Since the 2014 Mount Polley tailings dam breach, the British Columbia government has made numerous changes to its mining regulatory regime. The most recent amendments, some of which came into force late last week, significantly increased the penalties that may be imposed for violation of the Mines Act (Act). The changes heighten the potential exposure of mining companies and their directors, officers and agents in cases of unpermitted environmental impacts, as well as non-compliance with the administrative aspects of the legislation and permits issued under it.
Mine owners and operators throughout British Columbia have faced increased scrutiny over the past two years, a trend which is likely to continue. The government’s most recent actions have stemmed largely from the reports and recommendations of the Independent Expert Engineering Investigation and Review Panel and the Chief Inspector of Mines, delivered in January and December 2015 respectively. The government has stated that it is committed to ensuring all of the recommendations are implemented over the next 12 to 18 months.
Some of the changes that have already been implemented have included increased tailings dam foundation inspections; more ministry staff; and added requirements for the environmental assessment of newly proposed mines.
Most recently, the Act has been amended in two primary ways. First, the maximum fine for offences under the Act has been increased from C$100,000 to C$1-million and potential prison terms have been lengthened from one to three years. These changes are effective immediately. Note that if a corporation commits an offence, a director or officer of the corporation who authorized, permitted or acquiesced in the offence can also be fined, imprisoned, or both.
Second, the amending legislation authorizes administrative penalties for non-compliance with the Act. The Chief Inspector of Mines will be authorized to issue an administrative penalty if he or she finds that a person has contravened the Act, regulations, code or an order under the Act.
The administrative penalties regime is notable for a few reasons. The Chief Inspector of Mines only needs to determine the contravention on a balance of probabilities after giving the person an opportunity to be heard, unlike an offence that must be proven in court beyond a reasonable doubt. In addition, most administrative penalty regimes provide that due diligence is not a defence, although it is relevant to the quantum of the penalty. Furthermore, the scope of potential liability is also broader for administrative penalties than for offences: along with director and officer liability, an agent (a party having control of a mine on behalf of the owner) who authorized, permitted or acquiesced in the contravention may also be liable. Finally, if an employee, contractor or agent of a corporation commits a contravention, the corporation is also liable for a penalty.
Further details regarding the application and quantum of administrative penalties will be set out in future regulations, which will likely also include clarification of whether due diligence will be a defence to an allegation of a contravention.
These latest amendments are consistent with the increased emphasis on higher fines and broader enforcement tools that have been implemented by both the provincial and federal governments over the past few years. For example, changes to federal laws in 2009 and 2012 established minimum fines and significantly higher maximum fines for violations of key environmental statutes. Administrative penalties, in place and widely used in British Columbia under forestry laws since the late 1990s, have been implemented by the province over the past several years under the Environmental Management Act and the Oil and Gas Activities Act. What remains to be seen is to what extent the regulators will utilize the new tools they have been given to address issues over non-compliance these statutes and now, the Mines Act.