CARC recognizes the important contribution of mining to economic development and well-being. We are not opposed to mining but we do insist that mining take place in a responsible manner. We outline here some public rights and corporate responsibilities, principles that we believe should guide ‘responsible’ mining, highlight major issues, and propose some solutions.

The CARC’s Northern Minerals Program, carried out between 1995 and 1999, allowed CARC to undertake important independent research and apply that work during the environmental assessment and regulation of several new diamond mines in the North. Our work on free entry and impact and benefit agreements is widely quoted and used by others, including Aboriginal communities. Building on this success, CARC is continuing work on two fronts: reform of the “free entry” system of mineral tenure and development of binding mining reclamation standards.

The North is changing and its communities are preparing for a future that will include development, but also provide for an unparalleled opportunity to protect the integrity of ecosystems, communities and the sustainable way of life they support. The recent boom in mineral development in the Slave Geological Province in the NWT and Nunavut is one the greatest social, economic and environmental challenges facing these jurisdictions. Northerners must have a central role in any decision-making around this potential development.

We believe that the North, Canada and the world as a whole, need to shift consumption patterns toward reuse of metals and minerals, and renewable and sustainable forms of energy. We recognize that this shift will take significant time and effort. We believe that truly sustainable economic development needs to be planned very carefully.

We will work towards ensuring the responsible parties perform full environmental and socio-economic assessments, preferably guided by legally-binding regional land use plans. These assessments must include an examination of need for the project and the “no-go” option. Should any mineral development meet reasonable environmental assessment criteria, we will work towards the use of best practices, reduction of ecological footprints, and maximum retention of economic benefits in the North.

History of Mining in the North

While Dene and Inuit made limited use of native copper for tools, interest in northern minerals really began with the first European explorers and traders. Beginning in 1576, when Sir Martin Frobisher stumbled on fool’s gold in his search for the Northwest Passage, several expeditions were undertaken to search for copper and other minerals in the North. The first commercial mining in the North by Europeans took place in the Yukon, when the Klondike gold rush sparked the creation of a new northern territory and special mining regulations to encourage settlers to locate and live on their mineral claims as means of exercising Canadian sovereignty. A treaty was also negotiated with the Dene and Metis of the upper Mackenzie Valley to ensure peaceful relations. Changes in placer mining technology in the early 1900s resulted in the consolidation of mineral rights interests, and hard rock mining began in deposits at Conrad, Whitehorse Copper and later in the Keno Hill and Mayo areas.

Since these early times, mining has dominated the Yukon economy-- when the Faro mine operated intermittently in the 1970s and 1980s, it accounted for a quarter of the Yukon’s Gross Domestic Product. The boom and bust of mining cycles continues to this day in the Yukon.

Despite the discovery of some gold in the Mackenzie Valley, development of the Yellowknife area would have to wait until the 1930s, when the first commercial mining in the Northwest Territories took place at Port Radium. A few smaller mines operated around the east side of Great Bear Lake and exploration spilled over into the Yellowknife area with the discovery of gold. Major government subsidies later brought the Pine Point lead-zinc mine into production, with a special concession arrangement was put in place for the mineral rights. Similar subsides were provided for the Cantung mine on the Yukon-NWT boundary. A number of smaller gold and uranium mines operated in the 1950s and 1960s, but a new boom in NWT mining truly began with the discovery of diamonds at Lac de Gras in 1991. A huge staking rush resulted in an area the size of France reserved for mineral development in little over two years. Two diamond mines are now in production, and another two are in the regulatory approval process.

Commercial mining in Nunavut is relatively recent given the huge distances from markets and high development costs. The first mine was located at Rankin Inlet and produced nickel for just five years starting in 1957. Two lead-zinc mines were located in the High Arctic and operated from 1974 to 2002 and 1981 to 2002, respectively. With the closure of these mines, there are no active operations in Nunavut, although there is one potential diamond mine at the Jericho pipe and renewed interest in the Hope Bay gold belt as a result of relatively high world prices.

While there is no doubt that mining has made a very significant contribution to the economy of the northern territories, there has also been a tremendous environmental legacy. A recent report by the Commissioner for the Environment and Sustainable Development estimates that the worst abandoned mines in the North will cost at least $550 million to clean up. Health advisories are in place in some parts of the North for environmental contamination related to mining activities. While government revenues from mining have assisted with some social needs, there is a very substantial suite of subsidies and support for the mineral industry in the North as documented in a recent study by MiningWatch Canada. The economic rent captured from mining activities has not been directed, either wholly or partially, towards more sustainable or diversified economic development with the possible exception of a few recent impact and benefit agreements with some Aboriginal governments.

