Why Indigenous Consultation Isn’t Stakeholder Engagement

Governments and companies often treat Indigenous Nations as though they were just another voice in the stakeholder mix.

But Indigenous Peoples aren’t simply stakeholders — they are rights holders. That distinction changes everything.

The Tactic Misstep

When Indigenous consultation gets collapsed into general “engagement,” it reduces sovereign Nations to interest groups. That’s a recipe for conflict, legal risk, and lost trust. Consultation with Indigenous Peoples isn’t about listening sessions or public comment forms. It’s a constitutionally grounded, nation-to-nation process.

Stakeholders vs. Rights Holders

• Stakeholder engagement: discretionary. Governments and companies decide who to invite and how much weight to give their views. Stakeholder input may inform decisions, but it does not bind them.

• Indigenous consultation: mandatory. It flows from Section 35 of Canada’s Constitution, treaty rights, and UNDRIP. It cannot be skipped, rushed, or treated as symbolic. Indigenous Nations have the authority to demand conditions, shape terms, and in some cases withhold consent altogether.

Different Foundations

Stakeholders are invited participants; their influence is granted by the decision-maker. Indigenous Nations, by contrast, hold legal and governance authority that is recognized in law and increasingly enforced in the courts. Their consultation is not optional — it is a constitutional duty.

Case Study — Squamish Nation + Woodfibre LNG

In 2015, the Squamish Nation made history by conducting its own environmental assessment of the Woodfibre LNG project — separate from provincial and federal reviews. The Nation set its own standards for air quality, water use, and marine safety.

The assessment wasn’t advisory—it was binding. The Nation required 25 legally enforceable conditions in exchange for its consent, covering issues like spill response, cumulative impacts, and benefits agreements.

The project proceeded only because the proponent accepted Squamish Nation’s authority to lead, assess, and decide. This wasn’t “engagement” — it was governance in action.

Why the Distinction Matters

1. Legal Risk
   Canadian courts have been clear: inadequate consultation can overturn approvals. The Trans Mountain Expansion (TMX) project was delayed repeatedly because courts found consultation processes deficient. In the 2014 Tsilhqot’in decision, the Supreme Court recognized Aboriginal title for the first time — making clear that consent is not just a courtesy but a constitutional requirement.

2. Financial Risk
   Projects that confuse Indigenous consultation with stakeholder engagement face escalating costs. Delays, litigation, and reputational damage all translate into financial risk. The Atlantic Coast Pipeline in the U.S., for example, was abandoned after years of legal challenges, many tied to Indigenous and environmental consultation missteps.

3. Reputational Risk
   Companies that minimize Indigenous consultation face long-term brand consequences. Being seen as dismissive of Indigenous voices can erode investor confidence, damage social licence, and trigger activist campaigns that persist for years. In today’s environment, reputational damage often outlives the project itself.

4. Partnership Potential
   When done right, Indigenous consultation creates opportunities that go far beyond compliance. Equity partnerships in energy and infrastructure projects are now increasingly common, with Indigenous Nations becoming co-owners, revenue partners, and decision-makers. That shift changes consultation from a risk to be managed into a partnership to be leveraged.

The Leadership Test

The difference between stakeholder engagement and Indigenous consultation is more than process — it’s a test of leadership. Leaders who blur the line invite conflict, but those who respect Indigenous consultation as distinct build the trust and certainty needed to move projects forward.

Indigenous consultation is not a hurdle. It’s not a delay tactic. It’s not a checkbox. It’s a recognition of sovereignty, an expression of governance, and increasingly, the gateway to successful project development.

The CORE Take

Consultation with Indigenous Nations is not a courtesy. It’s a contract. Treat it as anything less, and you’re not engaging — you’re inviting conflict. Fail to spend the time building meaningful relationships with Indigenous rights holders and your project faces more than delay.

At CORE Strategic, we help leaders navigate risk and opportunity — and build impact where it counts. Get in Touch ➞