A number of recent court decisions, and new federal enforcement laws passed but not yet in effect, are significant to all businesses with potential resource projects in British Columbia and for operations with environmental impacts.
Environmental assessments are a fact of life for all new resource projects. In late 2009, the Supreme Court of Canada held in MiningWatch Canada v. Canada (Department of Fisheries and Oceans) (a successful challenge to the federal environmental assessment of a B.C. project) that there is no discretion in a federal environmental assessment to rescope a project to allow a lower-level, less-stringent assessment once the project qualifies for a comprehensive review.
The court also suggested there should be federal-provincial co-operation to avoid duplication in such assessments.
While B.C. reacted quickly (in the 2010 throne speech) to suggest it would conclude equivalency agreements to establish “one process for one project,” the federal response was more direct. Tucked into the 2010 Budget Implementation Act were amendments to the Canadian Environmental Assessment Act (CEAA) that confirm comprehensive assessment applies to qualifying projects but also inserted discretion into the act to allow federal authorities to limit the scope of review to components of a project, the issue at the heart of the MiningWatch decision.
The Supreme Court of Canada also ruled this May that a comprehensive agreement with a First Nation does not override the federal environmental assessment process without explicit language. A proposed vanadium mine in Quebec could not avoid a CEAA review by relying on the James Bay and Northern Quebec Agreement that contemplated an environmental review process leading up to the decision of the provincial administrator, as well as federal approvals where necessary. The provincial assessment mandated by the James Bay Agreement was much less comprehensive (as to fisheries matters) than that which the CEAA required.
Perhaps most interesting, and with potentially the most significant impact, will be the Taseko Mines situation regarding the environmental approvals for its proposed Prosperity gold-copper mine project near Williams Lake.
The B.C. provincial environmental assessment found the significant adverse environmental effects were justified and gave an approval. The federal CEAA review panel decision in early July 2010 found there would be significant adverse effects mainly on fish and aboriginal interests and turned the decision over to the federal cabinet with no explicit recommendation to approve or reject the project.
The significant economic benefits of the project (estimated to generate 275 jobs per year in its construction and operation phases, 600 indirect jobs during its 20-year operating life with $200 million in spending in the local economy over the course of the project, and government revenue of $30 million per year) were not within the review panel’s terms of reference.
Cabinet’s decision is due in early September. The manner in which it weighs environmental, aboriginal and economic interests will be of interest to all mining companies operating in Canada.
On the enforcement side, mining is also in the headlights. Syncrude was convicted in June following charges arising from the death of 1,600 waterfowl in 2008 in one of its Fort McMurray, Alberta, oilsands tailings ponds. The conviction included charges under the federal Migratory Birds Convention Act (MBCA), as well as provincial legislation.
Sentencing was set for August 20, 2010, but was adjourned to October when the parties advised that they were trying to work out a creative sentencing arrangement. Syncrude has indicated it would appeal the conviction, but that may be part of any sentencing discussions.
It is worthy to note that Syncrude was convicted prior to the new enforcement provisions for the MBCA, which were passed in June 2009 but are not yet in force.
These much tougher environmental enforcement provisions will see a large company facing a potential fine under the MBCA of $4 million (summary conviction) to $6 million (indictable offence) with a minimum fine of $100,000 (summary) and $500,000 (indictable), as compared with the $300,000 maximum applicable to Syncrude under the current MBCA.
Harsher environmental enforcement may be coming provincially as well. In April, Quebec introduced legislation to be considered this fall that would dramatically increase provincial environmental penalties, similar but more stringent than the new federal provisions. So far, there has been no indication that British Columbia will follow suit, but increased penalties in this area in one jurisdiction have historically prompted consideration and then similar legislation in other jurisdictions.
Bill McNaughton is a partner in the Vancouver office of national law firm Borden Ladner Gervais LLP. He is national leader of the firm’s environmental group and practises in the areas of environmental law and civil and commercial litigation.