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The British Columbia Court of Appeal Confirms Limits on the Duty to Consult in Face of Mine Owner’s Rights: Louis v. British Columbia (Minister of Energy, Mines, and Petroleum Resources)

Date

October 2, 2013

AUTHOR(s)

Stephanie Axmann
Lisa Martz


Overview

On September 26, 2013, the British Columbia Court of Appeal (BCCA) released an important decision regarding the scope of the Crown’s duty to consult Aboriginal peoples in regard to government approvals for existing resource extraction operations.

In Louis v. British Columbia (Minister of Energy, Mines, and Petroleum Resources) (Louis),1 the BCCA confirmed that consultation regarding a government approval for an existing operation (in this case, an open-pit molybdenum mine located in northeastern British Columbia that had been in operation since 1965) need focus only on the impacts, if any, of the specific activities for which government approval was being sought. The BCCA rejected the argument of the Stellat’en First Nation (Stellat’en) that the approvals sought for a mine expansion project (including a permit amendment to allow the construction of a larger, more technologically advanced mill) should be viewed as an application to extend the life of the mine beyond the previously projected closure date. The BCCA held that the Crown could not use its regulatory discretion as a tool to undermine the existing rights of the applicant – which included previously granted rights to the minerals to be mined – by trying to arbitrarily control whether the mine could remain in operation.

In this decision, the BCCA applied several important principles articulated by the Supreme Court of Canada (SCC) in Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council (Rio Tinto)2 and provided some practical guidance for the Crown, proponents and Aboriginal groups in situations where they may have differing perspectives on the appropriate scope of consultation.

British Columbia Court of Appeal Decision

The BCCA accepted the findings of the British Columbia Supreme Court (BCSC) that the proposed expansion of the Endako Mine (Mine) would not significantly expand the footprint of the Mine. Writing for the unanimous court, Justice Groberman upheld the decision of the BCSC that the Ministry of Energy, Mines and Petroleum Resources (MEMPR) had correctly focussed its consultation efforts on the direct effects of the specific amendment to the Mines Act permit for the Mine (M-4 Permit) being sought (to construct a new mill), and that such efforts were reasonable in the circumstances.

The BCCA addressed a number of important issues in its decision:

1. Consultation must focus on the decision before the Crown

In Rio Tinto, the SCC held that consultation must focus on whether there is an Aboriginal claim or right that may be adversely impacted by the current government conduct or decision in question. One of the fundamental issues on appeal in this case was whether the MEMPR and the BCSC erred by not characterizing the impact of the proposed new mill as involving the extension of the operating life of the Mine from the initial projected shutdown date of 2013 to an extended date of 2025. Counsel for Stellat’en had taken the position that "Legally…this project would be the same type of consultation as if it were a new mine."

The BCCA rejected this view and held that MEMPR correctly took the position that the closure date for the Mine was effectively in the hands of the mine owner/operator, Thompson Creek Metals Company Inc. (Thompson Creek), not in the hands of the Crown. As the M-4 Permit did not expire, it authorized the operation of the Mine for an indefinite period, subject to regulatory compliance. Therefore, Thompson Creek already had the right to extend the closure date for the Mine, without any further decision by the Crown. The fact that, from a practical standpoint, there was a connection between the authorization to construct the new mill and the prolongation of the mining operation’s projected closure date did not alter the SCC’s direction in Rio Tinto to focus on the government approval being sought.

The BCCA noted that title to both the minerals and the land in question (the new mill was to be located on privately-held land owned in fee simple) had been granted to the proponent decades earlier. As a result, the Crown could not "abuse its regulatory discretion by using the application as a tool to undermine the existing rights of the applicant"3 and "MEMPR was not entitled to use the application as a backdoor process for the elimination of rights already held by Thompson Creek."4

Given the relatively small increase to the Mine’s footprint, the BCCA held that the novel, adverse impacts of the proposed permit amendment would be minimal, and that the consultation efforts of MEMPR were appropriately directed at the direct, novel impacts of the expansion project.

2. Consultation in respect of past infringements was not required

The BCCA concluded that Stellat’en refused to participate in the consultation process with MEMPR because it was of the view that the consultation efforts should include consideration of the past impacts of the Mine on its asserted Aboriginal rights and title going back to the opening of the Mine in 1965, as well as its continued operation beyond the previously projected closure date.

Citing Rio Tinto, the BCCA held that MEMPR was not obliged to consult on the historic presence and the use of the Mine. Past infringements are not revived by present government decisions.

