Category Archives: Mining

Canada backs foreign investor rights to protect mining sector: Book

Canadian Prime Minister Justin Trudeau with OECD Secretary-General Angel Gurria during a bi-lateral meeting in Paris (OECD/Flickr CC Licence)

Canada’s controversial mining sector may be the driving force behind the country’s insistence on protecting foreign investors’ rights over laws that guard its own citizens and environmental values. Prime Minister Justin Trudeau, like Stephen Harper before him, has doggedly defended corporate rights enshrined in an increasingly controversial aspect of many international trade deals, commonly referred to as an Investor-State Dispute Settlement (ISDS) clause. The provision protects foreign investors from domestic environmental and labour laws that could impede their development of a mine, a pipeline, or other potentially destructive industrial projects.

This is just one of the many fascinating revelations detailed by Canadian author Joyce Nelson in her new book Bypassing Dystopia: Hope-filled Challenges to Corporate Rule – the essential sequel to her 2016 book Beyond Banksters: Resisting the New Feudalism, which my late colleague Rafe Mair reviewed in these pages.

In her latest effort, available now from publisher Watershed Sentinel, Nelson paints a frightening picture of what The Economist has called “The Arbitration Game” – a system of corporate lawyers, hedge funds, industry-friendly governments and secretive international tribunals that enable corporations to profit off these clauses. 

Canada defends Corporate Magna Carta

World Bank headquarters, home to the International Centre for the Settlement of Investment Disputes (Photo: Makzhou/Flickr CC Licence)

The idea grew out of a “magna carta for corporations”, which The World Bank endorsed in 1964, setting up the International Centre for the Settlement of Investment Disputes (ICSID) at its Washington, D.C. headquarters. There are four other venues for ISDS-related hearings, Nelson explains: the Permanent Court of Arbitration in the Hague, the Court of International Arbitration in London, the International Chamber of Commerce in Paris, and the Chamber of Commerce in Stockholm. These closed-door arbitration panels preside over cases arising from some 3,000 international investment agreements. “Lawsuits have been increasing exponentially in recent years, rising from about 15 per year in 2000, to 70 in 2015,” Nelson notes.

So important are these ISDS clauses to the Trudeau Government’s trade policy that when another government it’s negotiating with proposes to cut one from a draft agreement, it’s often a deal-breaker for Canada. “Reportedly, in 2016 Canadian officials stopped free trade talks with India ‘until it agreed to sign’ the Foreign Investment Promotion and Protection Agreement that included ISDS – which India still has not done,” Nelson writes, drawing on a story from The Council of Canadians. A source within the Canadian government’s NAFTA negotiation team told The Washington Examiner in 2017 that Canada “would refuse any changes to the existing [ISDS] system. ‘It would be something we couldn’t accept,’ the source said, adding that was ‘a pretty hard no.’”

The same issue threatened to topple the Canada-EU Comprehensive Economic and Trade Agreement (CETA) when the EU’s top court ruled in 2017 “that any deal allowing foreign investors to challenge national governments, such as the proposed investment court system within CETA, must be unanimously approved by all [28] EU states,” the Toronto Star’s Thomas Walkom explained. “Just a few weeks after EU’s top court ruling (May 2017), discussions around another Canada trade deal were ‘paused’ because of Trudeau’s insistence that it must include the ISDS provision,” Nelson adds. 

Chapter 11 costs Canadian taxpayers

With all the pushback against ISDS clauses, why is the Trudeau Government so hell-bent on protecting foreign investors’ rights? After all, Canada is about as big a loser as they come from these international courts and related settlements. The country has been sued at least 39 times under NAFTA’s Chapter 11 ISDS clause, costing taxpayers over $300 million, though that figure is set to skyrocket this year, with big, new judgments in the pipeline. That’s all in addition to bizarre, voluntary settlements like the one Stephen Harper made with US forestry, pulp and paper company AbitibiBowater for $130 million in 2010.

In that case, the provincial government of Newfoundland and Labrador had justifiably reclaimed water and electrical rights from the company after it closed the mill they were tied to, costing the community of Grand Falls-Windsor 800 jobs. The company sued for compensation over the expropriation of those rights and rather than try the case at the NAFTA tribunal, the federal Conservative government cut one of the largest Chapter 11-related cheques ever written at the time.

Today, that figure is less astonishing, compared to the ballooning settlements and judgements under ISDS clauses. Canada just lost its appeal of a $570 million judgement against it over US concrete company Bilcon’s rejected quarry in Nova Scotia. And the country could well face its biggest ISDS judgement yet if Texas-based Kinder Morgan decides to file a Chapter 11 case over the Trans Mountain Pipeline.

Digging for gold through ISDS claims

So, on the surface, Canadian leaders’ support for these clauses is puzzling. But Nelson offers a compelling explanation for why Trudeau and company would continue to champion investors’ rights, writing:

[quote]A February 2017 report from Corporate Europe Observatory (CEO) called Gold-Digging with Investor-State Lawsuits sheds some further light on the situation. It states that Canadian mining corporations are “among the worst in the world when it comes to using investor-state lawsuits to bully governments” into backtracking on environmental regulations: “62% of the 55 ISDS cases that involved a Canadian investor until 2015 were in the resource or energy sectors. And 58% of the cases challenged resource management or environmental protection measures.”[/quote]

Nelson underscores this point with the dispute between two Canadian mining companies and El Salvador. “For more than a decade, the people of El Salvador fought against a mining site proposed by Canadian gold mining company Pacific Rim,” she writes. “Understandably, they were concerned that toxic cyanide from the mining would enter the watershed of the Rio Lempa, a river that provides water to more than half of El Salvador’s population.”

Photo: Eric Carlson/Flickr CC Licence

But when Pacific Rim was acquired by larger Canadian-Australian mining company OceanaGold in 2013, the new owner, despite holding only a preliminary exploration licence, launched a $300 million ISDS challenge against El Salvador for balking at the project’s environmental impact statement. The tiny nation eventually won the case, but still had to foot a $12 million legal bill for its defence. (Despite a 2016 court order to reimburse the country for $8 million of these costs, OceanaGold had yet to pay up by the time the 120-day deadline passed in early 2017).

