It's another in a growing list of legal actions from First Nations opposing how the rapidly growing industry is managed.
"The current relationship in Alberta's oilsands with First Nations and government is deteriorating incredibly fast and the reason why is First Nations are asserting themselves as not merely the Indians out on the rez any more," said Eriel Deranger, spokeswoman for the Athabasca Chipewyan First Nation, which filed the application Jan. 3.
"We want to be looked at as equals."Story continues below slideshow
"ACFN has multiple legal actions we've filed over the years. Even being part of the regulatory hearing process requires lawyers and legal costs and that's what Neil wanted to stand behind."
This action, however, is different, Deranger said.
"This is definitely more significant than the rest. For us, this filing is once again bringing to light the various deficiencies that (the governments) admitted to by saying, 'It's in the public interest,' which we feel is unlawful.
"You can't just simply state it's in the public interest and absolve yourself of any responsibility of upholding the law."
The band's application says the approval process for the Jackpine expansion broke at least three federal statutes — the Canadian Environmental Assessment Act, the Species At Risk Act and the Migratory Birds Convention Act — as well as several international agreements Canada has signed.
The band also argues the process broke the First Nation's constitutional right to be consulted.
It says final approval from the federal cabinet ignored almost all the band's recommendations. It points out that although Ottawa granted a 35-day extension before making its decision so as to consult with the band, it released its approval before that period was over.
"The Crown's departure from many central recommendations of the (environmental review) panel and failure to provide concrete and equivalent alternative accommodation constitutes bad faith," says the application.
The review panel concluded Jackpine would create irreversible environmental damage. It said the project would mean the permanent loss of thousands of hectares of wetlands. It predicted the expansion would harm migratory birds, caribou and other wildlife and wipe out traditional plants used for generations.
It also said Shell's plans for mitigation are unproven and warned that some impacts would probably approach levels that the environment couldn't support.
Shell has said the expansion will double its production and create 750 jobs.
Martin Dupuis, spokesman for Alberta Aboriginal Affairs Minister Frank Oberle, says the province already strives to treat aboriginal groups as equals. He said previous minister Robin Campbell visited half the reserves in the province last year and his successor plans to continue that approach.
"We believe that a lot of work and progress had been done with the previous minister and it's continuing,"Dupuis said.
"First Nations are not stakeholders, they are rightsholders. There's a distinction."
At a news conference in Calgary, Shell vice-president Stephanie Sterling said the company has invested $1.5 billion since 2006 in aboriginal businesses.
"Our relations are quite positive with this community and the other aboriginal communities as well," she said. "We'll continue to engage and consult as we've done in the past."
Dave Collyer, president of the Canadian Association of Petroleum Producers, said industry's relationships with First Nations across the country have generally been good — but there's work to do.
"I readily acknowledge that we've got issues in certain places, some of those more broad and some of those quite specific to the individual issues," he said.
He said no one party can solve all the problems.
At least four other major lawsuits have been filed by aboriginal bands to challenge laws central to how the Alberta and federal government review oilsands projects and manage the industry. They criticize the federal government's rewriting of environmental legislation and the province's revamp of the regulatory system.
Bands are also fighting provincial proposals to centralize and standardize consultation and Alberta's land-use plans for the oilsands region.