WALPOLE ISLAND: THE MODEL FOR THIS ENVIRONMENTAL AUDIT MODEL

Walpole Island First Nation is located on Lake St. Clair, in southwest Ontario. Approximately 2200 Chippewa, Pottawatomie and Ottawa live under a single Chief and Council on six small islands that form the Canadian portion of a delta at the mouth of the St. Clair River, where it enters Lake St. Clair. The total area is about 350 square kilometres.

Because the whole area is a delta, the water table is everywhere close to the surface, and much of the area is vulnerable to flooding during periods when water levels in the Great Lakes are above normal, as they were during the mid-1980s. Almost 7,000 hectares of the total area (48%) are marshland, representing almost half of the wetlands around the northern part of Lake St. Clair. This area is `the largest and most significant wetland in the Great Lakes system.'

Walpole Island also preserves one of the largest areas of tallgrass prairie and oak savannah in North America. Because of its situation in the Carolinian natural habitat of southwest Ontario, and traditional Indian conservation patterns, Walpole Island has preserved a distinctive flora and fauna, including many rare or endangered species. For example, over 800 vascular plants are found on Walpole Island, nine per cent of these being rare in Canada and one per cent not found elsewhere in Canada. Archæological surveys have found evidence of Indian occupation of the islands going back about 3,500 years.

Walpole Island has administered itself since 1965. During that time, major developments have taken place, including the building of a bridge to the Ontario mainland, and the creation of a Band-owned farm that has grown from 81 to 1821 hectares in two decades, as agricultural leases to off-Reserve farmers have not been renewed.

The agricultural area represents about one-third of the land of the First Nation, and there is concern that pesticides and other chemicals used in agriculture are reaching the water table and affecting the adjacent marshland. A study in the mid-1980s suggested that economic returns from the marshland (duck and muskrat hunting, and fishing) were comparable, on a per-hectare basis, with those from agriculture.

Over the years, however, the main environmental threat to Walpole Island has been pollution of the St. Clair River by the chemical companies near Sarnia that constitute `Chemical Valley'. For several decades after these companies were established during World War II, the St. Clair River was a convenient dumping ground for liquid wastes. Other pollutants were injected into deep geological strata near to the chemical plants. In recent years, the water quality in the river has improved substantially. However, accidental spills are still frequent (averaging one a week); some of these require the intake of the First Nation's water treatment plant to be closed while the polluted water passes. The contaminants are bioaccumulated and biomagnified in the delta wildlife, affecting the health of the wildlife and probably also the health of those families on Walpole Island that consume substantial amounts of wildlife.

The First Nation's resident population is growing steadily, and looks forward to rising material standards of living in the future. Living on a delta with a high water table and a fragile ecosystem, the First Nation is however encountering problems of solid waste disposal and overstrained sewage disposal systems. They illustrate the difficulties involved in reconciling rising living standards with traditional patterns and stewardship of the resource.

Closely linked to Walpole Island's environmental and resource concerns is the issue of self-government. The boundaries of the First Nation have never been formally defined, and are at present being negotiated with Canada and Ontario. Walpole Island claims the whole of the Canadian portion of Lake St. Clair, and envisages a lakewide management system that will be equitable for all users. Negotiations on boundaries and self- government have vital implications for sustainable resource use and environmental protection. Environmental issues shape much of the political negotiations.

This brief summary of Walpole Island's situation shows that this First Nation is unique in its environmental setting. However, in several respects it may also be typical of many, perhaps most, First Nations that have a similarly close relationship with their environment. For many First Nations, self-government is an essential part of ensuring that this relationship is sustainable in the future.

AN ENVIRONMENTAL AUDIT: WHAT IT IS AND WHAT IT IS NOT

At the same time as this Environmental Audit Model is being prepared, Indian and Northern Affairs Canada (INAC) is also making an inventory of environmental issues affecting all First Nations in Canada. This inventory should provide useful data that can be used in an audit, but it is not itself an audit.

