Compliance and enforcement lacking in B.C.’s mining sector: auditor general

Auditor General of B.C. Carol Bellringer issued her latest audit today - An Audit of Compliance and Enforcement of the Mining Sector.

  • May. 3, 2016 7:00 p.m.

Auditor General of British Columbia Carol Bellringer issued her latest audit today – An Audit of Compliance and Enforcement of the Mining Sector.

“Almost all of our expectations for a robust compliance and enforcement program were not met,” says Bellringer. “The compliance and enforcement activities of both the Ministry of Energy and Mines, and the Ministry of Environment are not set up to protect the province from environmental risks.”

The findings indicate major gaps in resources, planning and tools in both ministries. For example, both ministries have insufficient staff to address a growing number of permits, and staff work with cumbersome and incomplete data systems.

As a result, monitoring and inspections of mines were inadequate to ensure mine operators complied with requirements. Additionally, some mining companies have not provided government with enough financial security deposits to cover potential reclamation costs if a mining company defaults on its obligations. It’s underfunded by over $1 billion – a liability that could potentially fall to taxpayers.

Given the sheer scale of mining in B.C., and because the environmental impacts of mining can last forever, the report emphasizes the critical need for regulatory enforcement. In B.C., the environmental risks of mining are increasing, but compliance and enforcement are decreasing.

The risks are real as evidenced by the Mount Polley tailings dam failure which occurred during this audit. “To avoid such failures, business as usual cannot continue,” says Bellringer.

To reduce the risks to the environment, this report recommends that government create an integrated and independent compliance and enforcement unit and calls for the removal of the mining sector compliance and enforcement program from the Ministry of Energy and Mines. Bellringer made an additional 16 supporting recommendations to provide further guidance to government in the development of this unit.

Minister Bill Bennet responds to audit

The B.C. government is accepting all recommendations from the Office of the Auditor General (OAG) audit report “An Audit of Compliance & Enforcement of the Mining Sector” with the exception of one recommendation that government will seriously consider.

“I want to thank the Office of the Auditor General for this report. We are well on our way to implementing the audit report’s 17 recommendations, as well as the combined 26 recommendations from the Independent Expert Panel and the Chief Inspector of Mines,” said Bill Bennett, Minister of Energy and Mines. “I agree with the Expert Panel and the Auditor General’s Office that ‘business as usual’ on mine sites in British Columbia is just not good enough, and that’s why we are acting on all 43 recommendations.”

Government is currently reviewing the Health, Safety and Reclamation Code for Mines in B.C. and expects the tailings storage facility portion of the code review to be completed this spring, with revisions expected to be in place by mid-2016. Government will also work with the Association of Professional Engineers and Geoscientists BC (APEGBC), which has the legislative authority and responsibility to oversee engineers in B.C. to ensure that recommendations directed at them are implemented. This work should be done by spring 2017.

Recent changes to the Mines Act enable government to include administrative monetary penalties as a more flexible, responsive compliance and enforcement tool. The legislation also increases existing penalties available for court prosecutions under the act. The maximum penalties were raised from $100,000 and/or up to one year imprisonment to $1 million and/or up to three years imprisonment.

“Government believes there is no evidence its compliance and enforcement regimes place the environment at risk generally. But the Mount Polley disaster, despite being unprecedented in modern B.C. history and despite the hidden, sub-surface cause of the accident, is evidence that improvements in regulation are necessary to increase protection against the unforeseen,” said Bennett. “We are committed to improving the regulatory oversight and reducing the margin of risk so that such a disaster can never happen again.”

Despite embracing the vast majority of recommendations in the audit report, government believes a number of assertions in it are incorrect and therefore was compelled to set the record straight in the audit report’s “Response from Government”. Government’s position on these assertions in no way undermines its commitment to making the changes recommended by the Expert Panel, the Chief Inspector of Mines and the Office of the Auditor General.

Government does not, at this time, agree with the OAG’s main recommendation to reorganize the Ministry of Energy and Mines compliance and enforcement programs into a separate ministry or agency. This recommendation suggests that the public servants in the Ministry of Energy and Mines are incapable of differentiating between promotion, and regulation of mining, a view government does not share.

However, government does agree that a new, separate compliance and enforcement board will strengthen government’s regulatory oversight of the mining sector and government will, within 90 days, set up a mining compliance and enforcement board. This board will create greater integration between Ministry of Energy and Mines and the Ministry of Environment, as well as with the Environmental Assessment Office.

Unfortunately, the report fails to understand government’s management of the water issues in the Elk Valley. Mining has occurred for over 100 years in the Elk Valley and government began monitoring water quality in the area in the mid-1980s. However, it was not until recently that a more detailed understanding of the increasing selenium levels was realized.

The Ministry of Environment took significant steps to reduce selenium levels in the Elk Valley when, in 2013, it directed Teck Coal to take steps to stabilize and reverse water quality concentrations for selenium, cadmium, nitrate and sulphate. Government stands behind these concrete actions, including the valley-wide Area Based Management Plan.

“As it stands today, Teck Coal has built one water treatment facility, has committed to building a minimum of eight more such facilities, and has invested millions in testing selenium reduction technologies,” said Bennett. “By following the Area Based Management Plan, selenium levels will be reduced over time to acceptable levels and the company, not the taxpayer, will cover those costs.”

In addition, the audit does not align with what two investigations of the dam failure at Mount Polley – one by the Independent Expert Panel and one by the Chief Inspector of Mines – determined that the dam failed because the strength and location of a layer of clay underneath the dam was not taken into account in the design or in subsequent dam raises. Based on both reports, it was not a question of the number of ministry staff on the ground or the number of inspections performed. The audit also relies on a misinformed view that “original design” remains a constant benchmark for development of a TSF dam, while in reality, dam designs change regularly at all mines around the world.

“Starting in 1995, there were nine design stages over the life of the tailings storage facility at Mount Polley,” said Harvey McLeod, chair of the Code Review tailings storage facility sub-committee and a vice president with Klohn Crippen Berger Engineering. “This is the nature of mining. The tailings dam design at Mount Polley, just as it is at mines around the world, is not static and evolves throughout the life of operations. This is appropriate engineering practice. Operating mines evolve their tailings dam designs over time to reflect actual operating conditions, all with the assessment and approval of licensed engineers.”

The Independent Expert Panel released 35,000 pages of information as part of its investigation and the report is available here: https://www.mountpolleyreviewpanel.ca/. The chief inspector of mines investigation released 100,000 pages of information and the report is available here: http://goo.gl/kBgP13.

Learn More:

Government’s full response to each of the Auditor General’s recommendations can be found online at: http://ow.ly/4nnimD

A complete list of the recommendations from the Independent Expert Panel and the Chief Inspector of Mines is available here: www.gov.bc.ca/minecodereview.

 

Releases by the Office of the Auditor General of British Columbia and the Ministry of Energy and Mines.