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Federal regulation of Canadian mining companies operating in Canada and abroad

Petition: 304

Issue(s): Compliance and enforcement, and Natural resources

Petitioner(s): Isabelle Sawyer

Date Received: 16 September 2010

Status: Completed

Summary: The petitioner is concerned that federal mining laws and regulations may not apply to Canadian mining companies operating abroad. The petitioner asks the federal government to explain what laws and regulations govern mining in Canada and whether they also apply to Canadian mining operations outside the country. The petitioner also inquires about the potential legal and financial consequences for mining companies that infringe on federal mining laws and regulations.

Petition

[OAG Translation]

Montréal, 1 September 2010

To
:
Office of the Auditor General of Canada
Commissioner of the Environment and Sustainable Development
Subject: Petitions
240 Sparks Street
Ottawa, Ontario K1A 0G6
Telephone: 1-888-761-5953 (extension 2923)
Fax: 613-941-8286
Email: petitions@oag-bvg.gc.ca

Name of petitioner: Isabelle Sawyer
[personal information withheld at the petitioner’s request]

Pursuant to section 22 of the Auditor General Act, I am submitting this petition concerning the environment to the Auditor General of Canada.

Signature: [Original signed by Isabelle Sawyer]  Date: 1 September 2010

Title of petition:

Federal regulations concerning Canadian mining companies in Canada and abroad

Background:

I am a Canadian citizen and a B.A. student in environmental geography at a Quebec university. I learned during my studies and through my research that many mining companies establish their corporate headquarters in Ottawa. It is said that one of the reasons for this trend is that Canada does not have regulations to govern the activities of these mining companies outside Canada. Thus, the regulations that apply in Canada (covering various things, including protection of the physical environment and human and community rights) are no longer applicable when our Canadian companies operate on foreign soil. However, a guest specialist at one of my classes denied this, stating that under Canadian law, Canadian regulations ought to apply on foreign soil, particularly when the regulations in force in the other country are not as stringent as our own. I would therefore like to know what the case is in fact.

Questions pertaining to the petition:

My questions are the following:

  1. What federal acts and regulations govern the activities of mining companies in Canada?
  2. Are there other acts and regulations that specifically cover the activities of mining companies outside Canada? If so, which ones are they?
  3. Are Canadian acts and regulations applicable when the mining companies whose corporate headquarters are in Canada operate abroad? Must these Canadian acts and regulations be complied with everywhere outside of Canada, i.e. even in places where the regulations (pertaining to human, collective and environmental rights) are less stringent than in Canada?
  4. What are the consequences (penalties, fines, breaches of contract, compensation, etc.) for mining companies that contravene federal acts and regulations in Canada? Who enforces these sanctions (judge for civil or criminal cases, an inspector from a Canadian government department after a complaint has been received from a citizen or group, etc.)?
  5. What consequences await Canadian mining companies that contravene Canadian acts and regulations when they operate on foreign soil? Who enforces these sanctions (Canadian or foreign judge, a Canadian inspector after a complaint has been received in Canada or after a complaint has been received from abroad, etc.)?

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Minister's Response: Environment Canada

21 January 2011

Ms. Isabelle Sawyer

[personal information withheld at the petitioner’s request]

Dear Ms. Sawyer:

I am pleased to provide Environment Canada’s response to your Environmental Petition no. 304, to the Commissioner of the Environment and Sustainable Development, regarding federal regulations concerning Canadian mining companies operating in Canada and abroad. Your petition, which was addressed to the former Minister of the Environment, was received in the Department on September 30, 2010.

Environment Canada has reviewed the questions in your petition and is providing answers to questions 1, 3 and 4. I understand that my colleagues in other departments to whom your petition has also been sent will respond to questions that fall under their respective mandate.   

I appreciate this opportunity to respond to your petition, and trust that you will find this information helpful.

Sincerely,

[Original signed by Peter Kent, Minister of the Environment]

The Honourable Peter Kent, P.C., M.P

Enclosure

c.c.:  The Honourable Gail Shea, P.C., M.P.
The Honourable Christian Paradis, P.C., M.P.
The Honourable Lawrence Cannon, P.C., M.P.
The Honourable John Duncan, P.C., M.P.
The Honourable Chuck Strahl, P.C., M.P.
The Honourable Peter Van Loan, P.C., M.P.
Mr. Scott Vaughan, Commissioner of the Environment and Sustainable Development


Environment Canada’s Response to Environmental Petition No. 304 regarding federal regulations concerning Canadian mining companies in Canada and abroad

Question 1: What federal laws and regulations govern the activities of mining companies in Canada?

