Pipeline Magazine


Making Peace

It all comes down to land. Who has title to it? Who has the right to use it? What will it cost to protect it for future generations? A 2014 decision by the Supreme Court of Canada granting Aboriginal title to a large piece of contested, resource-rich land in British Columbia has shifted the power balance in favour of First Nations by giving them greater say over development projects that would include pipelines.
For almost 25 years, lawyers have been arguing over the fate of the remote, largely unspoiled valley lands in the Cariboo-Chilcotin region of west-central British Columbia. The Tsilhqot’in Nation’s Chief Joe Alphonse calls it “the most beautiful place in the world.”
The lands claimed by the Tsilhqot’in spread west from the Fraser River across the high Chilcotin Plateau to the snow-capped Coast Mountain Range. Deep valleys have been cut into the gently rolling plateau. Deer, sheep, elk and grizzly are common, while the lakes and streams teem with salmon, whitefish and trout. Stands of pine, spruce and Douglas fir cover the land. Beneath the surface, there are deposits of gold, copper, tungsten and molybdenum — and maybe oil and gas.
The troubles began more than 30 years ago. In 1983, British Columbia granted a commercial logging licence on land that the Tsilhqot’in considered to be part of their traditional territory. The Nation objected and sought a declaration prohibiting commercial logging on the land. Talks reached an impasse, and there were roadblocks, protests and temporary injunctions. Eventually, the Nation’s original land claim was amended to include the lands at issue.
Chief Roger William of the Xeni Gwet’in, one of the six bands that comprise the Tsilhqot’in Nation, has spent much of the last 25 years in meetings, negotiations and courtrooms fighting to protect and lay claim to the traditional lands of his people. “There were a number of attempts at agreement — we got close several times — but in the end, and as a last resort, we went for legal action,” Chief William says. “They were going to log it whether we liked it or not, so in 1998, we filed our action for Aboriginal title.”
The legal wrangling occupied the British Columbia Supreme Court for five years. The issues were argued again in the British Columbia Court of Appeal in 2010 and were eventually dumped onto the laps of the eight Justices of the Supreme Court of Canada (SCC).
On June 26, 2014, the SCC — using a wider, more inclusive definition of Aboriginal occupation — unanimously granted the Tsilhqot’in Nation title to some 1,700 square kilometres of central British Columbia. While it marked the first time that a court had granted Aboriginal title to a specific piece of land in Canada, the SCC did much more than settle a complex land claim:

• The Court spelled out in law the “culturally sensitive” criteria to be used when determining Aboriginal title, tossing aside the restrictive “postage-stamp” approach favoured by Ottawa and British Columbia that would limit title to specific settlement sites;
• They affirmed the Crown’s “fiduciary duty” to a First Nation holding title and the narrow conditions under which a project can be pushed through over a Nation’s objections; and
• They ruled that British Columbia had breached its “duty to consult” the Nation and to accommodate their interests when it issued logging licences on the Tsilhqot’in’s traditional lands in the 1980s and 1990s.

Following the decision, both parties returned to the bargaining table to map out a new, cooperative plan for resource development — and revenue sharing — in the years ahead. The province, the Xeni Gwet’in and the Tsilhqot’in signed a Letter of Understanding in September 2014, setting the stage for long-term negotiations “to explore new and innovative approaches to Crown-First Nations reconciliation,” according to a statement from the ministry.
To date, the parties have developed some common understanding, exchanged information and put resources in place for ongoing negotiations. The government has also provided some “capacity funding” for the Tsilhqot’in to help the communities participate in the reconciliation process more fully. “We are currently focusing our discussions on resource and revenue-sharing agreements and ways to enhance the meaningful participation of First Nations in decision-making processes,” Edward Hill, spokesperson for the province’s Ministry of Aboriginal Relations and Reconciliation, says from Victoria.
“These discussions have been on hold for 20 years while we wrestled over Aboriginal title in the courts,” Chief William says. “Now is the time to sit down with the province, operators and developers and start working together. We are not against mining or lumbering, but any development has to be done with regards to our rights, to our culture and to the environment.”
And if things bog down again? “We can always go back to court,” he suggests.