One vital difference between the inventory and an audit is that the inventory is concerned only with the environment, whereas an audit concerns the relationship of a community Ä in this case a First Nation Ä to its physical environment and resource base. Many of the issues that are identified by the inventory may have arisen because of human actions (by aboriginal people or others), but the main purpose of the inventory is to collect environmental facts. An audit relates those facts to a specific First Nation community.

Another vital difference is that the Environmental Issues Inventory (EII) has been designed primarily to meet INAC's need for an overall database of environmental information about First Nation's throughout Canada. The primary user is INAC, and the data are being collected in a standard form that varies little across the country. An environmental audit, by contrast, is commissioned by, belongs to, and is used by an individual First Nation. Its scope, form and content are therefore specific to the situation of that First Nation.

In the case of the financial audit of a business firm Ä or of a First Nation's finances Ä the auditor's report is normally very brief. The audit may take several days or weeks, but the report is often only a single paragraph that certifies that the enterprise's financial statements have been prepared in accordance with standard accounting principles and rules.

This concern for compliance with standard rules and requirements is also relevant to environmental audits, but normally will not dominate the audit, as it does a financial audit. The environment cannot be reduced to a set of rules, such as those that control the preparation of financial statements. Certainly, an environmental audit should examine the extent to which a First Nation complies with drinking water standards, waste disposal laws, or similar requirements, but it needs to go much further than compliance. Consequently the report on an environmental audit will be lengthy rather than brief, and its findings will tend to be in the form of comments, recommendations and suggestions. This means that there is scope for disagreement or different interpretations, and the quality of the audit depends very much on the ability of the auditor to recognize what is important and what is not.

This is another significant contrast with an inventory of environmental issues. As an action-oriented document, such an inventory tends to focus on environmental problems that have been inherited from the past, and need to be solved. Remediation of such problems, and the introduction of strategies to prevent their recurrence, should make a substantial contribution to creating a sustainable environment.

An audit also considers how the past has led to the present situation, but it is more concerned with the overall picture than with specific problems. Since it looks to the future, it has some similarities to a development plan for the community, but there are important differences.

Development plans are commonplace in North America: every municipality has one. Typically, they are a mixture of the community's economic and social aspirations on the one hand, and controls (such as zoning regulations) that the community finds necessary to ensure that the aspirations remain feasible. More philosophically, development plans often represent an underlying belief that the community can create the future that it wants.

Development plans have been less successful in First Nation communities, for at least two reasons. In practical terms, it has not been easy to reconcile restrictions on individual behaviour (as zoning and similar controls tend to do) with the desire for consensus that characterizes decision-making in First Nations. Secondly, the emphasis in an environmental audit on the close relationship between humans and their environment, and the need to ensure that the earth's resources are passed on to future generations, is more compatible with aboriginal thinking than the human-focused, `all things are possible', philosophy that is at the root of many development plans. To live in a sustainable relationship with the earth and its resources is a principal and deep- rooted objective of aboriginal people. An environmental audit can be a powerful tool for First Nations in achieving this objective.

• places the emphasis on interpretation rather than on data collection:;
• emphasizes the overall view (synthesis) rather than specific investigation of individual problems (analysis);
• is an activity commissioned by and used by a First Nation, not something carried out by or for another body, such as INAC;
• assists the identification of goals and priorities, rather than being a response to problems or opportunities.

In the previous section, it was suggested that there are major differences between an environmental audit and the financial audits that are routine events in business activities. The qualifications required of an environmental auditor will also be different. However, there remain many similarities in the relationship of the auditor to a First Nation that requests an environmental audit.

It is worth remembering, at the outset, that the environmental auditor, like the financial auditor, is there to assist the client, not to find fault. Often, the arrival of external financial auditors each year seems a threatening event, but this should not be the case. Most businesses want to operate properly and keep their accounts in order; if mistakes have been made, the business needs to know this, so that the situation can be corrected. The external auditor is there to help this happen: he or she looks at the overall picture, and carries out a series of checks to test whether the draft accounts are based on generally accepted principles, that have been applied consistently throughout the period being audited. Minor errors may be found and corrected, but in the vast majority of cases the auditor is able to reassure those who do not work on a daily basis with the accounts (such as senior managers, shareholders, etc.) that the accounts give an accurate picture of the financial situation.

