The duty to consult Indigenous communities — what it means and how it should be properly executed — is now a key issue for pipeline and petroleum companies hoping to proceed with proposed mega projects.

This was more than evident earlier this week in downtown Calgary when about 250 people gathered for lunch in The Palliser Hotel eager to hear a panel of experts discuss two recent Supreme Court of Canada decisions and their impact on resource project applications.

The two unanimous judgements rendered at the end of July both involved the responsibility of the National Energy Board (NEB) to conduct thorough consultations on behalf of The Crown with Indigenous communities impacted by resource development.

Clyde River, Chippewa of the Thames Cases Show Importance of Consultation

One decision, Clyde River, involved an authorization granted to Petroleum Geo-Services Inc. (a Norwegian-based company) to conduct marine seismic testing in Baffin Bay and Davis Strait. The Clyde River Inuit community asserted that the noisy underwater explosions would impact its treaty rights to harvest marine mammals such as seals, narwhals, whales and fish.

The NEB gave the go-ahead anyway. But the Supreme Court found that the NEB had only considered environmental effects and had given no consideration to the source (Treaty) of the Inuit community’s rights to harvest marine mammals, nor to the impact of the proposed activities on those rights.

“There were no oral hearings, and there was no participant funding. While these procedural safeguards are not always necessary, their absence in this case significantly impaired the quality of consultation,” the court found.

The second Supreme Court decision dealt with the Chippewa of The Thames First Nation in southwestern Ontario and Enbridge’s Line 9 oil pipeline reversal. In this case, the Supreme Court found that the NEB had conducted thorough consultations with the community. It also affirmed the NEB’s capacity and expertise to assess thorough consultation and accommodation to Indigenous communities.

The Supreme Court decisions not only reaffirmed the NEB’s duty to consult, they elaborated on what thorough consultation looks like, said Dwight Newman, Canada Research Chair for Indigenous Rights in Constitutional and International law at the University of Saskatchewan.

“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 subject to litigation,” he said during the panel organized by the University of Calgary’s School of Public Policy.

Resource Companies Grapple With Supreme Court Decisions on Duty to Consult #Indigenous Communities https://t.co/anD2jUvFTK #cdnpoli

— DeSmog Canada (@DeSmogCanada) August 24, 2017

‘Litigation Not the Answer’

Another member of the panel, Norine Saddleback, who hails from Maskwacis in central Alberta and is a member of the National Indigenous Monitoring Committee for the Kinder Morgan pipeline, said she much prefers thorough consultation that results in impact agreements to paying scores of lawyers to go to court.

“We are trying to build bridges with people who have been in our back yard for a long time,” she said. Several First Nations in the area where she lives have developed oil resources on their territory in partnership with petroleum companies.

“As Indigenous people our job is to provide balance. To protect the environment and our Indigenous use of the environment,” Saddleback said. “That can be done if Indigenous people are taken seriously by proponents.”

Gerry Chipeur, a Calgary lawyer who has represented the interests of both project proponents and Indigenous communities, said relying on the courts to settle development disputes is risky business.

“Litigation is not the answer,” he said.  

Panel participants agreed that the two recent Supreme Court decisions were an important indicator of  the future role of the NEB which is currently undergoing a modernization review initiated by the federal government.

The review’s mandate includes Indigenous engagement and public participation.

Regulators May Be Vehicles for Consultation

Gaetan Caron, former chair of the National Energy Board, said the Supreme Court decisions affirm that the regulatory body is a vehicle through which The Crown can carry out its responsibilities to Indigenous people.

“The Crown has to consult and accommodate so why not use the regulatory body to carry out those responsibilities?” he said.

Both the court cases discussed during the Calgary panel involved instances where the NEB was authorized to make the final decision on a project.

Feds Took a Different Tack With Kinder Morgan Trans Mountain Consultation

These cases differ from the legal challenge of the Kinder Morgan Trans Mountain pipeline approval, where the NEB merely made a recommendation to federal cabinet and cabinet made the final decision.

Nigel Bankes, an expert in Indigenous and resource law at the University of Calgary was not on the panel, but in a recent law faculty blog he discussed the implications of the two Supreme Court decisions on legal proceedings challenging the federal government’s approval of the Trans Mountain pipeline.

Bankes contends that in the Trans Mountain case, the federal government did not rely on just the NEB process to discharge its responsibility to consult and accommodate. Having learned from mistakes during the Northern Gateway project proposal, the federal government took supplementary steps to improve its consultation and accommodation practices.