Hedge funds join the “arbitration game”

The ISDS “arbitration game” could prove highly lucrative for Canadian mining firm Gabriel Resources through its $4.4 billion claim against Romania, over the government’s rejection of permits for the company’s proposed Rosia Montana mine. Corporate Europe Observatory’s 2017 report documents the case, raising a troubling new development in the world of investor rights litigation – the money hedge funds are putting up to back and profit from such arbitration:

[quote]Despite the secrecy, it has emerged that Gabriel’s claim is financially backed by Wall Street hedge fund Tenor Capital Management. Tenor pays Gabriel’s lawyers in exchange for getting a share of the compensation that the company might win. The [hedge] fund has already profited handsomely from an ISDS case of another Canadian mining company, Crystallex: it will cash in 35% of a whopping US$1.4 billion ruling against Venezuela from 2016 – a return of over 1,000% on the US $36 million that Tenor had initially injected in the claim. Such funding arrangements allow companies like Gabriel to draw out legal fights, driving up defence costs for states and [increasing] the likelihood that governments give in to corporate demands.[/quote]

Other companies and countries are getting into the game as well. Another major “investor” in ISDS litigation is New York-based Burford Capital, which describes itself plainly as “the world’s largest provider of arbitration and litigation finance.” The company reportedly made $140 million when an arbitration panel awarded its client $324 million from the government of Argentina over the country’s nationalization of the airline Aerolíneas Argentinas. 

Meanwhile, Canada has become a major player in the global arbitration game. According to one of Nelson’s sources, Cecilia Olivet of the Netherlands-based Transnational Institute, Canada ranks fifth in the world in ISDS-related suits, led by its mining sector. “More than 60% of the world’s mining companies are headquartered in Canada (about 1,700 companies), operating more than 8,000 mining sites in over 100 countries,” Nelson adds.

“If these companies ‘are among the worst in the world’ when it comes to using ISDS lawsuits to bully governments, it becomes clearer why the Justin Trudeau government (and previous Canadian administrations) have been so adamant about trade deals needing to contain ISDS.”

Is the jig up for investor rights clauses?

Montreal-based writer and activist Yves Engler supports this notion, writing last year“Nearly two years into their mandate the Trudeau regime has yet to follow through on any of their promises to rein in Canada’s controversial international mining sector. In fact, the Liberals have largely continued Harper’s aggressive support for mining companies.”

That should come as no surprise given the amount of lobbying access the industry has received from the Trudeau government. Between November of 2015, when Trudeau was sworn in, and March of 2018 (the last month for which data is available), federal government representatives recorded 636 communications (meetings, emails and phone calls) with The Mining Association of Canada, the industry’s chief lobby – according to data from Canada’s lobbying registry. That doesn’t include other groups and corporations within the sector. 

Yet while Canada continues to push hard for ISDS clauses protecting its mining sector, many other countries are growing fed up with the arbitration game. As Nelson writes, “India – like Ecuador, South Africa, Bolivia, Venezuela, Indonesia, China and other countries resisting ISDS – has developed its own Model [Bilateral Investment Treaty] that requires investors to pursue disputes in public domestic courts for at least five years before moving on to international arbitration.” 

If this trend continues, the Trudeau government will face increasingly hard choices between growing international trade and protecting its mining sector. Even Donald Trump reportedly wants to scrap Chapter 11, as Canada and the US renegotiate NAFTA. Trudeau would be wise to let him have his way on this one, rather than defending a clause that runs so contrary to regular Canadians’ interests.

The ISDS racket is just one of many important topics Nelson addresses in Bypassing Dystopia. The book serves two important functions – first, decoding the corporate jargon used to disguise what is really the transfer of wealth from the pockets of everyday citizens to the hidden offshore accounts of multinational corporations and the elite investor class. Terms like “quantitative easing” (bailouts for big banks), ​“austerity​“ (passing the cost onto regular people), and ​”asset recycling” (privatizing public assets) are translated into plain English, so the public can know what it’s up against. 

The other role the book plays is offering solutions from empowering stories of resistance to these neoliberal economic policies. Through Rafael Correa’s Ecuador, Mexico’s Zappatistas,​ Spain’s “Indignados”​, Cuba’s revolutionary organic farmers, the North American divestment movement, Denmark’s happiness-boosting social services, and ​​Japan’s erasure of “sovereign debt” with smart central banking, Nelson provides a roadmap to liberation from the ​greedy banksters’ ​deathgrip on our environment and societies.

For all that, you need only buy her book.


“Captured” environmental regulator thinks of Kitimat smelter owner Rio Tinto as “client”

Rio Tinto Alcan's Kitimat smelter (Rio Tinto Alcan/Canada Newswire)
Rio Tinto Alcan’s Kitimat smelter (Rio Tinto Alcan/Canada Newswire)

Rweprinted with permission from DeSmog Canada.

Move over Duffy diaries. There’s a new black book in town.

That’s the detailed work journal of B.C. Ministry of Environment senior official Frazer McKenzie, which recounts conversations between ministry officials and Rio Tinto Alcan while the company was applying for a permit to increase aluminum production at its Kitimat smelter.

Frazer McKenzie was a diligent and thorough employee. He documented ongoings with Rio Tinto Alcan within government that we’d otherwise never know about,” lawyer Chris Tollefson told DeSmog Canada.

The hen guarding the fox house

During the application process, Rio Tinto Alcan financed McKenzie’s position at the Ministry of Environment through a secondment agreement and government officials repeatedly refer to the company as a “client.”

DeSmog Canada has learned this parlance has become commonplace between ministry officials and industry. Indeed, much of what occurred in the Rio Tinto Alcan case appears to be standard operating procedure.

McKenzie’s journal — made public due to an appeal — offers a rare glimpse into the inner workings of B.C.’s Ministry of Environment.

The ministry has argued that it agreed to allow the company to fund McKenzie’s position because of concerns there would be “inadequate staffing to deal with the application” otherwise. Such arrangements with industry are not entirely unusual due to chronic underfunding.