The environmental auditor also works for the client. In this case, a First Nation looks to the environmental auditor for reassurance that the First Nation is living in harmony with its environment, complying with specified requirements (such as drinking water standards), and ensuring a sustainable future for the land and the people who live there. The environmental auditor may or may not be able to provide such reassurance, but if the audit exposes problems or inadequacies, these are things that the First Nation needs to know. If it is important that the First Nation's books are kept accurately, it is even more important that the First Nation lives in a healthy and sustainable relationship with its environment.

The basic principle of an audit is that the auditor is someone `outside'. Normally a financial audit is carried out by specialist firms that have no other link to the enterprise being audited. Some large corporations also employ `internal auditors', whose job is to find errors before the external auditors do so. These internal auditors, however, are also separated from the accounting departments that they audit.

For both financial and environmental audits, the external auditor has two important advantages. First, he or she looks at the activity being audited with a fresh eye, noticing things that are taken for granted by those who are part of the activity itself. (`Why do you do this?' `Never thought about it; we've always done it that way.') Secondly, the auditor will usually come with a great deal of experience in other situations; he or she knows where problems are most likely to arise, and can also make suggestions based on successful methods used elsewhere.

This does not mean that the auditor must come to the audit knowing nothing about the First Nation or its environment. Again the analogy with a financial audit is relevant. A business may employ auditors who have never looked at the business's accounts before, but in many cases it will employ the same firm of auditors year after year. Although the firm remains independent and `external', its accumulated knowledge of the activity being audited is also useful: the auditors `know where to look'. The same is true of environmental auditing.

What sort of qualifications should the First Nation require of its environmental auditor? This is a much more difficult question to answer, and financial auditing is not a useful analogy, because it tends to be more straightforward than environmental auditing, and because it emphasizes compliance with an established set of rules. As we noted above, compliance forms only a part of the environmental audit of a First Nation.

Recognition that auditing goes well beyond compliance may be one of two key requirements in an environmental auditor for First Nations. This is because there is a rapidly-growing field of environmental auditing that does focus on compliance. Firms and businesses are increasingly aware of the need to meet federal, provincial or other environmental requirements in their activities, and accounting firms and similar groups now often include those with the expertise to audit firms for environmental compliance, while their colleagues are similarly auditing the firm's compliance with accounting requirements.

Such firms may also have the capacity to undertake environmental audits that go beyond questions of compliance, but the First Nation needs to be satisfied that this is the case before employing the auditor. The First Nation should also insist that the audit is undertaken in a manner that recognizes the values and priorities of the First Nation (e.g. emphasizing the need for a sustainable future, the importance of consensus, self-government, etc.) The audit may, of course, identify situations that conflict with such values and priorities, but knowing what those values and priorities are is essential if the audit is to be useful when it is completed.

The second essential requirement is that the auditor should be able to take an overall, integrated, view of the situation. The audit is likely to cover the land, water, air, plants and animals in and around the First Nation, as well as significant characteristics of its population, such as health. This calls for scientific expertise, but scientists are normally trained to specialize, often in very narrow areas of expertise. Because of this training, and because they have learned to be cautious when generalizing beyond their individual areas of expertise, many scientists are uncomfortable when asked to undertake tasks that require consideration of such a wide area of knowledge as is implied by an environmental audit.

To some extent, the problem can be reduced if the auditor is not one person but a small team, with expertise in different fields. But the problem of integration remains. What the First Nation will be looking for at the end of the audit is an overall view, that explicitly or implicitly says `This problem in this field is more important or urgent than that problem in a different field.' The larger the team, the less likely it is that such an overall view will emerge. Some scientific disciplines find it easier to see the broader picture than others, but it is also a matter of experience: most scientists start out as narrow specialists and may broaden their horizons over time.

It will not be easy for a First Nation to select an environmental auditor that can provide such an overall view. One way may be to present potential candidates with the problem as it is stated here, and then to ask for evidence of previous work that shows the capability of the auditor to take the broad view.

