First Nations/Private Sector Partnerships in British Columbia
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Throughout the Province of British Columbia, First Nations businesses are thriving in many sectors of the Economy. Some of this growth can be attributed to strategic alliances between Aboriginal and non-Aboriginal companies. These partnerships, or joint ventures, have resulted in many successful business ventures. This program profiles the experiences of five First Nations groups, in a cross section of industries located throughout BC:
- a winery in the Okanogan,
- a clean-energy producer on Vancouver Island,
- a heritage hotel on the Sunshine Coast,
- a forest products producer near Burns Lake,
- and a natural gas drilling rig near Fort Nelson.
We'll look at the reasons to go into a joint-venture, the importance of two-way cultural awareness, the importance of planning and setting the environment for partnerships, the partnership development process, and then hear some factors for successful partnerships.
[Text on screen: WHY PARTNERSHIPS]
Joint venture arrangements are developed for a variety of reasons, including access to capitol and resources, sharing knowledge and expertise, and building relationships for future opportunities. In a joint venture there is usually and exchange of capitol for a share of the company. For both sides involved, a successful joint venture can expedite the business process and increase a business's chance of being successful.
In order to turn the large amount of standing and underwater timber available on their land into a business opportunity, the Cheslatta Carrier Nation negotiated a joint venture with Carrier Lumber and Ootsa Resources, a conglomerate of local investors. Both Carrier Lumber and the Cheslatta people realized they would benefit by coming together to share resources, and that they needed each other to access this business opportunity.
On this side of the lake, for years, there wasn't any employment, you know substantial employment for our people. So as part of our joint venture with Cheslatta forest products, we benefit financially and also through job creation which ripples down into our community and to the family in many different ways.
What we had confidence in, mainly, was our timber supplies. We also had a good reputation for doing business, and we had a good reputation with the local forest district. ‘Course being a small Indian band here we lack capacity, we lacked credibility, we lacked business sense, we didn't have any capitol, and that's what our non-Native partners brought to the table and our industry partners, Carrier Forest Products.
We came to the conclusion a long time ago, that, in order to be successful, you have to be part, and work with the local people in the community. You have to be able to become a smaller part of something that you hope will become a success story, as opposed to being a big part of a failure. And a venture like this, I think, it truly is, it's not one plus one plus one plus one is three. It's actually more like one plus one plus one equals 10. It's when you work it all together, and you get the groups working in harmony, that's where the true benefit, of these ventures comes in.
Now is the most crucial time, I think, within our structure, as First Nations people, to take advantages of these joint ventures that are offering themselves to us, We're not even looking for them anymore, they're coming to us, for sustainable resources, value added, components within our forest industry. So we need to take advantage of it, need to take advantage of it now.
In the China Creek Micro Hydro Project, the Hupacasath First Nation joined forces with their neighboring tribe the Ucluelet First Nation, and are now in a joint venture with other investors to generate green energy from the river. When two or more First Nations come together to pool resources, knowledge and expertise to create a business venture, great things can be accomplished.
The Hupacasath First Nation determined that we wanted to do a run-of-the-river, green-energy project, and we needed to have some equity partners to help us pull the money that we needed for the project. We did offer partnerships to all the surrounding local First Nations, particularly the Ucluelet First Nation because we are partners with them in another business that we have, and so we thought it would be important to ask them to come into the project for capacity building and we've also identified another micro-hydro project in our areas of joint territories.
The Ucluelet First Nation and Hupacasath First Nation are relative tribes, and I think that cultural awareness, that we have a connection that extends just beyond political and economic ties. It really helps build a trusting partnership for economic ventures so, you know, the Ucluelet First Nation brings their contribution in equity and shared resources and I think a progressive tribe like the Hupacasath First Nation has a lot to share with the Ucluelet First Nation. It really gives us a good opportunity to learn how to develop our own corporations effectively and aim towards the long term.
The Osoyoos Indian Band entered into a joint venture with Canada's largest wine producer Vincor, in order to match their world-class grapes with Vincor's expertise in making wine. The result is a Native-themed estate winery that might not have been possible without this well-suited partnership.
We see the advantage of partnering with Vincor, in that, that gives us the opportunity to make North America's first Aboriginal-owned winery all it can be, and to be able to compete on the world scale. First Nations people, we're in our first generation of not only manager-owned affairs, but in our first generation of being business people. Even though the Osoyoosian band has been involved in the grape industry for 30 years, we will be the first to say we still have a lot to learn about being business people. And once you have risked your own money and your business you have got to have capable people at every position and not put them there because they are First Nations people or Osoyoos Indian Band members. So we work closely with Vincor in developing the human resource side of your people training. And Vincor's, of course, being the experts direct a lot of that.
