Acho Dene Koe First Nation sues resource company for $1M-plus

The Acho Dene Koe First Nation says resource company Paramount owes it more than $1 million in missed payments as Paramount faces separate criticism over its cleanup work.

In NWT Supreme Court, the Fort Liard-based First Nation alleges Paramount Resources has missed $100,000 annual payments mandated under a community investment plan since 2009.

It wants a back payment of $1.4 million to be made, plus interest and damages for Paramount’s alleged “breach of duty of good faith.”

Paramount is an oil and gas firm. In the 1990s and early 2000s, it was involved in work to run a pipeline in the region and explore for gas. Its primary function in the Dehcho is now remediating those operations.

When the pipeline was about to become a thing, Paramount signed a community investment plan that promised a committee of First Nation members would be given “a budget of $100,000 a year [and] such payments will continue each year … until such time as distributions to Acho Dene Koe under the Shiha Energy Transmission Limited Partnership Agreement reach $10,000 per year. When such occurs, no further payments pursuant to this clause will be due and owing.”

In other words, once the pipeline operated by Shiha Energy (a group involving Paramount and others) began sending the First Nation more than $10,000 a year, the $100,000 annual payments from Paramount would stop.

In late 2008 or early 2009, Paramount – not Shiha Energy, according to the First Nation – sent the First Nation about $17,500 as a “distribution payment.” In later documents, Paramount said that $17,500 meant the First Nation had now received one of the “$10,000 per year” payments under the community investment plan, so it had stopped paying the $100,000 annually.

Filing a notice of motion against Paramount on March 12, the First Nation said Paramount had “artificially calculated” its $17,500 payment “to attempt to terminate its obligation” to keep paying $100,000 a year.

The case is an evolution of legal action that has been ongoing for years.

First, the Acho Dene Koe First Nation went to court asking a judge to order the NWT government to take steps to enforce broader benefits plans drawn up with the likes of Paramount. (The judge denied an application for judicial review.)

Since 2020, the First Nation has been more narrowly pursuing Paramount over the matter of the annual payments.

Paramount had not filed a statement of defence by Tuesday this week and did not respond to a request for a comment. The company is being represented by Vancouver law firm Gall Legge Grant Zwack.

In earlier statements of defence, Paramount has maintained that the First Nation got a payment of more than $10,000 in line with the terms of the original deal.

The First Nation’s counsel, Doug Rae, told Cabin Radio whether the $17,500 payment was a genuine payment from the pipeline as agreed – or an artificial sum cooked up by Paramount to get out of the broader $100,000 annual obligation – “will be the issue for the court to decide.”

Beyond 2008, the pipeline was deactivated.

‘Unacceptable’ use of emergency remediation clause

Meanwhile, Paramount is also being accused of regulatory missteps at its Pointed Mountain former gas field site, north of Fisherman Lake to the west of Fort Liard.

Having previously been accused of a Waters Act violation at the site, Paramount was told this month by the NWT’s Department of Environment and Climate Change that the company is using “unacceptable” approaches to remediation.

Paramount is attempting to remediate a surge pond – a contaminated pond that includes the likes of chloride. In the past, environmental officials have observed dead trees below the surge pond. Paramount is tasked with stopping any leak, draining the pond and backfilling it so it can’t fill with water (and contaminants) again.

Last summer, Paramount told the Mackenzie Valley Land and Water Board it would use a set of regulations expressly designed for emergencies to “alleviate the pressing and escalating concerns regarding the discharge from the surge pond.”

The regulation in question states: “Notwithstanding any other provision of these regulations or the conditions of any permit, where an emergency threatens life, property or the environment, a person may carry out such land-use operations as are necessary to cope with the emergency.” Essentially, it’s a free pass to do whatever you need to do in a crisis.

ECC disputes that this was a crisis warranting the use of emergency provisions, not least because Paramount has known about the surge pond’s problems for years.

“The historical delay in addressing this through the established regulatory system and using an unprecedented emergency measure is unacceptable for legacy sites,” ECC senior water resource officer Wendy Bidwell told the company on Monday in an email appearing on regulators’ public registry.

“Doing so has removed public input on the remediation standards and methods for the site,” said Bidwell. (Normally, companies have to file plans for public review prior to taking action. The emergencies clause can allow firms to circumvent that.)

“ECC-GNWT firmly states that Paramount’s method of using emergency measures for a long historical waste discharge is unacceptable and this approach should not be used by the company or others in future,” Bidwell concluded.