Comments on BC tailings dams risk reduction audit
May 26th, 2016
These comments on BC tailings dams risk reduction audit are based on the recently published AUDIT OF COMPLIANCE AND ENFORCEMENT OF THE MINING SECTOR.
We enjoyed reading in the audit:
“1.10 Risk-based approach
We recommend that government develop a risk-based approach to compliance verification activities, where frequency of inspections are based on risks, such as industry’s non-compliance record, industry’s financial state, and industry’s activities (e.g., expansion), as well as risks related to seasonal variations.”
We couldn’t agree more. It almost sounds like the auditor read from Riskope’s playbook. Indeed we have been preaching for years for risk-based approach for safety compliance, but also appropriate mitigation level, bonds, and calibrating insurance.
The audit gives advices already addressed in various instances by researchers, scholars, academics and consultants. They all aim at enhancing current performances of the world’s tailings dam portfolio. They are definitely the way of the future and constitute a proven best available technology (BACT).
When properly built a risk-based approach not only gives a clear roadmap toward mitigation, but also provides a transparent justification on decisions made both internally (for corporate boards and governments) but also externally.
However, as usual, the devil is in the details and thus we would like to point out a few caveats. Our comments below are far from covering all the aspects the audit discusses. They represent a risk advisor point of view on some of the main issues.
Comments on BC tailings dams risk reduction audit
The audit gives strong advice for removing “irreconcilable conflict” from the chain of command and permitting in the mining industry. Absolutely! Many times over the years we solved degenerating and potentially catastrophic crises by simply coming in with a set of new unbiased eyes. Being free of any conflict of interest, not having a solution to “sell”, being only eager to rationally evaluate and support constitute a winning angle. This is a point we had focused our attention on at CIM 2013 even at design and risk assessment level.
The audit considers the major risk to the environment from mining activities as being water contamination from the chemical processes. We think this statement may require some detailed evaluations as it comes out as a “gut feeling” rather than a proven statement. It would be a good idea to perform a 360-big picture risk assessment of the mining industry system before jumping to conclusions. The mining industry system includes our society at large.
In our decades long experience in risk assessment we have noticed several times that what seems or is perceived as a major risk may often not be as damaging as others.
Interestingly the audit also tackles another major theme we have discussed for years, i.e. the silo culture. Silo culture reigns in all levels and sectors of our society and the audit stated: “Neither ministry coordinates with the other on their compliance and enforcement activities”.
Later-on the audit focuses on monitoring, site inspections and states: ”Neither MEM nor MoE are conducting adequate monitoring and site inspections and neither have assessed how this is impacting risks”. The point is that a risk-based approach must keep track and alter its road-map according to new available information. A risk-based approach is a dynamic practice. A manager has to re-update the approach every-time they perform a mitigation or monitoring campaign. This is completely doable and considered standard practice in many industries.
Based on our international experience we would consider the lack of assessment is mostly due to a variety of “syndromes”. They stem out of the general poor quality of common practice risk assessment methods, but also from what we call the overwhelming syndrome. We have solved those issues for example here or here or here.
And, last but not least, another remark from the audit: “We found that the two ministries are not informing the public and legislators about the long-term risks from mining, the effectiveness of the agencies’ regulatory oversight, and the overall performance of the companies being regulated”. In our experience the lack of communication will eventually turn into major crises.
Transparent communication is paramount to increase the credibility of the project and obtain the Social License to Operate (SLO). In a world dominated by social media risks can create, if not contained from the start, a massive ripple effect. It may then by far outweigh business interruption or physical losses of a mishap. In our risk assessments we always consider reputational damages and crisis potential as components of the overall consequence function. A few years ago we already focused our attention on these themes in pigs don’t fly.
We will stop this brief review here. However the audit touches many other points that would be worth discussing. Among these, for example, the adoption of codes not specific to tailings dams. Or the fact that those codes leave many points open to interpretation.
At the end of the day the audit cites the independent expert panel for Mount Polley. That panel clearly stated that “business as usual cannot continue”. Again an advice that we totally share with all those aiming at a significant enhancement of the world-portfolio of tailings systems.
Do we really want to stop the “business as usual”? Do we want to get significantly better at avoiding, from the early stage of investigations, the root causes of future failures?
If that’s the case we need:
- to embrace, among many other measures, “Risk Management 2.0”. Leave behind common-practice risk assessments, their incomplete and thus misleading results.
- Rethink the investigation, design, construction, management and monitoring process of tailings dams. That means also to include quantitative and rational, unbiased risk based decision-making at each step.
- Find a way to minimize complacency. Also, find a way to eliminate conflict of interest in the process of building, operating and closing a tailings system.
It will take time to enhance the world-portfolio performance of tailings dams.
It will be costly.
The public will want answers. No or poor answers will upset the public.
We have to maximize efficacy, efficiency (look here to see a discussion on these two terms) and get the job done. That will add value to our operations, preserve the social license to operate. It will avoid boycotts and foster our corporate social responsibility culture.
Tagged with: BC tailings, risk reduction audit, Risk-based approach
Category: Consequences, Crisis management, Mitigations, Risk analysis, Risk management