LookingLooking BeneathBeneath thethe Surface:Surface: An Assessment of the Value of Public Support for the Metal Mining Industry in Canada Looking Beneath the Surface: An Assessment of the Value of Public Support for the Metal Mining Industry in Canada by Mark Winfield, Ph.D., Catherine Coumans, Ph.D., Joan Newman Kuyek, D.S.W., François Meloche, B.Sc. (Agr.) and Amy Taylor, M.R.M. October 2002 Acknowledgements The Pembina Institute and MiningWatch Canada would like to express their thanks to the Walter and Duncan Gordon Foundation, EJLB Foundation, George Cedric Metcalf Foundation and the Brainerd Foundation, for their financial support of this project. Cover photographs from left to right, top to bottom: Underground mining equipment in The authors also benefited from the counsel of an outstanding project advi- Sudbury, Ont., Jamie Kneen, MiningWatch Canada; acid mine drainage at Sullivan Mine sory committee and an excellent team of external reviewers. We wish to thank in BC, Ric Careless, BC Spaces for Nature; Colin Chambers, Brenda Lucas, Ellie Perkins and Tom Green, in particular for aerial of the extent of scarring mines can have, their contributions. Both our advisors and reviewers pointed out many impor- BC Spaces for Nature; men underground, tant ways in which the study could be refined and strengthened. We would like BC Spaces for Nature; terraced open pit at to thank Sara Wilson for her work in the initial design of this project. We are Island Copper Mine on Vancouver Island, also grateful for the prompt responses we received from officials in all of the Ric Careless, BC Spaces for Nature; Iron Ore Canada in Schefferville, Que., Serge Ashini jurisdictions studied to our many and often very detailed questions. Any errors Goupil, MiningWatch Canada. or omissions remain the responsibility of the authors. Finally, we’d like to thank Green Living Communications for their invaluable contributions to the design and production of this report. 2002 Pembina Institute for Appropriate Development and MiningWatch Canada. ISBN: 0-921719-84-1 µ Pembina Institute / MiningWatch Canada About MiningWatch Canada MiningWatch Canada is a coalition of labour, Aboriginal, environmental, social justice and development organizations from across Canada with a mandate to support communities affected by mining in Canada, and affected by Canadian mining companies abroad. It is a coordinated public interest response to the threats to public health, water and air quality, fish and wildlife habitat and community interests posed by irresponsible mineral policies and practices in Canada and around the world. The aims of the organization are to: ª ensure that mineral development practices are consistent with the goals of sustainable communities and ecological health; ª strengthen technical and strategic skills within communities and organiza- tions faced with impacts of mineral development; ª impose appropriate terms and conditions on mining and in some cases prevent the development of projects that would adversely affect areas of ecological, economic and cultural significance; and ª advocate policies to improve the efficiency and reduce the risks of mineral development. For more information, visit our website at www.miningwatch.ca, or contact us at: MiningWatch Canada Suite 508, 880 Wellington Street Ottawa Ont., K1R 6K7 Telephone (613) 569-3439 Fax (613) 569-5138 e-mail: [email protected] About the Pembina Institute The Pembina Institute is an independent, citizen-based environmental think- tank specializing in the fields of energy-environment, climate change, environmental economics and environmental governance. The Institute engages in environmental education; policy research, analysis and advocacy; community sustainable energy development; and corporate environmental management services to advance environmental protection, resource conservation, and environmentally sound and sustainable resource management. Incorporated in 1985, the Institute’s head office is in Drayton Valley, Alberta with additional offices in Ottawa and Calgary and research associates in Edmonton, Vancouver, Saskatoon, Toronto, and other locations across Canada. For more information on the Institute’s work, please visit our website at www.pembina.org or contact us at: Pembina Institute for Appropriate Development Suite 505, 124 O’Connor Street Ottawa, Ont., K1P 5M9 Telephone (613) 235-6288 Fax (613) 235-8118 e-mail: [email protected] µi Looking Beneath the Surface About the Authors Mark Winfield, Ph.D. Mark Winfield is Director of the Pembina Institute’s Environmental Govern- ance Program. Prior to joining Pembina, he was Director of Research with the Canadian Institute for Environmental Law and Policy. Dr. Winfield holds a Ph.D. in Political Science from the