o  o  o o  o  (If a contracting venture, refer to Part 3 #4d of survey) Y o u r survey response indicated that the formal agreement D O E S / D O E S N O T (circle one) create obligation for the parties. Explain the reason for this. If the agreement does create obligations, identify and describe them. D i d you use another partnership/business to model your partnership structure or to develop the business arrangement? If yes, how was it customized? Describe the process. The business D O E S / D O E S N O T have set objectives i n place (SR Part 3  #16a).  IF Y E S , how are business objectives set? Process? Protocol? Mediator? Other? Explain. (SR Part 3 #16b) IF N O , explain w h y your business D O E S N O T have objective in place? What are your business objectives? (SR Part 3 #16c) Explain.  •  Partner Selection o H o w was the partner selection process developed and conducted? Describe in detail. o What were the desired qualities in the First Nation partner? Industry partner?  •  Monitoring Assessment and Improvement Mechanisms o H o w are open lines o f communication kept within the business? Communications strategy? Explain, o A r e there clearly defined roles and responsibilities within the business? o The business D O E S / D O E S N O T have a procedure to resolve conflict between parties (SR Part 3 #13). If so, have these rules ever been used? Explain. Were you satisfied with the process? Explain, o Describe the evolution o f the negotiation process? A n y benchmarks? A n y watershed dates? o H o w are internal politics handled? Does the First Nation partner have influence over the policy environment within the business? Explain how? b H o w is the changing o f company strategy or human resource practices handled? Explain.  •  Expectations and Satisfaction with Business Structure o Describe the expectations and, motivations o f the First Nation partner, o Describe the expectations and motivations o f the Industry partner. , o Overall, are you satisfied with the structure o f the business itself? Explain, o Identify any changes you would make to the structure o f the business.  C) E X P E C T A T I O N S A N D S A T I S F A C T I O N W I T H B U S I N E S S / P A R T N E R S H I P PERFORMANCE • In the survey, you identified your expectation for the success o f the business relationship when it was established (SR Part 2 #llc). Explain why you expected this.  154  • •  In the survey, you rated your satisfaction with the business Explain in detail your feeling behind this.  (SR Part 2 #lla).  In the survey, you rated your level o f trust in your partner. H o w has this trust developed/not developed? Explain the factors influencing this. (SR Part 4  11)  •  #10,  In the survey, you rated you rated your satisfaction with how the partners involved in this'business work together. Explain w h y you rated this way. What are the strengths and weaknesses in the Industry partner/First Nation partner? A n y additional strengths/weaknesses? (SR Part 3 #12)  D) A C T I V I T I E S T H A T E N H A N C E B U S I N E S S / P A R T N E R S H I P S U C C E S S • H o w has the cultural gap within the business been dealt with? Have crosscultural training workshops been offered (SR Part 4 #6c)l Explain. •  Does the business incorporate traditional Aboriginal values into day-to-day business operations? Does the business deliver any cultural benefits? (SR #6f) Explain.  •  Does the business offer any job or skills training specifically for First Nations employees? (SR Part 4 #6a) Explain.  •  Identify and describe additional factors that have helped to enhance the success o f the business.  Part 4  E) L E S S O N S L E A R N E D • Partner selection • Business structure • Business performance  T H E M E THREE: VISION FOR BUSINESS RELATIONSHIPS Discussion Topic Prompt Questions A) FACTORS I N F L U E N C I N G SUCCESS OF RELATIONSHIPS WITH N O N ABORIGINAL BUSINESSES • From your survey response, it was indicated that 1) ,2) , and 3) (SR Part 4 #7) were the most important factors that contribute to a successful relationship with a non-Aboriginal company. Explain why you chose these as the most important factors? •  From your survey response, it was indicated that 1) ,2) , and 3) (SR Part 4 #8) were the most important factors that contribute to deterioration in relationships with a non-Aboriginal company. Explain why you chose these as the most important factors?  B) L E S S O N S L E A R N E D  155  •  Do you have a long-term strategic vision for developing relationships with the forest industry? Explain some potential methods for achieving this.  •  From your forest-based business experience(s), what were the major factors that contributed to success/failure with your non-Aboriginal partner? Explain in detail.  •  Is there anything you would have done differently? What are some required areas of improvement?  •  Where w i l l your enterprise be in the future? What challenges do you foresee?  T H E M E FOUR: F O R E S T INDUSTRY AND G O V E R N M E N T I) R E L A T I O N S H I P W I T H F O R E S T I N D U S T R Y Discussion Topic Prompt Questions A) N A T U R E OF RELATIONSHIP WITH INDUSTRY • Describe the nature and state o f your current relationship with the forest industry? •  Y o u r survey response indicated that your First Nation's relationship with the forest industry has I M P R O V E D / D E T E R I O R A T E D / N O T C H A N G E D (circle one) i n the past 5 years. (SR Part 4 #9) Has your relationship changed over the past 20 years? What do you feel are the factors that have contributed to this?  •  What do you perceive are the roles and responsibilities o f the forest industry with respect to increasing Aboriginal involvement i n forest-based economic development and improving Aboriginal and non-Aboriginal relationships?  •  What efforts have been made by the forest industry to increase your community's involvement in forest-based economic development? What circumstances led to this?  •  What efforts have been made by your First Nation to increase your involvement?  •  What are the primary motivations for First Nations to enter into relations with the -forest industry?  •  What do First Nations see as the primary motivation for Industry to enter into relations with Aboriginal communities/companies?  B) P O L I C Y E N V I R O N M E N T • H o w much influence does your community have over the policy environment to determine the degree o f participation in the forestry sector? (SR Part 3 #14) •  Explain what form this influence takes (i.e. self-government, co-management, membership i n advocacy groups like C A N D O , N A F A , and A F I C etc).  156  C) L E S S O N S L E A R N E D • Identify and describe the impacts, benefits and outcomes for your community with respect to your relationship with the forest industry. •  Identify and describe the impacts, benefits and outcomes that you perceive for industry as a result o f relationships with Aboriginal communities.  •  Identify and describe the major barriers encountered through your efforts to improve relationships with the forest industry.  •  Identify and describe factors that hinder First Nations' ability to improve industry relations and increase involvement in forest-based economic development.  •  What are the areas o f improvement for increasing your communities' involvement in forest-based economic development?  •  What have you learned from your experiences with the forest industry?  II) R E L A T I O N S H I P W I T H G O V E R N M E N T , R O L E O F G O V E R N M E N T Discussion Topic Prompt Questions A) N A T U R E OF RELATIONSHIPS W I T H G O V E R N M E N T • Describe the nature and state o f your current relationship with the federal and provincial Government? •  D o you feel that your First Nation's relationship with the federal government has improved, declined, or remained the same over the past 5 years? Has your relationship changed over the past 20 years? Explain. What do you feel are the factors that have contributed to this change?  •  D o you feel that your First Nation's relationship with the provincial government has improved, declined, or remained the same over the past 5 years? Has your relationship changed over the past 20 years? Explain. What do you feel are the factors that have contributed to this change?  •  What do you perceive are the roles and responsibilities o f the federal/provincial government with respect to increasing Aboriginal involvement i n forest-based economic development and improving Aboriginal and non-Aboriginal relationships?  B) G O V E R N M E N T E F F O R T S T O I M P R O V E A B O R I G I N A L A N D N O N ABORIGINAL FOREST-BASED RELATIONSHIPS •  Policy Environment  157  •  •  o  What efforts do you perceive have been made by the Federal government with respect to the development and implementation o f policy/legislation that aid in strengthening First Nation and forest industry relations? To increase First Nation involvement i n forest-based economic development?  o  What efforts do you perceive have been made by the Provincial government with respect to the development and implementation o f policy/legislation that aid in strengthening First Nation and forest industry relations? To increase First Nation involvement in forest-based economic development?  o  H o w much influence do you feel your community has over the development and implementation o f these policies? Explain?  