Report to Mines Ministers from MiningWatch Canada

MiningWatch Canada is pleased to have this opportunity to address Mines Ministers on behalf of our members and colleagues.

Founded in April 1999, MiningWatch Canada is a pan-Canadian coalition of environmental, social justice, development, Aboriginal, labour and church organizations which advocates for responsible mining practices in Canada and by Canadian companies operating abroad. Our members are Canadian Arctic Resources Committee, CAW Social Justice Fund, Canadian Environmental Law Association, Canadian Nature Federation, Canadian Parks and Wilderness Society, Citizens Environmental Mining Council of Newfoundland, Environmental Mining Council of British Columbia, Innu Nation, Inter Pares, Northwatch, Steelworkers Humanity Fund, the Sierra Legal Defence Fund, Task Force on the Churches and Corporate Responsibility, and Yukon Conservation Society.

We would like to bring three issues in particular to your attention:

  • Accounting for the full costs and benefits of mining
  • Regulatory compliance concerns
  • Mine closure and abandoned mines.

Accounting for the Full Costs and Benefits of Mining

Increasingly, international organisations such as the OECD, national policy makers and the public are engaging in a pressing debate about the need to promote more sustainable forms of production and consumption. This debate involves questions about the economic value of the environment and the most sustainable use of land and water. It raises questions about social sustainability, how economic activities impact the health and well-being of individuals and communities. This debate informs policy discussions about improving resource conservation, removing perverse subsidies that promote unsustainable economic practices, the role of subsidies in international trade, environmental tax shifting, and rethinking "distorting methods of calculating national wealth that largely dismiss resource wealth and ecological goods and services."

These discussions are taking place in the context of urgent warnings by the OECD that "[a]ll major global ecosystems are in decline" and by academics that the economy has already exceeded many ecological limits [i] In this context resource extraction and material consumption play a central role. It has been argued that in order to achieve global sustainability world wide material consumption will need to be reduced by 50% and material consumption in OECD countries will need to be reduced by a factor of between 2 and 10. The environmental impacts of mining have made it a significant target for reform.

Humans now move more earth by mining then is carried to the sea by all the world's rivers and this is the second year in a row the mining industry has earned the title of top polluter in the EPA's annual report on toxic chemicals released by U.S. industries. A strong argument has been made that the current environmental and social costs of mineral extraction are so high as to make it unsustainable [ii] and the subsidies that promote and sustain mining are coming under scrutiny.

Historically, resource-based sectors have benefited from preferential tax treatment from federal and provincial governments. [iii]

Mining has been portrayed as a sector that "built" Canada. The industry commonly refers to this history while asserting its continuing importance to the Canadian economy. But the industry must now also face questions about its role in the pollution and depletion of Canada's natural resources. And, whereas government subsidies were once viewed as laudable support for a key industry, there is now growing recognition that exploration and extraction subsidies in fact distort resource market prices and promote primary resource consumption instead of conservation and reuse.

A recent analysis of industry benefits by Environment Canada shows 93 operating metal mines in Canada employing 33,012 people with total production of $11.2 billion annually [iv] . On the other hand Canadians spend approximately $11 billion in nature-related activities, and each year about 1.3 million people do so within a 50 km radius of a metal mine site. [v] It is time to rethink the role of exploration and extraction subsidies in regional development and ecological well-being. In the past few years, most provinces and the federal government have responded to requests to stimulate development by increasing subsidies to exploration and streamlining the regulatory environment for mining. [vi]

We need a much more critical analysis of the effectiveness of mining as a generator of sustainable economic development. The Voisey's Bay Environmental Assessment panel developed the following criteria to measure the sustainable development potential for a mine. In order to contribute to sustainability the mine had to:

  • not impair ecosystem integrity or bio-diversity;
  • not significantly damage local and regional ecosystem functions;
  • not reduce the capacity of renewable resources to support present and future generations;
  • deliver durable and equitable social and economic benefits, with special attention to the needs of aboriginal peoples;
  • proceed in a manner compatible with stewardship of non-renewable resources, and;
  • respect aboriginal rights and not prejudice land claims agreements [vii] .

Sustainability is too often discussed in the abstract or in general terms, without reference to disturbing specific cases. However, instances where mines pollute water, land and air; where they destroy local subsistence economies, undermine human health and subvert human rights are treated as aberrations. At MiningWatch Canada, we hear entirely too many horror stories to dismiss them as aberrations.

There is one operating mine in the Yukon and at least 43 abandoned mines. The closed and abandoned mines include Faro, Mt. Nansen, Ketza, Viceroy and United Keno Hill, all of which have left behind devastated landscapes, leaching tailings and disrupted Aboriginal economies, and uncertain human health effects.

