CAPP Speaker Series - Tom Isaac & Shawn Denstedt: Osler, Hoskin & Harcourt


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Issues of Aboriginal rights and consultation related to the development of energy resources in Canada can be complex. Learn more about this key area from legal experts Shawn Denstedt and Tom Isaac of Osler, Hoskin & Harcourt LLP.

Their presentation provided an overview of Aboriginal rights and what they mean to the energy industry, offered some best practices for industry consultation with Aboriginal groups, and provided insight into the implications of the recent Supreme Court decision on the William case.

Isaac is a nationally recognized authority in the area of Aboriginal law and leads Osler’s Aboriginal Law Group.

Denstedt is a partner at Osler and advises on energy, mining, environmental, regulatory and Aboriginal law matters.

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CAPP Speaker Series - Tom Isaac & Shawn Denstedt: Osler, Hoskin & Harcourt

  1. 1. ABORIGINAL LAW & CONSULTATION IN CANADA Shawn Denstedt, Q.C. Tom Isaac July 24, 2014
  2. 2. INTRODUCTION 1. Idle No More and the Rise of Aboriginal Activism 2. Overview of Aboriginal Rights in Canada 3. Duty to Consult 4. Engagement Plans – Planning to Succeed 5. Aboriginal Agreements – What to Expect 6. Conclusion 2
  4. 4. Aboriginal – History of Aboriginal Activism 4  Historically, tension existed between many Aboriginal groups and the Crown but Aboriginal groups were not involved in government decision- making and had limited opportunities to influence resource development  Following the Constitution Act, 1982, there was increased recognition among Aboriginal groups and Canadian society as a whole of Aboriginal rights and the need to respect them  Past 30 years have seen trend towards more and more litigation surrounding natural resource projects and greater cohesion amongst Aboriginal populations demanding involvement in processes  Communications technology and social media tools are facilitating a larger coordinated effort
  5. 5. Aboriginal - Idle No More 5  Idle No More began in December 2012 after the federal government passed Bill C-45  Advocate for stronger position on Aboriginal issues including:  Government consultation  Environmental sustainability  Treaty modernization  Land claim settlements  Generally more adversarial, litigious, opposed to resource development and media driven  Idle No More appears to have found significant support amongst younger generation of Aboriginal peoples  In some cases, Idle No More movement has aligned with ENGO and celebrity campaigns (i.e., Neil Young)  Resulting in increased expectations, e.g. Tsilqhot’in
  7. 7. Who are the Aboriginal Peoples of Canada 7  Aboriginal Peoples:  First Nations (Indian Bands)  Inuit (Eskimos)  Métis (Indian or Inuit and European heritage)  Other  Indians or First Nations:  “Indians” is outdated term but still legal term under the Indian Act. “First Nations” now preferred term.  “First Nations” sometimes defined as “a band under Indian Act or a body of Aboriginal peoples who are treated by INAC in the same manner as a body of Aboriginal peoples living on reserve.”  Many, but not all, live on the over 600 reserves across Canada.
  8. 8. Historical and Modern Treaties 8  Historic Treaties signed in 1700s & 1800s:  Pre-Confederation Treaties  Post-Confederation Treaties  Many groups received reserve lands and “Treaty rights” in exchange for surrendering their land.  Modern Treaties/Land Claim Settlements – fee simple, mineral rights, consultation, benefits, etc.