University of Toronto, and has published on a wide range of environmental law and policy issues, including hazardous wastes, toxic substances and pollution prevention, biotechnology regulation, community right-to-know issues, and environmental governance. Dr. Winfield has been involved in many environmental law reform and policy development processes at the provincial, federal and international levels. He also teaches environmental politics and policy at the University of Toronto and York Uni- versity. Catherine Coumans, Ph.D. Catherine Coumans is Research Coordinator at MiningWatch Canada. She holds an M.Sc. from the London School of Economics and a Ph.D. in Anthro- pology from McMaster University. Before starting at MiningWatch Canada, Dr. Coumans taught at Cornell University while holding a postdoctoral posi- tion there and she established an international support coalition for mining- affected communities of Marinduque in the Philippines. Dr. Coumans has written and published extensively on indigenous religio-political movements, the impact of mining on communities and social and cultural responses to large-scale resource extraction projects, as well as on the environmental impli- cations of mining technology. Joan Newman Kuyek, D.S.W. Joan Kuyek is the National Coordinator of MiningWatch Canada in Ottawa. A community organizer and popular educator by vocation, Dr. Kuyek has been instrumental in creating a number of organizations in her home community, including the Sudbury Better Beginnings Better Futures Association, GEODE (a community economic development corporation), and the Sudbury Com- munity Legal Clinic. She worked for the United Church of Canada as the National Animator for the Church and the Economic Crisis Project and from 1989-91 for the World Council of Churches. She is the author of a number of books and articles, including Fighting for Hope: Organizing to Realize our Dreams, and The Phone Book: Working at Bell Canada. µii Pembina Institute / MiningWatch Canada François Meloche, B.Sc. (Agr.) François Meloche is an environmental analyst for the Groupe investissement responsable, a division of Demers Conseil inc. in Montreal. His areas of work include research and consulting around shareholder engagement with compa- nies in the oil-and-gas, forestry and mining sectors. He has worked for Michael Jantzi Research Associates Inc. in Toronto and the Interfaith Center on Cor- porate Responsibility in New York. François Meloche est analyste au Groupe investissement responsable, une divi- sion de Demers Conseil inc. Il étudie entre autre les entreprises du secteur de l’énergie, des forêts et des mines et agit comme consultant pour des actionnaires responsables. Il a travaillé pour Michael Jantzi Research Associates Inc. à To- ronto et le Interfaith Center on Corporate Responsibility à New York. Amy Taylor, M.R.M. Amy Taylor is Director of the Pembina Institute’s Ecological Fiscal Reform Program. Since joining the Pembina Institute in May of 2000, she has com- pleted numerous projects on ecological fiscal reform for the National Round Table on the Environment and the Economy and the Green Economy Secre- tariat of the British Columbia Government. Ms.Taylor has co-organized and run an international conference on environmental taxation and worked with industry leaders to advance environmental tax shifting in Canada. She came to the Pembina Institute following work with the BC Ministry of Finance, where she was the lead author and researcher for the BC government’s 1999 discus- sion paper, “Environmental Tax Shift: A Discussion Paper for British Columbians.” µiii Looking Beneath the Surface Table of Contents I. Introduction 1 Materials and Sustainability 1 The Environmental and Social Impacts of Mining 2 ª The Legacy of the Past 3 Social Impacts 4 Economic Benefits 5 Project Objectives 6 Full-Cost Accounting: The Need for an Ecological Approach 8 Outline of the Report 9 II. Methodology 13 Introduction 13 The Choice of Jurisdictions for Study 13 The Choice of Time Frame 13 Defining the Metal Mining Sector 14 Approaches to Defining Public Costs of Metal Mining 14 @ Stage One: Prospecting and Exploration 15 @ Stage Two: Mine Development and Operation 15 @ Stage Three: Closure, Remediation and Long-Term Care 15 ª Data Sources 16 ª Non-Metal Mining-Related Expenditures 17 ª Promotional Versus Regulatory Functions of Mine Ministries and 17 Departments ª Infrastructure Support 18 ª Liability and Risk Assumption for Abandoned Mine Remediation 18 ª Excluded Costs 18 Approaches to Defining Benefits from the Metal Mining Sector 19 Relating Costs and Benefits 20 Corrections for Inflation 20 III. British Columbia 22 I. Introduction 22 @ The Metal Mining Industry in BC 22 @ Legislative and Institutional Framework for Metal