Ottawa, Ontario, December 20, 2005
PRESENT: The Honourable Madam Justice Hansen
BETWEEN:
PEHDZEH KI FIRST NATION, and
DEH CHO FIRST NATIONS
and
and
ATTORNEY GENERAL OF CANADA
Intervener
REASONS FOR ORDER AND ORDER
INTRODUCTION
[1] In March 2001, pursuant to the Mackenzie Valley Resource Management Act, S.C. 1998, c. 25 ("Act") and the Northwest Territories Water Act, R.S.C. 1992, c. 39, Canadian Zinc Corporation, the Respondent, applied to the Mackenzie Valley Land and Water Board ("Board") for a land use permit to excavate a tunnel to collect rock samples to determine the size of an ore body and a water licence for water use and discharge by a pilot plant through which a small amount of ore would be processed to determine production feasibility.
[2] After a lengthy process, in September 2003, the Board issued a Water Licence ("Licence") to the Respondent. In October 2003, the Nahanni Butte Dene Band, Pehdzeh Ki First Nation, and the Deh Cho First Nations ("Applicants") commenced this application for judicial review challenging the Board's decision to issue the Licence on the basis that the Board failed to incorporate certain conditions in the Licence and that it failed to observe the principles of natural justice. In May 2004, the Attorney General of Canada, the Intervener, was granted leave to intervene in this proceeding.
[3] The parties and the Intervener are now in agreement that the Board exceeded its jurisdiction when it included a particular condition in the Licence, namely, condition 2 in Part D of the Licence. Accordingly, the Board's decision to issue the Licence should be quashed. They are also in agreement that since there is no dispute that the decision should be set aside, it is not necessary for the Court to engage in a discussion of the standard of review. For the same reason, the Applicants agree that a consideration of their procedural fairness argument is no longer necessary and, in fact, they made no submissions on this issue during their oral argument.
[4] As well, the Respondent and the Intervener have reached an agreement regarding an amendment to the wording of condition 2 and asked the Court to direct the Board to substitute the existing condition 2 in the Licence with their proposed wording. The Applicants are opposed to the Court making such a direction.
[5] A brief description of the history leading up to the granting of the Licence is necessary to understand the outstanding dispute between the parties.
BACKGROUND
[6] The Respondent owns the Prairie Creek Mine which is located in the Mackenzie Valley in the Northwest Territories. On March 5, 2001, the Respondent applied to the Board for a land use permit and a water licence in relation to operating a pilot plant from which treated waters were proposed to be retained within the existing tailings pond originally designed to hold the mill tailings. The Respondent's applications were referred to the Mackenzie Valley Environmental Impact Review Board ("Review Board"), who, on January 22, 2002 recommended in its Report of Environmental Assessment ("EA Report") that the Licence be granted if the Respondent provides the Board with a geotechnical assessment and an engineering certification as to the suitability of the tailings pond for its proposed use.
[7] On February 5, 2002, the Review Board submitted the EA Report to the Minister of Indian and Northern Affairs ("Minister"). On September 3, 2002, the Minister returned the Respondent's application to the Review Board for further consideration to determine if there was an alternative to using the tailings pond.
[8] The Review Board then asked the Respondent to address various questions, several of which were in relation to the tailings pond. On November 1, 2002, the Respondent replied to the Review Board's information request. Due to the concerns raised by the regulatory authorities and expert advisors regarding the integrity of the tailings pond, the Respondent stated that it was "prepared to proceed with the developments without using the tailings pond." The Respondent's alternative to the tailings pond was treatment and discharge via a new polishing pond.
[9] As a result of the Respondent's response in November 2002, the Review Board stated in its second information request to the Respondent the following:
CZN [the Respondent] has indicated that it is prepared to proceed with its proposed developments without the use of the existing tailings pond. Therefore, the alternative method proposed by CZN in its IR [information request] response to the Review Board is in fact, the only water management and treatment method currently under consideration in the EA [environmental assessment]. CZN is asked to provide alternatives to its current plan to treat and discharge to the surrounding environment. If the alternative is to be on-site containment, CZN is asked to provide sufficient detail so that the alternative can be analysed and assessed.
[10] In the Respondent's second reply dated January 31, 2003, the Respondent stated:
The decision to change the preferred alternative from containment within the existing tailings impoundment to treat and discharge was brought about by requests of the "responsible ministries" who were concerned over the stability of the tailings impoundment dam. However, the tailings pond remains a viable alternative to the current treat and discharge plan. Such use has been analysed and assessed in detail over the course of the EA. It is CZN (sic) understanding that the general consensus was that such use, if approved, would be subject to geotechnical certification prior to use and CZN is in agreement with this approach.
