No veto power, but First Nations still have clout
‘No veto,’ but Trans Mountain highlights influence of Indigenous communities
Many First Nations in B.C. have declared projects on their traditional territories need their consent to get built, a major issue for developers most recently accentuated in the dispute over Kinder Morgan’s $7.4-billion Trans Mountain oil pipeline expansion.
But the law in Canada does not say projects need First Nation consent, even as governments in Canada adopt the United Nation’s declaration on the rights of Indigenous peoples that calls for free and informed consent before approval of any project affecting their territories and resources. Legally, there is no veto.
But in the evolving Canadian legal, regulatory and political arena, Kinder Morgan is learning some hard lessons from its pipeline project. Even where First Nations don’t hold all the power, a project is difficult to build without their consent.
Those lessons were spelled out this week when institutional investors, prompted in part by First Nations advocacy from British Columbia, called for Kinder Morgan to publish an annual sustainability report that better reflected the environmental, social and governance issues that can pose significant risks to business.
Shareholders had the Trans Mountain project — which will triple capacity to 890,000 barrels a day for bitumen from the Alberta oilsands and is meant to provide better access to markets in the U.S. and open up new markets in Asia — squarely in mind when making the decision.
While the measure is not binding on the Houston, Texas-based company, shareholders clearly want to know how the company is managing these risks.
“It’s not a veto. I want to make that clear,” says B.C. lawyer Jack Woodward, of First Nations’ say on major projects including the Kinder Morgan project.
But the process to properly consult First Nations and also deal with accommodation, and the complex issue of infringement can take years, said Woodward, a leading authority on Aboriginal law.
“Right now, it looks like a veto even though it is technically not a veto,” he said.
Added Woodward: “People, including the shareholders of Kinder Morgan, are realizing that arbitrary deadlines, retaliatory threats, and unfounded claims of jurisdictional superiority, are not the way to get the pipeline built. It is more complicated than that.”
He is referring to Kinder Morgan’s ultimatum that unless it has certainty by May 31 it can construct the pipeline through B.C., it will walk away.
Also on his list is Alberta Premier Rachel Notley’s threat to turn off the fuel tap to B.C. unless the province paves the way for the project, and Prime Minister Justin Trudeau’s threat that he will use federal powers to ensure the project is built.
All are efforts to overcome resistance to the project, including from First Nations.
The law in Canada evolved over decades, with First Nations winning successive key victories at Canada’s highest court.
Among critical Supreme Court of Canada decisions are the 2004 Haida decision defining the federal government’s duty to consult Aboriginal groups before exploiting lands and natural resources to which First Nations may have claims.
Another key court decision was the 1990 Sparrow case that declared Aboriginal rights such as fishing could not be infringed without justification.
Most recently, the landmark 2014 Tsilhqot’in decision granted title to 1,750 square kilometres of territory in the Interior, where the high court said the Constitution permits incursions on that land only for a “compelling and substantial public purpose.”
These decisions have given First Nations increasing clout over projects on their claimed territories.
Neskonlith First Nation chief Judy Wilson, who spoke to the Kinder Morgan AGM, allowed through a proxy provided by an investor, said she tried to impress upon the shareholders that as most First Nations in B.C. had never signed a treaty that their rights had not been extinguished; that the “proper” titleholders have to provide consent on the project.
Wilson, who is secretary-treasurer for the Union of B.C. Indian Chiefs, called it a new reality.
“It’s not the low level of consultation any more — it’s more of a consent-based process,” Wilson told Postmedia News.
The Trans Mountain expansion was given federal approval in late 2016. Two months later, the B.C. government, then led by premier Christy Clark’s Liberals, gave approval to the project.
With those approvals in hand, the company believed there was no reason it could not build the project.
Kinder Morgan had also worked hard to get First Nations’ support.
After six years of discussions, the company signed 43 benefit agreements with First Nations, 33 located in B.C. The agreements would provide $400 million during the construction and operation of the pipeline over 20 years.
But it has proved challenging to get all First Nations along the 1,150 kilometre pipeline to sign on, including on the marine route.
Several First Nations adamantly opposed to the project — including those that hold strategic positions such as the Tsleil-Waututh, whose traditional territory encompasses the project’s marine terminal in Burnaby — launched legal challenges.
The Tsleil-Waututh and the Squamish, Sto:lo, Coldwater, Upper Nicola and Stk’emlupsemc te Secwepemc, challenged approval at the Federal Court of Appeal. The Squamish has a separate challenge of provincial approval at B.C. Supreme Court.
The courts will look at each of the cases individually, so majority rule does not come into play, explained University of Saskatchewan law professor Dwight Newman.
He also stressed that Indigenous communities do not have a veto on a project.
But Newman said anyone who is just waking up to the fact that First Nations have a significant say on these types of projects has not been paying attention.
“It shouldn’t come as a surprise to people that there are implications from Aboriginal rights that have been established in the courts, or Aboriginal rights around consultation, even where there is uncertainty because that law has been developing for the last number of years,” said Newman, who holds a Canada Research Chair in Indigenous rights at the University of Saskatchewan.
The institutional investors that backed the resolution for more disclosure of environmental and social risks included Norway ’s $1.3 trillion sovereign wealth fund and pension funds in California and New York state.
Shin Imai, a professor at Osgoode Law School at York University, called the successful shareholder vote rare and significant.
It underscores that First Nations concerns need to be addressed, said Imai, a director of the Justice and Corporate Accountability Project, an international and volunteer organization.
He thinks the Canadian courts are lagging behind.
Noted Imai: “The United Nations declaration of rights of Indigenous people basically says that Indigenous people have to give their consent. That was in 2007.”