In BC, there are only 10 operating mines, but there are at least 26 acid-generating mines, including Mt. Washington which has destroyed a $2 million a year salmon fishery. The notorious Britannia site which is destroying the fishery in Howe Sound is now being addressed at a cost of $60 million.

In Ontario, where prospecting and exploration are being encouraged in every way possible — including with a $4 million operating grant to the Ontario Prospectors Association [viii] - the province has not yet come to terms with the enormous problems created by the industry that fall on private and public ledgers. The Kam Kotia Mine alone will require more than $40 million to remediate properly. Cancers, heart disease and other health problems in historic mining and smelting communities are now being linked to the mineral industry in places such as Port Colborne, Falconbridge, and Serpent River. At the same time, requirements for reclamation bonding have been reduced and public access to closure plans denied.

Recommendations:

  • Before any new mining projects are allowed to proceed they must demonstrate that they will respect ecological limits, maintain the capacity of ecosystems to provide environmental services and renewable resources, deliver lasting and fair social and economic benefits, and fit a larger global imperative for resource stewardship and efficiency.
  • The costs and benefits of mineral development to the ecosystem and the public must be reflected in the same accounts.
  • Research and support for the reuse and recycling of metals should have priority over greenfield mineral development.

Regulatory Compliance Concerns

We are very concerned about the timidity of governments in regulating the mining industry. There has been a steady diminution of the ability of governments to enforce even these moderate environmental standards on the industry. Cutbacks to monitoring and enforcement staff have occurred in most provinces. Where citizens attempt to enforce the Fisheries Act on their own, the government intervenes and stays the prosecution. Community monitoring programs often get very different contaminants results than company or government readings [ix] .

The recent Metal Mining Effluent Regulation is a case in point. The limits set in the MMER are based not on requirements to protect human health and the environment, but on what has been deemed to be economically achievable for industry. In the course of the review, much lower levels of pollution were identified as being achievable with available technology, but were rejected in favour of more permissive limits, on the basis of their already being achieved by the top 50 percentile of currently operating mines in Canada. The opportunity to be technology forcing and make Canadian mines world leaders was passed by. A requirement that says that water is of acceptable standard if only 50% of the fish die when exposed for 96 hours is simply irresponsible. The standards are less stringent than those recommended by the consultants hired to do the study and less stringent than those in the US. Mercury and cadmium are still outside the MMER. The Environmental Effects Monitoring program will provide information about emerging problems, but it does not trigger enforcement. The industry may tell you that meeting the standards of a more effective MMER will be too costly, but we ask you to consider the costs to the eco-system and communities.

Programs like ARET and NPRI all rely on data reported by industry. They do not protect the public or good industrial practices from inaccurate reporting and bad actors.

From our point of view, it is important to challenge the assumption that technology can fix everything. In the lexicon of mining companies, dams will never leak or break, permafraost will never melt, perpetual care of tailings and AMD sites is possible, catastrophic earthquakes, droughts and floods will never happen. However, specific data on any mine show how absurd this assumption is. The BHP Ekati Mine, one of the most carefully monitored mines in the world, is already having unpredicted problems with Acid Mine Drainage and phyto-plankton blooms downstream. [x]

Recommendations:

  • Mines Ministers ask for a stronger MMER, including lower limits for contaminants, the inclusion of mercury and cadmium and an enforceable regulatory link from the EEM process to more protective and site-specific regulations.
  • Adequate resources for enforcement and effective delegation of monitoring and assessment responsibilities among government departments must be in place to ensure that mine developments are proceeding according to their plans. In the long term, proper management of mine operations keeps closure costs reasonable. As on-site problems go unchecked, challenges for remedial action escalate in difficulty and costs required to remedy the problems at hand.
  • Enforceable penalties with substantial repercussions for non-compliance with closure plans and regulations are important to ensure that responsible action will be cheaper and easier for a mine operator than irresponsible practices. The United States' SMCRA has permit blocking provisions wherein violators of the Act are not allowed permits for new operations until they have proven that their problems have been mitigated.

Mine Closure and Abandoned Mines

We were pleased in late June to participate in a workshop sponsored by the Intergovernmental Working Group (IGWG) on abandoned mines. We fully support the guiding principles and conclusions from that workshop [xi]

In preparation for the workshop we commissioned a study by CCSG Associates entitled Financial Options for the Remediation of Mine Sites. The study examined the bonding practices and abandoned mines programs in five jurisdictions in Canada and selected programs from three other countries and other industries. Based on that study, we make the following recommendations:

Recommendations:

The costs of remediating existing abandoned mines sites in Canada will be enormous. [xii] The cleanup of the arsenic trioxide at the Giant Mine alone will cost more than $300 million. Although initially, government funds will continue to be required, every effort should be made to ensure that the mining industry bears responsibility for replenishing these funds in the long term. Funding will have to come from a variety of sources such as mining sectoral funds, fees, taxes, penalties, fines, cost recovery, etc. Other jurisdictions in the United States and Europe already use these fiscal tools.

