Canada: Appeal Court Maintains Balance Between Public & Operator Interests In Offshore Petroleum Resources Data In Geophysical Service Incorporated (GSI) v. Encana Corporation

Last Updated: May 8 2017
Article by Daniel Watt and Sara Mahaney

On April 28, 2017, the Alberta Court of Appeal decided to maintain the balance struck between the public's interest in accessing offshore petroleum resources data and operators' commercial interests. In Geophysical Service Incorporated (GSI) v. Encana Corporation, the unanimous Appeal Court's dismissal of GSI's appeal couldn't have been clearer: generally, the Regulatory Regime governing offshore petroleum resources data will prevail to the extent there's any conflict between it and the Copyright Act – and regulators have the "unfettered and unconditional legal right" to allow public viewing and copying of "all materials", not just seismic data, they hold under that Regulatory Regime after the privilege period expires. The decision has far-reaching impact, providing all industry stakeholders with the comfort of certainty and very possibly an end to years of costly litigation throughout Canada.

The heart of the dispute between Geophysical Service Incorporated (GSI) and Encana Corporation (and a number of others) is the balance struck by the Regulatory Regime (the legislation and policy) governing seismic operators' data acquisition and reporting requirements between the public's interest in accessing offshore petroleum resources data and operators' commercial interests. In April 2016, Alberta's Court of Queen's Bench decided that Regulatory Regime overrides, and is a complete response to, any claim by GSI of unlawful disclosure and breach of copyright in its seismic data against the regulators and the companies that copied GSI's seismic data after the regulatory privilege period expired. GSI appealed this decision to the Alberta Court of Appeal – and on April 28, 2017, lost. The Appeal Court considered a wide range of statutory interpretation arguments GSI proffered, none of which convinced it the lower court's interpretation of the Regulatory Regime was wrong. The unanimous Appeal Court affirmed the lower court's modern, purposive approach to statutory interpretation and use of the "extraordinary volume of extrinsic evidence" to discern the legislature's intent in establishing the Regulatory Regime, and couldn't have been clearer: the Regulatory Regime gives the regulators (the Boards) the "unfettered and unconditional legal right ... to disseminate, in their sole discretion as they see fit, all materials acquired ... and collected under the Regulatory Regime" after expiry of the privilege period. The decision has far-reaching impact for all industry stakeholders:

Balance Tips to Regulatory Regime. Generally, to the extent there is any conflict between the Regulatory Regime and the Copyright Act, the Regulatory Regime prevails. The decision demonstrates to law-makers the value of a full record of legislative intent to the Court's ability to resolve subsequent disputes. The extensive historical legislative record very clearly demonstrated the Regulatory Regime is intended to strike a balance between "a variety of disparate interests", to achieve two policy objectives: "to attract investment by companies with capacity to acquire geophysical data regarding petroleum resources in the challenging frontier and offshore" and "to regulate dissemination of geophysical data at a pace that would broadly encourage further interest and study by the resource and investments industries, and academia, in frontier and offshore resource exploration and development, for the benefit of all Canadians."

Broad Scope. Seismic data is likely the most tradable commodity, but the impact of the Appeal Court's decision is broad: the Regulatory Regime's privilege and disclosure provisions also apply to other data and information submitted to the regulators. And the regulators' disclosure to the public necessarily includes the ability to copy and re-copy – not just view – the documentation and information acquired under the Regulatory Regime. 

Stakeholder Comforts. The Regulatory Regime is now certain for all industry participants:

  • Exploration and production companies can take comfort that accessing from the regulators or copying seismic data after the expiry of the "privilege" (or confidentiality) period is lawful under the Regulatory Regime.
  • Regulators can take comfort that their long-standing practice of publicly disclosing and permitting copying of seismic information and documentation after the expiry of the privilege period is lawful under the Regulatory Regime.
  • Third party copying companies can take comfort that receipt and copying of seismic data for their customers is lawful under the Regulatory Regime.
  • Seismic operators can take comfort in the certainty that the seismic data they are required to deposit with the regulators will be protected during – but not after – the privilege period: the term of the privilege period now seems clear and the consequences of its expiration unconditional.

Long-Term Balance. The Appeal Court's unreserved affirmation of the lower court's – and industry's – understanding of access to seismic data could just be the final answer, ending years of uncertainty and costly litigation across Canada. Although GSI could endeavour to appeal the Appeal Court's decision further to the Supreme Court of Canada, it must first apply for and obtain that Court's leave (or permission). The Supreme Court will only grant such leave if satisfied the question involved is of sufficient public or national importance. The Regulatory Regime is national, but there are no conflicting decisions from any other appeal courts. The Alberta Appeal Court's ruling decided issues common to the parties to the 25 lawsuits GSI has launched in Alberta, and none of the lawsuits GSI has commenced in any other provinces have progressed this far or produced any different result.

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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