Rio Tinto Alcan’s application, which was approved by B.C. in 2013, granted the company the right to increase sulphur dioxide emissions in the Kitimat airshed by 56 per cent.

Sulphur dioxide is released from the combustion of sulphur-laden fossil fuels — such as the petroleum coke used to smelt aluminum — and irritates eyes, noses, throats and lungs. People with asthma, children and the elderly are at increased risk from sulphur dioxide exposure.

Two Kitimat elementary school teachers — Emily Toews, who suffers from asthma, and Lis Stannus — are now challenging that permit approval through the B.C. Environmental Appeals Board, arguing the project threatens human and environmental health. The appeal, being heard by a tribunal in Kitimat, is in its third week.

This case really does represent a situation where you have a regulator that has gotten too close to a powerful and well-resourced private interest that it is supposed to be independently regulating,” Tollefson told the tribunal.

black diaryCentral to the tribunal are the extensive notes McKenzie took while the Ministry of Environment, including manager of environmental protection Ian Sharpe, and Rio Tinto Alcan discussed the company’s permit application.

On Monday, Sharpe told the appeals panel Rio Tinto Alcan was “after comfort in the authorization process” and that he discussed the possibility of creating “some kind of comfort letter or document…that would give Rio Tinto Alcan’s board the comfort they needed to get on with funding.”

This is B.C.’s version of the Duffy senate scandal: it shows how deeply comfortable government and industry are with one other,” said Richard Overstall, counsel for Emily Toews.

BC left sulphur dioxide limits unanswered

McKenzie’s notes show the provincial government was aware of scrubbing technology — used to eliminate sulphur dioxide emissions from smelters around the world — but chose not to require Rio Tinto Alcan to put that technology in place.

Under cross-examination, McKenzie read aloud his notes, which referenced Rio Tinto Alcan’s request to eliminate the mention of scrubbers from an internal memo. He also noted a phone call from a deputy minister who “did not want to let a little SO2 get in the way” of Rio Tinto Alcan’s project.

McKenzie’s journals also show the company was anxious about the projected increase of sulphur dioxide emissions from the modernization project and wanted regulatory certainty to calm investors.

Construction on Kitimat smelter modernization (Bechtel)
Construction on Rio Tinto Alcan’s Kitimat smelter modernization (Bechtel)

Rio Tinto Alcan requested specific sulphur dioxide discharge limits during the creation of a joint memorandum of understanding (MOU) with the province. Under the MOU, the province committed to regulate Rio Tinto Alcan under sulphur dioxide standards from the 1970s — and guaranteed those weak rules would stay in effect for the project until at least the end of 2018, even though the province introduced much stronger interim standards in 2014.

Those weak standards were eventually dropped altogether by Sharpe, who said he began to consider them “obsolete,” but told the panel he could not recall when. No new standards for Rio Tinto Alcan’s smelter have been put into place and, according to Sharpe, won’t be in place until B.C. or the federal government mandate them after conducting a full public consultation.

McKenzie’s notes make numerous mentions to Rio Tinto Alcan’s desire for “certainty” regarding potential SO2 standards.

SO2 is troubling to Alcan,” McKenzie wrote in one entry entered into evidence. “Insisting they have limit ahead of time — something in writing.”

McKenzie noted in one internal correspondence:

[quote]Alcan is anxious to get green light…to provide good news on project to stakeholders.[/quote]

The province approved the company’s permit in 2013 but did not release an environmental monitoring plan until 18 months later. Although the modernization project is very close to complete, it remains without sulphur dioxide emission limits.

Appellants point to regulatory capture

Between the period of 2007 and 2013, McKenzie was seconded to Rio Tinto Alcan, which funded his position. He worked closely with the company during the permit application process.

Tollefson argues Sharpe’s close ties with Rio Tinto Alcan influenced and ultimately fettered his decision-making.

The evidence shows that government of B.C. and Rio Tinto Alcan “deliberated carefully over the language” contained in their agreement “knowing that it might be challenged in court on the ground that it fettered the discretion of the decision-maker charged with granting the permit,” he told the panel.

[quote]We need to reinvigorate the idea of a regulator as a fearless public defender[/quote]

That was not the case with Ministry of Environment officials, who, according to Tollefson, throughout years of documents refer to Rio Tinto Alcan as a “client” and tend to view the world through “industry-coloured glasses.”

Overstall said there was a “slow creep” of industry’s interests into government activities.

That’s what we see with the Duffy scandal: these guys get so involved they lose their compass,” he said.

No one wakes up one morning and decides, ‘I’m going to get cozy with industry.’ It’s more of a slow creep,” Overstall said. “They make small decisions one after another behind closed doors thinking what they’re doing is okay until suddenly the public spotlight is shone on them.”


Mount Polley investigation: Whitewash follows tailings flood – culprits let off the hook

Aerial image after Mount Polley mine tailings spill (Cariboo Regional District)
Aerial image after Mount Polley mine tailings spill (Cariboo Regional District)

The recently concluded “independent” investigation into the Mount Polley tailings pond rupture essentially exonerates the various culprits in what was likely the worst environmental catastrophe in BC history. The report can only be seen as a whitewashing of the world record 25 million cubic metres of mine tailings and other debris swept into Hazeltine Creek and the formerly pristine Quesnel Lake this past August.

Designing disaster

While the government-appointed panel behind the investigation acknowledges a design flaw in the  containment facility, it downplays any real human negligence by attributing it to misinterpretation of the geology below the breached dam wall:

[quote]The design did not take into account the complexity of the sub-glacial and pre-glacial geological environment associated with the perimeter embankment foundation[/quote]

Yet the report curiously maintains such a design flaw can occur without human error in the design process or subsequent construction, finding:

[quote]…no evidence that the failure was due to human intervention or overtopping of the perimeter embankments…In regard to regulatory oversight, the Panel found that inspections of the tailings storage facility would not have prevented failure. [/quote]

Thus both the builders and the regulators are magically let off the hook.