Our relationship with the Osoyoos Indian Band goes back to 1984. We have a very broad based partnership, and we built a winery there in the ‘80s. We have now up to 850 acres of land leased and developed with the band, which is one of the premiere grape-growing regions in the world. And we're looking at it as a partnership, we're looking at it as a basis where if the band and ourselves both do well in the relationship, it will succeed and thrive and continue in the long-term.
[Text on screen: WAY CULTURAL AWARENESS]
Developing awareness between parties is key in any business relationship. In joint ventures between Aboriginal and non-Aboriginal parties there is a need for understanding, both in terms of cultural nuances and business operating styles. The organizational goals of the parties involved in a joint venture might not always be the same, so it is necessary to find a common ground on which to do business.
I believe that it's important to get training in business and then use your own heart, the needs of your people, the corporate needs and mesh them all together, and then create what kind of structure you want for your people. Everyone's going to be different. They'll never be two the same. It's hard to explain but it'll all fall into place if you have the foundation properly done. The Elders and the Community members are the ones that will tell you what you do, then you use your business sense to take it from there.
The community aspect, the First Nations aspect is, you know, different focus, in a lot of respects, than what business wants. And so you have to go into these with a different mindset. I think that they also realize that the business has to make money. You can't just break even. You have to make money; making profit is not a dirty word. So they have to realize that it isn't just community, it isn't just jobs, it has to be a viable business enterprise. And so somewhere in the middle is where this has to meet, and that's the trick of making this work.
Non-Native people wanting to setup joint ventures with First Nations people have to be really sensitive to the First Nation component of their history, their culture and ideals and, you know, things the First Nations bring to the table. And First Nations people have to understand that in a real business world you're running businesses that depend on a certain amount of your own self-earned revenue, and your risking your own money, and therefore the pace has to be a lot quicker and your due diligence has to be a lot more detailed.
First Nations people have a perspective that is more like the people from Asia in that they think 360 years in terms of continuum, while Corporate Canada and America tends to think about the last quarter and you have to have a much longer perspective in how you look in the quality of what you do, the importance of building it for a very long-term, and building it in a way that is very compatible and friendly to the environment. And, I guess, what we've learned is that it's just as easy to do that as it is to do it any other way, so that's been a gift that they've given to us along the way of this joint venture.
[Text on screen: PLANNING AND SETTING THE ENVIRONMENT]
A joint venture, like any other type of business, can benefit from good planning. There are unique considerations when dealing with a joint venture between Aboriginal and non-Aboriginal parties. It is important to develop the right environment in a community to encourage business and attract outside investment.
When the opportunity arose for the Sliammon First Nation to purchase the Historic Lund Hotel, an attractive business environment enabled them to enter into a joint venture with a private investor.
The joint venture is very much dependant on the community in regards to our political stability. We need to, as the Sliammon First Nation have always said, we need to separate politics from business. Before our business corporation was structured, Sliammon was on a slippery slope where we couldn't develop any business opportunities because outside opportunity did not want to deal with First Nations Chiefs and Councils. We were on a two-year election system where a complete turnover can happen and business partnerships would be in jeopardy. So having the support of the council was very necessary in making joint ventures such as the Lund Hotel happen. We, as the Sliammon First Nation, being in the treaty process, wanted to put a footprint in the sand within our traditional territory. I think the Lund Hotel was a big opportunity for us. We went out and searched for a partner that understood our culture, our traditions and understood business, and the partnership developed from there.
You've got to be very careful that, within your management agreement and chair-holders agreement, it's structured in such a matter that business can carry on without, say, politics getting involved and jeopardizing their capital and my capital. So the contracts are extremely important and we spent a lot of time going over them and you need to have a First Nation that's wanting to venture out into the business world and has an acceptance of going into business. Sliammon has 900 and some members so we've got 900 partners on one side and one on the other. So in our case, with a development corporation, that really helps separate the two and I think that's why the council set up the development corporation so that they could do business. People don't want to do business with a council, an Indian band council, or a town council for that matter. They want to do business with a business arm. And SDC is a separate corporation, an entity itself.
The development corporation does have quarterly meetings with the community, and we have our one, annual general meeting where all the businesses are placed on the table, and the community sits, and listens and asks questions at that time. And that's a way of trying to bring the community up to speed in regards to the business. But with regards to the development corporation, the doors are wide open.
