Canada: Mining, People And The Environment - Law: Duty To Consult

Relations between Canada's First Nations communities and mining companies continue to evolve with new case law, legislation and industry practice.

It has been almost 10 years since the seminal decision Haida Nation versus British Columbia (minister of forests). This ruling first articulated the constitutional duty of the Federal and Provincial Crowns to consult with First Nations in making decisions that may adversely affect as yet unproven aboriginal rights and title claims. The duty to consult has since developed considerably. Subsequent court decisions have clarified and refined the parameters of the duty.

The ways in which Canadian and international mining companies work with First Nations communities has also evolved and important lessons have been learned. By law, the duty to consult with and accommodate only applies to government. And the duty to consult does not include a veto over development for First Nations communities. In practice, mining developments will work to accommodate communities' concerns through mitigation measures and local project benefits.

The reality is that mining companies have just as much of a stake in this approach – it is now an expected standard of practice and good business.

Consultation must be meaningful

Case law and experience have shown that if consultation with First Nations is not meaningful, mining projects will likely stall or fail. In the 2011 West Moberly First Nations versus British Columbia (Chief Inspector of Mines) decision, the Court of Appeal of British Columbia ordered the suspension of mining operation permits because the province's consultation process was not meaningful.

The court found inadequate consultation concerning the potentially adverse impact on a caribou herd and the ability of the First Nation petitioners to hunt this species in its feeding grounds. Leave to appeal of the decision was sought at the Supreme Court of Canada, and denied.

Consultation should be a genuine and a potentially long-term relationship with the community or communities that may be affected by a project. To effectively work with First Nations, in the context of the Crown's duty to consult and accommodate, companies should engage early on in a project and provide timely information. Personal interaction is key.

There are many diverse First Nations communities across Canada and their concerns about development can differ. In some cases, the priority is on economic development, while in others it is environmental or territorial. Partnerships, equity or joint ventures may be priorities as well. This is where engagement and consultation and a mutually respectful relationship with local communities allows a company to understand what the community is most concerned about and why.

Agreements with First Nations

Entering into formal agreements with First Nations have proven to be successful for mining projects. They can provide companies with an effective and efficient engagement process that could be included into an Exploration Agreement (for initial or advanced exploration) or in a Memorandum of Understanding to set out the manner in which the parties agree to move forward.

Agreements can address capacity issues and funding for First Nations supports community efforts to plan and undertake a Traditional Ecological Knowledge mapping programme, as well as for discussing employment, training and economic development opportunities with First Nations. Companies should also consider, where appropriate, the opportunity of entering into Impact and Benefit Agreements with First Nations to provide certainty for the project.

As far as the duty to consult with First Nations communities has come in the last decade, new government guidelines, policies and court decisions across Canada continue its evolution. Mining companies are a key part of this journey.

Provincial policy

Newfoundland and Labrador has seen the most controversial policy. The province's Aboriginal Consultation Policy on Land and Resource Development Decisions was released in April 2013 and requires proponents to pay the costs of consultation and of accommodation. Proponents are also expected to provide information regarding short-term and long-range use or development plans for an area.

Quebec's Mining Act has been substantially amended and modernised by Bill 70, which the Quebec National Assembly adopted on December 9, 2013. The Act now contains three provisions that relate specifically to aboriginal communities, including a provision that the minister is to draw up an aboriginal community consultation policy specific to the mining sector.

The Act also states that it is to be construed in a manner consistent with the obligation to consult aboriginal communities and requires the minister to consult aboriginal communities separately if the circumstances so warrant. What those circumstances might be, however, has not been clarified.

The policy focus in Ontario is on the early stages of mineral exploration. The province entrusts important responsibilities in the hands of developers and proponents should be prepared to contribute to community capacity needs.

The Ministry of Northern Development and Mines (MNDM) must be satisfied that consultation with affected First Nations communities has been appropriate prior to making a decision whether or not to issue a permit. MNDM encourages proponents to make efforts to reach arrangements with aboriginal communities. Major amendments made to Ontario's mining laws in 2012 and 2013 codified consultation requirements that apply to both junior and major mining exploration companies.

In Alberta, consultation is delegated to proponents in most cases. The negotiation of project impact benefit agreements remains optional. The province is prepared to enter into specific consultation process agreements with First Nations and a programme will be developed to increase capacity funding for First Nations and fund the programme through an industry levy.

Proponents will be required to provide the Aboriginal Consultation Office (ACO) with all consultation related agreements signed with First Nations. As of November 1, 2013, the ACO merged some services provided by the Stewardship Branch of Environment and Sustainable Resource Development with some services provided by Consultation and Land Claims Division of Aboriginal Relations in order to manage all aspects of consultation.

The courts

Canadian courts have clarified many elements of the duty to consult. However, an important question remains: do past projects, cumulative effects and future developments change the scope of the duty to consult?

For First Nations communities, the basic issue is how much land is sufficient land to exercise traditional activities. In Rio Tinto Alcan versus Carrier Sekani Tribal Council (2010), the Supreme Court of Canada explained that a duty to consult arises from current government conduct and is limited to the specific Crown proposal at issue and not to a larger project of which the current proposal merely forms a part. However, this case is probably not the end of the story.

The British Columbia Court of Appeal has indicated that, while the duty to consult does not involve addressing past wrongs, it is essential to take into account the historical context in order to have a proper understanding of the seriousness of potential impacts. The BC Court also said that consideration of future impacts, beyond the immediate consequences of the exploration permits, may come within the scope of consultation.

International trade deals?

Last year brought a potentially radical enlargement of the duty to consult – one that aimed to expand it beyond Canada's borders. The Canadian and Chinese governments signed an investment agreement (CCFIPPA) at the APEC Summit held in Russia in September 2012.

However, the Hupacasath First Nation (HFN) opposed the deal because the federal government failed to consult the band before signing. The HFN claimed that a ratified and implemented CCFIPPA will negatively affect it in a number of ways. The issue that went before the federal court was: does Canada have a duty to consult the HFN prior to ratifying the agreement?

In August 2013 the Federal Court found that the Government of Canada did not have a duty to consult the HFN prior to ratifying the CCFIPPA, because the potential adverse impacts asserted were non-appreciable and speculative in nature.

This is a new approach to watch. It is the first time that a First Nation has gone up against the ratification of such an agreement. If future international trade deals are challenged, the court might tell the government to consult the First Nation in question and return with the results. The court could find the arguments made during the consultation to be sound and order the government to insert or redraft new provisions within the treaty, ensuring aboriginal rights are protected.

Looking ahead

When mining companies have the duty to consult with one or more of Canada's First Nations communities on projects, a strong relationship can yield many benefits and avoid costs including litigation and delays. A poor relationship can result in the project's failure. This area of law and community relations will continue to evolve.

Mining companies, First Nations and governments must keep working so that resource development projects both become successful and minimise or eliminate potentially adverse impacts on existing or asserted treaty rights.

Originally published in MPE Magazine, April 2014.

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

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Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

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