COMMENTARY — Green revolution spawns expensive red tape

For many developing countries in the process of modifying their mining codes, Canada is a model. For many investors, the country is perceived as setting some expensive trends.

In addition to ever-rising taxes by all levels of government, Canadian miners are having to cope with unprecedented environmental regulations. These regulations are contributing substantially to the costs of doing business. As an example, environmental impact assessments for new projects can delay approvals for months, sometimes years.

Once in operation, a mine is watched closely by local, provincial and federal departments. In Ontario, these include the Mines Ministry, the Department of Labour, the Workers’ Compensation Board and the Ministry of the Environment (MOE). In addition, both the MOE and Environment Canada (EC) set standards and monitor discharges to local waterways.

When a mine is depleted, it must be closed safely to prevent contamination of the surface area or the local waterways. Contaminated seepage from mine waste is a particular concern. In Ontario, new standards for closures are adding tens of millions of dollars to corporate costs.

A new small mine without a mill has to post a minimum $1-million bond for closure expenses.

The procedures for getting a mine off the ground have never been more arduous. After describing in minute detail the site, operating and closure plans and having them environmentally audited by a third party, a company must submit to further site inspection and make any necessary alterations. It then must submit 11 copies of revised plans for approvals, which can take anywhere from three to 12 months to process.

Once in operation (and assuming the best available technology has been installed for meeting environmental standards), mines can expect to spend some 2% of gross revenues just to ensure compliance with regulations. In addition to the myriad of existing regulations, there are a host of major new initiatives under development in this country.

The Basel Convention, intended to tighten control on the transportation of deemed wastes across international boundaries, was recently signed by Canada. Consequently, shipments of waste destined for landfill and industrial scrap (such as steel) will require more paperwork than before. Forms for each load must be signed by shippers, receivers and their respective governments. Under the Canadian Environmental Protection Act (CEPA), companies must comply with a Priority Substances List (PSL 1). The list includes 44 substances which must be tested to determine a) whether they are toxic and b) what levels are discharged into the Canadian air, water and land environment. Working with provincial governments and industry associations, the company must contribute to a Strategic Options Report by Environment Canada (EC), which outlines how discharges of toxic substances are to be reduced. (Banning, phasing out and tight usage controls are three common means of doing so.) Included in the list are chemicals such as DDT

(dichloro-diphenyl-trichloro-ethane) and metals such as arsenic, cadmium, copper, chrome, lead, nickel, mercury and zinc. Assessments are under way, to be completed by 1994. Mines and metal processors are affected, as are manufacturers.

EC is now setting up a PSL 2 List of a further 66 substances for review. It will take effect in 1994.

Under an agreement among the U.S. and Canada and the affected provincial and state governments, the Great Lakes Pollution Prevention Program has been created to reduce or eliminate the use of certain substances by various industries. Chlorinated compounds and effluent-containing heavy metals are especially targeted. Participation is voluntary, with auto manufacturers, auto parts suppliers and metal finishing companies being among the first candidates. A list of targeted substances is under development. This year, under the CEPA, the National Pollutant Release Inventory (NPRI) reporting program was created. Companies which annually use 10 tonnes or more and whose employees collectively work 20,000 or more manhours will have to report on any use of the 178 substances listed. Required data include purchases, sales and waste tonnages. Included in the list are most common chemicals, as well as most metals and their compounds.

To phase out the use of chlorinated solvents, the Canadian Council for Ministers of the Environment (CCME) has initiated a voluntary program called VOX/NOx. Co-operation by most industries is expected to reduce use of these solvents over the next few years.

The CCME has also initiated a voluntary Hazardous Waste Minimization Committee, to explore ways of reducing toxic wastes. It intends soon to set up a steering committee of government and industry members. No list of substances has yet been established.

There is also EC’s Accelerated Reduction and Elimination of Toxic Substances (ARET) program. Its purpose is to accelerate bans and phase-outs on certain listed substances.

Also, the Domestic Substances List program has been set up to screen all new substances proposed for use in Canada.

Besides the federal iniatives, a series of pollution prevention programs has been set up within each province. One of the newer ones is the Pollution Prevention Pledge Program, in which industries have been invited to reduce pollution and receive public acknowledgement for their efforts. Ontario is also issuing its list of Candidate Substances for Bans or Phase-outs. (Municipal and regional governments set their own bylaws for local enforcement.)

The effect of all these well-intended efforts is to create a costly complex of pollution prevention and control programs — on top of the existing stringent regulations. A unified list of substances and a uniform approach to deciding which exposure levels are safe would be welcome, as would standards for setting reasonable controls.

— Jack Dupuis is a metals marketing consultant in Thornhill, Ont. A regular contributor to The Northern Miner, he also publishes a monthly metals newsletter, “Metopine,” for clients.