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HOW THE MI'KMAQ PROFIT FROM FEAR
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Meet the people of Membertou, traditional second-class citizens
of downtrodden Cape Breton. Their community is best known as
the home of pain, poverty and courtroom star Donald Marshall,
but now its fortunes are on the rise. What would possess a huge
multinational to sign a costly deal with natives
covering a mine site they don't even own?


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By JOHN STACKHOUSE 
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Tuesday, November 6, 2001 – Print Edition, Page A16


Head office in Georgia had been warned about Canada, that things had changed. For half a century, the company had helped to build America's suburbs with gypsum from Cape Breton. Getting its way with the Nova Scotia government was seldom a problem.

But this time, as Georgia-Pacific prepared to open its third mine on the island, the Atlanta-based multinational with more annual revenue than all but two African countries was confronted with two new realities up north: the Greens and the natives.

For Felmer Cummins, a southern gentleman who oversees the company's affairs in Eastern Canada, news that the Sierra Club of Canada was ready to do battle was heart-wrenching. The company had gone toe to toe with the club's U.S. branch and didn't like it one bit. Showed no respect for a corporation. Played dirty.

But at least in Cape Breton, a region as economically stagnant as the Caribbean, where Georgia-Pacific also is used to getting its way, he knew that there were enough jobs and tax revenue at stake to win the day with government.

The Indians were another matter. Back in Atlanta, Cummins and his bosses had seen TV images of native blockades in Canada, and read about the growing feistiness when it came to land and resource disputes. They did not seem to be moved by jobs or money, and those were the only aces he had up his sleeve.

The situation was uncomfortably reminiscent of the 1950s, when Georgia-Pacific's assets in the Dominican Republic were nationalized. "There was a lot of fear factor in Atlanta," Cummins recalls.

"We almost walked away because of fear. In the States, we're not used to groups claiming they had rights to your land. We were afraid they would try to claim our whole company."

Well trained in the fine art of multinational politics, he now laughs at that particular fear. The Mi'kmaq of Cape Breton turned out to be as savvy as any company or union he has come across in Canada; they had their own corporate office, lawyers and a killer instinct that impressed the Americans.

They agreed to the new mine -- but only in return for jobs, royalties, environmental safeguards and first dibs on all contracts related to the project. What's more, the Mi'kmaq offered to take care of the environmentalists -- and did, by applying pressure to the Sierra Club to back off a planned confrontation with the company.

For Georgia-Pacific, which operated in Cape Breton for nearly 50 years without much concern for the Mi'kmaq, the negotiations were a quick lesson in the new sophistication and clout of Nova Scotia's Indians. The local bands are also in negotiations to develop joint ventures with some of Canada's biggest fish-processing, hotel, engineering and accounting firms.

"I would liken it to a very tough negotiation with the Teamsters," Cummins says.

"You're dealing with very well-educated and informed people who probably know how far they could push you, but they don't want you to go out of business because your existence is good for them."

That the Mi'kmaq may have more in common with a U.S. multinational than with their traditional allies in the environmental movement speaks volumes about how much reserve culture has changed since the 1970s when their most famous member, Donald Marshall Jr., was wrongfully convicted of killing a white man.

According to a new generation of leaders, the world has changed too much for the Mi'kmaq to rely on government handouts or to resort to the old adversarial politics they see playing out in Burnt Church, N.B. They still face bigotry, but they feel they have to build bridges.

"The train left already," says Terrence Paul, chief of the Membertou First Nation, Cape Breton's most influential band. "The corporate world already controls our resources, without our say in anything that is going on."

Far from the
Mi'kmaq's ancestral lands, their new spirit buzzes about the 17th floor of Purdy's Wharf, a blue-chip office complex next to Halifax Harbour. Inside the Membertou business development office, the band's lead deal-maker, Bernd Christmas, is holding court with some bankers and oil types. Tomorrow, he says, checking his Palm Pilot, he is off to Montreal and Toronto to cement a deal with a big accounting firm that would help his band to serve as a financial consultant to other native organizations.

In every way, the 40-year-old Christmas appears to personify the new Mi'kmaq image, one that bridges the old world and new. In 1999, Canadian Business magazine called the lawyer, whose ponytail flows over the collar of his business suit, "the most powerful guy in Atlantic Canada," ahead of the McCains, Irvings and Brian Tobin.

