Court orders consultation with First Nations before granting mineral claims in BC

In a landmark case, the British Columbia Supreme Court (“BCSC”) has addressed the issue of whether the ‎Crown must consult Indigenous groups prior to registering mineral claims in BC. In the current system, ‎‎“free miners” stake claims online without any prior Crown consultation with potentially affected ‎Indigenous groups. As a result of this decision, BC’s mineral tenure system will need to change.‎

Key takeaways

1. The BCSC found that the Crown owes a duty to consult Indigenous groups prior to granting mineral ‎claims to prospectors or “free miners” on lands on which Indigenous groups assert Aboriginal rights. ‎
2. The BCSC gave the province 18 months to consult with the mining industry and Indigenous groups to ‎modernize the mineral tenure system to address the Crown’s duty to consult. This could mean changing ‎the way the Chief Gold Commissioner exercises discretion, or amending the Mineral Tenure Act.‎
3. The BCSC found that the Declaration on the Rights of Indigenous People Act (“DRIPA”) does not ‎‎implement the UN Declaration on the Rights of Indigenous People (“UNDRIP”) into BC law, and that it is ‎not up to the courts to decide whether the Province’s laws are consistent with UNDRIP.‎
4. The BCSC decision does not impact existing mineral claims in BC. All existing mineral claims remain ‎valid.‎
5. ‎Ultimately, the BCSC held that the province owes the duty to consult. The court did not find the ‎Mineral Tenure Act to be unconstitutional, nor did the court grant the Indigenous groups’ ‎requests for an interim and permanent injunctions or quashing existing mineral claims on lands in ‎which they assert Aboriginal rights‎

Case background

In Gitxaala v. British Columbia (Chief Gold Commissioner), the BCSC considered whether British Columbia is under a constitutional obligation to consult with Indigenous groups prior to the registration of mineral claims in their asserted (but not established) territories.

The petitioners in the case were the Gitxaala Nation and the Ehattesaht First Nation (the “First Nations”). The Gitxaala and the Ehattesaht named as respondents some individual holders of mineral claims on their respective territories, seeking declarations to quash those mineral claims, as well as a declaration that the Mineral Tenure Act (British Columbia) (the “MTA”), under which mineral claims are granted, is unconstitutional. However, ultimately the issue before the BCSC was the operation of the mineral tenure system as a whole, and how decisions are made about the registration of mineral claims in British Columbia.

The free miner system in British Columbia

The MTA and the Mines Act regulate the continuum of activities from mineral exploration to mineral extraction. In general, tenures granted under the MTA permit initial exploration to identify potential mineral deposits. The MTA is administered by the Chief Gold Commissioner (“CGC”). ‎Permits under the Mines Act regulate activity on mine sites, including exploration that results in disturbance in the land, constructing a mine and extracting minerals.

In BC (as well as most Canadian and US jurisdictions), the “free entry system” provides “free miners” with the right to enter lands in pursuit of Crown minerals and the right to obtain a mineral claim. A person must be a “free miner” to record a mineral claim, meaning a person must obtain a Free Miner Certificate in compliance with the MTA through the Mineral Titles Online (“MTO”) registry.

The duty to consult

The Crown’s duty to consult Indigenous groups has been established in Canadian law through the case of Haida Nation v British Columbia (Minister of Forests) (“Haida”). In the Haida case, the Supreme Court of Canada (“SCC”) established three elements triggering a duty to consult, namely:

1. the Crown’s knowledge, actual or constructive, of a potential Aboriginal claim or right;‎
2. the Crown contemplating activity; and
3. the potential that the contemplated activities may adversely affect the Aboriginal claim or right.‎

To trigger a Crown duty to consult under the Haida test, the Aboriginal claim or right in question need not ‎be proven; it will suffice for the Crown to have actual or constructive knowledge of the potential for its ‎existence and that such claims or rights may be impaired by governmental decisions. ‎

The positions of the parties

All parties agreed that the first two parts of the Haida test were met, and the case ultimately turned on whether the third element of the Haida test was satisfied. Specifically, the BCSC divided the petitioners’ submissions on the impacts to their Aboriginal rights into two categories:

1. non-physical impacts, including a loss of decision-making power over asserted territory, undermining existing legal orders and governance, and cultural and spiritual impacts arising from interference with places of spiritual significance; and
2. physical impacts, including a potential loss of minerals and mineral rights, a loss of financial benefit of the minerals, and a non-negligible disturbance to the land.

The First Nations argued that the duty to consult under the Haida test ‎arises when a free miner applies for a mineral claim under the MTO registry. ‎Conversely, the province took the position that its duty to consult arises after the granting of mineral tenure. They ‎contended that some level of consultation is required only if the initial exploration is successful and the ‎miner seeks to proceed with the level of exploration requiring a Mines Act permit. The province ‎asserted that the physical impacts on the land at the mineral tenure stage are “nil or negligible”, and that ‎the non-physical impacts to Aboriginal groups do not trigger an adverse impact for the purpose of the ‎Haida test because Aboriginal title has not been established.‎

The BCSC decision

The BCSC found, applying the Haida test, that the current system of granting mineral claims does trigger a duty to consult because it causes an adverse impact upon Aboriginal claims and rights. The BCSC accepted the First Nations’ position that the system has non-physical impacts (on areas of significant cultural and spiritual importance), and physical impacts (on the rights of Aboriginal groups to own, and benefit financially from, the minerals within their asserted territory).