Response:
The main federal laws and regulations that apply to mining activities in Canada and for which the Minister of the Environment has responsibility are the following:

  • Canadian Environmental Assessment Act
  • Canadian Environmental Protection Act, 1999
  • Metal Mining Effluent Regulations under the Fisheries Act

Canadian Environmental Assessment Act
The Canadian Environmental Assessment Act is a federal law that requires federal decision makers (called responsible authorities) to consider the environmental effects of projects before making any decisions or exercising any powers that enable the project to proceed, i.e. before initiating the project, providing funding, granting land, or issuing certain regulatory approvals.

Therefore, as described above, mining projects in Canada are subject to the Act where there is a federal decision-making responsibility to enable a project (as defined by the Act). 

Further information on this Act can be found at www.ceaa-acee.gc.ca

Canadian Environmental Protection Act, 1999
Mining activities can result in emissions to the environment. These emissions can include various pollutants of concern, including criteria air contaminants (smog-causing pollutants), greenhouse gases, and substances that have been declared toxic under the Canadian Environmental Protection Act, 1999 (CEPA 1999). The National Pollutant Release Inventory (NPRI) is Canada‘s legislated, publicly accessible inventory of pollutant releases, disposals and transfers for recycling.  Information is reported by facilities and published by Environment Canada under the authority of sections 46 to 50 of CEPA 1999. The NPRI reports on pollutant releases to air, water and land, as well as on-/off-site disposal, which includes substances in waste rock and mine tailings.

Further information on CEPA 1999 can be found at www.ec.gc.ca/lcpe-cepa.

Metal Mining Effluent Regulations under the Fisheries Act
The quality of effluent discharged from metal mines in Canada is regulated under the Metal Mining Effluent Regulations (MMER) under the Fisheries Act. Fisheries and Oceans Canada is responsible for the Fisheries Act.Environment Canada administers the pollution prevention provisions of the Fisheries Act, which are sections 36 to 42. Subsection 36(3) of the Fisheries Act prohibits the deposit of deleterious substances in water frequented by fish unless permitted under regulations such as the MMER. Mining operations that are not captured under the MMER, such as coal mines, diamond mines, quarries and other non‑metallic mineral mining facilities, are subject to the prohibition in subsection 36(3) of the Fisheries Act.

Further information on the Fisheries Act can be found at http://ec.gc.ca/pollution.  

Question 3: Do Canadian laws and regulations apply when mining companies (with Canadian head offices) conduct activities abroad? Do those laws and regulations have to be complied with everywhere outside Canada, even in places with regulations (concerning human, community and environmental rights) that are less stringent than those in Canada?

Response:

Canadian Environmental Assessment Act
The Canadian Environmental Assessment Act applies to projects (as defined by the Act) outside Canada, where a federal responsible authority proposes to initiate or provide funding for a project. The environmental assessment process for foreign projects is set out in the Projects Outside Canada Environmental Assessment Regulations established under the Act. Mining projects outside of Canada do not typically trigger an assessment under these regulations.

Canadian Environmental Protection Act, 1999
This Act does not apply when mining companies conduct activities abroad. 

Metal Mining Effluent Regulations under the Fisheries Act
These Regulations do not apply when mining companies conduct activities abroad. 

Question 4: What consequences (penalties, fines, breach of contract, compensation, etc.) are faced by mining companies that violate federal laws and regulations on Canadian soil? Who can enforce those consequences (judge in civil or criminal proceedings, inspector from a Canadian government department in response to complaints from citizens or groups, etc.)?

Response:
Canadian Environmental Assessment Act
Pursuant to section 11.1 of the Canadian Environmental Assessment Act, a proponent can be prohibited from carrying out the project until it has been assessed. Under section 11.2 of the Act, injunctions can be issued by the courts if it appears a section 11.1 order is likely to be contravened.

Under the Act, the responsible authority, when making decisions concerning proposed projects, may impose mitigation measures to address significant adverse environmental effects through their decision-making process and ensure that they are implemented. Proponents are responsible for their implementation, through conditions attached to responsible authorities’ permits, authorizations and approvals. Compliance and enforcement is carried out under the responsible authorities’ enabling legislation and not the Act itself.

Canadian Environmental Protection Act, 1999 andthe Fisheries Act
The mandate of Environment Canada is to enforce CEPA 1999, the pollution prevention provisions of the Fisheries Act, and accompanying regulations. When an alleged violation is discovered, the Department’s Enforcement Officers verify compliance with these pieces of legislation and responses to violations are taken in accordance with departmental policies.

