Federal Review PanelProsperity Gold-Copper Mine Project

160 Elgin Street, 22nd Floor, Place Bell Canada - Ottawa, Ontario K1A 0H3

January 12, 2010

Murray A. Clemens, QCNathanson, Schachter & Thompson750-900 Howe StreetVancouver, BC V6Z 2M4Via email at mclemens@nst.bc.ca

Brian BattisonTaseko Mines Ltd.Suite 1020 – 800 West Pender St.Vancouver, BC V6C 2V6Via email atbrianbattison@tasekomines.com

Dear Mr. Clemens and Mr. Battison:

Further to my letter of December 9, 2009, Panel member Klassen and I haveconsidered the information provided by Taseko Mines Ltd., as well as thesubmissions from interested parties, on the matter of whether Panel member Morinshould recuse herself from the federal Prosperity Review Panel on the basis of areasonable apprehension of bias.

Panel member Klassen and I have concluded, after reviewing all the submissions andinformation provided, that the matters raised by Taseko do not raise a reasonableapprehension of bias on the part of Panel member Morin. Therefore, Panel memberMorin will not be asked to recuse herself.

Attached please find the Reasons for Decision in this matter.

The Panel shares Taseko's concern that the review of its proposed Prosperity GoldCopper Mine Project be conducted in accordance with principles of natural justice.We believe the process put in place to examine the matter of an apprehension of biason the part of Panel member Morin and the analysis and conclusions reached on thismatter fully reflect these principles. We remain committed to ensuring that this reviewis continued in a way that is consistent with the principles of natural justice and is fairto all parties. The Panel will now resume the federal review of the Project and willshortly be providing an update on the next steps in the review process.

If you have any questions or require clarification regarding the attached, please donot hesitate to contact Colette Spagnuolo, Panel Manager, at 613-957-0541 or viaemail at prosperity.review@ceaa-acee.gc.ca.

Sincerely,

<original signed by>

Robert ConnellyPanel Chair

c.c. Nalaine MorinMinister of the Environment, the Honourable Jim Prentice

Reasons for Decision in the Matter of a Request by TasekoMines Limited that Panel Member Nalaine Morin be Recusedfrom the Federal Panel reviewing the Prosperity Gold-Copper

Mine Project

1.0 Introduction

On December 4, 2009, special counsel for Taseko Mines Ltd. (Taseko) wrote tothe federal panel reviewing the proposed Prosperity Gold-Copper Mine project(the Project), stating that Taseko had become aware of facts which it allegedraise a reasonable apprehension of bias on the part of Panel member NalaineMorin and requesting that she recuse herself from the Panel1.

After consultation with Panel member Morin, the Panel Chair wrote to Taseko onDecember 9, 2009 indicating that Panel member Morin would not voluntarilyrecuse herself from the Panel2. This letter also outlined the process that would befollowed to consider Taseko’s request that Panel member Morin recuse herself,as summarized below:

The question whether Panel member Morin should be recused fromthe Panel for reasonable apprehension of bias was considered byPanel Chair Connelly and Panel member Klassen sitting as a quorumof the Review Panel. Although Panel member Morin could, accordingto judicial authorities, have participated in the determination of thisissue, to be as fair as possible to Taseko the Panel decided that shewould not. The ability of two Panel members to carry on in the absenceof the third is expressly contemplated in the Panel’s Terms ofReference3;

Taseko was given the opportunity to provide additional information orsubmissions in support of its recusal request, by December 11, 2009;

The Panel retained amicus counsel to argue the contrary position toTaseko’s position, in writing, by December 18, 2009;

Interested parties were given the opportunity to make submissions tothe Panel on Taseko’s recusal request, by December 18, 2009;

Taseko was given the opportunity to make reply submissions to anysubmissions made by amicus counsel and any interested parties, byDecember 22, 2009.

1 Prosperity Project Registry, CEAR #14452 Prosperity Project Registry, CEAR # 14463 Prosperity Project Registry, CEAR #48, pages 2-3

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In these Reasons, a reference to “the Panel” should be interpreted as meaningPanel members Connelly and Klassen, sitting as a quorum of the Panel for thepurpose of dealing with Taseko’s recusal request, unless the context otherwiseindicates.

2.0 Positions of the Parties

2.1 Views of Taseko

Taseko submitted three letters in support of its request for the recusal of Panelmember Morin, dated December 4, 20094, December 11, 20095 and December22, 20096. Taseko is concerned that the beliefs of Panel member Morin and therole that she plays in her community as an advocate, disqualifies her from beinga neutral and unbiased member of the Panel. Taseko argues that Panel memberMorin’s beliefs may unconsciously affect her judgment or that a reasonableperson might apprehend that to be the case.

In its original December 4, 2009 letter, Taseko drew to the attention of the Panela letter dated November 25, 2009 addressed to the British ColumbiaEnvironmental Assessment Office (EAO) signed by Ms. Morin in her capacity asCoordinator of the Tahltan Heritage Resources Environmental Assessment Team(THREAT)7. The letter was in regards to the review of a proposed amendment tothe Forrest Kerr run-of-the-river hydroelectric project. Taseko alleges that theviews espoused in the November 25, 2009 letter are the same views held by theTsilhqot’in National Government (TNG).

Taseko elaborated on its concerns in its subsequent letters of December 11 and22, 2009. Taseko states that it is particularly concerned with the fact that Panelmember Morin is serving, by virtue of her role as Coordinator of THREAT, as anadvocate for the Tahltan while contemporaneously serving on the federalProsperity Review Panel. Taseko points to the alleged similarity in the views ofthe Tahltan Nation which it says are being advocated by Ms. Morin asCoordinator of THREAT (i.e. that development should not occur on Tahltantraditional territory without the Tahltan’s consent) with the views which Tasekosays are being advocated by the TNG in respect of the proposed ProsperityProject.

