QU, i tE&&£§ g 1&&&2 .,. L COMPENSATION IN HAZARDOUS FACILITY SITING: AN ANALYSIS OF COMPENSATORY AGREEMENTS By Marta Wrzal HBSc (Env. ScL), York University, 2007 A Thesis Presented to Ryerson University In partial fulfillment of the requirement for the degree of Master of Applied Science In the Program of Environmental Applied Science and Management Toronto, Ontario, Canada 2009 ©Marta Wrzal, 2009 AUTHORS DECLARATION I hereby declare that I am the sole author of this thesis. I authorize Ryerson University to lend this thesis or dissertation to other institutions or individuals for the purpose of scholarly researcl1. I further authorize Ryerson University to reproduce this thesis or dissertation by photocopying or by other means, in total or in parts, at the request of other institutions or individuals for the purpose of scholarly research. 11 ABSTRACT Compensation in Hazardous Facility Siting: An Analysis of Compensatory Agreements Marta Wrzal Environmental Applied Science and Management Master of Applied Science, Ryerson University, 2009 Although theoretically the voluntary site strategy has been commended for its success at solving local community problems, there has been a small number of siting successes actually achieved. This study investigates the approach of negotiated compensation and reward in the collaborative process under which willing individuals can come to an agreement concerning the siting of a noxious facility. Elaborating upon Kuhn and Ballard's (1998) optimistic conclusions regarding the progress of facility siting approaches in North America, the study investigated the true nature of collaborative theory in a case analysis of environmentally hazardous facility projects. The results suggest that compensation is an effective tool in the siting process. The analysis indicates that there has been an evolution in the nature of the community agreements over the last ten years into more sophisticated allocations of benefits and burdens. The study also concludes that direct costs allocated by proponents for the purpose of compensation remain low and are relatively small when compared to the estimated initial capital cost of the projects. 111 • .. ~u ? 't .. p. -- me me t, t t tttt ww'vt':?wnr! ' ,t r !::: ' . - AKNO\VLEDGl\IENTS Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius -- and a lot ofcourage -- to move in the opposite direction. -Albert Einstein First and foremost I would like to extend my deepest gratitude to my thesis supervisor Dr. Ron Pushchak for his unconditional support, encouragement, and patience. I am grateful for having the opportunity to work with someone who has been a source of inspiration and motivation at every tum, thank you. I feel lucky to have encountered along the way the most remarkable individuals whose belief in my abilities always surpassed my own. Their constant motivation and support have helped me to overcome setbacks and to persevere. I would like to thank Dr. Rick Bello, Dr. Andre Robert, and all my teachers and mentors for recognizing and nurturing my curiosity. I extend my final and most sincere thanks to my family and friends for their love and support. During the most difficult of times, when I could not see the end, their words of encouragement and faith meant the most and always will. iv DEDICATION Only when the last tree has died, the last river has been poisoned, and the last fish been caught will we realize we cannot eat money. -Cree Indian Proverb To my parents Grazyna and Wlodzimerz Wrzal. In their selflessness, patience and understanding they have taught me to face life's challenges with confidence and pride, and in times of weakness and self doubt they provided a solid foundation to refocus and press on. Thank you for taking the time to support my passions and encourage my dreams. To my loving sisters, Paulina and Barbara. Always believing in the person I am, faithful and honest in everyway, their laughter and unconditional love has been the source of all my strength. lowe my sanity to you both. v iLa TABLE OF CONTENTS Authors Declaration ...................................................................................................ii Abstract ................................................................................................................. iii Acknowledgments .....................................................................................................iv Dedication ............................................................................................................... v Table of Contents ......................................................................................................vi List of Abbreviations .................................................................................................vii List of Tables and List of Figures ................................................................................... x Chapter 1: Introduction ............................................................................................... 1 1.1 Background ............................................................................................ 1 1.2 Focus and Context. ................................................................................... 2 1.3 Statement of Problem .................................................................................5 1.4 Research Objectives ........................................... : ...................................... 6 1.5 Organization of Thesis ...............................................................................7 Chapter 2: Literature Review ........................................................................................8 2.1 Facility Siting and Public Opposition .............................................................. 8 2.1.1 Roots ofPublic Opposition ... ................................................................... 10 2.1.2 Overcoming Public Opposition ......... ........................................................ 12 2.2 Compensation ........................................................................................ 14 2.3 Traditional Siting Approach ....................................................................... 17 2.4 Voluntary Siting Process ............................................................................ 18 2.4.1 Sub-Optimal Distribution ......................................................................... 20 2.5 Kuhn and Ballard's Investigations ................................................................. 23 2.5.1 Failures and Successes in Facility Siting ... ................................................. 25 Chapter 3: Methodology .............................................................................................28 3.1 Research Design .................................................................................... 28 3.2 Case Surveillance and Identification ............................................................ .30 3.2.1 Site Selection ................................................................................30 3.3 Case Analysis .. ,...................................................................................... 34 3.3.1 Cost Estimate Analysis ................................................................... .36 3.4 Definition ofTerrns .................................................................................38 Chapter 4: Results .....................................................................................................39 4.1 Proponent Identification ............................................................................ 39 4.2 Project Type .......................................................................................... 43 4.3 Scale of Project ...................................................................................... 44 4.4 Capital Cost and Compensation Expended ...................................................... .4 7 4.5 Length of Time ...................................................................................... 51 4.6 Degree of Conflict ...................................................................................54 4.7 Summary Analysis ..................................................................................58 Chapter 5: Discussion and Conclusions ...........................................................................60 References ...............................................................................................................70 Appendix A: Case Summaries ......................................................................................79 vi LIST OF ABBREVIATIO~S AACI Accredited Appraiser Canadian Institute AECL Atomic Energy 0 f Canada Ltd. AEDTC Athabasca Economic Development and Training Corporation AENV Alberta Environment AEUB Alberta Energy and Utilities Board AFN Assembly of First Nations ALUP Applied Land Use Planning ALUPIAC Athabasca Land Use Planning Interim Advisory Committee ARD Acid rock drainage AWA Alberta Wilderness Association CEAA Canadian Environmental Assessment Act CMEI Canadian Mountain Enhancement Inc. CNRL Canadian Natural Resources Ltd. CNSC Canadian Nuclear Safety Commission CNSOPB Canadian Nova-Scotia Offshore Petroleum Board CPI Consumer Price Index CRC Cardinal River Coal Ltd. DBCMI De Beers Canada Mining Inc. DDMI Diavik Diamonds Mine Inc. DFO Department of Fisheries and Oceans D:VIS Dense media separation EA Environmental Assessment EAO Environmental Assessment Office EAP