[11] On April 4, 2003, the Review Board issued Reasons for Decision which addressed the issue of the use of the tailings pond and the polishing pond and recommended approval of the Respondent's proposed development, subject to the following three measures:
1. CZN is required to file with the Mackenzie Valley Land and Water Board (MVLWB) and the federal Minister, a favourable geotechnical assessment and engineering certification of the suitability of the tailings pond before it can be used. This assessment must certify that the tailings pond liner is intact and impermeable, and that the soil underlying and surrounding the tailings pond is stable.
[This recommended measure supersedes recommended measure #2 from the Report of Environmental Assessment of February 6th, 2002.]
2. CZN is required to file with the MVLWB and the federal Minister, a favourable geotechnical assessment and engineering certification of the suitability of the site of the proposed polishing pond and related water treatment facilities before they can be used.
3. If these geotechnical assessments fail to establish either the integrity and stability of the tailings pond or the suitability of the proposed site of the polishing pond and related water treatment, the Review Board recommends that the CZN development proposal, as it is now constituted, be rejected without an Environmental Impact Review, under paragraph 128(1)(d) of the MVRMA. In the Review Board's opinion, the likelihood of significant adverse impacts on the environment in the area of the proposed development cannot be justified unless the integrity of these structures can be established and their mitigative potential realized.
[12] The Review Board also stated the following in the Reasons for Decision:
The Review Board notes that the tailings pond is still included as a part of the development. It is proposed as a backup treatment facility in the event that the polishing pond does not treat water adequately....it is possible that the tailings pond could still have a role in the water treatment process....
The Review Board recognizes that the addition of the polishing pond for water treatment purposes significantly reduces the likelihood of reliance on the tailings pond. However, the tailings pond has still been included as a part of the water treatment alternatives.
....
The polishing pond addresses many of the concerns raised by the parties to the EA pertaining water treatment. On the Review Board's analysis, it will play a useful role in mitigating the adverse impacts of the proposed development.
However, because of the proximity of the polishing pond to Harrison Creek and Prairie Creek...the stability of the polishing pond is therefore essential...because the results of slumping or erosion of the polishing pond could by themselves result in a significant adverse impact on the environment.
[13] The commitments made by the Respondent during the course of the environmental assessment include the following:
- CZN has committed to having the geotechnical assessment carried out and providing an engineering certification as to the suitability of the tailings facility before commencement of any discharges to the impoundment;
- CZN to construct a polishing pond with 20 hour retention time. The polishing pond to serve as treatment pond for the 870 portal discharge;
- CZN to discharge all water via the final site catchment pond.
The Respondent also lists the following commitments:
- Geotechnical assessment of tailings facility to be completed & report submitted for approval prior to discharge of process water to pond
- Process water to be tested prior to discharge either to tailings pond (if approved for use) or to receiving environment
20. Minewater from the decline to be discharged to a sump for settling prior to discharge to the receiving environment, or discharged directly to tailings impoundment (if approved for use)
[14] On June 16, 2003, the Minister approved the proposed development subject to the imposition of the following:
- measures three to fifteen contained in the Review Board's EA Report of February 6, 2002;
- all commitments made by the Respondent in submissions to the Review Board; and,
- measures one to three contained in the Review Board's Reasons for Decision of April 4, 2003
[15] After receiving the Minister's decision dated June 16, 2003, the Board established a working group to assist in drafting the Licence. On September 12, 2003, the Board issued the Licence to the Respondent. In the Licence, the Board prohibited the use of the tailings pond by imposing condition 2 under Part D of the Licence. It states:
The Tailings Containment Area is not to be used in conjunction with the licensed undertakings
[16] The Applicants assert that the Licence does not reflect the Review Board's recommendations as approved by the Minister. Specifically, the Applicants maintain that according to the Review Board's recommendations, the Respondent's development proposal is approved if the Respondent receives a favourable geotechnical assessment of both the tailings pond and the polishing pond. The Applicants submit that this Court should direct the Board to seek clarification from the Review Board.
