Guidelines for Unconsolidated Non-Metallic Substances on Reserve Land (Sand and Gravel)

1.1. Definition

"Unconsolidated non-metallic substances" are defined as minerals located at or near the surface which may be removed by an open excavation that does not involve quarrying of hard rock or blasting. It includes sand, gravel, stone, fill material, clay used as fill material, earth, ash, marl, top soil and peat.

The mineral resources not included in this definition are:

1. consolidated minerals extracted and disposed of under Section 58(4)(b) or Section 53(1) of the Indian Act (e.g., potash);
2. unconsolidated minerals not defined above;
3. minerals obtained from metallic placer deposits; and,
4. oil, gas, bitumen, petroliferous minerals, coal, lignite, metallic minerals, metallic placer deposits and all other minerals included in and administered in accordance with the Indian Mining Regulations or the Indian Oil and Gas Act and Regulations.

Unconsolidated non-metallic substances are considered a capital asset and represent economic development opportunities for First Nations. Many reserves throughout Canada possess large volumes of such material in commercial quantities and in excess of their present and future local needs.

Several of these resources are used extensively on roads in asphalt and as a road base, and as components of concrete in the building and housing industry. Parties interested in accessing these resources must do so in consultation with First Nations and AANDC to arrange for permits or leases for removal of materials from reserve lands in accordance with the Indian Act and to provide fair equitable compensation to the affected First Nation in the form of rental fees and/or royalty monies. These compensatory monies are accrued to their revenue and capital trust accounts respectively.

Table 1. Deposit size classification and potential use (sand and gravel)

3.1. Proponent

The proponent's responsibilities include, but are not limited to:

• exploration for the unconsolidated non-metallic substances (demonstrating that the amount, type, and quality of material desired is present);
• verifying that proposed project complies with the First Nation's zoning and land use by-laws for that area;
• providing a survey plan (legal description), sketch and/or a textual description of the permit/lease area, which also identifies roads to be used for access (refer to Indian Lands Registration Manual, July 2013 for standard requirements);
• providing AANDC and the First Nations with the documentation needed in support of the application such as: Project Description, Operational and Restoration Plan, environmental information for the proposed activities in the subject area;
• obtaining and complying with all required regulatory approvals and the right to extract and sell the resource (e.g. see Appendix C);
• addressing and resolving any outstanding concerns raised by AANDC's Environmental Review Process which is carried out pursuant to s. 67 of the Canadian Environmental Assessment Act, 2012 (CEAA, 2012) with respect to the proposed project;
• financing the project;
• complying with other applicable federal legislation (see Appendix C for examples of relevant legislation);
• developing and operating the pit or quarry; and,
• finding markets.

3.2. Permittee/Lessee

The permittee/lessee's responsibilities include, but are not limited to:

• applying for and obtaining all required permits and licences for the project, refer to Section 4.0 Non-metallic mineral Disposition of the present guideline;
• providing a geotechnical report including topographical and geological surveys of the permit/lease area prior to the removal of any material;
• addressing and resolving any information gaps and/or outstanding concerns raised by AANDC's Environmental Review Process with respect to the proposed project;
• compliance with terms and conditions of permit/lease, and posting securities for performance of restoration obligations;
• submitting a statutory declaration certifying the total volume of material removed from the permit/lease area and royalty payments reconciliation;
• complying with other federal legislation (see Appendix C for examples of relevant legislation);
• finding markets for the unconsolidated non-metallic substances;
• developing and operating the pit or quarry;
• arranging for a professional engineer, a geologist or a person with requisite experience & qualifications, to supervise project activities for compliance with permit/lease; and,
• restoring the site to the conditions specified by the permit/lease.

3.3. First Nation

The First Nation's responsibilities include, but are not limited to:

• consulting with its community members, in accordance with the "Operational Policy on the taking, disposition, and removal of non-metallic substances from reserves" effective November 1, 2000 to ensure that they have all available information before making a decision on the proposed development;
• identifying an area for development, consistent with the community's land-use requirements and zoning by-laws;
• negotiating suitable terms and conditions with the developer;
• ensuring that its community members have all available information to make a decision on the proposed development;
• conducting a vote, as required under the "Operational Policy on the taking, disposition, and removal of non-metallic substances from reserves" effective November 1, 2000;
• referring the proponent to AANDC for information on AANDC's requirements regarding unconsolidated non-metallic substances permits/leases;
• where applicable, the First Nation Council is to sign a BCR (Band Council Resolution) consenting to issuance of the permit/lease on allotment holder's land;
• negotiating with holders of allotments (Certificate of Possession) registered in the Indian Lands Registry, where applicable, to assure access to the permit/lease area;
• supporting the permittee/lessee in identifying any environmental issues; and,
• monitoring the operation of the pit and reporting breaches of the permit/lease to AANDC.