“The federal Crown undertook further consultation through the Major Projects Management Office and, as well, appointed the Trans Mountain Pipeline Expansion Project Ministerial Panel to engage potentially affected communities close to the proposed pipeline and shipping corridors.

In addition, the federal Crown itself conducted more intense consultation and accommodation activities in conjunction with the provincial Crown,” Bankes wrote.

Bankes also contends that the Chippewa of the Thames First Nation decision is confirmation that consultation and accommodation with respect to Trans Mountain will focus on the particular application and not on past decisions with respect to that same pipeline.

While the “new project” that was before the NEB in Chippewa of the Thames was small, the same cannot be said of Trans Mountain since it involves a very significant expansion in both pipeline capacity and tanker shipments, Bankes wrote.

The B.C. government recently announced it has hired renowned lawyer Thomas Berger and will seek intervener status in the court challenges, expected to be heard this fall.

Image: Idle No More, 2012. Photo: Zack Embree

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Chevron lost a high-profile pollution case in Ecuador in 2011 and was ordered to pay $9.5 billion for cleanup of billions of gallons of toxic waste in the Amazon rainforest. So far, the company hasn’t paid a dime — but a recent ruling in Canada might finally force Chevron to pay up.

Chevron appealed the 2011 ruling all the way to Ecuador's highest court, the National Court of Justice, which voted 5-0 in 2013 against the company. But Chevron still refuses to comply with the ruling, and since the Big Oil behemoth has no assets in Ecuador, the plaintiffs were forced to seek enforcement of the decision elsewhere.

Last Friday, the Supreme Court of Canada ruled unanimously to allow Ecuadorian plaintiffs to pursue just such an enforcement action. In the majority opinion, Justice Clément Gascon wrote that the ruling had implications for attempts to hold the entire global oil industry accountable for its pollution and other abuses.

“In a world in which businesses, assets and people cross borders with ease, courts are increasingly called upon to recognize and enforce judgments from other jurisdictions,” Gascon wrote in the 7-0 ruling, according to The Globe & Mail. “Sometimes, successful recognition and enforcement in another forum is the only means by which a foreign judgment creditor can obtain its due.”

Some 30,000 Ecuadorians have been affected by the oil pollution in the Amazon, left behind when Texaco (which Chevron bought in 2000) ceased operating hundreds of oil wells in the country in 1990.

Humberto Piaguaje, the Coordinator of the Union of People Affected by Texaco, welcomed the ruling, saying in a statement, “after 22 years we can perform actions to collect the judgment against Chevron and immediately start repairing our territories."

Chevron is fighting a multi-front battle against the Ecuadorian judgement. The company secured a favorable ruling under RICO statutes in a New York court last year after its lawyers convinced a federal judge that the Ecuador ruling was the result of a corrupt judicial process.

The company has also entered into an arbitration process at the Hague, where its lawyers are attempting to argue that the government of Ecuador absolved Texaco of all liability when it ceased its Ecuador operations and left the country 25 years ago, though Chevron’s main legal defense in that case recently hit a major snag when it was rejected by the arbitrators.

Chevron once issued a statement threatening the Ecuadorians with "a lifetime of appellate and collateral litigation" if they continued to pursue their lawsuit — a company official later vowed to "fight until hell freezes over . . . and then we'll fight it out on the ice" — and the company appears to be making good on that threat.

Still, the Canada ruling comes at a bad time for Chevron, which has lost as much as $100 billion in market value over the past year thanks to cratering oil prices and other factors. Among them is the fact that the company made $24.7 billion from operations over that same time period while laying out $41.7 billion in expenditures and dividend payments.

At some point, says Amazon Watch’s Paul Paz y Miño, Chevron investors have to start wondering if the billions spent by the company on its aggressive, scorched earth legal strategy have really been worth it — especially as Ecuadorians continue to get sick and die as a result of the pollution still littering the forest floor.

“What does that say about [CEO John Watson’s] leadership? If I were a shareholder I’d say you have to pay this back to the company. You can’t mismanage the funds of our shareholders any further,” Paz y Miño told DeSmog.

The Financial Post reports that Chevron has assets worth roughly $15 billion in Canada, more than enough to satisfy the Ecuadorian judgement.

The Canadian assets include a network of Chevron gas stations in B.C.; a 20 per cent-stake in the Athabasca Oil Sands Project in Alberta; a 26.9 per cent interest in the Hibernia Field and a 23.6 per cent interest in Hibernia South Expansion off the shore of Newfoundland and Labrador; a 26.6 per cent interest in the Hebron Field in Newfoundland; an interest in the Duvernay Shale Field; and an interest in the Kitimat LNG Project in B.C.

