BC considers bonds to cover high-risk industrial site project cleanups

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industrial cleanup
B.C. Minister of Environment and Climate Change Strategy, George Heyman, said the revised legislation is designed to protect taxpayers who have at times found themselves on the hook for cleanup costs from abandoned projects. Photo Credit: photogeek, stock.adobe.com

British Columbia has proposed legislation that would require owners of high-risk industrial projects to set aside funds for environmental cleanups, even if a project is abandoned.

The proposed changes could use the Environmental Management Act to enable future provincial regulations to collect, use and enforce financial assurance requirements for project cleanups to prevent the creation of future contaminated sites.

The amendments are part of B.C.’s multi-year Public Interest Bonding Strategy aimed at strengthening environmental accountability and upholding the “polluter pays” principle. It could ultimately mean that companies will be obligated to plan for decommissioning and closure of their operations, and be required to provide financial security for project cleanups in advance.

“Abandoned industrial projects can negatively affect communities, the surrounding environment and our economic well-being,” announced Josie Osborne, Minister of Energy, Mines and Low Carbon Innovation, in a statement. “Improving environmental accountability will strengthen relationships with First Nations, increase investor confidence, support B.C.’s competitiveness and help build a climate-resilient province,” added Osborne.

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B.C. Minister of Environment and Climate Change Strategy, George Heyman, said the revised legislation is designed to protect taxpayers who have at times found themselves on the hook for cleanup costs from abandoned projects.

The mining, oil and gas, and energy sectors already have frameworks in place to address financial assurances. Some environmental organizations have recommended the Public Interest Bonding Strategy follow the guidelines set out in the Major Mines Reclamation Security Policy. 

If the new system for high-risk industrial projects moves ahead, projects with the highest potential risk will be addressed first, said provincial officials, although the province has yet to define what those risks could be. In online feedback on the issue, respondents noted that risks apply to ecosystems, wildlife, water quality, and biodiversity.

A 2022 B.C. discussion paper on the Public Interest Bonding Strategy states that, “while most companies responsibly manage their environmental risks, some are either unwilling or unable to do so.” 

The discussion paper suggests a two-phase review for projects could start with foreseen cleanup costs and end with unforeseen cleanup costs. 

“Closure plans could be used to ensure industrial project sites are properly cleaned-up and reclaimed in a timely way,” states the discussion paper. “They are a planning tool that help to identify preliminary closure activities that can be taken throughout the life of a project to ensure that environmental clean-up and reclamation is ongoing and not left until a project’s end-of-life.”

The discussion paper suggests that “proactive planning” around decommissioning could potentially prove to be more cost-effective for companies and result in improved environmental outcomes. 

The new legislation could also call for an increased role for Indigenous groups during cleanups in highly-sensitive areas or on land valued by Indigenous communities.  

The discussion paper notes that more work needs to be done to clarify and define “environmental cleanup and reclamation.” 

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