3.4. AANDC

AANDC's responsibilities include, but are not limited to:

• carrying out its fiduciary obligations towards First Nations as given rise from the Supreme Court decisions of Guerin v The Queen and Sparrow v The Queen;
• ensuring that all available information is accessible to the First Nation community making the request, to allow the First Nation the opportunity to make the best informed decision possible on any proposed unconsolidated non-metallic substances development and the required instrument to be used for its removal and disposition;
• obtaining First Nation's consent to a transaction in appropriate form (by way of individual consent, Band Council Resolution, or full membership vote) and ensuring that all consents are properly documented;
• negotiating the terms and conditions of the permit/lease including the Operational and Restoration Plan;
• ensuring all relevant project information is available to identify the appropriate level of environmental review which would take into account mitigation measures and make a determination with respect to the likelihood of the project to cause significant adverse environmental effects;
• ensuring the transaction terms and conditions represent favourably and fairly the interests of First Nations;
• verifying that AANDC's requirements have been satisfied before authorizing the development of unconsolidated non-metallic substances through permits or leases issued in accordance with the provisions of the Indian Act;
• crediting First Nation accounts with royalties and other revenues from the development; and,
• if AANDC is aware of a breach of the permit/lease, seeking DOJ guidance, where applicable, on remedies or options in the permit/lease or at law available to AANDC for responding to the said breach such as sending a demand letter, forfeiture of security, initiating litigation, and other possible options to address compliance.

4.1. Policy and Regulatory Management

The "Operational Policy on the taking, disposition, and removal of non-metallic substances from reserves" dated November 1, 2000 (Appendix B) states the following:

• A subsection 58(4)(b) permit cannot be issued for reserve lands which have been surrendered or designated.
• Where a person seeks to take non-metallic substances from an Indian Reserve in which the cumulative volume of all deposits is estimated to be less than 100,000 cubic metres (excluding overburden), AANDC may issue a subsection 58(4)(b) permit with the consent of the Band Council.
• Where a person seeks to take non-metallic substances from an Indian reserve in which the cumulative volume of all deposits is estimated to be in excess of 100,000 cubic metres (excluding overburden) thereby potentially causing a significant and permanent loss of, or diminished use of the surface of the reserve, AANDC will consult with the Band Council whether it wishes to proceed through a subsection 58(4)(b) permit or through a designation process.
• Where the Band Council chooses to proceed by way of a subsection 58(4)(b) permit, AANDC may issue such permit where (i) the Band Council and (ii) the majority of on and off-reserve electors of the First Nation, at a general meeting receiving independent legal and professional advice have consented to the project.

Subsection 58(4)(b) permits may authorize the permittee to acquire non-exclusive interests in a reserve necessarily incidental to the taking of non-metallic substances. AANDC recognizes the importance of restricting access to these lands to protect the health and safety of the residents. It also recognizes the permittee's need for security of buildings, equipment and inventory of non-metallic minerals and the need to conduct his/her business in an efficient manner. The Department will only grant other non-exclusive interests in the land that are compatible with these concerns (e.g. supervised industrial or educational tours, etc.). These interests shall be explicitly specified in the terms and conditions of the permit and be consented by the BCR.

Subsection 28(2) of the Indian Act identifies specific provisions in the context of unconsolidated non-metallic substances developmentgranting to the permittee the right to use and occupy the permit area for all purposes necessary or reasonably incidental to the exercise of the right to extract, store and remove unconsolidated non-metallic substances. It may be used in combination with subsection 58(4)(b).

In situations where the taking of non-metallic substances from reserve lands is to occur on designated lands, the designation must have provisions enabling such rights and consistent with the primary scope of the designation.

