Canadian mine project refused Environmental Assessment Certificate

Published by MAC on 2012-12-04
Source: Fasken Martineau

Morrison Copper/Gold Mine project refused Environmental Assessment Certificate

Statement of Fasken Martineau

26 November 2012

On September 28, 2012, BC Environment Minister Terry Lake issued a decision informing Pacific Booker Minerals Inc. (the “Proponent”) that their planned Morrison Copper/Gold Mine project (the “Project”) would not be issued an environmental assessment (EA) certificate. This was in keeping with the Executive Director’s Recommendations (September 20, 2012) but contrary to the conclusions in the Environmental Assessment Office (EAO) that the project would result in no significant adverse effects [1].

Several media sources have noted that the Project is only the second mining project to be denied an EA certificate from the Minister, and the second time a Director has recommended the Minister decline to grant an EA certificate despite a determination by the EAO that it would result in no significant adverse effects. While the Minister’s decision is surprising in relation to standard practice, there were a number of issues in the EA process, including opposition from other Ministries and First Nations that may have influenced the result.

Due to the unusual nature of the Director’s Recommendation and the Minister’s decision, we have prepared a more in-depth analysis of this decision than our usual bulletin format.

About the project

The proposed mine is located 65 km northwest of Smithers, BC, adjacent to Morrison Lake, at the headwaters of the Skeena River. Morrison Lake is approximately 15 km long, and up to 1.5 km wide. It flows into Babine Lake before reaching the Skeena. Morrison Lake and its connected waterways are a spawning and rearing ground for a genetically unique sockeye salmon population, which is considered to represent an irreplaceable gene pool.

The proposed Project would be an open pit mine utilizing conventional truck and shovel equipment, with a 21-year mine life. At its closest point, the lip of the open pit is approximately 85 m from the shore of Morrison Lake. The proposed Tailings Storage Facility (TSF) would be located approximately 3 km northeast of the mine site, and would cover an area of approximately 5 km2.

EA Process

The EA process appears to have been characterized by a series of issues regarding water quality, hydrogeology and the potential effects to Morrison Lake, as well as claims of insufficient certainty regarding that information.[2]

The Proponent first submitted a project description to the EAO in 2003. Terms of reference for the project were approved on May 21, 2009. The Proponent’s initial Application was submitted in September 2009, but was not accepted by the EAO as it did not meet the information requirements set out in the Terms of Reference. After re-submission, the Application Review began in July, 2010. From that point until September 2011, the review was suspended multiple times in order for the Proponent to provide additional information requested by technical reviewers.

On September 29, 2011, the EAO again suspended the process with only four days remaining in the review period, out of concern that the EAO could not come to a final conclusion on the potential for impacts to water quality and sockeye salmon in Morrison Lake due to the lack of appropriate information.

In the fall of 2011, the EAO took the uncommon step of retaining independent experts to conduct an external review of water quality and fisheries aspects of the Application, as well as other issues raised. The Proponent responded to the comments from the third party experts, and a further response on hydrogeology and water quality concerns was provided to the Proponent in April 2012, setting out the expert’s remaining concerns. The Proponent provided a final report within the same month. A technical review of the water quality model used by the proponent was conducted by yet another third party expert in June 2012.

In August 2012, the EAO completed its Assessment Report, concluding that if the agreed upon mitigation measures were implemented and were to operate as proposed, the Project would result in no significant adverse effects. The EAO did note that there would be a long term decline of water quality in Morrison Lake, and their determination of “no significant adverse effects” means that the Proponent has demonstrated that “long term water quality can likely still meet British Columbia Water Quality Guidelines for the protection of aquatic life.”

Environmental issues

The key environmental concerns arising from the Project relate to the potential effects to water quality and quantity in Morrison Lake, and the potential effects to fish and fish habitat.

As a result of these concerns, the Project description evolved significantly during the EA review process. Two primary issues were seepage from the proposed TSF into nearby Morrison Lake, and the potential for Mineral Leaching/Acid Rock Drainage (ML/ARD) from waste mine rock. In their final report of April 2012, the Proponent addressed the seepage concerns by proposing to line the TSF with a geomembrane that would reduce seepage to low levels.

The ML/ARD concerns arose largely in the context of mine closure. The Proponent proposed to store waste rock near the open pit while the mine was in operations, and then back fill the open pit on mine closure, covering the rock with a shallow pond. Several reviewers had questioned why waste rock could not be transported to the TSF and submerged before it became acidic, rather than left exposed to become acidic thereby contaminating the pond at the base of the pit on closure (keeping in mind that the pit’s edge is 85 m from the lake). The Proponent determined that this alternative was not economically feasible. As a result, water collecting in the pit would require active water treatment into the distant future (100+ years from closure). Treated water, both during operations and after closure, would be discharged into the deepest part of Morrison Lake using an effluent diffuser. Over the long term, seasonal turn-over of water in the lake was expected to dilute the treated effluent to levels that could meet BC Water Quality Guidelines.