Taseko submits that subsection 33(1) of the Canadian EnvironmentalAssessment Act (“CEA Act” or simply “the Act”) mandates the application of themost rigorous test for bias, the reasonable apprehension of bias test. In applying

4 See footnote 15 Prosperity Project Registry, CEAR #14496 Prosperity Project Registry, CEAR #15547 See footnote 5

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that test, Taseko concludes that Panel member Morin’s position with THREATand the position of the Tahltan Nation regarding the role of consultation within theenvironmental assessment process would result in an informed person, viewingthe matter realistically and practically and having thought the matter through,thinking it more likely than not that Panel member Morin would unconsciously orconsciously decide the issues in the Prosperity review unfairly.

2.2 Views of Amicus Counsel

The Panel retained James B. Laycraft, Q.C. of Wilson Laycraft, Barristers andSolicitors to serve as amicus counsel to the Panel for the purpose of providing asubmission on the issue contrary to Taseko’s position. Given the seriousness ofan allegation of bias, and the potential impact of the Panel’s decision on thisissue to its ongoing work on the Prosperity review, the Panel wanted to ensurethat both sides of the issue were fully and appropriately presented.

Amicus counsel is of the view that there is no single overarching test for bias thatis applicable to all decision-makers and administrative tribunals8. Rather, hestates it is necessary to differentiate between tribunals that are adjudicative innature and those that are more legislative and policy-oriented. In his opinion,tribunals which are less like the courts and more policy oriented will be held to aless rigorous standard known as the “closed mind” test.

Amicus counsel submits that the more relaxed “closed mind” test should beapplied to consider an allegation of bias against a member of a federal reviewpanel appointed pursuant to the CEA Act. Amicus counsel concludes that there isnothing in the materials submitted by Taseko that would suggest to a reasonableperson, fully informed of the nature of an environmental assessment reviewunder the Act and the mandate of the Panel, and viewing the matter objectively,would think that Panel member Morin would not be able to fulfill that duty. Amicuscounsel is of the opinion that Panel member Morin has not been shown to bebiased, unconsciously or otherwise.

2.3 Views of Other Interested Parties

The Panel invited interested parties to provide submissions on Taseko’s requestthat Panel member Morin be recused on the grounds of a reasonableapprehension of bias. The Panel received comments from a number of interestedparties which are summarized below.

A number of First Nations submitted letters in support of Panel member Morinremaining on the Panel9. Several of these parties pointed to the following facts:

8 Prosperity Project Registry, CEAR #15409 Prosperity Project Registry, CEAR # 1529, CEAR #1530, CEAR #1542, CEAR #1550, CEAR #1552

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that the Minister of the Environment (the Minister) was aware of Ms.Morin’s work with THREAT when she was appointed to sit on the Panel;

that the November 25, 2009 letter referred to the provincial environmentalassessment process, not the federal process under the CEA Act;

that the views expressed in the November 25 letter were those of theTahltan, not Panel member Morin personally; and

that pursuant to its Terms of Reference, the Panel has no jurisdiction tomake determinations relative to the scope of the federal Crown’s duty toconsult or whether the federal Crown has met its duty to consult andaccommodate Aboriginal groups.

Many of these parties were of the opinion that Panel member Morin’s experienceand background in both mining and First Nation issues are an asset to the Paneland do not give rise to a reasonable apprehension of bias.

A number of letters were submitted by members of the public in support ofTaseko’s argument that Panel member Morin should be recused10. The Panelnotes, however, that many of these letters did not provide a rationale for theirposition. Of those that did, several were of the opinion that Panel memberMorin’s actions on behalf of THREAT, and the similarity of positions between theTahltan and the TNG, demonstrate that Panel member Morin is incapable ofseparating her emotions and providing a fair and unbiased decision. Further, itwas argued by some that because Ms. Morin had, in their view, criticized theprovincial environmental assessment process in the November 25, 2009 letter,the legitimacy of the federal environmental assessment process would becompromised if she were to remain on the Panel.

Mr. P. Jerry Asp, a former Chief of a Tahltan Band, submitted a letter whichincluded information on the role of THREAT, including its mandatedresponsibilities11. The Panel found this information of assistance inunderstanding what THREAT is and what it does.

Finally, AltaGas Renewable Energy Inc. (AltaGas) submitted a letter regarding itsexperience with Ms. Morin in respect of the Forrest Kerr project12. The proponentof the Forrest Kerr project, Coast Mountain Hydro Corp., is a wholly-ownedsubsidiary of AltaGas. AltaGas noted that it found Ms. Morin to be objective andable to blend sound scientific research and engineering with a deepunderstanding of the Tahltan Nation’s needs to create practical approaches thatwill allow projects like theirs to successfully advance with the support of theTahltan Nation.

10 Prosperity Project Registry, http://www.ceaa-acee.gc.ca/050/05/documents-eng.cfm?evaluation=44811&type=7, starting at CEAR #145111 Prosperity Project Registry, CEAR #151612 Prosperity Project Registry, CEAR #1518

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3.0 Analysis

The Panel has carefully reviewed Taseko’s December 4 and December 11, 2009submissions, the submissions of amicus counsel, the submissions of interestedparties, and Taseko’s reply submission of December 22, 2009. The Panelsincerely appreciates the input received from all parties. The Panel has alsoreviewed the various judicial decisions on the matter of bias that have beenreferenced by amicus counsel and by Taseko. Although the facts of thesejudgements are different from those in this matter, they were nonetheless veryhelpful to the Panel in addressing this difficult issue.

