Canada: Mining And Aboriginal Consultation In The Yukon

Mining and Aboriginal Peoples are both significant aspects of life in the Yukon. The territorial government recently amended its mining legislation to require consultation of Aboriginal Peoples before exploration programs are undertaken. The Yukon Supreme Court also recently quashed the government's approval of a proposed mining exploration project. These legal developments provide a timely reminder of the importance of undertaking proper processes in developing, financing and acquiring projects in First Nations' territory.

BACKGROUND

Mining in the Yukon is governed by the Placer Mining Act and the Quartz Mining Act. Both statutes have been amended in response to a December 2012 decision of the Yukon Court of Appeal in Ross River Dena Council v. Government of Yukon.

As described in our Blakes Bulletin: Duty to Consult Fosters Change to Yukon Mineral Claims Regime, the Court of Appeal held that the Yukon government's open entry registration system for quartz mineral claims is subject to the Crown's duty to consult with First Nations. The Quartz Mining Act allows an individual to acquire mineral rights by simply staking and recording a claim. Under the former regime, the holder of the mineral claim would then be able to undertake a Class 1 exploration program, which includes activities such as the clearing of land; the construction of lines, corridors and temporary trails; the use of explosives; and the removal of subsurface rock. All of this activity could be undertaken without the tenure holder providing notice to the government and without obtaining permission from, or consulting with, any person, including First Nations.

The Ross River Dena Council applied to court for a declaration that the government had a duty to consult before recording a mineral claim under the Quartz Mining Act. The Court of Appeal held that the Quartz Mining Act must allow for accommodation of First Nations before their aboriginal title or rights are adversely affected. Mere notice of a newly recorded quartz mineral claim is not sufficient consultation. Accordingly, the court issued declarations regarding the duty to consult, but suspended its ruling for one year to allow the government to consider legislative changes to provide for appropriate consultation. On September 19, 2013, the Supreme Court of Canada dismissed the government's application for leave to appeal.

LEGISLATIVE AMENDMENTS

The territorial government recently adopted statutory and regulatory amendments to address the court ruling. Bill 66 amends both the Quartz Mining Act and the Placer Mining Act. The bill provides that, within any designated area, a Class 1 exploration program cannot be undertaken until the government has consulted with each affected First Nation, and determined whether any adverse effects on the First Nation's interests can be appropriately mitigated. So far, the government has only designated Ross River as an area where these consultation requirements apply.

The process for consultation under the new regulatory scheme is as follows. First, the proponent must give the chief of mining land use (Chief) notice of the proposed exploration program (Notification). Next, the Chief has a 25-day review period during which to initiate consultation with each affected First Nation and determine whether the exploration program will appropriately mitigate any adverse effects on the First Nation's rights. If so, the Chief may allow the exploration program to proceed. Conversely, if the Chief determines that the exploration program will not appropriately mitigate these adverse effects, the Chief may reject the program or allow it to proceed on conditions.

Interestingly, if the Chief does not make a decision on a proposed exploration program during the 25-day review period, it appears from the legislation that the proponent may proceed with the program upon the expiry of the review period. It is uncertain whether this is the government's intention or simply a gap in the legislative scheme.

The government has indicated that details of which activities require Notification will be addressed early in 2014. In addition, the government issued an interim order prohibiting mineral staking in the Ross River Area until May 1, 2014.

White River First Nation v. Yukon Government

In this case, the White River First Nation sought judicial review of the approval by the director of mineral resources (Director) of a proposed quartz exploration project within the First Nation's traditional territory.

FACTS & ARGUMENTS

The Yukon Environmental and Socio-economic Assessment Act provides for the assessment of a proposed exploration project by an assessment board (Board). The Board is made up of government staff. In this case, the Board prepared an evaluation report for the proposed project in consultation with the First Nation. The report recommended the project not proceed because it would have significant adverse effects on caribou, wildlife habitat, and the First Nation's traditional land use and culture.

The Director rejected the evaluation report. He found any potential significant adverse effects associated with the project could be mitigated by restricting project activities spatially and temporally. Although he met with representatives of the First Nation after receiving the evaluation report, he did not indicate he was considering rejecting its recommendation. The Director permitted the exploration project to proceed.

THE COURT DECISION

The Yukon Supreme Court overturned the Director's decision. The court held that the Director had a duty to consult and accommodate the First Nation in a manner that gave the First Nation meaningful input into the decision-making process. The Director misconceived both the strength of the claim of the First Nation and the extent of the potential adverse impact of the project on their right to harvest caribou. The Director's meeting with the First Nation was insufficient because he did not disclose any intention or basis on which he might reject the evaluation report's recommendation. Information contrary to the evaluation report should have been disclosed to the First Nation to allow it an opportunity to challenge and test the Director's information. The court held that the Director's consideration of the scientific information, traditional knowledge and other information was not full and fair, and therefore the decision had to be reversed. The proponent did not appeal the court's decision.

CONCLUSION

A fair process is the key to aboriginal consultation. The White River case demonstrates that risks to a project may arise when a proposed development is approved without transparent justification. Likewise, the amendments to the Quartz Mining Act and Placer Mining Act show that the Yukon government intends to respect First Nations' rights while also promoting a viable mining industry in the territory.

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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