ENVIRONMENTAL ASSESSMENT –WHERE IS IT GOING?

CANADIAN MINING LAW & FINANCE 2009Negotiating Complex Markets

(Canadian Executive Forums)Vancouver, June 15, 2009

Presented By:Caroline Findlay (Blake, Cassels & Graydon LLP), Gary Letcher (Edwards, Kenny & Bray LLP) and

Leon Botham (Golder Associates Ltd.)

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OVERVIEW

• Objective: To highlight significant developments & trends in the EA arena

• Legal Considerations Red Chris; Kemess North Panel; First Nations engagement

• Technical Considerations Climate Change, Sustainability & Cumulative Effects

• Are we in a new era of sustainability?

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RED CHRIS

• The issue presented on the Appeal is whether a mine, or any major industrial project, described on the CEAA Comprehensive Study List must proceed by way of a comprehensive study.

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RED CHRIS

• In Red Chris, DFO determined that the scope of the “project” (that is, those aspects requiring assessment under CEAA) necessitated only a screening report.

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RED CHRIS

• The Appeal will involve the harmonization of section 15 (Scoping) with section 21 of the CEAA.

• The Appellants also focus on the public consultation aspects of section 21.

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RED CHRIS

• The real issue on the Appeal may be whether TrueNorthin the Federal Court of Appeal was correctly decided.

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RED CHRIS

• TrueNorth was an oil sands project. DFO determined that the scope of the project in relation to which the CEAA environmental assessment was to be conducted related to those specific components of the project that were connected to the Fisheries Act approvals that had triggered CEAA.

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RED CHRIS

• The Federal Court of Appeal held that DFO, as the RA, were not required to scope the project as the entire oil sands undertaking and thus were entitled to conduct a screening level assessment.

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RED CHRIS

• In interpreting the statute, the Supreme Court of Canada will be called upon to consider the purposes of the Act as set out in section 4. Section 4 makes express reference to sustainable development and, accordingly, the Court will be called upon to comment upon sustainable development at least in the context of the CEAA.

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“One of the most important benefits of a panel review is the integration of public values into the review process... By the time that the hearing record closed in May 2007, federal and provincial government agencies had advised the Panel that, in almost all important respects, the Project could be implemented in a mannerconsistent with their respective programming and regulatory objectives. While this is an important consideration, the Panelrecognizes that most agencies examine the question of Project acceptability primarily from the perspective of their own well-defined mandates. The Panel believes that it is also necessary to evaluate the Project effects holistically, and to incorporatevalues expressed by the public. In the Panel’s view, compatibility with government requirements does not necessarily mean the Project would not cause adverse effects… or would necessarily be in the public interest.”

Kemess North Copper-Gold Mine Project Joint Review Panel Report(September 17, 2007) at 232.

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SUSTAINABILITY – EVERYTHING OLD IS NEW AGAIN

• The Kemess North Panel’s sustainability perspective is not new; this balancing act is at the heart of all traditional environmental laws

• Foundational principle in Brundtland Commission’s 1987 Report, that coined the concept of sustainability

• Sustainable development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

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DEVELOPMENT STAGE CONSIDERATIONS

• 2007: 19 out of 50 mining projects nationwide were in BC; now 26 BC projects

• over past 6 years, 10 mines have been approved under the EA process

• Kemess North – not approved

• Red Chris – approved but subject to litigation

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KEMESS NORTH

• referred to joint review panel and report recommended the project not be approved

• March 7, 2008 – Ministers of Energy & Mines and Environment accepted Panel’s recommendation to refuse to issue an EA Certificate

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KEMESS NORTH

• Panel’s Analysis

– holistic approach following the “five sustainability perspectives”:

1. Environmental Stewardship

2. Economic Benefit & Costs

3. Social and Cultural Benefits & Costs

4. Fair Distribution of Benefits & Costs

5. Present vs. Future Generations

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KEMESS NORTH

• Panel’s Key Issues:

1. the impact of the loss of Duncan (Amazay) Lake on Aboriginal peoples;

2. the long term legacy of environmental management related to the use of Duncan (Amazay) Lake to dispose of waste rock and tailings;

3. the project’s lack of economic robustness and vulnerability to fluctuations in currency and metal prices; and

4. the modest anticipated operational life of the mine.

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FIRST NATIONS ENGAGEMENT

• In British Columbia, definitely a “new era” as the BC Government embarks on a legislative initiative:

Recognition and Reconciliation Act

• Described as a “seismic” change in the law by the Vancouver Sun (March 6, 20019)

• Proposes to develop new ways for shared decision-making and revenue-sharing over land and resources

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FIRST NATIONS ENGAGEMENT

• Confluence with EA process is law on the duty to consult & accommodate

• Framework set out by Supreme Court of Canada:

– Haida, Taku River and Mikisew Cree cases

• Recent affirmation that NEB process satisfies consultation/accommodation process:

– Brokenhead Ojibway Nation v. NEB

• Open question: BC’s Mineral Revenue Sharing Policy (November 2008)

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TECHNICAL OBSERVATIONS IN EAs

• Cumulative Effects Assessment

• Traditional Knowledge

• Climate Change

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COMMULATIVE EFFECTS:SPATIAL AND TEMPORAL BOUNDARIES• Spatial Boundary

– Local study area

– Regional study area

– Beyond Regional Study Area

• Temporal Boundaries

– Development phases of the Project

– Predicted duration of effects on VCs from Project

– Incorporates sustainability

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COMMULATIVE EFFECTS: EFFECTS ANALYSIS

• Examines all valid pathways that result in expected changes to VCs, after implementing environmental design features (i.e., residual effects)

• Measurement endpoints are used to analyze residual effects to VCs for each valid pathway

• Analyses are quantitative and qualitative

• Predicted changes are described numerically and qualitatively

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COMMULATIVE EFFECTS: EFFECTS ANALYSIS

• Cumulative Effects

– Sum of all natural and human-induced influences on VCs through time and across space

– Typically occur beyond the local and regional scales

– Project (incremental) effects occur at local and regional scales

– Objective is to estimate the amount of change in a VC that is due to the Project, other previous and existing developments, and natural factors

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EFFECTS ANALYSIS

Development

Zone of Influence

A

BC

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EFFECTS ANALYSIS

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TRADITIONAL KNOWLEDGE

• Review panels are becoming more reliant on TK as well as conventional scientific knowledge

• Proponents must:

– Make efforts to collect relevant Traditional Knowledge

– Include TK in project design, impact prediction and mitigation measures

– Provide plans for cooperation between the developer and traditional knowledge holders

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TRADITIONAL KNOWLEDGE

• Various models for inclusion of TK in Project design

– Impact Mitigation

• Erection of Inukshuks to divert Caribou from danger

– Environmental Stewardship

• First Nations becoming involved as regulator

– Sustainability

• First Nations becoming involved as partners in project development

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CLIMATE CHANGE• North is particularly vulnerable to climate change

• Proponents must evaluate projects as potential GHG contributors

– Quantity of emissions

– Project alternatives, including GHG offsetting options

– Linkages between GHG prevention and other environmental opportunities

• Include impacts of various climate change scenarios on project development

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1. Appreciate the Meaning of Sustainability

2. Be Prepared for a Rigorous and Dynamic EA process

3. Watch for New Developments and Stay Vigilant on Compliance and Due Diligence

CONCLUDING THOUGHTS: STAYING SUSTAINABLE