Alternate report alleges cover-up

Suzuki: Canada at risk for more Mount Polley-type disasters
Hazeltine Creek after tailings dam breach (Chris Blake)

Quite to the contrary, another report, by the BC Tapwater Alliance last December, marshals credible evidence to lay blame at the feet of the BC Liberal Government, mine owner Imperial Metals and the engineer of record, Knight Piesold. It concludes, “the Mount Polley mine tailings storage catastrophe could have been, and should have been, preventable,” equating subsequent denials of culpability to a “cover-up”.

And that should stand to reason. The mere notion of “design” implies human agency. Someone had to conduct the geological studies, interpret the data, and incorporate that into the engineering of the facility; just as human regulators were responsible for overseeing this process and verifying its implementation and evolving risks over the lifetime of the project. How one can attribute flaws to the design process but not to the people, companies and governments behind it is simply baffling.

What the panel’s report left out

The panel’s report also ignores some of the key political and regulatory plot points in the Mount Polley tragedy.

For instance, the half million dollars in campaign contributions and big-time fundraising support the Liberal government received from mine owner Murray Edwards and his companies, including Mount Polley Mining and Imperial Metals. In the aftermath of the disaster, Minister of Energy and Mines Bill Bennett threatened a fine of – wait for it – one million dollars! Not a peep on this clear conflict of interest.

Then there were the numerous warnings from the outset that the type of design used for the dam was a bad fit for a wet climate (p.ES-6).

Or the fact that Engineer of Record Knight Piesold acknowledged Imperial “failed to comply with some of its duties/responsibilities over the [tailings storage facility] during the ‘Care and Maintenance’ years, the three and half year period when the Mount Polley mine was temporarily shut down from October 2001 to March 2005,” as the BC Tapwater Alliance report notes. This also could have helped weaken the containment structure.

Or how about the dangerous ramping up of production at Mount Polley to boost profits as Imperial sought to build another mine (with similar tailings pond design concerns) in northwest BC, Red Chris. This, of course, was sanctioned by the government, even though it meant overloading the containment facility with more tailings and water than it was designed to hold.

Or the numerous annual reports Imperial neglected to file with the ministry (p. ES-4), in contravention of the terms of its permits.

Mount Polley disaster- More misinformation than facts
The wide of a Mount Polley whistleblower, Lawna Bourassa displays cloudy water vollected near her Quesnel Lake home (Damien Gillis)

Or cut-backs in mine inspections and the transfer of this process away from independent ministry officials to contractors hired by the company – a clear conflict of interest. A 2012 study by the UVic Environmental Law Centre warned, “This ramshackle enforcement regime is not good enough for an industry that can create environmental and financial catastrophes.” Ignored.

Or the critical “deficiency” unearthed by ministry officials during a 2008 geotechnical inspection of the dam.

Or the mysterious departure of Knight Piesold from the project in 2011, amid warnings from independent consultant Brian Olding that dam was in danger of collapse.

Or the multiple, internal warnings from employees, like foreman-turned-whistleblower Gerald MacBurney and truck operator Larry Chambers. All ignored.

Or Imperial Metals’ lack of environmental disaster insurance and sufficient plans and resources to clean up the spill.

I could go on…But you won’t learn any of the above issues from the “independent” panel’s report.

Sure, there are vague calls to “improve professional practice” and “strengthen current regulatory operations”, but they lack teeth and fail to capture the gravity of the situation.

Nothing learned

Beyond the absence of justice for this ongoing travesty – which continues to pollute Hazeltine Creek and the former natural marvel called Quesnel Lake – the panel’s effort represents a failure to learn anything meaningful that would prevent governments and industry from making the same mistakes in the future.

Then again, none of this comes as a surprise. Ever since the wee hours of BC day this past August, when the levee broke, there’s been as much spin, obfuscation and excuse-making gushing out of  Mount Polley as toxic mine tailings. If the public accepts this whitewash, then we risk another Mount Polley – perhaps up at Imperial’s latest venture, Red Chris Mine, which could pollute the Sacred Headwaters of three major salmon rivers.

It’s hard to know where to go from here – the whole thing is such a mess – but we can start by rejecting this report and demanding real answers and justice for an entirely preventable disaster.


Digging out of Canada’s mining dilemma

A Toronto March in solidairty with Guatemalan Goldcorp protestors (Allan Lissner)
A Toronto March in solidarity with Guatemalan Goldcorp protestors (Photo: Allan Lissner)

It sometimes seems people in the mining and fossil fuel industries — along with their government promoters — don’t believe in the future. What else could explain the mad rush to extract and use up the Earth’s resources as quickly and wastefully as possible?

Mining production doubles globally

Global mining production, including fossil fuels, has almost doubled since 1984, from just over nine-billion tonnes to almost 17-billion in 2012, with the greatest increases over the past 10 years.

It’s partly to meet rising demand from expanding human populations and supply the cycle of consumerism that fuels the global economy through planned obsolescence, marketing unnecessary products and wasteful technologies. And, as the British Geological Survey notes:

[quote]It may be uncomfortable to acknowledge, but wars have been the drivers for many of mankind’s technological developments. Such technologies depend on secure supplies of numerous mineral commodities for which demand inevitably escalates in times of war.[/quote]

Canada: Global mining titan

Mining is important to human well-being, but the current economic system means it’s often aimed at maximizing profit with little regard for people or the environment. It’s one area where Canadians can make a difference. Canada is a global leader in mining, especially in Latin America. According to the Mining Association of Canada, “Almost 60% of the world’s public mining companies are listed on the TSX and TSX-Venture Exchanges, and 70% of the equity capital raised globally for mining companies is raised on these exchanges.” The association adds, “Canadian-headquartered mining companies accounted for nearly 37% of budgeted worldwide exploration expenditures in 2012.”

Canada has also tied foreign aid to support for mining interests.

Canada tries to improve on dark history

Canadian mining companies haven’t always had a great record for environmental and social responsibility in communities where they operate — but public scrutiny and pressure may be helping to change that. In the face of criticism, industry leaders insist practices are improving. “The Canadian mining industry, and certainly what our members are doing now, is much, much different now than what it was 20, 25 years ago,” Canadian Mining Association president and CEO Pierre Gratton told Global News in response to a critical Council on Hemispheric Affairs article.

