SOMBA K'E/YELLOWKNIFE - The Federal Court of Canada ruled in favour of two Akaitcho Dene First Nation bands Friday, in a ruling that confirms the need for the federal government to consult with First Nations before issuing permits and beginning work on their land.

Justice Michael Phelan's ruling last week cancels North Arrow Minerals Inc.'s rare earths exploration permit, which was issued in July 2009 by the Mackenzie Valley Land and Water Board.

The judge said the water board and the Department of Indian and Northern Affairs failed to consult with the Yellowknives Dene or the Lutsel K'e Dene band, and later failed to accommodate their concerns about the project in the Aylmer Lake area, about 300 km northeast of Yellowknife.

"In this case, no one took responsibility for ensuring meaningful consultation. The duty was not met," wrote Phelan in his judgment.

Along with the cancellation of North Arrow's permit, the Akaitcho communities were awarded $80,000 to cover fees and disbursements.

The court held that although the federal government can rely to some extent on consultation by industry, it can't just take industry's word for what happened.

"There were no face-to-face meetings with chiefs on issues; no real meetings with the communities and no attempt to address any of the communities' or leaders' ideas into North Arrow's proposal. North Arrow simply refused to negotiate," Phelan said.

Chief Ed Sangris of the Yellowknives Dene First Nation, said this decision sends a clear message to companies who want to operate in Akaitcho Dene territory.

"It just goes to show that industry needs to consult with the people. If you want to do work on First Nation traditional territory, you have to consult with us. That's all we ask," he said Tuesday.

In December 2008, North Arrow notified the Akaitcho communities of its intention to seek a permit for exploration activities near Aylmer Lake.

Exploration agreements, which manage consultation and accommodation on mineral exploration projects, were proposed to North Arrow by the First Nations litigants, but the company rejected them.

The company instead went to the Mackenzie Valley Land and Water Board to initiate a formal request for permit approvals, stating it had consulted the affected First Nations.

When the water board sought a determination from Indian and Northern Affairs on the adequacy of the consultation, the department confirmed the consultation.

The Akaitcho communities initiated legal proceedings on Aug. 14, 2009 and a two-day hearing was held June 24-25 in Yellowknife.

"We hope that in the future companies will work with us through the exploration agreement," stated Chief Antoine Michel of Lutsel K'e in a press release issued yesterday. "In this way, we can make sure our interests are protected, and the company can have certainty on their projects."

Officials with Indian and Northern Affairs could not be reached for comment by press time.

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