[17] The Respondent and the Intervener submit that the Review Board recommended that the development proposal be approved as long as the Respondent obtained a favourable geotechnical assessment of either the tailings pond or the polishing pond to fulfill the water treatment function, but not both. The Respondent and the Intervener have agreed that condition 2 in Part D of the Licence should be changed to read as follows:
The Licensee shall submit to the Board for approval a favourable geotechnical assessment and engineering certification of the suitability of the Tailings Containment Area before it can be used in conjunction with the licensed undertakings. This assessment must certify that the tailings pond liner is intact and impermeable, and that the soil underlying and surrounding the Tailings Containment Area is stable.
ISSUES
[18] Since all parties agree that the matter should be sent back to the Board, the narrow issue that remains is whether the matter should be sent back to the Board with directions that the Licence be corrected to include the language agreed upon by the Respondent and the Intervener.
SUBMISSIONS OF THE PARTIES
[19] The Applicants submit the Review Board found that it was a concern that the tailings pond was still included as a part of the proposed development. The Applicants further submit that the Review Board contemplated the use of the tailings pond and, therefore, the Respondent must assess both the tailings pond and the polishing pond. This is evidenced by the Review Board's use of the plural forms in paragraph 3 of the Review Board's decision:
If these geotechnical assessments fail to establish either the integrity and stability of the tailings pond or the suitability of the proposed site of the polishing pond and related water treatment, the Review Board recommends that the CZN development proposal, as it is now constituted, be rejected without an Environmental Impact Review, under paragraph 128(1)(d) of the MVRMA. In the Review Board's opinion, the likelihood of significant adverse impacts on the environment in the area of the proposed development cannot be justified unless the integrity of these structures can be established and their mitigative potential realized. [Emphasis added]
[20] The Respondent submits that given the facts leading up to the decision and in light of paragraphs 1 and 2 of the decision, paragraph 3 of the Review Board's decision should be interpreted to mean that either containment in the existing tailings pond or treatment and discharge from a new polishing pond could be used as alternative water treatment plans. The Respondent argues that paragraph 3 of the Review Board's decision is not a mitigative measure and that it should be read without the double negative so that it reads:
If these geotechnical assessments establish either the integrity and stability of the tailings pond or the suitability of the proposed site of the polishing pond and related water treatment, the Review Board recommends that the CZN development proposal, as it is now constituted, be accepted. [Emphasis added]
[21] Both the Respondent and the Intervener submit that it is the role of the Board, not the Review Board, to draft the Licence. Moreover, the Review Board's mitigative measures should not dictate to the Respondent how to carry out its project.
ANALYSIS
[22] The Board has jurisdiction to issue water licences under the following provisions of the Act:
| 60. (1) A board established for a settlement area has jurisdiction in respect of all uses of waters and deposits of waste in the settlement area for which a licence is required under the Northwest Territories Waters Act and may
(a) issue, amend, renew and cancel licences and approve the assignment of licences, in accordance with that Act, and
(b) exercise any other power of the Northwest Territories Water Board under that Act,
and, for those purposes, references in that Act to that Board shall be read as references to the board established for the settlement area.
102. (1) The Board has jurisdiction in respect of all uses of land or waters or deposits of waste in the Mackenzie Valley for which a permit is required under Part 3 or a licence is required under the Northwest Territories Waters Act, and for that purpose the Board has the powers and duties of a board established under Part 3, other than powers under sections 78 and 79, as if a reference in that Part to a settlement area were a reference to the Mackenzie Valley. |
60. (1) L'office a compétence, dans la région désignée pour laquelle il est constitué, en ce qui touche toute forme d'utilisation des eaux ou de dépôt de déchets pour laquelle un permis est nécessaire aux termes de la Loi sur les eaux des Territoires du Nord-Ouest et peut :
a) en conformité avec cette loi, délivrer, modifier, renouveler ou annuler tout permis d'utilisation des eaux, ou en autoriser la cession;
b) exercer toute autre attribution conférée à l'Office des eaux des Territoires du Nord-Ouest par cette loi.
À cet égard, la mention, dans cette loi, de l'Office des eaux des Territoires du Nord-Ouest vaut mention de l'office.