I think our community really needs to increase their awareness around business. We are in stage five of the treaty process and that's going to open up all kinds of doors and opportunities for the Sliammon First Nations people, whether that's in tourism, or entrepreneurship or whatever the case may be. We have a very young, bright population of people that we want to come back into Sliammon and create opportunities. So our people really need to get their minds around educating themselves as to how business operates.
[Text on screen: PARTNERSHIP DEVELOPMENT PROCESS]
When the Fort Nelson First Nation began getting offers with a number of companies to set up a natural gas drilling station operation, they wanted to make sure that the partner they chose shared their respect for the land and operated with an environmental conscience.
Fort Nelson is so busy right now in terms of the oil and gas industry, and we have companies knocking on our door. And we really have to take your time, do your due diligence, and check into the company, like what do they bring to the table, what type of reputation do they have, and is it someone you can work with and not compromise your principles and your values. The qualities that we wanted was someone that respected us, valued us in terms of seeing us as a partner, and not just as a blank cheque to get into tradition territory.
Ensign brings to their table, they're a world leader in drilling rigs and basically are all over the world and in terms of the drilling rig, its state of the art, and how we were brought together was EnCana, the biggest oil company in western Canada, and they basically played a dating service and brought the two of us together. And we evaluated their relationship with Ensign and we compared it to others and basically thought this is a good one for us to get into, our community would benefit form this agreement, so we chose to go with Ensign.
Part of being in Fort Nelson is trying to work with the community and employ local people as well as services. In this case Fort Nelson First Nations is trying to develop itself economically and Ensign Drilling seeks to expand its area of operations so it makes sense to work in partnership with them to our mutual benefit.
Another consideration when setting up a joint venture is determining what the management structure of the partnership will be. For China Creek micro-hydro the amount of control held by each of the four partners involved was determined by several factors, including capital investment, management experience and access to resources. The corporate governance structure for the joint venture had to be agreed upon by all parties and one that would best serve the business as a whole.
One of the issues with the partnership is that while clearly Hupacasath First Nation over 70 per cent of the partnership has a controlling interest on issues of total partnership, all of the partners get a significant voice. In other words we have a number of resolutions that can only be passed with majority or near-majority issues of the directors. That's important because of all the parties that are in this partnership all of them are really looking for a long-term relationship. And all of the partners are heading in with the view of being there for 20 years and being hot. And they all want a little bit of relationship to the project, none of them want to deal with it as if it were a bank where you just get cash out of it, they all want an active say in it so the partners actually remain part of it throughout the entire corporation.
I think that the relationship between the city and the First Nations is a big improvement in that. Also in this community it's always been the companies that's kind of looked after us. There's MacMillan Bloedel and now we've got Weyerhaeuser and Norske. They're coming and going, so we want someone who's going to be permanent and be here for a long time. We can see the future is going to be the First Nations just to start and there's going to be many more joint ventures in the future, you can see that happening.
[Text on screen: FACTORS FOR SUCCESSFUL PARTNERSHIPS]
There is no one thing that can ensure the success of a joint venture, but there are several factors that can help.
A joint-venture is all about relationships. Once you get past the numbers and the P&L's (profits and losses) and that kind of stuff and the actual legal document, it's can the people that are appointed to the board of directors work together?
Finding someone who could respect us as a First Nation, respect us in our goals and objectives and realize we that had a lot to offer.
What will make it successful, I think, is that all of the parties have a common view as to what the project is going to do.
I think it's trust, it's understanding each other and picking your partner before you start and knowing why you want them.
A good joint venture creates value for its partners. All of the businesses we have featured here today would not be here if not for their partnership. Through these joint ventures, value is created, not only in terms of profit, but also in the benefits that are provided to local community.
The opportunities are going to be huge in the future, and people need to get their mind around that and work towards that goal of being in business.
There's going to be a number of jobs opening up when people start retiring and people are looking to the First Nations because we have such a young growing population.
To have half or a third of something is way better than having all of nothing.
Successful partnerships create financial prosperity, job opportunities and bring people from different cultures together to achieve a common goal.
They bring things that are very culturally rich at the end of the day, that is helping us not just in the joint venture, but maybe how we're looking at business in general.
As you start talking and working with people, you find that they quickly become your friends, and you wouldn't have had that opportunity if you didn't have that reason that got you together in the first place.
Joint ventures with First Nations will play a crucial role in the future of business in British Columbia, helping to create value for the private sector, the First Nations and the provincial economy.
We can step into the business sector, we can become a utility corporation, we can become a player.
There are First Nations people all across this country and we're starting to get into the business world, and there are awesome joint ventures being done across Canada between First Nations people and Corporate Canada.
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