Representatives from the Tsilhqot’in National Government were in the B.C. Supreme Court this week asking for an immediate injunction to stop Taseko’s exploratory drilling for the controversial open-pit New Prosperity Mine from beginning August 7.

To the dismay of the Tsilhqot’in, B.C. issued Taseko exploratory permits in the dying days of the former BC Liberal government while the Tsilhqot’in were under a wildfire evacuation order — even though the $1.5 billion gold and copper mine project itself has been twice rejected by the federal government in 2010 and again in 2014.

A court decision on the injunction is expected this week.

But the fight both for and against the permits doesn’t stop there.

Taseko Calls Federal Stop Order ‘Absurd’

The Tsilhqot’in request for an injunction comes as the Canadian Environmental Assessment Agency (CEAA) has stepped into the fray, issuing a cease and desist order to Taseko, warning any exploratory drilling by Taseko could be in violation of federal environmental laws.

“The agency is of the view that the proposed activities may cause an environmental effect,” says the letter to Taseko, signed by Kristin Coverley, senior compliance enforcement officer.

The order warns that enforcement action may be taken if Taseko does not comply with the CEAA requirements and each day work proceeds will be considered a separate federal offence.

But Taseko is hitting back with claims that the section of the Act cited by CEAA applies only to construction or operation of the mine and not to exploration activities.

“None of the work involves construction or operation of a mine,” says a letter to the agency from John McManus, Taseko’s chief operating officer.

If the CEAA interpretation stood “it would result in absurd and unconstitutional effects,” McManus wrote.

The ruling could put all mining exploration in Canada at risk as it suggests that even preliminary exploration would first need a full federal environmental review, he wrote.

Tsilhqot’in National Government lawyer Jay Nelson said it is hard to imagine that the company would ignore the cease and desist order and start the work at its own risk.

“But it is conceivable that the company could proceed and openly defy the federal regulator,” Nelson told DeSmog Canada.

“We haven’t had any assurance that the company is going to respect that [federal] direction, so there is a risk of harm to the Tsilhqot’in.”

Fish Lake, known as Tetzan Biny to the Tsilhqot’in is considered a sacred cultural place. In its first application for the mine Taseko proposed to use Fish Lake as a tailings pond. In a subsequent application, Taseko redrafted plans to build a tailings impoundment separate from Fish Lake. Both proposals were rejected by the federal government. Photo: Garth Lenz

Tsilhqot’in Hopeful New NDP Government Will Change Fate of Taseko’s Mine

The permits would allow Taseko to build 76 kilometres of trails, drill 122 holes, excavate 367 test pits and cut 20 kilometres of seismic lines in an area of prime cultural importance to the Tsilhqot’in Nation.

The exploration permits place the province firmly at odds with the federal government, which cited severe environmental damage and adverse effects on Tsilhqot’in culture and aboriginal rights when it turned down the mine proposal in both 2010 and 2014.

The controversial permits have landed the new B.C. Minister of Energy, Mines and Petroleum Resources Minister Michelle Mungall with a dilemma.

Mungall was not available for comment but a ministry background statement provided to DeSmog Canada said the timing of the permit decision was unfortunate “but a regional statutory decision maker must balance procedural fairness and the repeated extensions already provided at the request of the Tsilhqot’in National Government (TNG).”

Statutory decision makers are independent civil servants, meaning their decisions are not meant to be influenced by political considerations.

Such decisions are not political and are made “solely by the statutory decision maker, who, in this case, was a senior permitting inspector located in Kamloops,” according to the ministry’s statement, which adds that the permits do not authorize Taseko to begin mining at the site and include 37 conditions to address concerns raised by the Tsilhqot’in, including cultural heritage assessments in exploration areas.

B.C. Premier John Horgan’s mandate letter to Mungall emphasizes that the government will be adopting and implementing the United Nations Declaration on the Rights of Indigenous Peoples and the Calls To Action of the Truth and Reconciliation Commission.

Nelson said he hopes the NDP government will usher in a new attitude towards indigenous people.

“I do really feel that this latest legal skirmish with Taseko hits on the need for a new approach,” he said.

“For all this to go forward for a mine that the federal government has rejected, to inflict that sort of damage on people’s culture and lives seems over the line and shows a disregard of aboriginal interests.”

If exploration goes ahead, but the federal government continues to reject the mine, a large amount of damage will have been done for no reason, he added.

New NDP Government Could Amend, But Not Cancel, Permits: Lawyer

The timing of the provincial permits incensed the Tsilhqot’in Nation, who, for decades, have fought Taseko’s proposal for an open pit gold and copper mine.

