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Thursday 27 October 2016


Guest Post Written by David Vardy

The marathon consultations between the province and aboriginal leaders concluded early Wednesday morning with an Agreement to establish an Expert Advisory Committee. This was the outcome arising from occupation of the Muskrat Falls site, along with a hunger strike and demonstrations in Ottawa, in Labrador and on the Island. 

The agreement leaves many questions unanswered, including the composition of the Advisory Committee, its governance and its authority. The outcome will rest in the hands of “science” and “traditional” knowledge but often scientific evidence and research are inconclusive or divergent.

How will divergent views be accommodated to reach a reasonable solution to the risks posed to human health by methylmercury? Will the Expert Advisory Committee agree on measures to remove additional vegetation and topsoil to mitigate the poisoning of mammals, fish and birds?  The Agreement also leaves many questions unanswered, including the resolution of the risk of landslides at the Muskrat Falls site because of sensitive clays. These risks have the potential to threaten the safety of workers on the site as well as Labrador residents.

Will this Agreement be the Tipping Point, to use the words of Malcolm Gladwell? The Tipping Point is “that magic moment when an idea, trend, or social behavior crosses a threshold, tips and spreads like wildfire.” This historic Agreement could be the Tipping Point that will empower citizens and communities who have been alienated from the Muskrat Falls project and make those who are responsible for the project more accountable.

Is there a better approach?

David A. Vardy
Is there a better approach which does not require that people go to the barricades, a more rational approach to finding solutions to the complex problems arising from this beleaguered project? The joint federal provincial panel offered a number of ideas, along with a generic approach to dispute resolution, in their report of August 2011, prior to the sanctioning of the project. This generic approach presents a better approach to that which has been on offer to date. It might not be the best possible solution but it offers a basic standard for developing an effective system for monitoring, adaptive management, community engagement and dispute resolution. The purpose of this article is to review this better approach, which was largely rejected by both the federal and provincial governments, along with the panel’s warnings about the wisdom of proceeding with this project, without evaluation of the alternatives (panel report p.13).[i]

The problem is that the previous government did not put in place proper mechanisms to deal with methylmercury and the many other issues that are simmering. The public interest was sacrificed to get this project completed; Nalcor was given unfettered power to do so and to override all opposition. A project of this magnitude requires a well-designed process for oversight, engagement of communities and for dispute resolution.

The agreement reached in the early hours of October 26, 2016 provides a catalyst for the Liberal government of Premier Ball to revisit the approach taken by his predecessors in the province’s official Response of March 15, 2016 to the joint panel report. Indeed, it also suggests that both the federal and provincial governments should take a fresh look at the recommendations contained in the joint panel report (particularly Chapter 15), along with a renewal of the proposed joint federal provincial approach. If the occupation of the site, the hunger strike and the demonstrations become the catalyst for an improved adaptive management approach to this project the efforts of those who “stormed the Bastille” will not have been in vain. 

It is not too late to change direction. Indeed the three year delay until 2020 before full power affords an opportunity to Make Muskrat Better. The undersigned continues to believe that the case for continuing with the project, rather than suspending the generation component, has yet to be made, a position that government has not embraced. If they are determined to go forward without documenting the evidentiary base for continuing then the least government can do is to get the environmental management right, by establishing independent and effective environmental oversight.

Both the federal and provincial governments took a dismissive approach to the panel’s recommendations, with the federal government deferring to the province and the provincial government deferring to Nalcor. On specific measures the province repeated that government “accepted the intent” but they did not generally accept the specific mitigation measures.[ii]

The joint panel recommended independent monitoring and oversight of the project, along with a mechanism to mediate disputes. In such a complex project they foresaw that many issues would arise that would require a forum for discussion and mediation, a mechanism independent of Nalcor, the project proponent.

Monitoring and Community Liaison Committee
The panel recommended (Recommendation 15.5) the creation of a Monitoring and Community Liaison Committee. This committee would “provide community feedback and advice to the Department (of Environment and Climate Change) and to Nalcor on relevant issues including Project-specific mitigation, impact monitoring and adaptive management committed to by Nalcor and as recommended by the Panel.” The Committee would “liaise with the public to ensure a transparent approach to addressing public concerns and the communication of monitoring results.” The province’s response “accepts the intent of this recommendation” and commits that “a committee will be established by Nalcor to provide feedback and advice to the Proponent and Government on the effects of the Project.” They went on to say that the “Government is committed to ensuring consultation with affected Aboriginal groups, Communities, and relevant stakeholders to address public concerns and communicate monitoring results.”

They missed the point when they said the Committee would “be established by Nalcor”. The Committee should be completely independent of Nalcor. The previous government allowed Nalcor full control over the project, including its oversight.