Christmas became the band's first chief executive officer in 1995, when he came home to Nova Scotia from Bay Street law firm Lang Michener. Since then, he has recruited other band members from the federal government, Mobil Exxon and Nestlé Canada to help to forge ties with the business world. And he has set a new tone with the business community in Atlantic Canada, distancing himself and his people from the lobster warriors at Burnt Church.

"The days are kind of over when we just demand we have these rights," he says. "It's not working any more."

The Mi'kmaq came to their position honestly. Few other first nations have known more turmoil and few bands have been through more ordeals than Membertou has. To make way for a huge new steel mill back in the 1920s, it was removed from its traditional coastal site near Sydney and set on a hilltop overlooking the depressed coal-mining city.

Soon, there was little for band members to do other than collect welfare and take their chances on generations of government make-work schemes. In the 1980s, they lost $400,000 in a failed bid to manufacture porous irrigation pipes for a U.S. company.

Even today, the reserve may be best known as the home of Donald Marshall, who spent 11 years in prison for a killing he did not commit. But another legal case in which he was involved had an even greater impact on his people.

Now 48, Marshall spends most of his time in Halifax, but in the 1990s he fought a landmark case to the Supreme Court of Canada that affirmed aboriginal people's special fishing rights. As a result, his band has seen its economy transformed. Its fishing quota has grown to such a degree that Clearwater Fine Foods now markets a Membertou line of snow crab and employs about 20 band members in its fish plant at Glace Bay.

This year, fishing and other economic activities will cover about half the band's $12-million budget. In the 1970s, the budget was less than $100,000, and all the money came from Ottawa.

But the cash flow was not automatic. Chief Paul says the band had to clean up its own act first before companies such as Clearwater and Georgia-Pacific would take it seriously. He hired a qualified controller and put in place finance and personnel policies, rather than running the place like a corner store, which is how many band offices function.

His band also launched a Web site (http://www.membertou.ca) that includes financial statements and the salaries of top officials (the chief's is $42,000 a year), and now is applying for ISO 9000 certification -- the seal of approval in international business -- which it believes no other aboriginal government in the world has obtained.

Tucked away on the bleak edge of Sydney, the reserve, with its rows of small bungalows, still looks like a low-rent suburb, no better or worse than the rest of Cape Breton's northern coast. But the chief says his people are at least talking again of hope, the one sentiment missing on so much of the island. Since the push for private investment, suicides and teen pregnancies have gone down while incomes have gone up. Last year, the band says, its 1,000 members generated $52-million in economic activity.

Despite this success, the Mi'kmaq knew that they might look about as threatening as a parent-teacher association when they sat down with a company that boasts of $27-billion (U.S.) in revenue and 85,000 employees, making it bigger than the combined governments of Atlantic Canada.

Georgia-Pacific even could have tried to bypass the Mi'kmaq, since the proposed mine site at Melford, south of Cape Breton's sprawling Bras d'Or Lake, was not on proven native ground. That was the company's approach when it opened its first Cape Breton gypsum mine in the 1950s, at River Denys, and a second site at Sugar Camp outside Port Hawkesbury in the 1970s.

But now, with Sugar Camp running out of the soft white rock so essential to wallboard, Cummins was told to take no chances with Melford. The company could not afford the delays of litigation, or bad publicity, when its factories were working overtime to supply a U.S. housing boom.

A competitor, Chicago-based U.S. Gypsum, had already tried to ignore the Mi'kmaq by starting to dredge Bras d'Or, a traditional native waterway that leads from the sea to the middle of the island, without contacting them. The case soon landed in court. "Their attitude was perhaps what bugged me the most," says Dan Christmas, a Membertou Mi'kmaq (no relation to Bernd) who headed the Union of Nova Scotia Indians at the time and is now a senior adviser to the Membertou band.

They won the court fight and stopped the dredging, but the natives were in no mood to do business when Georgia-Pacific came along. "My guard was really up," Dan Christmas says. "I was out to stop the project, I'll admit that now."

U.S. Gypsum's big mistake was to try to rush a decision past the Mi'kmaq. Cummins, who had head office breathing down his neck, was told by his local advisers to take his time. He spent long hours sitting with Cape Breton native chiefs, and working the phones to build a relationship. At the Waycobah First Nation, up the Trans-Canada Highway from the proposed site, he offered jobs and a possible share of revenue to the band. His company also sent an environmental assessment team from Atlanta to work with a local native team in assessing wildlife and medicinal plants near the proposed site.

