Auditor General Blasts 'Major Gaps' in BC's Mining Oversight

To avoid more disasters like the 2014 failure of the tailings pond dam at Mount Polley mine, responsibility for regulating mining in British Columbia should be taken away from the ministry that also promotes the industry, concludes a new report from the province's auditor general.

"[The Ministry of Energy and Mines'] role to promote mining development is diametrically opposed to compliance and enforcement," wrote Carol Bellinger in the 109-page report "An Audit of Compliance and Enforcement of the Mining Sector."

"This framework, of having both activities within [Energy and Mines], creates an irreconcilable conflict," she said. "Because compliance and enforcement is the last line of defence against environmental degradation, business as usual cannot continue."

Work on the audit was already underway when the Mount Polley disaster happened, causing the damaging release of some 25 million cubic metres of wastewater and tailings from the Imperial Metals mine 56 kilometres northeast of Williams Lake.

"We noted the same issues in the Mount Polley file as we did throughout the audit," Bellringer said. "That is, too few resources, infrequent inspections, and lack of enforcement."

The ministry failed to "ensure that the tailings dam was being built or operated according to the approved design, nor did it ensure that the mining company rectified design and operational deficiencies," the report found.

And yet the ministry continued to allow the mine to operate and approved permit amendments allowing it to raise the dam, it said.

The Ministry of Energy and Mines and the Ministry of Environment are together responsible for making sure mines follow the province's laws. "We found major gaps in resources, planning and tools," said the auditor general's report. "As a result, monitoring and inspections of mines were inadequate to ensure mine operators complied with requirements."

The report noted there are 13 major coal and metal mines open in the province, plus another 160 that are either temporarily or permanently closed, and several more that are seeking approval. The industry produced about $7 billion worth of material in 2013 and spent $476 million on exploration.

'Always going to be some level of risk': minister

Energy and Mines Minister Bill Bennett said the government agrees that there needs to be improvement and that it accepts all of the recommendations, except for the one to take compliance and enforcement out of his ministry.

"We had not enough stick and not enough carrot," he told reporters, noting that there are new penalties for non-compliance. "We're not shying away from the fact our legislation was old. It needed improvement."

Within the next 90 days the government will create a new compliance and enforcement board that will oversee how mines are regulated, he said, though he added it would stay in his ministry. "We're not yet convinced that board needs to be outside the ministry."

Nor could he agree that the Mount Polley disaster could be attributed to the lack of enforcement of regulations or that it could have been prevented by the ministry, he said. People working in the ministry did everything they were supposed to do based on the legislation that was in place at the time, he said.

"I think some of the assertions in the report just beg to be disagreed with by government," he said, adding they aren't fair to professional civil servants.

The main person who promotes the industry is him, and he rarely interacts with the people who are in compliance and enforcement, Bennett said.

It would be possible to take all of the risk out of mining in the province, but that would likely lead to investment in the industry leaving too, he said. "You have to acknowledge there's always going to be some level of risk," he said before adding, "I don't believe there is a culture of lack of enforcement."

Damage can last forever, says auditor

In a teleconference with reporters, Bellringer said that water contamination is the most serious threat from mining and that problems can last forever, sometimes much longer than the companies that are legally responsible exist. "Mining companies are vulnerable to boom and bust," she observed.

The government takes money from mining companies to cover the liability in case a company ceases to exist and leaves taxpayers on the hook to clean up a mess, but Bellringer said the government has only received about $900 million of the $2 billion her office calculates it is entitled to hold.

Minister Bennett said most of the $1.1 billion the government failed to collect was from Teck Resources Ltd. and Barrick Gold Corp., both of which are big companies with plenty of resources. "Those companies aren't going anywhere," he said.

There needs to be a fundamental change in the way mining is regulated in B.C., said Norm Macdonald, the NDP's energy and mines critic. "From this ministry we see again and again what the auditor general properly described as a lack of rigour. That culture of enforcement is not there."

Bennett is pushing back on the central part of the auditor general's message, Macdonald said. "It's clear the auditor general is saying the structure that is in place isn't working. The language is extremely strong from the auditor general."

No consequences for spills, says NDP

Despite the mistakes that led to the Mount Polley disaster, there have been no penalties or other consequences so far for anyone involved, Macdonald said.

"There has never been a penalty under the mines act from this government, ever," he said. "What signal do you send to operators in this province? The only way professional reliance is going to work is if you make decisions that have a negative impact, there have to be consequences."

Premier Christy Clark has been keen to open mines, but not to protect the environment from the mines that are already open, said NDP leader John Horgan. "It's the promotion over protection that seems to be endemic in the BC Liberal philosophy."

Horgan said Imperial Metals and other mining companies have been big donors to the BC Liberals. "I think the public quite rightly has a concern this money may well influence decisions and if the regulator wasn't on the ground protecting the public interest, why was that the case? That's the question the premier should be answering."

He said he supports the recommendation to separate promoting mining from regulating the industry. "It's always been my view that we need to aggressively promote the sector, but we need to separate promotion and protection," he said.

"We need to make sure that those that are responsible for ensuring and encouraging and enhancing investment in the sector are not also responsible for enforcement and compliance with the regulations that are put in place to protect the land, to protect the water and most importantly to protect workers," Horgan said. "Workers do not benefit when there is lax regulation."

Bellringer said she was disappointed the government doesn't plan to follow her main recommendation to take the regulatory functions out of the ministry that promotes mining, but observed, "It is at the end of the day a political decision."

The next step is for her report to go to the legislature's standing committee on public accounts, and then it will be up to the government to produce an action plan in response to the issues the report raises, she said.