HUPACASATH CHALLENGE TO CCFIPPA DENIED BY FEDERAL COURT: “DAVID DID NOT SLAY GOLIATH...YET”

"The controlling question in all situations is what is required to maintain the Honour of the Crown and to effect reconciliation between the Crown and the Aboriginal people with respect to the interests at stake".

(Haida: Supreme Court of Canada)

In a surprisingly quick decision, Chief Justice Paul Crampton, of the Federal Court, rendered his decision August 26, 2013 in the Hupacasath First Nation vs. Canada regarding Canada's ratification of the Canada China Investment Promotion and Protection Agreement (CCFIPA). Hupacasath (HFN) maintained that Canada must consult with them regarding the negative impacts CCFIPPA will have on their rights and thereby fulfil their constitutional duties and maintain the Honour of the Crown.

The Court disagreed with HFN and dismissed the challenge stating basically that there was no evidence that there would be potential adverse affects on HFN rights or governance and what was put forward by HFN was only speculative. The court further ruled that there was no connecting link between the alleged potential adverse affects and CCFIPPA. In other words, any affects of CCFIPPA are so far removed from HFN that it will never affect them.

Before I get into the analysis of the decision, picture this. HFN is located on western Vancouver Island in a territory that is rich with water, fish, wildlife, forests and forest resources, minerals and precious stones. It is located on an inlet where there is a deep sea harbour that is already being looked at to develop as the gateway to Asia and container port. A coal company in Courtenay wants to transport coal to Port Alberni to put on ships to market in China. Interestingly, the court stated that companies from China wanting to develop resources in Hupacasath territory is speculative and I respectfully and strongly disagree especially when China need the kinds of resources the HFN territory offers. The fact that Chinese investors are already looking at buy 12.5% of Island Timberlands who operate on so called "private lands" is an example of this interest but the court dismissed this evidence as "hearsay". HFN has always maintained that the increase in the development of its resources will increase exponentially with CCFIPPA and besides telling the court this is a very real reality, it cannot be proven with proposed developments at this point, but has a very real potential to affect the way of life and the rights of the Hupacasath. If development increases-any chance that HFN has of concluding a treaty, or even a reconciliation agreement for access to resources decreases because there will be nothing left to negotiate. Haida at the Supreme Court of Canada has said

"The Crown, acting honourably cannot cavalierly run roughshod over Aboriginal interests where claims affecting these interests are being seriously pursued in the process of treaty negotiation and proof. It must respect these potential, but yet unproven, interests. To unilaterally exploit a claimed resource during the process of proving and resolve the Aboriginal claim to that resource, may be to deprive the aboriginal claimants of some or all of the benefit of the resource. THAT IS NOT HONOURABLE." (para 27) (emphasis added)

CCFIPPA will inevitably lead to exploitation of these resources but Justice Crampton said there would be no affect on HFN.

It is clear that there has never been a court case that challenged an international agreement or a federal legislative initiative with respect to the Crown's duty to consult. This case is definitely precedent setting and therefore an important issue to be tried. The Supreme Court of Canada has said very clearly, that if there are higher level strategic decisions or legislation that could negatively impact aboriginal rights, First Nations must be consulted. That was the question the court was looking at here.

WHAT DID THE COURT RULE:

1. The court ruled that this case was solely to deal with whether the Federal Government had to consult with HFN. It did not look at any other First Nation as there were no other First Nations named in the proceeding. The Justice agreed to keep the affidavits of supporting First Nations in the case as guidance for understanding the impacts on rights and the history of the duty to consult. I did want to bring out a telling statement of the Justice found at p. 9, paragraph 24:

...the issue of whether a duty to consult is owed to other First Nations, even if the formidable practical impediments to workable and meaningful consultations with the over 600 First Nations that exist across the country could be overcome...

This statement shows clearly the concern by the Justice of the formidable task of consulting with all First Nations across Canada and keeps that in mind in determining the need to consult. This has always been the theme of Canada that they cannot possible consult with 633 First Nations and in the case of BC, consult with 203 First Nations.

2. The exercise of the prerogative power of the Crown can be reviewed for constitutionality-therefore Canada can be challenged on whether a duty to consult exists with regard to CCFIPPA.

3. The court ruled the Gus Van Harten, the expert produced by HFN was not impartial due to his vocal criticism of CCFIPA and his duty to assist the court impartially had been compromised. Therefore little weight was given to HFN's expert and this was very unfortunate given Mr. Van Harten's understanding and considerable expertise. The court preferred the expertise of a Mr. Thomas, from the National University of Singapore whose expertise is in international agreements, but none with respect to Canadian Law and the duty to consult First Nations. The court failed to comment on the credibility of Mr. Thomas who makes a living off investor state arbitrations and whose income relies on these kinds of agreements.

