SOMBA K'E/YELLOWKNIFE - For the second year in a row, Diavik Diamonds Mines Inc. (DDMI) has cut back the annual budget of the board tasked with monitoring the mine by $150,000, a move that could hamper the board's ability to fully carry out some initiatives, says the board's executive director.

John McCullum, executive director of the Environmental Monitoring Advisory Board (EMAB), which monitors the environmental mitigation measures of the Diavik Diamond Mine, said the board's annual budget has been slashed by $150,000 by Diavik. McCullum stands by a map of the Diavik mine inside the EMAB office in Yellowknife. - Guy Quenneville/NNSL photo Signatories to the environmental agreement The Diavik environmental agreement (EA), signed in 2000, created the Environmental Monitoring Advisory Board (EMAB). It is tasked with monitoring the environmental mitigation measures taken at the Diavik mine, which is majority owned by Rio Tinto. The signers of the agreement were: Tlicho government Kitikmeot Inuit Association Lutsel K'e Dene First Nation Yellowknives Dene First Nation North Slave Metis Alliance Government of the Northwest Territories Government of Nunavut Government of Canada Diavik Diamond Mines Inc. (operator of the mine)

In September 2008, the Yellowknife-based Environmental Monitoring Advisory Board (EMAB) - created in 2000 with the signing of the mine's environmental agreement (EA) - submitted its proposed budget for the fiscal years 2009-2010 and 2010-2011 to Diavik, which fully funds the board.

"We went back and forth for a while and at the end of the day Diavik informed us that they would be reducing their contribution by $150,000 in 2009-2010 and then again in 2010-2011," said John McCullum, executive director of EMAB.

"Our original reading of the situation was that Diavik was interpreting a clause of the environmental agreement incorrectly and that, basically, they were in non-compliance (of the agreement) by not giving us the full contribution."

Roughly speaking, the board's full annual operating budget is usually $600,000.

When EMAB didn't get $600,000 for its 2009-2010 budget, it entered talks with Diavik and Indian and Northern Affairs Canada, a co-signatory to the agreement, said McCullum.

"Since then we've been working really hard to try to come to some agreement that would resolve that," he said.

"And yet, in spite of some progress ... Diavik cut our funding again by $150,000."

Gord MacDonald, manager of sustainable development for Diavik, declined to comment on why the latest cut was made.

"The hard part with this is that we are in discussions, and that's where these discussion should be, not with the press," said MacDonald. "So while I really appreciate the opportunity, I really don't think we will have that discussion in the media."

According to McCullum, one reason for Diavik's decision may have been the approximately $360,000 in unspent money the board accrued since its first year of operation.

"DDMI's logic at (the time the first cut was made) was that we had this money and they were just going to reduce their contribution by that amount," he said. "However, the environmental agreement doesn't provide for anything like that. There's no provision for Diavik to arbitrarily reduce its funding to EMAB."

Dettah Chief Ed Sangris acknowledged Diavik has voiced concerns in the past about EMAB's surplus.

"I know there have been some arguments before that (EMAB) wasn't using all that money, (that) they were just banking it," said Sangris.

Of Diavik's budget cut, Sangris said, "They (must) have a reason for why they did it. I've got to hear both sides of the story before I jump in there."

He added, "But if anything, they should have consulted with First Nations."

The cuts won't exactly cripple EMAB, but some important initiatives - including community consultation and providing community members with monitoring training - may have to be scaled back, said McCullum.

"Among all of those things, we will have a little bit of money to disperse among them. So the board will have to make some very hard decisions about what it wants to do," he said.

McCullum said he remains hopeful about its discussions with Diavik.

"Right now, we're really hopeful that we can still work this out," he said.