Effects to water quality and quantity were a particular concern for several reasons. On one hand, there was a high level of uncertainty with respect to the physical characteristics of Morrison Lake, such that relying on seasonal water turn-over in the Lake as a primary long term means of mitigation would operate as anticipated. On the other hand, Morrison Lake is an important ecosystem, in that it supports genetically unique populations of sockeye salmon, which are one of the largest stocks of non-hatchery sockeye. These stocks are important for their genetic diversity, and cannot be replaced if they are lost.

First Nations issues and consultation

The proposed Project lies within the asserted traditional territory of the Lake Babine Nation, who participated throughout the EA process. Part of the proposed transmission route passes through Yekooche First Nation’s asserted traditional territory, and they were kept informed of studies but did not express an interest in direct government consultation. In 2010 the Gitanyow and Gitxsan First Nations contacted the EAO to express concerns with the proposed project as it related to their traditional fishing rights on the Skeena River. They were consulted from that point forward.

The EAO determined that the Lake Babine Nation has a moderate to strong prima facie claim for Aboriginal title to the Project area, and consulted with them accordingly. The Lake Babine Nation participated in project working group meetings, met directly with the EAO and the Proponent, and provided written feedback as well as a number of technical reports. In their final submission to the EAO, the Lake Babine Nation stated they remained strongly opposed to the Project, and disagreed with the EAO’s assessment that the Project would not have significant adverse effects.

The Executive Director’s Recommendations

The Executive Director of the EAO issued a report dated September 20, 2012 that recommended the Minister not issue an EA Certificate, despite the EAO’s assessment report conclusions that there would be no significant adverse effects.

The Executive Director’s report summarized the EAO assessment report and its conclusions with respect to addressing potential adverse effects, sufficiency of public consultation, and fulfillment of the Crown’s obligation for consultation and accommodation to First Nations. The Executive Director recommended that the Ministers consider not only the EAO assessment report, but also adopt a risk/benefit approach in considering a number of other factors that arose during the assessment process. The Executive Director listed the factors that must be weighed in making the decision, quoted here in full:

• • the location of the proposed Project directly adjacent to Morrison Lake, which has a genetically unique population of sockeye salmon at the headwaters of the Skeena River that could be impacted if the Proponent's mitigations measures are unsuccessful;
  • the long-term environmental liability and risk from the proposed Project to the environment, as well as financial risk and liability to the Province, particularly if:
    • the Proponent's operations and closure plans are unsuccessful; or,
    • the Proponent is unable to resource long term closure plans;
  • the use of the dilution capacity of Morrison Lake as the primary means of mitigation for mine effluent, and in particular the "in-perpetuity" nature of water treatment and discharge into Morrison Lake;
  • the anticipated long-term decline in water quality in Morrison Lake;
  • the Proponent's currently limited knowledge about the physical limnology, behaviour and ecosystem of Morrison Lake, recognizing their mitigations depend upon certain assumptions regarding lake behaviour (e.g. lake turnover, flushing rates, etc).;
  • input from the Ministry of Energy and Mines which highlights concerns such as:
    • the "in-perpetuity" environmental liabilities of the proposed Project;
    • the unprecedented scale of the bond that would be required;
    • inconsistency with provincial Metal Leaching/Acid Rock Drainage policy; and,
    • uncertainties related to the Proponent's proposed water treatment;
  • input from the Ministry of Environment which highlights concerns with the following:
    • the "in-perpetuity" nature of water treatment;
    • the long-term maintenance of water treatment infrastructure; and,
    • the potential risks to fish populations and water quality if the Proponent's mitigations are unsuccessful or do not perform as predicted;
  • opposition from Gitxsan and Gitanyow Nations and Lake Babine Nation;
  • the strength of claim of Lake Babine Nation, in particular their moderate to strong prima facie case for Aboriginal title;
  • the economic effects on the Province, including tax revenue and job creation; and,
  • the Proponent's views regarding these additional factors.

However, the Executive Director did not include any analysis as to how these factors weighed in the risk/benefits analysis or why those factors led to his recommendation. In making sense of this recommendation, it is important to understand the context of the EAO assessment report.

Through the EA process, the EAO seeks to identify specific potential environmental effects of the Project, and require that the Proponent develop a plan to avoid, mitigate, or compensate for each of those effects. The assessment report conclusion that a specific effect will not result in a significant adverse effect is based on a consideration of each effect and associated mitigation measure in isolation, as well as on the assumptions that all mitigations would perform as described and that modelled outcomes could be achieved. The assessment report does not include any detailed risk assessment of the likely success of specific mitigation measures, nor the consequences should mitigation measures fail. It provides the basis for commitments that will legally bind the Proponent, but is not a decision making tool – the EAO is not a decision maker. The fact that the assessment report does not provide a complete answer to whether a project should receive an EA Certificate is anticipated in the Environmental Assessment Act, which provides at s. 17(3)(b) that “[…] ministers may consider any other matters that they consider relevant to the public interest in making their decision on the application […]”.

