Soon-to-be-released Mining Act regulations will show the Government of Ontario taking seriously its duty to consult with Aboriginal peoples and, more practically, taking seriously the delay in natural resource development which can result from a failure in consultation. These regulations will introduce a mechanism to assist with resolution of disputes between Aboriginal communities and mining sector participants concerning the Crown's duty to consult. This mechanism is important because the duty to consult Aboriginal peoples is a constitutional duty and so can override otherwise valid regulatory approvals.
The new regulations are part of Phase II of the Mining Act modernization project. Phase II regulations will also include a new system of exploration plans and permits which categorizes exploration activities according to their potential impact.
The dispute resolution mechanism will take its basic structure from the Mining Act. Section 170.1 (not yet in force) permits the Minister to designate one or more individuals, or a body, to hear and consider disputes arising under the Mining Act which relate to the duty to consult Aboriginal peoples. Such individuals or body will then report to the Minister and set out recommendations.
During its development of the regulations the Ontario Ministry of Northern Development, Mines and Forestry proposed two streams to the dispute resolution mechanism: 1) a hearing-like procedure for disputes arising in relation to a permit decision, and; 2) a mediationbased process for disputes arising from advanced exploration or pre-production mine activities. Whatever proposal the regulations adopt, they should include provisions concerning: timelines; how any submissions are made, and; the content of any factual record, including whether affidavit evidence is available. Other important matters such as counsel funding for often under-resourced Aboriginal communities may be left to the parties.
The harsh economic conditions facing most Northern Ontario Aboriginal communities and the mineral wealth lying under their traditional lands suggest that the dispute resolution mechanism will be much used.
That is not a bad thing. The danger in failing to consult adequately is evident in two recent judgments. In Wahgoshig First Nation v. Ontario, 2011 ONSC 7708 (January 3, 2012), the Ontario Superior Court of Justice enjoined Solid Gold Resources Corp. from further exploratory activity pending additional consultation. Further, in Taseko Mines Limited v. Phillips, 2011 BCSC 1675 (December 2, 2011), the B.C. Supreme Court enjoined Taseko from undertaking exploratory work and clearing timber – activities otherwise permitted by Taseko's permits.
In addition, use of the dispute resolution mechanism may help industry participants demonstrate to investors that they have addressed any environmental, social and governance (ESG) concerns. Such concerns, including observance of the principle of free, prior and informed consent (FPIC) are receiving increasing attention in the natural resources sector.
The new Mining Act dispute resolution mechanism will provide an additional tool to help the mining industry, and for many will be unavoidable. However, it will not change the best advice for industry participants: consult early and often and, most importantly, build a relationship.
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