Complaints Resolution Process
The panel recommended (Recommendation 15.8) creation of a complaints resolution process to address “concerns relating to possible adverse Project effects on individuals”. It would provide easy access for individuals to bring concerns or complaints to Nalcor via a toll-free phone number, website and other appropriate means” along with “third-party adjudication in the event that complaints cannot be otherwise resolved to the satisfaction of both Nalcor and the complainant”. This process was to be developed “in consultation with the Monitoring and Community Liaison Committee, to address concerns relating to possible project adverse effects.”

Accountability Reporting
The joint panel recommended (Recommendation 15.1) an authorizing regulation, listing the environmental commitments made by the proponent and other requirements recommended by the panel and accepted by the government, and enforcing compliance therewith? Has any such regulation been issued? This recommendation calls for an “annual report describing Nalcor’s environmental management activities and results, including mitigation, monitoring and adaptive management.” Has any such environmental accountability report been published by Nalcor?

Joint Federal Provincial Agreement
The joint panel recommended (Recommendation 15.2) a joint federal provincial regulatory plan, along with a Memorandum of Agreement to make it legally binding. This Memorandum of Agreement identifies the department responsible to coordinate activities and to produce a joint annual report for each government. The government’s response “accepts the intent of this recommendation and will continue to work to ensure collaboration with federal regulatory authorities to develop a coordinated and effective approach regarding compliance and inspection activities.” Has such a Memorandum of Agreement been executed? Where are the joint annual reports?

Budget for Environmental Activities
Recommendations 15.3 and 15.4 of the joint panel report call for a ten year budget for environmental activities, to enable implementation of the environmental management plan. Is there a ten year plan for Nalcor, as well as for each responsible implementing department? The March 15, 2012 provincial response provided no comfort when they said:

“The Government of Newfoundland and Labrador accepts the intent of this recommendation (my bolding). The Government of Newfoundland and Labrador supports the provision of adequate and appropriate funding for Project-related environmental management including socio-economic mitigation commitments until there is no longer evidence of on-going environmental effects resulting from the Project. Any allocation of funding would be subject to the appropriate legislative approval.”

Does this sound like an unequivocal commitment to fund environmental remediation and mitigation?

Dam Failure: Emergency Preparedness
Recommendation 14.1 calls for emergency preparation in the event of a dam failure and for Nalcor to “prepare and provide to affected communities updated maps that more clearly show areas that would be flooded following a dam failure”. Also the panel recommends preparation of an Emergency Preparedness Plan, for a response in the event of a catastrophic dam failure, including evacuation plans and a flood warning system for Mud Lake and Happy Valley-Goose Bay to be approved by the provincial Department of Environment and Conservation. While the Government “accepts the intent of this recommendation” has any action been taken?

Sensitive Clays
The oversight framework recommended by the joint panel, if implemented, would provide a forum within which concerns relating to the sensitive clays on the site of the Muskrat Falls project could be addressed. Questions remain unanswered as to the extent of the sampling of soils (through boreholes and other techniques) that has been undertaken by Nalcor and the dangers arising from the filling of the reservoir. Such a forum would allow consideration of the effectiveness of remedial and mitigation measures, such as the installation of cut-off walls, the stabilization of slopes and the use of pumps to reduce water levels. The work undertaken by Nalcor and their consultants requires a forum for its discussion and testing.

This is too important an issue for Nalcor to decide on its own. The independent experts retained by Nalcor have not given strong assurances of the safety of the project after remediation. The letter from Nalcor’s geotechnical expert, Serge Leroueil, is an example of this when he says, in his letter of support, that “my knowledge of the dynamic behaviour of soils and its analysis is rather limited.” Dr. Stig Bernander has categorized the stability problems in terms of “downhill progressive landslides” for which standard methodology does not apply but this has been contested by Nalcor. No forum has been offered for Dr. Bernander to present his research results or to be taken seriously by Nalcor and the Department of Environment and Climate Change. The Grand Riverkeeper Labrador Inc. has done yeoman service by insisting that a process be established to weigh and to test the evidence presented by “science”, recognizing that science does not always speak with absolute certainty and must be weighed by independent experts.

The problem of the sensitive clays at the North Spur calls for independently facilitated forums where the community can question Nalcor’s experts. Nalcor should not be allowed to flood the dam without a thorough airing of the risks and the threat to human life, to both workers at the site and residents of Labrador. Many of the remedial measures being implemented by Nalcor had not been developed before the joint panel concluded its report and have not been publicly presented and discussed with stakeholders. Application of the precautionary approach demands that all risks be thoroughly explored.

Methyl Mercury
Turning to the methyl mercury issue, the panel recommended (Recommendation 4.5) the full clearing of the reservoir, but did not include the removal of all vegetation or topsoil. The Harvard research study repudiated Nalcor’s assumption that the mercury leached from the soil would be dissipated and dispersed. It has led to demands for full clearing and soil removal.