It was not enough. The broader Mi'kmaq community (there are five bands across Cape Breton) suggested that the mine resemble a joint venture, with a native veto on environmental issues, jobs and expansion. It did not matter that some bands were two hours away by car. They saw the mine as sitting in their back yard. Some wanted to go so far as to declare the property as native land and lease it to the company -- the very spectre of expropriation that Georgia-Pacific feared.

But Bernd Christmas, fresh from a stint on Bay Street, knew that his people were risking a public-relations disaster as much as Georgia-Pacific was. If they were seen as greedy, none of the big oil and gas companies setting up offshore operations in the region would want to do business with them. Moreover, any protests could cost more jobs -- for native as well as non-native miners -- which would not go over well in Cape Breton.

"We could have said, 'We own all the land. Give us all the royalties,' " he says. "We took an approach not to go overboard."

Cummins had already spent enough hours lobbying non-native politicians, many of whom were skeptical about special favours going to the Mi'kmaq.

Still, the Cape Breton chiefs were reluctant. The Waycobah band complained that the mine would disrupt a traditional fishing brook. No one had seen salmon in the stream for years, but the company agreed to shift its site slightly to the north.

The adjustment had a downside -- it moved the mine area into one of the region's few remaining old-growth forests. Bears, foxes, deer and muskrats were in danger of losing their habitat, but the natives felt that they had already picked their battle. They were willing to let the mine go ahead, despite objections from the World Wildlife Fund of Canada.

The WWF protests -- the work of an environmental consultant who operates from his kitchen table in Dartmouth, across Halifax Harbour from the tony Mi'kmaq office -- were almost an afterthought. "Eventually we got lost in the shuffle," says Colin Stewart, a naturalist and part-time WWF campaigner who admits to being a bit overwhelmed by the natives' lobbying skills. His objections did not stand a chance.

Once the Melford mine site was shifted, the natives agreed to a deal that guaranteed them one-quarter of the 100 or so jobs to be created by the project. All supply contracts also will be offered to native-owned companies before going out to tender. And any non-native company working at the mine must allot one-quarter of its jobs to natives. Finally, the Mi'kmaq of Cape Breton will receive five cents for each of the three to four million tonnes of gypsum expected to come from the mine every year (an additional 12 cents goes to the province).

The money will be devoted entirely to a native scholarship fund and the Unama'ki (Cape Breton) Institute of Natural Resources, which the Mi'kmaq are building to house an environmental team and laboratories. The institute will not only track what is happening to traditional Mi'kmaq lakes and forests (work the WWF thought it could do); the company will also pay the natives to monitor the Melford mine's environmental impact.

With jobs, money and a corporate success story, the Mi'kmaq could not have been happier. Georgia-Pacific was pleased too. Its new mine had won the blessing of Nova Scotia's biggest native group, and it was developing a new environmental ally. Most important, it had secured a new gypsum supply that should last 20 years.

A beautiful relationship had been formed -- until Cummins's local manager opened his mouth.

Anyone around these parts will tell you that Jim Graham is as old as the gypsum mines. He helped to open the first one at River Denys, and 40 years later put off his retirement to get Melford up and running. His opinion matters.

So last year, when the time came for a government committee to consider Georgia-Pacific's mining application, some of the members wanted to know about the innovative native deal and, more important, what Graham thought of it. He was asked if young natives would agree to work at the mine, and if they would be able to handle the pressures of a regular job. Most of the local reserve population, after all, lives on social assistance.

Well, Graham said, "they don't take direction very well, unfortunately."

The comments made local papers, and went off like TNT when they landed on the desks of every Mi'kmaq chief in Cape Breton. At Sugar Camp, a handful of native workers walked off the job in protest.

Cummins flew north to make amends. He published apologies from both Georgia-Pacific and Graham in the papers and met with every community leader and aboriginal employee willing to see him. He told Dan Christmas, who had gone from skeptic to supporter of the mine, that he was willing to fire Graham, a half-century employee, if that was what was needed.

The reply he got came as a surprise. Retribution is not the native way, he was told. "The Mi'kmaq have some respect for someone in their 70s," Christmas says now. "Plus, we knew our own mistakes. We make mistakes all the time, and no one fires us."

