Canada: Judicial Scrutiny Of Alberta Environment And Sustainable Resource Development Policy On Objections To Oilsands Projects

Last Updated: December 19 2013
Article by Stuart W. Chambers and Sean D. Parker

In the recent Alberta Court of Queen's Bench decision Pembina Institute v. Alberta (Environment and Sustainable Resource Development), Justice Marceau held that the Director of the department of Alberta Environment and Sustainable Resource Development ("AESRD") violated principles of natural justice when rejecting the standing of the Oilsands Environmental Coalition and/or its members (collectively "OSEC") to file a Statement of Concern with AESRD. By way of background, OSEC had attempted to file a Statement of Concern relating to an application for approval of a steam assisted gravity drainage oilsand project proposed next to the Fort MacKay River, in the Fort McMurray area. Filing a Statement of Concern with AESRD, if accepted, not only enables the concern filer to participate in the process relating to the application in question, but is a requirement for standing before the Environmental Appeals Board ("EAB") in any later appeal of the Director's decision. If the Statement of Concern is not accepted by the Director, that party will not have the opportunity to appeal the Director's decision or take part in any subsequent proceedings before the EAB.

The Director rejected OSEC's Statement of Concern on the basis that OSEC "did not sufficiently demonstrate that a majority of OSEC or its members are directly affected by the subject applications" and "did not demonstrate that OSEC or its members are directly affected" by the project. The governing legislation requires that a party be "directly affected" by a project in order for a Statement of Concern to be accepted.

Of the utmost importance to the Court's decision was an AESRD briefing note to the Deputy Minister of Environment, dated August 12, 2009, titled "Statement of Concern Rejection of Oilsands Environmental Coalition". The briefing note was prepared in connection with another oilsands project but was disclosed in these proceedings as part of the Director's Record (the collection of documents disclosed by the Director to the parties challenging the Director's decision). The briefing note described the reasons for "Alberta Environment rejecting the Coalition [i.e., OSEC] as a Statement of Concern filer". The Court found that the briefing note essentially set out a policy for not accepting any Statements of Concern filed by OSEC or its members, on the apparent basis that the organization has a history of being uncooperative in the regulatory process and that at least one of its members had published "negative media on the oil sands".

The Court took several issues with the briefing note and its application by the Director, in particular:

. . . that the only party who has been accepted as a Statement of Concern filer by the Director may appeal the decision of the Director concerning the Application for Environmental and Water Permit to the EAB. The EAB may decide not to allow a Statement of Concern filer to appeal by deciding, for instance, that the Statement of Concern filer, while allowed that status before the Director during the decision making process, is not sufficiently "directly affected" by the Director's actual decision to be allowed to appeal it. Significance of this is that by denying OSEC, or perhaps more correctly, Pembina and FMEA, status as a Statement of Concern filer, the Director has foreclosed the possibility that these two organizations could be allowed status as an Appellant of the Director's decision.

The Court went on to find in the first paragraph of its analysis that "the entire process in this case is so tainted by the "Briefing Note" that in arriving at my decision, I need only refer to the applicants' contention that the Director has breached the principles of natural justice by taking into account improper and irrelevant considerations." The Court went on to find that all four fundamental principles of the duty of procedural fairness, as outlined in the Supreme Court decision Baker v. Canada, were violated and therefore quashed the impugned decision by the Director. The four fundamental principles of procedural fairness are:

1. A fair and open procedure;

2. The right to be heard;

3. Consideration by the decision-maker tasked with the duty to decide; and

4. Decisions are to be free from reasonable apprehension of bias.

In reaching its conclusion, the Court looked at the purposes of the Environmental Protection and Enhancement Act ("EPEA") and the Water Act and found that:

... the briefing note contradicts the publicly stated policies of the EPEA encouraging public participation and the regulatory process by using criteria for acceptance of the "Statement of Concern" whether the filer:

a. Has been relatively simple to work with, i.e. whether they have appealed a Decision;

b. Is perceived as being cooperative ... ; and

c. Has published negative media on the oilsands.

Another noteworthy finding of the Court was in relation to the principle that decisions are to be free of reasonable apprehension of bias. In this regard, the Court found that one of the objects of EPEA, to give citizens of Alberta the opportunity to voice concerns about a proposed industrial developments, was "hijacked" by the Briefing Note. That note basically says the interpretation of "directly affected" will be changed in such a way that OSEC will no longer qualify as a Statement of Concern filer for oil sands projects. The Court further found that "it is difficult to envision a more direct apprehension of bias..."

Although the Court quashed the Director's decision due to the denial of procedural fairness and natural justice, the Court went on to make additional, non-binding comments regarding which parties are to be recognized as Statement of Concern filers and the application of the "directly affected" test.

Regarding the first point, the Court found that it was not unreasonable for non-legal entities, such as OSEC, to present a single Statement of Concern for their constituent members as opposed to requiring the filing of several duplicative pleadings. Regarding the directly affected test, the Court concluded that the Director ought to be afforded deference when interpreting his own statute, i.e. who may be a Statement of Concern filer; however, the Court also found that the process of identifying directly affected parties should not be subject to rigid rules of interpretation at the Statement of Concern level. Rather, the more rigid application of the directly affected test is to be applied by the EAB when determining which parties have standing for an appeal before that board.

On November 13, 2013, Environment and Sustainable Resource Development Minister Diana McQueen issued a press release stating that the Province will not be appealing Justice Marceau's decision.

Although the Court's decision primarily focuses on the conduct of the Director and AESRD, it is of significance to any operator who may be seeking an approval in connection with an oilsands project in particular, and additionally to individuals and organizations interested in expressing their views in connection with such proposed projects. The Court has sent a clear message that the principles of natural justice and procedural fairness will be applied rigorously to the decisions of the Director in connection with allowing parties to participate in the regulatory approval process as Statement of Concern filers. For an operator seeking an approval, this means that the Director's rejection of a particular Statement of Concern filer may be subject to review by the Court, and possibly reversal, potentially resulting in delay and complication for the process of the approval application itself. With respect to individuals and organizations seeking to file Statements of Concern, the Court has provided guidance on some key considerations for non-legal entities and coalitions of concerned citizen groups, as well as some clarity on the proper application of the "directly affected" test. All parties involved or potentially involved in the regulatory approval process can learn something from this decision.

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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Stuart W. Chambers
Sean D. Parker
Events from this Firm
13 Dec 2017, Webinar, Calgary, Canada

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