British Columbia Supreme Court Orders First Nation to Disclose Impact Benefit Agreements

Written By David Bursey, Colm Boyle and Sean Assie

The recent decision by the Supreme Court of British Columbia (BCSC) in Yahey v British Columbia (2018 BCSC 123, 25 January 2018) offers interesting insight into the circumstances in which benefit sharing agreements and accommodation payments might be disclosed. The issue of transparency around payments to indigenous groups by project developers is drawing increasing attention in litigation like the Yahey case and in regulatory initiatives like the federal Extractive Sector Transparency Measures Act.

Typically, such payments are protected by confidentiality clauses in the associated agreements between project developers and indigenous groups. However, the broader public interest in transparency can in some circumstances override the private interest to keep the payments confidential. We expect this trend to continue.

Background to the Treaty 8 Infringement Claim and this Decision

This decision is part of an ongoing action—started in 2015—by the Blueberry River First Nation (BRFN) against the Crown for infringement of BRFN Treaty 8 rights and breach of the Crown’s fiduciary duty to the BRFN.

BRFN alleges that the Province has caused or permitted industrial development in BRFN's traditional territory to such an extent that the cumulative impacts have "increasingly pushed the Blueberry River First Nations to the margins of their traditional territory, and have now left the members with almost no traditional territory within which to meaningfully pursue their constitutionally protected cultural and economic activities."

Among other things, BRFN is seeking a permanent injunction against further development in its territory. On two occasions BRFN unsuccessfully applied to enjoin the Province from allowing further industrial development in its traditional territory pending trial of the civil claim (Yahey v British Columbia, 2015 BCSC 1302; Yahey v British Columbia, 2017 BCSC 899).

Trial of the action is set to commence on March 26, 2018, though the parties are still attempting to resolve issues relating to what documents should be disclosed in the proceeding.

One of the defences to the claim being advanced by the Province is that BRFN acquiesced to or benefited from the industrial developments in its territory that it says are infringing the exercise of its treaty rights. In support of this argument, the Province requested that BRFN disclose agreements it has entered into with industry parties operating in its territory. When BRFN refused, the Province brought an application to the court for relief ordering that BRFN disclose the requested documents.

The Disclosure Decision

The Province had requested a broad range of documents. After weighing the relevance and probative value of the documents requested in the context of the issues in the trial, the court ordered BRFN to disclose the following categories of documents:

1. maps of traditional territory or land use, 
2. traditional use studies (final versions), transcripts or recordings of interviews with BRFN members for the studies (but only for those members who are scheduled to be witnesses at the trial),
3. BRFN communication documents, and
4. agreements, arrangements, joint venture, term-sheets, payments, donations, and programs between or involving the BRFN and industrial project proponents, current or in the past 10 years—except for documents relating to developments that proceeded despite BRFN’s objection and documents related to capacity funding.

The court found such documents would be relevant to British Columbia’s “novel” legal argument in the underlying litigation; namely, that BRFN acquiesced to or benefited from industrial development in its treaty territory. The documents would also be relevant to the Province’s pleading “that Treaty 8 foreshadowed change and that the Province has managed that change honourably.”

The court, however, declined to order the BRFN to disclose:

1. instructions, notes and drafts of traditional use studies where no final report was prepared,
2. transcripts or recordings of interviews with BRFN members for the studies where those members are not scheduled to be witnesses at the trial,
3. agreements between industrial proponents and companies which were owned or controlled by BRFN members, 
4. Treaty 8 First Nations communications, and
5. Treaty claim documents.

Implications for Negotiations between Project Developers and Indigenous Groups

Benefit sharing and other development agreements will continue to be valuable tools for both proponents and indigenous groups since they can allow projects to proceed with each party benefiting. These agreements also help build and strengthen relationships between indigenous groups and industry, which assists with the overall reconciliation of the interests of the indigenous groups and the Crown.

Like other commercial agreements, these agreements often contain commercially sensitive information, including terms relating to benefits payments, contracting and employment terms and other substantive non-fiscal terms. While the parties may prefer to keep these commercial terms confidential, the regulatory policy trend is increasingly toward public disclosure of any economic payments to indigenous groups when they exercise governing power over the resource or land. This trend is evident in the extractive resource sector with the recent enactment of the Extractive Sector Transparency Measures Act.

This Yahey decision adds another dimension that must be considered when drafting these relationship agreements. The risk of disclosure is increasing, so the agreements must anticipate broader circumstances for disclosure and allow for that outcome.