Mining News

Ontario Sued by Mining Junior over Consultation Short-Comings

Posted by Alana Wilson on 11/20/2013 4:13:14 PM

By Chris Apps

The legal quagmire of Aboriginal consultation has taken an interesting turn in recent weeks. Northern Superior Resources (NSR) – a Sudbury-based junior miner – has filed suit against the province of Ontario for $110 million on the basis the province has failed to fulfill its duty to consult with First Nations.

The Statement of Claim submitted by NSR notes their three claims, located 740km NW of Thunder Bay, cover approximately 23,178 ha (57,200 ac). These claims lie within the Traditional Territory of the Sachigo Lake First Nation (SLFN), and the Kitchenuhmaykoosib Inninuwug First Nation (KIFN), and are therefore subject to the James Bay Treaty (Treaty 9). The claims are still in the exploration stage, with assessments revealing a gold-rich copper-silver-molybdenum porphyry system and a gold-bearing shear system.

According to NSR, in 2005 the company began to engage in good faith with the SLFN, the only First Nation they were aware of being affected by operations. NSR also engaged with the KIFN at the request of that First Nation; however this was only for a limited time. In 2011 the SLFN proceeded to make unreasonable demands, and in the fall of that year, physically detained two NSR employees in an attempt to obtain payment. [1] These actions lead to NSR terminating their 2011 program early.

The Province of Ontario is accused of failing to provide the miner with any kind of clear framework for consultation. Additionally, the NSR is accusing Ontario of failing to provide any relevant information on the topic of consultation (possible consequences or Ontario’s own proceedings [or lack thereof]). NSR claims it has spent approximately $15 million thus far on acquisition, maintenance and Aboriginal engagement/accommodation.

A lawsuit of this nature sheds light on the changing norms of extractive industries in Canada. Through taking the steps to engage the First Nation regardless of provincial participation, NSR has demonstrated that junior firms – not only the majors – are recognizing the value, and impact, positive relationships can have on their industries. The case also highlights the vital role provincial governments play in consultation processes.

Lawsuits concerning the adequacy of consultation are not uncommon in Canada’s extractive industries, but this adds a new twist to the development of this already complex legal issue. Whereas in the past, claims of this nature have typically been filed by First Nations against a province or company, here is an example of a company filing a claim against the province for receiving a permit too hastily. As a result, the mining rights obtained by NSR under the Mining Act came into conflict with section 35 of the Constitution Act, 1982. By failing to clearly delegate the duty to consult or to proactively solve the issue, the Province of Ontario has given NSR just cause for such a suit. Article 23 of the Statement of Claim notes, “until the events…nothing suggested to NSR that the defendant was of the view that NSR had failed or omitted to do anything it was required to do or that it should have done in order to continue work in the area… or that NSR was not appropriately dealing with any affected aboriginal traditional interests.” [2]

Failures in consultation processes such as this highlight the vast amount of uncertainty the mining sector faces when it comes to engaging with First Nations. Provincial consultation policies across the country each have their own intrinsic problems and, as a result, appear to be in a constant state of adaptive management. In light of these uncertainties, both miners and investors must take cautious and measured steps in preliminary phases of mine planning and Aboriginal engagement.

Show References


1 Some of these demands are outlined in the statement of claim in items 25-30.
2 Northern Superior Resources Inc. Oct. 24, 2013. Statement of Claim Between: Northern Superior Resources Inc. (Plaintiff) and Her Majesty the Queen in Right of Ontario (Defendant). Ontario Superior Court of Justice.  

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