102. (1) L'Office a compétence en ce qui touche toute forme d'utilisation des terres ou des eaux ou de dépôt de déchets réalisée dans la vallée du Mackenzie pour laquelle un permis est nécessaire sous le régime de la partie 3 ou aux termes de la Loi sur les eaux des Territoires du Nord-Ouest. Il exerce à cet égard les attributions conférées aux offices constitués en vertu de cette partie - exception faite toutefois des articles 78 et 79, la mention de la région désignée, dans les dispositions pertinentes de cette partie, valant mention de la vallée du Mackenzie. |
[23] However, the Board's authority in the issuance of water licences is limited pursuant to section 62 because the Board is required to implement the recommendations arising from the environmental assessment under Part 5 of the Act:
| 62. A board may not issue a licence, permit or authorization for the carrying out of a proposed development within the meaning of Part 5 unless the requirements of that Part have been complied with, and every licence, permit or authorization so issued shall include any conditions that are required to be included in it pursuant to a decision made under that Part. |
62. L'office ne peut délivrer de permis ou d'autorisation visant à permettre la réalisation d'un projet de développement au sens de la partie 5 avant que n'aient été remplies les conditions prévues par celle-ci. Il est en outre tenu d'assortir le permis ou l'autorisation des conditions qui sont imposées par les décisions rendues sous le régime de cette partie. |
The relevant provisions under Part 5 of the Act provide:
| 111. The definitions in this section apply in this Part.
...
"regulatory authority", in relation to a development, means a body or person responsible for issuing a licence, permit or other authorization required for the development under any federal or territorial law, but does not include a designated regulatory agency or a local government.
...
118. (1) No licence, permit or other authorization required for the carrying out of a development may be issued under any federal or territorial law unless the requirements of this Part have been complied with in relation to the development.
128. (1) On completing an environmental assessment of a proposal for a development, the Review Board shall,
...
(b) where the development is likely in its opinion to have a significant adverse impact on the environment,
(i) order that an environmental impact review of the proposal be conducted, subject to paragraph 130(1)(c), or (ii) recommend that the approval of the proposal be made subject to the imposition of such measures as it considers necessary to prevent the significant adverse impact;
...
(d) where the development is likely in its opinion to cause an adverse impact on the environment so significant that it cannot be justified, recommend that the proposal be rejected without an environmental impact review.
130 (5) A first nation, local government, regulatory authority or department or agency of the federal or territorial government affected by a decision made under this section shall act in conformity with the decision to the extent of its authority. |
111. Les définitions qui suivent s'appliquent à la présente partie.
...
« autorité administrative » Personne ou organisme chargé, au titre de toute règle de droit fédérale ou territoriale, de délivrer les permis ou autres autorisations relativement à un projet de développement. Sont exclus les administrations locales et les organismes administratifs désignés.
...
118(1) La délivrance, au titre de toute règle de droit fédérale ou territoriale, d'un permis ou de toute autre autorisation nécessaire à la réalisation d'un projet de développement n'a lieu qu'une fois remplies les exigences de la présente partie.
128. (1) Au terme de l'évaluation environnementale, l'Office :
...
b) s'il conclut que le projet aura vraisemblablement des répercussions négatives importantes sur l'environnement :
(i) soit ordonne, sous réserve de la décision ministérielle prise au titre de l'alinéa 130(1)c), la réalisation d'une étude d'impact, (ii) soit recommande que le projet ne soit approuvé que si la prise de mesures de nature, à son avis, à éviter ces répercussions est ordonnée;
...
d) s'il conclut que le projet aura vraisemblablement des répercussions négatives si importantes sur l'environnement qu'il est injustifiable, en recommande le rejet, sans étude d'impact.
130(5) Ces premières nations, administrations locales, autorités administratives, ministères et organismes gouvernementaux sont tenus de se conformer à la décision ministérielle dans la mesure de leur compétence. |
[24] It is clear that the Board is not permitted to issue a water licence unless it is in compliance with the Minister's decision made under Part 5 of the Act. In this case, the Minister's decision required the Board to impose the three measures in the Review Board's decision. The key question is whether the Review Board intended to require the Respondent to obtain favourable geotechnical assessments on both the tailings pond and the polishing pond or whether the Respondent is only required to obtain a favourable geotechnical assessment of either one.
[25] Based on the following evidence of the history surrounding the issue of the tailings pond, I find that the tailings pond and the polishing pond were alternative water treatment plans advanced by the Respondent and that the Respondent had the option to use either the tailings pond or the polishing pond to fulfill the water treatment function:
- The Minister returned the EA Report to the Review Board for reconsideration because the Minister was looking for an alternative to the use of the tailings pond as a water treatment option.
