First of all, it is against the law to remove sand and gravel from a reserve without the consent of the First Nation and written permission of the Minister of Indian Affairs and Northern Development or the Minister's representative. For a First Nation to initiate sand and gravel activity on its reserve, a permit or lease must be issued by DIAND. The terms and conditions of the permit or lease are drawn up in accordance with the First Nation's needs.

Permits and Leases

To initiate development, you have two disposition options: permit or lease, both of which require the consent of the First Nation. DIAND, as grantor, obtains the consent of the band council before granting a permit or lease.

A sand and gravel permit has the following characteristics.

• It does not grant exclusive possession, although fences and locks are permitted if safety is a concern.
• It is usually granted for a short period - section 58(4)(b) of the Indian Act refers to "temporary permits."
• The rights granted are not assignable; they cannot be transferred to another party.
• The permit can be cancelled at any time by the Minister, upon the First Nation's request, for just cause, such as if the terms and conditions are breached. The permit should also contain specific authority for cancellation.
• A permit makes no reference to an interest in the land.
• A permit should not be granted under the preference of a lease.
• A permit does not allow for permanent structures to be built on the land.

When a developer wants conditions other then those described in a permit, then a lease is required. Such conditions may include:

• long-term development;
• exclusive occupation to remove large volumes of sand and gravel;
• erection of permanent structures;
• assignability of the rights to another party; and
• a granting of an interest in the land, such as the sand and gravel.

In order to dispose of large quantities of sand and gravel by way of lease, it is necessary to designate, in accordance with the provisions of the Indian Act, the surface area that will be the subject of the lease, together with any access requirements. Large quantities are amounts in excess of 100,000 cubic metres per year. A designation means that a First Nation designates a particular interest, on a temporary basis, so that the Minister may deal with that interest.

Not only does the developer need rights of access and rights to the surface sufficient to conduct operations, but there must also be a transfer of an interest in the sand and gravel so as to allow for its sale. In this regard, the designation vote should also address the need for an absolute surrender of the interest in the sand and gravel which is to be extracted by the developer. In most cases, the sand and gravel surrender, and the designation, can be conducted in the same vote. Details of the designation process, and requirements relating to the surrender of the sand and gravel, can be obtained from DIAND regional offices, Lands and Trust Services.

Because most activity in sand and gravel development is for a short period of time and carried out under permit, the remainder of this booklet will deal with the development of sand and gravel deposits by permit.

The Permit Process

The Minister responsible for DIAND issues sand and gravel permits at the request of band councils. The permit holder may contract out certain parts of the operation or control all aspects directly. If the permit holder is a company owned by your First Nation, the legal authorities and responsibilities of the First Nation are separate and distinct from the permit holder.

The terms and conditions agreed to by the First Nation, the Minister and the permit holder are described in the permit. The First Nation determines when, where and who can develop sand and gravel on its reserve.

Before a permit is issued, a Band Council Resolution (BCR) is passed by the First Nation to authorize the Minister to issue a permit. The BCR clearly states what the Minister and the permit holder can do and protects the First Nation by documenting its terms and conditions.

The permit identifies the permit holder (the developer), the lands to be used, their size and location, and the terms under which the permit is to be issued. Recording all the terms and conditions helps reduce confusion and potential misunderstandings. A standard permit may have about 30 clauses dealing with:

• start and expiry dates of the permit;
• a description of the land involved, including an accurate legal description and a survey plan or sketch;
• the amount, type and reporting procedures for the sand and gravel involved in the disposition, including the maximum volume that can be removed;
• royalties to be paid to the Minister for each tonne or cubic metre removed;
• surface rents, if any, for the use of the land;
• bonuses (if any) and the conditions of payment;
• damage deposits or rehabilitation fees;
• environmental assessment requirements;
• provisions to protect the Minister and the First Nation in the event of accidents, disagreements, default and unforeseen difficulties;
• a schedule of payments to DIAND for deposit into the appropriate First Nation trust account, or to be divided between the band and an individual who is in lawful possession of the land. (The division would be described in the permit);
• the right of the Minister or First Nation to see the developer's financial records relating to the project;
• a description of how the project developer will report volumes, royalties and other fees paid by date or period;
• an outline of opportunities for First Nation members and businesses to participate in;
• any requirement relating to the rehabilitation of the land at the expiration of the term of the permit; and
• additional provisions which address specific concerns of the First Nation.