Where an instrument issued under subsections 58(4)(b), 53(1) of the Indian Act authorizes the taking and disposition of non-metallic substances from a reserve, the instrument should include explicit authorization to the permittee/lessee and persons acting for or on behalf of the permittee/lessee, to remove those substances from the reserve from which they were taken.

An unconsolidated non-metallic substances permit cannot be issued under the Indian Mining Regulations because the unconsolidated non-metallic substances are not defined as a "mineral" under those regulations.

Table 2 below shows the essential mineral disposition authorities for unconsolidated non-metallic substances.

4.2. Permit/Lease Holder

The permittee/lessee is the registered legal company or the developer that will operate or contract out the operation of the pit. First Nation-owned companies can operate a pit, however the legal authority and responsibility between the First Nation and operator must be separate and distinct. The permit/lease is the contract between the company and the Crown which ensures that the interests of all First Nation members are addressed as required under the Indian Act.

There are several variations on how First Nations can become involved in unconsolidated non-metallic substances development. The following options are most common:

1. An agreement established by a permit/lease between Canada and a private company.
2. A First Nation-owned company ("First Nation Corporation") may be used to develop the First Nation's unconsolidated non-metallic substances under a permit or lease. This permit or lease establishes an agreement between the First Nation Corporation and Canada.
3. If the First Nation Corporation does not have the ability or capacity to conduct the operation on its own, it can enter into an agreement and subcontract out the actual mining and development work to a third party. The conditions of the permit would be binding on the First Nation Corporation or the contracted third party. This binds the First Nation Corporation or the third party engaged to do the work to ensure that the needs and obligations of community members are fully met under the permit or lease.

4.3. Issuing Permits/Leases

The issuing of an unconsolidated non-metallic substances permit/lease is a complex process that requires the input and participation of several AANDC regional staff. The lead role is bestowed to a Regional Land Management Officer. However some AANDC regions use a Natural Resources Officer in addition to a Land or Environment Officer. The Responsible Officer guides and is guided by First Nations to ensure that the intentions of the First Nations are clearly stated within the actual permit/lease issued.

AANDC regional offices issue unconsolidated non-metallic substances permits/leases at the request of First Nations and on their behalf. A Band Council Resolution is required to initiate the process.

Permits and leases must be issued in accordance with the AANDC "Operational Policy on the taking, disposition, and removal of non-metallic substances from reserves", effective November 1, 2000 (see Appendix B). Permits and leases function as a means of making an activity, which would otherwise attract penalties under s. 93 of the Indian Act lawful.

First Nations operating under Section 53/60 of the Indian Act's land management delegation of authority can approve unconsolidated non-metallic substances permits/leases.

In general terms, land/environment officers in the regional offices are responsible for:

• coordinating the administration of permits/leases issuance, including negotiating the permit/lease terms and conditions;
• providing advice and support to First Nations;
• assessing the project for compliance with federal environmental legislation and AANDC environmental considerations as it pertains to activities in mineral disposition on reserve land and ensuring permits required by other regulators are obtained;
• completing, authorizing and registering the permit/lease; and,
• monitoring for compliance with the terms and conditions of the permit/lease;

For standards related to legal survey plans requirements refer to the Indian Lands Registration Manual, 2013.

4.4. Subsection 58(4)(b) Permit

Graphic 1. Subsection 58(4)(b) Permit Issuing Process

4.5. Subsection 53(1) Lease

4.5.1. Authority for Subsec

Description of Graphic 1: Subsection 58(4)(b) Permit Issuing Process

This graphic describes general phases of the issuance of an unconsolidated non-metallic substances permit.

Step 1. The proponent consults the First Nation with regards to the proposed project. During this first step the Proponent approaches the First Nation indicating that he is interested in developing a sand and gravel resource extraction operation on their reserve. The proponent inquires if the First Nation wants to proceed with the project.

Step 2. The Proponent submits a proposal, including an Operational and Restoration Plan to the First Nation Council. If the First Nation agrees to the project then the Proponent prepares a proposal and an Operational and Restoration Plan of the project. These two documents, when ready are sent to the First Nation Council for review and approval.

Step 3. The First Nation Council submits a copy of the proposal together with the Operational and Restoration Plan to the appropriate AANDC regional office. The regional office verifies the application.