Chiefs are now raising questions about the independence of the decision and questioning whether the new NDP government can revoke the permits.

“It just boggles my mind that any statutory decision-maker should make this decision when the Liberals were ending their reign and a new government coming into play,” said Chief Roger William, of the Xeni Gwet’in First Nation and vice-chair of the Tsilhqot’in National Government..

“They say it’s non–political, but I will always wonder because it’s a decision we have been waiting for since February this year and the timing makes no sense because of the state of emergency with the fires,” William told DeSmog Canada.

“We are going to be sitting down with (Premier John) Horgan and the ministers. We want to get rid of this issue for once and for all,” he said.

Andrew Gage, West Coast Environmental Law staff counsel, said that, under the Mines Act, it seems clear that, although the permits for the New Prosperity Mine exploration cannot be revoked, they could be amended.

“It gives decision-makers complete freedom to review and revisit issues after licensure and to limit the term of the permit,” he said.

One section of the Act gives the minister the power to take any necessary action.

“If the minister considers it to be necessary in the public interest, the minister, in respect of the issuing of permits, has and may exercise all the powers that the chief inspector may exercise under this Act,” it says.

The provisions of the Act have twice been backed by the B.C. Court of Appeal, Gage said.

That means the minister could step in and take an action such as suspending the permits until the company obtains federal approval, he suggested.

However, it is not known whether Taseko, which previously sued the federal government over its decision to reject the New Prosperity Mine, could sue the province if the permits are changed.

Gage believes Taseko is unlikely to sue under the Mines Act as the wording is solid, but, looking at the company track record, Nelson believes there could be a risk.

“The company certainly sent a message to government that, if the permits weren’t granted, they would be looking at legal action,” Nelson said.

While the Tsilhqot’in people wait for a decision on the injunction, William is wondering what will happen if the work goes ahead.

“If the injunction is not issued, our people are going to take action. Our elders, our youth, our children have been raised in this whole controversy,” he said.

2017 07 28 LT Taseko Response to CEAA Re Notice of Work Activities by DeSmog Canada on Scribd

Ceaa Letter to Taseko – July 28 2017 – New Prosperity – Application of CEAA 2012 by DeSmog Canada on Scribd

Image: A Tsilhqot’in elder at a Fish Lake ceremony. Photo: Garth Lenz

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In only its earliest phases of construction, the Site C dam project has already spent more money than projected and missed key benchmarks, threatening to undermine Premier Christy Clark’s commitment to taxpayers to keep the project on budget and on time.

BC Hydro documents filed June 10 with the province’s independent public utility watchdog, the B.C. Utilities Commission (BCUC), show that that Site C expenditures totalled $314 million more at the end of March than was originally budgeted for that date.

The same documents, reviewed by DeSmog, also flag the potential for cost overruns if interest rates climb, taxes increase or the Canadian dollar continues to depreciate over the projected eight remaining years the dam is under construction.

More than $1.4 billion of Site C’s $8.8 billion price tag consists of interest payments, and twenty percent of its capital costs are based on foreign currency.

“The project is monitoring and evaluating some specific cost pressures and is conducting detailed budget reviews to identify opportunities for savings,” BC Hydro said in its quarterly progress report to the utilities commission, noting that Site C’s overall cost forecast remains “on track.”

Despite Hydro’s assertion that the project’s total price tag will not increase, the Crown corporation’s latest report is an early indication that the Site C dam may be headed the way of major hydroelectric projects worldwide, which have posted average cost overruns of 56 percent.

Former BC Hydro CEO Marc Eliesen said the higher than projected expenditures by March are not at all surprising, especially given that Site C is proceeding “without due diligence.” In 2010, the provincial government changed the law to exempt the BCUC from decision-making authority to determine if the project was in the best interests of British Columbians.  

“We can expect nothing but escalating increases in the future if Site C is to go ahead,” Eliesen said in an interview with DeSmog. “This is scheduled to become a big white elephant.”

Eliesen predicts that Site C’s final price tag will be $11 to $12 billion. He points to last week’s announcement that the cost of Labrador’s Muskrat Falls hydroelectric dam has ballooned to $11.4 billion, from $7.4 billion in 2012, as an indication of what will happen with Site C.

As Newfoundland and Labrador consumers face huge hydro bill increases, the man in charge of Muskrat Falls, Nalcor Energy CEO Stan Marshall, admitted the project was too large and “not the right choice” but said it is too late to discontinue building.

“If [Site C] goes ahead this is exactly what B.C. ratepayers face,” said Eliesen. “They will be paying rates among the highest in the country.”

Notably, the Joint Review Panel that examined Site C for the federal and provincial governments said it could not conclude on the likely accuracy of Site C’s cost estimates because the panel did not have “the information, time, or resources.”