Upon receiving Taseko’s original December 4, 2009 request that Panel memberMorin be recused from the Review Panel, Panel Chair Connelly wrote to Tasekoand advised, among other things, that interested parties would be requested toaddress in their submissions the following question:

Does Panel member Morin’s role as a member of the Tahltan HeritageResources Environmental Assessment Team, and the views sheexpressed on its behalf in the November 25, 2009 letter, give rise to areasonable apprehension of bias in the federal Panel’s review of theproposed Prosperity Gold-Copper Mine project? That is, would aninformed person, viewing the matter realistically and practically and havingthought the matter through, think it more likely than not that her role as amember of the Tahltan Heritage Resources Environmental AssessmentTeam and the positions she espoused on its behalf in the November 25,2009 letter mean Panel member Morin would not consider Taseko MinesLtd.’s project fairly?

In making that request, the Panel was not making any prejudgment on what isthe appropriate test, in this case, for establishing whether a reasonableapprehension of bias exists on the part of Panel member Morin. Rather, thePanel was attempting to paraphrase what the Panel understood to be Taseko’sarticulation of the test in its December 4, 2009 letter. Accordingly, the firstquestion the Panel must address is what is the appropriate test for bias in thiscase.

3.1 What is the appropriate test for bias in this case?

The Supreme Court of Canada has considered the question of bias in a numberof cases. It is generally accepted that the modern articulation of the test forreasonable apprehension of bias has been most clearly stated in the dissent ofJustice de Grandpré, in Committee for Justice and Liberty v. Canada (NationalEnergy Board), [1978] 1 S.C.R. 369 (S.C.C.) (the “NEB” case). The test wasstated as follows:

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What would an informed person, viewing the matter realistically and practically – andhaving thought the matter through – conclude. Would he think that it is more likely thannot that [the person alleged to be biased], whether consciously or unconsciously, wouldnot decide fairly. (page 14)

Although Justice de Grandpré dissented in the NEB case, his statement of thetest for reasonable apprehension of bias has been affirmed by the SupremeCourt of Canada in several subsequent decisions. For example, in R. v. S.(R.D.)[1997] 3 S.C.R. 484, Justice Cory stated that this test “has been adopted andapplied for the past two decades.” In concurring reasons, Justices L’Heureux-Dube and McLachlin stated that Justice de Grandpré’s articulation of the test“has been consistently endorsed by this Court in the intervening two decades.”This test was confirmed again more recently in Wewaykum Indian Band v.Canada [2003] S.C.J. No. 50 (“Wewaykum”) at paragraph 60.

This test is often described as the “informed bystander” test. The “informedbystander” test is an objective test in which actual (subjective) bias is notrequired to be proved. As the Supreme Court of Canada stated in Wewaykum:

... in cases where disqualification is argued, the relevant inquiry is not whether there wasin fact either conscious or unconscious bias on the part of the judge, but whether areasonable person properly informed would apprehend that there was. In that sense, thereasonable apprehension of bias is not just a surrogate for unavailable evidence, or anevidentiary device to establish the likelihood of unconscious bias, but the manifestation ofa broader preoccupation about the image of justice. (paragraph 66)

This “broader preoccupation about the image of justice” is often described by thewell-known phrase that justice must not only be done but must also be seen tobe done.

The informed bystander test is applied when reasonable apprehension of bias isalleged against a judge. However, the Supreme Court of Canada has recognizedthat this standard may not be appropriate for administrative decision-makerswhose role is less adjudicative. For example, in the NEB case Justice deGrandpré stated:

The question of bias in a member of a court of justice cannot be examined in the samelight as that in a member of an administrative tribunal entrusted by statute with anadministrative discretion exercised in the light of its experience and of that of its technicaladvisers. (page 14)

This principle was further developed by the Supreme Court of Canada in Old St.Boniface Residents Assn. Inc. v. Winnipeg (City), [1990] 3 S.C.R. 1170 (“Old St.Boniface”), a case in which it was alleged that a city councillor participating in avote on an urban development scheme was biased because he had supportedthe scheme in an earlier meeting. Writing for a majority of the Supreme Court ofCanada, Justice Sopinka stated:

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It could not have been intended by the Legislature that this rule [the “informed bystander”test] apply to members of Council with the same force as in the case of other tribunalswhose character and functions more closely resemble those of a court. (paragraph 45)

Justice Sopinka went on to articulate what is known as the “closed mind” test,which requires the party alleging bias to establish that the decision-maker hasprejudged the matter to the extent that any attempt to change the decision-maker’s mind would be futile:

In my opinion, the test that is consistent with the functions of a municipal councillor andenables him or her to carry out the political and legislative duties entrusted to thecouncillor is one that requires that the objectors or supporters be heard by members ofCouncil who are capable of being persuaded. The Legislature could not have intended tohave a hearing before a body who has already made a decision which is irreversible. Theparty alleging disqualifying bias must establish that there is a prejudgment of the matter,in fact, to the extent that any representations at variance with the view, which has beenadopted, would be futile. (paragraph 57)

The “informed bystander” test constitutes the most rigourous or highest standardfor reasonable apprehension of bias, while the “closed mind” test represents themost relaxed or lowest standard for reasonable apprehension of bias. Since itsdecision in Old St. Boniface, Canadian courts, including the Supreme Court ofCanada, have considered what standard or test for reasonable apprehension ofbias should apply to other administrative bodies which fall in the spectrumsomewhere between judges and municipal councillors.

In Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners ofPublic Utilities), [1992] 1 S.C.R. 623 (the “Newfoundland Telephone” case),Justice Cory writing for the full court stated:

It can be seen that there is a great diversity of administrative boards. Those that areprimarily adjudicative in their functions will be expected to comply with the standardapplicable to courts. That is to say that the conduct of the members of the board shouldbe such that there could be no reasonable apprehension of bias with regard to theirdecision. At the other end of the scale are boards with popularly elected members suchas those dealing with planning and development whose members are municipalcouncillors. With those boards, the standard will be much more lenient. In order todisqualify the members a challenging party must establish that there has been a pre-judgment of the matter to such an extent that any representations to the contrary wouldbe futile. Administrative boards that deal with matters of policy will be closely comparableto the boards composed of municipal councillors. For those boards, a strict application ofa reasonable apprehension of bias test might undermine the very role which has beenentrusted to them by the legislature. [emphasis added] (paragraph 27)

In Zundel v. Canada (Minister of Citizenship and Immigration), [1997] F.C.J. No.948 (C.A.), the Federal Court of Canada dealt with a body (the SecurityIntelligence Review Committee) that was neither primarily adjudicative nor purelylegislative but rather was primarily investigative. The court stated:

“These functions, as a whole, lie somewhere between the two ends of the scale, namelythe purely adjudicative functions and the legislative functions. The correct test, with

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regard to a board which stands somewhere in the middle of the spectrum, cannot be theinformed bystander’s test. It must be a less rigorous one. To paraphrase Cory J. in theNewfoundland Telephone case, the test must be flexible so as to allow this agency tocarry on the role with which it has been entrusted by parliament.” [emphasis added](paragraph 20)

Based on the foregoing, the Panel accepts that there is not one single standardfor determining reasonable apprehension of bias but rather a kind of slidingscale. The Panel further accepts that the highest standard, the “informedbystander” test, will apply to judges and to administrative bodies that areprimarily adjudicative in nature. Political decision-makers such as municipalcouncils will be held to the lowest or most relaxed standard, the “closed mind”test. Administrative bodies that are not primarily adjudicative in nature, but ratherlegislative or policy-oriented, will fall somewhere between these two extremes,but based on the case law, will be closer to the lower end than the higher end ofthe spectrum as per Newfoundland Telephone Co. and Zundel.

The Panel believes it is clear that it is neither primarily adjudicative like a courtnor political like a municipal council. Where on the spectrum, then, does a federalreview panel appointed by the Minister of Environment under the CEA Act fall?The case law indicates that the standard which properly applies, and whetherthat standard is met in a given case, is fact-driven. It will depend on the specificlegislation creating the administrative tribunal and the facts of the particular case.

The federal Prosperity Review Panel has been established by the Minister inaccordance with the CEA Act to conduct an assessment of the environmentaleffects of the Project and to report to the Minister and the responsible authorities(in this case, Fisheries and Oceans Canada, Transport Canada and NaturalResources Canada) in accordance with section 34 of the Act. The Panelconsiders that several sections of the CEA Act are relevant to the question of thePanel’s nature and function.

Subsection 4(1)(a) states that one of the purposes of the CEA Act is:

to ensure that projects are considered in a careful and precautionary manner beforefederal authorities take action in connection with them, in order to ensure that suchprojects do not cause significant adverse environmental effects.

This suggests to the Panel that its role is not to adjudicate, but rather to carefullyconsider and assess (and report to the Minister and the responsible authorities)information brought before it regarding the potential environmental effects of theProject. Ultimately, the responsible authorities, after obtaining approval of theGovernor in Council, have the decision-making role in the federal panel reviewprocess.

This is reinforced by section 16 of the Act, which sets out various factors which areview panel shall give “consideration” to when conducting a review of aproposed project. Further, the Minister may require additional factors to be

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considered by a review panel and shall determine the scope of the factors to beconsidered by a review panel. This emphasizes, the Panel believes, that afederal review panel is not a decision-making body, but rather a mechanismwhich the Minister can use to obtain information about potential adverseenvironmental effects of a project which engages federal jurisdiction.

Of particular relevance, section 34 of the Act, in referring to federal reviewpanels, states:

A review panel shall, in accordance with any regulations made for that purpose and withits term of reference,

(a) ensure that the information required for an assessment by a review panel isobtained and made available to the public;

(b) hold hearings in a manner that offers the public an opportunity to participate inthe assessment;

(c) prepare a report setting out

(i) the rationale, conclusions and recommendations of the panel relating to theenvironmental assessment of the project, including any mitigationmeasures and follow-up program, and

(ii) a summary of any comments received from the public; and

(d) submit the report to the Minister and the responsible authority.

The Panel believes that section 34 of the Act is clear that the primary function ofa federal review panel is to obtain information about the environmental effects ofa project, in part by holding hearings to allow for participation by the public, andto prepare a report setting out its assessment of and recommendations relatingto those environmental effects. Obtaining information necessary to assesspotential environmental effects is, in the Panel’s view, more of an “investigative”function than an adjudicative function. Also, preparing a report setting out thePanel’s assessment of potential environmental effects, and makingrecommendations with respect to mitigation and the significance of adverseeffects, is more policy-oriented than adjudicative. Finally, the Panel can onlymake recommendations; it is not the decision-maker. Any decision to permit theProject to be carried out, in whole or in part, is made by the responsible authority,after obtaining the approval of Governor in Council, not the Panel.