Education and Training o Explain efforts that you perceive have been made by the Federal government with respect to increasing capacity within First Nation communities through workshops, training, funding education, scholarships, etc? o  Explain efforts that you perceive have been made by the Provincial government with respect to increasing capacity within First Nation communities through workshops, training, etc?  o  D o you feel there has been effort by the Federal and Provincial level o f government to further educate the non-Aboriginal forest sector by undertaking research that addresses historical and contemporary Canadian Aboriginal issues i n forestry? W o u l d this benefit First Nation communities? Explain.  Government Funding o H o w successful have the Federal and Provincial governments been at establishing funding programs for First Nation communities who wish to undertake forest-based economic development initiatives? o Y o u r survey response indicates that your business IS/IS N O T reliant on external source o f funding from the government. Explain why or why not.  C) L E S S O N S L E A R N E D • Identify and describe the major barriers encountered through your efforts to improve relationships with the Federal and Provincial government. •  Identify and explain some required areas for improvement.  •  Identify and describe the impacts, benefits and outcomes for your community as a result o f Federal and Provincial governments, with respect to your involvement in forestry and forest-based economic development.  RELATIONSHIP WITH OTHER STAKEHOLDERS A) N A T U R E OF R E L A T I O N S H I P W I T H O T H E R S T A K E H O L D E R S  158  •  Are there other groups that have influenced forest-based economic development in your community? If so, who?  •  Explain your relationship with these groups. H o w have they affected forest-based economic development in your community?  B) L E S S O N S L E A R N E D • Identify and describe how your relationships with other stakeholders have benefited or impeded forest-based economic development in your community.  T H E M E FIVE: COMMUNITY WELL-BEING Discussion Topic Prompt Questions  •  A) C O M M U N I T Y G O A L S A N D OBJECTIVES • What is your community's long-term vision for quality of life within the community (economic, social, cultural, environmental, health, and education conditions)? Do you see your current involvement in the business meeting your long-term vision? Explain. •  If not, do you have potential methods for achieving your vision of well-being? Explain.  •  What other methods do you think would be useful to achieve your long-term community vision/goals?  •  In the survey you identified a number of objectives that are important to your community as priorities for development planning (SR Part 4 #3). H o w does your involvement in this business contribute to your goals? Explain in detail.  B) N A T U R E O F C O M M U N I T Y E C O N O M I C D E V E L O P M E N T P L A N N I N G • H o w does your community organize its economic development to meet community objectives? •  W h o controls the nature of community development within your First Nation? Explain? (who makes these decisions about development approaches, type of resources to develop and projects to undertake)  •  Y o u r community H A S / H A S N O T (circle one) undertaken an economic development plan (SR Part 4 #5a). If not, explain why. If yes, when was the first time an economic development plan was developed in your community?  •  W h o is involved in the process of preparing your community's economic development plan?  •  Have there been any changes to the plan? Are you actively trying to make changes? Explain how?  159  •  From your experience, what lessons have you learned by preparing or not preparing a Community Economic Development plan? H o w has this affected the economic condition within your community? What would you do differently?  C) S O C I A L I M P A C T A S S E S S M E N T / C O S T - B E N E F I T A N A L Y S I S • H o w has the business/partnership benefited the community? Explain. •  What costs have been borne by the community for the business?  •  H o w has the community changed as a result o f involvement (direct or indirect) with the business/partnership? Explain i n detail.  T H E M E SIX: E C O L O G I C A L S U S T A I N A B I L I T Y Discussion Topic Prompt Questions A) PERCEPTION OF SUSTAINABILITY • If your forest-based business(es) are based on extraction o f natural resources on community lands (reserves and "traditional territory" as defined by the community), do you think this is being carried out sustainably? Explain. !  •  D o you feel that resources available now and the degree o f your business's sustainable forest practices w i l l ensure that future generations are able to enjoy those resources as well? Explain.  T H E M E SEVEN: FACTORS UNIQUE T O CASE Discussion Topic Prompt Questions A ) Issues/topics/matters that arise, not addressed in other parts o f the report  160  

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