Canadian aboriginal victory jeopardise energy projects

Canadian aboriginal victory jeopardise energy projects
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Late June, Canada’s Supreme Court granted the First Nations group Tsilhqot’in aboriginal title over a vast area of land in British Columbia. The ruling puts energy and natural resource projects there in limbo.

The ruling found that the group has the right to not only live on the land, but decide how that land is used for the current generation and for those to follow. It is the first time in Canadian history that aboriginal title has been given to a First Nations group over territory in the country. The ruling will apply not just in British Columbia but across the country, and creates an important precedent which many say Canadian courts have moved toward since the 1970s.

The finding will have an enormous impact on the natural resource sector, one of Canada’s most important economic drivers. Prior to the Tsilhqot’in ruling, both the Canadian government and businesses were urged by courts to “consult” with First Nations groups before embarking on energy or mineral project. This often meant signing Impact and Benefit Agreements (IBAs) with local populations which frequently included measures to hire First Nations workers, safeguard the local economy, and make payments to the band.

Now, as a result of the latest court decision, companies and the government are legally required to obtain the permission of the aboriginal groups that live on those lands.

However, the Canadian government will be able to override this condition if it can make a compelling case that the overall outcome of the government program that uses the land outweighs any possible detrimental impacts on that community.

Claims challenge Northern Gateway pipeline

The impact of the ruling is already having an impact, with several aboriginal groups filing claims in courts asserting that the government’s proposed Northern Gateway pipeline is an imposition on lands for which these groups claim aboriginal title. The Northern Gateway pipeline is a controversial pipeline plan put forward by Prime Minister Stephen Harper which would stretch 1,177 kilometers from Edmonton, Alberta to Kitimat, B.C. to transport 525,000 barrels oil per day, which would then be shipped to China and other Asian customers.

In these cases, First Nations groups must first prove that they have inhabited the land historically before the court can find that they are eligible for the claim. As of July 14, First Nations groups had filed at least nine legal challenges to the Northern Gateway pipeline in court.

The Tsilhqot’in decision has been met with consternation among business leaders, who contend that the likelihood of pushing forward with mining, energy, and other natural resource ventures has been jeopardized by giving First Nations the power to block economic development via the exploitation of resources.

First Nations groups, however, have emphatically denied this, pointing out that they are not against development but would prefer being considered partners in future ventures, instead of having their land rights overlooked while communities surrounding the project experience few benefits.

Aboriginal claims not the only obstacle

It is a mistake to assume that this Supreme Court decision alone will cause more roadblocks by aboriginal groups to burgeoning resource endeavours. A lack of clarity in provincial and federal laws over aboriginal rights to land and companies’ duties towards local groups has already stymied its fair share of projects, most notably Cliffs Natural Resources’ proposed chromite project in Ontario’s remote Ring of Fire region.

Several factors came to play in Cliffs eventually abandoning the billion-dollar project, but a failure by both the company and the Ontario provincial government to effectively consult with local groups in the area ultimately resulted in a stalemate, leading to a tremendous loss in potential revenue for everyone involved in the project.

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