The Compliance and Enforcement Policies for CEPA 1999 and the pollution prevention provisions of the Fisheries Act set out the principles for the enforcement of the legislation that ensure fair, predictable and consistent application of the law and responses by enforcement officials to alleged violations. 

Enforcement responses can include warning letters, inspector’s directions, and prosecutions by the Public Prosecution Service of Canada. Upon conviction, enforcement officials will recommend that Crown prosecutors request penalties that are proportionate to the nature and gravity of the offence. Penalties provided under these Acts include, but are not limited to, fines or imprisonment or both. The courts have authority to impose penalties following the conviction of an offender. 

Some relevant statutory provisions of CEPA 1999 are noted below:

272. (1) Every person commits an offence who contravenes
(a) a provision of this Act or the regulations;
(b) an obligation or a prohibition arising from this Act or the regulations;
(c) an order or a direction made under this Act;
(d) an order, direction or decision of a court made under this Act; or
(e) an agreement respecting environmental protection alternative measures within the meaning of section 295.

(2) Every person who commits an offence under subsection (1) is liable
(a) on conviction on indictment, to a fine of not more than $1,000,000 or to imprisonment for a term of not more than three years, or to both; and
(b) on summary conviction, to a fine of not more than $300,000 or to imprisonment for a term of not more than six months, or to both.

273.  Penalties:
(2) Every person who commits an offence under subsection (1) is liable
(a) on conviction on indictment, to a fine of not more than $1,000,000 or to imprisonment for a term of not more than three years, or to both, if the offence is committed knowingly;
(b) on summary conviction, to a fine of not more than $300,000 or to imprisonment for a term of not more than six months, or to both, if the offence is committed knowingly;
(c) on conviction on indictment, to a fine of not more than $500,000 or to imprisonment for a term of not more than three years, or to both, if the offence is committed negligently; and
(d) on summary conviction, to a fine of not more than $200,000 or to imprisonment for a term of not more than six months, or to both, if the offence is committed negligently.

Metal mining companies in Canada are regulated by the Metal Mining Effluent Regulations. Any person who contravenes or fails to comply with subsection 36(3) of the Fisheries Act, including the Metal Mining Effluent Regulations, made pursuant to subsections 34(2), 36(5) and 38(9) of the Fisheries Act, is guilty of an offence and may be liable under the Fisheries Act.Some relevant statutory provisions are noted below:

Penalties

40.(2) Every person who contravenes subsection 36(1) or (3) is guilty of

(a) an offence punishable on summary conviction and liable, for a first offence, to a fine not exceeding three hundred thousand dollars and, for any subsequent offence, to a fine not exceeding three hundred thousand dollars or to imprisonment for a term not exceeding six months, or to both; or

(b) an indictable offence and liable, for a first offence, to a fine not exceeding one million dollars and, for any subsequent offence, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years, or to both.

Section 42 of the Fisheries Act also provides for civil liability to the Crown in specified circumstances.

Further information on enforcement of these Acts can be found on the Enforcement Branch website at www.ec.gc.ca/alef-ewe.

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Minister's Response: Fisheries and Oceans Canada

6 January 2011

Isabelle Sawyer

[personal information withheld at the petitioner’s request]

Dear Ms. Sawyer:

Please find attached Fisheries and Oceans Canada’s response to your environmental petition No. 304, received on September 30, 2010, to the Commissioner of the Environment and Sustainable Development regarding federal regulations respecting Canadian mining companies in Canada and abroad.

The questions raised in your petition are addressed to a number of federal government departments. The responsibilities of DFO in respect of the questions raised in your petition are limited to certain aspects. That being said, I am pleased to contribute to the response to your petition and I hope you will find this information helpful.

Sincerely,

[Original signed by Gail Shea, Minister of Fisheries and Oceans]

Gail Shea, P.C., M.P.

Att.

c.c.: The Honourable John Baird, P.C., M.P., Minister of the Environment
The Honourable Christian Paradis, P.C., M.P., Minister of Natural Resources
The Honourable Lawrence Cannon, P.C., M.P., Minister of Foreign Affairs
The Honourable John Duncan, P.C., M.P., Minister of Indian Affairs and Northern Development
The Honourable Chuck Strahl, P.C., M.P., Minister of Transport
The Honourable Peter Van Loan, P.C., M.P., Minister of International Trade
Mr. Scott Vaughan, Commissioner of the Environment and Sustainable Development


FISHERIES AND OCEANS CANADA’S RESPONSE

PETITION 304–Federal regulations respecting Canadian mining companies in Canada and abroad

Question 1—What federal acts and regulations govern the activities of mining companies in Canada?