Step 4. The AANDC regional office provides comments on the proposal, relevant information and procedural requirements to the First Nation and the proponent. It is important that the First Nation has all the necessary and available information to make a sound decision.

Step 5. Provides two options to proceed:

Option 1. If the cumulative volume of all deposits is estimated to be less than 100,000 cubic metres the First Nation Council continues to assess the proposal, consults with the community members, and decides whether or not to proceed with the project development.

Option 2. Where the cumulative volume of all deposits is estimated to be greater than 100,000 cubic metres AANDC consults with the First Nation Council on whether it wishes to proceed by way of a permit or by way of a designation and lease.

If the First Nation agrees to pursue the project, and selects the option of regulating the extraction by way of a permit a general meeting be held by the First Nation Council. A majority of on and off-reserve electors, receiving independent legal and professional advice, should participate in the meeting. The purpose of the meeting is to inform the community on the proposed project and to approve proceeding by way of a permit.

If the First Nation Council chooses to go through a designation process they will proceed by way of a subsection 53(1) lease.

Step 6. The First Nation passes a Band Council Resolution (BCR) authorizing the Minister to issue a permit.

Step 7. The AANDC regional officer conducts an encumbrance check to ensure that no land use conflicts exist.

Step 8. The proposed permittee hires a consultant to undertake the appropriate environmental report for departmental review. The responsible departmental officer ensures that the environmental report is complete and makes a decision on the environmental review.

Step 9. The Proponent, the First Nation Council and the departmental representatives meet to negotiate terms and conditions of the permit.

Step 10. AANDC regional officials draft a permit on the basis of the negotiated terms and conditions and also review for compliance with the policy requirements.

Step 11. During the last step of the permit issuing process the permittee and the department sign the permit. The executed permit is registered in the Indian Lands Registry. If a CEAA 2012 Environmental Assessment is required, the assessment is registered in the Federal Environmental Assessment Registry. Originally executed copies of the permit are distributed to all parties inclusive to the First Nation.

4.6. Subsection 53(1)(b) Permit

As stated above in chapter 4.5.1. Authority for Subsection 53(1) Leases, section 53(1)(b) of the Indian Act authorizes the Minister, or a person authorized by the Minister, to manage, lease, carry out any other transactions affecting designated lands.

Permits may be subject of ss. 53(1)(b), being implicitly understood and defined as "other transactions". These types of permits are issued in situations where the disposition of non-metallic substances from reserve lands is to occur on designated lands, the minerals have not been surrendered and when the cumulative volume of all deposits is estimated to be less than 100,000 cubic metres (excluding overburden). The designation must have provisions enabling such rights and in accordance with the primary scope of the designation. The permit issuing process will basically follow the same requirements and procedure as per chapter 4.4.4. Permit Process and Key Elements of the Permit.

4.7. Allotted Land (Certificate of Possession)

The establishment of an unconsolidated non-metallic minerals operation on individual landholdings requires special consideration. In principle, there are two different ways of issuing permits and leases that are supported by the authority of two sections of the Indian Act, as detailed below. In determining which authorization to grant it is vital to first ascertain the extent of the physical impact on the lands and the volumes to be removed. In the situation where the disposition of the unconsolidated non-metallic minerals in which the cumulative volumes of all deposits is less than 100,000 cubic meters (excluding overburden) and is associated with a small impact on the lands, it is possible to proceed with a ss. 58(4)(b) permit.

In the situation that the disposition of the unconsolidated non-metallic minerals in which the cumulative volumes of all deposits is over 100,000 cubic metres (excluding overburden), with an extensive physical impact on the lands, then it is possible to proceed with a ss. 58(3) lease. In the event of large scale operations it is recommended that the First Nation membership be involved, and, that provided the band receives the appropriate share of the revenues generated by the operation, a designation of the minerals is not necessary. However it is, still, in the interest of the community that requiring a designation of unconsolidated non-metallic minerals made as a condition of the lease is the most prudent course of action.

Since reserve lands and often underlying minerals are ultimately held for the First Nations members as a whole, First Nations have the opportunity to express their views on the division of revenues derived from locatee lands. Revenues generated whether it is pursuant to a ss. 58(3) lease or a ss. 58(4)(b) permit must necessarily be shared between the C.P. holder and the First Nation as referenced in ss. 58(4) and ss. 58(5) of the Indian Act according to shares as convened by the First Nation membership. The division of revenues generated from surface rent, bonus, royalty and others is a matter for discussion between the First Nation and the locatee.

