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Legal team thrives in mining hotbed

June 1, 2010
by Norm Tollinsky
In: News with 0 Comments
Law firms don’t usually come to mind when thinking of mining supply and service companies, but then again, not much happens in the mining industry without the deft hand of a lawyer crafting contracts and sealing commercial relationships.

Sudbury’s Weaver Simmons, the largest legal firm in Ontario north of Toronto and west of Ottawa, has built a mining practice that covers almost every facet of the mining industry, serving suppliers appointing agents and distributors around the world, and mining companies negotiating impact benefit agreements with First Nations.

It’s not surprising that a firm founded in 1929 in one of the world’s greatest mining camps would attract clients like Falconbridge (now Xstrata), De Beers, Newmont, Atlas Copco and Franco Nevada.

It was Weaver Simmons and two of their lawyers in particular – Martin Bayer and Steve Moutsatsos – who successfully guided De Beers through the long and tortuous negotiations that led to an impact benefit agreement (IBA) with the Attawapiskat First Nation and the development of the Victor diamond mine in Ontario’s James Bay Lowlands.

Bayer, a member of the Aundek Omni Kaning First Nation on Manitoulin Island and one of a handful of Aboriginal lawyers practicing in Northern Ontario, helped De Beers overcome the cultural gulf separating the two sides and inspired an atmosphere of trust at the negotiating table.

“De Beers didn’t have a lot of knowledge about the Cree people on the James Bay coast,” said Bayer. “There was a lack of understanding of their culture and traditions.

“For example, we proposed a set of meeting dates, and the First Nation agreed, but the dates coincided with goose season, and that’s not anything you can predict.

Geese

“You only really appreciate how important the geese are to their diet when you go up there and see how much a chicken costs. I’ve been there and I’ve seen it,” said Bayer. “It’s like $40, so they need the geese, and when they fly, that’s when you have to shoot them. It doesn’t matter if you have a meeting scheduled.”

The impact benefit agreement with the Attawapiskat First Nation was the first significant agreement of its kind following a Supreme Court decision in 2004 that enshrined an obligation on the part of government to consult with First Nations prior to any development that might adversely impact on their treaty rights.

“Everybody wants to see these projects go ahead, but they want to see them go ahead in a way that reconciles the competing interests of all the players,” said Bayer.

Having an Aboriginal lawyer at the negotiating table helped to create a climate of trust.

“A lot of times if there’s an impasse on a particular issue, they’ll only believe what we’re saying if I say it,” said Bayer. “They’d say ‘We know you wouldn’t screw us. If you say it, we trust you.'”

The work performed by Bayer and Motsatsos was critical to the successful negotiation of the IBA, said Brian Montgomery, who practices corporate and commercial law for the firm.

“The project wasn’t going to go ahead. The talks had failed. It was only because of Steve and Martin that talks resumed and it was through their skills that De Beers was able to successfully conclude the IBA and other supplementary agreements.”

Retaining a law firm like Weaver Simmons in Sudbury as opposed to a big Bay Street firm in Toronto has several advantages, said Moutsatsos. Overhead costs are a fraction of what they would be in Toronto and travel to First Nation communities is much more convenient from Sudbury. But it’s the firm’s roots in Northern Ontario and familiarity with mining and First Nation issues that give it an edge.

“Growing up and living in a mining community and in Martin’s case, growing up and living in an Aboriginal community in Northern Ontario, gives you a better understanding of how to fairly share the benefits of resource development” said Moutsatsos. “It’s not an abstraction for us because we live it every day.”

Weaver Simmons began serving the mining industry long before the Supreme Court ruling of 2004. The firm acted as Falconbridge’s local counsel for many years and continues to act for Xstrata Nickel.

Property transfers

Other mining companies, including Newmont Mining and Franco-Nevada Corporation look to Weaver Simmons and its property title and mining claims specialist Walter Zaverucha to facilitate property transfers. A former mining lands registrar with the Ministry of Northern Development, Mines and Forestry, Zaverucha confirms land ownership, pieces together properties, looks for open ground and ascertains the nature of the mining rights by accessing mining records at the Ministry’s offices in Sudbury.

The large mining supply and service sector also relies on Weaver Simmons for contract work and distribution agreements. The firm does all of Atlas Copco’s contract work in Canada and acts for Xstrata Process Support. Suppliers signing up agents and distributors in other jurisdictions also turn to Weaver Simmons to ensure their interests are protected.

“It’s very important to establish what the nature of the commercial relationship is because, if you don’t, you’re into an argument of “he said, she said” and it’s not a position you want to be in,” said Moutsatsos.

Sealing a deal with a handshake is risky for mining suppliers, prospectors and junior mining companies, and can result in costly litigation that can drag on for years.

Unlike many mining supply and service companies in Northern Ontario that are expanding their reach to other jurisdictions, Weaver Simmons will more than likely continue to focus on its home turf.

Bayer has been offered assignments in British Colombia and as far away as the Philippines, but decided it wouldn’t be practical to accept them.

“The limitation is talent,” said Moutsatsos. “We wouldn’t be able to service these projects. We’d need people capable of operating at the highest level and they’re difficult to find.”

www.weaversimmons.com

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