First nations win court fight over major B.C. power projects

COMMENT: Whew. Already a legendary figure in BC legal circles when it comes to high profile public interest and civil rights cases, and especially with respect to aboriginal rights, Greg McDade continues to rack 'em up. In early February, McDade and his client, the also legendary marine biologist Alexandra Morton, won a decision from the BC Supreme Court when it ruled that the jurisdiction over fish farms resides with the federal government, not the provincial government.

This week, the BC Appeal Court ruled in two power projects that aboriginal rights had not been adequately respected. And the potential outfall are huge.

The first major component of BC Transmission Corp's strategy to add capacity and redundancy to provincial transmission infrastructure is a new line between Merritt and the lower mainland. A necessary approval from the BC Utilities Commission had been granted, but the Appeal Court says the approval is invalid, and affected First Nations need to be consulted before the approval can be issued. Back to the drawing board, and expect first, that the project will be delayed by years, and second, that the financial accommodation with First Nations will be Olympian.

The Appeal Court ruling with respect to the Carrier Sekani and Kemano, though it goes back many decades, affects the electricity purchase deal between BC Hydro and Rio Tinto Alcan - itself already an agreement that was protracted and painful in its delivery.

Wrists were slapped everywhere, especially at the BCUC.

Off to the Supreme Court.

And with these decisions, could McDade and his clients be turning their attention to Williston Lake and the Peace River dams? To the Columbia Treaty projects? Don't go countin' yer Site Cs, not any time soon.

By Neal Hall
Vancouver Sun
February 18, 2009

VANCOUVER – The B.C. Court of Appeal has issued two major rulings upholding the rights of first nations to be consulted by the government, which will affect two major projects in B.C.

In one case, the court has struck down a licence required to build a massive new hydro transmission line from Merrit to Coquitlam because native Indians were not consulted.

In the other case, the court ruled there was “massive” infringement of the right of the Carrier Sekani Tribal Council to be consulted in the Kemano Power Project and later expansion near Kitimat that involves B.C. Hydro buying electricity from the Rio Tinto Alcan Inc. aluminum smelter.

The appeal court granted the appeal of the tribal council and found that the BC Utilities Commission erred in approving the Electricity Purchase Agreement (EPA) between BC Hydro and Rio Tinto Alcan in January 2008.

The court found “B.C. Hydro, as a Crown corporation, was taking commercial advantage of an assumed infringement on a massive scale, without consultation.”

The court was also critical of the BC Utilities Commission, finding “the commission has demonstrated in several cases an aversion to assessing the adequacy of consultation.”

“I think this is a very significant decision both for the Kemano project itself and also for aboriginal rights,” said Vancouver lawyer Gregory McDade, who represented native bands in both cases.

Tribal Chief David Luggi was pleased by the appeal court victory.

“We are pleased that the Court of Appeal has recognized in law that First Nations interests must be taken into account in important decisions relating to the Kemano Project," he said in a statement.

"The Alcan Kemano Project remains the most devastating environmental impact in our region.”

“First Nations were never consulted when the Kemano Project was built, and we were not involved in the backroom deal in the 1987 Settlement Agreement, by which flows in the Nechako River were reduced by over 70 per cent. Our fisheries have never recovered, and the Nechako Sturgeon is endangered and almost extinct.”

He said this was the first step "to ensure that the environment and First Nations interests are not ignored over long-term electricity sales.”

The Kemano project, which began in the 1940s, involved reversing the flow of a river and the creation of a watershed that discharges west into a long tunnel through a mountain down to sea level at Kemano where it drives the generators at the power station and then flows into the Kemano River.

Up to 80 per cent of the natural water flow of the Nechako River was diverted for the project, which affected fish and wildlife, especially salmon.

The Nechako River eventually joins the Fraser River at Prince George.

Alcan holds a water licence in perpetuity for the reservoir. It is obliged by the licence and an agreement made in 1987 settling litigation involving the provincial and federal governments to maintain water flows that meet specifications for migratory fish.

In the course of an expansion project, often referred to as Kemano II, the B.C. government changed its mind about allowing the full utilization of the reservoir, which shut down the project and prompted a lawsuit by Alcan.

The legal action was settled in 1997 on terms which included a power deal whereby the province would supply Alcan should it enlarge the smelter and need more electricity.

The settlement also granted Alcan the water licence on a permanent basis. But there was no consultation with native Indian bands in the area.

“My clients rely on the fishery and they have been ignored for 50 years on this,” McDade said in an interview. “This potentially has a huge environmental impact on the Nechako and the Fraser,” he said.

He pointed out that scientists believe diverting up to 80 per cent of the Nechako River has increased the temperature of the Fraser, which has affected salmon returning upstream in the summer.

“When the Fraser gets up to 20 degrees, fish begin to die,” McDade said. “Even half a degree can make a big difference.”

nhall@vancouversun.com

The two appeal court decisions are posted online: http://www.courts.gov.bc.ca/jdb-txt/CA/09/00/2009BCCA0068.htm

© Copyright (c) The Vancouver Sun

Court rulings delay power projects

Utilities commission must re-evaluate whether natives adequately consulted

VANCOUVER -- Two major power projects approved by the British Columbia Utilities Commission have been delayed by rulings issued by the B.C. Court of Appeal.

In separate judgments handed down yesterday, the court found the B.C. Utilities Commission erred in not determining whether natives had been adequately consulted over an Electricity Purchase Agreement (EPA), involving B.C. Hydro and Rio Tinto Alcan Inc., and over a new power line proposed by the British Columbia Transmission Corporation, from Merritt to Coquitlam.

One case involved a decision by the commission to reject a motion by the Carrier Sekani Tribal Council concerning a 2007 B.C. Hydro application for an EPA. The EPA would have cleared the way for B.C. Hydro to purchase surplus electricity from Rio Tinto Alcan Inc.

The power is generated by the diversion of water created by the Kemano power project, which was built by Alcan in the 1950s.

The Carrier Sekani argued that accepting the EPA would be a jurisdictional error because the band wasn't consulted initially, when the power project was first built. The water diversion flooded native graveyards and caused declines in important salmon and sturgeon fisheries.

The band argued there was a "historical, continuing infringement of aboriginal title and rights."

The B.C. Utilities Commission, however, rejected the Carrier Sekani position on the grounds that there were no new physical impacts created by the EPA.

But the court disagreed with that decision, saying B.C. Hydro had been "taking commercial advantage of an assumed infringement on a massive scale, without consultation."

The court ruled that the B.C. Utilities Commission must reopen the application for an EPA, so that it can consider whether a duty to consult with the Carrier Sekani had ever been met.

In the second case, the Court of Appeal found that the Kwikwetlem First Nation had not been adequately consulted over a 246-kilometre power line that the B.C. Transmission Corporation proposed to build from Merritt to Coquitlam.

The line would pass through the traditional territory of several bands, but the courts found the B.C. Utilities Commission had failed to assess whether there was adequate consultation.

"Consultation requires an interactive process with efforts by both the Crown actor and the potentially affected First Nations to reconcile what may be competing interests. It is not just a process of gathering and exchanging information. It may require the Crown to make changes to its proposed action based on information obtained through consultations. It may require accommodation," the court stated.

The court ordered the utilities commission to "reconsider the scoping decision" approving the transmission line.