Section 34 of the Act also states that a review panel must carry out its duties inaccordance with its terms of reference. In this case, the Terms of Reference forthe Panel state:

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The mandate of the Panel is to conduct an assessment of the environmental effects(including any effect of any change that the Project may cause in the environment onhealth and socio-economic conditions, physical and cultural heritage, the current use oflands and resources for traditional purposes by aboriginal persons, or any structure, siteor thing that is of historical, archaeological, paleontological or architectural significance)of the proposed Project and to report to the Minister of the Environment and theResponsible Authorities in accordance with section 34 of the CEAA. (page 1)13

The Panel believes that this description of its mandate reinforces that the Panelis not primarily an adjudicative body but rather is an investigative and policy-oriented one.

Of particular relevance to Taseko’s recusal request, the Panel’s Terms ofReference state the following with respect to First Nations issues:

The Panel will have the mandate to invite information from First Nations related to thenature and scope of potential or established Aboriginal rights or title in the area of theProject, as well as information on the potential adverse impacts or potential infringementthat the Project may have on potential or established Aboriginal rights or title.

The Panel shall fully consider and include in its report:

1. information provided by First Nations regarding the manner in which the Projectmay adversely affect potential or established Aboriginal rights or title; and

2. in the case of potential Aboriginal rights or title, information provided by the FirstNation regarding the First Nation’s strength of claim respecting Aboriginal rightsor title.

The Panel will not have a mandate to make any determinations as to:

1. the validity of Aboriginal rights or title claims asserted by First Nations or thestrength of those claims;

2. the scope of the Crown’s duty to consult First Nations; and/or3. whether Canada has met its respective duty to consult and accommodate in

respect of rights recognized and affirmed by section 35 of the Constitution Act,1982. [emphasis added] (page 2)14

Clearly, the Panel has no jurisdiction or mandate to make any determinations asto the validity of aboriginal rights or title, the scope of the federal Crown’s duty toconsult and/or whether Canada has met its duty to consult and accommodate.Rather, the Panel’s role is to invite and consider information from potentiallyaffected First Nations and to include any such information received in the reportwhich it prepares for the Minister and the responsible authorities. Therefore, withrespect to First Nations issues, the Panels function is expressly not adjudicative.This aspect of the Panel’s jurisdiction will be discussed in greater detail below.

Finally, in determining the appropriate test for reasonable apprehension of bias,the Panel must refer to section 33 of the Act, which states:

13 See footnote 314 ibid

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33. (1) Where a project is referred to a review panel, the Minister shall, in consultationwith the responsible authority,

(a) appoint as members of the panel, including the chairperson thereof, personswho

(i) are unbiased and free from any conflict of interest relative to the project andwho have knowledge or experience relevant to the anticipated environmentaleffects of the project, … [emphasis added]

The Terms of Reference also state:

The Panel will be composed of three members, chosen from outside the public service,each of whom shall be unbiased, free from any conflict of interest relative to the Projectand shall have knowledge or experience relevant to the anticipated environmental effectsof the Project. [emphasis added] (page 2)

15

In its December 22, 2009 reply submission, Taseko states that the effect ofsection 33 of the Act, with its express reference to review panel members being“unbiased”, is that the highest standard for reasonable apprehension of bias (the“informed bystander” test) is applicable16. Taseko asserts that the existence ofsection 33 distinguishes this case from the several cases cited by amicuscounsel in support of the proposition that the “closed mind” test or some otherlower standard should apply to the Panel.

Respectfully, the Panel cannot agree with Taseko’s argument. If anything, thePanel interprets section 33 to mean that federal review panel members must beactually (i.e., subjectively) unbiased. The section does not speak of membersbeing appointed who “appear to be” unbiased but rather members who areunbiased. Yet even Taseko acknowledges that there is no question of Panelmember Morin being actually or subjectively biased. In the Panel’s view, section33 of the Act does not mean that the Panel—an administrative tribunal which isnot primarily adjudicative—is subject to the “informed bystander” test.

In short, the Panel concludes, based on both the CEA Act and its Terms ofReference, that it is an appointed administrative body with limited and delegatedjurisdiction. Further, that jurisdiction is not primarily adjudicative. The Panel doesnot act as judge but rather, obtains information, assesses that information andthen prepares and submits a report to the Minister and the responsibleauthorities for their consideration before a decision is made with regard to theProject.

While hearings will be conducted, the hearing process differs from that of thecourts in that its overriding purpose is to obtain information from interestedparties with respect to the potential environmental effects of the Project asdefined in the Terms of Reference and the CEA Act. The Panel will not bedeciding a dispute between parties. While there may be disagreement between

15 ibid16 See footnote 6

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Taseko and some interested parties, such disagreement is with respect topotential environmental effects and the available means to address and mitigatethose effects. These are policy issues.

Based on the forgoing, the Panel concludes that it falls towards the legislative orpolicy end of the spectrum and, as such, should properly be held to a standard ofreasonable apprehension of bias close to the “closed mind” test.

Notwithstanding, as will be discussed below, the Panel also concludes that evenif the “informed bystander” test is the appropriate standard for assessing theexistence of reasonable apprehension of bias in this case, Taseko has still failedto provide evidence and information which meets that test.

3.2 Does a reasonable apprehension of bias exist on the part of Panelmember Morin?

As recognized by Taseko, an allegation of reasonable apprehension of bias ismost serious. As stated by Justice Mosley of the Federal Court in Detorakis v.Canada (Attorney General), [2009] F.C.J. 191:

Allegations of bias are very serious matters. They call into question the integrity of thedecision maker. The burden of demonstrating a reasonable apprehension of bias restswith the party arguing for disqualification. Moreover, the inquiry that must be conductedis very fact-specific and there can be no “shortcuts” in the reasoning that supports theallegation…

The presumption is that a board or tribunal is impartial. The grounds must be substantial.A real likelihood or probability of bias must be demonstrated. Mere suspicion is notenough. It is the informed person’s perception that counts, not uninformed speculation.(paragraphs 53-54)

In R. v. S.(R.D.) Justice Cory of the Supreme Court of Canada emphasized thatthe “informed person” is someone who has “knowledge of all the relevantcircumstances”. He went on:

To that I would add that the reasonable person should also be taken to be aware of thesocial reality that forms the background to a particular case… (paragraph 111)

The federal Prosperity Review Panel members were appointed by the Minister onJanuary 19, 2009. The appointment was announced in a news release, whichincluded a “Backgrounder” containing biographical notes on each of the Panelmembers17.