If these are the principal requirements in the auditor, what is required of the First Nation? One requirement is the complement of that just stated for the auditor: if the First Nation has requested an overall and integrated view of the environmental situation, it should not expect the auditor to provide detailed solutions to specific problems. The audit may well suggest that detailed study of one or more problems should be undertaken, using appropriate expertise. This may happen because the auditor has asked questions for which answers do not appear to exist, or are inadequate, but in most cases the auditor will not be able to provide the answers either.

The second requirement is that the First Nation ensure that the auditor gets the necessary help and information during the audit, and is recognized as someone who is there to help, at the request of the First Nation. This may not be easy, since the auditor will normally want to ask questions that are searching, and may appear critical or threatening, especially when they have to be asked of individuals or groups in the community who were not involved in the decision to commission an audit or in the choice of auditor. Some of the potential friction can be reduced if the First Nation assigns an appropriate liaison person to the audit, but the liaison person cannot replace the auditor, even in asking questions.

AUDIT FACILITIES AND DURATION

It is difficult to generalize here, since much will depend on individual First Nation characteristics, including its areal extent and the state of scientific knowledge about different aspects of its environment.

The auditor should be expected to spend a substantial amount of time `on the ground' in the First Nation. If (as at Walpole Island) there already exists a substantial amount of written material about the environment, more time will be spent on reading, appraising and updating such material than in situations where the auditor must undertake an overall survey of the environmental situation because little earlier work exists. In all situations, the auditor will need to be able to travel through the land and water area.

The period of the audit that is spent in the auditor's home office will not be wholly devoted to report writing. Because the environment is a diverse topic, he or she will need to spend time relating the situation in the First Nation to a broader context (drinking water standards, forest management practices, health statistics, etc.) The less detailed information that there is available about the specific environment of the First Nation, the greater is likely to be the need for the auditor to utilize such general sources.

Like a financial auditor, the environmental auditor needs to be able to `see the books.' Explanations as to why specific environmental or resource decisions were taken may involve tracking back into Council minutes and similar documents of the past, and may well involve material that the First Nation now regards as confidential, embarrassing or potentially divisive if it became more widely known through an audit report.

The auditor has of course no absolute right to see confidential or similar material. In the last analysis, the auditor is working for the First Nation, which can determine for itself what limits to place on the auditor's freedom of action. As with financial audits, however, if the auditor feels that a question has not been answered adequately, or that relevant material has not been made available, he or she will feel bound to say so in the report.

This problem should not be exaggerated: in most cases it will be a minor issue or will not arise at all. The auditor is not trying to assign blame or `point the finger' at individuals or groups in respect of past decisions. He or she is concerned only to understand and report on the situation, and it should not be difficult to provide the auditor with the information required, without going into unnecessary or embarrassing detail. Mistakes are often made, and what now seems to have been an unfortunate decision or action may be entirely understandable in the context of the state of knowledge or other factors at the time it happened. The auditor has the right to expect honest answers and reasonable access to data; the First Nation has the right to expect that the auditor will be sensible and tactful when using the information provided.

This is obviously a matter of importance to both the First Nation and the auditor, if only for financial reasons. Though the time required will depend in part on local conditions, it seems reasonable to anticipate that most audits can be accomplished in a period varying from several weeks to a few months. The First Nation is entitled to ask the prospective auditor to prepare a schedule of anticipated activities; the auditor is entitled to expect that this schedule can be renegotiated if the audit encounters unforeseen difficulties.

FORMAT AND PRESENTATION OF THE REPORT

As noted above, a typical auditor's report after a financial audit is rarely more than a paragraph or two in length. Even the words themselves vary little or not at all: they usually state that the accounts of the enterprise being audited appear to have been maintained in accordance with generally-accepted accounting standards, and that the accompanying financial statements represent a true picture of the situation.

The report from an environmental audit will be a much longer document. The environment cannot be reduced to a series of `dos and don'ts', certified by the auditor. But neither should the audit be encyclopædic: it is not a compendium of environmental knowledge about the First Nation.

