Legal expenses force First Nation to abandon litigation.

Expense and delay are the two certainties in the continuing dispute between Kitchenuhmaykoosib Inninuwug (KI) First Nation, a northwestern Ontario fly-in community and Platinex Inc., a Toronto junior mining company.

KI has incurred crippling costs of more than $600,000 in a two-year battle that arose--as the judge in the case, Superior Court Justice Patrick Smith, made clear in his July 2006 ruling--from Ontario's failure to engage the Aboriginal community before issuing licences and permits under the provincial mining act.

"Platinex's presence was illegal," KI Councillor John Cutfeet said recently. "Now we're subsidizing Ontario's duty to consult," he added, noting that Supreme Court decisions require Ontario to provide funds so that First Nations can retain the expertise needed to evaluate what is proposed for its territory.

"We cannot further afford your justice system," Chief Donny Morris and his council said in an Oct. 22 letter to Ontario Premier Dalton McGuinty. Community programs as basic as housing and food have been impacted.

On Oct. 25, Toronto lawyer Kate Kempton appeared in court to say KI was releasing her as legal counsel because of the mounting cost of litigation. Councillors Sam McKay and Cutfeet addressed the judge and left the courtroom with other KI members and supporters.

Among them, Anna Baggio of the Wildlands League, who was left bemused by the turn of events.

"I don't know why the judge seems to have done a 180 on this issue but everything is lining up for Ontario and Platinex and how mining must go on," she said.

After KI left the court, Smith entertained motions from Platinex and Ontario and issued an order, drafted by company lawyer Neal Smitheman, that grants Platinex access to the land, enjoins the community from interfering, and provides a timetable, starting Nov. 2, for an archeological survey and a drilling program.

"Our people at this point are saying that that order cannot be left standing," says Cutfeet.

A notice of appeal has been filed by KI and on Nov. 2, KI chief and council sent a letter to Platinex stating that the company would not be allowed into the community.

On Nov. 19, Platinex gave notice that it intends to start proceedings to have KI found in contempt of court--a serious offence that can carry substantial penalties.

Fourteen months ago, the situation looked very different.

After a three-day trial in Thunder Bay, Smith brought down a landmark ruling that recognized the spiritual and cultural significance of the land for Aboriginal people.

The writing seemed to be on the wall for the archaic mining act that provides free entry for exploration companies in a process that mandates no consultation or accommodation.

But by May 2007, Ontario had become a party to the legal action and the judicial tide was turning in Platinex's favour. Smith set a timetable for the parties to agree on a consultation protocol.

Platinex was close to bankruptcy when it launched a $10 billion suit against KI (a community of 1,200, formerly known as Big Trout Lake) after a protest by members resulted in the withdrawal of a drilling crew in February 2006.

The protest arose because Platinex was ignoring a moratorium on exploration and resource extraction imposed by KI in 2001, a moratorium prompted by Ontario's failure to address environmental and economic issues in the North.

KI filed a countersuit and--far more worrying for the province--a constitutional challenge to the mining act. That challenge is now in abeyance because of KI's withdrawal from the justice system, Cutfeet said.

The creation of Jim Trusler, a veteran of the industry, Platinex is becoming the object of investor interest after Noront Resources found high-grade nickel and copper mineralization in 17 drilling holes 250 kilometres away. Noront's discovery has sparked a rush to stake claims in an area stretching from Big Trout Lake in the east to Attawapiscat in the west.

Smitheman said he's mystified by KI's refusal to accept "the most generous MOU (memorandum of understanding) ever offered to a First Nation by a junior exploration company."

The MOU provides for 500,000 warrants at a share price of 40 cents. The price has risen to 70 cents, Smitheman noted. There would also be a benefit fund to which Platinex would contribute two per cent of all the monies it spends, and a KI nominee would sit on the board of directors.

Kathy Nossich, spokesperson for the Ontario ministry of Northern Development and Mines, said the ministry recently sent a letter to the community. "We would very much like to sit down with them and meet and talk about their financial situation," she said.

Cutfeet said he hadn't seen the letter. "They say that in public," he said. "That's the illusion of trying to meet, that's not our experience."

Even Platinex, in an Oct. 18 release, hinted at dissatisfaction with the province's role.

"For more than a month Platinex has been requesting that high level meetings be convened by the Ontario government without conclusive evidence of any such efforts on the part of Ontario," the release read.

Smith's July 2006 ruling had led KI members to feel the courts were starting to accommodate Aboriginal views. Smith denied Platinex the injunction it sought to keep community members away from the drilling sites and granted KI an injunction to keep Platinex off the land for five months, calling on the parties instead to talk and try to settle their differences.

He noted that a significant factor in the dispute was KI's concern that exploration might reduce its options in a settlement of a treaty land entitlement claim. The claim was based on a miscalculation of the population at the time KI adhered to Treaty 9 in 1929, which led, KI says, to a 197-square-mile shortfall in the amount of land set aside for a reserve. Ontario denied the claim in March 2007, arguing that a 1975 gift of 204 square miles satisfies the claim, a position KI angrily rejects.

The issue remains a major sticking point. In a Nov. 6 release, KI stated that it would negotiate only with the Ontario government, not with the company, and that three matters must be addressed: the treaty land entitlement claim, the revocation of illegal licenses and permits issued by the province, and compensation of financial costs incurred by KI in the court process.

"We want our money back," Cutfeet said. "Why do we have to pay for the province's failure to consult and accommodate us?"

Ontario reportedly came up with an initial $25,000, then another $25,000--a fraction of what the community has had to pay to defend itself.

"Ontario and Platinex have developed a deliberate legal strategy designed to increase KI's legal costs, thereby denying our community's access to justice," said McKay.

"We just don't have the money to answer Ontario and Platinex's legal maneuvres and they've joined together using legal tactics to bankrupt our community."

By Kate Harries

Windspeaker Writer

TORONTO