Alternatively, it is common practice that when particular reserve lands are intended to be developed to the benefit of the First Nation as a whole and those lands are held pursuant to a certificate of possession, negotiations are undertaken between the First Nation and the C.P. Holder for a transfer under sec. 24 of the Indian Act. In exchange for transferring his interest back to the First Nation the C.P. Holder usually receives some form of compensation (e.g. land and/or financial compensation).

5.1. Application

In general the non-metallic minerals are subject to a fairly uniform administrative regime for all provinces/regions provided by AANDC, which allocates the non-metallic rights. The income from their extraction is collected by the federal government for the use and benefit of the First Nation.

The unconsolidated non-metallic substances are not subject to the federal-provincial mineral agreements (i.e., Natural Resources Transfer Agreements) which solely address the legal frameworks for administering the metallic minerals on reserves. However clay is identified under New-Brunswick's and Nova Scotia's agreements. Where no federal-provincial agreements exists, (i.e., Québec, Prince Edward Island and Northwest Territories) mineral title and rights need to be considered prior to any development.

First Nation initiatives towards the development of land use, planning and zoning by-laws are encouraged to optimize the opportunities for orderly resource development.

To ensure compliance with the Minister's responsibilities, the regional officer will be responsible for the necessary documentation and ensuring that any permit or lease issued is compliant in accordance with this guideline including the collection of any revenues. In addition, the responsible officer will investigate and report on all unconsolidated non-metallic substances disposals made with or without permits or leases to AANDC headquarters. There is no tender required, nor is any staking process involved.

5.2. Band Council Resolution

A BCR requesting the issuance of a permit/lease will be submitted to the delegated AANDC officer, accompanied by a copy of the offer to extract and purchase non-metallic substances from First Nation lands, prior to issuing the permit/lease. A copy of the BCR will be attached to and form part of the permit/lease.

5.3. Technical Evaluation

The proponent shall provide a geotechnical evaluation report to determine the viability and long term sustainability of unconsolidated non-metallic substances development projects on reserve land at the earliest possible stage of the process. This evaluation should be in accordance with the long term land use and resource planning in order to prevent or impede resource depletion as well as develop a mechanism to evaluate the environmental and social impacts that may result from this type of activity over a prolonged period of time. This also provides background data for more accurate assessments of potential future site development of minerals disposition on reserve land.

This evaluation will serve to inform the First Nations and their councils, as well as regional offices as to the extent of mineral resources available for commercial development and eventual sale in excess of that amount set aside for reserve use and development. Recommendations can then be made to the First Nation as to the safe commercially sustainable level of extraction at a fair royalty rate, an accurate description of the method(s) of extraction monitoring and the development of an operational and restoration plan the company will be providing.

5.4. Operational and Restoration Plan

Each application for a permit/lease for disposal of unconsolidated non-metallic substances must include an operational and restoration plan by following the Operational and Restoration Plan – Terms of Reference (see Appendix A).

Once agreed upon by the responsible officer and the proponent, the plan will be appended to the permit/lease as a schedule. The permittee's/lessee's obligations are clearly specified and criteria are established for assessing compliance with the terms of the permit/lease.

Restoration of land(s) from which unconsolidated non-metallic substances have been extracted may be considered separately from redevelopment. A particular source of substances might be used for many years and may be developed by more than one permittee/lessee over the course of the deposit's life span, though only by one party at a given time. In such cases, each permittee/lessee shall be required to use and restore the area in such a manner as to minimize the defacement of the land in accordance with the restoration plan and the potential cost of restoration for future use.

Removal of unconsolidated non-metallic substances may cause damage or defacement, physical or otherwise, to the permit/lease area and may include such things as:

• damage to land that is deemed irreparable;
• temporary damage to land that could have been corrected during its excavation;
• a complete loss of development potential of the permit area alone or as an integral part of a larger land block;
• a depreciation in the monetary value of adjoining lands, or in other terms; and/or,
• damage to ground and surface water.

