Environmental, Indigenous and Natural Resources Blog

On June 17, 2021, a Joint Review Panel (the “Panel”) acting in its capacity as the Alberta Energy Regulator (AER) denied approval of the Grassy Mountain Steelmaking Coal Project (the “Project”), a proposed open-pit coal mine, on the basis that the Project would likely result in significant adverse environmental effects. On January 28, 2022, the Alberta Court of Appeal released its decision denying Benga Mining Limited (Benga), Piikani Nation (Piikani), and the Stoney Nakoda Nations (Stoney Nakoda), the right to appeal the Panel’s decision.

Before proceeding to a public hearing, the Panel reviewed materials submitted by Benga, including an environmental impact assessment (EIA). In June, 2020, the Panel issued a letter informing Benga that the content of its EIA report was deemed “complete pursuant to section 53 of [the Environmental Protection and Enhancement Act (EPEA)]” (the “Completeness Decision”).

As the key reason for denying approval, the Panel cited the likelihood of significant adverse effects to the environment and sites of physical and cultural heritage for three Treaty 7 First Nations. The Panel also found that Benga’s EIA took a limited approach to assessing the Project’s cumulative environmental impacts and failed to consider certain risks that could reduce the Project’s positive economic impacts.

Benga appealed the Panel decision on the following grounds:

1. A denial of procedural fairness relating to the Completeness Decision;
2. The Panel failed to consider the South Saskatchewan Regional Plan;
3. The Panel ignored relevant material evidence;
4. The Panel failed to consider rules of expert evidence and reliability concerns; and
5. The Panel erred in finding Benga’s satisfaction of Alberta’s Mine Financial Security Program was inadequate.

The Stoney Nakoda and Piikani Nations further appealed on the following grounds:

1. The Panel did not properly consider the public interest test or the Honour of the Crown;
2. The Panel erred by failing to seek further information from the Stoney Nakoda and Piikani; and
3. The Panel limited their own consideration via their Terms of Reference.

Key Findings of the Alberta Court of Appeal

While the Court of Appeal made a number of findings on the listed grounds for appeal, this blog focuses on two key issues: the significance of an EIA completeness determination and the responsibility of the Panel in assessing socioeconomic effects of a Project as part of its public interest determination.

The Significance of an EIA Completeness Determination

Benga argued that because the Panel issued the Completeness Decision prior to the Panel hearing, it was procedurally unfair and an error in law for the Panel to go on and deny the approval on the basis of insufficient information from Benga.

The Court found that Benga’s position did not have arguable merit. The issuing of a Completeness Decision only means that the submitting party has met all of the requirements outlined in EPEA. It is merely an expression of the Director’s opinion that the matter is ready to proceed to the next stage of the assessment process and does not equate to Project approval, as the evidence of the proponent is yet to be tested at a public hearing.

The Court opined that the issuance of an EIA completion letter does not preclude a Panel from finding that an EIA contains informational deficiencies and, on this basis, recommending against project approval. Furthermore, the fact that a Panel can request additional information through the public hearing process makes it evident that a completeness decision does not preclude the Panel from denying a Project due to the insufficiency of information on a particular issue; such a determination would be “at odds with the requirement that hearing participants have an opportunity to meaningfully participate in the public hearing process.” The obligation to satisfy the Panel’s informational requirements rests on the project proponent and, in this case, the process implemented by the Panel before and during the hearing was not unfair.

The Panel’s Obligation to Consider the Socioeconomic Impacts to Stoney Nakoda and Piikani in Denying the Project

Stoney Nakoda and Piikani argued that the Panel failed to consider, apply and assess both the public interest and the honour of the Crown as it related to various considerations, including the economic benefits and implications associated with approval of the Project.

Both Nations entered into private benefit agreements with Benga that were not filed as evidence in the proceeding. Without those agreements or any further evidence, the Panel found that it could not “undertake a detailed assessment of the effects of the Project on the socioeconomic conditions of Stoney Nakoda and Piikani.”

Nevertheless, while the Panel did not have enough information to undertake a detailed assessment of the effects of the Project, the Court found that the Panel did in fact consider whether the project was in the public interest and, accordingly, was able to fulfill its mandate in a manner consistent with the honour of the Crown. The Panel’s decision considered the potential positive socioeconomic impact on Indigenous people and communities in the area, finding that the positive economic impacts of the project would be relatively modest.

The Stoney Nakoda and Piikani further argued that the Panel had a positive obligation to seek information from these groups about the social and economic effects of denying approval.

The Court found that this ground of appeal had no arguable merit because the Panel had sufficient information to fulfill its mandate. The Court also commented that the Stoney Nakoda and Piikani were granted full participation rights in the hearing. It was not the responsibility of the Panel to seek further information. While Stoney Nakoda and Piikani were not asked an explicit question about what they would lose if the Project did not proceed, the record was clear that Stoney Nakoda and Piikani were not limited by the Panel as to what information they could file in support of the Project, including information in relation to the benefit agreements.

Key Takeaways

1. A Completeness Decision does not represent agreement with its contents

An EIA completeness decision from a decision maker does not constitute a decision maker’s agreement with the accuracy of the report or the strength or reliability of its contents. A completeness determination also does not denote a forthcoming approval for a project. EIA completeness is only a single step in the regulatory process and does not preclude a later finding with respect to its sufficiency, particularly as it relates to issues that arise during a hearing from interested parties or Panel members.

2. The onus is on the project proponent to ensure that an EIA is accurate and sufficient

The Panel is under no obligation to “fill in the gaps” of a proponent’s EIA. The public hearing process is designed to test the strength, accuracy, and reliability of the research methodology and findings of a proponent’s EIA. It is important that an EIA consider both the positive impacts and negative effects of a project and express why, on a balance, the EIA’s conclusions favour project approval.

3. Indigenous groups supporting approval of a project should participate in a public hearing

Proponents who have entered into impact benefit agreements with affected Indigenous groups should encourage and facilitate the Indigenous group’s full participation in the Panel hearing process, where possible. Even in circumstances where an impact benefit agreement is not filed as evidence in a proceeding, an Indigenous group’s active participation in the hearing process will enable the Panel to better understand, assess and incorporate the positive impacts and socioeconomic benefits to the Indigenous group, as part of its overall public interest determination for approval of a project.