According to the June 2014 article:

[quote]Large-scale Canadian mining companies, and the Canadian government that oversees such commercial ventures, have failed to adhere to reliable standards of international law, which assert that home states are responsible for the actions of their citizens abroad.[/quote]

The article points to evidence that Canadian mining corporations have often operated with little regard for nature reserves and protected areas, and have depleted scarce water supplies, neglected indigenous rights and disrupted communities and created health problems through air, water and land pollution. “Each year, a number of protestors who raise concerns against mining activities are seriously injured, persecuted, or even killed.”

Goldcorp mines outrage in Guetemala

That appears to be the case at a gold- and silver-mining operation in Guatemala run by a subsidiary of Canada’s Goldcorp. According to the Guardian, it’s drawn numerous local complaints for “intimidation, threats, social division, violence, bribery and corruption of local authorities, destruction and contamination of water sources, livestock dying, houses shaking, cracked walls, the criminalization of protest, forest cleared, and appalling health impacts such as malnutrition and skin diseases.”

An indigenous man who spoke against the mine was beaten and burned alive by hooded men who first questioned him about anti-mining activities. Goldcorp has denied the allegations.

Lawsuits could lift “corporate veil”

In the past, Canadian companies haven’t been held responsible for actions of foreign subsidiaries — but that may change. A number of people from Eritrea and Guatemala are suing three Canadian mining companies in Canadian courts for alleged abuses at mines in those countries, which include forced labour, human rights violations and assault.

The Financial Post said lawyers are getting around the “corporate veil” by “suing the Canadian parents for negligence and other traditional torts on the grounds that management hasn’t lived up to the standards outlined in their public pronouncements.” In other words, the companies are being held globally to the standards they publicly claim at home.

Mining is important but, as with much human activity in the face of rapidly growing populations, we must learn to develop and use resources in ways that aren’t wasteful, destructive and unsustainable. And mining companies must be held to high standards for environmental and human rights protection — at home and abroad.

Written with contributions from David Suzuki Foundations Senior Editor Ian Hanington.

Red Chris Mine- First Nations win round 1 with Imperial Metals in court

Red Chris Mine: First Nations win round 1 with Imperial Metals in court

Red Chris Mine- First Nations win round 1 with Imperial Metals in court
Tahltan and Secwepemc First Nations and supporters celebrate at the BC Supreme Court (contributed)

BC First Nations added a small but potentially significant notch to their legal winning streak yesterday, with a temporary victory over Imperial Metals in BC Supreme Court.

The company was seeking an interlocutory injunction and enforcement order enabling it to have Tahltan Nation protesters immediately, forcibly removed from a blockade of Red Chris Mine – Imperial’s lastest venture, in northwest BC’s Sacred Headwaters.

Red Chris Mine
Red Chris Mine under construction (Unuk River Post)

After hearing from the company’s lawyers and three First Nations women from the Tahltan and Secwepemc Nations, Justice Grauer refused to issue the injunction and enforcement order Imperial was seeking – instead issuing a non-permanent injunction, without the accompanying enforcement order. This means the blockade will likely remain in place until at least October 14, giving the defendants more time to respond to the temporary injunction.

The judge also agreed to a change of venue to Terrace court, allowing Tahltan elders from the region to participate in future proceedings.

Klabona Keepers’ successful track record

Red Chris mine was due to open in September but faces lingering concerns over its tailings pond design. In the wake of the company’s disaster at Mount Polley mine in the Cariboo region – the largest tailings spill history – a group of Tahltan First Nations began applying renewed pressure on Imperial. Known as the Klabona Keepers, the grassroots organization has a highly successful track record of blocking unwanted development in the Sacred Headwaters – including Shell’s planned coalbed methane development and Fortune Minerals’ proposed anthracite coal mine.

Injunctions take a hit

Yet despite this history and the legal strength of First Nations, injunctions have become a commonplace tool for corporations to remove protestors and are rarely refused or watered down by the courts – so Justice Grauer’s ruling is a significant, if small departure from this pattern.

Said the Indigenous Network on Economies and Trade’s Arthur Manuel on the verdict:

[quote]Injunctions are one of Canada’s last colonial instruments used to dispossess Indigenous Peoples of their land but pressure from the grassroots community is causing the colonial government to retreat. Today’s decision puts the injunction in question as being a sure form of remedy for corporations like Imperial Metals acting with impunity and without consent.[/quote]

First Nations take on Imperial together

Kanahus Manuel
Kanahus Manuel addressing reporters

Manuel’s daughter Kanahus has been instrumental in confronting Imperial Metals over the environmental devastation of her traditional Secwepemc territory from the Mount Polley spill. She and other community members and supporters started a sacred fire and water monitoring program in the area and quickly offered their support to the Klabona Keepers in challenging the company’s tailings dam design at Red Chris.

This concern is shared by others, including US-Canadian conservation group Rivers Without Borders. In a recent op-ed in these pages, RWB’s Tadzio Richards noted:

[quote]In 2013, a third party review was done of Imperial Metals’ engineering designs for their tailings pond at Red Chris. The independent review concluded there was no guarantee that Imperial Metal’s tailings pond would hold toxic wastewater from the mine. Despite this conclusion, construction at Red Chris has been allowed to continue, and the mine is currently scheduled to open in September of this year.[/quote]

Soon after writing this, the Klabona Keepers instituted an initial protest against Red Chris – stalling the mine’s opening. They backed down temporarily once Imperial offered the Tahltan increased oversight over the mine’s tailings pond design. But losing confidence in the new arrangement, the Klabona Keepers erected a new blockade on Sept. 29.

“An incredible victory”

On October 3, Imperial filed initial documents announcing injunction proceedings for 10 AM yesterday.

“The defendants, through their physical blockade and their conduct, are interfering with Red Chris’s use and enjoyment of property,” the filing claimed.

 Yet Justice Grauer clearly didn’t feel the blockade needed to be removed with the same urgency Imperial had sought.

