NEPA process a litigation gauntlet

Vancouver — Anti-mining activists in the United States carry briefcases instead of placards these days, and are racking up victories through the National Environmental Policy Act (NEPA) — the federal law mandating an environmental assessment (EA) or environmental impact statement (EIS) for major development projects — and other more specific statutes enacted to protect air and water quality, wildlife, and public health.

As self-professed “watchdogs” of NEPA, environmental lawyers have almost quashed mining outright in some states, stopped or stalled new mines in other states, and are now even challenging mine expansions in established mining camps of Nevada, Utah and Arizona.

Laura Skaer, executive director of the Northwest Mining Association (NWMA), has spent countless hours lobbying the federal government to reform the NEPA process, which she says allows anti-mining groups to delay projects through appeals and litigation “with little or no investment, no risk and no accountability.

“NEPA is no longer about the environment,” Skaer testified before a congressional task force examining the need for NEPA reform in 2005. “It has become the tool used by obstructionist groups who oppose responsible and lawful mineral development on public lands; a project-killing, job-killing, community-killing tool.”

Steve Borell, executive director of the Alaska Miners Association, calls NEPA “the single greatest impediment” to project permitting in a state that is otherwise viewed as a favourable jurisdiction for mineral investment.

“The strategy now is not to sue the companies,” Borell says, “but rather to sue the permitting agencies, and try to shut everything down by claiming they haven’t done a sufficient job, or didn’t follow the process quite right.”

Borell says out-of-state activists are backing many of the legal challenges that have stopped or stalled projects in the state, ostensibly on behalf of local citizens.

“Almost every (environmental) group in the U.S. has offices in Alaska, though many are just an answering machine and a post office box. Alaska is a huge money-making machine for environmental groups (in the Lower 48).”

At the national level, mining associations warn that NEPA-related litigation is undermining the broader economy and national security by accelerating America’s growing reliance on imported minerals and raw commodities. Their concerns are borne out by the latest data (2006) from the U.S. Geological Survey, which show that the U.S. relies on imports for more than half of its consumption of 45 mineral commodities (including copper), and is 100% import-reliant for 17 of these.

Constant threat

The mining industry is not alone in its view that litigation related to the NEPA process is adversely affecting the national economy. Forestry, agriculture, ranching, commercial fisheries, federal highways, pipelines, ports, and energy and construction projects also come within NEPA’s reach. And in hearings across the nation, the task force struck to examine the need for NEPA reform heard a litany of complaints from these industries (and others) that the process had become too complex, cumbersome, lengthy and expensive, in part because of the constant threat of litigation.

Foresters complained that even salvage plans to remove dead trees from wildfires and windstorms are challenged by environmental activists. Commercial fishermen noted that fish rarely remain in one place for the three years required to collect data for harvest decisions under NEPA. And contractors testified that NEPA-related litigation forced them to stop construction of highways in order to examine nonsensical “alternative routes.” The task force also heard that the costs of NEPA compliance had forced some proponents to abandon projects altogether.

Among the mining case studies presented by NWMA was the Rock Creek copper-silver deposit of Revett Minerals (RVM-T, RVMIF-O) in Montana, which had then endured more than 17 years of “permitting analysis.”

The first plan of operations for the non-acid-generating project was filed in 1987. The NEPA review began in 1989, and the first draft EIS was released in 1995, with a supplemental draft EIS released in 1998.

The proposal was reviewed by federal and state agencies and tribal groups, and a favourable record of decision (ROD) was issued in late 2001. However, a biological opinion (BO) by the U.S. Fish and Wildlife Service (USFWS) — a key part of the ROD — was successfully challenged by anti-mining groups and was withdrawn in favour of more studies. As a consequence, the ROD was also withdrawn.

A revised BO was issued in May 2003, with a new ROD issued a month later. These positive developments allowed Revett to complete a public offering and listing on the Toronto Stock Exchange.

The reprieve was short-lived. Activist groups filed suit against the USFWS, ostensibly to protect grizzly bears and their habitat, and in 2005, a sympathetic judge remanded the BO back to the USFWS for further review. After 18 months of additional studies, USFWS reaffirmed that development of the project with recommended mitigation measures would not have adverse net impacts on grizzlies and their habitat.

While the final outcome is still pending, Revett has gained the support of many local residents and tribal groups and expects to ultimately obtain the necessary permits to build and operate the mine.

