One Project. Two Court Cases. A Couple of Suggestions.

Hi, my name is Sandy. I have the honour of preparing P2 Regulatory Solutions first blog post. Thanks @NickBryanskiy and @EvanDixon for joining me in this great adventure. 

I have no idea what form or direction these blogs will ultimately take but I thought I’d kick things off with my take on two recent court decisions These decisions each uphold separate challenges to the same proposed project and set aside the respective approvals for the project in question. While the particular circumstances addressed by each decision are significant on their own, from my perspective the decisions also provide examples of issues that can arise across a broad spectrum of regulatory proceedings. This blog focuses on these wider issues and suggests strategies that might help your project or application avoid ending up back at the drawing board along with the related delays, expense and potential risks to the viability of certain projects.

The Project

Canadian Nuclear Laboratories (CNL) holds the licence for Atomic Energy of Canada Limited’s (AECL) Chalk River site, approximately 180 km northwest of Ottawa, and manages the operations of the site on behalf of AECL. CNL proposed to construct and operate a low-level nuclear waste disposal facility at the Chalk River site.

If you’re interested in more information about CNL or the proposed disposal facility, you can find it here and here. 

The Court Decisions

On February 19, the Federal Court released its decision in Kebaowek First Nation v Canadian Nuclear Laboratories (Kebaowek 1). As some of you might have previously read, Kebaowek 1 addressed a challenge by the Kebaowek First Nation to the Canadian Nuclear Safety Commission’s approval of the proposed disposal facility. 

Kebaowek argued that the Commission needed to consider and apply the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) in assessing whether the Crown’s duty to consult Kebaowek about the disposal facility had been satisfied. The Commission disagreed. To the contrary, the Commission found that it did not have the jurisdiction to determine how to implement UNDRIP in Canadian law.  

The Federal Court disagreed with the Commission. The Court found that that the Commission was wrong in finding that it had no jurisdiction to determine if UNDRIP or the Canadian United Nations Declaration on the Rights of Indigenous Peoples Act applied to the Crown’s duty to consult and, if necessary, accommodate Kebaowek. (For those of you who aren’t familiar with the Crown’s duty to consult and accommodate Indigenous Nations in Canada, maybe we should grab a coffee and catch up on things.)

Then, on March 14, the Federal Court dropped Kebaowek First Nation v Canada (aka Kebaowek 2). 

In Kebaowek 2, the Federal Court addressed a further challenge by the Kebaowek First Nation and others to CNL’s proposed facility. This time, Kebaowek and their co-applicants challenged a permit issued by the federal Minister of Environment and Climate Change under section 73 of the Species at Risk Act (SARA). 

Section 73(3) of SARA provides that before the Minister can issue a permit under section 73, “all reasonable alternatives to the activity that would reduce the impact on the species have been considered and the best solution has been adopted” (emphasis added). CNL only considered other AECL sites for the disposal facility and took the position that section 73(3) only required it to consider non-AECL sites if CNL wasn’t able to find a suitable site on AECL lands. Kebaowek and its co-applicants disagreed. They argued section 73(3) required a broader consideration of alternatives. The Federal Court agreed with Kebaowek and its co-applicants and set aside the section 73 permit.

Here's A Couple of Suggestions

The jurisdiction of a regulatory body to consider certain factors or arguments, such as in Kebaowek 1, arises from time to time in regulatory proceedings. The problem with jurisdictional issues is they tend to result in a binary choice, does the regulatory body have jurisdiction or not? 

Jurisdictional arguments cannot always be avoided but, in my experience, should always be approached with extreme caution. These types of conclusions are particularly ripe to be challenged and, like in Kebaowek 1, if the regulatory body is wrong in its decision on jurisdiction the consequences are harsh. 

If it isn’t possible to avoid a jurisdictional issue, one strategy to attempt to mitigate the risk of a regulatory body being wrong is to encourage the regulatory body to expressly address what it would decide in the alternative (i.e., if the regulatory body is wrong in determining it doesn’t have jurisdiction, this is how it would have exercised its discretion in the event it has jurisdiction). While this may not avoid a court challenge, it may avoid the proposed project or other application being sent back to it. 

The need to consider alternatives like in Kebaowek 2 takes place more frequently and is a common feature in many regulatory proceedings. While regulatory decisions on alternative analyses are less likely to be overturned given their inherent nature, this doesn’t mean they can’t be, as seen in Kebaowek 2. 

One of the common issues with alternative analyses is that they often rely on studies and assessments (including interpretations of the legal requirements involved) long before the regulatory lawyers get involved. One risk mitigation strategy is to involve your regulatory lawyer or other regulatory professional earlier in the project development process to ensure that there is a clear understanding of the necessary legal requirements for the particular analysis in any given case. This can also help assess whether the evidence being gathered to undertake the analysis is sufficient and persuasive. While I still don’t think I’ve met a client who like paying legal fees, if given the choice in hindsight, most would prefer to pay for early advice rather than much greater fees to defend a court challenge and potentially conduct a do over. 

A further risk mitigation strategy is to consider what if you’re wrong in your assessment of what’s required or the strength of your analysis. Nobody can guarantee you’re going to be right 100% of the time. Does your assessment hold up if it’s stress-tested by other interpretations and arguments? If not, how might you be able to fill these gaps. 

Ultimately, whether it’s jurisdictional issues, alternative analyses or other issues that arise in regulatory proceedings, one of the common denominators is trying to avoid lengthy, expensive and risky court proceedings – and, if court challenges can’t be avoided, doing what you can to ensure the regulatory record and regulatory body’s decision-making are as robust as possible to meet any court challenge. 

Be safe out there. Welcome to P2 Regulatory Solutions.

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