|Authors:||Duncan Kenyon, Nikki Way, Andrew Read, Barend Dronkers, Benjamin Israel, Binnu Jeyakumar, Nina Lothian|
|Publish Date:||October 2016|
|PDF Download:||[Landowners' Guide] [Landowners' Primer]|
|Pipelines and Other Infrastructure|
|Abandonment and Reclamation|
|Compensation, Rights, and Hearings|
Compensation for Wells, Facilities and
Surface Rights Board and Surface Agreements
Before a Hearing
Filing a Statement of Concern
Post Hearing and Regulatory Appeals
Surface Rights Board and National Energy
The powers of the Surface Rights Board are set out in the Surface Rights Act and the Exploration Dispute Resolution Regulation (see Surface Rights Act). The process often starts when a company applies to the board for a right-of-entry order because they have failed to reach agreement with a landowner before receiving an approval from the AER (see Right-of-entry orders when landowner and company cannot agree).
Or, once a right-of-entry order has been issued, the board may hold a compensation hearing for both right-of-entry compensation and damages, or an objection hearing. Both types of hearings are described in The compensation hearing process. Additionally, a landowner or occupant can reopen negotiations with the company and negotiate a private surface agreement. Additionally, they can request a dispute resolution conference (DRC) to resolve additional considerations, facilitated by a Surface Rights Board member. A dispute resolution conference is similar to the AER’s ADR process, and may be initiated before a hearing is scheduled.
If negotiations between a landowner/occupant and a company fail, yet the AER has decided to issue the company a licence (with or without a hearing), the company can apply to the Surface Rights Board for a right-of-entry order after they have received an approval from the AER. As long as the AER has provided a licence, an application for a right-of-entry order is a formality, as the Surface Rights Board will not refuse entry.
After the board receives a right-of-entry application, the company must serve a copy of the application to the landowner. However, if the landowner or occupant believes they have valid objections, they can refuse to sign and appeal to the Surface Rights Board for a hearing (see Regulatory Appeals for AER Decisions Made Without a Hearing), although according to the Surface Rights Board such hearings are rarely held for objections to right-of-entry orders. Any initial objection must be related to something other than compensation, as monetary concerns are dealt with in the next stage of the process. If no issues are raised, the Surface Rights Board will issue a right-of-entry order no earlier than 14 days after the application has been provided to the landowner or occupant. After the Surface Rights Board has issued the order, and if the issues haven’t been settled through private negotiations, the Board will set a date for the compensation hearing.
When you receive a company’s application for right of entry and you still have outstanding objections, you should immediately (within the 14 day window) file an objection with the Surface Rights Board to the right-of-entry order, and ask the Surface Rights Board to hold an objection hearing. Previous decisions from the Surface Rights Board have held that you cannot challenge the AER’s decision on its technical legitimacy, but objecting to a right-of-entry order may allow you an opportunity to capture in writing additional requirements that the Board can include in its decisions; however, this is certainly not guaranteed.
As explained in The Role of the Surface Rights Board, even if a landowner and company are close to reaching an agreement on entry and the amount of compensation, a landowner may request that a company obtain a right-of-entry order from the SRB. The board will issue a right-of- entry order as requested, then issue a board compensation order to formalize the amount of compensation the company and landowner have agreed to. This has mainly fallen out of practice, but remains a way for landowners to have the agreement additionally legitimized through the Surface Rights Board.
The main type of hearing held by the Surface Rights Board is a compensation hearing. Compensation hearings are scheduled automatically by the board after a right-of-entry order has been issued. In the meantime, the company can start building the access road, well or pipeline. However, the company is required to pay the landowner the full entry fee and 80% of the compensation offered in the last written offer — not necessarily the last best offer — before they start operations (Surface Rights Act, section 20). The compensation hearing process is described in The compensation hearing process.
Objection hearings are rare, but if the Surface Rights Board holds an objection hearing for a right-of-entry order, the company cannot enter the land prior to the hearing. As noted previously, the reasons for objection must not be related to compensation, and should instead focus on any technical failings in a company’s proposed development. Although the Board will not dismiss an approval, an objection hearing is an opportunity for you to seek additional conditions on the agreement. Unlike compensation hearings, objection hearings are typically conducted through writing rather than an oral process.
The Surface Rights Board may also hold proceedings to resolve a dispute between a company and a landowner/occupant about any damages done by a company, where damage has been done outside the area covered by the lease or right-of-way agreement (Surface Rights Act, section 30(2)(c)). As indicated in Recovery of rentals when company fails to pay, claims must be brought to the Surface Rights Board within two years and the total amount of the claim must be for less than $25,000.