Premier Clark, who visited the Peace River region June 19, made no acknowledgement of higher than projected Site C spending or tardiness in meeting this year’s major benchmarks. Choosing her words carefully, the Premier said the government must ensure “we don’t go overtime, we don’t go over budget.”

BC Hydro attributes the spending variance to early expenditures for workers’ accommodation facilities and the main Civil Works contract, according to the quarterly report, which also notes that BC Hydro “has encountered challenges in the early stages of mobilization” of the main civil works contractor.

The $1.75 billion civil works contract, the largest single Site C contract, was awarded last December to a consortium called the Peace River Hydro Partners, which is responsible for building river diversion tunnels and constructing the 60-metre high dam across the Peace River. The consortium includes ACCIONA Infrastructure Canada Inc., a wholly owned subsidiary of a Spanish company, the Calgary-headquartered Petrowest Corporation and Korean-owned Samsung C&T Canada Ltd.

Hydro’s report to the BCUC also shows that Site C has fallen behind on four of seven key 2016 milestones, and is at risk of being late on a fifth.

#SiteC has fallen behind on 4/7 key milestones & is at risk of being late on a 5th https://t.co/vyTKfIkElj #bcpoli pic.twitter.com/idXKq56OQi

— DeSmog Canada (@DeSmogCanada) July 2, 2016

The only two key milestones BC Hydro expected to meet from April to October 2016 involved the on-time construction of workers’ accommodation facilities, recently showcased to the media. Missed milestones, which fall one to eight months behind, involve site preparation, road work and excavations on the Peace River’s north bank, the latter of which is slated to be carried out by the Peace River Hydro Partners.

BC Hydro’s previous two quarterly reports to the BCUC listed all but two of 16 milestones as on track.

Hydro’s most recent report to the BCUC provides an intriguing snapshot of some of the other financial risks Site C faces as the government strives, in Clark’s words, to push the project “past the point of no return.”

Among the risks are unexpected geotechnical problems BC Hydro says it is monitoring to determine how they will affect the project’s future finances.  

Key geotechnical surprises to date include unexpected shearing during construction, unexpected slope failure on the project’s north bank, larger than expected deterioration of shale bedrock exposed during construction and a phenomenon called rock rebound/swell.

To mitigate geotechnical risks, BC Hydro recommends transferring “some degree of ground condition risks to the Contractor,” Peace River Hydro Partners. The Crown corporation says it will have more information about geotechnical risks once the consortium commences its excavation of 32 million cubic metres of earth and rock.

Other noted risks to delivering the project on time and on budget include three on-going lawsuits against the dam by First Nations and outstanding permits requested from the federal government, under the Fisheries Act and Navigable Waters Act.

Hydro notes that up to 34 provincial permits are also needed, but tells the BCUC it is conducting weekly meetings with the Ministry of Forests, Lands and Natural Resource Operations (FLNRO) “to ensure that these future applications meet the scheduling needs of the project.”

DeSmog previously learned that FLNRO granted BC Hydro several exemptions from the B.C. Wildlife Act to keep Site C dam construction from falling behind expected timelines, a move that experts said was illegal.

The financial risk that is judged by Hydro to have risen the most this year involves the successful execution of Site C contracts, including the main civil works contract. “Contractors may be unable to execute successfully on scope of contract without resulting costs to BC Hydro,” BC Hydro notes.

As part of its response, BC Hydro has increased supervision to address the failure of some contractors to comply with conditions outlined in Site C’s environmental assessment certificate, an issue that has begun to dog the project.

In April, BC Hydro was issued a non-compliance order by the B.C. Environmental Assessment Office for failing to adhere to measures to control run-off water and sediment. That was followed by a warning letter to BC Hydro from the Canadian Environmental Assessment Agency in May after federal investigators discovered air monitors near Site C operations were not collecting any data.

On June 24, an Edmonton-based Site C contractor, Morgan Construction & Environmental Ltd., was issued two non-compliance orders by the B.C. Environmental Assessment Office, following months of verbal and written warnings. 

Chris Parks, Senior Compliance and Enforcement Officer with the B.C. Environmental Assessment Office, wrote in the orders that Morgan had failed to implement measures to control and clean up leaks and spills of hydrocarbon material, and to segregate and dispose of waste material properly.

An inspection by Parks last December found that Morgan had deposited recyclables, food waste and hazardous waste containing hydrocarbons in a single bin marked “municipal waste.”

BC Hydro’s Site C spokesperson Dave Conway was travelling and not available for comment.

Image: Site C construction. Photo: Garth Lenz

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