On The Road To Snap Lake

Sometimes when filing an article, some facts may already have changed when it gets uploaded. Last Wednesday (Yellowknife, NWT, Canada time), De Beers Canada president joined the Mackenzie Valley Environmental Impact Review Board (MVEIRB) hearings in the Snap Lake licensing process, putting to rest any uncertainty on who-is-in-charge and rumors about changes at the helm of the company. His presence certainly underscored how seriously De Beers views these hearings - and that was an important message to various participants.  As reported previously, these hearings enable representatives of each and every affected aboriginal group, NGO's, the Government of the Northwest territories and the public to question De Beers, to identify what "it still wants" from De Beers, where it feels De Beers hasn't done enough, etc. It can question De Beers- and it must be ready to reply. At the end of the hearings, the Board must conclude that the Snap Lake project will not have an adverse "significant impact" on the wildlife, environment and communities. And if there is an impact, De Beers must "mitigate" those effects. That's what last week's hearings were all about.

After a full week of hearings there was near-unanimity that De Beers had skillfully evaded making more commitments beyond these it has already made. The stakeholders (the aboriginal groups, the NGO's and the Government of Northwest Territories) were anything but happy. The "winner" of the week was, undeniably, De Beers. There is little doubt that the Board will recommend to the Federal Minister in Ottawa that a mine development license be issued. In terms of taxation, the Federal Government will collect the royalties from the Snap Lake mine. And Ottawa, which has poured billions of dollars year after year in the NWT, seems eager to get some revenues -- and it is not in the interest of the Federal Government to postpone the mine development. De Beers has strong support in the Federal Government.

It is sometimes hard to explain the status of the Northwest Territories in Canada's Federal System. Just as in the United States, the provinces (individual states) have great authority, while the NWT in a real sense has remained "a colony". That is changing. Through a process called sometimes revenue sharing, sometimes "devolution", the NWT will become eventually "independent" in the sense that it will be allowed to collect royalties directly from the mines. It may, however, take between 5-10 years before real progress on that process is made.

As a NWT government official admitted during the hearings, the costs which local government will incur as a result of the Snap Lake mine, far exceed local governmental revenues from the project. At the end of the day, as it stands now, it's the Federal Government that gets most of the taxation benefits and it is the Federal Government that also has the right to issue all the necessary mining licenses. Unless something really unexpected will happen (an outcry over the fate of the caribou, for example), De Beers seems to have come out of this week not more popular - but certainly closer to the license. (The migration of the caribou, a large deer that lives in large herds in northern regions, is an enormous event; literally hundreds of thousands of these reindeer will move through the icy tundra, nothing can come in its way. The proposed Snap Lake mining area finds itself within the migratory range of the caribou herds).

The water needed for the mining comes from a watershed (river system) previously undisturbed by industrial activities. Moreover, the project is to be located in an area of unextinguished Aboriginal title. There are at least six aboriginal groups who consider themselves "impacted parties" - peoples whose lifestyles, whose future, whose livelihoods, may somehow be affected by the De Beers mine. These communities are all Dene People, consisting of many tribes and bands, having their own languages, making a living from hunting and fishing.

The aboriginal groups (sometimes also called Inuit, literally meaning "People" in Eskimo language) likely to be affected by the Snap Lake mine include the Yellowknives Dene First Nation, NWT Metis Nation, North Slave Metis Alliance, Dogrib Treaty 11 Council, the Lutsel K'e Dene First Nation. Four of these aboriginal groups, their chiefs (or "elders"), their representatives are presently negotiating with De Beers so-called Impact Benefit Agreements (IBA's) to secure benefits for their peoples and to mitigate the impact on their society. They want jobs, education, training, supply contracts, etc., but at the same time they also want to minimize any impact on their hunting and fishing grounds.

Incidentally, as part of the IBA's, De Beers has expressed willingness to allocate rough diamonds to the relevant aboriginal groups. Details about this are scarce as the agreements are covered by secrecy covenants. According to De Beers Canada vice president John McConnell, progress on these negotiations are on level 7-8, out of a scale of ten. Eventually, these commitments on rough diamond supply will be in the public domain - the aboriginals will have "to do something" with the goods.

Why were these hearings so important? As we said it is the Federal Minister for Indian and Affairs and Northern Development who has the authority to issue some of the eight crucial permits or licenses in the regulatory process. However, the Minister will not issue any license before getting specific recommendations from a statutory regional body, the Mackenzie Valley Environmental Impact Review Board (MVEIRB). As the law requires that a "consultative process" which potentially impacted parties take place, the Board has to schedule hearings and take the views expressed into account in its determination.

At the hearings, the community "stakeholders" didn't seem happy. They will still give De Beers a rather difficult time. Even the Federal Minister, when giving approval of the project, may still make this approval subject to De Beers coming to satisfactory arrangements with stakeholders. (Some think that De Beers may challenge the legality of some such provisions, if they can't live with them.) None of this is likely to affect the timetable too much. The MVEIRB recommendation will be forthcoming. De Beers has passed the hurdle of last week…  By not "giving much" it hasn't endeared itself much with the stakeholders, but, at the same time, it has kept many options open to do so in the future.

In a process with "many rounds", De Beers was the winner of this one.