Placer Dome faces $115M lawsuit - Philippines sues mining giant for cleanup of 1996 spill

Placer Dome faces $115M lawsuit - Philippines sues mining giant for cleanup of 1996 spill

Kelly Patterson, The Ottawa Citizen

Tuesday, October 04, 2005

[MAC Editorial note: Please note there are two inaccuracies in the story, the amount of the suit - it is open ended, and the fact that it is not only for the 1996 spill - it is for all damages areas and people.]

Vancouver-based Placer Dome Inc. is being sued in the U.S. for more than $115 million over its role in the troubled Marcopper mine in the Philippines.

The suit was to be filed today on behalf of the province of Marinduque, where a spill at Marcopper sparked a national disaster in 1996. A recent U.S. study found that for decades, toxins have been seeping into local rivers from the now-defunct mine, in which Placer Dome owned a 39.9-per-cent share until 1997.

The province of Marinduque wants money for the cleanup of land, rivers, bays and coastlines, as well as compensation for affected villagers and the repair of Marcopper's leaky mine-waste facilities.

Marcopper has a troubled history: In 1993, a dam holding back tonnes of toxic sludge burst, contaminating a river and killing two villagers. Three years later, a drainage plug at the same tailings pond failed. This time, the flood of mine waste smothered all life in a major waterway, causing a national emergency.

"After reaping the wealth of the province for decades, Placer Dome left us with nothing but lost lives, environmental destruction and the bill for the cleanup of all the toxic waste," says Allan Nepomuceno, a representative of Marinduque.

Placer Dome declined to comment before the formal statement of complaint had been filed. However, spokeswoman Gayle Stewart said, "We understand the national government of the Philippines has taken over remediation of the site, and given this, we find the actions of ... Marinduque surprising."

Ms. Stewart referred to a July article in the Manila Bulletin in which the Philippine government announced it would start fixing several dams and other mine-waste facilities at Marcopper, which closed after the 1996 disaster.

A 2004 study by the U.S. Geological Survey said the mine's waste facilities were crumbling and another disaster is imminent if they are not fixed immediately. The mine has left a number of other lingering environmental problems, including a causeway of tailings that stretches seven kilometres into the sea, and mounds of potentially toxic mine waste piled along riverbanks, the study noted.

After the 1996 spill, Placer Dome voluntarily put up more than $70 million U.S. to repair damage from the accident, which sent almost 300,000 cubic metres of potentially toxic mine waste into the Boac River, a major waterway. It also paid $1.5 million U.S. in compensation to affected villagers.

The company left behind a technical crew until 2001 as well as a cleanup fund to help remediate the disaster. Subsequent studies by its technical staff found the cleanup successful, noting no impact on groundwater or on coastal areas.

"To me, that doesn't sound like running away," Keith Ferguson, vice-president of safety and sustainability at Placer Dome, told the Citizen earlier this year.

Mr. Ferguson also pointed out that Placer Dome was a minority shareholder in the venture, and came forward with compensation only out of a sense of moral duty.

But Catherine Coumans of the Ottawa-based advocacy group MiningWatch Canada says Placer Dome was a key technical adviser for the mine from Day 1, pointing out that for 25 years, the firm was the only mining company involved in funding the venture.

For the first 17 years of the project, the only other major player was former Philippine president Ferdinand Marcos, who held 49 per cent of the shares until he was deposed in 1986, she points out. His shares were taken over by the Philippine government, and later privatized in 1994. Earlier this year, Joost Pekelharing, chairman of Marcopper's board, told the Citizen, "It is obvious that during the period Placer was involved in the mine, they were in fact managing the operations."

But, Mr. Ferguson denies Placer Dome was running the mine. He has admitted some managers were "former employees."

The lawsuit comes just as the Canadian government is drafting its response to a report from the standing committee on foreign affairs and international development, which urged the government to adopt "clear legal norms" to hold Canadian mining companies accountable for the social and environmental impact of their operations overseas.

The government must respond by Oct. 19.