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GNWT faces 'huge financial liabilities' over mine sites
Government could be on the hook for unpaid bonds for cleanup, warns Bromley

Cody Punter
Northern News Services
Published Friday, February 28, 2014

A $136-million shortfall in clean-up money from the North's largest diamond mine highlights concerns the territorial government will be on the hook for a lot more after the federal government transfers responsibility for mine sites to the GNWT, April 1.

"We are potentially assuming huge financial liabilities here without the securities to cover them," said Weledeh MLA Bob Bromley, who questioned the territorial government on the issue during a recent sitting of the legislative assembly.

He said Ekati Diamond Mine, which has so far contributed only $127 million in securities to the federal government, even though the Wek'eezhii Land and Water Board assessed its financial security at $263 million last July.

On Jan. 21, Bill Ross, chairperson of the Independent Environmental Monitoring Agency, addressed a letter to Bernard Valcourt, federal minister of Aboriginal Affairs and Northern Development Minister, and Environment Michael Miltenberger, stating "this large shortfall puts the public and environment at risk."

Ross also noted that in its two previous annual reports, the monitoring agency has been unable "to provide assurance to our society members and the general public that there is sufficient financial security to properly close the Ekati Mine."

He added that while "a proposal of some sort has been made by the company recently, progress on resolving this situation appears to be unreasonably slow."

According to the devolution agreement signed on June 25, the GNWT

will assume responsibility from the federal government for 13 developed sites throughout the territory on April 1 as devolution takes effect.

Some of the more significant sites on that list include Diavik Diamond Mine, the Deh Cho Bridge, Ekati Diamond Mine and Snap Lake Diamond Mine.

The owners of these projects are legally and financially liable for those sites, but if they should go bankrupt or abandoned these sites, responsibility for the clean-up would fall to the GNWT.

According to the federal commissioner for sustainable development, Ottawa is already liable for $8 billion in clean-up costs across the country due to previous failures to hold securities, said Bromley.

Three of 11 operating mines in Nunavut had security shortfalls totalling nearly $11 million, according to the commissioner's 2012 report.

Yellowknifer asked the Department of Aboriginal Affairs and Northern Development why the full amount of assessed securities were not paid to the federal government, and also to provide information regarding unpaid securities at all operating mine sites in the NWT, including Ekati.

Those questions had yet to be answered by press time. Yellowknifer was also awaiting comment from Ekati owner Dominion Diamond Corporation.

Ray Case, assistant deputy minister for the Department of Environment and Natural Resources, said the GNWT has conducted its due

diligence in reviewing the risk associated with the 13 sites it will now be responsible for and will continue to do so up until devolution comes into effect.

"We are reviewing the status of these sites and ensuring that the securities and such that the boards have identified as necessary are in place," said Case.

devolution, the GNWT will become responsible for approximately 1,000 additional sites, ranging from mines and public roads to oil and gas projects and residential cabins.

According to Case, those sites will not become the immediate responsibility of the GNWT because

they have not gone through the same high level regulatory reviews as the 13 major sites.

"(They) have gone through screening and regulatory processes but have not been subject to the higher level EA (Environmental Assessment) process," he said.

He added the GNWT will be conducting an assessment of all those sites over the next five years.

"If within five years the GNWT finds something amiss with those sites, it would then pursue the owner of those sites ... or if the site is abandoned, pursue the (federal government)," he said.

The federal government has agreed to take responsibility for 96 sites which have been designated as waste sites and need to be cleaned up, said Case.

The cleanup of Giant Mine, which is covered under a separate agreement, will also remain the federal government's responsibility.

Case added the responsibility for another five waste sites - Crestaurum Mine, Ptarmigan Mine, Tin Mine, Rod Mine, and Burwash Mine, all of which are located on Commissioner's land near Yellowknife - will be determined by separate agreements between the federal and territorial governments.

Future mine sites such as Gahcho Kue, as well as all future operating mines, will become the sole responsibility of the GNWT.

In the future, if the territorial government believes the federal government should be liable for the cleanup of a site it has inherited responsibility for, it will have the ability to refer the matter to a dispute resolution process, as per the devolution agreement.

If that process were to fail, the GNWT could then sue the operator of the mine site.

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