International Trade Law and Aboriginal-Law (Part 2)

Free-Trade / Fair Trade
From the 20th Century to 21st Century
Part II
Second Conference in International Inter-Tribal Trade
Thompson Rivers University - Faculty of Law
Kamloops, BC - November 12, 2016
Michael Woods, Partner – Woods LaFortune LLP

Woods, LaFortune LLP
Woods, LaFortune LLP is an innovative, flexible and proactively cost-effective boutique
law firm that focuses on international trade and business, investment, customs,
government procurement and government relations. We provide a wide range of services
to our clients including advocacy before domestic and international courts and tribunals,
strategic advice and analysis, business planning and analytical research.
Michael Woods
woods@wl-tradelaw.com
613.355.0382
www.wl-tradelaw.com

“In our every deliberation, we must consider the impact
of our decisions on the next seven generations.”
Iroquois Maxim

NAFTA Strategies
“The Columbia River Treaty
has had devastating effects
on Aboriginal Title and
Rights, including
throughout the Arrow Lakes
area which is vitally
important to the Okanagan
Nation Alliance.”

NAFTA Strategies
“When all the trees have been cut down, when all the
animals have been hunted, when all the waters are polluted,
when all the air is unsafe to breathe, only then will you
discover you cannot eat money.”
Cree Prophecy

“Our land is more valuable than your money.
It will last forever.
It will not even perish by the flames of fire.
As long as the sun shines and the waters flow, this land
will be here to give life to men and animals.”
Chief Crowfoot, Siksika (circa 1825-1890)

“We do not inherit the earth from our ancestors, we
borrow it from our children.”
Haida Saying

NAFTA Strategies
NAFTA Options :
•NAFTA Chapter 11 – an investment
•Aboriginal Title
•Aboriginal Rights
•Aboriginal Title as Basis for Claim
•First Nation Investor – Sovereignty/Dual Nationality

• Free Trade and First Nations in Canada – new law, new options, new opportunities
• Supreme Court of Canada - Aboriginal title land and Treaty Territory in Canada.
• Haida Nation v British Columbia (Minister of Forests), [2004] 3 SCR 511 - confirmed the
Crown’s duty to consult with Aboriginal peoples in
• Tsilhqot’in Nation v. British Columbia (2014 SCC 44)
• confirmed the Tsilhqot'in people’s exclusive Aboriginal title to BC Interior lands
• outlined a legal test for other First Nations across
• First Nations able to successfully establish Aboriginal land title holders the right to
extensive possession in addition to ownership rights, including the right to decide the
use of the land, the right to profit from economic development of the land, and the
right to pro-actively use and manage the land.
• Will require new, creative and flexible approaches on all sides

• Grassy Narrows First Nation v. Ontario (Natural Resources) 2014 SCC 48.
• Supreme Court of Canada made a major decision on Aboriginal Treaty
territory.
• The Crown has the authority to “take up” lands in question
• Citing Tsilhqot’in decision, the Court also reinforced its language duty of
the Crown to consult and accommodate the affected First Nations in a
manner “consistent with the honour of the Crown.”
• Crown infringement of treaty rights (such as the issuance of resource
development and harvesting leases on treaty lands) will require the Crown
to act in a manner consistent with its fiduciary relationship with Treaty
rights holders.

Daniels v. Canada (Indian Affairs and Northern Development), 2016
SCC 12 :
In this Supreme Court decision, the top court was asked to answer
three questions:
1. Whether or not Métis and non-status Indians are “Indians” under s.
91(24) of the Constitution Act, 1867;
2. Whether the federal Crown owes a fiduciary duty to Métis and non-
status Indians; and
3. Whether the Métis and non-status Indians have the right to be
consulted and negotiate with.

• S. 35 states that Indian, Inuit, and Métis peoples are
Aboriginal peoples for the purposes of the Constitution.
• Therefore, the terms “Indian” or “Indians have two meanings:
• A broader meaning, used in s. 91(24) of The Law of 1867,
including Métis, and Inuit – can b equated with the term
“aboriginal people of Canada”, also used in s. 35; and
• A narrower meaning that distinguished Indian bands from
other Aboriginal peoples.

