Husky Oil Operations Limited v Canada-Newfoundland and Labrador Offshore Petroleum Board, 2014 FC 1170

Another recent decision from a Canadian court highlights the ongoing tension between industry confidentiality and the right for the public to access documents disclosed to regulatory bodies (see our previous post from September 26, 2014 dealing with a similar issue [found here].  In its Reasons for Judgment released December 19, 2014 [a copy of which can be found here], the Federal Court of Appeal overturned a decision (the “Decision”) by the Canada-Newfoundland and Labrador Offshore Petroleum Board (the “Board”) to disclose incident notifications and investigation reports (the “Information”) which had been provided to the Board by Husky Oil Operations Limited (“Husky”), in connection with Husky’s operation of its Henry Goodrich drilling rig, located in the Newfoundland and Labrador offshore area. The Information, which was for the period from April 1, 2012 to December 31, 2012, had been requested by an unidentified party pursuant to the provisions of the Access to Information Act, RSC 1985 c A-1 (the “Access Act”). The Information Commissioner of Canada (the Information Commissioner”), who had been added as Respondent to the proceeding by Order made May 3, 2013, unsuccessfully submitted that the Board had correctly determined that the Information ought to be disclosed.

By way of background, Husky was required to submit the Information to the Board pursuant to the requirements of the regulations enacted under Part III of the Canada-Newfoundland Atlantic Accord Implementation Act, SC 1987, c 3 (the “Accord Act”).  In accordance with section 119(2) of the Accord Act, the Information was privileged and could not knowingly be disclosed without the written consent of Husky, “except for the purposes of the administration or enforcement of either Part [II or II of the Accord Act]…” (the “Exception”). The central issue before the Federal Court was whether the Board had erred in having determined that section 119(2) contains an element of discretion that authorized the disclosure of the Information pursuant to the Exception, notwithstanding the statutory privilege created by that provision.

Describing itself as a safety regulator working in the public interest, the Board argued that the release of the Information would inform the public about the management of safety issues in the offshore industry. It submitted that it had exercised its discretion to release the Information in good faith and without regard to irrelevant considerations, and that its exercise of discretion was reasonable. The Information Commissioner largely agreed with the submissions of the Board, arguing that the Board had correctly determined that the requested Information fell within the Exception, set out under section 119(2) of the Accord Act.

Husky argued that the privilege provided for under section 119(2) of the Accord Act applied to the Information, and that the Exception was inapplicable since disclosure of it was not required for the purposes of administration or enforcement of Part II or III of the Accord Act. It submitted that section 119(2) is meant to encourage witnesses and parties to participate openly in safety investigations and that if Parliament intended to create a public interest discretion to authorize the disclosure of privileged information, it would have clearly set out such an exemption.

The Federal Court agreed with Husky, and rejected the Board’s interpretation of section 119(2) as containing an element of discretion that permitted the Board to act in the public interest. While the Court acknowledged that “[t]he jurisprudence has established that the public has a real and important interest in having access to information relative to safety in the offshore industry and the Board’s fulfillment of its mandate” (para 59), it further found that:

The Board had not shown that exemption of the information from the benefit of the privilege would be necessary for the purposes of administration or enforcement of the Accord Act. The interpretation of that provision, as submitted by both the Board and the Commissioner, would effectively create a public interest discretion which is not found in the Accord Act (para 60).

The Court held that if Parliament had intended to include a public interest override for the statutory privilege in section 119(2) of the Accord Act, it would have done so in clear terms, as it has in the Canada Transportation and Accident Investigation and Safety Board Act (para 66).

The Court went on to find that while safety is a concern of the Board, and while there is a public interest in the safe operation of offshore petroleum operations, the public interest alone does not justify disclosure of reports and information generated by offshore petroleum operators. It was held that the Board’s interpretation of section 119(2) of the Accord Act arose from an overly broad reading which the language of that provision cannot bear. Interestingly, the Court held that Husky “is not generally accountable to the public and is entitled t​o the protection of both the Access Act and the Accord Act” (para 83).

Industry Implications:

  • This case is an example of an administrative body taking the controversial position of appearing on an application for judicial review (or an appeal) of its decision, not merely to provide the adjudicator with the necessary background underlying the decision, but to actively advocate a position in support of it.  This ongoing tension has been recently discussed in our blog post on January 21, 2015 regarding the decision of Imperial Oil Limited v Jacques [found here].
  • Importantly, industry may be able to rely on this decision to resist any attempt by the Alberta Energy Regulator to disclose potentially sensitive information provided to it following a request for that information pursuant to s.4(1) of the Alberta Freedom of Information and Protection of Privacy Act.