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Canadian Court Sides With Natives in Frack Sand Mine Dispute

A court decision Monday posted a sharp warning against cutting environmental and aboriginal rights corners to British Columbia's avidly pro-liquefied natural gas (LNG) development Liberal government.

As the BC legislature began a special summer sitting to ratify an LNG project agreement billed as worth C$36 billion (US$29 billion), Fort Nelson First Nation (FNFN) won a lawsuit against hasty approval of a northern industrial spinoff.

BC Supreme Court Justice Barry Davies ordered provincial authorities to reconsider a decision not to hold an environmental assessment on a mining project for sand to be used in horizontal drilling and hydraulic fracturing to produce shale gas for LNG exports.

The judge also declared that the province violated the natives' constitutional rights to be consulted and accommodated by initially not telling them about the mining scheme in their traditional territory, and then only requiring sketchy notices and descriptions.

The victorious FNFN is not a doctrinaire opponent of industry. Formally recognized by treaty, the community has 900 official citizens in six villages around a mailing address at Mile 295 on the Alaska Highway across BC's northern shale gas region.

Tribal business interests include contract drilling, gravel mining and worker housing. Chiefs have repeatedly emphasized that the community's goals are inclusion in benefits of development done in a manner that respects the regional environment.

The contested mine, proposed by Canadian Silica Industries Inc., is one of six northern BC fracking sand supply sites proposed by four companies, according to evidence in the court case.

FNFN accused the aspiring miners of "project splitting." The tactic avoids environmental assessments and aboriginal consultation by breaking up development into pieces that look separate and too small to warrant enforcement of provincial or national requirements.

The BC judge found that provincial authorities, in exempting the fracking sand mine from formal review and consultation, used "uncritical acceptance of a proponent-driven assessment at the front end of the environmental regulatory process."

The pro-development approach "has the very real potential to defeat existing treaty rights by allowing projects to proceed without environmental assessment," the ruling warned. As construction and production go ahead, any "relief" or compensation for damages would be "left to sanctions which may be of no or little benefit once those rights have been abrogated," the judge added.

In the BC capital of Victoria, government leaders in the legislature repeated predictions that the LNG project agreement with Malaysian state conglomerate Petronas would support a 25-year series of investments, job creation and provincial revenue generation.

The official deal value of C$36 billion (US$29 billion) began with a 2012 takeover of Calgary-based Progress Energy to obtain a large portfolio of BC shale assets and a Canadian operating base, and is forecast to accumulate steadily with construction of the proposed Pacific NorthWest LNG export terminal and TransCanada Corp.'s planned Prince Rupert Gas Transmission, plus a northern BC array of production, processing and pipeline developments.

The project agreement includes favorable BC royalties and taxes, plus rights for Petronas-Progress to sue for compensation if any future provincial regime imposes increases. Government leaders promote the deal as providing essential investor certainty.

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