The report is, in fact, best thought of in terms of the requirement that it be an overview: a summary of a complex situation that sorts out the important from the trivial and identifies urgent needs and chronic problems. To be useful, an overview has to be read from beginning to end by as many people as possible. If it is too brief, it may be, and will certainly appear, superficial; if it is too long, then it will not be read by those who commissioned it.

The form and chapter structure of the report will depend very much on the area concerned. Appendix A shows the chapter structure and page allocation of the 1993 audit of the Walpole Island First Nation. Almost half the report (48%) was devoted to auditing environmental elements over which the First Nation already has substantial control or responsibility. The following section, dealing with those environmental elements over which the First Nation has little control is much shorter, as much because the available information (e.g. on the fisheries) is less in volume and less specific to Walpole Island than is the detailed information assembled in recent decades on topics ranging from water supply to archæological remains. The first section attempts to put Walpole Island in its physical and human context, and also emphasizes the importance of self-government to environmental issues (and vice versa.) The final section identifies the key issues and recommendations emerging from the audit. The recommendations and other suggestions are also reproduced in Appendix A.

During a financial audit, the auditors will normally share their findings with those whose work is being audited, especially if errors are found that need to be corrected. Something similar should characterize an environmental audit, though it is the auditor's own errors that may need correction. In particular, the auditor should normally invite comments on the draft report from appropriate people in the First Nation. The auditor is, after all, an `outsider' by definition, and outsiders may misinterpret what they see or hear. This does not mean, of course, that the First Nation should expect to censor or control the auditor's report, but the report is likely to be more readily accepted if knowledgeable people in the community have had an opportunity to comment on a draft version.

ELEMENTS OF THE REPORT

As noted already, the form and content of an audit will vary according to the individual situation of a First Nation, and the amount of information that is available. What follows is not intended to be prescriptive: some elements may be irrelevant for an individual First Nation; others may be of minor significance, and some elements that are not mentioned here may need to be included.

This section is therefore intended only as a guide to First Nations on what to expect in an audit report. It may be helpful as a basis for discussion between the First Nation and the auditor at the outset of and during the audit; from such discussion can emerge a structure for the audit report with which both the First Nation and the auditor are comfortable.

1. Setting and context for the audit
2. Analysis of the individual environmental elements
3. Synthesis and recommendations

• Highlight distinctive features, and potential environmental or other conflicts;
• Develop, as completely as possible within the time available, a bibliography or list of sources on which the audit statements are based, and that can be used to obtain additional information;
• Identify gaps in knowledge that need to be filled if the First Nation is to live in a sustainable relationship with its environment.

The audit of a First Nation takes place at a specific time in the history of the First Nation and covers a specific area. It also takes place within a less-easily specified socio-political context (e.g. during self-government negotiations; as the result of a `new beginning' for the First Nation; because of a perceived major threat to the environment or to those living on-Reserve, etc.)

Since the client for, and principal user of, the audit is the First Nation itself, it may seem as though the setting and context for the audit can largely be taken for granted. True, this section may form a relatively brief introduction to the audit itself, but it serves a vital function nevertheless. For example,

The context statement, especially its socio-political part, should reassure the First Nation that the auditor understands the philosophy and principles that distinguish First Nations from other elements of Canadian society.

In many cases, the statement will emphasize that this is a period of rapid change in the First Nation, with strong implications for environmental protection and sustainability. Most First Nations are poised on the threshold of social and economic change that they have been denied for too long. At the same time, they have a strong attachment to traditional values and behaviour. The audit is likely to identify several places where these are in real or potential conflict, and a good deal of the explanation for such conflict is likely to be found in the present context and setting.

The setting and context statement, therefore, is likely to include brief notes on the following:

• The physical setting: area of the Reserve or other unit being audited; its general setting (e.g. prairie, delta, muskeg); climate; plant cover; rivers and streams;
• Population and society, especially recent changes in population size; age- structure; settlement pattern within the area being audited; employment; health;
• History and political context: outline of the First Nation's occupation of the area; its situation vis-à-vis self-government; its general aspirations for the future and especially for the next 5-10 years.

