Ontario’s new mineral exploration landscape [Aboriginal and treaty rights] – by Bryan Phelan (Onotassiniik – Fall 2013)

 Onotassiniik is Wawatay’s new mining quarterly.

Mining Act rules now require consultation on Aboriginal and treaty rights

A bear somehow found itself dangling beneath a bridge, desperately holding on with its paws. At this point, we don’t know how it got there or what will happen next.

Bernie Hughes, a director of Aboriginal relations for the Ministry of Northern Development and Mines (MNDM), uses the image to introduce his presentation on new Ontario Mining Act rules.

“We needed to play some catch up with respect to all of the law that has changed in the last 20 years … in how resource development works in relation to Aboriginal and treaty rights,” Hughes says. “The industry has done something in a certain way for perhaps over a hundred years. We’re now in a state of transition and a state of change.” Along with change comes difficulty, he adds, looking at the picture of the vulnerable bear.

The new rules, which took full effect April 1, apply to early mineral exploration activities that until then weren’t regulated. Proponents must now file exploration plans with the province, and Aboriginal communities that could be affected by proposed work will be given 30 days to review a copy and provide comment. But MNDM encourages consultation with Aboriginal communities even before a plan is submitted, so the document can reflect those conversations. “By doing so, you may avoid delays encountered if the (MNDM) director of exploration finds that an exploration permit is required to deal with concerns raised about Aboriginal and treaty rights,” the ministry advises on its website.

Exploration companies are expected to respond to questions or concerns about their plans and to engage directly with communities. Plans and permit applications should include any proposals to minimize potential harmful effects on Aboriginal and treaty rights, the ministry adds, such as changes to timing or location of activities.

Under the new system, permits are also required if exploration activities – such as line cutting and trenching rock, mechanized drilling and surface stripping of overburden – will reach a certain threshold. Again, Aboriginal communities get to comment on the permit application, “and the proponent may be required to take additional steps to consult with communities,” MNDM states on its website. “Lack of response (from Aboriginal communities) will not prevent a decision by MNDM.” Under normal circumstances, MNDM decisions on whether to issue a permit must be made within 50 days.

These are the latest in a series of changes resulting from an update of the Mining Act in 2009. Compliance was voluntary when the rules were introduced last November, but mandatory as of April 1.

Before then, “there really wasn’t anything in Ontario to regulate early exploration … and that gave rise to a lot of issues on the land, especially a lot of frustration from the First Nations side,” Hughes says.

In more than four years of consultation leading to the current regulations, “From the First Nations side we heard: ‘We don’t know who is on our lands’; ‘We’re not benefitting from the use of our lands’; and ‘We don’t have the capacity to work with industry,” recalls Hughes. Among the main points made by industry, meanwhile, were that companies didn’t know how to engage Aboriginal communities; that they needed a more certain exploration environment; and that they felt pressured to enter agreements with Aboriginal communities without understanding their rights.

Along with its new regulatory system, MNDM’s response has included a policy for consultation with Aboriginal communities; a mining act awareness program offered online; and Mining 101 courses, technical support for the sharing of electronic files, and funded advisory positions for First Nations.

“There are things that we did that industry isn’t happy with, and there are things that we did that First Nations and Métis may … disagree with,” Hughes concedes. “But we feel that we have achieved a balance in providing a way forward.”

The remarks from Hughes come in June at the Ontario Mining Forum, hosted in Thunder Bay by Insight Information. He’s on a panel discussing the engagement of Aboriginal communities under the modernized Mining Act.
Two panel speakers who follow him are dissatisfied.

Nishnawbe Aski Nation (NAN) chiefs-in-assembly did not support the changes to the Mining Act and the “unilateral decision-making” that led to them, points out Les Louttit, deputy grand chief of NAN. “Although the regulations call for certain requirements for exploration, Ontario continues to ignore the NAN chiefs’ recommendation that First Nations must be consulted at the earliest stages, prior to exploration,” he says.

Under the new system, there are still basic exploration activities that do not require a plan or permit. Examples include prospecting activities such as hand sampling and geological mapping; certain types of geophysical surveys; and gathering baseline data by taking photos or measuring water quality.

Louttit also re-stated key NAN positions on resource development referred to generally by MNDM in its policy on consultation as “differing perspectives” between Aboriginal communities and provincial and federal governments. “These differing perspectives may raise issues that go to the broader and ongoing process of reconciliation and treaty interpretation which MNDM does not expect to resolve when discussing specific mineral exploration proposals,” states the MNDM policy. “Canadian courts have generally not recognized a legal right of First Nations to regulate activities of third parties off reserve or to otherwise require First Nation consent to proposed activities.”

NAN wants government-to-government negotiations on resource revenue sharing, Louttit notes, while the MNDM policy cautions: “These are issues that are not appropriately addressed by proponents in the context of early exploration but which are better addressed by the Crown in more appropriate forums.”

Still, the issue of compensation often comes up in consultations with First Nations, says Ewan Downie, CEO and president of Premier Gold Mines. As an example, he shows on the projection screen one exploration agreement proposed by a First Nation to Premier Gold, an exploration and development company, before they had met. Nineteen sections of the proposal involve payment to the First Nation, for consultants, travel and honorarium, compensation for harmful effects and damage before any has occurred, archaeological work, environmental studies, and so on. “I’d have to be out of my mind to sign an agreement like this,” Downie says of the costs and similar expectations from other First Nations he thinks would result.

