Environmental, Indigenous and Natural Resources Blog

Impact benefit agreements (“IBAs”) between industrial proponents and Indigenous groups are becoming an important way for proponents to address regulatory risks and for Indigenous groups to benefit from industrial development in their traditional areas. Because IBAs may contain commercially sensitive information such as financial contributions, employment commitments and contracting commitments, they are typically considered to be confidential as between the proponent and the Indigenous group. 

But what happens when the Indigenous group files a claim against a government for allowing industrial development to infringe on its Aboriginal or treaty rights under section 35 of the Constitution Act, 1982? Is the fact that the Indigenous group has entered into IBAs relevant to the litigation? If so, do the IBAs need to be produced along with other relevant documents for the purposes of the litigation? A recent decision from the BC Supreme Court, Yahey v. British Columbia, 2018 BCSC 123, says they are relevant, and do have to be produced. This is a very significant decision for proponents who have entered into IBAs and who wish to preserve the confidentiality of those IBAs.

The Blueberry River Treaty Infringement Litigation

The decision arises out of litigation commenced by the Blueberry River First Nations against the Province of British Columbia. Blueberry River has sued the Province for allowing industrial development to infringe its rights under Treaty 8 and, among other things, is seeking a permanent injunction against allowing further industrial development. (Blueberry River applied, twice, for an interim injunction to prevent further industrial development pending trial, but they were denied an injunction both times. (See the earlier decisions here and here.)

The trial is currently scheduled to commence in March 2018. However, the parties are still seeking to resolve differences about the disclosure of documents that may be relevant to the litigation. As part of this disclosure process, the Province asked Blueberry River to disclose agreements with industrial proponents. When Blueberry River refused, the Province applied to court for an order requiring Blueberry River to produce the agreements. This led to the decision released on January 25 by the BC Supreme Court.

The Province's Application for Production of Agreements with Industrial Developers

In its application for disclosure, the Province asked that Blueberry River be ordered to produce (among other things) IBAs, requests for capacity funding and receipt of capacity funding from proponents, revenue sharing agreements with industrial proponents, memoranda of understanding with industrial proponents, cooperation agreements with industrial proponents and agreements or arrangements with industrial proponents about training and education programs. 

The Province took the position that these documents were relevant to the litigation because they relate to the Province’s defence that Blueberry River benefited from and acquiesced to industrial development; they speak to the nature of the change foreshadowed by Treaty 8 and how the Province has managed that change honourably; and they relate to Blueberry River’s pleading that industrial development has caused a breach of their treaty rights. Blueberry River opposed production of the agreements on the grounds (among others) that benefiting from industrial development was not a defence to their treaty right infringement claim.

The Court's Decision on Production of Agreements

The Court held that certain documents must be disclosed, even though the Province’s defence claims that Blueberry River acquiesced to or benefited from industrial development was “novel”:

One of the Province’s core arguments in this litigation is that Blueberry River First Nations has acquiesced in or benefited from the industrial developments that it says are infringing the exercise of its treaty rights. This is a novel legal argument in the context of a treaty infringement claim that raises novel legal issues, particularly with respect to the cumulative impacts of industrial development on the exercise of treaty rights.

The Province also argues that these documents are pertinent to its pleading that Treaty 8 foreshadowed change and that the Province has managed that change honourably.[1]

On this reasoning, the Court ordered that Blueberry River produce “…agreements, arrangements, joint ventures, etc. between or involving Blueberry River First Nations and Industrial Development Proponents, currently or in the past ten years.”  However, the Court did not order the production of documents that relate to projects that Blueberry River opposed, as the Court held that there could be no argument about Blueberry River having acquiesced to those projects, and therefore the agreements were not relevant. 

The Court also refused to order the production of agreements between members of Blueberry River and industrial proponents, on the grounds that there is no authority for the proposition that economic activities of individual Indigenous people can derogate from the group’s collectively held Aboriginal or treaty rights. Finally, the Court refused to order the production of capacity funding agreements between Blueberry River and industrial proponents, because in the Court’s view the agreements were not relevant to the case as pleaded by Blueberry River. 

In the result, Blueberry River was ordered to produce “…agreements, arrangements, joint ventures, term-sheets, payments, donations, and programs between or involving Blueberry River First Nations and Industrial Development Proponents, currently or in the past, except: (i)    documents that relate to industrial developments where Blueberry River First Nation has objected to a project which proceeded despite the objection; and (ii)   requests for and receipt of capacity funding from Industrial Proponents, including capacity funding agreements.”[2]

It should be noted that the issue of confidentiality of IBAs was not a consideration in the decision.  It is not clear whether Blueberry River raised confidentiality as an argument against disclosure; in any event the issue is not mentioned in the decision. 

Implications

This decision should be of interest to industrial developers who have entered into or are considering entering into IBAs with Indigenous groups. If Indigenous groups sue governments for infringement of their Aboriginal or treaty rights, this decision shows that governments can take the position that those IBAs are relevant and seek disclosure on those grounds. In such cases, the fact that an IBA may have confidentiality obligations as between the Indigenous group and the proponent may not necessarily shield the IBA from disclosure. 

Governments are increasingly interested in greater transparency regarding the financial aspects of agreements between industrial proponents and Indigenous groups. Disclosure laws like the federal Extractive Sector Transparency Measures Act (ESTMA) and First Nations Financial Transparency Act and the now-repealed Alberta Aboriginal Consultation Levy Act[3] show that governments are part of a trend towards greater disclosure of (at least the financial aspects of) private commercial arrangements between Indigenous groups and industrial proponents. (See our previous blog posts on ESTMA here, here, and here.) The production of full agreements, in the context of litigation, could also result in broader disclosure of non-financial aspects of these agreements, including contracting and employment opportunities.

The potential for agreements to be disclosed in litigation, along with the impact of disclosure laws like those identified above, should be taken into account by industrial proponents when considering whether to enter into IBAs and the terms that they will contain. This decision also reinforces the importance of taking care that IBAs and other agreements are carefully prepared (including carefully crafted confidentiality provisions) to contemplate possible disclosure requirements.  IBAs have proven to be a useful tool for industrial proponents to manage risk and for Indigenous communities to obtain benefits.  Care needs to be taken in the preparation of these agreements to ensure that the tool is not used in a manner that was not contemplated by the parties to such agreements.

For more information on this decision, and its potential implications for your company, please contact: John Olynyk, Keith Bergner or Lana Shipley.

[1] Yahey, at ¶¶ 43 and 44.

[2] At ¶57, emphasis in original.

[3] SA 2013, c A-1.2.