On June 10, 2015, the Alberta Energy Regulator (AER) announced the release of the revised Joint Operating Procedures for First Nations Consultation on Energy Resource Activities (Joint Operating Procedures), which were originally released in February 2015 but subsequently suspended. The Joint Operating Procedures provide long-anticipated details regarding coordination between the AER’s application review process and the Aboriginal consultation process administered in Alberta by the Aboriginal Consultation Office (ACO). The Joint Operating Procedures should provide useful clarity to all interested parties regarding the relationship between the AER and the ACO and should improve the efficiency of the overall regulatory process for project proponents. At the same time, however, the Joint Operating Procedures may also create new areas of uncertainty and inefficiency for project proponents that must now be addressed.

Background: Alberta’s Consultation Policy and Guidelines

In August 2013, the Alberta government released a new policy on Aboriginal consultation in the province entitledThe Government of Alberta's Policy on Consultation with First Nations on Land and Natural Resource Management, 2013. This policy announced the creation of a new ACO, which was tasked with managing all aspects of Crown consultation. New consultation guidelines, entitled The Government of Alberta’s First Nations Consultation Guidelines on Land and Natural Resource Management (the Guidelines), were released in July 2014 to clarify the ACO’s consultation processes and the respective responsibilities of project proponents, First Nations and the ACO. Among other things, the Guidelines require the ACO to determine whether consultation with potentially affected First Nations has been adequate before the AER may issue any approval under a “specified enactment” as defined in the Responsible Energy Development Act (REDA), namely any approval under the Public Lands Act, Mines and Minerals Act (Part 8), Water Act or Environmental Protection and Enhancement Act.

Relationship Between the AER and ACO

Prior to the release of the Joint Operating Procedures, there was considerable uncertainty around the relationship between the AER and the ACO. For example, it was not clear at what stage of the AER application process the ACO consultation process was to be completed. In many cases, consultation was determined by the ACO to be adequate in advance of an application to the AER, but the same issues and concerns were then raised by the affected First Nations through the Statement of Concern (SOC) process before the AER. It was unclear how the AER and ACO would cooperate in these matters, if at all, to determine whether the potential impacts on Aboriginal rights and interests had been sufficiently addressed by the proponent. A Ministerial Order was released in October 2014 to provide high-level guidance to the AER, but the detailed processes for coordination between the AER and ACO were left to future joint operating procedures to be developed by the AER and ACO. There were also outstanding questions about the applicability of the Ministerial Order to applications under Acts other than “specified enactments,” as well as how certain requirements in the Ministerial Order would be addressed by the AER.

Joint Operating Procedures

Following amendments to the original Joint Operating Procedures which were released in February 2015, the AER released the final Joint Operating Procedures on June 10, 2015. These Joint Operating Procedures clarify that the Ministerial Order only applies to applications under “specified enactments” as defined in the REDA, and provide far more detail about how the requirements in the Ministerial Order will be addressed through coordination between the ACO and AER.

Under the Joint Operating Procedures, there are four different processes established for coordinating the AER and ACO responsibilities. In each case, an application to the AER under a “specified enactment” (with the exception of applications for activities listed in Appendix C of the Guidelines) must now be accompanied by an “application supplement” on First Nations consultation. The process for the AER to review the application then follows one of four avenues:

  • Process 1: No consultation required by the ACO. For these activities, the application supplement must attach the ACO’s pre-consultation assessment that determined no consultation was required (or demonstrate that the activity is listed in Appendix C of the Guidelines). The AER will then proceed to process the application in accordance with its standard processes. If a SOC is filed by an Aboriginal group, the AER will provide the SOC and the proponent’s responses to the ACO, but the ACO will have no formal involvement in the AER’s review process.
  • Process 2: Applications for Enhanced Approval Process (EAP) activities. For these activities, the ACO’s consultation process must be completed before an application can be made to the AER. As part of its consultation adequacy decision, the ACO may provide advice to the AER on whether actions are required to address potential impacts on treaty rights and traditional uses. The application supplement included with the AER application must include a First Nations Impacts and Mitigation Table demonstrating the outcomes of consultation through the ACO process, or alternatively the proponent may include a copy of the ACO consultation adequacy report. The AER will then proceed to process the application in accordance with its standard processes, as described for Process 1.
  • Process 3: Applications for non-EAP activities. For these activities, applications to the AER may be made before consultation adequacy is obtained from the ACO. SOCs from Aboriginal groups will inform the ACO’s consultation requirements and ultimate adequacy decision. Like for Process 2, the application supplement must include a  First Nations Impacts and Mitigation Table, which must also be updated once consultation adequacy is obtained from the ACO. Also like Process 2, the ACO’s consultation adequacy decision may include advice to the AER on whether actions are required to address potential impacts on treaty rights and traditional uses.
  • Process 4: Applications where extensive consultation is required (level 3 consultation under the Guidelines). For these activities, the AER will participate with the ACO and the project proponent in developing a consultation plan in accordance with the Guidelines. Once consultation under the plan is deemed “substantially complete” by the ACO, an application may be submitted to the AER, and the ACO will issue a “consultation completion notice” informing the proponent and First Nations that the period for delegated consultation is almost complete and will end at the same time as the deadline for submitting SOCs to the AER. Like Processes 2 and 3, the application supplement must include a First Nations Impacts and Mitigation Table, which must be updated once consultation adequacy is obtained from the ACO. The remainder of the process is the same as Process 3, except that where a hearing is held by the AER, the ACO may participate as an observer in the hearing and may issue a “hearing report” to the AER at the conclusion of the hearing process addressing the adequacy of consultation and proposed mitigation measures.

The new AER application requirements outlined above will come into effect on July 1, 2015.

Implications for Project Proponents

The Joint Operating Procedures provide helpful clarity on the relationship between the AER and ACO processes for different types of energy resources activities. In particular, it is clear that the ACO may rely on the AER’s regulatory process to form part of Alberta’s consultation process, which should allow certain types of applications to be filed sooner (i.e., in advance of consultation adequacy) and avoid some of the inefficiencies associated with separate ACO and AER reviews. The Joint Operating Procedures also clarify AER application filing requirements for issues and concerns raised through the ACO consultation process.

Despite these improvements, however, the Joint Operating Procedures may also create new areas of uncertainty and inefficiency for project proponents such as:

  • uncertainty regarding the processes for applications under Acts other than “specified enactments” for which consultation is required but the Joint Operating Procedures do not apply (i.e., while most activities will require approvals under one or more “specified enactments” such as the Public Lands Act, many activities also require approvals under other Acts such as a well and facility licence under the Oil and Gas Conservation Act, a pipeline licence under the Pipeline Act or an oil sands scheme approval under the Oil Sands Conservation Act, for which the Joint Operating Procedures do not apply)
  • uncertainty regarding the process for the ACO to address new issues and concerns raised through the AER’s SOC process, and possible inefficiency if the ACO requires additional consultation at that stage when the AER’s regulatory process includes mechanisms (such as alternative dispute resolution and hearings) that are designed to address such concerns
  • uncertainty regarding the process for the proponent and Aboriginal interveners to review and comment on any “hearing report” submitted by the ACO to the AER, which would be necessary to comply with basic requirements of procedural fairness

As a result, while the Joint Operating Procedures provide useful clarity in many areas, they may also create new areas of uncertainty and inefficiency for project proponents that must now be addressed.