Preferred Status for Aboriginal Groups and Procurement


When the Crown contemplates conduct that might adversely impact the potential existence of Aboriginal rights of an Aboriginal group, the Crown has a duty to consult and, where appropriate, accommodate the Aboriginal group. The construction and operation of large projects in BC that require regulatory approval from the Crown triggers this duty.

This duty must remain as the Crown’s obligation; however, the Crown can delegate procedural aspects of this duty onto the project proponent. As a result, the project proponent will often engage the Aboriginal group to negotiate an accommodation agreement to, among other things, assist the regulatory approval process and ensure that the project can proceed in a timely manner.

Accommodation agreements provide benefits to an Aboriginal group as accommodation for the potential adverse impact that a project may have on Aboriginal rights. There are many types of benefits that a project proponent may provide to the Aboriginal group which is a party, including the employment and training of Aboriginal people, direct contracts to provide materials or services for the project, and preferential treatment for future contracting opportunities, as well as monetary payment. Preferential treatment for contracting opportunities is increasingly used in accommodation agreements. Typically, in order to qualify, the Aboriginal group must have a minimal interest (such as 50% ownership or control) of the entity which receives preferential treatment.

There are many forms of preferential treatment that can be incorporated into an accommodation agreement. For example, there may be agreement to unbundle the construction principal contract or subcontract into smaller components to increase the likelihood that an Aboriginal entity will have the capacity to perform the work and successfully bid on the smaller contract. Another example of preferential treatment is a commitment to provide the Aboriginal group with advance notice prior to the contract being put out to tender. The advance notice creates additional time for the Aboriginal group to take steps, such as acquiring the capacity or forming a joint venture, to meet the required qualifications of the tender. There can also be agreement to structure the tender process to provide preferential treatment for an Aboriginal group or entity. Bidders can be required to subcontract certain work or a specified percentage of work to an Aboriginal group. Another possibility is that criteria used for evaluating bids can include a non-price criterion that requires a certain level of participation by the Aboriginal group or entity in the bid.

No matter how an accommodation agreement provides an Aboriginal group or entity with preferential treatment for contracting opportunities, the project proponent will want to ensure that the contracting process results in a competitive outcome.