The regulatory regime for mining in the North has not kept pace with technological changes or the environmental degradation caused by the industry. Mineral rights disposition is still based on the idea that mining is the highest and best use of the land. There are few approved regional land use plans, land and water inspection and enforcement activity is inadequate at best, and there is still no regulatory framework to ensure a full-cost accounting approach to mining with full security and reclamation standards that ensure that ecological integrity is protected. CARC’s program is crafted to ensure that there is some measurable movement towards sustainability in the North by improving policy and implementation of regulatory and enforcement measures.

Rights and Responsibilities

Mining activities can have profound, significant and often irreversible negative impacts on human health, safety, welfare and the environment. Therefore laws and regulations governing mining activities, and industry practices must ensure protection of environmental, aesthetic, recreational, cultural, social and historic resources and human health, safety and welfare. Good decision-making must be under-pinned by a set of public rights, which mining companies have a responsibility to respect and uphold. The mining industry also has a set of corporate responsibilities it should live by.

Public Rights

* Right to a clean, safe and healthy environment.

* Public accountability. Mining companies must be accountable to affected communities in addition to any laws and regulations. Citizens should have the right to compel the enforcement of environmental laws and to participate in decision-making.

* Right-to-know. Communities and affected citizens have the right-to-know about all significant mining information used by companies and government in decision-making, including environmental monitoring results, alternatives and financial information.

* Right to say “no”. Mining is not always the highest or best use of public lands or public resources. Communities should have the right to protect areas from mining.

* Protection of workers. Employees at mining operations shall have the right to organize, and to have a clean, safe and healthy workplace.

Corporate Responsibilities

* Compliance with national and international laws and regulations. Companies should follow the most advanced environmental standards and practices worldwide.

* Implement the ‘Precautionary Principle’.

* Burden of proof. The burden of proof should rest with the mining industry that their proposals will not harm communities or the environment.

* Full-cost accounting. Mining companies must provide full security to avoid public liability for any clean-up, reclamation, perpetual care and monitoring.

* Efficient extraction and use of resources. The use of water and energy in mineral extraction should be minimized. Minerals, once extracted, should be used efficiently and recycled rather than continued mining at new sites.

* Responsibility for social and cultural impacts. Mining companies should acknowledge there are serious social and cultural impacts from their operations. Mitigation of these impacts should involve the affected communities and requires careful planning, especially during the initial assessment and approval, if given, and at closure.

Principles for Responsible Mining

To restore and maintain the social and economic well-being of northern communities, the health of ecosystems and the wildlife and people that rely on them, ecologically and culturally sensitive land and waters must remain free of resource development. Where development is appropriate, it must conform to northern values, benefit northern peoples and contribute to sustainable communities.

To this end, we equally support the following principles, many of which have already been endorsed by the mining industry and governments in one form or another. We believe that they are fully achievable given appropriate commitment and funding from both government and industry.

* Fully Funded and Integrated Environmental Management Regime

A fully funded and integrated environmental management regime must be in place and operational before any further major mineral development in the Canadian North. This includes:

* Regional land use plans must be completed and approved;

* Environmental assessment processes must be rigorous, examine the need for and alternatives to mining projects (including the ‘no-go’ option), provide for meaningful intervener funding, ensure a broad assessment of cumulative effects, implement the precautionary principle and full-cost accounting, and establish timelines that will encourage the full participation of northerners at all stages;

* Land and water management must be strictly enforced and based on best available technology and publicly reported monitoring with independent oversight. Full security must be set aside for accidents or malfunctions and for full reclamation; and

* Cumulative effects management systems must be fully implemented with monitoring of overall environmental quality trends and measures to ensure that human activities stay within defined thresholds to protect ecological integrity and sustainable communities.

* Protected Areas

A system of protected areas that includes ecologically and culturally representative, large self-regulating ecosystems and key wildlife habitat areas must be identified and reserved for legal protection through the protected areas strategies and other legal means in the NWT, Yukon and Nunavut, prior to further major development of northern mineral.

* There should be no new, re-opened or expanded mines in the North until a network of legally protected areas is reserved that adequately represent the natural region(s) affected by that development.

* The environmental assessment of a new, re-opened or expanded mine must include a review of the adequacy of the network of protected areas within the ecoregions(s) affected. Mines should not be approved until adequate representative areas have been reserved for protection.

* Aboriginal Rights

Any development in the North must fully respect and be consistent with Aboriginal rights as defined in the Canadian Constitution, common law, treaties, and land claim and self-government agreements.

* Fair Return and Fair Distribution of Revenues

The Canadian federal government must increase land, water, mining fees and royalties to ensure fair and equitable return to the public purse for the use and extraction of these public resources. A significant portion of these revenues must be set aside for use in economic diversification including import substitution towards locally sustainable communities. Remaining revenues should be split amongst federal, territorial and Aboriginal governments, consistent with any final Aboriginal rights agreements.

