Norton Rose Fulbright speaks to GBR about its recent merger with Bull Housser and regulations effecting mining in British Colombia.
What motivated the merger between Norton Rose Fulbright and Bull Housser?
The merger with Bull Housser provided Norton Rose Fulbright with a new presence in Vancouver. The firm now has offices in the key business centers across Canada and can provide services to clients in British Columbia, which is a key market, especially because it is the gateway to Asia. In Bull Housser’s view, Norton Rose Fulbright’s global reach was attractive because it allowed Bull Housser’s lawyers and clients to leverage a growing network and access expertise in other parts of the world.
Vancouver is an international center for the mining industry, and from the perspective of Norton Rose Fulbright’s mining practice, merging with Bull Housser made sense because it provided access to an important market of Vancouver-based mining clients, including existing clients from Bull Housser.
What are the main areas in which Norton Rose Fulbright provides services to its clients involved in the mining industry?
We provide a complete suite of legal services associated with mineral exploration and development, including securities and finance, mineral tenures and permitting, environmental issues and First Nation consultation. We also provide legal advice to industries connected to the mining industry, such as contracting, procurement, shipping and transportation.
As a legal service provider, what are the main takeaways you gathered from the mining downturn?
The reluctance of investors to invest in the mining sector has obviously made it very difficult for mining to carry out exploration programs, or in some cases, retain their key assets and even survive. There have been acquisitions of these assets by major mining companies, but perhaps not as much as was initially anticipated due to the fact that the downturn has been for an extended period. Many of the larger, producing mining companies have been seeking to conserve their cash supplies rather than spend it.
What are the main hurdles for mining companies doing business in British Columbia?
Aside from investor confidence in the industry, in my view, there are two key hurdles for the mining industry in British Columbia: the uncertainty of claims over aboriginal rights, including aboriginal title, and also uncertainty over the establishment by government of new protected areas. We’ve seen examples of protected areas established over access routes to and from a proposed mine site, which can cause a real problem for the development of the mine.
To counter the uncertainty associated with aboriginal claims, we have seen mining industry clients start to engage with First Nations at the earliest stages of exploration or enter into arrangements where industry is partnering with the First Nation in the development of the resource. It is a misconception that most First Nations are anti-development. We have recently seen a number of successes in British Columbia where First Nations have been involved in the process and willing to work with mining companies to promote responsible development in their territory.
How would you characterize the environmental assessment process of mining developments in British Columbia?
Until recently, certain mining developments needed to undergo separate environmental assessment processes at both the federal and the provincial level, under the Canadian Environmental Assessment Act and the British Columbia Environmental Assessment Act. There was some duplication associated with fulfilling the two processes separately, which was perhaps not the best way forward. We now have a substituted environmental assessment process, so that in cases where both federal and provincial environmental assessments are required, there can be a single review based on the provincial process, but a decision both at the federal and provincial level will be made.
This will streamline the environmental assessment process, improve efficiencies and reduce costs. I think mining companies would like to see one decision to be made on whether the project is granted approval, but at least this is a step in the right direction.
Following almost one year of the coming into force of the Water Sustainability Act in British Columbia, have you identified any impact of new water regulations on juniors and producers? If not, how do you think groundwater regulations could affect operations and investments?
As of today, the impacts of the Water Sustainability Act are limited in respect to mining companies and producers. This is due to an exemption under the Water Sustainability Regulation. Under this exemption, any person currently holding a section 10 Mines Act permit in relation to placer mining or mineral exploration is exempt from requiring authorization (i.e. a licence) for the diversion or use of water under as would otherwise be required under the Act. This exemption will continue to apply until the end of calendar year 2017 at the earliest.
Once the exemption expires and the full licencing regime begins to apply to mineral producers and junior exploration companies, a number of concerns may arise as a result of the Act, including uncertainty over decisions related to water allocation, usage restrictions (including of groundwater), and the extent of new requirements for measuring and reporting of water use.