Said the Klabona Keepers in a statement following yesterday’s ruling:

[quote]Ultimately, this is an incredible victory – not only for the Klabona Keepers, but for all Indigenous Nations connected by the water and the salmon. [/quote]

Imperial Metals asks court to remove Red Chris Mine blockade

Imperial Metals asks court to remove Red Chris Mine blockade

Imperial Metals asks court to remove Red Chris Mine blockade
First Nations have been protesting several Imperial Metals mines since Mount Polley (Photo: Facebook)

UPDATE: In a surprise ruling today, Justice Grauer refused to grant Imperial Metals an injunction against the Klabona Keepers’ blockade

Imperial Metals, the company behind the Mount Polley tailing pond disaster, is seeking an injunction today at the BC Supreme Court to forcibly remove Tahltan First Nations protestors from a blockade of the company’s newest project, Red Chris Mine.

In a media advisory this morning, the leaders of the Yuct Ne Senxiymetkwe Camp – established near Mount Polley mine by a group of local Secwepemc First Nations following the largest tailings pond spill in history – announced a protest of the injunction proceedings outside the Vancouver court house where they are being held.

The Mount Polley disaster inspired the Klabona Keepers, from Tahltan territory in northwest BC, to set up a blockade of Imperial’s yet-to-be-opened Red Chris Mine – over concerns about the company’s tailings pond design.

This concern is shared by others, including US-Canadian conservation group Rivers Without Borders. In a recent op-ed in these pages, RWB’s Tadzio Richards noted:

[quote]In 2013, a third party review was done of Imperial Metals’ engineering designs for their tailings pond at Red Chris. The independent review concluded there was no guarantee that Imperial Metal’s tailings pond would hold toxic wastewater from the mine. Despite this conclusion, construction at Red Chris has been allowed to continue, and the mine is currently scheduled to open in September of this year.[/quote]

Soon after writing this, the Klabona Keepers instituted an initial protest against Red Chris – stalling the mine’s opening. They backed down temporarily once Imperial offered the Tahltan increased oversight over the mine’s tailings pond design. But losing confidence in the new arrangement, the Klabona Keepers put up a new blockade on Sept. 29.

On October 3, Imperial filed initial documents announcing injunction proceedings for 10 AM today.

“The defendants, through their physical blockade and their conduct, are interfering with Red Chris’s use and enjoyment of property,” the documents claimed.

Imperial Vice President Steve Robertson acknowledged to the Terrace Standard over the weekend that the company will be seeing an injunction to break the blockade, noting, “We don’t think there is a good reason for [the current blockade]. We understand there are some outside forces that have come in that are very active on the blockade.”

Says Kanahus Manuel of the Yuct Ne Senxiymetkwe Camp near Mount Polley:

[quote]In light of the Tsilhqot’in case, injunctions must not and cannot be used as a tool to displace Indigenous Peoples from their homelands anymore.[/quote]

Supporting Manuel at a recent press conference in Vancouver on the lack of post-spill cleanup in the area, Grand Chief Stewart Phillip of the Union of BC Indian Chiefs declared, “We’re moving from the era of consultation to the era of consent,” putting governments and corporations on notice that First Nations are prepared to take a far more active role in protecting their territories from dangerous development.

Mount Polley disaster- More misinformation than facts

Mount Polley disaster: More misinformation than facts

Mount Polley disaster- More misinformation than facts
Likely resident Lawna Bourassa displays cloudy water taken from the shore of Quesnel Lake (Damien Gillis)

Since day one the claim has been that the tailings flowing from Mount Polley mine’s breached dam were “stopped”, yet one month after the BC Day Disaster occurred, the Ministry of Environment found Mount Polley to be “out of compliance”, and on September 9 – fully 5 days later – issued an “advisory letter” pleading that the company do more to bring the tailings discharge to a halt.

This pattern of misinformation permeates virtually every significant piece of information related to the disaster.

From conflicting data on the status of the drinking water to what exactly the clean up plan entails and how it’s being paid for, plain lies and misinformation seem to rule the day.

Scale of disaster significantly downplayed from get-go

At first, the total release was 14.5 million cubic metres but weeks later, after the story had played out on front pages and was winding down, the company quietly released on its website that in fact the new revised volume is some some 78%larger, making it the largest disaster of its kind anywhere in the world – ever – as first reported here at The Common Sense Canadian the day Christy Clark arrived in Likely with media in tow.

Imperial Metals raises $115 million…but not committed to cleanup

Remarkably however, in mere days, Imperial metals raised 115 million dollars in a “private placement” issuance of a convertible debenture, of which the company’s two largest shareholders purchased near 75% – with an interest rate of at least 6%. Meaning the mine’s primary owners and largest stakeholders are already seeing returns on this disaster, before the tailings even stop flowing! And the kicker?  The money raised is not even committed to clean up as was first trumpeted by the company and media.

The players behind Mount Polley raised 115 million dollars before they even stopped the tailings discharge, and it’s mostly to ensure liquidity to shore up a new mine development known as Red Chris that was relying on the cash flow from the massive increases in production at Mount Polley – until the levee broke. While the toxic tailings flowed, the cash flow to that project ceased.

No real cleanup has started

The company no longer hosts weekly town hall meetings and has now switched to “open houses” with no more dinner for the locals. It’s designed only to keep them updated. On what exactly, no one is sure, as no money has actually been committed to cleanup, no cleanup has started and no cleanup plan has been presented to the public – even though the government received the demanded plan by the due date of August 15th.

The company met this August 15th deadline and, in so doing, avoided any fines or penalties – however, no one knows what was actually submitted to the government, outside of a small circle of ministry bureaucrats.

September 10 is the first of the ” open houses” and there are requests that they be filmed and posted online, as many people impacted are outside of the small town of Likely and unable to attend. These people deserve to know what is happening and be told straight-up facts.

There are many questions left unanswered thus far. The following list is a good start for the September 10 “open house” – or feel free to take these and any other questions you may have directly to the government and company responsible.

