Canada: NRCan Updates Implementation Tools And Provides Guidance On Payments To Indigenous Payees Under The Extractive Sector Transparency Measures Act

Natural Resources Canada (NRCan) has published revised implementation tools under the Extractive Sector Transparency Measures Act (ESTMA) nearly two years after its initial implementation. The revised tools result from the review of submissions of reporting entities through the first reporting cycle and extensive consultations with a variety of stakeholders.

The revised implementation tools consist of:

  • A revised guidance document, which provides general information on who is subject to ESTMA, which entities must report payments under ESTMA, and what payments should be reported under ESTMA;
  • New guidance on reporting payments to Indigenous payees which to date have been excluded from the reporting obligation;
  • A new reporting template intended to simplify the reporting process; and
  • A new version of the validation checklist.

The technical reporting specifications have not been revised.

Revised Guidance

The Concept of Control

While the revised guidance advances or introduces a number of important topics, the most instructive revisions to the guidance relate to the analysis of control in the context of the reporting obligation. Insofar as many commercial oil & gas and mining operations are conducted through direct or indirect affiliates - either individually or pursuant to joint venture or other cooperative arrangements - the determination in those contexts of whether reporting obligations exist and on whose behalf reports are required to be submitted is of critical importance. NRCan has clarified that the concept of "control" will be applied broadly and on a purposive basis. While the concept of control as dictated by applicable accounting standards will generally be sufficient to evidence control, that does not foreclose the possibility of other relationships nonetheless resulting in "control" for purposes of ESTMA, including situations of joint control of a commercial enterprise.

In certain joint control scenarios, the incremental consideration as to operatorship and non-operatorship of the particular commercial endeavour and the relative control of the operating entity, whether single-purpose or otherwise will be germane. In those contexts, NRCan is clear:

  • If an operator is a Reporting Entity in its own right, then it should in most cases report all payments made on behalf of non-operators, with non-operator Reporting Entities obligated only to report direct payments by them and any joint venture payments not reported by the operator on its behalf.
  • If an operator is not a Reporting Entity, then the non-operator members that are Reporting Entities would be obligated to report both direct payments by them and any joint venture payments made by the operator but not otherwise reported.

By necessary implication, the foregoing bifurcation of responsibilities will require participants in joint ventures to be well-informed as to the payments being made by an operator on behalf of the commercial endeavour, its own reporting situation and the obligations and the resultant implications for non-operator Reporting Entities. Commercial counterparties would be well advised as a result to contemplate drafting provisions into joint venture agreements and related documentation that will impose disclosure and record-keeping obligations on the operator in respect of the non-operator co-venturers.

Notwithstanding the foregoing, there may also be circumstances where no one entity truly "controls" a commercial endeavour involving multiple parties, in which case if the commercial endeavour itself is a Reporting Entity it will report the payments.

Social Payments

NRCan has clarified that in determining whether social payments are reportable, a Reporting Entity should consider the nature, timing or extent of the payment and the degree of control that the payee has over such criteria. To the extent the payee dictates one or more of the criteria, then a payment is likely reportable. 

In that regard and following the purposive approach to reporting required by ESTMA, Reporting Entities should consider whether the commercial activities being undertaken could have proceeded in the absence of such payments, regardless of whether those payments were made as a bonus, infrastructure improvement or other payment category, including if they were made to secure the withdrawal of any potential opposition to the commercial activities proposed to be undertaken.

New Guidance on Reporting Payments to Indigenous Payees

Following a two year deferral from the date of initial implementation of ESTMA, effective June 1, 2017 qualifying payments made to Indigenous payees are now required to be reported by Reporting Entities.

While the analysis applicable to the need to report payments to Indigenous payees is essentially the same as in respect of other payments and to other payees, it is important to recognize that ESTMA does not discriminate between payees generally and Indigenous payees, requiring some guidance as to what the payee definition itself means in the Indigenous context.

In that regard, the overlay of Indigenous considerations on the existing payee framework is instructive:

  • "any government in Canada..."
    • Could include an Indigenous group that has the power, duty or function of government, including in respect of law and rule-making authority relative to natural resources or which is recognized as such legislatively or otherwise.
  • "a body that is established by two or more governments"
    • Could include treaty associations, tribal councils or Chiefs' council established by an Indigenous group.
  • "any trust, board, commission, corporation, body or authority that...exercises or performs, a power, duty or function of government..."
    • Could include treaty associations, tribal councils or Chiefs' council established by an Indigenous group or a body established by any such organizations.

New Reporting Template

NRCan has updated the reporting template for Reporting Entities both to streamline the reporting process and to add further reporting fields for, among other things, currency and exchange rates. Reports for 2017 can continue to be made on the previous template, though transition to the new reporting template is encouraged.

Further Information

For further information, please see our earlier blog posts on ESTMA ( here, here, here, and here).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions