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‘We don’t try to stop all development, but when new stuff comes in, we want to look at it,' says Chief David Babin of the Wahgoshig. (Fred Lum/The Globe and Mail/Fred Lum/The Globe and Mail)
‘We don’t try to stop all development, but when new stuff comes in, we want to look at it,' says Chief David Babin of the Wahgoshig. (Fred Lum/The Globe and Mail/Fred Lum/The Globe and Mail)

THE LAW PAGE

A cautionary tale for the mining industry Add to ...

David Babin, chief of the tiny Wahgoshig First Nation in Northern Ontario, was driving home from nearby Kirkland Lake during the spring thaw last year when he noticed the heavy equipment of a drilling crew, looking for gold in his people’s traditional lands.

It was the first Chief Babin had heard of the drilling. And it was the beginning of conflict that would end up in court, with an Ontario judge handing down a rare injunction earlier this year that suspended drilling on behalf of Solid Gold Resources Corp., a Thornhill, Ont.-based junior miner, and ordered consultations with the Wahgoshig.

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“They didn’t understand first nation’s concerns,” Chief Babin said of the company in an interview. “Meanwhile, these guys kept on drilling, saying, ‘We’ve got the right to drill, and you can’t stop me.’ ”

Lawyers who work on these cases, representing both native bands and mining companies, say Solid Gold’s story is a cautionary tale for companies that fail to properly consult native communities that could be affected by their activities on Crown land.

Mining activity has boomed in recent years in the North, but the Supreme Court of Canada’s landmark 2004 Haida decision, which broadened the legal concept of a “duty to consult” native bands in such cases, has also forced companies to conduct broader consultations. But in addition to revenue-sharing deals, job guarantees and other agreements between native bands and mining companies, dozens of cases like Wahgoshig’s are ending up before courts and tribunals.

It is a front-of-mind issue in the industry. The Prospectors and Developers Association of Canada (PDAC) annual mining industry convention in Toronto this week offers a list of workshops in aboriginal engagement.

Outside the event on Tuesday, members of the Kitchenuhmaykoosib Inninuwug First Nation, located some 600 kilometres north of Thunder Bay, and about 80 supporters protested against the presence of junior miner God’s Lake Resources Inc. in their traditional lands.

On Sunday, the Ontario government suspended all other mineral exploration in the area to avoid conflicts. (In 2008, six KI members were jailed as they battled another mining company, Platinex Inc. In that case, Ontario paid the company $5-million to abandon its plans.)

In the Wahgoshig case, Ontario Superior Court Justice Carole Brown issued an order in January that Solid Gold cease any exploration for 120 days and enter into a process of “meaningful consultation and accommodation.” The injunction was granted pending a lawsuit from the Wahgoshig against both Solid Gold and the province over the drilling.

Judge Brown pointed out that Solid Gold had been advised by the Ontario government in 2009 to consult the Wahgoshig but failed to do so before starting drilling last year close to the reserve, which is near Matheson, Ont.

She said the evidence shows Solid Gold “made a concerted, willful effort not to consult,” until after its financing from so-called flow-through shares had been exhausted at the end of last year.

Solid Gold is appealing the ruling, and says it intends to sue the Ontario government for its losses in the case. Its president, Darryl Stretch, said in a press release that the results of the case could have an impact on the Canadian economy as a whole.

The company could not be reached Tuesday. But it argues in court documents that it was doing nothing wrong and had no duty to consult the Wahgoshig about its drilling, which the company said would have minimal impact, because it was guaranteed the right to exploratory drilling under Ontario’s “free entry” mining legislation.

In its court submissions, the company’s lawyers, Neal Smitheman and Tracey Pratt of Fasken Martineau DuMoulin LLP, dismiss the Wahgoshig’s claims to its traditional territory around Lake Abitibi: “Contrary to WFN’s repeated references to the contemplated drilling taking place on ‘its’ traditional territory, the exploratory drilling in the is case will take place on land that was surrendered more than 100 years ago under a treaty whose express purpose, in the very text of the treaty, was to open up the surrendered territory to, among other things, mining uses.”

Lawyer Kate Kempton of Olthuis Kleer Townshend LLP, who acts for Wahgoshig, said this argument simply ignores the current landscape of aboriginal treaty rights. The Supreme Court’s decision in the Haida case obligates the Crown, or a mining company to whom the Crown delegates this obligation, to consult first nations whose rights to use those Crown lands, often guaranteed in treaties signed over 100 years ago, may be affected.

While there is no formula for just how much consultation is required, it must be real, she says, with companies prepared to change their plans to address concerns.

“It’s not just talking at somebody or sitting there while they talk at you,” said Ms. Kempton, who also acted for KI in its court battle with Platinex. “It’s really engaging.”

In the Wahgoshig case, members have raised concerns about the need for studies to find burial sites before drilling or mining, and whether the activity would affect the local moose population.

Ms. Kempton said many companies now make efforts to engage with first nations. In many cases, their ability to get financing depends on signed agreements with native groups. But other companies make only half-hearted attempts, she said.

Lawyers who act for mining companies in talks with native bands say proper consultations with first nations are increasingly important for their clients.

Richard King, a partner with Norton Rose Canada, said he was surprised at the approach that Solid Gold appears to have taken. Most of his clients, he said, are interested in holding proper talks with native groups.

“It’s not been my experience that clients approach the consultation process aggressively, like ‘Let’s get in and out of the consultation stuff doing as little as possible,’ ” he said.

Chief Babin, in Toronto for the PDAC mining conference, says the Wahgoshig are by no means opposed to development, pointing to other resources companies operating nearby with whom they have signed agreements.

“We don’t try to stop all development, but when new stuff comes in, we want to look at it,” he said. “We want to make sure that they understand that there’s a lot of history in our area.”

Follow on Twitter: @jeffreybgray

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