• Hupacasath First Nation v Canada (Ministry of Foreign Affairs) 2015 FCA 4
• Since SCC confirmed Crown’s duty to, courts have been tasked with determining
precisely when the duty is triggered
• Hupacasath First Nation argued that the duty applied to the ratification of the
Canada-China Foreign Investment Protection Agreement (“CC-FIPA”) as potential
of arbitral awards creates incentive for the government to act in a manner that
avoids breaching CC-FIPA and that this may cause the government to injure HFN
rights and interests.
• Consequently, the HFN argued Canada was obligated to consult with it and, if
necessary, accommodate its rights and interests.
• At the first instance, the Federal Court rejected the HFN’s argument. It found no
conflict, “actual or potential,” between the provisions of the CC-FIPA and the
HFN’s asserted rights and interests. The HFN appealed to the FCA.

Canada-China FIPA Challenge
•Hupacasath First Nation v. Canada (Foreign Affairs
and International Trade Canada), 2015 FCA 4
• Background:
• In September 2012, Canada signed a reciprocal foreign investment
agreement with the People’s Republic of China.
• The Agreement provides a minimum standard of treatment to foreign
investors by providing a guarantee against discriminatory treatment and also
provides a protection from expropriation without compensation.
• Hupacasath First Nation, is a band under the Indian Act, with 285 members
living on two reserves covering roughly 56 acres of land on Vancouver Island,
British Columbia.

Hupacasath First Nation v. Canada
• Federal Court:
• Hupacasath alleged that the Agreement might affect Aboriginal rights and
interests it has asserted over lands in British Columbia and therefore, the
Minister of Foreign Affairs had an obligation to consult Hupacasath prior to
entering into the Agreement.
• Application dismissed, the Court found that the Agreement could not
potentially cause harm to Hupacasath, and that the Hupacasath’s asserted
rights and interests were “non-appreciable” and “speculative”.

• Trial Judge found potential adverse effects “non-appreciable” and
“entirely speculative” as a matter fact
• Application was on behalf of a small 300-member nomadic tribe
• Territory of about 230,000 hectares in Alberni Valley of Vancouver
Island
• Limited budget, resources, and few strategic allies & little media
cover
• Case heard before Tsilhqot’in, Grassy Narrows First Nation, and
Harry Daniels et al.

• The issues before the Federal Court of Appeal:
• Does the federal court have jurisdiction over decisions by the Government of
Canada to enter into international agreements and treaties falling under the
Crown’s prerogative power? and
• Is the exercise of a Crown prerogative power justiciable? In other words, can
the Hupacasath’s case be heard at all?

Conclusion of the Federal Court of Appeal:
• The Jurisdictional issue:
• Rejected the Crown’s position that “the residue of discretionary or arbitrary
authority, which at any given time is legally left in the hands of the Crown”
• The Crown holds prerogative powers on the conduct of foreign affairs:
“An interpretation that the Federal Court has the power to review federal exercises of
pure prerogative power is consistent with the Parliament’s aim to have the Federal
Courts review all federal administrative decisions. The contrary interpretation would
carve out from the Federal Courts a wide swath of administrative decisions that stem
from federal prerogative, some of which can have large national impact”. (para 54)

Conclusion of the Federal Court of Appeal:
• The Issue of Justiciability:
• The government of Canada’s position that exercises of pure prerogative are
reviewable only when Charter rights are at issues was rejected, adding that
non-justiciable issues are very rare and are limited to:
“Exercises of executive power [that] are suffused with ideological, political,
cultural, social, moral and historical concerns of a sort not amenable to the
judicial process or suitable for judicial analysis. In those rare cases, assessing
whether the executive has acted within a range of acceptability and
defensibility is beyond the court’s ken or capability, taking courts beyond the
proper role within the separation of powers” (para 66)

Duty to Consult:
• The Federal Court of Appeal found that the duty to consult did
not arise in these circumstances:
• Adverse effects to Canada-China FIPA on the Hupacasath were speculative
• Investment in Canada does not necessarily lead to a conclusion that Aboriginal
rights will be affected
“The problem with the appellant’s submission is that notwithstanding the existence of
other agreements, there is no evidence deserving of sufficient weight that these
agreements are causing or might cause Canada to make decisions that are contrary to
law. In particular, there is no evidence that those agreements are causing Canada to
make decisions that do not respect Aboriginal rights (para 91)”

What can we retain from the decision?
• Although the Hupacasath First Nation was unsuccessful in its
claim, this decision is significant as it states the authority of
the Federal Court of Appeal with respect of the Federal
Court’s jurisdiction vis-à-vis Crown prerogative and the
review of executive authority that will be considered non-
justiciable.