3. Incremental consultation was appropriate

In Rio Tinto, the SCC held that high-level, strategic decisions that will affect the regulatory process may often trigger the duty to consult. Stellat’en therefore argued that MEMPR was required to discuss with it whether the Mine expansion project as a whole should proceed, as this constituted a high-level, strategic decision. More specifically, Stellat’en took the position that the "piecemeal" discussions engaged in by MEMPR in respect of each individual permit application required for the Mine expansion project did not satisfy the duty to consult.

Stellat’en made a related argument that MEMPR should not have issued any early permits necessary for the expansion project until consultation had taken place on the whether the Mine expansion project should proceed at all. Unless the project as a whole were going ahead, Stellat’en argued that there was no need to clear land, engage in geotechnical studies or prepare the site for construction. Stellat’en argued that the consultation process was a "sham" because the Crown was determined to allow the Mine expansion to proceed.

The BCCA held that the SCC’s comments in Rio Tinto regarding high-level strategic planning meant that the Crown must engage in consultations from the earliest phases of a project, and that the Crown "cannot defer consultation such that a project become a fait accompli without ever having been subject to comprehensive consultation and consideration."5 The BCCA also held, however, that Rio Tinto and other cases did not suggest that the Crown must restructure its own statutory duties to engage in consultation where it plays no role in strategic planning or decision-making.

In this case, the BCCA found that it was Thompson Creek who made the high-level, strategic decision to proceed with the Mine expansion project. Thompson Creek provided the Crown with an overview of the project and proceeded to apply for the various permits required, and the Crown considered each application as it was presented. The BCCA held that the consultation record did not support Stellat’en’s assertion that MEMPR had at any point fettered its discretion with respect to later permits. The Crown’s incremental consultation process was therefore held to be appropriate.

4. MEMPR did not breach its duty as a result of Stellat’en’s failure to engage

The BCCA found that MEMPR had repeatedly attempted to engage with Stellat’en, but that Stellat’en effectively refused to do so unless past infringements of the Mine were recognized as part of the consultation process. Further, Stellat’en failed to identify Aboriginal rights that might be adversely affected by the Mine expansion. The BCCA stated that a First Nation is not under any duty to participate or cooperate in a consultation process. However, since Stellat’en failed to raise specific concerns that MEMPR could address, it could not then argue that consultation had been inadequate.

The BCCA held that in this case, the consultation process was a failure, not because of an absence of effort by MEMPR, but rather as a result of the parties’ disparate views as to the nature of the required consultation. Stellat’en misconstrued the nature of the consultation required and refused to participate. In such circumstances "the consultation undertaken by the MEMPR was as deep as it could be."6

Discussion

In this decision, the BCCA has confirmed that consultation in respect of a current decision before the Crown is not the appropriate venue for addressing past wrongs. The decision provides no guidance, however, on how the statements by the SCC in Rio Tinto and in Haida Nation v. British Columbia (Minister of Forests)7 that remedies for historical infringements can be addressed through other means will be applied.

The comments of the BCCA that First Nations do not have a duty to participate or cooperate in the consultation process are somewhat at odds with previous pronouncements from Canadian courts that Aboriginal groups have a "reciprocal duty" to express their interests and concerns once they have had an opportunity to consider the information provided by the Crown, and to consult in good faith by whatever means are available to them. They cannot frustrate the consultation process by refusing to meet or participate or by imposing unreasonable conditions.8 The BCCA’s statement could potentially be reconciled if it is clear, as it was in this case, that Aboriginal groups cannot allege a lack of consultation if they fail to participate in the process.

While the Stellat’en sought a ruling from the BCCA that the Crown’s offer of an Economic Community Development Agreement (ECDA) did not meet the honour of the Crown as an appropriate form of accommodation, the BCCA held that the ECDA discussions did not form part of the consultation process.

McCarthy Tétrault LLP represented Thompson Creek before the BCSC and the BCCA.


1 2013 BCCA 412
2 2010 SCC 43
3 Louis at 81.
4 Ibid.at 83.
5 Ibid. at 106.
6 Ibid. at 92.
7 2004 SCC 73
8 See for example Halfway River First Nation v. British Columbia (Minister of Forests) [1997] 4 C.N.L.R. 45 (B.C.S.C.) at 161, and R. v. Douglas, 2007 BCCA 265 at 39.

Expertise