Regarding non-physical impacts, the BCSC looked to the perspective of the First Nations, and found that cultural and spiritual impacts on the First Nations ‎amounted to an adverse impact for the purpose of the ‎Haida test.‎ For Ehattesaht, this impact is in ‎regards to crystals being removed permanently from Ehattesaht territory, and for Gitxaala, the impact is ‎in mineral claims being allowed in the spiritually sacred Ksgaxlam area. ‎

Regarding physical impacts, the BCSC found that the holder of mineral claims under the MTA is authorized to collect and extract a prescribed amount of minerals from the claim area (although it should be noted that any substantial extraction or removal requires a Mines Act permit, which already requires consultation with Indigenous groups). As permanently removing minerals is irreversible, this may amount to a permanent reduction in the land’s value, and thus a reduction in the value of the asserted territory. While a mineral claim is temporary, the removal of minerals is not, and so the BCSC found that the removal of minerals from the land could constitute an adverse impact for the purpose of the Haida test.

Similarly, the BCSC noted that holders of a mineral claim have the right to engage in a limited amount of pitting, trenching, drilling and conducting geological sampling using only hand-held tools, and may set up temporary residences on the claim area in tents or trailers. The BCSC found that such activities, though limited, may cumulatively have an adverse effect on a First Nation asserting Aboriginal rights.

The BCSC did not agree with the First Nations’ position that granting a mineral claim triggers a duty to consult based on asserted Aboriginal rights to manage territories in accordance with their legal systems and systems of government. The BCSC distinguished between proven Aboriginal title and an asserted right. As the Province already administers the territory at present, the role of the Province is to preserve the territories such that each First Nation can exercise its rights after Aboriginal title is settled. For the duty to consult to be triggered, the Crown conduct must impede on the current state of the asserted Aboriginal claim. For cultural and spiritual impacts, as well as impacts to mineral rights and financial benefit, the BCSC found that there is an impact based on the current legal rights of the parties, whereas in regard to legal systems and governance impacts, there is not.

As an additional point, the BCSC found that the Declaration on the Rights of Indigenous People Act does not implement the UN Declaration on the Rights of Indigenous People into the domestic law of the Province. Further, s. 3 of DRIPA does not create “justiciable rights” when properly interpreted, which means that it is not up to the BCSC to decide whether the province’s laws are consistent with UNDRIP, but rather that this interpretive exercise is an obligation that falls on the consultative process between the Crown and Indigenous groups. The BCSC noted in its decision that it is “cognizant that these reasons may represent the first in a long progression of judicial considerations of UNDRIP and DRIPA”, and that a higher court will ultimately determine the effect of DRIPA.

The result

The BCSC held that the province owes a duty to consult in relation to the mineral tenure process. However, the court found that the MTA is not constitutionally invalid, and that the CGC has discretion within the existing MTA to create a structure that provides for consultation with First Nations prior to granting mineral claims. The BCSC gave the province 18 months to consult with the mining industry and First Nations groups to design a regime that allows for consultation prior to granting mineral claims (or, if the province chooses, to amend the MTA to the same effect). The court did not grant injunctions or quash existing mineral claims, as had been sought by the First Nations.

The consequences for the mining Industry and Indigenous groups

This case answers key questions regarding the scope of the Province’s duty to consult Indigenous groups, while raising new ones regarding the future of the mineral tenure system. The BCSC has underlined the importance of respect for the constitutional principles that govern the ‎relationships between the Crown, Indigenous groups and private industry in continuing to pursue British ‎Columbia’s bountiful natural resources for the benefit of all British Columbians. There is a clear obligation ‎on the Crown to engage Indigenous groups in this process, and the question remaining is what this looks ‎like in practice.‎

The BCSC quotes former Chief Justice Lamer as stating “let’s face it, we are all here to stay” in reference to the need to resolve differences through negotiation. British Columbia has long been known as a mining friendly jurisdiction, in part because of the ability of prospectors to legally explore mineral claims with the intention of ultimately developing mines. A new mineral tenure regime could have a meaningful impact on exploratory activity and the economic viability of prospecting in BC.

A particular challenge in designing a new regime will be to protect and recognize the fact that ‎prospectors invest significant up-front time, expertise and resources in researching and assessing the ‎geological and economic potential of prospective areas prior to staking claims. The staking of a mineral ‎claim may imply that the prospector expects that the staked area may contain valuable mineralization. If ‎the prospector has no ability to stake a mineral claim before informing others of this fact, then the ‎incentives in any mineral tenure regime are arguably misaligned. The key challenge is how to design an ‎exploration tenure system which still appropriately rewards the valuable function carried out by mining ‎prospectors while respecting the Crown’s constitutional duties to consult with Indigenous groups, and ‎where appropriate, reasonably accommodate their rights and interests.‎

For further analysis and explanation of this issue, please don’t hesitate to reach out to the authors or any member of our Indigenous Law group or our Mining group.