The panel decided to take a precautionary approach. They said they were “not convinced that all effects beyond the mouth of the river will be “non-measurable” as defined by Nalcor (within natural variability)…  The Panel acknowledges that there is difficulty in accurately predicting the scale of effects given the absence of long-term ecological studies of the effects of hydroelectric projects in northern environments on receiving waters. However, the Panel believes that this emphasizes the need for a precautionary approach particularly because no feasible adaptive management measures have been identified to reverse either long-term adverse ecological changes or mercury contamination of renewable resources.”

As the Telegram points out in its Editorial of October 15, this is in accordance with Principle 15 of the 1992 Rio Declaration on Environment and Development which states that ‘Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.’

The approach agreed to in the early hours of October 26 allows for a fresh look at the latest science. This will afford an opportunity to revisit the advice from the joint panel and to build upon it, perhaps devising some kind of independently facilitated process. Such an approach should balance divergent scientific views with traditional knowledge, to seek an effective model which can be applied to resolve other contentious issues.

As the Premier said Wednesday morning, government cannot abdicate its responsibility to govern but the public interest will be served by the kind of Expert Advisory Committee mutually agreed by the parties to the marathon consultations. Certain principles should be followed in creating the committee and configuring its governance structure. It should be chaired by an independent facilitator, independent of all stakeholders, including Nalcor and government. Nalcor’s role should be through non-voting membership and their role should be to supply information. The Committee should be inclusive of the community groups involved. Decision-making rules should be decided in advance, defining voting rights and the level of consensus needed before recommendations are presented to government.

Conclusion: Make Muskrat Better
It is time for the government to review the recommendations for oversight and dispute resolution offered by the joint panel and to strengthen them if possible. It has to be recognized that the joint panel delivered its report more than five years ago and that new information is available which has to be considered. The panel’s recommendations should be viewed as a minimum level of oversight, monitoring and adaptive management, not a maximum. The province should raise the bar, not lower it, and should introduce a pro-active approach which will empower communities and not subject them to the discretion of Nalcor. It is not too late in the day to get environmental management right, given the three year delay in the completion of the project, from 2017 to 2020.

Government must take charge of this project and put in place a proper oversight process for the environmental impacts, as well as for the other dimensions of the project, including safety, affordability, probity, and transparency. Government made a commitment during the election to “open the books on Muskrat Falls”.

This requires a full audit of all contracts by the Auditor General and reaffirmation of the oversight role of the Public Utilities Board, as well as the implementation of the recommendations of the joint panel for oversight, engagement of communities and for dispute resolution. Other oversight activities have been in abeyance, including reports from the Oversight Committee of Deputy Ministers and the completion of the Ernst and Young review, which had been expected in March of this year. No reports on visits by the Independent Engineer, MWH Global, to the Muskrat Falls site have been yet released in 2016. Hopefully the Agreement of October 26, 2016 will be a turning point in the oversight for this troubled project, whose sanctioning was a mistake of monumental proportions.

While government has taken the position that this project cannot be suspended or “placed on ice” the delay in schedule affords an opportunity to strengthen and reform environmental mitigation and remediation as well as the whole oversight process. It offers a Tipping Point.

The Ball administration has a real opportunity to Make Muskrat Better, if not To Make Muskrat Right! They should revisit the recommendations of the joint panel. In so doing they should design mechanisms that are independently facilitated, inclusive and transparent to reduce the risks posed by methyl mercury and sensitive clays.

David Vardy

[1] “The Panel concluded that Nalcor’s analysis, showing Muskrat Falls to be the best and least-cost way to meet domestic demand requirements, was inadequate and recommended a new, independent analysis based on economic, energy and environmental considerations. The analysis would address domestic demand projections, conservation and demand management, alternative on-Island energy sources, the role of power from Churchill Falls, Nalcor’s cost estimates and assumptions with respect to its no-Project thermal option, the possible use of offshore gas as a fuel for the Holyrood thermal generating facility, cash flow projections for Muskrat Falls, and the implications for the province’s ratepayers and regulatory systems.” (Page 13 of joint panel report)

[11] The author has requested a meeting with the Minister of Environment and Climate Change to seek an update on the progress achieved in implementing the recommendations of the joint panel and to learn what oversight mechanisms have been put in place by the federal and provincial governments. The author is operating with the understanding that it is this Department which has been designated as the coordinating authority for the province and therefore the principal Department charged with enforcing compliance with undertakings and conditions imposed upon the Proponent, Nalcor Energy. This meeting has not yet been scheduled. The meeting was requested in order to encourage the province to revisit the joint panel report as the basis for establishing generic mechanisms which might be applied to contentious environmental issues such as those relating to methylmercury, dam failure and landslides. Hopefully the process of review of the approach taken by the previous administration is already well underway.