Canada: BC Court Of Appeal Agrees That Consultation On Mine Expansion Was Adequate

Last Updated: October 3 2013
Article by Kevin O'Callaghan

On September 26, 2013, the Court of Appeal issued its decision in Louis v. British Columbia (Minister of Energy, Mines, and Petroleum Resources), 2013 BCCA 412, finding that the Crown met its obligations to consult the Stellat'en First Nation in the context of a series of applications related to the proposed expansion of the Endako Mine by Thompson Creek Metals Company Inc. (TCMC).

The Court of Appeal, in a decision by Mr. Justice Groberman, found that the consultation on such an expansion could proceed on an application-by-application basis. The Stellat'en had asserted that it was incumbent upon the Crown to engage in consultation over high-level strategic planning and not piecemeal. The Court held that the consultation record demonstrated that the Crown officials made adequate efforts to determine whether the application before them might have adverse effects on asserted Stellat'en Aboriginal rights – and that was sufficient to meet the duty to consult in these circumstances.

This was an appeal from the decision issued by the Supreme Court of BC in Louis v. British Columbia (Energy, Mines and Petroleum Resources), 2011 BCSC 1070, in which the Court found that the Crown had fulfilled its duty to consult and had acted honourably in its efforts to consult. View our previous bulletin on the case for more details.

Background

As described by the Court, the Endako Mine is located approximately 8.5 kilometres southwest of the town of Endako, which is 190 kilometres west of Prince George. It is an open-pit molybdenum mine and has been in operation since 1965, processing 28,000 tonnes of ore daily. TCMC is the 75% owner and operator of the Endako Mine. TCMC holds a "M-4 Permit" under the Mines Act, R.S.B.C. 1996, c. 293. This permit grants it the general right to mine and is not subject to expiry or time limitations.

TCMC sought to expand the mine in response to higher commodity prices to process lower grade molybdenum more rapidly through the construction of a larger and more advanced mill. The new mill required an amendment to the M-4 Permit. The other effects of the expansion, such as the merging of the three open pits, did not require an amendment.

Beginning in late 2007, TCMC began canvassing stakeholders about their intention to pursue the expansion. This was done independent of the Crown. In early 2008, TCMC gave notice to the Crown and began the formal process leading to the expansion. This also started the concurrent engagement between the Crown and the Stellat'en, and was the first instance in which the Crown requested the Stellat'en provide input on the process.

In the weeks that followed the Crown's request for input and notice of TCMC's intentions, the Stellat'en communicated their desire to begin consultation immediately to find out whether the expansion could take place. They also sought to address the issue of whether they were adequately consulted and accommodated when the Endako Mine originally opened in 1965. The Court lamented at this misapprehension of the law, prior to guidance from the Supreme Court of Canada in the Rio Tinto case, which spurred the Stellat'en to improperly refuse to consult.

From April to October of 2008, the Crown and TCMC made a series of attempts to engage the Stellat'en in the process related to the then-proposed expansion. Justice Crawford aptly summarizes the back and forth and noted the limited willingness of the Stellat'en to meet with the other parties, as well as the limited detail provided by the Stellat'en to the other parties regarding the alleged infringement of their Aboriginal rights. On October 29, 2008, the Ministry granted the requisite amendment to the M-4 Permit allowing construction of the new mill to proceed.

Market factors delayed the construction of the new mill through most of 2009, and it resumed in August of that year. A final in-person consultation was held in September of 2009 involving all major stakeholders, but was unable to produce a solution to the impasse.

The Stellat'en's petition was filed in Supreme Court in Vancouver on May 18, 2010. The hearing began February 28, 2011.

The Decision Below - Louis v. British Columbia (Energy, Mines and Petroleum Resources), 2011 BCSC 1070

Justice Crawford determined (at paragraph 156) that, "[c]onsultation did not readily 'get off the ground' because Stellat'en insisted on discussing alleged past infringements of their asserted Aboriginal title and rights with respect to the opening of the original mine back in 1965 and its continuing operation since then." He went on to dismiss Stellat'en's argument on past infringements based on the Supreme Court of Canada's decision in Rio Tinto. In Rio Tinto, the Court held that historical claims are not the subject of consultation or judicial review, although they may give rise to other things such as awards of damages. 

Justice Crawford reviewed the Crown's assessment of the consultation required in light of the Haida and Rio Tinto decisions from the Supreme Court of Canada, and concluded: "I accept as correct Crown's consideration that potential adverse impacts arising from [the Minister's] decision to amend the M-4 Permit would be low in terms of seriousness. In my view, [the Minister] fared well at this step of the Haida test, given Stellat'en's failure to articulate, with any specificity, the nature of its asserted title and rights."

Finally, the Court considered whether the Crown's consultation efforts were reasonable. Justice Crawford found that the Minister's engagement with the Stellat'en satisfied the appropriate test from Haida and identified a number of indicia in support of this conclusion such as finding that the Crown moved quickly to address issues of consultation; the Crown initiated consultation early, it continually and openly shared information and it listened to concerns and responded.