Fisheries Act
The Fisheries Act (FA) regulates certain aspects of mining activities near fish-bearing waters. This Act gives the federal government the authority to protect and conserve fish and fish habitat in support of Canada’s coastal and inland fisheries resources. The Act contains two protection components: the protection of fish habitat and the protection of fish-bearing waters from releases of deleterious substances.

Protection of fish habitat
The Fisheries Act contains provisions to protect the unobstructed passage of fish, provide sufficient flow for fish, prevent harmful alteration, disruption or destruction of fish habitat, and prohibit the destruction of fish by means other than fishing. The provisions apply to proponents of projects involving the construction and operation of mines, as they do to project proponents in any other industrial or non-industrial sector. Certain infrastructure and components of mine sites may therefore require the issuance of authorization under the Fisheries Act. An authorization must be issued prior to the commencement of the work and is conditional on the implementation of a project by the proponent to compensate for fish habitat losses caused by the work. As a general rule, a request for authorization triggers an environmental assessment process under the Canadian Environmental Assessment Act. For more information on this component of the Fisheries Act, you are invited to visit Fisheries and Oceans Canada’s website Working Near Water at http://www.dfo-mpo.gc.ca/habitat/habitat-eng.htm.

Protection of fish-bearing waters from releases of deleterious substances
Section 36 of the Fisheries Act protects Canadian fish-bearing waters from releases of deleterious substances. This provision applies to both individuals and companies. In the case of metal mines, the federal government developed the Metal Mining Effluent Regulations under s. 36 of the Fisheries Act to set specific limits for this sector.

Species at Risk Act
The purpose of the Species at Risk Act (SARA) is to prevent wildlife species from becoming extirpated or extinct, to provide for the recovery of wildlife species that are extirpated, endangered or threatened as a result of human activity, and to manage species of special concern to prevent them from becoming endangered or threatened. Under s. 79 of SARA, every person who is required by or under an Act of Parliament to ensure that an assessment of the environmental effects of a project is conducted must, without delay, notify the competent minister or ministers in writing of the project if it is likely to affect a listed wildlife species or its critical habitat. In addition, the person must identify the adverse effects of the project on the listed wildlife species and its critical habitat and, if the project is carried out, must ensure that measures are taken to avoid or lessen those effects and to monitor them. The measures must be taken in a way that is consistent with any applicable recovery strategy and action plans. “Person” includes an association or organization, and a responsible authority as defined in subsection 2(1) of the Canadian Environmental Assessment Act.

“Project” means a project as defined in subsection 2(1) of the Canadian Environmental Assessment Act.

Question 3 - Do Canadian acts and regulations apply to activities of mining companies (headquartered in Canada) that take place abroad? Is there a requirement to comply with these acts and regulations everywhere outside the country, i.e., even in countries where regulations (in the area of human, collective and environmental rights) are less stringent than those in Canada?

Fisheries Act
The Fisheries Act applies only to Canadian waters.

Species at Risk Act
The Species at Risk Act (SARA) applies to Canada and to sedentary living organisms on or under the continental shelf of Canada outside the exclusive economic zone. Thus, in principle, mining activities outside Canada are not covered by SARA.

Question 4 - What are the consequences (penalties, fines, contract termination, compensation, etc.) for mining companies that violate the federal acts and regulations on Canadian soil? Who can order that consequences be applied (judge in the event of civil or criminal proceedings, inspector of a federal department in response to complaints by citizens or groups, etc.)?

Fisheries Act
In Canada, mining activities are regulated by the Metal Mining Effluent Regulations (MMER), made under the Fisheries Act. The sanctions for violating the regulations include fines of up to $100,000 on summary conviction and up to $500,000 on indictment. The Fisheries Act also provides for prison terms of up to one year on summary conviction and up to two years on indictment. Under a memorandum of understanding between Fisheries and Oceans Canada and Environment Canada, the MMER is administered and enforced by Environment Canada. The Minister of Fisheries and Oceans designates enforcement officers, such as inspectors, to monitor conformity and compliance with the regulations.