Questions for Government and Industry

  • Is it true you intend to drain Polley Lake for 100 days? Would that not make it impossible to start Hazeltine Creek cleanup until spring, as 100 days delays any access until winter?
  • How much, if any, of the 115 million dollar debenture is committed to actual cleanup?
  • Mount Polley’s two major shareholders purchased 80 million dollars of the 115 million dollar debenture – what exactly is the return on the 40 million dollar investment Mr. Edward’s finance company “Edco” alone will receive?
  • When will the “cleanup plan” submitted to the Ministry of Environment on August 15th be available for public review?
  • Have you been fined or otherwise penalized by any level of government as a result of this BC Day “incident?”
  • How high was the dam when it failed?
  • How do you calculate the amount of tailings and water that was released in total?
  • Have you broken any laws in BC and Canada as a result of the release of this amount of pollution?
  • Are there any laws, statutes or Acts in BC and Canada demanding that you disclose everything that may have been released in this disastrous tailing storage facility (TSF) failure?
  • Will you release the results and all related data of the three-year scientific study undertaken between 2009 and 2012 dealing with the bioremediation of your tailings pond?
  • How much effluent has been released from this tailings pond prior to the disaster and for how long? What standards did this effluent meet prior to being released?
  • Is it true that Imperial is paying for the three member “Independent Review Panel” appointed by the Minister of Mines? Are they also paying for the Conservation Officers’ review, as well as the Privacy Commissioner’s review?
  • How many, if any, foreign temporary workers did Mount Polley employ and what were they responsible for?
  • What exactly is SNC Lavalin’s role as a “sponsor” of the cleanup “project” as noted on your website, and are they invested in the 115 million dollar debenture the company recently issued?
  • Who exactly have you contracted to undertake the cleanup thus far?
  • Will you provide a complete list of all TSF incidents, breaches and seepages, or any other out of the ordinary “incidents” for the twelve months immediately prior to the catastrophic failure?
  • Did you require any approvals, permits or even acknowledgement of your intention to dramatically increase production at the mine at anytime over the last twelve months?
  • Are there any laws at any level of government to which you must adhere in terms of compensating those impacted by the release of  your tailings in this disaster?
  • Will the company or ministry disclose the letters written by the former employee referred to in this story?
Mount Polley spill may be far bigger than initially revealed

Mount Polley spill may be far bigger than initially revealed

Mount Polley spill may be far bigger than initially revealed
Aerial image after Mount Polley mine tailings spill (Cariboo Regional District)

Updated 7 PM, September 2

Volumes of water, tailings and other debris released into the environment by the August 4 breach of Imperial Metals’ tailings pond at Mount Polley Mine were at least 70% higher than initial estimates, the company revealed on its website yesterday.

Now, a report from BC Tapwater Alliance, using satellite imagery from NASA and the US Geological Survey to estimate the size of the containment facility, suggests even the company’s re-estimate may still be significantly underplaying the true scale of the disaster.

While the company boosted estimates from 14.5 million cubic metres of water and tailings to over 25 million cubic meters of combined debris spilled into Polley Lake, Hazeltine Creek and Quesnel Lake, that may be just the tip of the iceberg.

The BCTWA report pegs the total surface area of the breached tailings containment facility at 225 hectares – or 2.25 million square metres (see graphic below).

According to Wendy Stueck in the Globe and Mail, “The tailings dam was about 35 metres high when it was breached”, meaning that the total volume of water and tailings contained in the facility was closer to 80 million cubic metres – perhaps slightly less, taking into account the dam’s rounded edges.*

Local environmental consultant Richard Holmes tells me that, upon recent visual inspection, much of the actual tailings remain within the containment area – not all of them having washed out of the facility with the release of water. Nevertheless, even these revised estimates from Imperial Metals are likely still on the low side.

Graphic: Will Koop / BC Tapwater Alliance

Imperial increased production, tailings to fuel Red Chris

The BCTWA report also contains a series of satellite images of the pond itself (see below), which clearly illustrate the massive ramp up in ore production Mount Polley underwent in the lead-up to the disaster. Under pressure to provide cash flow for a major new mine in Northwest BC which Imperial Metals was developing, Red Chris, the company’s increased activity led to a corresponding rised in tailings, as reported by The Common Sense Canadian following the spill.

According to Tadzio Richards of Rivers Without Borders:

[quote]Imperial Metals ramped up daily production of ore from 18,000 tonnes per day in 2009 to more than 23,000 tonnes by 2014, with production escalating in the three months just prior to the breach.[/quote]

This occurred despite at least five warnings from Ministry of Environment officials, on top of concerns expressed by the facility’s original engineer, independent consultants and even a former tailings dam foreman, Gerald MacBurney, who quit over the lack of action from the company.

The selected satellite images below, drawn from the BWTA report – chart the massive influx of tailings into the pond corresponding with the period of increased gold and copper production at the mine.


Satellite images reveal a slight decrease in tailings levels over the summer, corresponding with the deliberate, emergency release of some tailings water after a dangerous incident on May 24 of this year. According to a provincial government backgrounder:

[quote]The ministry issued an advisory to Mount Polley Mining Corporation for exceedance of the height of effluent within the tailings impoundment. The effluent level returned to authorized levels commencing June 30, 2014.[/quote]

Yet, just over a month later, the dam would burst, as this satellite imagery from the USGS shows:

Mount Polley tailings dam -before and after

The BC government has yet to respond to Imperial Metals’ increased estimates of tailings debris.

*NOTE: Estimated height of tailings pond revised 


Imperial boosts Mount Polley spill estimate by 10 million cubic metres

Silty mud remaining in Hazeltine Creek after Mount Polley tailings dam breach (Carol Linnitt/

In a Labour Day update on the Mount Polley mine disaster, owner Imperial Metals boosted its estimates of tailings, water and debris released into the environment by the failure of its tailings dam on August 4.

Compared with earlier estimates of 10 million cubic metres of water and 4.5 million cubic metres of solid tailings, the company is now figuring the following:

  • Supernatant water 10.6Mm
  • Tailings Slurry: tailings solids 7.3Mm3; interstitial water 6.5Mm3
  • Construction materials 0.6Mm3

Combining supernatant (water lying above the tailings within the “pond”) and interstitial (water trapped within the tailings), an extra 7.1 million litres of water poured forth from the burst dam than originally estimated. At 7.3 million cubic metres of solid tailings, the new estimate is nearly 3 million higher than the original 4.5 million – also making it the largest tailings pond disaster of its kind in history.