What is next for the First
Nations?
• Hupacasath First Nation v Canada
(Ministry of Foreign Affairs) 2015 FCA 4
• Would finding of fact differ in context of
broader application?
• Canada’s Aboriginal Population – 1.4 Million
(4% of Canada)
• 634 recognized First Nations governments or
bands
• Reserves cover 28, 000 sq.km. comprehensive
and special claims have brought 1.6 M sq. km.
under Aboriginal control
• New political awareness, important resources,
recognition and strategic allies
• Post Tsilhqot’in and Grassy Narrows First
Nation

Nations?

Nations?
The fundamental objective of the modern law of aboriginal and treaty
rights is the reconciliation of aboriginal peoples and non-aboriginal
peoples and their respective claims, interests and ambitions. The
management of these relationships takes place in the shadow of a long
history of grievances and misunderstanding.
The multitude of smaller grievances created by the indifference of some
government officials to Aboriginal people’s concerns, and the lack of
respect inherent in that indifference has been as destructive of the
process of reconciliation as some of the larger and more explosive
controversies.
Justice Binnie’s unanimous Supreme Court decision Mikisew Cree
First Nation v. Canada (Minister of Canadian Heritage)

Grand River Enterprises Six
Nations, NAFTA Chapter 11
A NAFTA Chapter 11 challenge:
• Grand River Enterprises Six Nations, Ltd., et al. v. United States of
America
• Claim on behalf of a corporation owned by Six Nations of the Iroquois
Confederation and to members of the Six Nations
• Issue was treatment of “non-participating manufacturers” under the
terms of a settlement agreement between 46 U.S. states and the
major tobacco companies to recoup public monies spent to treat
smoking-related illnesses.

Grand River Enterprises Six Nations, Ltd., et al. v. United States of
America’s NAFTA Chapter 11 challenge (continued) :
• Claim based on Articles 1102, 1103, 1104, 1105, 1110
• Aspect of the claim was time barred (3 years limitation period)
• Tribunal found that Grand River and two individual claimants did not
have an investment in the United States
• One individual claimants was found to have an investment but failed
to established a violation of the relevant articles with respect off
reservation sales of cigarettes

• Article 1105 case involved a review of arguments on violation of the
Jay Treaty and the UN declaration of the Rights of Indigenous People
and the principles of customary international law
• Nation Chief of the assembly of First Nations endorsed the claim
• Issue of what constitute an investment in context investment was
reviewed

Jay Treaty - Article 3
“It is agreed that it shall at all Times be free to His Majesty's Subjects, and to the Citizens of the
United States, and also to the Indians dwelling on either side of the said Boundary Line freely to pass
and repass by Land, or Inland Navigation, into the respective Territories and Countries of the Two
Parties on the Continent of America (the Country within the Limits of the Hudson's Bay Company
only excepted) and to navigate all the Lakes, Rivers, and waters thereof, and freely to carry on trade
and commerce with each other …
No Duty of Entry shall ever be levied by either Party on Peltries brought by Land, or Inland
Navigation into the said Territories respectively, nor shall the Indians passing or repassing with their
own proper Goods and Effects of whatever nature, pay for the same any Impost or Duty whatever.
But Goods in Bales, or other large Packages unusual among Indians shall not be considered as Goods
belonging bona fide to Indians … no Duties shall be payable on any Goods which shall merely be
carried over any of the Portages, or carrying Places on either side, for the purpose of being
immediately re-embarked, and carried to some other Place or Places … “

• On issues of (enterprises) tribunal found that the claimant assertion
were too general and lacked specific evidence with respect to Seneca,
law and customs
• With respect to reasonable expectation (Art 1105), claimants argued
that Iroquois Confederation was covered 3 of the Jay Treaty
• “The Tribunal believes that both Parties advanced positions regarding
the state of U.S. federal Indian law that were unjustifiably
categorical.” … “It is clear … that the domestic law is far from
conclusive ….” (para 137-138)

Grand River Enterprises Six Nations, Ltd., et al. v. United States of America’s
NAFTA Chapter 11 challenge (continued) :
• “The evidence before the Tribunal has shown mane of the actual or
potential effects of the MSA and related measures on reservation tobacco
sales and distribution to reservations retailers. The United States federal
government admits to the need for consultations with indigenous
communities on legislative and administrative measures affecting them, as
a matter of federal policy if not as a matter of international law.” (para
212)
• Tribunal found that the individual claimant had failed to meet the burden
of proof in the circumstances and that the economic loss was insufficient to
amount to expropriation

Nations?
• However as with the Hupacasath case, it is arguable that a broader
based case with a stronger argument as to what constitute an
establishment under First Nation law, may lead to different result.

