B.C. proposes to change rules on mine development, compensation

British Columbia’s mining industry is expressing a wide range of concerns about the provincial government’s proposed environmental assessment legislation and the establishment of a commission of inquiry into compensation for holders of mineral and forest interests.

The New Democratic Party (NDP) government headed by Michael Harcourt introduced a discussion paper, Reforming Environmental Assessment in British Columbia, which proposes, among other things, that the Ministry of Environment, Lands and Parks becomes the lead agency for the province’s mine development review process.

The government says the current system, where the Ministry of Energy, Mines and Petroleum Resources is lead agency, has generated concerns about an “underlying perception of bias and conflict of interest.”

The industry will be able to respond to this and 44 other

recommendations at a series

of open houses across the province, or in writing. This public consultation process is headed by Dale Lovick, MLA for Nanaimo and parliamentary secretary to the minister of environment.

“The mining industry must make its views known,” says Jack Patterson of the British Columbia & Yukon Chamber of Mines. “Some of the proposals involve drastic changes that will move us light years away from the way we now look, find, explore and develop mines.”

The public consultation process will be short, about one month. During this period, Lovick plans to meet with regional and provincial organizations, special interest and aboriginal groups, as well as host open-house sessions in 13 communities. The first meeting, in Prince George, took place April 6, just days after the discussion paper was released.

“We would like to have had more time to present a carefully thought out and reasoned position on these proposals,” says Susan Campbell of the province’s mining association. “One of our biggest concerns is that a generic environmental review process applied to all industry sectors will not work well. Mining, forestry and tourism are different animals, and we see a need for industry expertise in each sector so projects can be properly evaluated.” Patterson says another major concern is a recommendation that mining projects should be subject to “detailed justification analysis,” a proposal which he views as the beginning of a move to have government (rather than the private sector) decide if projects are economically viable.

The scope of “project justification” would extend beyond the study of markets, financial feasibility, procurement opportunities and economic benefit/cost analysis to encompass social values, land use goals and “the public interest.”

For the more controversial projects, the government is proposing to set up a permanent board to carry out independent public reviews. This has already been set in motion with recent NDP-announced reviews of the controversial Crystal Peak garnet and Windy Craggy projects. These reviews will include a formal public hearing by an independent panel, and in the case of Crystal Peak, involve a review of garnet markets.

“Who will pay for all these studies and how impartial will these panels be?” Patterson asks.

“These are relevant questions because the government is now proposing to develop a formula to recover its costs for project reviews.

“This could mean companies will pay for their own economic studies, and then be asked to pay part or all of a whole range of government studies. It’s like giving up a blank cheque . . . the government could spend us to death.” Patterson points out that mining companies already face heavy costs associated with the current mine development review process. And he adds that while the province doesn’t currently provide funding assistance to special interest groups to participate in public hearings, the discussion paper proposes such groups should receive financial assistance.

“Some of these special interest groups have huge budgets and a lot more money than we do,” says the president of one junior company. “Are we now expected to help pay for special interest groups to oppose our own projects?” In a separate but related development, the province’s attorney general, Colin Gabelmann, announced April 1 that he is establishing a commission of inquiry into compensation for holders of mineral and forest interests. The inquiry will be conducted by Richard Schwindt, a professor at Simon Fraser University who specializes in the industrial economics of resource industries.

The commission is being set up to review “principles to be used in determining compensation when mining or logging rights are reduced or taken back by the provincial government”. It will also examine the process to decide the amount of compensation, but will not deal with specific cases, such as the Cream Silver and Casamiro cases, which both involve mining claims. Gabelmann says the government is concerned about costs and uncertainty for all parties “resulting from drawn-out proceedings and the potential for inconsistent decisions”.

But Patterson takes a more jaundiced view. He says the initiative was triggered when government realized that delivering on election promises to double parkland and settle aboriginal land claims would “cost big money.” The report is expected to be completed by the end of June. In the meantime, Gabelmann says the government is drafting legislation to freeze any legal actions or compensation awards during the inquiry period.

“We need a fairer, less confrontational way of settling compensation when the province decides that it is in the public interest to withdraw mining or timber rights,” Gabelmann says. “The present procedures are expensive, and time consuming.

“We also have to recognize that a public interest exists not only in the use of Crown land and resources, but in the fair evaluation of claims for compensation. It is our responsibility as government to protect that interest.”