Consequently, it should be noted that the occurrence of any of the points listed above will vastly depend on the methods and extent of extraction. Consideration must therefore be given to land-use plans for the permit/lease area and the surrounding lands before implementing the technical recommendations.

Removal operations should be undertaken in such ways as not to create unsafe conditions within the permit area and are the sole responsibility of the permittee/lessee. As a direct result of such responsibilities, the permittee/lessee is obliged to maintain sufficient insurance to protect the First Nation and the Crown from any and all litigation that may be pursued by party whose property has been damaged or who suffered a personal injury by an unauthorized entry into the permit/lease area. Concurrently, the First Nation shall indicate in the BCR that it will not assume any responsibility for any damage or injury complaints suffered within the permit/lease area not covered by the permittee/lessee agreement.

The permittee/lessee will conduct operations in compliance with all provincial, industry and/or local standards unless specifically stated otherwise in the permit or lease. Permittees/lessees will accept sole responsibility and liability for any damages and inconveniences caused to surrounding land owners by any activities conducted within the permit/lease area, whether authorized or not.

5.5. Surface Rent

Surface rents are paid to Canada and placed in the First Nation's Revenue Account as compensation for the use of the land's surface area and are included in permit and/or lease agreements to cover the area required for on-reserve operations. Although no surface rent is required under the ss. 58(4)(b) of the Indian Act such charges can be negotiated stipulating that the proponent extracts only the identified non-metallic substances and not hold the land for other resources. All rents must be negotiated in good faith based on the most current market value of the utilized lands and the coverage area required for the operation. Surface rents are considered income and are accessible by the First Nations from their Revenue Accounts.

5.6. Royalties, Bonuses and Royalty Pre-Payments

All royalties must be negotiated and based on the current local market value and provide for future redevelopment cost. Royalties are calculated by weight or volume of unconsolidated non-metallic substances removed and sold off reserve. Royalties can be paid at various intervals and must be accompanied by a statement of account showing the amount in weight or volume of minerals removed from the reserve within the specified time period. An annual statutory declaration by the permittee/lessee showing the total amount removed in previous years is also required as royalties result from a one-time sale of a resource (capital asset). Funds are deposited into the Band's Capital Trust Account.

On rare occasions, a bonus payment or royalty pre-payment may be negotiated. These payments are at times paid to Canada for deposit to the First Nation's Revenue Account in the form of one or more lump sum payments prior to signing for a permit/lease for a large scale unconsolidated non-metallic substances development, or, on an agreed schedule.

Occasionally, it is possible for a permittee/lessee to enter into a permit/lease agreement for unconsolidated non-metallic substances extraction from a First Nation's pit and subsequently have no minerals removed. To avoid this, a clause may be inserted in the agreement, requiring the operator to financially compensate the First Nation with a monthly or annual minimum royalty payment regardless of the amount of material removed and processed from the extraction site. The minimal royalties dispensed to the First Nation will then be deducted from the royalties paid for the actual production.

There are other ways to derive maximized benefits from a permit/lease. Frequently, a First Nation may choose to receive a volume of processed aggregate or road improvements or some other form of trade as payment in return for their unconsolidated non-metallic substances.

5.7. Security Deposits

Security deposits in the form of money, bonds or promissory notes (letters of credit, safekeeping agreements etc.) payable to the Receiver General must be provided by the permittee/lessee to ensure there is money for site conservation and reclamation. Final drafts of the letters of credit and safekeeping agreements must be approved by the Minister prior to the ratification of the permit/lease. Usually the security deposits are negotiated at a rate of 10 to 20 percent of the estimated royalties payable. Security deposits are refundable upon termination of the permit provided that the permittee/lessee has complied with all the terms and conditions of the permit. Sections 11 and 12 of the Indian Mining Regulations may be consulted for guidance.

Regardless of the restoration method proposed, the permit/lease must contain a provision for the posting of a security deposit. This amount should be set at 10 to 20 percent of the maximum royalty expected. Security deposits shall be held by AANDC in safe custody and will be handled in accordance with the Financial Administration Act. These security deposits would be refundable upon evidence of satisfactory restoration of the affected lands as determined by the responsible officer in compliance with the agreement. Consequently, in the event of non-compliance with the terms and conditions of the permit/lease, the permittee/lessee would be liable, and the security deposit used to pay for works required.

