Compliance and Enforcement in the Mining Sector

Insufficient Penalties and Liability


Although proponents may face harsh penalties for disobeying the law, the penalties are not necessarily proportional to or reflective of the damage caused by the offence. Nor does the sentence necessarily require the proponent to pay for remediation. The sections below highlight some ideas for different penalties for consideration in sentencing.

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Expand liability to cover social, cultural, economic and environmental impacts

[Tags: Enforcement, Traditional Knowledge, Environmental Protection]

In some jurisdictions, liability is broadly expanded to explicitly hold proponents financially responsible for damage they cause to Indigenous knowledge systems, local economies and livelihoods, and damage to biological diversity. For example, in Zambia, legal provisions provide that liability shall extend to:

  • “any negative impact on the livelihood or indigenous knowledge systems or technologies of any community”;173
  • “any air, water or soil contamination or damage to biological diversity”;174
  • “any reduction in yields of the local community”;175 and
  • “any damage to the economy of an area or community”.176

In Queensland (Australia), proponents can be held financially liable for breaching their duty of care to avoid harm to Aboriginal cultural heritage as well as unlawfully excavating, relocating or taking away Aboriginal cultural heritage or for the unlawful possession Aboriginal cultural heritage.177 For example, proponents can be fined up to AU$1,000,000 for breaching their duty of care.178

Combine posting of security with issuance of orders

[Tags: Enforcement; Security]

To promote compliance with various permits and orders, some jurisdictions empower the courts to order that proponents post security to ensure compliance. In Newfoundland and Labrador, for example, proponents who are convicted of an offence under the Environmental Protection Act may be ordered by the court to take positive action to remedy or prevent an environmental effect related from the offence; and post security in an amount that will ensure compliance with the order.179 This legislation also provides the Minister with the power to require that proponents post security to ensure compliance with any order made by the Minister to control, manage, eliminate, remedy or prevent an adverse effect or an environmental effect.180

Extend liability to consultants completing environmental assessments

[Tags: Enforcement; Security]

Environmental assessments are generally completed by consultants hired by the proponent. To accompany this responsibility, consultants need to be held liable for the information they provide in the environmental assessments. This is recognized in Mozambique, where: “Registered consultants are civilly and criminally liable for the information in their environmental impact studies and jointly and severally with their clients for activities carried out in accordance with their advice that nevertheless result in damage to the environment.”181 Such a provision may help deter consultants from minimizing the risk of harm to the environment that they report on in their work.

Cancel mineral tenure for continued non-compliance

[Tags: Enforcement; Penalties]

In BC, if an inspector believes on reasonable grounds that a person is not in compliance with the law or permit conditions and that the contravention has a detrimental environmental impact, the inspector may order that the mine is closed until remedial action is taken. 182 Only where a delay in remedying a hazard would be dangerous to persons or property, is the inspector required to make an order regarding remediation.183 BC’s laws do not allow or oblige an inspector to take any further action against a proponent for non-compliance. By contrast, in New Brunswick, the regulatory authority will investigate a failure to comply and may then cancel the mining lease, extend the time to comply, or make any other order or decision that he considers just and equitable.184 If an extension is granted, and the proponent continues not to comply, “the Minister shall cancel the lease”.185

Prohibit offenders from applying for new licences

[Tags: Enforcement; Non-Compliance; Offender]

A powerful disincentive for proponents to flout their environmental responsibilities is the risk that they will be prevented from applying for new licences. This consequence for non-compliance is provided for under Canada’s new Environmental Enforcement Act, which empowers the court to prohibit an offender from applying for new licences or permits for a set period of time.186

Subject mining companies to profit stripping

[Tags: Enforcement; Penalties; Profit Stripping]

Profit stripping is another persuasive enforcement tool. Where profits were made in the commission of an offence, several federal statutes now direct judges to impose additional fines equal to such profits.187 Similar provisions are in place in Alberta.188

Legislate heavier penalties for repeat offenders

[Tags: Enforcement; Sentencing; Penalties]

Many jurisdictions have enacted legal provisions that provide for progressive use of heavier fines for repeat offenders. For example, in Manitoba, corporations first face fine up to $500,000, and subsequent offences up to $1 million.189 Similar provisions are in place in Ontario.190 Many federal statutes were recently amended to allow for fines to be doubled for repeat offenders, making large revenue corporations potentially liable to fines of up to $12 million.191 The Environmental Enforcement Act also amended several statutes to provide for cumulative fines: where an offence involves more than one animal, plant or object, the fine imposed may be the total cumulative fine that would have been imposed if each of the harmed animals, plants, or objects had been the subject of a separate prosecution.192

Encourage creative sentencing provisions

[Tags: Enforcement; Sentencing]

Various jurisdictions have recognized the need for creative sentencing for environmental offenders, including community service work, payment of scholarships for environmental studies, and reduction in production quotas. For example, Canada’s new Environmental Enforcement Act amended several federal statutes to recognize community service work as a sentencing option for environmental offences.193 Community service is also contemplated as a creative sentencing measure for offences under BC’s Water Act.194 In addition, Canada’s new Environmental Enforcement Act includes payment of scholarships for environmental studies as a creative sentencing option.195 In Indonesia, legal provisions provide that a sanction for failing to comply with the law may include the reduction of up to 50 percent of the offender’s quota for mining production.196

Establish long or indefinite limitation periods for commencing an action

[Tags: Enforcement, Liability]

Under the BC Mines Act, the prosecution of offenders is hampered by the fact the Chief Inspector is required to lay information within only six months after the facts relating to the offence come to his or her attention (or one year in the case of mine permit offences).197

These limitation periods are significantly shorter than what is provided in other jurisdictions, and even under BC’s other environmental and resources legislation.198 For example, at the federal level, both the Fisheries Act and the Canadian Environmental Protection Act, 1999 provide a two-year limitation period.199 In the Yukon, a two-year limitation period is also provided.200 Ecuador’s Constitution goes even further by providing that “the legal proceedings to prosecute and punish those responsible for environmental damages shall not be subject to any statute of limitations.”201 The European Union has instituted a five-year period of limitations for the regulator to recover costs against a polluter and a thirty-year statute of limitations for specified environmental offences.202

Replace strict liability offences with absolute liability offences for mining activities

[Tags: Enforcement, Due Diligence]

As indicated above, the due diligence defence is available for most mining related offences. Therefore, even if environmental harm occurs, proponents may avoid responsibility if they can establish that their actions met the due diligence standard. In recognition of the importance of the polluter pays principle, other jurisdictions have replaced their strict liability offences with absolute liability offences. For example, Canada’s new federal Environmental Violations Administrative Monetary Penalties Act prevents persons named in a notice of violation from being able to raise the defences of due diligence and mistake of fact.203 Similarly, under Canada’s Arctic Waters Pollution Prevention Act, it is absolute liability offence to deposit waste in Arctic waters.204

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