Shareholders Demand Placer Dome Disclose Environmental Risk

For Immediate Release

Ottawa, February 17, 2000 — Placer Dome Inc. (PDI) has been presented with a shareholder proposal by Working Enterprises Ltd. (owned by seven major BC unions). WE Ltd. is asking PDI to provide independent public assessments of environmental risk at each of its operations and to disclose detailed information to shareholders about insurers and levels of insurance that the company has in place to protect shareholders from financial liability. MiningWatch Canada welcomes this proposal. Catherine Coumans of MiningWatch Canada states: "The shareholder proposal put forth by Working Enterprises Ltd. seeks to protect shareholders. We support this proposal because independent and public risk assessments at all of Placer Dome's operations will also help protect the environment, local communities and the taxpaying public - all of which now end up paying the price for mining disasters."

MiningWatch Canada applauds the call for transparency and disclosure in this shareholder proposal. It is important that mining companies disclose both their level of environmental risk and their level of insurance. "If more people knew how under-insured most mining companies are, compared to the level of environmental risk associated with their operations, then more people would question why society should accept the burden of risks associated with mining when private insurers clearly won't," says Coumans.

This shareholder proposal is an important contribution to a broader effort by shareholders and stakeholders to make mining companies take responsibility for the full costs associated with their operations. Now, too many of these costs are externalized onto the environment and onto society. At thousands of active and abandoned mine sites around Canada local communities and local environments are paying a high price for mines that pollute. Canadian taxpayers are facing estimated cleanup costs of well over a billion dollars for sites such as the Britannia and Mt. Washington mines in B.C., the Giant Mine in the NWT, and the Faro and Mt. Nansen mines in the Yukon, to name but a few.

Impacts of toxic waste on local communities, such as in Deloro, Ontario, are rarely recognized or compensated. Too often, Canadians have subsidized marginal and polluting mines with their tax dollars. The Faro mine in the Yukon received about one billion dollars in grants and subsidies before it closed. Clean up costs, to be picked up by the Canadian taxpayer, are estimated to be at least 126 million dollars. "The environmental record of Canadian companies mining in Canada has not been exemplary," says Coumans, "but when Canadian companies move into less developed countries the record seems to get even worse."

Placer's Costs from Environmental Disaster Growing

This shareholder proposal stems directly from the increasing financial costs Placer Dome faces as a consequence of a 1996 tailings spill at PDI's Marcopper operations (then 40%-owned by PDI) on the island of Marinduque in the Philippines. Placer Dome took a US$43 Million dollar write off in the year of the spill but costs related to the spill have been steadily accumulating over the past four years.

Placer Dome now admits that costs have risen to "approximately US$70 million" and the end is not yet in sight. Almost four years after the spill, and three years after PDI divested from Marcopper, Placer Dome remains uncertain about when the cleanup will be completed and about what the final costs will be. For four years PDI has been unsuccessful in its attempts to reverse local opposition from Marinduque islanders to PDI's controversial plan to deposit the spilled tailings into the sea.

Insufficient Insurance to Cover Disaster that Could have been Avoided

Soon after the 1996 spill it became apparent that Placer Dome did not have sufficient insurance in place to cover the costs of the disaster. Insurance with three, undisclosed, insurers provided a maximum of US$ 27.2 Million dollars. To date only US$ 10.5 Million has been paid out. One insurer continues to deny coverage. One reason why this insurance claim may be under dispute is that studies have determined that the disaster could have been anticipated and avoided if proper "risk assessment had been carried out" (United Nations Report, September 30, 1996:68). The shareholder proposal put forth by Working Enterprises Ltd. requests not only that risk assessments be conducted but that they be independent and public.

For more information contact:
Catherine Coumans, Ph.D., Research Coordinator
or Joan Kuyek, National Co-ordinator
MiningWatch Canada 613-569-3439