  9. 9. Historical Treaties 9
  10. 10. Modern Treaties 10
  11. 11. 11 3. CROWN’S DUTY TO CONSULT
  12. 12. Constitutional Duty to Consult 12  Section 35, Constitution Act, 1982: “The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed.”  Reconciliation is a key part of section 35: reconciliation between the Crown and aboriginal peoples AND reconciliation between aboriginal and non-aboriginal interests by the Crown  Intended by drafters to be an “empty box”  Canada now leads the globe in protecting indigenous rights at law  Substantive burden on Crown authority and power
  13. 13. Crown’s Duty to Consult Aboriginal Peoples 13  6 key SCC decisions to date  Haida (2004)  Taku River (2004)  Mikisew Cree (2005)  Rio Tinto (2010)  Beckman/Little Salmon (2010)  Behn/Moulton Contracting (2013)  Crown has a duty to consult and, where appropriate, accommodate aboriginal peoples where the interests of aboriginal peoples may be affected by a Crown decision or action
  14. 14. Crown’s Duty to Consult Aboriginal Peoples 14  Duty grounded in “honour of the Crown”, which is part of section 35  The government, acting honourably, cannot “cavalierly run roughshod over aboriginal interests” and must always act in “good faith” (Haida)  But Crown is not rendered “impotent” and can continue to “manage the resource in question” (Haida)  No aboriginal “veto” (Haida)  Crown bound to balance broader societal interests with those of aboriginal peoples  Focused on process NOT outcome
  15. 15. Crown’s Duty to Consult Aboriginal Peoples 15  Crown may not always meet aboriginal expectations  Aboriginal peoples must show causal relationship between Crown conduct/decision and potential for adverse effects  Duty restricted to particular Crown decision at issue – underlying infringement, continued breach, lack of past consultation do not give rise to the Duty  Louis – BCCA, 2013 – leave to appeal to SCC refused  Crown cannot “abuse its regulatory discretion by using the application as a tool to undermine the existing rights of the applicant.”  Aboriginal peoples must participate in good faith in consultation and not thwart Crown’s efforts to consult  Duty to exercise good faith is “reciprocal” – e.g. Louis decision, BCCA 2013
  16. 16. Crown’s Duty to Consult and Accommodation 16  Accommodation not always required, depends on facts  Mitigation, minimized effects and/or avoidance can all be forms of accommodation  Accommodation to be judged on “reasonableness”  Courts are only to interfere where a Crown decision-maker has made a “palpable error” (Little Salmon)  Little express reference to “economic accommodation” in case law  Ka’A’Gee Tu First Nation, FCC, 2012 – no “economic accommodation”  Benefits agreements can assist in mitigating risk and are common
  17. 17. Practical Issues: Government Policies 17  Alberta 2013 – new Consultation Policy and Levy Act  Levy Act – theoretically sound, but in practice?  Alberta Aboriginal Consultation Office v. Alberta Energy Regulator – taking advantage of what the regulator does  Newfoundland & Labrador 2013 – new Consultation Policy  proponents required to provide capacity funding  required to conform to NFLD’s “benefits related expectations”  “economic accommodation”
  18. 18. Practical Issues: Government Policies 18  Saskatchewan – draconian view of consultation and private property  New Brunswick – over its head  Ontario – Mining Act and Regulation changes – not clear if Ontario has actually changed in practice  Ontario - sector-specific policies aimed at encouraging benefits agreements “beyond consultation”  e.g., new electricity transmission policy, aboriginal loan guarantee programs, preferential proponent scoring for new electricity generation projects involving aboriginal communities
  19. 19. Aboriginal Title - Tsilhqot’in Nation v. B.C., 2014 SCC 44 19  Aboriginal title is highest form of Aboriginal right - right in the land itself as opposed to a right to do or participate in a certain activity  Aboriginal group must have exclusively occupied the particular land at time of European occupation  First case where Aboriginal title proven  Consistent with earlier SCC case law; Aboriginal title must be proven over a specific area, and significant evidence must be advanced  Provincial laws of general application apply to Aboriginal title lands and governments can infringe Aboriginal title where justified  Decision does not affect lands over which there are “assertions” of Aboriginal title
  20. 20. Law is uncertain in Canada when it comes to aboriginal issues Treaties with aboriginal groups are essential for business and regulatory certainty e.g. exploration permits in BC, Yukon and Ontario Canada lags behind rest of world when it comes to protecting indigenous rights Governments are powerless when it comes to aboriginal issues and law 20 Myths
  21. 21. 21 4. PLANNING TO SUCCEED
  22. 22. Mitigating the Risk 22 Design of an Engagement Plan:  Consider all interested stakeholders, including Aboriginal communities. Principle-based approach (transparent, early and regular communication, responsive to concerns expressed, etc.).  Consider Aboriginal interests from both an environmental impact and a rights perspective.  Plan to consult with the community on how it wants to be consulted with. Have culturally- sensitive consultation protocols.
  23. 23. A. Identify Aboriginal and Treaty Rights 23 Start by attempting to identify any Aboriginal or treaty rights in the area:  Initially use publicly available information (Aboriginal websites), government information and contacts and previous applications.  Update or replace initial assessment with information from the Aboriginal community itself (e.g. through discussions with elders or a Traditional Land Use or Traditional Ecological study).
