BYG Natural Resources Inc. left a toxic mess when it shut down its Mount Nansen gold and silver mine in 1999.
It left the Canadian taxpayer holding the bill to manage and reclaim the site contaminated with arsenic and heavy metals.
Now, a recent Yukon Supreme Court judgment allows Ottawa to take action against the people behind the mine to recoup cleanup costs.
Mining Watch Canada is calling it a “significant decision by the court in terms of getting polluters to pay for the mess they leave behind,” said Joan Kuyek from the organization’s Ottawa office.
“It looks past the corporate identity.”
Under Canadian law, a corporation is considered a person, she said.
“So, to be able to go after the directors of a corporation is very unusual.”
For three years, from 1996 to 1999, the Ontario-based BYG operated a gold and silver mine at Mount Nansen, located about 180 kilometres north of Whitehorse and 60 kilometres west of Carmacks.
BYG began to violate terms in its water licence almost immediately after opening.
The infractions continued until 1999, when the feds ordered the mine closed for failing to remedy its environmental problems and water-licence violations.
That year, the company was also convicted on three criminal charges of violating its water licence in Yukon territorial court.
It was found guilty of haphazardly constructing its tailings pond and dam; and failing to run a simple treatment to stabilize arsenic levels in that pond.
The company’s actions “demonstrate an attitude consistent with ‘raping and pillaging’ the resources of the Yukon,” and described BYG to be “inept, bumbling, amateurish and possibly negligent,” according to territorial court judge Heino Lilles.
In 1999, Canada took responsibility for the minesite, which was polluted by arsenic and other heavy metals.
The feds handed control of the site over to the Yukon through devolution in 2003, but still retained responsibility for remediation costs.
The feds spent $6.9 million on the site between 1999 and 2003, and another $3.8 million between 2003 and 2006 to fund the Yukon’s management of the site.
The estimated cost of cleaning up the abandoned mine site is pegged at $23 million, according to Supreme Court Justice Ron Veale’s judgment.
In the 21-page document, Veale also outlined his reasons for approving a sales and marketing plan that would see BYG’s assets and land sold off to pay creditors.
Under the plan, BYG’s holdings in the Mount Nansen area would be sorted and sold off.
It would concentrate on selling off areas that have not been developed or mined.
BYG owned 234 claims and 30 leases. The core area, where the mining took place, consists of 48 claims and 17 leases.
Its gross metal value is pegged at $21 million.
“However, the extraction and milling of the ore would exceed the net recovery value without even considering the environmental liability,” wrote Veale in his ruling.
“It would be futile to attempt to sell the core area until the cleanup is completed.”
The Yukon Supreme Court’s finding is an important one, but not in the way one might expect, Yukon Conservation Society mining co-ordinator Gerry Couture said from Dawson.
When BYG closed, the federal government’s quartz mining legislation didn’t account for “worst-case scenarios,” said Couture.
“Bad things occurred because there wasn’t a regulatory regime in place to take care of these kinds of situations where a mine went bad,” said Couture.
So, the Canadian taxpayer was left holding the bill.
“Under a good regime, money would be put aside while mining is occurring to prevent environmental damage,” said Couture.
And the Yukon government has stepped up to the plate and drafted a policy to ensure that the public is no longer on the hook for messes left behind by mining companies.
In 2006, Yukon’s Energy, Mines and Resources department enacted a Yukon Mine Site Reclamation and Closure Policy.
Basically, the 14-page policy ensures mine operators have government-approved reclamation and closure plans prior to mine development.
It guarantees mine operators post a security with the Yukon government to cover any clean-up costs, which would be reassessed periodically over the life of the mine.
And it ensures mine owners file an annual report detailing its reclamation work after the mine closes until the government is satisfied it has met all the terms of its licence.
“This is what we needed many, many years ago,” said Couture.