17 Prosperity Project Registry, CEAR #47

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The biographical note for Ms. Morin noted her training and experience as ametallurgist and environmental supervisor in mining and resource development inB.C. It also states:

Ms. Morin has lived and worked in Manitoba and British Columbia and she is currentlythe manager of the Tahltan Heritage Resources Environmental Assessment Team whereshe has developed processes for the inclusion of Tahltan knowledge in the environmentalassessment and permitting processes for resource development projects in Tahltanterritory. [emphasis added]18

Having regard to the specific statements from the courts that the reasonableapprehension of bias must be that of the “well-informed” person, the Panelbelieves it is important to describe what is known about THREAT. As indicated inthe December 16, 2009 submissions of P. Jerry Asp, a former Chief of a TahltanBand, the responsibilities of THREAT are as follows:

A. To represent the Tahltan Nation in all resource development projects through activeparticipation in the Environmental Assessment process.B. To actively participate in the development of regulatory applications submitted byresource development corporations seeking resource development opportunities inTahltan territory.C. Critically review data and studies published related to various resource developmentprojects for each of the fields outlined as defined by THREAT.D. To assist in the development of a response to each of the respective fields that can besubmitted on behalf of the Tahltan Nation to the Environmental Assessment office.E. To increase capacity within the Tahltan Nation through the development anddistribution of resource materials on the various aspects of resource developmentprojects within the respective fields defined by THREAT.F. Conduct research in the various fields as outlined to assist in the development ofTahltan mining policy.G. Planning and delivering training workshops on the various fields as defined byTHREAT to increase capacity within the Tahltan Nation.H. To participate in internal Tahltan consultation within our communities.19

The Panel sees nothing in these terms of reference that would suggest that Ms.Morin’s employment as coordinator of THREAT would in any way give rise to areasonable apprehension that she will not be fair in her assessment of thepotential environmental effects of the proposed Project. To the contrary, basedon the biographical note referenced above, it seems to the Panel that Ms. Morin’sbackground in environmental assessment for the Tahltan Nation, coupled withher training and experience as a mining metallurgist, is precisely why she wasappointed to the Panel. Indeed, this would be consistent with the Panel’s Termsof Reference, which state that Panel members shall “have knowledge orexperience relevant to the anticipated environmental effects of the project”.

Further, as stated in the biographical note quoted above, and as has been notedin the submissions of several parties, Ms. Morin’s employment with THREAT wasknown and acknowledged by the Minister at the time of her appointment. The

18 ibid19 See footnote 10

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Panel presumes it was also known to Taseko, as a News Release and PublicNotice were issued. Yet Taseko raised no objection to Ms. Morin’s appointmentuntil December 4, 2009, almost 11 months later.

As best the Panel can determine, the precipitating event which caused Taseko toraise the allegation of a reasonable apprehension of bias was Ms. Morin’sauthorship, as Coordinator for THREAT, of a letter dated November 25, 2009 inrespect of the Forrest Kerr project20. The Panel will deal with that letter below, butnotes that Taseko also cites the “Tahltan Resource Development Policy” (theTahltan Policy) in support of its allegation of a reasonable apprehension of bias.Objection is taken by Taseko to the following passage from the Tahltan Policy:

Before a resource development project can commence within Tahltan tribal territory, it willbe necessary for the developer and the Tahltan Central Council to enter into a projectparticipation agreement. (page 3)

The Panel notes that the Tahltan Policy is dated April 1987. It is posted on thewebsite of the Tahltan Central Council21. Again, the Panel can only presume thatthe Tahltan Policy was publically available to both the Minister and Taseko inJanuary 2009 when Ms. Morin was appointed a Panel member. Notwithstanding,no objection was raised at the time to Ms. Morin’s appointment. As noted by theFederal Court in Detorakis:

Delay in raising an apprehension of bias can be indicative that the grounds lacksubstance. (paragraph 54)

Turning to the substance of the passage from the Tahltan Policy, Taseko allegesit raises a reasonable apprehension of bias because it indicates that the TahltanNation, and Ms. Morin, share the same view as the TNG, namely that resourcedevelopment projects in a First Nation’s territory cannot proceed without the FirstNation’s consent. For example, in its December 11, 2009 letter, Taseko states:

Ms. Morin believes, and in her role as "Coordinator THREAT" for her community stronglyadvocates, that resource projects should not go ahead without the support of the affectedFirst Nation.22

The Panel does not accept this as a view that a reasonable and well-informedperson would hold.

First, Taseko presumes that this statement from the Tahltan Policy is a personalview held by Ms. Morin. There is no evidence that this is the case. Second, it isnot relevant because the Panel is not a decision-making body and has nomandate to make any decision with respect to whether the Project will be

20 See footnote 521 Available at http://www.tahltan.org/RDC.doc22 See footnote 5

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approved, regardless of whether First Nations support the Project. This will bediscussed in greater detail below.