Yay or Nay
What does the SCC decision mean in practical terms? According to the Court, Aboriginal title confers on the group that holds it “the exclusive right to decide how the land is used and the right to benefit from those uses, subject to the restriction that the uses must be consistent with … the enjoyment of the land by future generations.” Essentially, a First Nation holding Aboriginal title to a big chunk of its traditional territory is in a position to veto any development project.
“If the answer is ‘No,’ you should think seriously about packing up and going back home. Otherwise, you are going to lose a load of your shareholders’ money on a project that is never moving forward,” says Drew Mildon, managing partner with Woodland and Company in Victoria, British Columbia.
“There is a pretty big cultural gap between those who hold a view of the world as a resource to be exploited and those who have a more direct connection with the land, who actually live on it and depend on it for survival,” Mildon explains, adding that First Nations have a sense of self that is inclusive of those lands. When it comes to some “big footprint” projects — strip mines, clear-cut logging and perhaps pipelines — “some things just aren’t negotiable.”
According to the SCC, once title is established, incursions are permitted only with the consent of the Aboriginal group or if they are justified “by a compelling and substantial public purpose.” It must also be consistent with the Crown’s fiduciary duty, essentially, to operate in the best interests of the First Nation.
“On lands where Aboriginal title has been established, the Crown has no interest outside its fiduciary duty to the community,” Mildon says. “Infringement on that title is allowed, at least theoretically, but it is going to be almost impossible to do so.”
But Mildon is positive about the future. “The old way of doing business with First Nations is dead. From now on, if you are interested in a project, you will have to go and ask for their approval. That is the only way to find out if there is a way to move forward together.”
Duty to Consult
Many First Nations interpreted the case to mean that, from now on, they could exercise a veto over resource development anywhere in their entire traditional territories. “But the Supreme Court reasserted that consent applies only after title has been determined,” clarifies Kevin O’Callaghan, a partner with law firm Fasken Martineau in Vancouver, which represented business and industry associations in the SCC case.
There is still “a distinct legal line” painted between lands with proven Aboriginal title and those that are considered traditional territories, but have yet to be granted title, O’Callaghan explains. If Aboriginal title has yet to be conferred, the old rules still apply. According to the SCC, “prior to establishment of title, the Crown is required to consult in good faith with any Aboriginal groups asserting title to the land about proposed uses of the land and, if appropriate, accommodate the interests of such claimant groups.”
O’Callaghan points out that the duty to consult is determined by three conditions: the province and/or the federal government must have knowledge that there is a potential claim to the title of the lands in question; some project or action is being proposed for those lands; and the activity could affect the rights of the potential title holder.
“The duty to consult can exist across a spectrum — from simple notice to involvement in decision making and accommodation — depending on the strength of the claim and the potentially adverse effects of the proposed activity,” O’Callaghan adds.
After clarifying the legal responsibilities, there are two key practical components to undertaking consultation. First, one has to ensure that sufficient information is being communicated to the First Nation, including the full details of the project and all its potential impacts. “This information has to be understandable, not geared to experts and engineers, so that the First Nation representatives can be confident they fully understand both the risks and the benefits,” O’Callaghan says.
Second, if one is seeking to come to an agreement with a First Nation, the interests and concerns of that Nation have to be determined. “Each First Nation community is unique, bringing a different history, different biases and different expectations to the table,” O’Callaghan advises. “You have to identify those areas where a project can provide tangible benefits to the community and satisfy its members’ needs and expectations.”
Too Complex
About a decade ago, members of the Canadian Energy Pipeline Association (CEPA) saw a need to develop a cross-industry “Aboriginal Consultation Framework” to guide their consultation activities.
The Framework — approved by the Association in 2007 — is built on eight overarching principles, supplemented by more specific guidelines based on its members’ experience and best practices: aboriginal rights must be respected; consultation activities can create mutually beneficial relationships; the Crown is ultimately responsible for consultation, although some aspects of consultation may be delegated to industry; consultation must be meaningful and requires a genuine attempt to address interests and concerns; consultation must be undertaken in a timely manner and as early in the decision or planning process as possible; information provided to the community must be comprehensive and understandable; impacts must be identified and minimized through appropriate mitigation plans; and the nature and scope of consultation will vary with the nature of the proposed activity and the effect on Aboriginal activities.