The Ecuadorian plaintiffs say they want to seize and sell the shares of Chevron Canada to satisfy the $9.5 billion judgment — which has actually risen to $10 billion with interest, according to Amazon Watch’s Paz y Miño, who says the Canadian courts will count that interest.

But even if the plaintiffs ultimately win the enforcement action in Canada, a judge will still have to sort through the so-called "corporate veil" and determine whether the seizure of assets owned by Chevron Canada, which is not directly owned by Chevron, can be used to satisfy the latter's debt. No less than seven companies stand between Chevron Canada and its US-based parent company, according to the Financial Post.

In the end, however, Paz y Miño says the lawsuit has never been about money.

“They’re sitting there twisting a knife into the people of Ecuador,” he told DeSmog. “This isn’t about saying, ‘These people were responsible for something that happened in the past, and they should be held accountable.’ It’s about stopping the poisoning of people that’s still going on. Chevron is continuing to poison people, and won’t clean up the pollution.”  

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A group of citizens fighting to speak about climate change and the oilsands at National Energy Board (NEB) reviews of pipeline projects, like the current Kinder Morgan Trans Mountain pipeline, are taking their battle all the way to the Supreme Court of Canada.

The group, comprised of landowners, academics, owners of business and many others, filed a constitutional challenge against the NEB’s restrictive policies that limit public participation and prevent discussion of climate and upstream oil and gas activities.

The purpose of taking the challenge to the Supreme Court “is to ask that Court to direct the NEB to do its job properly," David Martin, legal counsel, explained in a statement.

“The NEB's claim that it cannot consider scientific evidence regarding the long term impacts of the export of bitumen is simply wrong," Martin said.

"Instead the NEB is making a misguided choice to adopt an unconstitutionally narrow interpretation of its jurisdiction so as to avoid having to address the real competing public interests that pipeline approval applications necessarily entail."

In 2012, the federal government amended the National Energy Board Act, giving the NEB the final say in major infrastructure projects including pipelines.

The change, made through the infamous omnibus budget bill C-38, was accompanied by new rules limiting the length of hearings, who can participate in those hearings and what they can speak about.

“Given the potential environmental and health impacts of these pipeline projects, full public hearings on the merits and risks of the proposals are necessary to properly assess the public interest. This is precisely what the NEB has refused to do,” Martin said.

Over 468 individuals were prevented from participating in the Kinder Morgan Trans Mountain pipeline hearing process in April 2014. A group of 27 climate experts were prevented from participating on the basis that they wanted to dicuss the implications of the project for Canada's climate targets. 

The following month a small group including ForestEthics Advocacy Association and long-time environmentalist and author Tzeporah Berman, filed two motions with the NEB, challenging the constitutionality of the board’s exclusion of members of the public.

The NEB struck down the motions in October 2014, stating public hearings are not a forum for free expression.

Following a failed attempt to challenge the NEB in the Federal Court of Appeals, the group was left with no choice but to seek leave for appeal at the highest level in the Supreme Court of Canada.

“Due to rising public concern, the new CEO of the NEB Peter Watson has been touring the country telling Canadians the NEB does not have the mandate to look at issues related to climate change, and this is simply untrue,” Berman, applicant in the Supreme Court challenge, said.

“This case makes it clear that the Harper government gave them the mandate in Bill C-38 when they eliminated independent environmental assessments and gave the NEB broad jurisdiction to consider environmental impacts.”

The group argues the NEB’s role in assessing the long-term impacts of projects like pipelines — including expansion of the oilsands and associated climate impacts — “is a quintessential issue of national importance.”

Public participation in such assessments, the group also states, “is essential to democracy under the rule of law, particularly in a country whose economy and future is closely tied to the intelligent exploitation of our natural resources.” 

The Supreme Court of Canada has the authority to review any decisions made in the Federal Court of Appeal that involves matters of public importance.

The group advancing the challenge hopes the Supreme Court will restore the purpose of the NEB Act, to enable public participation and include public interest in a long-term assessment of major infrastructure projects like pipelines.

The decision will affect not only the Trans Mountain pipeline expansion, but will have implications for the Enbridge Line 9 project planned to carry oilsands crude between Ontario and Quebec as well as TransCanada’s Energy East pipeline, a massive project projected to carry more than 1 million barrels of oilsands crude to export facilities in New Brunswick each day.

Last month a coalition of groups including 350.org and LeadNow delivered a petition signed by more than 100,000 Canadians that demanded the NEB consider climate change in its review of the Energy East oilsands pipeline project.

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