Species at Risk Act
Section 97 of the Species at Risk Act states that every person who contravenes subsection 32(1) or (2), section 33, subsection 36(1), 58(1), 60(1) or 61(1) or section 91 or 92 or any prescribed provision of a regulation or an emergency order, or who fails to comply with an alternative measures agreement the person has entered into under this Act:

a) is guilty of an offence punishable on summary conviction and is liable:

(i) in the case of a corporation, other than a non-profit corporation, to a fine of not more than $300,000,
[...]

b) is guilty of an indictable offence and is liable:

(i) in the case of a corporation, other than a non-profit corporation, to a fine of not more than $1,000,000.

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Minister's Response: Foreign Affairs and International Trade Canada

17 January 2011

Ms. Isabelle Sawyer

[personal information withheld at the petitioner’s request]

Dear Ms. Sawyer:

The Commissioner of the Environment and Sustainable Development of Canada, Mr. Scott Vaughan, forwarded to us a copy of your Environmental Petition No. 0304 on the Federal regulations concerning Canadian mining companies in Canada and abroad.

Please find enclosed the response to questions 2 and 5 of your petition as they fall under the mandate of Foreign Affairs and International Trade Canada (DFAIT). It is DFAIT’s understanding that other government departments and agencies will be responding separately to the questions that fall within their respective mandates.

Thank you for the opportunity to respond to your petition. We trust that you will find this information useful.

Sincerely,

[Original signed by Peter Van Loan, Minister of International Trade]

The Honourable Peter Van Loan, P.C., M.P.
Minister of International Trade

[Original signed by Lawrence Cannon, Minister of Foreign Affairs]

The Honourable Lawrence Cannon, P.C., M.P.
Minister of Foreign Affairs

Enclosure

c.c. The Honourable Chuck Strahl, P.C., M.P.
The Honourable Christian Paradis, P.C., M.P.
The Honourable Gail Shea, P.C., M.P.
The Honourable Peter Kent, P.C., M.P.
The Honorable John Duncan, P.C., M.P.
Mr. Scott Vaughan


Question 2

Do any other laws or regulations exist specifically to govern the activities of mining companies outside the country? If yes, which ones are they?

There are no laws that specifically govern the activities of Canadian mining companies operating abroad. The Government of Canada respects the sovereignty of foreign states and does not generally apply its domestic laws to other jurisdictions.

The Canadian government expects Canadian companies working internationally to respect all applicable local laws and international standards; to operate transparently and in consultation with host governments and local communities; and, to continue to develop and implement corporate social responsibility best practices.

The Government of Canada maintains that voluntary initiatives, based on internationally recognized standards and supported by Canada’s Corporate Social Responsibility Strategy, Building the Canadian Advantage, are the best means to promote good and responsible practices, and ensure Canadian companies continue to play a positive role in communities around the world.

Question 5

What consequences are faced by Canadian mining companies that violate Canadian laws and regulations while operating on foreign soil? Who can enforce those consequences (Canadian judge, foreign judge, Canadian inspector in response to Canadian complaints, Canadian inspector in response to foreign complaints, etc.)?

The Government of Canada believes that working in collaboration with Canadian companies in the extractive sector to enhance their corporate social responsibility practices abroad through voluntary initiatives is more effective than punitive measures.

However, the Government of Canada recognizes that issues with Canadian companies operating abroad do sometimes arise. To this end, the Office of the Extractive Sector Corporate Social Responsibility Counsellor addresses issues pertaining to the activities of Canadian extractive sector companies abroad. The Corporate Social Responsibility Counsellor acts as an impartial advisor and facilitator, an honest broker that brings parties together to help address problems and disputes. This approach is based on the view that a credible, impartial and transparent process with appropriate checks‑and‑balances may find win‑win options to resolve disputes.

Furthermore, Canada’s National Contact Point for the Organisation for Economic Co‑operation and Development Guidelines for Multinational Enterprises promotes awareness of the Guidelines and ensures their effective implementation, while assisting in the resolution of any specific instances that may be raised regarding the behaviour of companies in relation to the Guidelines.

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Minister's Response: Indian and Northern Affairs Canada

25 January 2011

Ms. Isabelle Sawyer

[personal information withheld at the petitioner’s request]

Dear Ms. Sawyer:

I am pleased to provide Indian and Northern Affairs Canada’s response to your Environmental Petition No. 0304 to the Commissioner of the Environment and Sustainable Development, regarding federal regulations concerning Canadian mining companies in Canada and abroad. Your petition was received by the Department on September 30, 2010.

I appreciate this opportunity to respond to your petition and trust that you will find this information helpful.