Accordingly, the Panel is unable to conclude that Ms. Morin’s employment asCoordinator for THREAT, by itself, gives rise to a reasonable apprehension eitherthat Ms. Morin will approach the Prosperity environmental assessment with aclosed mind or that she will not, whether consciously or unconsciously, carry outher responsibility as a member of the Panel in a manner that is fair to Taseko.

That being the case, the Panel must still consider whether the November 25,2009 letter, which Ms. Morin signed as Coordinator for THREAT in respect of theForrest Kerr hydroelectric project, gives rise to a reasonable apprehension ofbias. As indicated above, Taseko points to the fourth last paragraph of the letter,which discusses the role of provincial Crown consultation and accommodationwithin the British Columbia EAO process, as information which gives rise to areasonable apprehension of bias.

The Panel wishes to make some general observations about the November 25letter first, and then will discuss in greater detail the paragraph referenced byTaseko.

First, the letter is on Tahltan Central Council letterhead and is signed by Ms.Morin as “Coordinator, THREAT”. Obviously, this is not a letter from Ms. Morin inher personal capacity.

Second, the letter is seven (7) pages long and, with the exception of the last fourparagraphs of the letter, consists of technical comments on the environmentalassessment of a proposed amendment to the provincial environmentalassessment certificate for the Forrest Kerr project. In other words, the Panelunderstands that this was a letter written by THREAT in its role as the Tahltanagency which participates in the environmental assessment of proposedresource projects in Tahltan territory. The writing of the letter falls squarely withinthe role assigned to THREAT by the Tahltan Central Council. The fact the letterwas written was entirely proper.

The facts associated with the Forrest Kerr Hydroelectric project23 are:

it is a proposal by Coast Mountain Hydro Corp. to construct a run-of-river

hydroelectric plant with a capacity of 112MW on the Iskut River and a 188

kilometre, 138 kV power line;

the project is located in northwestern British Columbia, approximately 100

kilometres northwest of the town of Stewart;

23 Coast Mountain Hydro Corp., Forrest Kerr Hydroelectric Project, Environmental Assessment Amendment- 195 MW, October 2009

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the proponent has applied to the British Columbia EAO for an amendment

to an existing Environmental Assessment Certificate;

the amendment is to increase the project’s generation capacity to 195 MW

and increase the transmission line capacity to 287 kV;

the amendment application did not trigger the CEA Act;

The Panel notes that this proposed project has no relation to Taseko's proposedProsperity Gold-Copper Mine Project currently under review by this Panel and islocated in a different area of British Columbia. Furthermore, as noted above, theapplication to the British Columbia EAO for an amendment to an existingenvironmental assessment certificate did not trigger the CEA Act.. The Panelfurther notes that neither the Tahltan Central Council nor THREAT is aparticipant in the review of Taseko's proposed Prosperity Gold-Copper MineProject.

The Panel will now turn to the fourth last paragraph in the November 25, 2009letter. Because of its importance to this issue, we reproduce the paragraph herein full:

Finally, we wish to be clear that the Tahltan Nation is of the view that the environmentalassessment process is not structured or implemented in a manner which leads toadequate consultation or appropriate accommodation. There are many reasons for thisincluding, but not limited to, the following: internal Crown policy limitations on informationand study requirements that do not result in comprehensive information about Aboriginaltitle and rights being gathered; lack of mandates or willingness to discuss elements ofappropriate accommodation, including accommodation of the economic component ofAboriginal title; a legally insufficient process and policy for determining the scope ofrequired consultation; and lack of structures and opportunities for meaningful andrespectful First Nations participation.24

The Panel notes that the paragraph addresses the need for adequateconsultation or appropriate accommodation. In this context, the Panel believesthat THREAT is referring to determinations made by the Supreme Court ofCanada dealing with the matter of consultation and accommodation with FirstNations in accordance with section 35 of the Constitution Act, 1982. There is noreference in this paragraph to the Tahltan Resource Development Policy or theTahltan’s alleged position "that resource projects should not go ahead without thesupport of the affected First Nation".

The paragraph quoted by Taseko is in fact followed by three additionalparagraphs, as follows:

24 See footnote 5

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The Tahltan Nation is of the view that the environmental assessment process, to thedegree it has some utility, is as a mechanism for sharing and managing some relevanttechnical information with respect to a project, and participates in the environmentalassessment process on a without prejudice basis to its position that the Crown is unableto discharge its obligation to consult and accommodate through the environmentalassessment process.

The Tahltan Nation is prepared at all times to discuss, and seek agreement, with theCrown on mutually respectful and collaborative processes for consultation andaccommodation.

Please contact me directly to set up a meeting.25

The Panel believes that, read together, these four paragraphs indicate thatTHREAT is not advancing the position that the Forrest Kerr project may notproceed without the Tahltan’s consent. In fact, the paragraphs describe theenvironmental assessment process as a mechanism for sharing technicalinformation about resource development projects, which is undoubtedly true. Thepoint made in the paragraph to which Taseko objects is that the provincial (notthe federal) environmental assessment process is, in the view of the TahltanNation, not adequate to discharge the provincial Crown’s duty to consult andaccommodate. Since the Panel is conducting a federal environment assessmentof the Prosperity Project under the CEA Act, and the Panel is specificallyprohibited by its Terms of Reference from making any determination on thefederal Crown’s duty to consult and accommodate, the criticism is not relevant.

The Panel concludes that the paragraph quoted by Taseko would not give rise, inthe mind of a reasonable and well-informed person, to the apprehension eitherthat Ms. Morin’s mind is closed or that she will not participate in theenvironmental assessment of the Prosperity Project in a manner that is fair toTaseko.

