Can a government be held accountable if its industry regulators don't treat applicants fairly? And should a court-ordered remedy for any proven case of unfairness include shelling out millions, maybe even billions, of dollars in compensation?
These are anything-but-hypothetical questions that Taseko Mines wants to put before the Federal Court of Canada. The Vancouver company, which has spent $130 million and counting over more than two decades in an unsuccessful attempt to win approval for a new $1.5-billion open-pit gold and copper mine near Williams Lake, thinks the federal environmental review process was unfair, and it wants to sue the government.
Taseko already has two judicial review applications before the Federal Court, one challenging the basis of the environmental review panel's negative assessment of its project, and the other asking that the court set aside the federal cabinet's thumbs-down decision that was based on the panel's recommendation. Now it has filed papers asking the court's approval to roll both these actions into a civil suit seeking unspecified financial compensation as well as costs and another chance to argue its case.
The company needs the permission of the court to proceed with a civil action against the federal government, but the documents it has filed set out several grounds it wants to argue. It claims "misfeasance" -- acts that are legal, but done improperly -- by public officials who met privately with opponents of the projects and didn't give Taseko any chance to respond. It says the federally appointed environmental review panel accepted -- and the environment minister and cabinet based their decision on -- incorrect facts, some of which were submitted very late in the process. It says the federal government overstepped its jurisdiction in making its ruling. And it says the panel members, who had a responsibility to make recommendations based on their findings, instead left most of the work to staff.
The mine proposal has been controversial for years, pitting First Nations and environmentalists who don't want it against workers and communities who do, and even the provincial government, which has approved it, against the federal government, which has turned it down twice.
The first application that the feds denied would have eradicated a remote freshwater body called Fish Lake. This environmental cost was deemed to be too high, says Taseko vice-president Brian Battison, but the company was allowed to tweak its proposal and resubmit.
It did so after spending an additional $6 million to $8 million on a new plan that would cost an additional $300 million to implement but would save Fish Lake, Battison told me in an interview.
This application was also denied in February in a decision that, Battison says, was based on incorrect information that was presented very late in the process, leaving no chance for the company to respond.
Taseko's court filings also list a series of private meetings that the claim maintains were held between federal officials involved in the process and opponents of the project. Taseko, it said, had "a legitimate expectation that it would be advised and could respond if such last-minute third-party interventions were made." But the company never heard a word.
As well, the company says it was denied many relevant documents that may have influenced the decision, and the relative few it did get had large portions blacked out.
The misfeasance allegations -- and none of this has been proven in court -- are particularly strong and, if true, disturbing.
The federal officials who met privately with and accepted late documents from project opponents "acted deliberately, unlawfully in the capacity of a public officer and with the knowledge that the conduct was unlawful and likely to harm Taseko," the company's documents say.
Regardless of whether leave to sue is granted, and regardless of the outcome of the case if it goes ahead, it has a significance beyond the $1.5-billion asset Taseko has riding on it. Because, even though a tiny handful of other resource companies have successfully sued governments over issues related to unfair treatment, none to my knowledge have gone after a regulator that jerked them around.
In 2011, Boss Energy ended up with a $30-million settlement when its uranium mining proposal for a site near Kelowna was scuttled by a hastily implemented moratorium on uranium exploration and mining in B.C. And this year, the province agreed to pay a mere $9.8 million to settle a $500-million lawsuit launched by Cline Mining Corp. over lost opportunity to develop a claim in the pristine Flathead area of the southeast.
There is also a precedent for a court to award a company punitive damages when they can prove government actions harmed their bottom line. In another case that, like Taseko's, dragged out over two decades, a lawsuit launched by Carrier Lumber of Prince George finally ended in 2002 with a $75-million award to the company for its loss of forest tenure.
With cases of this nature so rare, others interested in B.C. mining will be watching closely to see how it unfolds.
"It's a very important case for the industry," said Karina Brino, the president and CEO of the Mining Association of B.C.
Her group doesn't involve itself in individual company's issues, yet it did register as an intervener in the judicial review of the panel's conduct.
"We have, from the beginning, expressed concern about the regulatory process," Brino said. "The transparency and accountability of the process is what we're interested in. And that's what's at play in this particular case."
The Federal Court is to hear arguments on Oct. 22 concerning Taseko's bid to roll the two judicial reviews into a single civil case.