5.8. Liability Insurance

The permittee/lessee must agree to indemnify and protect the Crown against all possible costs incurred from claims that may arise from the permittee's/lessee's activities on reserve. For this reason the purchase of public liability insurance needs to be made mandatory in order to protect the lessor and/or general public against any and all claims and/or litigation that may arise as a direct exposure to the benefits/risks and/or hazards stemming from proposals. As a result, this security measure is mandatory for all large scale mineral development projects.

5.9. Environmental Considerations

Prior to a project being carried out determination must be made with respect to whether the project is likely to cause significant adverse environmental effects. AANDC shall identify those effects and include specific clauses in the permit/lease terms and conditions to ensure that all aspects related to environmental protection have been addressed.

The prospective permittee/lessee is required to submit environmental information (e.g. submission of a Project Description) to the AANDC regional office. The AANDC Environment Officer assesses and determines if the proposed project is a designated project under the Regulations Designating Physical Activitiesof the Canadian Environmental Assessment Act 2012.If the project exceeds the thresholds identified in s. 17 ofthe above mentioned regulationsthan a federal environmental assessment (EA) needs to be completed. A description of the AANDC's environmental review process is provided in the Proponents' Guide to Aboriginal Affairs and Northern Development Canada's Environmental Review Process (August 9, 2013, draft).

Detrimental effects that may result from the disposition of unconsolidated non-metallic substances include but are not limited to:

• noise;
• dust;
• heavy traffic;
• damage to community roads from heavy trucks;
• trespassers and theft of unconsolidated non-metallic substances because of improved road access to the permit/lease area;
• risk of injury to adults and children, wildlife and livestock that may be caused by the pit operation;
• polluting of ground water and surface water during pit operations (the risk increases if refuse is allowed to be dumped into the pit);
• risk of land damage because of poor erosion control during operations;
• destruction of trees, vegetation and wildlife habitat;
• changes in land use (hunting, agriculture, etc);
• disruptions to other forms of land use (traditional land use, for example, trap lines);
• decrease in the water table and drinking water supply;
• loss of flora and/or fauna, including species at risk, due to waste, pollutants, and/or fuel storage and handling; and,
• deterioration in the attractiveness of the pit's surroundings.

Many of these complications can be avoided or their effects considerably diminished by utilising good project planning, appropriate operational procedures, and by performing proper site restoration. For instance, a fence surrounding the pit and a gate at the perimeter can considerably reduce safety hazards. Noise problems can be managed by scheduling work for particular periods of the day. A suitable after-use for the area should be identified during the early stages of planning an operation, and restoration should be aimed at preparing for that after-use.

In environmental assessments/reviews of unconsolidated non-metallic substances pits, the developer must consider the following effects of excavation of the projects on:

• ground and surface water;
• noise levels;
• erosion and stability of slopes;
• land-use conflicts;
• unique physical features;
• permafrost;
• terrestrial and aquatic wildlife and habitats;
• aesthetics of the area;
• health and safety;
• local economy, employment, quality of life;
• social aspects;
• archaeological sites; and,
• traffic from trucks and heavy equipment.

AANDC measures environmental impacts based on:

• magnitude, frequency, duration, and likelihood of the effect;
• the nature of impact (for example, direct or indirect);
• the scope of impact (for example, local or regional);
• the direction of impact (for example, positive or negative);
• cumulative or residual effects; and,
• available technology that could minimize environmental effects.

The proponent's operational and restoration plan describes the potential impact of an operation on a reserve and its surrounding lands. The operation portion of the plan details the proposed site(s) and extraction methods, including:

• stages of excavation and backfilling;
• stockpiling of topsoil;
• height of the working faces and any provisions for access (security and public safety);
• drainage;
• storage;
• dust abatement;
• noise;
• haul routes; and,
• erosion protection.

The restoration portion includes plans for:

• identifying suitable after-uses for the site;
• slope reduction;
• reapplication of topsoil;
• clean-up of the site;
• backfilling of the pit; and,
• erosion and drainage control.

The First Nation community will want to ensure that its environmental concerns are properly identified and addressed in the operational and restoration plan. AANDC, provincial departments of transportation and natural resources and many private-sector consultants may provide environmental expertise and assistance.