  24. 24. B. Identify Potential Infringements 24 Identify potential infringements on the Aboriginal or treaty rights:  Conduct initial review of regulatory application documents (project description, enviro and socio- economic studies) to identify overlaps.  Identify the potential impacts from the project and how they might affect the asserted rights.  Draw upon actual community knowledge. Make sure to ask how project may impact rights.  Involve the Crown in discussions to the extent possible.
  25. 25. C. Avoid or Mitigate Impact 25 Take action to ensure that infringements identified are avoided (if possible) or mitigated:  Where effective consultation is conducted in the early planning stages, design changes can often be made with very little cost or impact to overall project objectives.  May be able to modify or adjust project to avoid an impact.  May be able to enter into an agreement (MOU, Consultation Protocol, Impact and Benefit Agreement).
  26. 26. D. Negotiating an Agreement 26 1. Determine need for and purpose of. 2. Determine authority to negotiate and execute agreement. 3. Content of agreement (Consultation, Equity, Benefits, etc.). 4. Community support for the agreement. 5. Effective processes for ongoing decision-making, conflict resolution, amending agreement, implementation, etc.
  27. 27. E. Document the Consultation Process 27 Regardless of outcomes or agreements reached, thoroughly document the consultation process including:  What steps were taken (log telephone calls, emails, correspondence).  The specifics of every concern raised and the details on how such concerns were resolved, if at all, and how that was communicated to the Aboriginal group.  Include any Crown consultation activities of which the developer has knowledge of as this record, plus the process itself, may be needed to demonstrate the Crown’s duty has been fulfilled.
  28. 28. F. Build Sustainable Relationships 28  Aim to build sustainable relationship.  Approval is beginning, not an endpoint.  Approval conditions may include meeting commitments to Aboriginal communities and failure to comply creates risk.  Project operations and potential expansions will create need for further consultation.
  29. 29. 29 5. AGREEMENTS
  30. 30. Agreements with Aboriginal Groups 30  Agreements are a tool that can be used to document mitigation measures and manage risk.  Agreements can vary considerably in scope and complexity:  Memorandums of Understanding or Consultation Protocols  Engagement Agreements  TEK and TLU Study Agreements  Participation or Cooperation Agreements  Impact Benefit Agreements  The type of agreement chosen should reflect the level of consultation required and be appropriate for the particular circumstance.
  31. 31. A. Memorandum of Understandings/Consultation Protocols 31  Generally, non-binding agreements  Describe the consultation process and the intention of the parties to work together to explore opportunities.  Commonly used for exploratory programs in oil and gas or mining, of short duration  Often describe a process to explore business or employment opportunities.
  32. 32. B. TEK/TLU Study Agreements 32  Aboriginal Traditional Knowledge (TK) is contemporary and generations old knowledge that has been accumulated and applied though generations of living in close contact with the land and nature, including environmental knowledge, local knowledge, empirical observations about the land, traditions, beliefs, legends, customs, etc.  Traditional ecological knowledge (TEK) focuses on knowledge about the environment, while Traditional land use (TLU) knowledge focuses on historical and contemporary use of the land.
