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The debate on consultation

Industry Spotlight
|Written By Shannon Kari
The debate on consultation

Companion decisions issued by the Supreme Court of Canada this summer to try to clarify the threshold to meet in terms of the Crown’s “duty to consult” and the jurisdiction of the National Energy Board were widely anticipated. They also may be somewhat unique in that the response to the decisions has generally been greeted favourably both by proponents seeking approval for new energy projects and by indigenous groups wanting to ensure their rights are not infringed.

The unanimous rulings in Clyde River (Hamlet) v. Petroleum Geo-Services Inc. and Chippewas of the Thames First Nation v. Enbridge Pipelines came to different factual conclusions on whether the duty to consult had been met, but they provide clarity about how to proceed in the future, says Martin Ignasiak, a partner in the Calgary office of Osler Hoskin & Harcourt LLP. “These decisions will reduce a lot of the arguing around the edges about the process,” says Ignasiak, national co-chairman of the firm’s regulatory, environmental, aboriginal and land group.

David Schulze, a partner at Dionne Schulze in Montreal, says the principles set out by the SCC are helpful especially for indigenous peoples with modern treaty agreements. “It is very encouraging for northern Canada,” says Schulze, who acted for the Makivik Corporation, the legal representative of the Inuit in Quebec, which was an intervener in the Clyde River case.

The SCC, in decisions both co-authored by justices Andromache Karakatsanis and Russell Brown, concluded that the Crown did not meet its duty to consult in terms of proposed offshore seismic testing off Baffin Island in the Clyde River project. It overturned the decisions of the Federal Court of Appeal and quashed the authorization granted by the National Energy Board. In the Enbridge case, involving a proposal to modify a section of a pipeline in southwestern Ontario, the NEB authorization was upheld and the court found that the duty to consult was met [see Facts: sidebar].

The outcomes turned mostly on the facts in each case, but the SCC also explained that an NEB decision will on its own trigger the duty to consult, although the Crown may be able to rely on the regulator’s process, in whole or in part, to fulfil its duty.

Nader Hasan, lead counsel for the successful appellants in Clyde River, says that even if the Crown is not involved directly in an NEB hearing, it will still be responsible to ensure that the duty to consult has been met if indigenous groups are affected. “Practically speaking, the buck stops with the Crown,” says Hasan, a partner at Stockwoods LLP in Toronto. “The greater the right and the greater the potential for harm, the greater the duty to consult,” he explains.

For proponents, the challenge in obtaining approval for an energy project and avoiding protracted litigation is in understanding what the duty to consult requires.

In its decisions, the SCC stressed that the level of consultation depends on the circumstances in each case, notes Joshua Jantzi, a partner at Dentons LLP in Calgary and one of the lawyers who acted for Enbridge. “There is no one-size-fits-all [formula]” when determining what consultation is necessary, says Jantzi, a partner in the firm’s regulatory and energy litigation group.

Tracy Pratt, a partner at Fasken Martineau DuMoulin LLP in Toronto, explains that relying only on the NEB or the Crown is unlikely to be effective. “Proponents have a very significant role to play themselves. Early and ongoing engagement is going to work to their long-term benefit. Consultation is not static; it is a fluid process,” says Pratt, a litigator who specializes in aboriginal law.

Ignasiak agrees that there are many aspects to effective consultation. “You are trying to mitigate the risk to the proponents. You don’t deal just with the communities. You raise issues with Crown agencies, you interact with government departments,” says Ignasiak, who was lead counsel for Suncor Energy Marketing Inc., an intervener in Clyde River.

While these rulings provide clarity in a number of areas, “there is still going to be debate in the future” when the Crown is not a party in an NEB process, so that is why interaction with government at an early stage is always important, Ignasiak says.