Opposition to the Rock Creek project is led by Earthjustice Legal Defense Fund (whose motto is “because Earth needs a good lawyer”) and Cabinet Resource Group, with partners Sierra Club, Alliance for the Wild Rockies, Earthworks/Mineral Policy Center, and others, including Western Mining Action Project (WMAP).

WMAP, based in Boulder, Colo., has developed a reputation in environmental circles for its willingness to “litigate everything,” including operating mines in established mining camps. Funded by grants from large foundations, WMAP was one of the first environmental law firms to litigate against operating mines in Nevada, and has made senior companies there a target, albeit with little success to date.

WMAP has more than 100 participants, including environmental groups in Canada, and lists a Nevada “kitty-litter” mine among its “recent victories and ongoing work.” It has some big projects on the hit list too, including the Carlota copper project in Arizona, Rock Creek in Montana, and the Imperial gold project in California. It’s fighting for new bans on cyanide, against reopening uranium mines in the western states, and is now working with native Alaskans and other groups to oppose the Pebble copper-gold project in that state.

Improved prices for minerals have provided activists with a literal bonanza of new mine projects to review and challenge. At the time of the hearings, NEPA-related court cases had reached 1,500, with several hundred more pending lawsuits. The task force was told that “nearly every word in NEPA law had been litigated.”

The hearings confirmed that the litigation chill is not confined to project proponents. Federal and state agencies involved in the review and permitting process are frequent targets of environmental activists. One U.S. Forest Service office in Montana had 23 vegetation projects in litigation, leaving staff little time to deal with other issues.

‘Paralysis by analysis’

The Colorado Mining Association (CMA) told the task force that the fear of litigation by federal agencies “has led to a ‘paralysis by analysis’ that results in duplicative review and delayed decision-making.”

The National Academy of Sciences also weighed in on the fray with a study concluding that the permitting process is “cumbersome, complex and unpredictable,” with a tendency for the process to “drag on for years, even a decade or more.”

The Republican-dominated task force also concluded that reform was necessary and made 22 recommendations to improve NEPA. The most important of these include: timelines for the creation and completion of NEPA documents; shif
ting the burden of proof in legal challenges from the agencies to the challengers; and a citizen’s suit provision that would require those wishing to file suit over “inadequate” NEPA analyses to determine that these analyses were not conducted using “best available information and science,” and to be involved in the NEPA process from the start to have standing.

As CMA noted in its submission, NEPA does not contain criteria to establish standing for parties to appeal NEPA decisions.

“This has led to what some refer to as the ’37-cent’ appeal — that is, for the cost of a postage stamp anyone can appeal a NEPA decision whether or not they have previously been involved in the process, have specific knowledge of the area or project, or have a specific interest to be protected.”

The proposed reforms drew immediate fire from environmental groups.

“Public comments inform agencies of environmental impacts that they may have misunderstood or failed to recognize, and often provide valuable insights for reshaping proposed projects to minimize their adverse effects,” states a submission from Georgetown Environmental Law & Policy Institute. “The public also serves as a watchdog, ensuring that federal agencies fulfill their responsibilities under the law.”

Mining associations insist that they support NEPA’s original goal to evaluate, manage, and mitigate potential environmental impacts from project inception through to post-closure, and are not seeking to curtail public participation in the process.

“U.S. environmental regulations are not the problem,” Skaer stated in the NWMA submission. “It is the process that allows obstructionists to delay the mine permitting process for years through frivolous appeals and litigation with no risk and little investment. Meanwhile, the project proponent and the community that depends on the jobs and economic contributions the mine will provide pay dearly.”

Stalled progress

While comments were accepted on the proposed recommendations through to early 2006, nobody believes that meaningful NEPA reform will happen any time soon. Progress was stalled by the 2006 mid-term election that returned control of the House of Representatives to the Democrats. Democrat Nick Rahall is leading the charge in the House to “protect” NEPA, which he claims has been under attack by Republicans in recent years. Rahall is also resuming his longstanding quest to end “giveaways” under the Mining Law of 1872.

Skaer says that while legislative changes to reform NEPA aren’t likely, at least until after the next election, there is still hope of administrative changes to certain amendments and sideboards associated with NEPA.

“Rome wasn’t built in a day. We intend to keep pushing for whatever constructive changes are possible.”

In the interim, resource developers are trying to dodge the litigation bullet by opting for a full-blown EIS, even for smaller projects that normally would require an EA. But opting for an EIS can be a challenge for a small company. In 1996, the average EIS was 570 pages long. By 2000, the average final EIS had grown to 742 pages and was so dense and complex that only lawyers and experts can understand its content, thus defeating the purpose of public participation in the review process.

