Structuring Joint Ventures & Major Projects

billie fortier

Forward Summit | WEST 2024 featured over 100 speakers discussing many of the most prominent topics involving Indigenous communities and economic reconciliation. “Bridging the Gap”, a roundtable panel, was one of the most informative, discussing how to structure joint ventures and organize major projects.

Led by moderator Billie Fortier and featuring panelists Reg Potts (Director of Partnerships and Indigenous Development, Backwoods Energy Services), Sandy Jackson (Business Development Manager), Mark Little (President, Chief Executive Officer & Director at Suncor Energy, Inc.) and Monika Wilson (Vice President of Fort McKay Landing LP), the panel offered a comprehensive overview of what companies should striving for when structuring joint ventures.

The panelists immediately jumped into the various roadblocks and impediments regarding joint ventures and Indigenous partnerships. They discussed the Indian Act, the roadblocks of investment and the inability to secure and access capital or invest in major Canadian projects that come along with being an Indigenous business member in the country. Sandy Jackson mentioned the Loan Guarantee Program and the Cascade Project, which allowed six First Nations to access power generation plants and participate in provincial projects that they otherwise would have been excluded from.

The panelists then dove headfirst into joint ventures–their definitions, their advantages, and their negative aspects. Reg Potts commented that joint ventures are not necessarily beneficial. Unlike long-term, sustained partnerships, joint ventures come with an exit clause. Some businesses may only act as positive partners until the joint venture ends. Monika added the two key elements of a successful joint venture: communication and collaboration. Communication starts from negotiating the transaction so that a structured deal can benefit both parties. Once this deal closes, those partners still need to work together. Joint venture partners need to come together, face challenges together and be willing to share information. Collaboration is the most important aspect of structuring joint ventures or long term sustained partnerships and every joint venture needs to be able to answer two key questions: 

  • Can you work well together? 
  • Can the community and company collaborate to advance the success of the business? 

Both parties should be striving for that success. Equally important and both parties should strive for the success of the community. A partnership is a two-way street, and as much as the company wants to succeed, that drive for success and advancement should always extend to the Indigenous community they’ve entered a partnership with. Likewise, the business needs to contribute to the success of the community––sponsor events, provide employment opportunities where applicable, visit the community and learn who they are.

Mark Little spoke of the various risks that naturally come with entering into joint ventures or large partnerships surrounding major projects. Risks will always be a factor in large deals, but there are ways to mitigate them. It’s about trust and relationships. In the earliest deals he was a part of, there was very little paperwork; it was about words and handshakes that strengthened relationships over time. First Nations want that familiarity with their partners. Monika added that these Ingenious communities are often expected to play the roles of investment bankers considering taxes, legal structures, finances and much more. They’re always trying to make the best decisions, but it can be challenging to build teams and gain experiences––building internal capacities within communities to do this complex work. This capacity is growing across all First Nations, but it’s still a challenge to make these big decisions on major projects.

Sammy Jackson and Reg Potts both spoke on the importance of communication through every step of the partnership process. They both want non-Indigenous businesses to play larger roles in the projects. How can they get more involved? How can they help communities? Good questions are important when entering these agreements: What’s your governing structure? Governing stability? What are the benefits to both the Nation and the company?

forward summit panel

After some audience questions, the panelists discussed the differences between partnerships and impact benefit agreements (IBAs). They encouraged having many IBAs for employment training, environments, businesses, and commitments to share info and involve communities. Companies should strive to increase their spending targets and Indigenous spend. Companies should constantly strive to improve the communities they’ve entered partnerships with, from supply chain to procurement. You don’t need to rely solely on IBAs; they should be the minimum in conjunction with existing partnerships.

Finally, Monika offered helpful tips when entering investments. Does the deal meet previously established policies and criteria? Both parties should have clear goals with constant assurances that those goals are being met or will be met on an agreed upon timeline. Unsuccessful partnerships ignore the criteria and policies or forget their goals. Take a step back and analyze these aspects to ensure the wrong investment isn’t made with misunderstandings and high risks.

Forward Summit continues to be a safe space where Indigenous communities can collaborate with non-Indigenous businesses. Panels like Bridging the Gap are important for everyone and contextualize the roadmap forward––familiar to some, but new to others––that will help future negotiations, future projects, future joint ventures and future partnerships. 

While this panel only scratches the surface of structuring joint ventures, Forward Summit strives to bring these aspects to the front of people’s minds to ensure healthier, stronger communities and business relationships moving forward in the spirit of economic reconciliation.

For more information on Forward Summit, their speakers and panelists, their vast library of informative content, or the upcoming Forward Summit | EAST on September 25, 2024, please visit: Forward Summit | EAST 2024.

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