New Frontiers – Mining Litigation in Canada
for the Activities of Foreign Subsidiaries
In June 2014, a Notice of Civil Claim was filed in the British Columbia Supreme Court in the case of Adolfo Garcia v. Tahoe Resources Inc. ("Garcia"). In Garcia, the plaintiffs have sued a Canadian parent company that conducts mining activities through a foreign subsidiary in Guatemala. This is the first time this type of claim has been brought in British Columbia. This claim parallels the claim brought in Ontario in Choc v. Hudbay Minerals Inc. ("Choc"). The courts in Ontario have refused to strike the claim in Choc and it appears to be heading to trial.

Historically, corporations have relied upon the separate legal personality of subsidiary corporations to shield the parent corporation from direct legal liability for the activities of the subsidiary. Garcia and Choc are examples of plaintiffs, usually backed by non-governmental organizations, using traditional legal principles in an attempt attach liability directly to the parent corporation for the activities of a foreign subsidiary. Importantly, these claims have been brought in Canadian, not foreign, courts. Accordingly, corporations conducting activities abroad should take note of these types of claims because, absent a strong judicial rebuke, the use of this litigation strategy is likely to increase. Read the full article by Craig Ferris with Lawson Lundell LLP. 

Eastern Promises? LNG Expands Beyond BC
Much media attention has been devoted to following the developments of British Columbia's nascent LNG Export industry. At the same time potential LNG Export Projects on Canada's East Coast are slowly gaining momentum. The following chart sets out LNG Export Projects on Canada's East Coast that have been announced to date.

Although the number of potential projects pales in comparison to proposed projects in British Columbia, there are a number of reasons why LNG export from Eastern Canada is becoming increasingly attractive. Perhaps the most significant reason is that Eastern Canada is home to Canada's only potential "brownfield" LNG Export Project. Repsol YPF SA, the owner of the Canaport LNG Import Terminal in New Brunswick, has publicly indicated that it is considering converting the underutilized import facility to export LNG. Read the full article by Jonathan Drance and Cameron Anderson with Stikeman Elliott LLP. 

BC to Release LNG Tax Laws [This] Month
British Columbia will unveil tax rules for the province's fledgling liquefied natural gas industry [this] month, during a pivotal point in the race to export LNG.

The timing is crucial because BC LNG proponents are edging closer to making their final investment decisions on whether to forge ahead with their massive projects.

Rivals such as Australia, Qatar, Nigeria and the United States are among the jurisdictions ahead of Canada in the global LNG competition. BC could miss out on a window of opportunity because foreign suppliers are eager to export LNG to meet growing global demand, especially in Asia.

BC Deputy Premier Rich Coleman said the province is optimistic that the proposed income tax on LNG, to be introduced in legislation in the fall session, will be competitive with other jurisdictions. Read The Globe and Mail article. 

Neucel Specialty Cellulose Fined
(Port Alice Pulp Mill)
The work of the Conservation Officer Service's Major Investigations Unit has led to the conviction of Neucel Specialty Cellulose Ltd. for illegally discharging waste from their Port Alice pulp mill operation.

Neucel Specialty Cellulose Ltd. has been ordered to pay $1,000 in fines to the Province and $174,000 to the Habitat Conservation Trust Foundation.

In 2011, Neucel exceeded authorized levels of discharge into Neroutsos Inlet on three separate occasions. The Major Investigations Unit of the Conservation Officer Service (COS), supported by Environment Canada, conducted a joint investigation and forwarded recommended charges to Crown counsel.

BC's Conservation Officer Service enforces over 33 pieces of provincial and federal legislation to ensure compliance with environmental laws and regulations. Specializing in commercial, environmental and industrial investigations, the COS has full authority to independently handle these cases and forward recommendations for charges directly to provincial Crown counsel. Read government news release.

Environmental Appeal Board Decisions
A number of Environmental Appeal Board decisions were released in the month of September. These include the following:

Environmental Management Act

• Domtar Inc. v. Director, Environmental Management Act [Mid-Hearing Rulings and Abandonments]
• Seaspan ULC (formerly Seaspan International Ltd.) v. Director, Environmental Management Act [Application for Costs – Granted]
• Emily Toews; Elisabeth Stannus v. Director, Environmental Management Act [Application for Order to Produce Documents – Granted in Part]

• Wilfred Boardman v. Regional Manager (Kootenay Boundary Region) [Final Decision – Appeal Dismissed]
• Tim Stephenson v. Regional Manager (Kootenay Boundary Region) [Final Decision – Appeal Dismissed with One Exception]
• Frederick Vandenberghe v. Regional Manager [Final Decision – Appeal Dismissed]

Visit the Environmental Appeal website for more information.

New Forestry-Related Annotation Posted
The first of many annotations was recently made to the Forest Act. You can identify an annotated section by the annotation icon located on the far right side of each section. For example, if you go to section 1 of the Forest Act, under the definition of "Crown Land" you will see a star icon adjacent to the section. Click the star icon to view the Expert annotation. Expect to see many more annotations posted in the coming weeks and months, including annotations to other resource-based laws.

Legal Case Study: Cost Recovery under the EMA –
J.I. Properties Inc. v. PPG Architectural Coatings Canada Inc.
On August 25, 2014, the BC Supreme Court rendered a ruling in a cost recovery action brought by J.I. Properties Inc. against PPG Architectural Coatings Canada Inc. pursuant to the Environmental Management Act, RSBC 2003, c. 53 ("EMA"). The Plaintiff obtained a judgment against the Defendant in the amount of $4,750,000, representing the reasonable costs incurred by the Plaintiff in investigating and remediating James Island, located between the Saanich Peninsula and Sidney Island, BC. In the reasons for judgment, the court interpreted and applied several key provisions of the Environmental Management Act, applicable to cost recovery actions, and considered legal arguments that had not previously received judicial consideration. The material facts giving rise to the action were largely not in dispute. The Plaintiff, J.I Properties Inc., purchased James Island (the "Property") from a third party, Pacific Parkland Properties Inc., on August 29, 1994. From 1913 to 1988, the Property was owned and/or operated by the corporate predecessor of the defendant, PPG Architectural Coatings Canada Inc. The Defendant manufactured and stored explosives on the Property until 1985, resulting in contamination. Read the full article co-written by Una Radoja and Kimberley Fenwick with Harper Grey LLP and published in the British Columbia Environment Industry Association (BCEIA) newsletter.