No charges for Mount Polley dam breach, yet

In December, 2015, the province of British Columbia announced it would not lay Mines Act charges against Imperial Metals Corporation for a catastrophic dam breach at its Mount Polley mine. On August 4, 2014, 8 million cubic meters of mining tailings and materials, along with 17 million cubic meters of water, were released into nearby lakes and water resources from the mine in that breach.

The B.C. Chief Inspector of Mines found that while there were weak practices, no legal contraventions of mining legislation occurred. If the Mines Act had allowed for administrative monetary penalties (“AMPs”), it might have been a different story.

Other provincial and federal laws allow for AMPs. An AMP system is intended to move offences into a civil penalty system avoiding the need to prove an offence in court.  Recommendation 4-3 of the Chief Inspector’s report about the dam breach recommended that the Mines Act should have enhanced compliance and enforcement options, and the full suite of options should be considered, including administrative penalties.

While Imperial Metals avoided Mines Act charges, it is not yet in the clear. The dam breach continues to be investigated as part of a joint investigation under the B.C. Environment Management Act and the federal Fisheries Act. Potential fines are very significant under the Fisheries Act, as we recently reported in the Teck Metals case, where $3,000,000 in fines were levied at the end of February, 2016.

Imperial Metals is also facing a class action. Siskinds LLP is counsel in a proposed securities class action brought on  behalf of investors against Imperial Metals and certain of its directors, officers and affiliates relating to the circumstances of Mount Polley breach.  The claim alleges that the defendants made misleading statements and omitted to disclose material information to the investors regarding the design, construction and operations of Mount Polley’s tailing storage facility.  To learn more about this securities class action visit Siskinds LLP’s website.

For more information about the Mount Polley dam breach, visit the B.C. government’s website.