Richard Gleeson
Northern News Services

NNSL (May 05/99) - Having missed the first boat, the federal government appears poised to stand on the docks and wave bon voyage to the second.

So says a deputy minister of the territorial government in a scathing criticism of the federal government's refusal to address secondary diamond industry in the Diavik environmental review.

"It's very clear the (environmental review) has to consider the impact the project will have on jobs in the North, so (secondary industry) has to be part of it," said Joe Handley, deputy minister of Resources, Wildlife and Economic Development.

"DIAND, for reasons that completely baffle me, just ignores this."

The draft report of the environmental review is scheduled to be made public this week. The decision on whether the mine will operate, and under what conditions, will be based on the 300-page final version of the report, due at the end of this month.

Handley said one of those conditions should be that Diavik sell some of its rough diamonds to cutting and polishing companies in the North. Handley said more and more often, diamond mining companies are required to sell a portion of their rough stones in the countries where they mine.

The issue of secondary diamond industry where BHP was concerned arose only after the environmental review.

The socio-economic agreement Diavik will likely be required to sign with the territorial government will be based on the requirements of the environmental assessment.

DIAND director general Hiram Beaubier said the federal and territorial governments are now discussing ways of fostering Canadian secondary diamond industries. He said a report that will flow from those discussions will be completed this summer.

"I guess it's our point of view that (secondary diamond industry is) probably a matter that would be reviewed outside of the comprehensive study," said Beaubier.

DIAND's associate director general Lorne Tricoteux, echoed Beaubier.

"Value added was not identified as an issue," said Tricoteux. "If that was the intent, it would have been mentioned specifically."

Tricoteux said the environmental assessment was meant to deal specifically with potential adverse affects of the project, not the product of the mine. He added that Diavik representatives have told him they are not opposed to selling to Northern-based companies.

Guidelines for the Diavik environmental review require that it address a range of socio-economic affects of the proposed mine, including "opportunities to diversify the Northern economic base to produce and to supply new goods and services."

Yellowknife Mayor Dave Lovell said DIAND's lack of action is a clear indication of how far Ottawa is from the NWT.

"The way the federal government has handled secondary diamonds is an argument for moving DIAND jobs North," said Lovell.

"If the people making the decisions lived in the North, they'd be a lot more on the ball."

Calls to Diavik and Western Arctic MP Ethel Blondin-Andrew were not returned by deadline.