Even though both sides may agree with the basic principles, the Framework cannot cover all situations and every contentious issue that may arise. “Our members have a pretty good idea of how to work productively with First Nations and how to resolve economic development, environmental and social issues,” says Philippe Reicher, vice-president of external relations for CEPA in Calgary. “However, we are in the business of building pipelines. Questions about Aboriginal title and rights are just too big and complex for us to solve alone.“
Reicher suggests that the Crown has a more prominent role to play in larger projects that affect multiple Aboriginal communities and different landowners, as well as projects located on greenfield sites, rather than those on previously developed brownfield locations. “They can’t wait for negotiations to break down,” Reicher suggests. All three parties — the private sector, First Nations and the federal and provincial governments — need to get involved “right from the get-go.”
Cumulative impacts are another “very important issue that many stakeholders are raising these days,” Reicher adds. For example, the levels of greenhouse gases emitted by a single operation may be insignificant, but when added to those from an entire region or industrial sector, they may represent an unacceptable contribution to global warming.
“There currently is no integrated regulatory approach available to deal with cumulative environmental effects,” Reicher points out. “They probably need to be looked at from an overall land-use-planning perspective. Again, it is not possible for a single proponent to resolve them.”
So what works? “It really boils down to an ability to build some lasting trust between a project proponent and a First Nations community,” Reicher says. “It is a matter of being transparent and honest right from the start. That can’t happen overnight.”
Sharing Benefits
Suncor Energy has been honing its working relationship with First Nations communities since it first became involved in the Alberta oilsands back in 1967.
“With a new project, we might be out in the community meeting on a weekly basis. For established operations, we maintain dialogue through our various Aboriginal-relations programs and community projects,” Suncor spokesperson Tracey Wolsey reports. To date, Suncor has established relationships with more than 150 Aboriginal groups across Canada.
In addition to its oilsands extraction and upgrading operations near Fort McMurray, Suncor also explores, develops and produces oil and gas reserves in Western Canada and along the East Coast, operates refineries in Edmonton, Sarnia, Montreal and Colorado and markets refined products through a chain of some 1,450 PetroCanada stations.
“We heard quite clearly from First Nations that they want to share the benefits, and one of the best ways is through the business opportunities that development provides,” Wolsey says. “We are proactive through our procurement, contract and capability development programs.” Suncor spent more than $431 million with Aboriginal businesses in 2013 and almost $2.5 billion since 1999.
Suncor has a “supply chain” group that works with local First Nations firms. The company uses tools to track the amount of business it is doing with First Nations suppliers and service firms and to determine how Suncor is helping to grow their companies. It has also established an Aboriginal Relations Steering Committee at the vice-presidential level, offering strategic direction and providing reports to the Board of Directors. A working group under the committee handles the details of its business development, community relations and education and recruitment programs.
“When Suncor first began operations in the oilsands back in the ’60s, there were no requirements for building relationships with First Nations communities or our other neighbours. Today, there are laws, regulations and policies covering consultation,” Wolsey says. “The depth and breadth of our policies, processes and practices are necessary for a company like ours to build a productive relationship with First Nations.”
Consent, Not Dissent
Obtaining consent does not always hinge on who holds title; consideration must also be given to Aboriginal rights. A 2007 decision by the Supreme Court of British Columbia, upheld by the Court of Appeal, which affirmed the Tsilhqot’in’s right to hunt, fish, trap and capture horses throughout the Claim Area, “will resonate for years ahead,” lawyer Drew Mildon says. “While not legally binding outside the province, it is already being argued in courtrooms across Canada.”
In order to exercise that right to hunt, fish and trap, it is a biological necessity to preserve sufficient forest and wild lands to produce a harvestable, sustainable surplus of game, Mildon argues. “When you drill or cut access roads or log, you are going to affect the diversity and abundance of species.”
For years, First Nations had been fighting a rearguard action, doing whatever they could to protect their lands. In the future, they will likely adopt a more aggressive, economically proactive stance, asking the courts to quantify their recoverable damages based on the environmental damage done to the natural resource base. Constraints on a First Nation’s Aboriginal rights to hunt and fish over large areas can be readily converted to a commercial value.
