Industry and government are slowly defining the duty to consult and accommodate First Nations

Industry and government are slowly defining the duty to consult and accommodate First Nations

April 19, 2010
Published in Alberta Oil Magazine, April 2010
By Adam Driedzic, Staff Counsel, Environmental Law Centre

An aboriginal claim against the government has an exploration company under pressure.

Flow-through shares were issued and tax deadlines are approaching. The company gambles and starts surveying, only to be blocked by a court injunction. Another company avoids this fate by deploying its own negotiators, but reporting to shareholders arouses investor unrest.

In Saskatchewan, some mineral rights now come with a caveat on surface development. In Alberta, foreign corporations engage local Indian bands in “nation to nation” discussions.

The “duty to consult” is everywhere: at the courthouse, in the boardroom, on the ground. This is a major shift in the law, with major implications for energy stakeholders in Western Canada.

It froze the Mackenzie Gas Pipeline, caused uncertainty around the Keystone project and fuels new litigation in the oil sands. The stakes are clear, but the law is not. Legal responsibility for adequate consultation falls exclusively on government, yet government can lawfully delegate procedural matters to industrial project proponents. This three-way dance resembles environmental assessments, but the steps are new. As Justice Frans Slatter of the Alberta Court of Appeal stated in 2007, the duty to consult “is still being hammered out on the anvils of justice.” Unfortunately, the cold forging of law takes place far from human frustrations on the ground. Add spooked investors, and some companies simply avoid opportunities that involve First Nations. Those that do address aboriginal interests gain a significant competitive advantage. Good consultation means faster regulatory approvals, long-term savings and greater social license to operate. It might even allow sound company practices to shape the law. Understanding “the duty” makes good business sense.

The duty to consult is not exactly an aboriginal right. It is a procedural obligation enforced by the courts when aboriginal rights are at issue. After the Constitution Act (1982) was adopted, the Supreme Court of Canada held that government must consult to justify infringing on known aboriginal rights. The ground shifted in 2004, when it further held that consultation comes before a right is proven. The reason is that unilaterally developing land before addressing a claim deprives the claimant of the benefits they would have received if successful. This runs counter to the reconciliation of current sovereignty with prior occupation and the need to uphold the “Honour of the Crown” in relationships with Aboriginal Peoples.

In English: no sharp dealing. The duty to consult is triggered when government knows that an aboriginal right might exist, and is considering conduct that might adversely affect it.

Knowledge is easy to prove. Treaties, court proceedings, negotiations or traditional activities are all sure signs that aboriginal rights might exist. The duty to consult kicks in when there are potential adverse affects on the alleged rights. That is harder to prove.

If a duty is triggered, the meaning of “adequate” consultation is determined by a spectrum of considerations. Stronger rights claims and more serious impacts require more consultation. At the low end of the requirement scale, providing notice of a project is good enough.

At the high end is “accommodation,” a term still under construction. Accommodation may require a change of plans or it can be economic in form, but it does not always mean “compensation.” Profit sharing and win-win solutions have a place in this area of law. Most cases fall in the middle, requiring steps such as sharing information, providing opportunities to be heard and responding to concerns.

In no case is there an aboriginal veto or consent requirement. Neither is a separate aboriginal track required on all project applications. Standard public participation processes may be adequate based on the specific case facts. Inadequate consultation will produce a court remedy based on the stage of a project and government’s behavior. Early stages will see work stoppages and court-ordered consultations or mediation. If there is already irreversible harm, or government’s conduct was blameworthy, then the court may order damage payment.

Several areas of the law remain unsettled. One is whom to consult with. Identifying who is authorized to represent an aboriginal group can be complicated by internal power disputes or the presence of umbrella political organizations. A second grey area is when to consult. Multi-stage projects may require consultation on the whole package up front, and requirements can change with subsequent events – an archaeological discovery, for instance. A third unsettled issue is how long to consult. An aboriginal group cannot deliberately stall the process, but its capacity to act is a legitimate factor in determining reasonable timelines. Fourth is the role of regulatory boards. Boards with quasi-judicial power and proper expertise may supervise consultations, but whether they are required to do so remains to be determined. Finally, there is the increasing weight of the international indigenous rights regime. Canada faced criticism in this arena before attention turned to Alberta’s oil sands. Now the issues are converging.

How to operate under such uncertainty? In The Duty to Consult (2009), University of Saskatchewan law professor Dwight Newman argues that new rules of engagement will be shaped by the practices and policies of stakeholders. To begin, there is more behind the duty to consult than rights and honor. Channeling legal disputes into negotiations is also about results and efficiency. The courts are inherently slow, and legislative solutions are limited by the fact that natural resources are provincial and Indian treaties are federal. Consequently, the rules will emerge where the behavior of government, aboriginal groups and companies align. Like international law, parties who engage in a practice all believing that it is required will create customary norms – basically law without courts. Newman suggests that the duty to consult might even stall the court-driven evolution of other aboriginal rights.

Provincial consultation policies are in place from British Columbia through to Manitoba. Alberta’s First Nations Consultation Guidelines on Land Management and Resource Development state that the province “will delegate some project-specific activities to proponents.” The energy-specific guidelines assert that consultation is not required at the mineral leasing stage and can begin with applications for surface activities. At that stage the proponent provides notice, to which aboriginal groups have 21 days to respond if seeking further consultation. Saskatchewan and Manitoba, in contrast, make government the sole consulting partner. Involving industry is the government’s choice. Industry is split on the subject. Some proponents want to be involved to ensure adequate consultation and cost-effective accommodation. Some offer direct compensation at the outset, and by doing so shape the playing field against their competitors. Others see the financial burden of conducting consultations as yet another example of government downloading. Indeed, Alberta’s delegation policy is no guarantee that your agents will be well received. A First Nation’s policy might demand direct contact with government decision-makers, or at least company higher-ups. Informal exchanges between field agents and local individuals can make it difficult for an aboriginal group to determine what counts towards the duty.

Court will be needed if parties dig in on policy points that are not in the law itself. Government might not be able to rely on its universal timelines. An aboriginal group might not be in a position to demand compensation. Company-direct compensation might not count as accommodation. The big test in Alberta will come when the province delegates consultation to a proponent and an aboriginal group refuses to participate.

Many industry lawyers agree that their role is to address aboriginal rights, not to help infringe on them. From this perspective, industry’s job is to see that government does theirs: Accept delegation of procedural matters and take all steps towards good consultation, but make no decisions about the adequacy of the process. No company can fix the relationship between Aboriginal Peoples and the Crown. The best that can be done is to learn the steps, and perhaps help create the new ones.

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