Sincerely,

[Original signed by John Duncan, Minister of Indian and Northern Affairs Development, Federal Interlocutor for Métis and Non-Status Indians]

John Duncan, PC, MP

Encl.

c.c.: The Honourable Gail Shea, PC, MP
The Honourable Christian Paradis, PC, MP
The Honourable Lawrence Cannon, PC, MP
The Honourable Peter Kent, PC, MP
The Honourable Chuck Strahl, PC, MP
The Honourable Peter Van Loan, PC, MP
Mr. Scott Vaughan


Indian and Northern Affairs Canada’s Response to Environmental Petition No. 0304 regarding Federal Regulations concerning Canadian Mining Companies in Canada and Abroad

Introduction:

Indian and Northern Affairs Canada (INAC) has reviewed the questions in the Environmental Petition No. 0304 submitted to the Office of the Auditor General of Canada. In the response, INAC addresses questions 1 and 4, as they fall within its mandate to do so. INAC has not addressed questions 2, 3 and 5, as the subject matter falls outside of its mandate.    

Question 1:

What federal laws and regulations govern the activities of mining companies in Canada?

Response

Note: This question is very broad. There are innumerable federal laws and regulations governing the activities of mining companies in Canada; depending on what activity, where, when, why and how. Relevant federal departments include Natural Resources Canada, Transport Canada, Fisheries and Oceans, Environment Canada, etc.

Canadian mining law is location-dependent: 10 provinces and three territories, each with its own laws, and within each province or territory areas within Aboriginal land claim settlement areas or reserves; areas in which the surface is owned by the Crown or by Aboriginal groups or privately; and areas in which the minerals are owned by the Crown or by Aboriginal groups or privately. Canadian mining law is also commodity-dependent, with different laws applicable to hard rock minerals, coal, industrial minerals, petroleum and natural gas, uranium, etc.

INAC administers a wide range of acts and regulations, many of which govern mining activities. 

For example, the Minister of Indian Affairs and Northern Development is responsible for the administration of the Territorial Lands Act. This Act authorizes the Governor in Council to make regulations for the leasing of mining rights in, under or on territorial lands and the payment of royalties. Territorial lands here refer to lands, or any interest in lands, in the Northwest Territories or Nunavut, that are vested in the Crown or which the Government of Canada has power to dispose of.

One of the regulations stemming from the Territorial Lands Act is the Northwest Territories and Nunavut Mining Regulations, which set out a regime whereby mineral title is issued and administered (licences to prospect, prospecting permits, mineral claims and leases) and mineral royalties are collected. Other regulations of note include the Territorial Coal Regulations (regime for coal), Territorial Lands Regulations (sale, lease of lands), Territorial Land Use Regulations (land use permits) and the Territorial Quarrying Regulations (inorganic building material such as sand and gravel). These regulations cover mineral staking, locating and recording claims, resolution of disputes, conversion of claims to mining leases, requirements for the maintenance of claims in good standing – including reporting requirements and performance and filing of representation and royalties payable to the Crown.

The federal government, through INAC, is directly responsible for mining activities North of 60°, including mineral exploration and extraction, the development, management and reclamation of mine sites and the collection of resource revenues and royalties in Yukon and the Northwest Territories.

Note that it is an exception that mining in the Northwest Territories and Nunavut is regulated federally; for all other provinces and for the territory of Yukon, it is regulated at the provincial or territorial level.

Further information can be found on the INAC website at: http://www.ainc-inac.gc.ca/al/abr/index-eng.asp

Question 4:

What consequences (penalties, fines, breach of contract, compensation, etc.) are faced by mining companies that violate federal laws and regulations on Canadian soil? Who can enforce those consequences (judge in civil or criminal proceedings, inspector from a Canadian government department in response to complaints from citizens or groups, etc.)?

Response:

Note: This question is very broad. The answer depends on what the activity is and the “gravity” of the violation.

With regard to the Territorial Lands Act and its regulations, there can be contractual remedy (e.g. due to defaults of terms of a mining lease) but there is also a range of administrative consequences such as refusal of applications (e.g. for permits), suspension or cancellation of certain rights or privileges (e.g. cancellation of a recorded mineral claim), reassessment of obligations (e.g. for fraudulent mining royalty return), retention of security deposits (e.g. non-compliance with terms and conditions of land use permit), collection (e.g. rent arrears) etc.

These actions are enforced by federal inspectors and other relevant administration officials.

