New law requiring aboriginal consultation takes effect April 1 – by Siobhan McClelland (Law Times – March 25, 2013)

Changes to the Mining Act in Ontario will require companies to consult First Nations on any mineral exploration claims before the work begins. As of April 1, the act will require third parties wishing to stake mining claims to effectively take over the Crown’s duty to consult with First Nations.

But the lack of guidance on what they must do as part of that duty to consult leaves uncertainty for both First Nations and the mining companies. “What the mining industry needs now more than anything is some certainty,” says Neal Smitheman, a partner at Fasken Martineau DuMoulin LLP.

The Divisional Court recently had an opportunity to clarify the duty to consult on Jan. 25, 2013, in ruling on the appeal in Wahgoshig First Nation v. Solid Gold Resources Corp. The case dealt with an appeal of an interim injunction prohibiting the defendant mining company from engaging in exploration activities on land the plaintiff had claims to.

The court granted leave to appeal with the leave judge noting that, in the absence of legislation, “it is important that the court clarify the respective obligations of the Crown and mining exploration companies operating in this province toward First Nations whose treaty rights or aboriginal [rights] might be adversely affected by exploration activities.”

However, given that amendments to the Mining Act would become effective in April, the Divisional Court decided the appeal was moot and chose not to hear it.
The new legislation does clarify that third parties have a duty to consult.

Kate Kempton, who was counsel for the Wahgoshig First Nation, notes that the new regulations under the act will trigger the duty to consult and accommodate First Nations affected by mineral exploration in virtually all cases.

She says the new legislation essentially requires every proponent to either file an exploration plan, which should trigger the duty to consult, or apply for an exploration permit, which will trigger the duty to consult and accommodate. The exploration company will have to go out and consult with First Nations to create a consultation record that will become part of its permit application.

According to Smitheman, who was counsel for Solid Gold Resources on the appeal, “under the new regime, the director . . . will not issue a permit until he or she is satisfied that there has been consultation by the third parties with the First Nations.

So in essence and in effect, what happens is that duty to consult that’s been triggered by the conduct of issuing a licence has been delegated to third-party proponents.”

Kempton says the new Mining Act regime is certainly better than it was but suggests it’s not going to solve all problems. She believes that despite the new legislation, there will still be disputes because the act doesn’t go far enough in stipulating what the content of consultation and accommodation has to be.

“I guess we’ll have to see what the Crown’s reaction is to the disputes, whatever form they might take, and are they prepared to go further in fleshing out the regulations.”

This is important as the government has to determine whether a consultation has taken place.
Kempton says the legislation just says the proponent has to engage the First Nation and indicate to the Crown what it has done to consult with it and meet its concerns.

“There will no doubt be proponents who think that picking up the phone and making one phone call or sending one letter letting the First Nation know what they plan to do is enough. I hope not but I expect that there will be some out there who think that’s enough, whereas I expect no First Nation would think that’s enough.

There has to be some interactive engagement or back and forth and the First Nation has to be informed about what its values and sites are and connections to the land and then has to be informed about what the impacts of the exploration might be on that and then those concerns need to be addressed.”

Kempton also notes the new legislation doesn’t stipulate who has to pay the cost of the consultation process.

“A lot of First Nations unfortunately don’t have the internal resources or expertise to understand the scientific, environmental implications of things or legal implications of things, so they have to hire people to inform them of what the effect of the exploration might be and to do their due diligence. Who’s going to pay for that?”

She goes on to note that the regulations don’t stipulate that. “They don’t state, for instance, that certain archeological or land-use and occupancy studies have to be done where there’s any evidence of ancient or even more recent historical sites or values in the land. There’s no requirement in the regulation, in black and white, for those things to happen.”

Smitheman is concerned about the effect of the new legislation on junior mining exploration companies.

“The difficulty that we’re going to have is with junior exploration companies trying to reach some sort of accommodation with First Nations that is affordable.

What has happened is that some mid-sized or mining companies who have lots of resources and funding available can enter into agreements that are far too rich for junior exploration companies. But unfortunately, that sort of sets the bar.

I think the expectations sometimes of the First Nations vis-a-vis junior exploration companies is simply too high. You just cannot expect to get the same impact benefit agreement or response from junior exploration companies as you can with mining companies.”

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