4. The test used to determine if there was a duty to consult had 3 elements:

i) Whether there was Crown knowledge of aboriginal rights claim-which the court found there was

ii) Contemplated Crown conduct: which was ratification of CCFIPPA

iii) the POTENTIAL that the conduct MAY adversely affect an aboriginal claim or right. The effect may not be immediate on the lands and resources of HFN. The court looked at HFN evidence to find that the rights advanced by HFN were mainly the use, management and conservation of lands and resources within their territories and determined there would be no impact. The court also looked at whether CCFIPPA would cause a significant change in the legal framework applicable to land and resource regulation in Canada that could have potential adverse affects on aboriginal rights. HFN had produced a series of cases that had found the duty to consult. These cases were about actual developments which would on the ground adversely impact rights. The court said there was no such connection with CCFIPPA. What the court failed to realize was that these were the cases setting out the principles of law on consultation. While recognizing there are no other court cases that look at the effect of international law on aboriginal rights and there should be a different test than those cases where the impact is immediate. How does a high level policy affect rights-this has never been explored by any court and unfortunately this court did not create any guidance for future cases or for governments on what they should consult on when passing laws and upper level strategic policy. Another distinction made by the court was that CCFIPPA is an "Investment treaty" and does not apply to any particular lands or resources. In the words of Justice Crampton at p. 30, paragraph 78:

"...CCFIPPA does not address any specific lands, potential projects involving specific lands or specific resources. It is simply a broad, national, framework agreements that provides additional legal protection to Chinese investors in Canada..."

This is a very broad interpretation of FIPPA and a failure to recognize that the majority of investments by Chinese companies will deal with lands and resources and that it does indeed have the potential of negatively affecting aboriginal rights. This could be true of the Canadian Environmental Assessment Act or the Fisheries Act, it sets up a framework on how Assessments are done or how fish are managed. The effects are in the implementation and should require consultation by the Federal Government.

The court also looked at whether CCFIPPA would change the governance of HFN and decided since it only has powers under ss. 81 and 83 of the Indian Act that it would not. The Justice determined that such things as the Hupacasath Land Use Plan and Cedar Access strategy were only guidance documents and therefore would not be affected by CCFIPPA. This reasoning fails to understand how CCFIPPA would work. For example, if HFN according to its Land Use Plan refused to allow a development in their Red zone (no Development at all), an area where HFN has strong aboriginal rights documented- Canada could come and ask HFN to change their LUP to allow development. HFN would likely say no, so Canada could be faced with a claim for damages for expectations of development under CCFIPPA. A company from China would have begun their applications for development and would be faced with strong First Nation opposition and hopefully no development permits. Would it be speculative to think HFN may achieve a treaty one day and have other governance powers, or a self government Act like Westbank or Sechelt? Or some other governance arrangement? How speculative is speculative? Good question that was not explored by the court.

5. I do want to mention that I find the Justice did not consider one other issue in the right manner. On page 62, the court says that is important to distinguish between potential adverse effects on asserted aboriginal rights and potential adverse effects on a First Nation's future negotiating position. The test is right, but the reason for the test is to ensure that there are lands and resources left for a First Nation to be able to negotiate a treaty or other settlement. That is the point HFN was making was as stated in Haida, p 21 para. 33, "when the distant goal of proof is finally reached, the Aboriginal peoples may find their land and resources changed and denuded. This is not reconciliation. Nor is it honourable." This concept was not explored by the court.

6. The question of whether an international law could affect aboriginal rights was evaluated with respect to NAFTA. The Justice says that the US has far greater investment in Canada than China does at this point and as there have never been any arbitrations on aboriginal rights and few under NAFTA-it is unlikely to happen. But I would ask-does it have the potential to happen? This is not a matter of looking at other laws and seeing if they have worked- this is looking at the particular CCFIPPA and what it has the potential to do. How many First Nations have the resources to bring a court cases against NAFTA or the 24 other FIPPA's. I am sure many First Nations have had many adverse effects with respect to the Migratory Birds Convention Act with respect to agreement with the US and Mexico.

7. The court did a review of the Minimum Standard of Treatment and Most Favour Nation clauses and found some uncertainty regarding the effects of both of them but concluded that HFN did not lead any material evidence to demonstrate how, as a practical matter, it would have an appreciable adverse impact on its asserted aboriginal interests. The court found the same with respect to an arbitral tribunal finding that measures designed to protect or accommodate HFN's interests would not contravene the expropriation clauses, and it would not cause Canada to implement measures designed to protect aboriginal rights for fear of being found liable to pay significant damages to one or more Chinese investor. Otherwise known as the "chilling effect." Canada has always placed development over aboriginal rights and I am not sure how you would illustrate this to a court that would support HFN's assertion that Canada will do everything they can to avoid large awards of damages to the detriment of First Nations rights and title.

This is a very lengthy judgment and I have only provided analysis on the issues I felt were important. The Justice was very careful to cover every point raised by HFN as I am sure he knew there was a good chance it would be appealed. The bottom line for the court is that HFN did not produce evidence to prove potential adverse effects and a causal link between HFN and CCFIPPA. I am sure this is a very important legal issue to be considered and hope that there will be an appeal. Canada may ratify this before an appeal is launched and that would not be honourable. If Canada is serious in reconciling with First Nations in Canada, it must change its actions and actually work with First Nations people to protect their rights before entering into International agreements.

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