A small operator can also be overwhelmed by environmental and non-governmental organizations (NGOs), which number in the tens of thousands and have access to immense financial and legal resources.

European governments rarely disclose their grants to NGOs, but the U.S. has recently enacted legislation — the Federal Funding Accountability and Transparency Act — for a public website that will list every entity receiving federal grants (US$400 billion annually) and contracts (US$300 billion).

Some NGOs don’t rely on government largesse, which makes accountability an elusive exercise. North Carolina-based Resources for Global Sustainability (RGS) maintains a large database of more than 110,000 grants awarded by various U.S.-based foundations. From these databases, RGS publishes Environmental Grantmaking Foundations, a directory of more than 900 foundations that fund environmental projects to the tune of about US$1 billion annually.

The growing number of non-profit NGOs and the tax-exempt foundations that fund them has raised debate that they are gaining power and influence at the expense of the democratic political process.

NGOs are not supposed to engage in political lobbying during elections, but the only agency that appears to be paying attention is the Internal Revenue Service (IRS). In response to mounting complaints, the IRS has stepped up efforts to enforce its “Political Activity Compliance Initiative,” which is aimed at investigating these complaints immediately, rather than waiting to audit tax-related filing.

NGOs are supposed to be accountable to the public by virtue of their tax-exempt status, but this too, is a challenging exercise. A single large grant can flow through its initial recipients to many other groups, including activists with a much different agenda.

As an example, the Gordon and Betty Moore Foundation (Gordon Moore is a co-founder of Intel) recently granted US$4.5 million to the Conservation Fund to launch the Southwest Alaska Salmon Habitat Initiative, formed to “protect key salmon habitat” in southwest Alaska, ostensibly threatened by encroaching development. It’s no secret, locally at least, that “encroaching development” is double-speak for the Pebble copper-gold project in the Bristol Bay region.

The fund also plans to use the proceeds to “strengthen the activities and membership” of the local land trust and the Southwest Alaska Conservation Coalition, described as a coalition of diverse interests and organizations working with the common goal of “salmon habitat conservation.”

The Moore Foundation grant includes a pledge to obtain matching funding by having the fund engage the public, recreational outdoor equipment retailers and manufacturers, and other businesses to raise additional funding and support.

The Moore Foundation largesse doesn’t stop there. In one month alone (November 2006), it doled out US$925,625 to Trout Unlimited, US$864,163 to Earthworks, and almost US$2 million to the Renewable Resources Coalition (RRC), for “media” and other campaigns involving the Bristol Bay region. RRC is also backed and supported by Robert Gillam, a wealthy and influential financier with a posh fishing lodge about 20 miles from the Pebble project he wants quashed.

Pebble opponents are lobbying hard for a fish-and-game refuge in the Bristol Bay region, along with various other proposals aimed at halting the project before it enters the permitting stage. But Pebble has many local supporters too, including government officials who believe the project should have the opportunity to go through the permitting process, “because to do anything less sends absolutely the wrong message to businesses that want to come here and invest in Alaska’s future.”

Advocating land withdrawals, for any reason, is a risky tactic because 40% of the total acreage in the state is already locked up in parks and preserves, wildlife refuges and wilderness areas. In southwest Alaska, such designations account for almost 70% of the land base. A proposal to remove another 7 or 8 million acres will be controversial in a state where many citizens still haven’t forgiven former president Jimmy Carter for withdrawing 100 million acres with a few pen strokes in 1980.

Borell says out-of-state funding used for anti-mining campaigns is a sore point, but adds that such tactics are part of modern-day resource development.

“All mining companies have these kinds of challenges no matter where they are in the world, even Chile and Peru,” he says.

With several mines now operating successfully in the state, Borell says activists don’t have the influence they once had.

“People see past the talk of preserving this and that, and see good jobs being lost.”

Alaskans have the expertise to responsibly mana
ge and develop their lands, Borell adds.

“We’ve got some pretty smart people in the legislature, and they’re going to do what’s best for the state.”

Community outreach

Borell says the best way to fight anti-mining activists is through community and stakeholder outreach programs that meaningfully engage local citizens throughout the development process.

“These programs have to be on-the-ground, and they have to be real. They can’t be just fluff, because people here can see through that.”

Borell says all the companies involved in the Donlin Creek gold project have done an “excellent job” on this front. The gold project is under lease from two Alaskan native corporations, Calista Corp. and the Kuskokwim Corp.

