B.C. First Nations should require full clean-up costs up-front for mines: new study

While other jurisdictions like Quebec and Alaska require mines to post full remediation costs as a condition of approval, B.C. rules allow environmental liabilities from mining projects — which are often on Indigenous lands — to fall to the taxpayer

Colin Arisman Tulsequah Chief
The abandoned Tulsequah Chief mine site is situated just meters from the Tulsequah, a tributary of the salmon-rich Taku River. For six decades B.C. has failed to address acid mine drainage at the mine site. Photo: Colin Arisman / The Narwhal

The First Nations Energy and Mining Council has added its voice to increasingly insistent calls for B.C. to toughen up mining rules and make polluters pay.

A newly released study, conducted for the council, recommends the province change rules to ensure mining companies post sufficient funds up-front to pay for cleanup and remediation of mining sites and the report recommends that, if the government will not act, First Nations should do it for them.

“If the British Columbia provincial government does not implement the … recommendations, Indigenous nations should require in-full and up-front financial assurance as a condition of their consent to mining projects,” the study says.

Alternatively, First Nations could negotiate full clean-up costs as part of impact and benefits agreements with mining companies, suggests economist Jason Dion, lead author of the report.

The demand is buoyed by B.C.’s commitment to implementing the UN Declaration on the Rights of Indigenous Peoples and the study says that requiring stringent financial assurances before mining projects can go ahead on Indigenous lands “would be fully in line with their rights as articulated in the UN Declaration.”

Robert Phillips, a member of the First Nations Mining and Energy Council, said government reaction to the report will indicate its commitment to UNDRIP.

“By accepting our recommendations, the B.C. government will be demonstrating that it is genuinely committed to not only mining reform, but also the spirit and principles of the Declaration on the Rights of Indigenous Peoples Act that is being passed by the Legislature,” Phillips said.

Another recently released report, from the B.C. Mining Law Reform Network is recommending that Indigenous-led groups should be given a larger role in overseeing mining projects approved on their lands.

Taxpayers on the hook for mine clean-up costs

Although mining companies are supposed to be liable for the costs of mine remediation in B.C., in reality, taxpayers are left on the hook for expensive clean-up of sites if a mining company goes broke because the province does not insist on up-front bonds in the form of cash or securities.

Instead, pledges or guarantees based on the value of minerals are often accepted when the provincial Chief Inspector of Mines decides on the form of financial assurance.

That leaves B.C. taxpayers on the hook, with Auditor General Carol Bellringer estimating in her 2016 report that there is a $1.43 billion gap between the total cleanup liability of $2.79 billion and $1.36 billion held in financial assurance. Another report by the watchdog group MiningWatch Canada estimated the figure to be closer to $3 billion.

The expense of cleaning up mining messes, such as acid mine drainage, can be staggering.  MORE

 

Five years after Mount Polley disaster, taxpayers still on hook for cleaning up mining accidents

B.C. is supposed to have a polluter-pay policy, but that’s not the reality on the ground according to experts

Red Chris Mine Tailings Pond
View of the north dam and lower seepage collection dam at the Red Chris mine, owned by Imperial Metals, in northwestern B.C. Photo: Garth Lenz / The Narwhal

s been five years since the Mount Polley tailings dam burst and spilled 24 million cubic metres of mining waste into critical salmon habitat in the Fraser River watershed, but B.C. hasn’t learned its lesson, according to a new report released on Tuesday.

If another mining accident happened today, B.C. taxpayers would still be at risk of paying the clean-up bill according to the report released by the First Nations Energy and Mining Council, which calls on the B.C. government to compel mining companies to provide funds for cleanup.

“The lack of financial assurance for mining disasters is a serious policy gap in British Columbia — one that increases the risk of another Mount Polley,” said report author and economist Jason Dion. “By implementing smart financial assurance requirements, B.C. can better protect the public while still ensuring a thriving mining sector in the province.”

The cost of cleaning up B.C.’s abandoned mine sites was pegged at more than $500 million in 2016.

Financial assurance is a system of ensuring funds are available to pay for a cleanup even if a company goes bankrupt. It screens out companies that can’t afford the risk of their own projects.

British Columbia currently relies on a phased system of financial assurance, in which companies do not have to put up the full estimated clean-up cost up front; companies can rely in part on the value of the untapped commodities in the ground, an approach that is vulnerable to commodity swings, company bankruptcies and technological innovations at competing mines elsewhere in the world, Dion says.

Two tailings dam failures expected each decade under current regulations

The expert panel that reviewed the cause of the Mount Polley mine disaster warned B.C. can expect two dam failures every 10 years unless mining laws are updated. Nearly five years later, no fines and no charges have been laid against the mine’s owner Imperial Metals, which is now on precarious financial ground. One economist has estimated that British Columbians are on the hook for a $40 million clean-up bill for the Mount Polley disaster.

“B.C. has a polluter-pay policy under its Environmental Management Act, but that’s not the reality on the ground,” said Allen Edzerza of the First Nations Energy and Mining Council.

“By accepting our recommendations, the government would not only ensure that polluters pay when there are disasters, it would also reduce the risk of another Mount Polley by giving mining companies a financial incentive to reduce risk in their operations.”

The recommendations would bring the mining sector into line with other heavy industrial sectors – pipelines, offshore oil and gas production, tanker traffic and nuclear power generation – which must provide financial security against the risk of disaster, in many cases up to $1 billion, according to the report.

A June report from the First Nations Energy and Mining Council found that British Columbia does not need to reinvent the wheel in terms of mining rules. It can emulate other jurisdictions such as Quebec and the United States. MORE