There is no specific offence scheme in the Northwest Territories and Nunavut Mining Regulations, but there is a general offence provision under section 30 of the Territorial Lands Act that stipulates that every person who contravenes any provision of this Act or any regulation for which no other punishment is provided is guilty of an offence punishable on summary conviction. Section 7 of the Territorial Lands Act expressly stipulates that every person who contravenes any regulation for the protection, control and use of the surface of land in a land management zone set apart for the protection of the ecological balance or physical characteristics of any area in the Northwest Territories or Nunavut, or fails to comply with any term or condition of a permit issued pursuant to such regulations, is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. Section 21 also creates an offence for trespassing.

If these regulatory offenses are prosecuted, there would be criminal proceedings.

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Minister's Response: Natural Resources Canada

21 January 2011

Isabelle Sawyer

[personal information withheld at the petitioner’s request]

Madame Sawyer :

I am pleased to respond to Environmental Petition no. 304 to the Commissioner of the Environment and Sustainable Development, pursuant to section 22 of the Auditor General Act, regarding federal regulations concerning mining companies in Canada and abroad. Your petition was received by Natural Resources Canada on October 1, 2010.

I am responding to questions 1 through 4, as they relate to the mandate of Natural Resources Canada. I understand that my colleagues, the Honourables Peter Kent, Minister of the Environment, Gail Shea, Minister of Fisheries and Oceans, Chuck Strahl, Minister of Transport, Infrastructure and Communities, John Duncan, Minister of Indian Affairs and Northern Development and Federal Interlocutor for Métis and Non-Status Indians, Lawrence Cannon, Minister of Foreign Affairs, and Peter Van Loan, Minister of International Trade will be responding separately to issues that fall under their portfolios.

I appreciate having this opportunity to respond to your petition and trust that you will find this information helpful.

Thank you for raising these important concerns.

Yours sincerely,

[Original signed by Christian Paradis, Minister of Natural Resources]

The Honourable Christian Paradis, P.C., M.P.

Enclosure: (1)

c.c.: Mr. Scott Vaughan, Commissioner of the Environment and Sustainable Development
The Honourable Peter Kent, P.C., M.P. Minister of the Environment
The Honourable Gail Shea, P.C., M.P. Minister of Fisheries and Oceans
The Honourable Chuck Strahl, P.C., M.P. Minister of Transport, Infrastructure and Communities
The Honourable John Duncan, P.C., M.P. Minister of Indian Affairs and Northern Development and Federal Interlocutor for Métis and Non-Status Indians
The Honourable Lawrence Cannon, P.C., M.P. Minister of Foreign Affairs
The Honourable Peter Van Loan, P.C., M.P. Minister of International Trade


1) What federal acts and regulations govern mining company activities in Canada?

Within the mining industry, Natural Resources Canada is responsible for one act; the Explosives Act. For mining projects, this act applies to explosives manufacturing facilities and to the Explosives User Magazine Licence.

http://laws-lois.justice.gc.ca/eng/acts/E-17

http://www.nrcan.gc.ca/mms-smm/expl-expl/env-env-eng.htm

2) Are there other acts and regulations that exist specifically to monitor mining company activities abroad? If so, which ones?

For the most part, the laws of a country apply only within its territorial jurisdiction. Thus, Canadian companies operating abroad are subject to the domestic law of the country in which they operate.

Therefore, the Explosives Act does not apply outside of Canada.

3) In terms of mining companies whose corporate headquarters are based in Canada, do Canadian laws and regulations apply to their activities abroad? Do these laws and regulations apply anywhere outside of the country, even in places where human, collective and environmental rights are less stringent than in Canada?

For the most part, the laws of a country apply only within its territorial jurisdiction. Thus, Canadian mining companies operating abroad are subject to the domestic law of the country in which they operate.

4) What consequences (penalties, fines, breach of contract, compensation, etc.) do mining companies face if they breach federal laws and regulations on Canadian soil? Who enforces these consequences (a judge in civil or criminal proceedings, a Canadian departmental inspector as a result of complaints from citizens or groups, etc.)?

Mining activities are a provincial and territorial responsibility. As such, you are encouraged to refer to the laws and regulations of those jurisdictions that pertain to the mining industry.