As much as the company tried to brush aside the embarrassing incident, the Mi'kmaq realized that it wasn't just an isolated slip. They have always felt that other Cape Bretoners see them as a different, perhaps inferior.

In the summer of 2000, more racial problems emerged at the Melford site when a road builder, under its agreement with Georgia-Pacific, set out to hire native workers. A local union set up a picket line, saying its members, all non-native, had been overlooked. "We were caught," says Jim Kennedy, Georgia-Pacific's manager in Cape Breton. "If you don't include natives, you get trouble with them. If you don't include the unions, you'll have trouble with them."

Cummins stepped in again, pleading with the international union to persuade its local to go easy on the natives. He told the union that it should even consider adopting Georgia-Pacific's practice of granting special status to native groups. "If you have people working on a pure seniority basis, you'll have people sitting on reserves forever," he says.

In the end, the local union agreed to allow some natives to jump the seniority queue for jobs at Melford.

Between them, Cummins and the Mi'kmaq had managed to win over -- or at least silence -- labour unions, politicians and environmentalists. But there remained one group that they could not persuade, entice or cajole, a group that claimed to hold as much moral and legal legitimacy to the site as any Indian. Through court fights and public struggles, it has refused to go away, perhaps because it cannot.

Up the hill
from the new mine pit, the only lingering challenge to the Mi'kmaq deal is a very local movement led by a construction worker who sits in his kitchen and looks over the valley where he grew up.

From his window, Blair MacLennan can see the thick forests where he and his friends played, and the brook where they caught trout. However, in the middle of this idyllic scene, he also can see the beginnings of a strip mine, where diggers and dump trucks scavenge over a bulldozed landscape.

MacLennan, who lives less than a kilometre from the mine site, can list its details as if he were reciting a cautionary Cape Breton ballad. The mine will go down 1,000 feet and require the blasting of gypsum every day for the next 20 years. Each blast, preceded by a shrill alarm that will ring through the valley, will carry enough force to shake his house. Then, the rocks will be hauled out of the mine and run through a big crushing machine before trucks, leaving every 15 minutes, pull out on the Trans-Canada Highway where his son and daughter wait every morning for their school bus.

When Georgia-Pacific applied for a permit, and was assiduously lobbying the Mi'kmaq, the impact on the MacLennans and eight other families living around the site was treated as a postscript. The company gave them a written warning, and later offered to buy them out.

But MacLennan was not willing to give up so easily. He had just built a new house, and although he spends much of his year working on distant construction sites, away from his children -- as Cape Bretoners have done for generations -- he wanted them to grow up on the same land he had.

He and his neighbours, who formed a group called Melford Concerned Citizens, went to the local media and contacted national interest groups such as the Salmon Association of Canada (because of the local stream) and Transport 2000 (because of the local highway). They spent $3,000 for an environmental consultant to prepare a study to accompany the court challenge they were planning.

In their favour was the site's proximity to the Bornish Hill Protected Area, a forested ridge that is one of only seven protected areas in Nova Scotia. Stewart and the WWF had been able to do little on the environmental front, but the residents believed that they knew someone else who could, someone whose very name sends shivers up the spine of Nova Scotia politicians. They called Elizabeth May.

A lawyer and environmental dynamo, May is the Erin Brockovich of Cape Breton. She is also executive director of the Sierra Club of Canada, and has a better sense of politicians and the media than most activists. Last spring, she went on a hunger strike on Parliament Hill to demand that more attention be paid to cleaning up a toxic-waste area in Sydney, known as the tar ponds, left behind by the defunct steel mill.

When she heard the story of a dozen families being pushed aside by a big mining project, she could not resist. She went to Melford from her home in Ottawa and met the residents in MacLennan's kitchen. She told them that they had a great court case, and urged them to prepare for battle.

The Sierra Club lined up lawyers, drummed up some media interest and prepared the residents to go to the province's Supreme Court to block Georgia-Pacific's mining permit. A case was filed in the name of Mary Chisholm, a 64-year-old nurse who had worked for years in Montreal before returning to her family's homestead for a quiet, peaceful retirement.

Chisholm, who now lives down the hill from the MacLennans, is timid and had never been in a public spat before, so she was not sure what to expect. She certainly did not anticipate someone like Felmer Cummins. As soon as the case was filed, the man from Atlanta began to call. "Oh, he tried to sweet-talk me," Chisholm says.