In this case, it is relevant that some of the other information regarding the decision was in opposition to the EAO assessment report. Critically, both the Ministry of Energy and Mines (MEM) and the Ministry of Environment, Environmental Protection Division (EPD) provided comments to the EAO indicating that they remained of the view that the Project presented significant risks. These comments featured prominently in the additional matters that the Director recommended the Ministers consider in refusing to issue the EA Certificate.

A highlight of the two Ministries’ objections was the specific eco-system at risk. As noted, along with many important fish species, Morrison Lake supports a genetically unique and irreplaceable population of sockeye salmon. As with any project, there is some level of ongoing risk of uncontrolled drainage, spill and erosion. In this case, there is an additional level of uncertainty with respect to whether the proposed mitigation measures were based on accurate assumptions and models about the currents and flushing rates of Morrison Lake.

The other critical context was the ongoing opposition of the Lake Babine Nation. The potential consequences of environmental harm was amplified by the strength of the Lake Babine Nation’s claim of Aboriginal title to the area of Morrison Lake. The EAO’s conclusion of no significant adverse effects was not supported by the Lake Babine Nation, the Gitxsan Nation, and the Gitanyow Nation. The extent to which First Nations opposition to the project influenced the outcome is not clear. However, given the nature of the fish populations in question and the predicted long term changes to water quality, First Nations opposition represents a substantial risk to the province that should something go wrong, they would be faced not only with reclamation of the site, but with legal challenges by the First Nations.

On the side of environmental effects, MEM’s comments highlight their concern with the Proponent’s project design decisions regarding Potentially ARD Generating (PAG) rock waste. MEM was concerned that the project design was inconsistent with the joint MEM/MOE “Policy for Metal Leaching and Acid Rock Drainage at Minesites in British Columbia,” and that project design options that would reduce environmental liabilities had not been explored. This concern acknowledged the Proponent’s significant efforts to make design changes to reduce the significance of environmental effects, but indicated they did not go far enough.

The “in-perpetuity” nature of the environmental liabilities was another significant concern identified by both MOE/EPD and MEM. Collection and treatment of contaminated mine water would need to occur for 100+ years in order to avoid significant adverse effects on Morrison Lake, beyond the expected long term changes to baseline water quality.

While it was not clearly stated, the nature of the Proponent may also have been a factor in the agencies’ concern regarding environmental liability. MEM’s preliminary analysis of the reclamation, closure and environmental liabilities for the proposed project was in excess of $300 million. MEM indicated that given the risk to the province associated with a liability like this, the full costs of the liabilities would likely have to be covered by bonding requirements under the Mines Act. This would be a significant challenge for any proponent, let alone a company the size of Pacific Booker.

The Executive Director of the EAO recommended that the Minister not issue an EA Certificate. The Minister followed that recommendation in the Ministerial Decision Record of September 24, 2012. In a letter to the Proponent dated September 28, 2012, the Minister reiterated the additional factors for consideration identified by the Director, and concluded that despite the Proponent’s participation in the EA process and willingness to make design proposals and commitments, the Minister remained of the view that an EA certificate should not be issued. The Minister did note that the decision does not prevent the Proponent from submitting another proposal based on a new project design in the future.

Conclusion

Although it was surprising and unusual for both the Executive Director and the Minister to reject the conclusions of the EAO assessment report, these decisions are a reminder that there is still discretion in the process. The Proponent spent a great deal of money over a period of almost ten years conducting environmental studies and redesigning their project description in efforts to meet the requirements of provincial regulatory agencies. Typically, the EA process results in the proponent agreeing to make some changes to project design in order to avoid or mitigate potential environmental effects, and commit to mitigation measures to address effects that cannot be avoided. However, this decision suggests that Proponents may increasingly see regulators requiring that environmental effects be minimized at the project design phase, rather than focusing on ways to mitigate effects associated with the Proponent’s choice of an economically acceptable design option. Additionally, the strength and focus of the Ministries objections may mean that projects that include perpetual treatment as part of reclamation may find it difficult, if not impossible, to receive an EA certificate.

In light of this outcome, it may be prudent for Proponents to seriously consider whether there are any “show-stopping” environmental effects associated with their Projects, and ensure that they get the views of key stakeholders, including other Ministries and First Nations, before investing the significant time and resources necessary to reach the end of an EA process.

-----------------------------

[1] Pursuant to s. 17 of the BC Environmental Assessment Act SBC 2002, c. 43, the director must prepare the assessment report and may make recommendations. The "EAO" doesn’t have any statutory role in this process. As a result, from a legislative point of view the Director’s recommendations conflict with the Director’s Assessment Report.

[2] These concerns are detailed in a January 31, 2012 letter from the EAO Project Assessment Manager to the Proponent.