The duty to consult does not provide indigenous groups with a veto over a project and the NEB framework is not intended to address broader or historical claims, the SCC stated in its decisions. But the duty is also about the principles of reconciliation and there must be meaningful opportunities to participate early in the regulatory process if an indigenous group is affected. “No one benefits — not project proponents, not indigenous peoples, and not non-indigenous members of affected communities — when projects are prematurely approved only to be subjected to litigation,” the court wrote in its Clyde River judgment.

The history of the legislative framework for energy or mining projects in Canada has been driven by a presumption in favour of granting approval at the end of the process, notes Schulze. “It is hard to reconcile that with the duty to consult. Aboriginal people would like the process to include the possibility to say no,” he adds. However, in Clyde River he is pleased with what the SCC stated is required, as a result of the rights granted in the 1993 Nunavut Land Claims Agreement. “The Inuit have very clear treaty rights and a crystal clear right to harvest marine mammals,” says Schulze.

“It will be a different exercise when rights are asserted but not admitted by the Crown,” such as with the Chippewas of the Thames First Nation, Schulze says. In that scenario, the level of consultation required will likely depend on specific facts related to a project.

For the Inuit, the express treaty rights required “deep consultation” by the Crown. Given all the facts, the SCC decision in Clyde River was not a surprise, says Pratt. As it relates to the proponent’s role, “It was an example of ‘small-c’ consultation” that included a significant amount of data ultimately provided in a way that was not widely accessible, she notes. “It did not meet the threshold of being meaningful. Proponents need to be mindful, not only of what information they are sharing, but how they are sharing it,” Pratt says.

Effective consultation, says Jantzi, requires genuine efforts by a proponent at an early stage. “That is the whole purpose of the consultation, to find out and address the impact and what can be done to protect those interests,” he says. “From a proponent’s perspective, it also needs to determine what the government is going to do in the tribunal process. Is it going to be enough,” Jantzi says.

Hasan agrees communication at an early stage is necessary. “You need real information sharing. It is also in the proponent’s interest to provide funding” for an indigenous group to participate in the regulatory process, he says.

Providing funding is increasingly common, says Ignasiak, and he believes it is important to ensure an indigenous group is fully informed of all relevant issues.

Consultation can be an extensive process, he notes, especially for projects such as pipelines, where many communities may potentially be impacted. At the same time, if done properly, it can also significantly reduce the chance of judicial review of a regulator’s decision.

“You are trying to build a relationship so that, ideally, the community will sign off on the project,” he says.

The facts of the two cases:

Clyde River (Hamlet) v. Petroleum Geo-Services Inc.

A Norwegian-led consortium sought to conduct seismic testing for oil and gas resources off the northeast coast of Baffin Island. The Inuit of Clyde River have harvested marine mammals for generations. It was not disputed that the testing could negatively impact this harvesting, which was protected by an established treaty right. The Supreme Court of Canada found that the consultation was inadequate on many levels. Basic questions asked by community members could not be answered by the proponent. When the National Energy Board asked for greater details, the proponents responded with a nearly 4,000-page document, posted on the regulator’s website. Most of the document was not translated into Inuktitut and no efforts were made by the NEB to see if it was accessible to the community and answered its questions.

Chippewas of the Thames First Nation v. Enbridge Pipelines

Enbridge applied to the NEB for the modification of a pipeline that runs from southwestern Ontario to Quebec, to reverse the flow of a section of it, increase capacity and enable it to carry heavy crude. The Chippewas of the Thames argued that the NEB had no jurisdiction to approve the changes without Crown consultation.

The Crown was not a party in the NEB process. The regulator issued notices in advance of hearings to indigenous groups that might be affected, including the Chippewas of the Thames. They were granted funding to participate as an intervener and filed evidence and made oral argument. The changes sought by Enbridge were on its existing right of way. The SCC concluded that the NEB hearing and its written reasons were sufficient to meet the Crown’s duty to consult and properly balanced “asserted” aboriginal and treaty rights and safety concerns related to
the pipeline.

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