The Ontario Court of Appeal’s recent decision in Frontenac Ventures Corp. v. Ardoch Algonquin First Nation[1] makes it clear that forest product companies must carefully assess their legal responsibilities when faced with protests and blockades by Aboriginal groups.

This case suggests that where an Aboriginal group engages in a blockade preventing a natural resource company from operating on land claimed by the group, even where the blockade has been ruled illegal by court injunction, the company may have to negotiate a resolution with the Aboriginal group.

Such an obligation to negotiate is grounded in the Crown’s duty to consult and accommodate Aboriginal peoples. It effectively means that, in the face of an Aboriginal blockade, a third party stakeholder, such as a forest products company, may have to continue seeking negotiated solutions to Aboriginal land disputes, rather than immediately seeking recourse through contempt of court proceedings for breach of court-imposed injunctions.

a) Background: The Duty to Consult Aboriginal Groups and the Forest Products Industry

A natural resource-based project in Canada may require multiple federal and provincial permits and approvals, any one of which may trigger the Crown’s duty to consult affected Aboriginal groups. If these consultations are legally inadequate, the permits and authorizations issued by the government may be challenged in court and could be cancelled, potentially suspending a project for an indeterminate period of time[2].

The Crown’s failure to fulfill its consultation duty therefore represents a significant risk to natural resource companies. Additionally, these companies are increasingly required by government to engage in consultation and accommodation processes with First Nations groups as part of the regulatory process.[3] Forest products industry stakeholders have an interest in properly understanding the Crown’s duty and effectively managing their own consultation strategies in order to enhance the likelihood that the Crown’s duty is fulfilled, and thereby reducing the risk to their activities.

b) Blockades, Injunctions, Contempt of Court and the Duty to Negotiate: the Frontenac case

Frontenac Ventures Corporation (Frontenac) is a private uranium exploration company holding mining leases and the legal claims required to conduct mineral exploration within an area of private and Crown land in eastern Ontario. The area is subject to a land claim by the Ardoch Algonquin First Nation (AAFN). The latter is part of the Algonquin land claim accepted for negotiation by the Governments of Canada and Ontario in 1991.

The AAFN and other groups protested against Frontenac’s exploration plan, blockading the company from gaining access to the land in question. One of the reasons for the blockade was an alleged failure by the Crown to fulfil its duty to consult with the AAFN regarding Frontenac’s exploration plan and the renewal of its mining leases. The AAFN maintained that the company could not legally proceed with its activities until the duty to consult had been discharged.

Faced with an inability to proceed due to the AAFN’s actions, Frontenac obtained injunctions restraining the AAFN from interfering with its exploration program. Neither the AAFN nor the individuals concerned participated in the injunction proceedings. In spite of the court-ordered injunctions, members of the AAFN continued to engage in peaceful protest and a blockade, effectively preventing the company from engaging in its planned activities on the land.

Frontenac brought an urgent motion to have the AAFN and several of its members found in contempt of court for not obeying the injunctions. At the Court's urging, the parties, along with the Government of Ontario, agreed to undertake twelve weeks of mediation. Despite their efforts, the negotiations were not successful. In the contempt proceedings that ensued, the AAFN members were sentenced to jail time and significant fines. The AAFN and the members appealed that decision.

Although the issue before the Ontario Court of Appeal was the appropriate sentence for contempt of court, the Court made several important comments about the duty to negotiate in the context of Aboriginal protests, including the following:

46 Having regard to the clear line of Supreme Court jurisprudence, from Sparrow to Mikisew, where constitutionally protected aboriginal rights are asserted, injunctions sought by private parties to protect their interests should only be granted where every effort has been made by the court to encourage consultation, negotiation, accommodation and reconciliation among the competing rights and interests. Such is the case even if the affected aboriginal communities choose not to fully participate in the injunction proceedings.[4]

[Emphasis added.]

Significantly, the Court went further by clearly signaling that, in the absence of the Crown having fulfilled its duty to consult, it would no longer be acceptable for private parties to seek through injunctions "a protest-free zone" for contentious private activities, followed by contempt proceedings against protestors for failure to comply. The Court went on to state that it must be satisfied that the duty to consult with the affected First Nation group has been fully discharged, and that every avenue for a negotiated settlement has been exhausted before issuing a requested injunction.