Junior exploration companies don’t own or earn income from producing mines, he stresses. These juniors raise money for their search “for that next big discovery” by selling shares to investors, explains Downie, but mineral exploration is a “low probability business – 99 out of 100 projects eventually fail.”

Facing new costs for consultation, “Small companies that have budgets of $100,000 or $200,000 can no longer afford to work in this province,” he says.

MNDM policy, however, advises that exploration companies should be prepared to contribute to the capacity of Aboriginal communities to participate in consultation through, for example, “direct reimbursement to communities for their specific expenses related to the process” or “financial support for technical or other advice depending on the complexity of the project.”

In Downie’s view, the modernized Mining Act contradicts the “spirit and intent” of court rulings on the Crown’s duty to consult by making it industry’s responsibility. Hughes acknowledges MNDM is delegating “procedural aspects” of consultation, but says the law allows this. Besides, he adds, exploration companies can best explain and adjust their own projects.

What seems to rile Downie most is the ministry’s policy suggestion that “the willingness of project proponents and Aboriginal communities to formalize commitments through arrangements or agreements … can often help bridge the gap between the differing perspectives,” leading to more certainty and long-term support for a project.

While MNDM policy notes those arrangements should ideally be in proportion to the scope of the exploration project and “not place an excessive burden on the proponent,” Downie considers it “irresponsible of the Crown to allude to agreements” at such an early stage of development. Agreements at the exploration stages often take months to negotiate without guaranteeing any long-term benefits to communities, he says. “Often negotiations go on longer than the actual exploration program. It might be six to 12 months of negotiations for a one-month exploration program; you don’t find what you want and the company is gone.”

Unquestionably, Ontario’s mineral exploration industry experienced some serious difficulty when the new plans and permits regime took effect, just as the poor bear clinging to the bridge does in his predicament.

A lot of exploration companies reportedly didn’t understand what was required of them as of April 1, so their exploration work abruptly stopped until they could file the necessary paperwork and have it reviewed. Several companies said they discontinued projects in Ontario altogether because of the new regulations.

At the Ontario Mining Forum in June, however, another panelist says little has changed for his company. “Some of these things that I’m hearing today about changes to the Mining Act really aren’t things that are that new to us,” contends Paul Semple, chief operating officer for Noront. “Maybe there’s a bit more paperwork involved. But before April 1, we identified drill sites, we showed our plans to the community and said ‘This is where we’re going,’ and in certain instances we brought appropriate people, Elders, up to look at the sites. We’ve always done that.”

For the Wabun Tribal Council and the six Nishnawbe Aski Nation communities it serves in northeastern Ontario, the new regulatory system is both a blessing and a curse, says Shawn Batise, Wabun’s executive director. “It is a blessing because prior to this, we had no idea who was out on the landscape. Now we do,” he says. “It is a curse because despite MNDM’s assistance, we are overwhelmed with permit requests.”

Wabun receives copies of all requests for consultations with its member First Nations and co-ordinates responses. For the first six weeks or so the new rules were in effect, “We were receiving 20-30 e-mails a week regarding notification and permit requests,” Batise says. In the weeks that followed, the tribal council was still getting up to 10 of those e-mails a week.

“On average, processing one permit request takes three to five business days for one person,” says Batise, “and this does not include the community consultation that is required.”

As it has for other tribal councils, MNDM provided funds for Wabun to hire a mineral development advisor, along with an assistant, to handle some of the work. As of June, Wabun was considering an MNDM offer of funds for another position or two.

Batise says the ministry expects as many as 600 notifications and permit applications just for the Wabun area – the busiest in the province for exploration and mining – in the first 12-18 months of the new system.

Not helping matters, Batise says, are companies filing plans and applying for permits even though they don’t intend to drill in the near future, or ever. “They only want to make the property more marketable (and) having a permit in hand does that,” he explains.

“I will say that MNDM has been accommodating thus far and if we have issues with permits around timing, processes, consultation issues, they have worked with us. For the most part industry has been positive to work through this as well.”

His early, overall assessment of the new system? “Although not perfect or what we would have preferred, it is doing what it intended, which is provide for early consultation with First Nation communities,” he says. “The fact that we are now aware of who is on our traditional territory is a good thing. Exploration companies that would not have otherwise approached us are now bound by legislation to do so.”

According to Hughes, MNDM had as of mid May received 161 exploration plans and 280 permit applications. About half of the applications had been approved, others were being processed and 10-15 were on “temporary hold.” There are still difficulties to work through, he acknowledges, but there hadn’t yet been a need to use a dispute resolution mechanism available for industry-Aboriginal consultations.

“The system is working,” Hughes says. Court decisions aside, “it was the right thing to do.”

Hughes sees in the bear projected on the screen, trying to figure out how to get safely off the bridge, some of the same characteristics he thinks the mineral exploration industry has: some uncertainty and risk, sure – that’s the nature of the business – but also strength and determination.

“There was a happy ending,” he says at the end his presentation. He clicks to his final slide, which shows the bear cradled in a rescue net. “The bear made it.”