Big messes for miners

Published by MAC on 2009-10-19
Source: Andy Hoffman, Globe and Mail (Toronto)

In the northwest corner of Marinduque, a small heart-shaped island in the Philippines, lay the remnants of a once-thriving mining operation run by Canada's Placer Dome - abandoned executive villas, an overgrown nine-hole golf course, rusting equipment and millions of tonnes of toxic waste.

The Vancouver company fled Marinduque and shuttered its Marcopper operations 13 years ago, but the island's 200,000 residents are still dealing with the environmental devastation caused by the mines.

According to allegations filed in a U.S. court, during 30 years of operations, more than 200 million tonnes of mine tailings were dumped into Calancan Bay, covering coral with more than 80 square kilometres of mine waste that has destroyed fish habitats. Two rivers, the Boac and the Mogpog, have also been contaminated with heavy-metal-laden and acid-generating mine waste that continues to flow into the waters every time it rains.

Barrick Gold Corp., ABX-T which acquired Placer Dome in 2006, is now caught up in a lawsuit by the province of Marinduque, seeking more than $100-million (U.S.) over alleged environmental damage.

Concerns about the potential health risks posed by shuttered mining operations vaulted onto the Canadian national stage last week when some residents living near an abandoned mine in Buchans, Nfld., were warned by the provincial government to get tested for possible lead poisoning.

It's estimated that there are 10,000 abandoned mine sites in Canada that, if not properly cleaned up, could pose health risks to nearby communities.

While provincial governments have generally held Canadian companies responsible for the remediation of domestic mine sites, those with operations overseas in developing nations have faced far less scrutiny.

In Barrick's case, officials in the Philippines have taken the legal battle closer to home.
Marinduque scored a legal victory this month when an appeal judge ordered the case to be heard in a district court in Nevada, near a major Barrick mine, overturning Barrick's attempt to have the case moved to a U.S. federal court.

"You have a company that mined in the most irresponsible manner possible to maximize profits," said Skip Scott, a Texas lawyer who is representing the province of Marinduque.

In Canada, a private member's bill, if passed, could impose sanctions on Canadian resource companies that violate good governance and environmental standards. Hundreds of millions of dollars of loans and investment for the resource industry are at stake.

Catherine Coumans of MiningWatch Canada, a mining watchdog group, says her organization has identified about 60 cases of environmental damage caused by mining companies operating in international jurisdictions, including the Marinduque case.

Ms. Coumans testified in Ottawa last week at the standing committee on foreign affairs and international development regarding bill C-300, the bill sponsored by Liberal MP John McKay, which has passed second reading in the House of Commons. Ms. Coumans focused much of her presentation on the Marinduque case.

"Contrary to what the mining industry may say, which is resetting the clock all the time and saying 'that was then and this is now,' all the cases we are currently working on now have the same elements [as Marinduque] - environmental devastation, human rights abuses, lack of recourse, weak governance and corruption," Ms.
Coumans said in an interview.

Bill C-300 would deny Canadian government support for resource companies found to be in violation of an agreed list of governance standards.

Investment from the Canada Pension Plan, loans from Export Development Canada and support from Canadian embassies abroad would be pulled if a company were found to violate the rules.

However, even if the bill were to become law, Ms. Coumans said it fails to provide a mandated remedy for victims of environmental damage caused by mining operations.

"We don't see bill C-300 as solving the problem.Š It doesn't deal with remedy. There needs to be legal reform," she said.

Barrick has not decided whether to appeal the decision to have the Marinduque case heard in the district court of Nevada, near Barrick's flagship Goldstrike mine.

"We will vigorously defend the action, whatever the allegations may be," said Brad Doores, vice-president and assistant general counsel at Barrick.

Mr. Doores would not comment on whether Barrick concedes that environmental damage in Marinduque was caused by the mines.

"We inherited this when we took over Placer.
Nothing has ever been established by anyone [in court], establishing that even Placer Dome, the Canadian company, was responsible," he said.

Marinduque's lawyer, Mr. Scott, said the Philippine province is suing Barrick in Nevada because that is where the world's largest gold producer's key operations are located. He said a legal victory in the Philippines would be difficult to enforce against the company, while Canadian law is woefully inadequate for dealing with such a case.

"The place we don't want to go, but we will go if we have to, is Canada. The reason is quite simple. Canada is an inhospitable forum for these types of claims," Mr. Scott said.