The company offered a "replacement value" for the homeowners on the mine's periphery, and a negotiable amount of "nuisance money" to those living more than 800 metres away.

Three concerned citizens, including MacLennan's brother, took the money and moved. Later on, two more families entered negotiations, but the others, including Chisholm, were not prepared to budge. This was their birthplace. Besides, they had been assured by the Sierra Club that their case was solid. What they were not told about was the new generation of Mi'kmaq deal-makers.

As the court date approached, and the Mi'kmaq grew nervous that their deal with Georgia-Pacific was in danger, Bernd Christmas decided to call Elizabeth May.

The two lawyers, as polished as their causes, knew each other. They hoped to work together on much bigger projects, especially as the oil industry looked to Nova Scotia for development.

But Christmas wanted to make one thing clear: He was not about to trade jobs for a bunch of forest. "I had to explain to Elizabeth sort of the history. . . . We fought so hard to get to this point where a company takes us seriously."

Christmas carried out what he calls "shuttle diplomacy" between Georgia-Pacific, the Sierra Club and his own chiefs to see if some sort of compromise could be reached. To compensate for the old-growth forest damaged by the mine, the company agreed to hand over a much bigger, and environmentally richer, chunk of forest on its Sugar Camp site. It even agreed that the Sierra Club and Mi'kmaq would manage the land jointly.

The Mi'kmaq still had their deal, and May had a small environmental victory. More important, she was not left standing on the wrong side of the natives, which would be difficult for a prominent activist to explain.

But she did have to explain to the local residents why she was abandoning their cause. "If it was a perfect world, I wouldn't want the mine in the Bornish Hills Protected Area," May now says. She is still torn by her decision, but believes the residents stood little hope of winning. "There's no question I feel we let them down," she says.

May visited Chisholm, offered an apology and got an earful. "The very last minute, she turned her back on us," the retired nurse says, still bitter at the mention of the environmentalist's name.

The residents continued with their case, and say they have spent $50,000 of their own money on lawyers. In return, all they have received are binders thick with letters from Georgia-Pacific's lawyers and accusations that their demands delayed the start of the mine, and therefore the creation of new jobs.

"They blamed it on us because no one can say anything bad about the natives. We're the bad guys," MacLennan says. "I have nothing against the natives and them getting ahead. Good luck to them."

But he fears that the natives have been used, just as he feels he was. "I've heard it said they [Georgia-Pacific] used the natives to get into this site. That was playing gutter ball. Sure, it was."

The image
of white residents feeling powerless, even dispossessed, is sweetly ironic to the Mi'kmaq of Cape Breton. Last year, after the Sierra Club abandoned them, the concerned citizens of Melford called Dan Christmas to ask for help, unaware that it was the natives who had pressed the environmentalists to back down.

"I know how they feel," Christmas says, "because we've been in that position so many times." But he still said no -- the Mi'kmaq had too much at stake.

The success of their work with Georgia-Pacific has encouraged the natives to pursue other deals. The band is looking to open a small casino early next year. It also wants to supply Cape Breton's thriving tourist market with custodial and catering services, and chase contracts to supply the many offshore oil rigs planned for Nova Scotia. There are thoughts of bidding to clean up the Sydney tar ponds.

Christmas knows a few business deals will not change Membertou's fate. He worries about the environmental effects and social disruption that another gypsum mine may bring to the island. But he also worries about the effect if there were no project.

As he drives around his reserve, he can point to overcrowded houses, broken roads and scores of idle young people to show what the status quo leads to. It's a far cry from the glass towers of Halifax, and Bernd Christmas's deal-making forays to Montreal and Toronto.

But at least the talk of change, and the emergence of new options, is leading to some hope at Membertou, and on Cape Breton's other reserves. Last summer, 25 of the band's 40 young people hired under a government-funded internship program were placed in jobs off the reserve, with companies and government agencies that now see natives as prospective, even necessary, employees.

When Dan Christmas was growing up, no one left the place, not even to shop. "When I was growing up, I thought Membertou was the world," he says, drinking a bottle of Dasani water back at his office.

The gypsum deal has helped the Mi'kmaq of Cape Breton to see themselves differently, he says. They can take on a multinational and talk down environmental groups and, if necessary, put the squeeze on their non-native neighbours.

If nothing else, he says, the new gypsum mine will demonstrate to his children that there is another world out there -- not always a nice one, but at least one they can do business with.
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