5.10. Monitoring and Enforcement

At stated intervals or upon permit/lease expiration, the permittee/lessee will provide a statutory declaration detailing the volume of minerals removed, royalties paid or details as set out in the permit/lease.

Inspections of the mineral project are to be conducted by representatives of the affected First Nation and AANDC personnel. If conditions of the excavation site and restoration process are not deemed to adequately satisfy the set requirements of the agreement, the permittee/lessee will be served notice of said breach of the agreement and directed to cease all operations until a resolution is provided to the satisfaction of AANDC and the affected First Nation.

If restoration of the affected lands is deemed unsatisfactory upon final inspection, the security deposit will be withheld and the permittee/lessee will be required to complete the restoration and incur any and all additional expenses. The security deposit is returned only after satisfactory restoration has been completed. Should the restoration work being not completed according to the Operational and Restoration Plan, the security deposit may be used to pay for such work.

5.11. Registration

The fully executed permit or lease including the designation document, if applicable, must be registered in theIndian Lands Registry System at the AANDC's regional office. The permit or lease must also be recorded in the department's "NetLands" system.

5.12. Aboriginal Employment Opportunities

Unconsolidated non-metallic substances development may also provide employment opportunities for First Nation members in business, management, geology, engineering and mechanical and related fields. Heavy equipment operators and drivers will also be in demand. Employment positions need to reflect the current rate being paid for off-reserve employees, and if required proper training should be provided.

Part A – Operational Plan Component

Part B – Restoration Plan Component

The proponent is obligated to restore and beautify reserve lands disturbed by mining development. The restoration plan component presents a detailed description of how the company will meet this obligation. The proponent must address all potential or anticipated environmental implications that may arise from excavation activities on reserve land as well as indicate the remedial measures it intends to implement to lessen or correct the impact on these lands.

Part C – Aboriginal Economic Opportunities

1. Identification of employment opportunities, including:
   • type and number of jobs to be created, indicating those available to Band members vs. non-Aboriginals
   • skill development
   • gross salaries to be paid
2. Identification of business opportunities, including:
   • type of service contracts available

1.0 Purpose

1.1 To establish a revised departmental operational policy (the "policy") on the taking of non-metallic substances from land in a reserve, the disposition of these substances and their removal from a reserve.

2.0 Scope

The policy outlined in this directive is applicable to regional staff responsible for carrying out functions of Lands and Trust Services.

3.0 References

Indian Act

• Section 2 (definition of "reserve")
• Subsection 53(1)
• Subsection 58(4)(b)
• Section 93

Indian Mining Regulations

• Section 2(1) (definition of "minerals")
• Subsection 5(2)
• Subsection 6(1)

Indian Oil and Gas Act

• Section 2 (definition of "oil" and "gas")

4.0 Issuing Authority

The policy directive is issued under the authority of the Assistant Deputy Minister, Lands and Trust Services.

5.0 Definition

"Non-metallic substances" include sand, gravel, clay, earth, ash, marl, peat, limestone, gypsum, granite, diamond, coal, placer deposits of non-metallic minerals, hydrocarbons not produced from a well in liquid form, and other non-metallic substances, but do not include (1) "oil" and "gas" as defined in the Indian Oil and Gas Act, and (2) naturally occurring metallic substances and rock containing those substances.

A "subsection 58(4)(b) permit" is a written document issued under authority of subsection 58(4)(b) of the Indian Act and which authorizes a person, including a corporation or other legal entity, to (1) take non-metallic substances from land in a reserve and dispose of these substances, and (2) acquire a non-exclusive interest in land in a reserve necessarily incidental to the taking of non-metallic substances from land in a reserve.

A "subsection 58(4)(b) permit" cannot be issued where (1) lands have been designated, since "subsection 58(4)(b) permits" can be issued only on reserve lands, which are defined in the Indian Act to not include designated lands for the purposes of section 58 of the Indian Act, or (2) where the minerals have been surrendered.

6.0 Management Policy

7.0 Enquiries

Enquiries regarding this policy may be addressed to the Director, Environment and Natural Resources, Lands and Trust Services, Headquarters. Prepared by:

Environment and Natural Resources
Directorate
Lands and Environment Branch
Lands and Trust Services

Warren Johnson
A/Assistant Deputy Minister
Lands and Trust Services