* Northern Benefits

Socio-economic impacts of further mineral development must be fully assessed, monitored and publicly reported. Development should be phased to local needs and capacity and reflect full-cost accounting. Measures to maximize the retention of economic benefits in the North must be implemented including impact and benefit agreements, socio-economic agreements, training programs, and economic diversification funds.

Key Issues and Solutions

Free Entry Mineral Rights Disposition System

The antiquated free entry system continues as the major means of rights disposition in the Yukon, NWT and Nunavut for public lands. The mining industry and governments have successfully resisted a public review of this system for years. The result has been numerous land use conflicts where mining is inherently considered the highest and best use of public land and water. This approach is not consistent with the concept of sustainable development and precludes integrated resource management.

* CARC fully support an immediate amendment to the Canada Mining Regulations and Yukon legislation to ensure that the spirit, intent and the letter of the law is adhered to as part of the comprehensive land claims settlements in the North. These amendment will ensure that land use plans are legally binding upon the mineral rights disposition system in the NWT and that land use planning in the Yukon provides a proper framework for integrated resource management.

* A timely and full public review is required of alternative mineral rights disposition systems for public lands in Yukon, NWT and Nunavut. This should include an examination of map staking, allowance of environmental and archaeological studies as representation work, bidding systems and other reforms. Devolution in the NWT and Nunavut offer an important opportunity for reform as territorial governments may assume management responsibilities for mineral resources.

Prevention and Reclamation

The legacy of mining in the North is a mixed one with many abandoned mines and orphan sites now public liabilities. A proper accounting, assessment and plan of action for these public liabilities has still to be completed. DIAND continues to experience great difficulty in securing the resources necessary to clean up many of these sites. Several of the worst sites are the results of so-called “modern” mines including Colomac in the NWT and BYG Mount Nansen in Yukon. The only two northern mines with anything closely resembling full security are the BHP Billiton Ekati mine and the Diavik project—all other northern mines have been subsidized through the transfer of environmental liabilities to the public purse. Although DIAND developed a minesite reclamation policy for the NWT and Nunavut over a ten-year period, it does little to improve this situation as it is not based in legally-binding standards, allows continued public subsidization of current mines, and is completely silent on the issue of orphan sites. Clearly a preventative approach is needed to protect human health and to avoid future environmental legacies.

* An analysis should be conducted on significant problem sites including Giant, Colomac, BYG Mount Nansen and others, to identify gaps in federal and territorial legislation, policy, monitoring and enforcement. This should lead to a plan of action to prevent future problem areas and sites.

* DIAND should immediately develop and implement a legally-binding set of reclamation standards. In the interim, the Minister should provide clear written policy direction to the northern water boards that no new licences or renewals will be accepted without full security based on an independent third-party assessment.

* DIAND and appropriate territorial governments should fully disclose surface leases for mining and other operations, and include full reclamation and security requirements in all new leases and any renewals.

* DIAND should examine, through a public process, approaches for the funding and remediation of orphan sites. This should include the Superfund model from the United States and British Columbia’s legislated approach to joint, several and retroactive liability.

Inspection and Enforcement

Several cases of inadequate inspection and enforcement of mining related activities have come to light recently. The DIAND inspectors for both the BHP Billiton Ekati mine and Diavik site resigned leaving these locations without inspections for several months. All active mines should be constantly monitored with regular inspections. The Prairie Creek advanced exploration project may be in violation of the NWT Waters Act and DIAND has not properly inspected or enforced the provisions of the Act or possible provisions of the surface lease. The Tungsten mine recently closed again after it went back production in 2002 after laying dormant for over 15 years. No environmental assessment was required and no inspection was conducted prior to recommencement of production. The mine was allowed back into operation without proper training of its staff, without a complete spill contingency plan and without a detailed drawing of its fuel system. After a recent fuel spill, it took DIAND staff three weeks to visit the site.

* An annual report should be produced by DIAND on inspection and enforcement including a written policy on inspection and enforcement, staffing, number of inspections, workloads, enforcement activities and related matters. This may help restore some confidence in DIAND’s capacity and commitment to protect the public interest.

Fair Return for Public Resources

The combined taxation and royalty regimes for mining in Yukon, NWT and Nunavut are amongst the lowest in the world. The current and future diamond mines of the North are extremely profitable enterprises that will pay off their capital costs within three years and generate profits for the operators in the range of $200-400 million per year per mine. Very little of these profits stay in the North and little if any of the government revenues are specifically targeted to diversification of local economies.

* There is a need for a public review of the taxation and royalty regime or economic rent from mining on public lands in the North. While the appropriate split of these revenues amongst the federal, territorial and Aboriginal governments may be the subject of on-going negotiations, a review of the fairness of the current system is desperately needed along with research on methods of targeting revenues towards more sustainable forms of economic development.

Revised: March 2004