Prior to any hearing by the Surface Rights Board, there may be a dispute resolution conference (DRC) facilitated by a Surface Rights Board member, which may allow you to come to agreement on terms that are outside the jurisdiction of the Surface Rights Board. If the parties come to an agreement through the DRC process, this agreement may be formalized by the Surface Rights Board in a written decision.
This section focuses on the compensation hearings that are held when a landowner and a company are unable to agree on compensation and the Surface Rights Board has issued a right-of-entry order.
While a hearing before the AER is a rather formal process, the Surface Rights Board tries to make it as easy as possible for individuals to present their own case. The board meets in different locations across the province, as close as possible to the site, so it will usually not be necessary to travel to the main office in Edmonton for a hearing. It is also possible to have your lawyer or a personal associate represent you at the hearing; if the representative is personal, you must fill out an Appointment of Personal Representative form and submit it to the board.
Before the compensation hearing begins, the board will hold a Dispute Resolution Conference by telephone to see if the parties can agree on compensation before proceeding to the main hearing. If agreement occurs, the hearing process ends immediately and a board compensation order can be obtained. If not, a mutually convenient date will be determined for the hearing.
At the hearing, you must tell the board members why you object to the last offer from the company, and why you think the compensation being offered by the company is insufficient. It is helpful to have your ideas on paper and the board does prefer a written statement. Provide the board with any evidence you have, such as the value of recent land sales and copies of access agreements for similar projects with other landowners that provide greater compensation. When calculating the value for loss of use, it helps to have receipts for the costs of inputs and to document revenue from sales and your estimated net return. If the board has held previous hearings in your area, it could be useful to read the board decisions and perhaps use them as evidence. Provide all the evidence you have, as the board has to base its decision on evidence. The board will request five copies of all documents — one for each of the three board members, one for the file, and one for the company.
If you are unable to attend the hearing and you have no one else to represent you, you must send the board your written statement 14 days in advance of the hearing, or request an adjournment.
If construction of the well, access road or pipeline is completed before the hearing, you may wish to take photographs showing the extent of any damage, although members of the Surface Rights Board may inspect the site. The company will also provide exhibits at the hearing.
When the hearing is over, the board will make a decision and issue the compensation order. The amount of compensation ordered by the board may be more or less than the amount offered by the company. If it is less than the preliminary amount already paid by the company, the landowner will have to give back the difference.
A separate hearing is usually held for each person who refuses right of entry to a company. In the case of pipelines, however, when several people raise objections, the board may request the landowners to join in one hearing as this will lead to a more efficient discussion. As an individual landowner, you may still ask for your own case to be heard separately.
For more information about the hearing process, visit the Alberta Surface Rights Board website, or contact them via email or telephone (see Surface Rights Board and Land Compensation Board). You may also wish to consult the Surface Rights Act or the Surface Rights Board Rules.
The board may award costs for a compensation hearing to a specific party, not necessarily just the landowner. This depends on a number of factors including complexity of the hearing, whether a party delayed the process, the use of lawyers, and source of costs. The Surface Rights Board may deal with the cost award at the hearing. It is thus advisable to bring any receipts and other evidence of costs and the time involved in preparing for the case to the actual hearing. Unlike the AER, the Surface Rights Board has not published special instructions about how to apply for compensation of costs incurred.
Additionally, the Surface Rights Board may issue a cost award for preliminary costs that occur before and outside of the hearing, even if compensation is settled between parties privately. This occurred in the case where both the company and the lessor settled on the amount of compensation for the project, but did not agree on the cost award for a landowner hiring a representative. Although the Surface Rights Board was not involved in determining the rate of compensation, it found that awarding reasonable costs associated with negotiating a private surface access agreement was consistent with the principles of the Surface Rights Board. Particularly, awarding reasonable private costs encouraged parties to privately resolve their disputes, allowed landowners the benefit of representation, and made landowners “whole” when negotiating an agreement primarily for the benefit of companies seeking surface access.
A landowner may ask the Surface Rights Board for a rehearing if the damage done by the company is greater than originally expected, or if they believe they have a legitimate complaint with the hearing process. For example, a rehearing might be possible in the case of a pipeline where construction was still underway at the time of the hearing and unexpected damage occurred after the board decision.
