Canada: Federal Court Of Appeal Upholds The National Energy Board's Authorization Of Seismic Testing In Davis Strait And Baffin Bay

Hamlet of Clyde River, Nammautaq Hunters and Trappers Organization — Clyde River, and Jerry Natanine v TGS-NOPEC Geophysical company ASA Petroleum Geo-Services Inc. Multi Klient Invest and the Attorney General of Canada, 2015 FCA 179.

On August 17, 2015, the Federal Court of Appeal (the "Court") released a highly anticipated decision that addressed the scope of the Crown's duty to consult and accommodate the Inuit of Clyde River in light of the potential impact of seismic surveys on the harvesting rights of Inuit, and whether the Crown could rely on the National Energy Board's ("NEB") authorization process to satisfy this duty.

At dispute before the Federal Court of Appeal was the National Energy Board's ("NEB") approval of the application for a Geophysical Operations Authorization ("Authorization") to conduct an offshore seismic survey in Baffin Bay and Davis Strait (the "Project") for the purposes of assessing potential oil and gas reserves.

The NEB decision related to an application by TGS-NOPEC Geophysical Company ASA ("TGS"), Petroleum Geoservices Inc. ("PGS"), and Multi Klient Invest AS ("MKI") (together known as the "Proponents") and the Authorization was granted pursuant to section 5(1)(b) of the Canada Oil and Gas Operations Act (the "COGOA").

The Hamlet of Clyde River, Nammautaq Clyde River Hunters and Trappers Organization (the "HTO") and Jerry Natanine, (together known as the "Applicants"), made an application for a judicial review of the NEB's decision.

The Court also considered the issue of the Applicants' standing to bring the application and whether the Crown was obliged to seek the advice of Nunavut Wildlife Management Board prior to issuing the Authorization.

Standing

On the preliminary issue of whether the Applicants could bring the case (referred to as "standing") the Court found that all the Applicants had standing to challenge the NEB Decision based on administrative law principles, as each would be directly affected by the Project if its potential impacts were realized.

The Court concluded the HTO could pursue claims based on Aboriginal or treaty rights as it has a real stake and genuine interest in the issues, sufficient to give them public interest standing. Having concluded that the HTO had standing to raise such claims, the Court deemed it unnecessary to consider whether the Hamlet and/or Mayor should be afforded similar standing.

Crown reliance on the NEB's consultation process

The Court confirmed and relied on the established principle that Parliament may delegate the procedural aspect of the duty to consult to a tribunal, including the duty to determine whether adequate consultation has taken place. Based on the jurisdiction and proscribed practices of the NEB, the Court found that the NEB was empowered to engage in a consultation process, and that this process was such that the Crown could rely on it to meet its duty to consult with Aboriginal peoples, at least in part. The Court emphasized that the Crown must independently assess if additional consultation or accommodation is required to satisfy the honour of the Crown.

In reaching its decision, the Court found that the National Energy Board Act and the COGOA provide the NEB with the jurisdiction to determine all matters before it; including matters of law and fact. Additionally, the Canadian Environmental Assessment Act ("CEAA"), which was in effect at the time, required the NEB to complete an environmental assessment prior to the Project's approval. The environmental assessment required consideration of the Project's "environmental effects" and mitigation measures that the NEB considers appropriate. "Environmental effects", as defined in the CEAA, included any "effects or changes to the current use of lands and resources for traditional purposes by aboriginal persons". The Court further found that the NEB's own publications outlined the obligations of the NEB and the Proponents' with respect to Aboriginal parties and interests in the context of the approval process.

As such, the Court concluded that the legislative framework and established processes of the NEB had clearly been designed to ensure gathering of sufficient evidence about the Project's possible impact on Aboriginal peoples and the degree "affected Aboriginal groups have been consulted and the extent their concerns have been addressed, or are still outstanding".

The Court also found that there were strong practical reasons to support the conclusion that the procedural aspects of the duty to consult had been delegated to the NEB. In support of this conclusion the Court quoted from an authority on Aboriginal consultation and environmental assessment who stated:

"robust environmental assessment and regulatory review of projects comprise a reasonable process for gathering and assessing information on the significance of project impacts on Aboriginal peoples" and allows for "effective and efficient dialogue" early on in the decision making process."

Scope and Sufficiency of Consultation

The Court agreed with the Applicants and found that the potential impact of the Project was such that it required "deep consultation" with Inuit. It was found that the Project had the potential to diminish the ability of Inuit to exercise their hunting, fishing, and harvesting rights pursuant to the Nunavut Land Claims Agreement. The Court, however, rejected the Applicants' argument that the consultation and accommodation relied on by the Crown was insufficient in the granting of the Authorization.

The Court concluded that the consultation process engaged in by the Proponents and the NEB was sufficient to uphold the honour of the Crown. Further, the Court found the NEB process provided timely notice of the Project to potentially affected Aboriginal groups, the NEB required the Proponents to give detailed information about the Project area and design and to respond to comments provided to the NEB by the affected Aboriginal groups. Importantly, based on the consultation undertaken, aspects of the Project were changed to mitigate possible impacts on Inuit. The Court concluded that this process, along with the environmental assessment report and the terms and conditions imposed on the Authorization, demonstrated that the Proponents and the NEB took Aboriginal concerns into account.

Sufficiency of the NEB 's reasons

The Court rejected the argument that the NEB breached its duty to give reasons in issuing the Authorization. It held that the environmental assessment provided adequate reasons in dealing with the real controversy at issue in this Application (specifically, the potential impacts of the Project on Inuit rights to harvest wildlife, which are protected under section 35 of the Constitution Act, 1982).

Consultation with the NWMB

Finally, the Applicants argued that the Crown breached the terms of the Nunavut Land Claims Agreement which they argue requires the Crown to consult the Nunavut Wildlife Management Board ("NWMB"). The Court found that based on the wording of the particular provision (Article 15.3.4 of the Nunavut Land Claims Agreement) the question to be answered was whether the decision to issue the Authorization was a "wildlife management" decision. The Court found that the issuance of an Authorization was not a wildlife management decision and as such the NEB's decision did not require any consultation with the NWMB.

Conclusion

This Project has garnered tremendous domestic and international attention. This decision touches on many legal issues that continue to evolve through the Courts and on the ground as Aboriginal rights and concerns collide with competing interests within the land and resource management regimes, such as the delegation of the duty to consult and issue of who within an Aboriginal community can raise claims of Aboriginal rights.

The Applicants have publically announced their intention to take the matter to the Supreme Court of Canada.

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