Overriding these treaty rights by approving logging or mining projects on traditional lands could constitute a “massive infringement and create billions of dollars in potential damages for governments and, in turn, the taxpayer,” Mildon cautions. “These damages are retroactive and could go back 60 years.”
As such, it is in any resource company’s commercial interest to come to an agreement with a First Nations, Inuit or Métis community that claims rights or title to lands the company wants to develop, advises Ben Bradshaw, associate professor of geography with the University of Guelph in Ontario. An impact-benefit agreement (IBA) creates a formal relationship between those who will develop and manage the project and those who will experience the impacts most directly.
“An IBA is essentially two agreements in one,” Bradshaw explains. First, it covers the management of the potential impacts of a project, such as risks that may lie outside those covered by the proponent’s operating approvals. Second, it contractualizes the benefits to a community, including the provision of training and employment opportunities, revenues and profit sharing and preferential contracting for services. Ideally, the IBA will cover “what proportion of the total value of the asset a community expects over the lifetime of the operation,” he says.
Negotiating an IBA can take time and a considerable amount of finesse. “You must widely canvas a community to determine the residents’ concerns,” Bradshaw says. “It is also incumbent on the community to invest in and draw upon its governance structures, in order to clarify its expectations in a clear and
timely manner.”
Increasingly in Canada, an IBA or some other manifestation of implied consent is absolutely necessary in cases in which an Aboriginal group holds or claims title to the property being developed. And while an IBA may not be a legal obligation for a project that will affect traditional lands to which Aboriginal title has not been granted, “it is certainly becoming a cultural necessity,” Bradshaw notes.
Building Relationships
Sonja Franklin, spokesperson for Canadian oil company Cenovus, says long-term community agreements are a cornerstone of the company’s relationship with its Aboriginal neighbours. “To date, we have signed seven such agreements with Aboriginal communities.” These multi-decade agreements typically span 40 years — the expected lifetime of a project. Each is unique and reflects a community’s particular needs, concerns and the potential impacts of the undertaking.
Cenovus operates two large oilsands projects at Foster Creek and Christina Lake in Alberta, with several others at various stages of development. The company also operates a number of conventional oil-producing properties in Alberta and Saskatchewan, natural-gas plays in southeast Alberta and oil refineries in Illinois and Texas.
Agreements set accountabilities and cover formal consultation on a project, ongoing engagement and the resolution of any issues that may arise. “Through long-term community agreements and local contracting and hiring practices, we work to ensure that local communities are sharing in the benefits of oil and gas development in their areas,” Franklin says.
Cenovus focuses on hiring locally whenever possible, and contracts many Aboriginal or band-owned businesses. “Since Cenovus was formed in 2009, we have spent more than $1 billion on goods and services supplied by Aboriginal businesses, including $395 million in 2013 alone,” Franklin adds.
The company has created the Aboriginal Employment Bridging Internship Program to help Aboriginal workers near its operations work towards a career in the oil and gas industry. These internships give workers experience in such trades as instrumentation, power engineering and field operations. It also offers 10 scholarships in its operating areas for Aboriginal students pursuing a post-secondary, full-time degree, diploma or trade certificate.
Impact across Canada
Although the 2014 decision by the Supreme Court of Canada was not “earth-shattering” in a legal sense, it was “certainly the next chapter in a series of important judicial rulings on Aboriginal title, rights and the duty to consult that we have followed over the last few years,” says Julie Abouchar, partner with Willms & Shier Environmental Lawyers in Toronto. She says the decision provides a road map for Aboriginal title claims, but warns that it “will likely create some uncertainty and maybe even turmoil as it is applied across the country.”
A number of First Nations in the Maritimes (where the Crown signed peace and friendship treaties) and across Ontario and the Prairies (where a series of numbered treaties are in effect) are certainly re-calculating the legal odds of asserting Aboriginal title over their traditional territories based on the criteria set out in the SCC decision, Abouchar adds.
For example, the Taykwa Tagamou Nation in Northern Ontario has launched a lawsuit concerning Treaty 9, covering great swathes of mineral-rich land, based on discrepancies between the treaty they signed in 1905 and the oral promises recorded in the official diary kept by one of the government representatives at the time. If successful, their consent could be required before any mining is permitted.