Mining affects communities in a variety of ways (e.g., through degradation of the ecosystem, water and air quality; and changes in social systems and subsistence activities, etc.). Funds similar to the Mining Reserve Fund set up under the Manitoba Tax Act, should be created in other jurisdictions. Communities affected by mining should have direct access to these funds to address their locally identified priority concerns.

Mechanisms for preventing the abandonment of mine sites should be a combination of incentives, regulations, monitoring, enforcement and penalties.

Key to the prevention of abandoned mines is assuring that funds sufficient to cover the full costs of clean-up (and any long-term monitoring, care and maintenance) are set aside in a security before the mine is developed. Such sums must be easy to access in the event that a mine goes bankrupt, or becomes insolvent. Therefore, types of securities such as bearer bonds, parent company guarantee, captive insurance, surety, self-assurance and other less certain forms of financial backing, should not be accepted, particularly where there are long-term water quality, ecological and/or health impacts.

Clearly defined time frames and responsibilities in the closure plan provide a point of entrance to require and enforce the completion of remediation work to proper standards, and to make clear at which point the company can be considered to have abdicated its responsibility for reclamation, so that the government can seize securities and other assets in order to undertake the work.

We thank you for this opportunity to make these recommendations to you on behalf of our members.


[i] OECD 1997:10

[ii] Meadows et al., 1992

[iii] Alan Young 1997, Public Interest Perspectives on the Canadian Mineral Industry

[iv] OECD report on Canada: August 2000:124

[v] Regulatory Impact Analysis Statement, MMER amendments, Canada Gazette Part I. July 28,2001

[vi] ibid

[vii] Canadian Minerals Yearbook, 1999

[viii] Report on the Proposed Voisey's Bay Mine and Mill Project, March 1999, page 6-11

[ix] As well, there is $6 million over 2 years in grants to prospectors through OPAP, $29 million over 3 years for geophysical and geo-chemical surveys by the Ontario Geological Survey, the Ontario Focused Flow-Through Share Program, tax deductions for exploration expenditures, CLAIMapsII, infrastructure support for roads and hydro, lowered requirements for environmental assessment, and so on.

[x] Report of the Independent Environmental Review Panel, 2001.

[xi] Recommendations For Action: Multi-Stakeholder Workshop On Orphaned/Abandoned Mines In Canada

Introduction

In June 2001, a workshop was held in Winnipeg to review the issue of orphaned/abandoned mine sites and identify processes for moving forward. The 63 attendees represented 12 provinces and territories; 7 NGO groups; 5 First Nations; 5 Federal Government Departments, Offices and Boards; 7 mining companies; 5 mining industry associations; 3 communities; 3 consultants and 1 academic. The group developed consensus guiding principles and recommendations for Ministers to consider at the 2001 Mines Ministers Conference.

Guiding principles:

  • The remediation of orphaned/abandoned mine sites must be based on concern for public health and safety , respect for ecological integrity, and sustainable development;
  • All work currently on-going with respect to inventorying and remediation must continue based on sound science and good communication among all parties;
  • Work toward eliminating future abandonments must continue, including the tightening of regulatory approaches;
  • Implement the "polluter pays" principle;
  • Targeted end-use and reclamation standards must be acceptable to local communities;
  • Although the objective must be comprehensive reclamation of all sites, the approach must be cost-effective and based on an acceptable method of prioritizing sites;
  • Transparency and disclosure must be present in all decision-making processes;
  • Encompass the notion of "fairness" in all endeavours;

Recommendations:

  • That a national multi-stakeholder advisory committee be formed and funded, to address the following issues/initiatives and report back to Mines Ministers in 2002:
  • Developing capacity for a national inventory of active, closed, and orphaned/abandoned mine sites based on compatible inventories in each province and territory, and including a nationally acceptable categorization and priority-ranking system;
  • Engaging other relevant federal, provincial and territorial departments and ministries;
  • Developing a plan to foster community involvement in decision-making about closure and reclamation standards, and to ensure that targeted end-use and reclamation standards are acceptable to local communities;
  • Developing a plan to foster transparency and disclosure in all processes
  • Developing a plan for shared responsibility and stewardship where ownership cannot be established
  • Evaluating the efficacy of approaches including: "Good Samaritan legislation", "permit-blocking", "non-compliance registries", "allocative" vs. "joint and several liability";
  • Evaluating models and mechanisms to pay for the remediation of orphaned/abandoned sites, including insurance options and contingency funds;
  • Securing appropriate funding for the above, at a level to be determined by IGWG and other stakeholders by November 2001.

[xii] The Mining Association of Canada estimates $6 billion for remediation of abandoned mines in Canada.