Justice Crawford found that the Stellat'en failed to properly respond to the Minister's "numerous good faith attempts" to determine their specific concerns from the proposed expansion. Justice Crawford characterizes the dynamics of this reciprocal obligation as one of "give and take".

Decision of the Court of Appeal

The Court of Appeal first dealt with the idea that the expansion of the mine would extend the life of the mine, which would in turn have the effect of elongating the effects that the mine was having on Aboriginal rights. The Court pointed out that the life of the mine was not in the hands of the Crown, but was the decision of TCMC based on technological and market factors. Although the practical effect of expansion could be that the life of mine was extended, that was not a novel impact of the mine on the Stellat'en's claimed Aboriginal rights. 

[85] The consultation efforts engaged in by the Crown in this case were appropriately directed at the novel impacts of the expansion project. Given that the existing titles and permits allowed extensive disturbance of the mine-site by Thompson Creek Metals, and given the relatively small increase to the mine's footprint, the process engaged in by the MEMPR appears to me to have been a reasonable one. This is particularly the case in light of Stellat'en's refusal to identify any particular impacts of the project on Aboriginal rights. ...

The Court also examined how the discretion of a Crown decision maker could affect the content of consultation in certain circumstances, holding:

[81] The existence of a duty to consult, does not, however, represent an invitation to the Crown to exercise its powers in an arbitrary or capricious manner, even if it is asserted that by doing so, it might be able to protect asserted interests of First Nations. A new application for regulatory approval must be considered on its merits, and where it will affect asserted Aboriginal rights, the Crown must engage in consultation. It cannot, however, abuse its regulatory discretion by using the application as a tool to undermine the existing rights of the applicant.

...

[84] This is not to say that the Minister's statutory discretion when considering amendments to the mining permit was narrow. Undoubtedly, the Minister's statutory discretion was a broad one. In considering whether to authorize the construction of the new mill, the Minister's representatives were clearly entitled to consider such things as the impact on Aboriginal rights of the taking up of additional land by the mill, the environmental impacts of the increased mill throughput, and any other novel adverse impacts resulting from the industrial processes that were to be used in the new mill.

The Court found that the Crown did consider the above impacts, and as a result the consultation was sufficient.

The Stellat'en's core argument was that the Crown must consult regarding high-level strategic planning and that, therefore, the consultation undertaken by the Crown on an application by application basis was insufficient. They characterized this as piecemeal consultation.

The Court disagreed, holding that in the context of an existing mine applying for an expansion was a series of applications – there was no overarching strategic level decision to be made by the Crown. Given that the Crown was not making such a "strategic" decision, consultation on an application-by-application basis was appropriate in these circumstances. The Court held:

[111] The Stellat'en assert that the early permits should not have been issued until a decision had been made on the appropriateness of the project as a whole. They point out that, unless the project as a whole was going ahead, there was no need to clear land, study the geotechnical characteristics of the proposed mill site, or prepare that site for construction.

[112] This argument might well have considerable force if the Stellat'en had asserted that the relatively minor disturbances envisioned by the early permits had significant adverse impacts on their asserted Aboriginal rights. Indeed, even relatively minor impacts might have militated in favour of delaying consideration of the applications so that they could be considered along with the other applications critical to the expansion project.

A critical issue for the Court was the Stellat'en's refusal to engage in consultation. Although the Court was clear that there was no legal "duty" on First Nations to engage in consultation, the practical result is that the First Nation cannot rely on a lack of consultation if they refuse to be involved in the process or provide any substantive information about site-specific rights that may be affected:

[113] The Stellat'en did not, however, make any assertion that specific Aboriginal rights would be adversely affected by the early authorizations. The Crown officials who issued the permits concluded, in the absence of any substantive response from the Stellat'en, that the relatively small and already highly-disturbed areas involved would not seriously affect asserted rights.

Conclusion

The Stellat'en decision is an application of the Supreme Court of Canada's decisions in Haida and Rio Tinto. However, there are two key issues that were fundamental to the result in the case which bear remembering.

The first is that the context matters. Much of the Court's analysis in this case turned on the fact that the company had pre-existing rights and an existing facility. The decision to have a mine there had been made a long time ago, what was at issue was the plan to make it incrementally bigger. Everything from the seriousness of impact to the sufficiency of the consultation was viewed through the lens of that incremental change.

The second is that the Court does not view favourably a party (whether First Nation or Crown) who refuses to engage in consultation. In this case the Stellat'en refused to consult because of their view of the state of the law regarding consultation (which turned out to be incorrect). The Court judged the consultation that the Crown was able to undertake in the light of that refusal and found that it was sufficient. Any party that refuses to engage in consultation on principle takes a risk that the Court will not agree with that principle.

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.

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