As mentioned earlier, Natural Resources Canada administers the Explosives Act, which applies, among other areas, to mining projects in Canada. Sections 13 to 14.6 of the Inspectors and Chemists division clearly define the role of the inspector, as well as the penalties and fines that individuals or businesses will face in the event of non compliance.

http://laws-lois.justice.gc.ca/eng/acts/E-17

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Minister's Response: Transport Canada

24 January 2011

Isabelle Sawyer

[personal information withheld at the petitioner’s request]

Dear Ms. Sawyer:

I am writing in response to the petition you sent to the Office of the Commissioner of Environment and Sustainable Development, dated September 1, 2010, regarding federal regulations concerning Canadian mining companies in Canada and abroad. Your petition (No. 304) was forwarded to me on September 30, 2010, pursuant to Section 22 of the Auditor General Act.

Your petition has been reviewed in relation to Transport Canada’s mandate. I understand that Environment Canada, Fisheries and Oceans Canada, Indian and Northern Affairs Canada and Natural Resources Canada will also respond to your petition according to their mandates and legislative responsibilities.

With respect to Transport Canada, I am pleased to offer the following:

Question 1: What Federal laws and regulation govern the activities of mining companies in Canada?

The Minister of Transport is responsible for the administration of the Navigable Waters Protection Act (NWPA), which is a federal law designed to protect the public right of navigation.

Pursuant to section 5 of the NWPA, no work shall be built or placed in, on, over, under, through or across any navigable water without the Minister of Transport’s prior approval of the work, its site and the plans for it. The term “work” includes refers to any man-made structure, device or thing, whether temporary or permanent, that may interfere with navigation (such as a bridge) and any dumping of fill in any navigable water, or any excavation of materials from the bed of any navigable water, that may interfere with navigation.

In addition to section 5 you may wish to note that sections 21 and 22 of the NWPA prohibit, subject to a proclamation by the Governor in Council pursuant to section 23 of the NWPA, a person from throwing or depositing certain material as specified in those provisions that are liable to interfere with navigation in any water (any part of which is navigable or that flows into any navigable water) or that are liable to sink to the bottom of in any water (any part of which is navigable or that flows into any navigable water) where there are not at least 120 feet of water at all times.

Furthermore, paragraph 24(1)(b) of the Railway Safety Act (RSA) contains a regulation-making authority concerning mining works on land adjoining the land on which a line of railway is situated. The Mining Near Lines of Railway Regulations (SOR/91-104), which was made pursuant to paragraph 24(1)(b) of the RSA, requires that the owner, operator or lessee of certain mining works provide notice to the railway company and Transport Canada’s Regional Director of Railway Safety before altering or operating non-railway works where these are located within a specific distance of a line of railway.

Question 2:  Do any other laws or regulations exist specifically to govern the activities of mining companies outside the country? If yes, which ones are they?

The NWPA only applies to activities carried out within Canadian waters and the RSA, associated rules, standards and regulations are only applicable in Canada with respect to federally regulated railways.

Question 3:  Do Canadian laws and regulations apply when mining companies (with Canadian head offices) conduct activities abroad?

Please see response to question 2.

Question 4:  What consequences (penalties, fines, breach of contract, compensation, etc.) are faced by mining companies that violate federal laws and regulations on Canadian soil? Who can enforce those consequences (judge civil or criminal proceedings, inspector from a Canadian government department in response to complaints from citizens or groups etc.)?

Section 40 of the NWPA provides for offences (up to $50,000 per day for each day of the offense) and punishment (up to six months imprisonment) when certain orders, regulations and other requirements under the NWPA are contravened. For the purposes of the administration and enforcement of the NWPA and any regulation or order, you may note that the Minister of Transport may designate persons or classes of persons to exercise powers in relation to any matter referred to in the designation (see section 33 of the NWPA). 

Furthermore, pursuant to paragraph 41(2)(a) of the RSA, it is an offence to contravene the Mining Near Lines of Railway Regulations.

Question 5: What consequences are faced by Canadian mining companies that violate Canadian laws and regulations while operating on foreign soil?

Please see response to question 2.

Thank you for expressing your concerns to the Commissioner of the Environment and Sustainable Development. I trust that the foregoing has clarified your questions.

Sincerely,

[Original signed by Chuck Strahl, Minister of Transport, Infrastructure and Communities]

Chuck Strahl, P.C., M.P

cc.: Scott Vaughan, Commissioner of the Environment and Sustainable Development
Peter Kent, Minister of Environment Canada
Gail Shea, Minister of Fisheries and Oceans Canada
Christian Paradis, Minister of Natural Resources Canada
Lawrence Cannon, Minister of Foreign Affairs
John Duncan, Minister of Indian Affairs and Northern Development and Federal Interlocutor for Métis and Non-Status Indians
Peter Van Loan, Minister of International Trade