Either the company or landowner/occupant may appeal a decision made by the Surface Rights Board to the Court of Queen’s Bench. The appeal can relate to the amount of the compensation order or to the person to whom the compensation is payable, or both (Surface Rights Act, s.26). The appeal must be made within 30 days of the date on which the compensation order was received. Section 26 of the Surface Rights Act sets out exactly what is required with respect to an appeal. It is also possible to appeal a decision made by the Court of Queen’s Bench up to the Court of Appeal.
The National Energy Board (NEB) regulates pipelines that cross provincial or international borders. The NEB is required to hold a hearing for applications for the construction of a major interprovincial or international pipelines (known as a facilities hearing), the abandoning of a pipeline, and when there is opposition from landowners on the detailed route of an approved pipeline.
The NEB may hold two hearings on a project. The first hearing is to determine whether the construction of a pipeline over forty kilometres in length is in the public interest and to review the general route or corridor for the pipeline. The NEB decides whether to provide the company with a Certificate of Public Convenience and Necessity, so this hearing is called a certificate hearing.
Once a company holds a certificate, it will plan the detailed route of the pipeline. As with provincial energy development, the company and landowner should first try to resolve all issues through direct discussions or use of appropriate dispute resolution (see Working with the Alberta Energy Regulator for the similar provincial process). If problems remain with respect to the location of the pipeline or other issues (with the exception of compensation), the NEB may hold a detailed route hearing.
NEB hearings can be written or oral proceedings and are usually held at locations in or near communities most impacted, sometimes in multiple locations. The NEB is a quasi-judicial body and operates somewhat like a court. Its powers include the swearing in and examination of witnesses and the taking of evidence. The NEB accepts written evidence prior to a hearing and allows oral cross-examination at the hearing.
Anyone who has a legitimate interest and wants to participate in a NEB hearing can apply by filing out an Application to Participate with the NEB. The NEB allows two categories of people to participate: those who can show that their interest is related to the outcome of the application (considered ‘directly affected’), and those who have relevant information or expertise. The public notice for the hearing will explain how to register.
There are two ways to participate in a certificate hearing. You may be asked to submit a Letter of Comment, which is written testimony that contains comments on how you will be impacted, suggestions or comments on conditions of approval, and any other information that supports your comments. Otherwise, you can participate as an intervener, which allows you to attend the oral hearing to present evidence, cross examine other witnesses, and give a final argument. Interveners must show that they have an interest in the results of a certificate hearing.”
In a detailed route hearing, the National Energy Board Act clearly distinguishes between people who own land that the company requires for pipeline development, and people who believe that pipeline development may negatively affect their land. Both groups have the right to submit a written statement of objection that describes their interest in the land and their objections to the pipeline. The purpose of the hearing is not to oppose the principle of the project, but to discuss the details and logistics of the route. The company is obligated to notify anyone who was found to have legitimate concerns of the Hearing Order for the detailed route hearing. The NEB must receive all written statements within 30 days of the public notice announcing the hearing. The NEB may also allow other people who are not interveners to present their comments.
Interveners at an NEB certificate hearing can apply for the Participant Funding Program to help cover expenses. Participants in detailed route hearings are not eligible for cost coverage under the NEB’s Participant Funding Program; however, the NEB may direct the company to reimburse hearing costs to landowners who are directly or indirectly affected by the project.
Where a right-of-way agreement has not been signed between the company and landowner, the NEB can grant a right-of-entry order allowing the company immediate access to the land, although the landowner or occupant does have the opportunity to submit a written objection.
If the project application is approved, the NEB sets and enforces conditions to ensure that the company protects the environment and ensures public health and safety. The NEB audits and inspects the company’s construction activities, the operation of its system, and the company’s routine maintenance and monitoring procedures.. You can find a description of the NEB’s processes in Pipeline Regulation in Canada: A Guide for Landowners and the Public. More information is provided in Alberta Geological Survey.
An NEB decision can be appealed to the Federal Court of Canada, but the appeal is limited to a point of law or jurisdiction. An appeal must be made to the court within 30 days of the NEB’s decision.
Proposed pipeline projects submitted to the NEB are also subject to review under the Canadian Environmental Assessment Act, 2012 (see Alberta Geological Survey).
A 2015 review of the NEB by the Canadian Auditor General found that the NEB did not adequately track company implementation of pipeline approval conditions, or consistently follow up on deficiencies in company compliance with regulatory requirements, so improvements in these processes are expected in the next few months.