Added to that are 600,000 cubic metres of construction materials.

Imperial Metals was also not carrying any proper environmental disaster insurance, though it maintains in this latest update that it will be able to clean up the spill:

[quote]…we believe the costs can be managed over time given the underlying value of Imperial’s assets, the commitments for the additional $100 million financing announced on August 14 and insurance proceeds. [/quote]

Water quality concerns renewed

The revelation comes as fresh concerns surface regarding water quality, human and animal health in the region.

Last weekend, Interior Helath issued a new advisory warning residents of Likely, BC that – despite the lifting of an earlier water use ban – increased turbidity in the water column warranted caution in terms of drinking water from Quesnel Lake.

At the same time, independent biologist Alexandra Morton made waves reporting on a mysterious blue film covering much of Quesnel Lake and the Quesnel River.

The Ministry of Environment was allegedly aware of the situation and taking samples but has yet to report back to the public regarding the issue.

Finally, recently released data from the ministry’s water tests on August 13 reveal a major a spike in total copper levels from its “deep” station at the mouth of Hazeltine Creek –  “two orders of magnitude higher than on August 8th,” according to biologist John Werring of the David Suzuki Foundation. Topping out at 325 ug/l, says Werring, they vastly exceed aquatic life guidelines of just 4 ug/l.

CEO Kynoch: Thanks for understanding

Imperial Metals CEO Brian Kynoch included a personal message in his company’s update. “We thank all our employees and stakeholders who very quickly responded to offer help following the August 4 breach at our Mount Polley mine,” Kynoch says.

[quote]We also appreciate the offers of support from our colleagues in the mining industry and residents of BC and beyond, who understand the complexity of responding, planning and working toward mitigating the effects of this event.[/quote]

Suzuki: Canada at risk for more Mount Polley-type disasters

Suzuki: Canada at risk for more Mount Polley-type disasters

Suzuki: Canada at risk for more Mount Polley-type disasters
A resident of the region surveys Hazeltine Creek following tailings dam breach (Chris Blake)

When a tailings pond broke at the Mount Polley gold and copper mine in south-central B.C., spilling millions of cubic metres of waste into a salmon-bearing stream, B.C. Energy and Mines Minister Bill Bennett called it an “extremely rare” occurrence, the first in 40 years for mines operating here.

He failed to mention the 46 “dangerous or unusual occurrences” that B.C’s chief inspector of mines reported at tailings ponds in the province between 2000 and 2012, as well as breaches at non-operating mine sites.

This spill was predictable. Concerns were raised about Mount Polley before the breach. CBC reported that B.C.’s Environment Ministry issued several warnings about the amount of water in the pond to mine owner Imperial Metals.

With 50 mines operating in B.C. — and many others across Canada — we can expect more incidents, unless we reconsider how we’re extracting resources.

Lower-grade mines generating more tailings

Sudden and severe failure is a risk for all large tailings dams — Mount Polley’s waste pond covered about four square kilometres, roughly the size of Vancouver’s Stanley Park. As higher-grade deposits become increasingly scarce, mining companies are opting for lower-grade alternatives that create more tailings. As tailings ponds grow bigger and contain more water and waste than ever before, they also become riskier. The average height of a Canadian tailings dam doubled from 120 metres in the 1960s to 240 metres today. Alberta writer Andrew Nikiforuk likens increasing mining industry risks to those of the oil sands.

Tailings ponds not the best technology

Open ponds of toxic slurry aren’t the best way to manage mining waste. Although there’s no silver-bullet solution, and more research funding on alternative technologies is needed, smaller underground mines are finding safer ways to deal with waste by backfilling tailings.

Drying tailings or turning them to a paste before containment are two other options. Safer solutions cost more, making them less popular with profit-focused corporations. But surely B.C.’s $8-billion mining industry can afford to pay more for public and environmental safety.

Imperial Metals lacks insurance coverage

The government allows the mining industry to choose the cheapest way to deal with waste, and companies often lack adequate insurance to cover cleanup costs when accidents happen. Imperial Metals admits its insurance will likely fall far short of what’s required to repair the damage at Mount Polley.

Weak monitoring and enforcement to blame

The mining industry and provincial and federal governments must do a better job of managing risks. But how can this happen when we’re facing unprecedented dismantling of Canada’s environmental regulations and decreased funding for monitoring and enforcement?

Although the B.C. government rightly appointed an independent panel of three top mining engineers to review the cause of the Mount Polley breach and report back with recommendations, the lack of an environmental or cultural perspective on the panel makes it unlikely we’ll see meaningful industry reform. And even the most thorough reviews remain ineffective without implementation commitments — a point made clear by the federal government’s failure to act on the Cohen Commission’s 75 recommendations on the decline of Fraser River sockeye.

First Nations hold power to confront risky mines

Canada’s mining industry must also work more closely with First Nations, some of which are challenging industrial activity in their territories. The Tahltan blockaded Imperial Metals’ nearly completed mine in the Sacred Headwaters, and the Neskonlith Indian Band issued an eviction notice to an Imperial subsidiary, which proposed an underground lead-and-zinc mine in Secwepemc Territory in the B.C. Interior. With the Supreme Court’s Tsilhqot’in decision affirming First Nations’ rights to land and resources within their traditional territories, we’re likely to see more defending their lands against mining and other resource extractions.

The Mount Polley tailings spill threatens two of B.C.’s most valued resources: salmon and water. As one of the largest sockeye runs enters the waterways to spawn, we must wait to find out the long-term repercussions for Polley Lake, Quesnel Lake and aquatic life further downstream.

This disaster has eroded public trust in the mining industry and regulations governing it. If risks are too high and long-term solutions unavailable or too expensive, the only way to ensure that toxic tailings are kept out of our precious waterways and pristine landscapes may be to avoid mining in some areas altogether.

As the government rallying cry of “world-class safety standards” echoes in our ears, it’s time we lived up to our self-proclaimed reputation.

Written with contributions from David Suzuki Foundation Communications Specialist Jodi Stark.