- The Respondent's responses to the Review Board's requests for information were consistent with the proposition that the polishing pond was the alternative to the tailings pond. In fact, the Respondent's responses demonstrate that the Respondent changed the preferred alternative from containment within the tailings pond to treatment and discharge via the polishing pond.
- The Review Board's reference to the tailings pond in its decision demonstrates its concerns and awareness of the tailings pond to be possibly used as a treatment facility. For example, the Review Board stated in its analysis that it is possible that the tailings pond could still have a role in the water treatment process because the Respondent stated that the tailings pond remains a viable alternative to the polishing pond.
- The Review Board also wrote that the following measure supersedes this measure in the EA Report:
CZN is required to file with the Mackenzie Valley Land and Water Board (MVLWB) and the federal Minister, a favourable geotechnical assessment and engineering certification of the suitability of the tailings pond before it can be used. This assessment must certify that the tailings pond liner is intact and impermeable, and that the soil underlying and surrounding the tailings pond is stable. [Emphasis added]
- That CZN provide the MVLWB a geotechnical assessment and an engineering certification as to the suitability of the tailings facility.
[26] I agree with the Respondent and the Intervener that the role of the Review Board is to provide an environmental assessment and not to draft licences. With regard to the plural references of "these geotechnical assessments" in paragraph 3 of the Review Board's decision, they are not conclusive evidence of the Review Board's intention that the Respondent must assess both the tailings pond and the polishing pond. I am of the view that the Review Board allowed the Respondent to use either the tailings pond or the polishing pond to fulfil the water treatment function. For example, the Review Board's use of "either" and "or" rather than "both" the tailings pond "and" the polishing pond is more telling of the Review Board's intention, that is, the Respondent is free to choose between the two alternatives.
[27] The Applicants contend that the Court cannot issue specific and conclusive directions to the Board unless the conclusion is obvious and inescapable. The Respondent and the Intervener argue that their agreed upon language is merely making obvious what should already have been clear to all parties.
[28] Given my conclusion that the Review Board's decision provides the Respondent with an option to use either the polishing pond or the tailings pond and that the Board clearly exceeded its jurisdiction by eliminating the use of the tailings pond from the scope of the Licence, I find that the Board has no discretion pursuant to sections 62 and 118(1) of the Act with regard to whether it implements the mitigative measures or conditions arising from an environmental assessment under Part 5 of the Act. In other words, the Review Board's mitigative measures must be included as conditions of any water licence that the Board issues for the Respondent's proposed development.
[29] Accordingly, I conclude that in these circumstances where the outcome is inevitable there is no reason to return the matter to the full process through which the Board made its decision regarding the Licence based on the narrow issue of the mitigative measure for the tailings pond. Further, a direction to the Board would be of some practical effect by saving valuable time and resources.
CONCLUSION
[30] For these reasons, the application for judicial review is allowed with costs to the Respondent. The Board is directed to re-issue the Licence with the following amendment to condition 2 in Part D:
The Licensee shall submit to the Board for approval a favourable geotechnical assessment and engineering certification of the suitability of the Tailings Containment Area before it can be used in conjunction with the licensed undertakings. This assessment must certify that the tailings pond liner is intact and impermeable, and that the soil underlying and surrounding the Tailings Containment Area is stable.
[31] If the parties are unable to reach an agreement regarding costs, at the request of the parties the Court will set a schedule for the filing of submissions.
ORDER
THIS COURT ORDERS that:
1. The application for judicial review is allowed with costs to the Respondent.
2. The Board is directed to re-issue the Licence with the following amendment to condition 2 in Part D:
The Licensee shall submit to the Board for approval a favourable geotechnical assessment and engineering certification of the suitability of the Tailings Containment Area before it can be used in conjunction with the licensed undertakings. This assessment must certify that the tailings pond liner is intact and impermeable, and that the soil underlying and surrounding the Tailings Containment Area is stable.
3. If the parties are unable to reach an agreement regarding costs, at the request of the parties the Court will set a schedule for the filing of submissions.
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1892-03
STYLE OF CAUSE: NAHANNI BUTTE DENE BAND ET AL v.
CANADIAN ZINC CORPORATION ET AL
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: August 30, 2005
APPEARANCES:
| Devon Page
|
|
| Kevin O'Callaghan
|
|
| Scott Duke |
FOR THE INTERVENER |
SOLICITORS OF RECORD:
| Devon Page
|
|
| Kevin O'Callaghan John Donihee |
|
|
Scott Duke |
FOR THE INTERVENER |