  A permit usually is accompanied by:

• a legal survey plan;
• an operation and restoration plan outlining, in detail, the activities of the exploration, development, production and restoration process which becomes a binding part of the permit holder's commitment;
• the permit holder's proof of liability insurances;
• the permit holder's proof of damage deposit or performance bond; and
• an Affidavit of Execution, which is a document attesting to the signature of the developer when the permit is signed.

  Once DIAND signs and issues a permit, the legal framework in which the project developer operates is established for the duration of the permit.

  How a Permit Is Issued

  There are a number of stages in issuing a permit.

• The project developer makes a proposal to the First Nation council, indicating the type and quantity of sand and gravel required, the timetable, the potential royalties and other pertinent details.
• The First Nation sends a copy of the proposal to the DIAND regional office. The regional office then forwards all information related to the development to the First Nation.
• Your First Nation council gathers information, assesses the proposal, consults with community members and decides whether to proceed. The developer, DIAND and other experts may be asked to make a presentation to the First Nation.
• Your First Nation council, DIAND and the project developer meet to discuss and negotiate the terms and conditions for the sale of the sand and gravel.
• Your First Nation council passes a BCR authorizing the Minister to issue a permit.
• DIAND officials draft a permit on the basis of the First Nation's negotiated terms and conditions and other standard clauses.
• Before any site preparation, processing or removal of sand and gravel begins, DIAND is required, under the Canadian Environmental Assessment Act (CEAA) to complete an environmental screening.

  The screening is based on the permit holder's "operation and restoration plan" which will be used to provide details of the sand and gravel operation and rehabilitation. (See the later section "Environmental Protection.") The screening must be completed before the Minister of Indian Affairs and Northern Development or delegate signs the permit.

• On completion of the environmental assessment and review process, the Minister issues the permit. Four originals of the permit are circulated for signatures.
• The permit and attachments are returned to the issuing office for execution by the Minister. The Land Registry, the First Nation, the permit holder and the DIAND regional office each receive a signed original for their records.
• When the permit expires, or at required intervals, the permit holder provides a statutory declaration detailing the volume of aggregate removed from the site and the royalties paid. The statutory declaration is forwarded to the Minister.
• Representatives of the First Nation and DIAND inspect the pit area. If site conditions and the rehabilitation meet permit requirements, the permit holder is released from further commitment. If unsatisfactory, the damage deposit is withheld until the permit holder has met all the requirements. Any costs associated with this work are the responsibility of the permit holder.

  Environmental Protection

  The 1995 Canadian Environmental Assessment Act (CEAA) requires that all federal departments involved in projects on Crown lands must review environmental implications before making decisions that affect the land.

  In an environmental assessment of a sand and gravel pit, the developer looks at the effects of the project 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;
  • attractiveness of the area;
  • health and safety;
  • local economy, employment, quality of life;
  • social aspects;
  • archaeological sites; and
  • traffic from trucks and heavy equipment.

  Before making a decision on the assessment, DIAND ensures that the environmental impact of the project on reserve lands is fully considered.

  DIAND measures environment impact based on:

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

  The project developer's operation and restoration plan describes the potential impact of an operation on the reserve and surrounding lands. The operations part of the plan includes:

  • proposed site and extraction methods; and
  • stages of excavation and backfilling, stockpiling of topsoil, the 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 part includes plans for:

  • slope reduction;
  • reapplying topsoil;
  • clean-up of the site;
  • backfilling the pit; and
  • erosion and drainage.

  Your community will want to ensure that its environmental concerns are identified and addressed in the operational and restoration plan. DIAND and Environment Canada, provincial departments of transportation and natural resources and many private-sector consultants can provide environmental expertise and assistance.

  Project developers should consult residents early in the process because, without community support, an environmental concern could jeopardize the success of a project if left unresolved.

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