The Lax Kw’alaams Decision on LNG: Indigenous Power Rises in British Columbia

The Story

During the second week of May, the Lax Kw’alaams First Nation in northwestern British Columbia (BC) rejected a proposed $1 billion (CAD) agreement with Pacific Northwest LNG, a joint venture led by the Malaysian energy company Petronas. Pacific Northwest is proposing a multibillion dollar liquified natural gas (LNG) project that would take natural gas from inland BC, liquefy it at a facility on the coast, and ship it across the ocean to Asian markets hungry for energy resources. The proposed location for the facility overlaps with salmon habitat on Lelu Island, a significant cultural area for the Lax Kw’alaams, many of whom make their living by fishing.

To avoid costly and lengthy litigation, Pacific Northwest offered the indigenous group a $1 billion (CAD) benefits package, and additional land, to offset the impact to Lelu Island and gain the Lax Kw’alaams’ approval for the project. The package would have translated to approximately $320,000 per member of the First Nation. Yet, in three separate votes across the group’s traditional territory, community members overwhelmingly rejected the deal, claiming that the potential long-term harm to the salmon habitat and the community’s way of life outweighed any temporary gains from an infusion of cash.

 

The vote is one of the most vivid examples of rising indigenous power in resource development decisions in Canada; other indigenous groups in BC have already vowed to challenge proposed pipelines and marine terminals to export Canadian oil to the Pacific Ocean, while First Nations on Canada’s East Coast organized protests that led to a ban on hydraulic fracturing in New Brunswick. Though Canadian law is still murky on this issue, the Lax Kw’alaams decision likely means that Pacific Northwest will have to change its plans for a liquefaction facility, despite support from the BC provincial government for the project. It’s important to note that the First Nations isn’t categorically opposed to all resource projects; in fact, its leadership voiced support for a pipeline project just a few days after the LNG vote, claiming that the pipeline company has properly listened to and addressed the community’s concerns about environmental impacts.

Background Articles

• “No LNG Project Without Environmental Guarantees, B.C. Grand Chief Vows“, by Erin Anderssen (Globe and Mail)
• “For the Lax Kw’alaams, Cultural Identity is Priceless Compared to LNG“, by Brett Jang (Globe and Mail)
• “Lax Kw’alaams Band Council Comments on Unanimous Rejection of LNG Benefits Agreement“, by Shaun Thomas (The Prince Rupert Northern View)

Key Quote

The band has said it is open to LNG, but only under the right conditions. Asked what would be required to win approval for these kinds of projects, [Lax Kw’alaams] Chief [Stewart] Phillip said governments and businesses need to be more democratic in their approach, and more environmental in their priorities. Until then, he said, ‘the answer will continue to be no.'” – Erin Anderssen (Globe and Mail)

Context

To understand the significance of the Lax Kw’alaams decision, it’s important to distinguish the legal concepts between “duty to consult” and “free, prior, and informed consent”. The “duty to consult” is enshrined in the Canadian Constitution and applies to indigenous groups that signed one of the eleven Numbered Treaties with the British government (also known as “the Crown”)  that served to settle much of the Canadian West in the late 1800s/early 1900s. This principle states that federal and provincial governments (representing the Crown) must consult with and accommodate indigenous rights when making decisions on a proposed project overlaps with their traditional territories.

On the other hand, the principle of “free, prior, and informed consent” is enshrined in the United Nations Declaration on the Rights of Indigenous Peoples (UN DRIP) and is generally interpreted to signify that governments and project proponents must obtain the full consent of an indigenous group prior to the start of a project that overlaps with its traditional territory. While the law is still murky on the full meaning of these terms, in practice, the principle of “free, prior, and informed consent” tends to be a stronger threshold than “duty to consult” – the former gives a potentially affected indigenous group ultimate decision-making power, whereas the government retains ultimate decision-making power in the latter principle.

 

This distinction is important for Canadian resource development issues, because the principle or “test” applied to a proposed project differs based on jurisdiction. In Alberta and northeast British Columbia, where most of Canada’s oil and gas resources have traditionally been developed, indigenous groups signed the Numbered Treaties and therefore have historically had the right to “duty to consult”, but not necessarily the right to “free, prior, and informed consent”. However, in the southern and western parts of British Columbia, which were settled by Europeans at a later date, indigenous groups did not sign a Numbered Treaty with the Crown, leaving a murkier legal environment for natural resource issues. This uncertainty is becoming increasingly significant as the resource industry targets pipeline routes and LNG facilities in this region, in order to export energy resources to Asian markets.

 

Last year, the Canadian Supreme Court issued a historic ruling involving one of these indigenous groups, the Tsilhqot’in Nation, asserting aboriginal title, or ownership, over their traditional territories. The legal ramifications of what this ruling means for indigenous groups not covered by the Numbered Treaties are yet to be determined; however, the ruling likely means that B.C. indigenous groups will have more legal recourse to argue that their consent is needed for any proposed resource project over their lands.

 

This month’s Lax Kw’alaams decision is a reflection of this growing indigenous power in British Columbia. It’s unclear what Pacific Northwest LNG’s next move will be – it may attempt to move forward with the project anyway and likely find itself in a lengthy legal battle with the First Nation – but at a minimum, the possibility that the indigenous right to free, prior, and informed consent will one day be recognized by the courts has led the company to seek that consent in a significant way prior to proceeding with the project. Meanwhile, the Lax Kw’alaams First Nation is in a stronger position of power to demand accommodation of its concerns over the health of its salmon habitat, or else veto the project entirely.

 

The outcome of this case will likely have broader implications for resource development in Canada, including affecting other proposed BC projects, such as Enbridge’s Northern Gateway pipeline. Moreover, it may even influence Alberta resource decisions; the province’s newly-elected New Democratic Party included the implementation of UNDRIP as part of its platform. At a time when all the talk is about the new government’s proposals for increased corporate taxes, a strengthened carbon policy, and a royalty review, it is this re-balancing of indigenous power that may one day have the most significant impact on resource development in this country.

Suggested Discussion Questions

• What is the significance of the Lax Kw’alaams decision to reject the Pacific Northwest LNG offer?

• How might the indigenous group have acted differently if asserting a right to consent was not a possibility?

• How might the overall landscape of resource development in Canada look differently if indigenous free, prior, and informed consent becomes widely recognized one day?