“The project started from day one as a dry, drug-free camp, which wasn’t easy, because the region had high unemployment and all the social problems associated with that,” Borell says. “Now most of the supervisors on-site are local native shareholders and we’re seeing young people learning skills they will be able to take anywhere.”

Borell says activists made the usual efforts to halt the project, without much success, because the companies had gained the trust of most local citizens.

“When the activists came, local folks listened and asked what kind of jobs they would provide. When they promised to deliver grants, folks said, ‘No, we don’t want grants, we want jobs.'”

Alaskan natives have a powerful voice in resource development in Alaska, where they control 44 million acres of land and are partners in several large mine projects, including the Red Dog mine near Kotzebue.

The success of Red Dog and other new mines in the state has helped the general population understand mining and the benefits it brings to remote regions with high unemployment, Borell says.

While Alaska was built on mining, the state didn’t have one major mine between the Second World War and 1989. It now has five operating mines, with many others in the development pipeline. Two of the proposed new mines — Kensington, near Juneau, and Rock Creek, near Nome — are stalled or partially stalled by NEPA-related legal challenges launched by environmental groups.

In the case of Rock Creek, the lawsuit was filed on behalf of the Bering Straits Citizens for Responsible Resource Development against the U.S. Army Corps of Engineers (COE), challenging its issuance of a permit for the project. The suit caused a stir in Nome, where a majority of residents and two native corporations support the project.

According to local reports, the organization behind the suit was a “community mystery” until three citizens stepped forward to confirm that they had filed the lawsuit; albeit with the help of Trustees for Alaska, an environmental law firm funded by more than a dozen foundations, mostly from the Lower 48, and including the Turner Foundation and Rockefeller Family Foundation.

In the case of Kensington, the suit was filed against COE by the Sierra Club, the Southeast Alaska Conservation Council, and Lynn Canal Conservation. The suit challenged a permit granted by COE to operator Coeur d’Alene Mines (CDM-T, CDE-N), which had spent more than US$25 million on more than 900 environmental studies since 1987.

The U.S. District Court for the State of Alaska dismissed the suit challenging the permit in mid-2006, which allowed Coeur to start building its US$100-million gold project. Notwithstanding, the Sierra Club and the Southeast Alaska Conservation Council took their fight to the U.S. Ninth Circuit Court of Appeals in San Francisco, and won a temporary injunction against at least some construction activity.

The Kensington project has faced many challenges over several decades, but a recent independent poll shows that the mine now enjoys the support of 76% of Juneau-area residents.

Borell is optimistic that Coeur and other companies stalled by litigation will ultimately prevail, but isn’t surprised that the environmental groups are taking the fight to courts in the Lower 48.

“Environmentalists prefer to file in the Ninth Circuit Court, which is typically a more liberal court,” he says. “It’s so overloaded down there that it can take a long time to hear a case. If delay is the goal, that’s the place to go.”

Fortunately, many of the cases filed by environmental groups ultimately fail in higher courts, such as the D.C. Court of Appeal, or the Supreme Court, which typically give “Chevron Deference” to federal agencies.

Based on the 1984 precedent-setting case of Chevron USA Inc. vs. National Resources Defense Council, the Supreme Court ruled that courts must defer to reasonable (federal) agency interpretations of ambiguous statutes, because these agencies bring more expertise to bear on such questions, are politically accountable, and because Congress, by leaving a statute ambiguous, delegated policy-making to the agencies.

Environmental lawyers appear to have much less faith in the capabilities of federal agencies, judging by the number of lawsuits challenging their competence and technical capabilities.

If submissions against NEPA reform are any indication, environmental lawyers don’t see much need for reforms to reduce delays and limit litigation. The real heart of the issue, according to one submission, is whether changes are needed to NEPA or other regulations “in order to improve the sometimes spotty performance of federal agencies charged with implementing the act.” The environmental law foundation also blamed the task force for spending “so little time inquiring into the sufficiency of agency training, the extent to which agencies commit adequate staff and financial resources to NEPA compliance, and the extent to which improvements in guidance, training, and resources could reduce unnecessary delays and burdens in the NEPA process.”

In the absence of NEPA reform, such battles will continue in the courts along highly polarized lines. But if the main battle is lost, America may no longer be a land of opportunity with a government of, for and by “the people,” but rather a land where opportunity is constrained by a government of the lawyers, by the lawyers, for the lawyers.

— The author is a freelance writer based in Vancouver, and former editor of The Northern Miner.