Rio Tinto dam impaired Aboriginal rights, but remedy can only be sought from governments: B.C. court

The British Columbia Supreme Court recently ruled that Saik'uz First Nation and the Stellat’en First Nation have constitutionally recognized rights to fish in the Nechako watershed, rights that were “significantly impaired” by the construction and operation of a Rio Tinto Alcan Inc. dam in the area.

However, the court found that any available legal remedy can only be sought against the governments that approved the project, not the global miner.

Justice Nigel Kent ruled in favour of defendents Rio Tinto, saying that it is government that has the duty to protect Aboriginal fishing rights, but no claim for damages was brought against government in this case.

“There are many complicated issues of fact and law in this case,” said Justice Nigel Kent in his decision, which considered whether the defence of statutory authority against tort claims applies when the claims are based on Aboriginal rights.

The trial took 189 days, spanning a year-and-a-half, with final oral arguments lasting six weeks. There were 3,000 pages worth of written arguments and parties cited around 600 legal authorities.

The Saik'uz First Nation and the Stellat’en First Nation brought common law tort claims of nuisance and breach of riparian rights against Rio Tinto Alcan, which operates the nearly 70-year-old Kenney dam. The dam diverts the Nechako River and its operations have depleted the First Nations’ traditional fishing sources. The plaintiffs also sought injunctive relief compelling the company and provincial and federal governments to restore the river and prevent further damage to the fishery.

Justice Kent found that Rio Tinto had built the dam with plans approved by the provincial and federal governments and the company had always “strictly complied” with their agreements concerning the flow of the river. He rejected the plaintiffs’ argument that their possession of Aboriginal title and Aboriginal fishing rights meant Rio Tinto could not be immunized from their tort claims with a statutory authority defence. He found the defence applied to the case.

“The Court’s reasons reflect its efforts to balance Indigenous rights on one hand with the legitimate expectations of private parties on the other,” say Daniel Bennett and Michael Manhas, who acted for Rio Tinto and prepared joint statements to Canadian Lawyer.

“What the Court makes clear is that while the common law must adapt to accommodate the rights of Indigenous peoples in tort claims, defendants do not lose standard common law defences where plaintiffs sue based on Aboriginal rights.”

Justice Kent’s decision provides certainty on “one of the key questions in this case,” whether the standard statutory authority defence applies the same way or is undermined where Aboriginal rights are involved, say Bennett and Manhas, who are partners at Norton Rose Fulbright Canada LLP. 

“[E]ntities operating lawfully under Crown authorizations permitting their conduct can be confident that any statutory authority they have extends to claims grounded in Aboriginal rights, and that those authorizations cannot be indirectly challenged in a tort claim. This holding should avoid surprises where an entity has been operating lawfully.”

Bennett and Manhas add that the court did not rule that industry can “never” be liable in these circumstances, only that industry is not liable when it meets its legal obligations and strictly complies with licenses and authorizations.

B.C.’s Nechako River stretches 516 km, from the Kitimat Range in the Coast Mountains to Prince George, where it flows into the Fraser River. Its waters touch several First Nations’ reserves and Indigenous people have relied on its fish stocks “since time immemorial,” according to the Supreme Court of Canada, in a related case.

Rio Tinto – then called the Aluminum Company of Canada – built the Kenney dam in the 1950s to create hydropower for aluminum smelting.

The plaintiff First Nations have long lived around and fished on the Nechako, and they claimed the dam has led to the extinction of the river’s White Sturgeon and a collapse of the salmon population. They claimed an Aboriginal right to fish on the Nechako watershed and assert Aboriginal title to their traditional fishing areas, which formed the basis of their tort claims.

Rio Tinto argued claims made based on Aboriginal fishing or title rights can only be asserted against the Crown and that a non-governmental entity such as itself cannot be held liable. The company argued it was immunized against liability by statutory authority, as the dam and its operation were authorized by government. It also disputed whether the dam’s operation has diminished fish stocks and said the plaintiff’s claim in that respect was merely speculative.

B.C. and the federal government – also defendants – argued they lack fiduciary duty to order Rio Tinto to make the changes the plaintiffs seek. “They say there is no plenary duty of the sort alleged by the plaintiffs in the absence of an identified specific Indigenous interest over which the Crown has assumed a discretionary control,” said Justice Kent. While the governments acknowledge the plaintiffs have Aboriginal fishing rights, they said constitutional challenges and tort actions are distinct and should not be conflated.

Justice Kent, ultimately, sided with the defendants. He ruled that, as the dam was a government-approved project, the defence of statutory authority applies, and he dismissed both the plaintiff’s claims for tort and injunctive relief. But Justice Kent also made a declaration that the plaintiffs indeed have an Aboriginal right to fish and, according to the honour of the Crown, both levels of government have an obligation to protect that right.

A B.C. Ministry of the Attorney General spokesperson told Canadian Lawyer the province is reviewing the implications of the decision, saying: “The province is taking time to review and assess the implications of this decision,”