In addition, land claims over large areas of British Columbia and parts of the Northwest Territories and Yukon are still unsettled. The SCC decision will certainly be cited in their ongoing land-claim actions. Even in Ontario, where the Algonquin have asserted title and Aboriginal rights to large areas of the Ottawa and Mattawa River watersheds, the decision could have an impact.
As a result, both developers and government regulators should take a cautious approach to disputed Aboriginal title when initiating projects or issuing permits. “Where there is a potential that title may be granted at some point in the future, the Supreme Court of Canada suggested that seeking consent might be the best way forward,” Abouchar says. “Otherwise, any permit or approval issued could be revoked if title is eventually proved.”
However, Abouchar does not believe that the SCC decision will put a chill on future resource-development projects. “We have found that more companies are seeking to engage in a meaningful way these days,” Abouchar notes. “However, consultation can’t be a superficial ‘box-ticking’ exercise. If you can come to some mutually satisfying agreement, it gives both sides greater security.”
First Nations are also re-examining their treaties and consultation protocols in light of the recent rulings. “We see more First Nations expressing an interest in becoming full partners in a planned development and holding some of kind equity stake in the project,” she says.
Hand in Hand
Chief Joe Alphonse has been fighting for the Tsilhqot’in homeland since the days of the first roadblocks. “It has been a long, hard journey, with lots of political and financial struggle,” he says, “but we don’t want to live on reservations, to live in poverty and live in shame any longer. We want to live on our own lands, and we want full access to our resources, so that we can live independent. These legal battles are all about giving us hope.”
To those who accuse the Tsilhqot’in of being anti-business and uncooperative, he points to the Nation’s work with the federal Department of Fisheries and Oceans restoring the salmon fishery in Chilko and Quesnel Lakes. “Today, that sockeye run is one of the largest, healthiest runs in the world. We started with maybe 300 fish a year back in 1990 and are now up to 1.5 million,” Chief Alphonse says. “It shows the success you can have by working cooperatively with us.”
Chief Alphonse’s message to industry is cooperation. “Don’t be fearful. We want to work with you,” he says. As the First Nation government lives and works right on the resources that companies want to develop, “it is much easier to get access to us and it is much easier to work with us,” he says. But he points out that interested parties have to be prepared to pay a fair price and to take the necessary environmental precautions.
“Our lands are so well managed, they look untouched. Then, you look across Canada and see so much environmental damage, so many endangered species and so many extinctions. This is not wise land management,” Chief Alphonse says. “Give First Nations people back their voice, restore their role in resource management and watch Canada flourish.”

William M. Glenn is a writer in Toronto. Follow us on Twitter @PipelineOHS.

National Energy Board Stresses Aboriginal Involvement
While a company can spend years planning an inter-provincial pipeline or powerline and consulting with the local communities that may be affected along the route, the National Energy Board (NEB) in Ottawa does not get involved with a specific project until the proponent files a project description or an application with the Board.
At that point, the NEB will review which Aboriginal groups the proponent has consulted, the concerns that were raised and how those issues were addressed. The Board can follow up on any unresolved problems either by requesting additional information from the proponent, questioning them during the hearing or, if necessary, appending conditions to any approval that may be issued.
“However, we encourage Aboriginal groups to participate in the hearing process, because it is important that they bring any outstanding concerns forward so the Board can address them directly,” says Margaret McQuiston, technical specialist with some 14 years’ experience in Aboriginal relations with the NEB. A quasi-judicial body, the NEB can consider only information that has been placed on its public record when making a decision. A group can either apply to submit a formal letter of comment or participate as a full intervenor in the hearing. Most Aboriginal groups choose to participate as intervenors, she says.
“We also try to accommodate any particular Aboriginal ceremonies or cultural protocols when possible,” McQuiston says. For example, the NEB has incorporated pipe ceremonies, rather than the traditional oath, to affirm the evidence provided by Elders. The Board will also provide translators, locate a hearing close to intervenors and adjust their timing, to the extent possible, in order to make a hearing as accessible as possible.
The NEB offers participant funding — up to a maximum of $80,000 for groups and $12,000 for individuals — to those deemed eligible and granted intervenor status. Since 2010, more than $7 million has been allocated by an independent committee to intervenors. “Based on past hearings, up to 80 per cent of the available participant funding has gone to various Aboriginal groups,” McQuiston adds.