The Importance Of Consultation With First Nations, Progressive Reclamation And Increased Reclamation Security For Amended Permits In The Mining Industry

• Published date: 07 December 2021
• Subject Matter: Government, Public Sector, Litigation, Mediation & Arbitration, Energy and Natural Resources, Mining, Constitutional & Administrative Law, Trials & Appeals & Compensation, Indigenous Peoples
• Law Firm: Miller Thomson LLP
• Author: Ms Sarah Hansen and Jason P. Fitzpatrick

The BC Supreme Court recently cast light on issues regarding British Columbia mining operations on First Nation's territory in Ignace v. British Columbia (Chief Inspector of Mines), 2021 BCSC 1989. Miller Thomson was counsel in Ignace challenging the permit amendment.

The Court determined that the decision by the Inspector of Mines (the "Inspector") to issue an amended permit in 2019 (the "Amended Permit") under the Mines Act, increasing production in the McAbee Quarry (the "Quarry"), was unreasonable and failed to adequately discharge the honour of the Crown regarding the consultation process with the Stk'emlupsemc te Secwepemc Nation ("SSN").

Notably, the Court also ventured into relatively uncharted waters for a long-standing mining operation in finding the Inspector's decision unreasonable on the grounds that:

1. the Inspector failed, without justification, to require progressive reclamation for the Quarry; and
2. the decision to require only $20,000 of security for an estimated $27 million reclamation was unreasonable.

BACKGROUND

The Quarry land is owned in fee simple by the Canadian National Railway Company ("CNR") and has been operated as a Quarry since 1978. CNR mines the Quarry for ballast that it uses to maintain its railway lines.

The Quarry land is located near Thompson River, British Columbia, and is part of the territory over which SSN claims Aboriginal rights and title. SSN commenced action in 2015 claiming these rights and title to the territory, though the action had not yet been set for trial at the time of this decision.

BC began regulating the Quarry in 1996 when it issued a permit under the Mines Act. As part of that permit, CNR was required to post $20,000 as security for reclamation. In 2010, CNR submitted a new Notice of Work ("NoW") to expand the Quarry and to continue blasting for ballast. Upon receiving the NoW, the Inspector amended the permit in 2010. The permit was similarly amended in 2012 in response to a further NoW from CNR.

CNR once again submitted a new NoW in 2017, this time requesting to increase production rates by 25% without expanding the Quarry lands. For the first time, CNR was required by the inspectors to perform a cost assessment and estimated the total reclamation costs to be around $27 million. On April 15, 2019, the Inspector issued the Amended Permit approving the expansion, however, the Amended Permit had no requirement for progressive reclamation, and only maintained the $20,000 fixed security requirement for reclamation.

SSN sought judicial review of this decision to have it quashed on the following grounds:

• BC failed to adequately consult SSN regarding the decision to issue the Amended Permit; and
• the decision was unreasonable in light of the inadequate technical information, failure to meet statutory requirements, and failure to impose reasonable conditions (including progressive reclamation, increased security for reclamation, and sufficient water quality conditions and monitoring).

THE DECISION: DUTY OF CONSULTATION

Existence of duty to consult

BC and SSN agreed that consultation was required for the Amended Permit. CNR argued that consultation was not required as the Inspector was operating under the reoccurring 5-year filing requirements of the previous permit and that it held a "perpetual permit." The Court rejected CNR's argument because CNR was not authorized to continue mining ballast after 2017 under the previous permit. Therefore, the Court found that consultation was required before issuing the Amended Permit.

Degree of consultation required

In determining the level of consultation required, the Court noted that BC and SSN were parties to a Mining and Minerals Agreement...