NAFTA - Chapter 11
NAFTA - Art 1139 […] investment means:
(a) an enterprise;
(b) an equity security of an enterprise;
(c) (c) a debt security of an enterprise
(i) where the enterprise is an affiliate of the investor, or
(ii) where the original maturity of the debt security is at least three years,
but does not include a debt security, regardless of original maturity, of a state
enterprise;
(d) a loan to an enterprise
(i) where the enterprise is an affiliate of the investor, or
(ii) where the original maturity of the loan is at least three years,
but does not include a loan, regardless of original maturity, to a state enterprise;

NAFTA - Chapter 11
[…] investment means (continued):
(e) an interest in an enterprise that entitles the owner to share in income or profits of the
enterprise;
(f) an interest in an enterprise that entitles the owner to share in the assets of that
enterprise on dissolution, other than a debt security or a loan excluded from subparagraph
(c) or (d);
(g) real estate or other property, tangible or intangible, acquired in the expectation or used
for the purpose of economic benefit or other business purposes; and
(h) interests arising from the commitment of capital or other resources in the territory of a
Party to economic activity in such territory, such as under
(i) contracts involving the presence of an investor's property in the territory of the Party,
including turnkey or construction contracts, or concessions, or (ii) contracts where
remuneration depends substantially on the production, revenues or profits of an enterprise;

NAFTA - Chapter 11
but investment does not mean,
(i) claims to money that arise solely from
(i) commercial contracts for the sale of goods or services by a national or enterprise
in the territory of a Party to an enterprise in the territory of another Party, or
(ii) the extension of credit in connection with a commercial transaction, such as
trade financing, other than a loan covered by subparagraph (d); or
(j) any other claims to money, that do not involve the kinds of interests set
out in subparagraphs (a) through (h);
investment of an investor of a Party means an investment owned or
controlled directly or indirectly by an investor of such Party;

NAFTA - Chapter 11
but investment does not mean (continued):
investor of a Party means a Party or state enterprise thereof, or a national or an
enterprise of such Party, that seeks to make, is making or has made an investment;
investor of a non-Party means an investor other than an investor of a Party, that
seeks to make, is making or has made an investment;
New York Convention means the United Nations Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958;
Secretary-General means the Secretary-General of ICSID;
transfers means transfers and international payments;
Tribunal means an arbitration tribunal established under Article 1120 or 1126; and
UNCITRAL Arbitration Rules means the arbitration rules of the United Nations
Commission on International Trade Law, approved by the United Nations General
Assembly on December 15, 1976

NAFTA - Chapter 11
NAFTA Article 1139
• investment of an investor of a Party means an investment owned or
controlled directly or indirectly by an investor of such Party;
• investor of a Party means a Party or state enterprise thereof, or a
national or an enterprise of such Party, that seeks to make, is making
or has made an investment;

“Prime Minister Justin Trudeau appeared to back away Wednesday from an
election pledge that First Nations would have a veto over natural resource projects
on their territories. During a joint press conference whether he would still stick to
his pledge that a First Nation’s no meant “no” on TransCanada’s proposed cross-
country Energy East pipeline project and Kinder Morgan’s Trans Mountain pipeline
project in British Columbia.
The prime minister responded saying that he was committed to a “renewed
relationship” with First Nations that “respect inherent and treaty rights.” He said
the federal Liberal government looked to “First Nations and Indigenous peoples as
partners in all that happens in this land.”
[http://aptn.ca/news/2016/02/04/trudeau-election-pledge-on-first-nation/]

“We owe the Aboriginal peoples a debt that is four centuries old. It
is their turn to become full partners in developing an even greater
Canada. And the reconciliation required may be less a matter of
legal texts than of attitudes of the heart.”
Former Governor General Romeo LeBlanc

Broader Options:
“He who would do great things should not
attempt them all alone.”
Seneca proverb
Government?
“It is time for a renewed, nation-to-nation
relationship with First Nations peoples, one
that understands that the constitutionally
guaranteed rights of First Nations in Canada
are not an inconvenience but rather a sacred
obligation."
PM Justin Trudeau

International Trade Law and Aboriginal-Law (Part 2)

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