  33. 33. C. Engagement Agreements 33  Define the process for communicating and sharing information regarding the impacts from a project and the mitigation measures  May address frequency of meetings, appointment of representatives, capacity funding, issues and process for resolving issues  Binding or non binding
  34. 34. D. Impact and Benefit Agreements 34  Most common for major, long-term projects (e.g. hydro-electricity, mining)  Complex and binding on the parties  Address environmental and cultural mitigation  Provide financial compensation for impacts on rights in exchange for support for the project  Provisions include communication and information- sharing protocols, recognition of rights, environmental mitigation measures, training and employment opportunities, economic and business opportunities, capacity building, commitments concerning cultural and traditional land use, and dispute resolution mechanisms  May also include revenue sharing, equity participation or financial compensation of some sort
  35. 35. Agreements with Aboriginal Groups: Examples of Benefit Provisions 35  Employment and Training  Maximizing Aboriginal employment (e.g., preferential hiring, setting of targets or quotas, reservation of positions)  Opportunities for co-op students, summer students, interns and apprentices  Provision of on-the-job training, job shadowing, community training courses, community job fairs, academic upgrading  Recognition of qualification equivalency (e.g., practical experience in lieu of formal education or qualifications)  Cooperation in generating labour pools, identifying employment opportunities, and recruitment (e.g., through the use of proponent and Aboriginal liaisons or coordinators)  Aboriginal employee retention initiatives (e.g., counselling, workplace cultural awareness programs, translation services, provision of transportation)  Requirement that proponent’s contractors abide by employment provisions
  36. 36. Agreements with Aboriginal Groups: Examples of Benefit Provisions 36  Business/Contracting Opportunities  Set-asides/direct awards for specified work  First opportunity to obtain contracts, preferential contracting  Assistance with down-payments for supplies and tender deposits  Assistance with business development initiatives to build capacity of Aboriginal businesses to bid on work  Pre-qualification of Aboriginal businesses  Provision of feedback on bids  May include joint venturing to meet needs of the project  Formulation of contracts in sizes which can be managed by Aboriginal businesses  Cooperation to identify business opportunities, establish business registries, and provide advance notice of bid opportunities
  37. 37. Agreements with Aboriginal Groups: Examples of Benefit Provisions 37  Environmental provisions (e.g., information sharing, involvement of Aboriginal group and incorporation of TK into monitoring programs and adaptive management, establishment of joint environmental oversight/management committee)  Funding or establishment of programs directed at specified initiatives:  Education (e.g., scholarship fund)  Community health and wellness  Cultural retention (e.g., youth and Elder programs)  Safety and security (e.g., enhanced policing)  Capital projects/infrastructure (e.g., construction of community centre)  Environmental stewardship  Salaries and support for Aboriginal coordinators and liaisons, professional consultation fees, and ongoing consultation  Establishment of working groups or committees to oversee implementation of the Agreement and evaluate success of measures taken under Agreement
  38. 38. Considerations When Negotiating Agreements 38  Be transparent.  Understand your objectives and what you are willing to offer in advance.  Determine the proper party to consult and negotiate with.  Confirm authority to negotiate and execute agreement.  Agree on negotiating budget, process and timeline.  Be principled.  Manage expectations.
  39. 39. CONCLUSION 39  Know and embrace your risks  Have a well considered strategy  Be principled and resolute in execution  Document, Document, Document
  40. 40. 40 Brion Energy Corp: Dover Commercial Project and Pierre River Mine Shell Canada Ltd: Jackpine Mine Expansion Chevron: Canadian Arctic Offshore Drilling KM LNG & Apache: Kitimat BC LNG Project Nalcor Energy: Lower Churchill Hydroelectric Project NextEra: Southern Ontario Wind Projects TransAlta: 660 MW Sarnia Regional Cogeneration Project BluEarth Renewables: Bull Creek Wind Project Quicksilver Resources: Fortune Creek Gas Plant Project De Beers Canada: Snap Lake Mine Gahcho Kue Diamond Mine Baffinland Iron Mines Corp.: Mary River Iron Ore Project ConocoPhillips: Parsons Lake Natural Gas Field Five Nations Energy Inc.: Greenfield power transmission project BC Hyrdro: Encanto/Muskogawen First Nation Potash Project Goldcorp: Redlake Project New Brunswick Forest Products Association Inc: Aboriginal Litigation Cliffs Natural Resources: Northern Ontario Chromite Mine Coalspur Mines: Vista Coal Project Kinder Morgan: TransMountain Expansion Osler’s National Environmental, Regulatory and Aboriginal Experience New Gold: Rainy River Project EnCana: Deep Panuke Sable Offshore Energy Project Vale: Thompson and Birchtree Mines & Pipe-Kipper Project Alderon: Kami Iron Ore Project Hydro One: Bruce to Milton Transmission Project & East-West Tie Project Shell Canada Ltd: Niglingtak Project Vale: Kroneau Potash Project Vale: Totten Mine Shale Gas inquiry before the BAPE Northcliff Resources: Tungsten Project Rubicon Minerals: Phoenix Project Chieftan Metals Inc.: Tulsequah Chief Project Northwest Transmission Line Project
  41. 41. Contact us 41 Shawn Denstedt, Q.C. Email: Calgary: 403.260.7088 Twitter: @shawnden Tom Isaac Email: Calgary: 403.260.7060 Toronto: 416.862.6451 Vancouver: 604.913.2303