Finally, the Panel has considered the concern raised by Taseko in its letters ofDecember 11 and December 22, 2009 that a reasonable apprehension of bias iscreated by the fact that Ms. Morin is serving as a member of the Panel at thesame time as she plays an advocacy role for the Tahltan as the Coordinator ofTHREAT26.

In considering this argument, the Panel has considered two points. First, thePanel does not believe that Taseko fairly or accurately describes THREAT’s roleas being “to advocate for the position that projects on lands asserted to be inTahltan traditional territory ought not to proceed without their approval orconsent”. In fact, as indicated in the submission of Mr. Asp, THREAT’s role is toparticipate in the environmental assessment of resource development projects inTahltan territory. Taseko has seized on a single passage from the TahltanResource Development Policy and linked it to a single paragraph in the

25 ibid26 See footnotes 5 and 6

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November 25, 2009 letter to contend that the sole or primary function of THREATis to require resource developers to obtain Tahltan consent before proceedingwith projects in Tahltan territory. The Panel does not believe that is a reasonableinterpretation.

Second, the Panel has examined the extent to which the B.C. environmentalassessment process and the Panel's Terms of Reference address the matter ofconsultation and accommodation as mentioned in the fourth last paragraph of theletter of November 25, 2009, signed by Ms Morin as coordinator of THREAT.

The British Columbia EAO Users Guide, issued in 2009, provides an explanationof its role and responsibilities to address consultation and accommodation withFirst Nations. Relevant quotes from the guide are as follows:

As the agency responsible for overseeing the provincial environmental assessmentprocess, EAO has a number of roles. Some of these include:

...carrying out the Province’s legal duty to consult and accommodate First Nations’ rights

and title...27

and

The Crown retains the overall responsibility for the consultation duties owed to FirstNations, and the EAO must ultimately assess whether the consultation efforts undertakenby the proponent (at the EAO’s direction) and by the EAO directly satisfy that duty.28

and

The assessment report also contains information regarding First Nations consultation,including an explanation of whether and for what reasons the EAO has concluded theCrown’s duty to consult and accommodate has been met. In any case where a FirstNation does not agree with the draft assessment report’s conclusions, the EAO offers theFirst Nation an opportunity to prepare a submission that the EAO can provide directly tothe responsible ministers when it submits the assessment report.

29

It is clear that the Government of British Columbia has assigned certainresponsibilities to the EAO for consultation and accommodation with FirstNations.

By contrast, the Panel's Terms of Reference say essentially the opposite.Although the relevant passage was quoted above, the Panel repeats it here:

The Panel will not have a mandate to make any determinations as to:

1. the validity of Aboriginal rights or title claims asserted by First Nations or the strengthof those claims;

27 British Columbia Environmental Assessment Office 2009 Users Guide, Page 11, available athttp://www.eao.gov.bc.ca/pub/pdf/EAO_User_Guide_2009.pdf28 ibid, Page 2429 ibid, Page 33

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2. the scope of the Crown’s duty to consult First Nations; and/or

3. whether Canada has met its respective duty to consult and accommodate in respect ofrights recognized and affirmed by section 35 of the Constitution Act, 1982." [emphasisadded] (page 2)30

The Panel’s Terms of Reference expressly prohibit the Panel from making anydetermination with respect to whether the federal Crown’s duty to consult andaccommodate has been discharged in relation to Taseko’s Project, in directcontrast to the British Columbia EAO guidelines, as quoted above. While it isexpected that the Panel will hear from First Nations about their asserted rightsand title and the strength of those claims, the Panel is prohibited from makingany determinations thereon. This is the responsibility of the federal Crown andnot of the Panel.

The Panel concludes that there is a critical difference between the twoenvironmental assessment processes on the matter of consultation andaccommodation with First Nations. Therefore, there can be no valid linkagebetween the comments made in the letter signed by Ms. Morin on November 25,2009 as coordinator of THREAT about consultation and accommodation in theForrest Kerr Hydroelectric project being reviewed under the provincialenvironmental assessment process and the federal Panel’s review of theproposed Prosperity Gold-Copper Mine Project. Furthermore, the allegedcriticism by Ms. Morin about the British Columbia environmental assessmentprocess is on a matter she will not be addressing as a Panel member for theProsperity Gold-Copper Mine Project.

Therefore, the Panel is unable to conclude that the November 25, 2009 lettergives rise to a reasonable apprehension that Ms. Morin will either approach theProsperity environmental assessment with a closed mind or that she will not,whether consciously or unconsciously, carry out her responsibility as a memberof the Panel in a manner that is fair to Taseko.

4.0 Conclusion

In summary, the comments made in the letter of November 25, 2009 by Ms Morinas coordinator of THREAT which are of concern to Taseko deal with mattersrelated to consultation and accommodation with the Tahltan Nation about ahydroelectric project in Northwestern British Columbia being reviewed under theBritish Columbia environmental assessment process. Furthermore, her allegedcriticism of the British Columbia process is unrelated to the Panel’s review of theproposed Prosperity Gold-Copper Mine Project since the federal panel reviewhas no mandate to address the adequacy of consultation and accommodation

30 See footnote 3

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with First Nations. Ms. Morin will not be required to decide on these matters as amember of the federal Panel reviewing the Prosperity Gold-Copper Mine Project.

Consequently, the Panel concludes that Panel member Morin's role as a memberof THREAT, and the views she expressed on its behalf in the November 25,2009 letter do not give rise to a reasonable apprehension of bias, according toany standard, in the federal Panel's review of the proposed Prosperity Gold-Copper Mine Project. She will therefore not be asked to recuse herself from thePanel. <original signed by>

________________________________Robert ConnellyChair, Prosperity Review Panel

_______________________________Bill KlassenMember, Prosperity Review Panel