The audit is likely to cover all or most of the following items, reviewing the adequacy and significance of available information, or pointing out that adequate information and data do not yet exist.

Systems for solid waste collection and disposal; separation of hazardous, recyclable and residual wastes; character of landfill and other disposal sites, with environmental implications; adequacy of present systems for the long-term future, and feasible alternatives.

Sewage systems (primitive, septic tank and centralized systems); proportion of population covered by different systems; maintenance information and needs; implications for wildlife and human health; available public health data.

Systems in use (individual and collective, wells or surface sources); treatment; quality monitoring (including individual sources); sources of contamination and prospects for improvement; adequacy of the system or alternatives for the long-term future.

Available data concerning air pollution from local and distant sources; implications for public health and plant and animal life (including agriculture).

Location and condition of known or suspected toxic sites (including earlier or current uncontrolled dumps and landfills, underground storage tanks, etc.); off-reserve toxic sources affecting air, surface waters or groundwater; potential or known health hazards; plans or need for removal or remediation.

Character of the hazard (river or lake flooding, forest fires, tornados, etc.) and frequency; risk of accidents or other dangers derived from human activity (e.g. release of toxic materials by rail derailment or traffic accident); potential for damage to humans and the local environment; scope for hazard avoidance or risk reduction; adequacy of emergency planning by First Nation and other bodies.

Character of enterprises (crops, owner-operated or rented, size of units, etc.); tillage practices; use of fertilizers and pesticides; known or potential impact on soils, watercourses and adjacent areas; evidence of soil erosion; long-term sustainability.

Extent, character and ownership; existence and implementation of long- term management plans; fire protection; liability to pests and diseases; value of forests for associated flora and fauna.

Overall character and significance to First Nation economy and society; long-term and recent trends (declining, recovering or sustainable?); vulnerability to persistent and bioaccumulating contaminants; implications for human health; plans and prospects for long-term sustainability.

Knowledge or probability of rare and endangered species or habitats within the area; similar data or information on archæological or historical sites, especially those important in First Nation traditions; vulnerability of sites and species to natural erosion or development plans (e.g. roads, water and sewage systems); long-term conservation plans and prospects.

Knowledge and documentation, from traditional and scientific sources, concerning the environment and resource base of the First Nation; extent to which this knowledge is shared throughout the First Nation; level of commitment to sustainability by First Nation (e.g. policy statements and actions of Chief and Council, voluntary recycling and similar programs, etc.); incorporation of sustainability and environmental protection in development planning, self-government and other negotiations; access to relevant professional expertise.

Unless they have been a pervasive theme throughout the audit, a vital part of the concluding section should be the linkages between the environment and the people of the First Nation. `Living in harmony' with the environment involves an understanding that the society, economy and health of the First Nation depend significantly on the state of the environment; conversely, the actions of the First Nation have both short and long term effects on the environment and resource base.

In the course of the audit, the auditor will normally see the need for, or desirability of, a large number of actions or investigations. These need to be brought to the attention of the First Nation; they are the most important and action-oriented parts of the audit. However, the auditor needs to do more than list these in the form of separate recommendations. To do so is likely to result in the First Nation deciding that it can tackle only a few of the recommendations, with those selected being chosen more on the basis of simplicity or available funding than because of urgency or overall importance.

The auditor, in other words, needs to offer the recommendations with some indication of relative importance and priority, and the reasons for these priorities. One way is to offer a small number of formal `recommendations', covering the key needs and inadequacies, with less important matters offered as `suggestions'. Of course, the First Nation may not agree with the priorities indicated by the auditor, but the main reason for conducting an environmental audit is to provide an overall view of a complex situation; the auditor's advice on what are the key elements of that situation is an essential part of the audit.

Appendix A includes a summary list of the recommendations and suggestions that emerged from the 1993 audit of Walpole Island First Nation. It illustrates the priority setting that is advocated in the preceding paragraphs; however, other formats could be equally effective in establishing priorities.