Article by Caroline Findlay, ©2006, Blake, Cassels & Graydon LLP
This article was originally published in Blakes Bulletin on Energy - Regulatory - May 2006
The answer to this question is currently being played out before the National Energy Board (the NEB) as part of the environmental assessment (EA) review process for Enbridge’s Gateway Project. This is a proposed oil export/condensate import pipeline running about 1,100 km from Edmonton, Alberta to BC’s coastal community of Kitimat. In early February 2006, the NEB recommended to the federal Minister of Environment, the Honourable Rona Ambrose, that the Gateway Project be referred to a review panel. After this recommendation, several of the First Nations along the pipeline route notified the NEB (and the other federal agencies) that they must be consulted first before the NEB makes such a recommendation to the Minister. They asked that the recommendation be withdrawn and recent press articles indicate that legal action has been threatened.
What is the Status of the Project?
Enbridge has not yet made a formal regulatory application to the NEB for the Gateway Project; we understand it expects to do so sometime before early July 2006. Notwithstanding this, a preliminary information package (PIP) about the Project was filed with the NEB on November 1, 2005. In this PIP, Enbridge requested that the Project be referred to a joint review panel between the NEB and the Canadian Environmental Assessment Agency.
The NEB has advised the complaining First Nations that the purpose of the PIP was to provide basic preliminary information to assist the NEB to determine the appropriate EA review process. In this case, this process can be either a comprehensive study or a review panel. More specifically, under section 25 of the Canadian Environmental Assessment Act, the NEB (as a federal responsible authority under the Act) may request the Minister of the Environment to refer a project to a review panel if it is of the opinion that:
- a project, taking into account the implementation of any mitigation measures that the responsible authority considers appropriate, may cause significant adverse environmental effects,
- public concerns warrant reference to a mediator or review panel.
After obtaining further submissions from Gateway about public concerns, the NEB formed the opinion that public concern about the Gateway Project warranted a referral to the Minister.
Within two months of the PIP filing, various BC First Nations groups (e.g., the Haida, the Carrier Sekani, the Haisla and the Wetsu’wet’en) wrote to the NEB expressing a variety of concerns with the Project. In particular, the Carrier Sekani explained that the PIP was not written in consultation with them, which was described as an "unfortunate start" and thus limited reliance should be placed on the PIP. They also stated that they should be involved in any staff deliberations about the Project, including any considerations of Gateway’s request for a joint review panel.
What are the positions of the First Nations and the NEB?
The positions of the First Nations and the NEB are polar opposites.
The First Nations say that the NEB’s decision to recommend a panel review to the Minister required consultation with them. This is because the NEB, as a Crown agency, has a constitutional obligation to consult with First Nations and the determination of its position on joint review was a "decision with statutory consequences that will significantly impact the assessment and decision-making process for this Project".
In fact, the Haisla observed that especially because the NEB is a quasi-judicial entity, they have a fiduciary obligation to First Nations that cannot be delegated to another agent of the Crown. As a result, some of the First Nations have requested that the NEB withdraw its recommendation to the Minister so as to allow the NEB an opportunity to consult with the First Nation and to take this consultation into account in the NEB’s full deliberation on the matter. There appear to be a variety of interests driving this position: the First Nations want "high level" involvement in the EA process (meaning a significant role in appointing members and designing the review process) and they would like to ensure the playing field is equal by obtaining adequate resources, such as expertise and funding.
In contrast, the NEB does not consider itself constitutionally obliged to carry out the Crown’s consultation duty. The NEB says this duty sits squarely with the Minister of Environment, being the decision-maker about both the process that will be followed and the scope of the EA. The NEB notes that the Minister has not yet made a decision about the process for the Project and observes that if the Minister decides to appoint a review panel, a draft of the terms of reference for the panel will be prepared and this will be available for consultation. This comment reflects the NEB’s view that consultation properly occurs at the point of scoping the terms of reference for the Project by the EA decision maker.
Furthermore, this view is consistent with the NEB’s March 2006 release of its policy document, Consideration of Aboriginal Concerns in National Energy Board Decisions. In short, this document states that the NEB is a quasi-judicial tribunal that operates much like a court. As a result, without expressly saying so, the NEB is of the view that it has no consultation duty as an arm of government but rather it deals with these considerations as evidentiary and procedural fairness matters by directing proponents to address First Nations’ concerns in their applications.
What Legal Risks Arise from these Positions?
There are existing court decisions articulating the two perspectives expressed in this situation. For example, in 2004, the B.C. Court of Appeal confirmed the view of the Saulteau Nation that the BC Oil & Gas Commission owed the First Nation a duty to consult. The Commission conceded that it had a statutory obligation to consult but not a constitutional or fiduciary duty to consult. The B.C. Court of Appeal held that as an administrative decision-maker and "an agent of Government", the Commission did have a fiduciary and constitutional duty to engage in good faith consultation with the Saulteau. It is also well established law that EA decision-makers have a consultation duty to address First Nation’s interests.
In contrast, over 10 years before the Saulteau case, the Quebec Grand Council of the Crees brought an action against the NEB in connection with its decision to grant an export licence. In the Cree case, the Supreme Court of Canada held that no fiduciary duty existed in relation to the decision-making function of the NEB because it is like a court, operating as an "independent decision-making body acting at arm’s length from the government."
This dialogue between the First Nations and the NEB manifests the current regulatory process tension that project proponents will continue to experience with their projects. For the Gateway Project, litigation seems highly unlikely from this preliminary skirmish. What it does signal is a high expectation from the First Nations to be more fully integrated into the regulatory process akin to a government decision-maker. We expect the Minister of the Environment will work towards a manageable integration for the Gateway Project, but perhaps not as fully as the First Nations envision given the quasi-judicial function that a review panel will likely perform. And, unlike some of the northern First Nations involved in the Mackenzie Valley Pipeline project, these BC First Nations have not yet entered into comprehensive land claims agreements, which have granted certain governmental regulatory powers to those northern First Nations.