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Vol. 21, No. 41 Week of October 09, 2016
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Breaking the impasse

Legal fee cap indicates resolution of Pebble-EPA court battle draws nigh

Shane Lasley

Mining News

Is the impasse between Pebble Limited Partnership and U.S. Environmental Protection Agency over the potential development of the world-class Pebble copper deposit in Southwest Alaska about to be resolved?

Northern Dynasty Minerals Ltd., currently the sole owner of the Pebble Partnership, believes the standoff will likely be over by January if an ongoing lawsuit between Pebble and the EPA runs its full course, and possibly sooner if the parties come to an agreement outside of the courtroom.

“Either way, we have every confidence that we will prevail, and Pebble will ultimately move forward to initiate the environmental impact statement process under the U. S. Clean Water and National Environmental Policy acts unencumbered by any extraordinary development restrictions as proposed by EPA,” said Northern Dynasty President and CEO Ron Thiessen.

Secret advisory committees

The extraordinary development restrictions mentioned by the Northern Dynasty executive and how the EPA went about supporting such restrictions is what got Pebble and the environmental agency locked up in a court battle in the first place.

In 2014, the Pebble Partnership filed a complaint in U. S. district court, alleging that the EPA violated the Federal Advisory Committee Act (FACA) by collaborating with anti-mining activists to develop a strategy for utilizing Section 404 (c) of the Clean Water Act to place restrictions or outright prohibit permits for developing a mine at Pebble before the permitting process.

In making its case, the Pebble Partnership claimed the “anti-mine coalition secretly advised EPA on how the agency should develop its strategy under Section 404(c), including making critical recommendations on who EPA officials should recruit, how the agency could best leverage the Alaska Native “tribes,” and how to formulate EPA’s messaging in a way that would minimize anti-federal government backlash among Alaskans.”

Once a suitable strategy was formulated, according to Pebble, the anti-mine groups played an integral role in preparing EPA’s Bristol Bay Assessment, a study aimed at determining the effects developing a mine at Pebble would have on fish resources near the enormous copper-gold-molybdenum deposit.

The assessment was used as the basis for unprecedented pre-emptive 404c restrictions that would detrimentally limit the footprint of any mine allowed to be developed at the enormous porphyry copper-gold-molybdenum deposit in Southwest Alaska.

The Pebble Partnership asserted that the behind-the-scenes collaboration between EPA and the anti-mine groups violates advisory committee law and taints the entire process for which the environmental agency is basing its Clean Water Act determination with regards to Pebble.

Beyond seemingly unlawful collaboration with anti-Pebble advocates, Northern Dynasty says the evidence collected in support of the FACA case shows that EPA first decided to preemptively veto or restrict permits to develop Pebble and then built a case to support this decision.

"We have every confidence these facts will be validated at trial, and EPA’s ability to use a severely flawed BBWA (Bristol Bay Watershed Assessment) report to justify its pre-emptive regulatory action at Pebble will be stayed,” Thiessen said

Federal Judge H. Russel Holland found Pebble’s allegations credible enough to issue a preliminary injunction in November 2014 that barred the EPA from finalizing its planned restrictions on Pebble permits.

Northern Dynasty said this indicates a reasonable likelihood of Pebble prevailing on the merits of its case.

“While it’s never possible to guarantee legal outcomes, we have long held that the evidentiary basis for us to prevail in our litigation against EPA is well-established,” said Thiessen. “From the tens of thousands of pages of communication, memos and reports obtained under discovery and the Freedom of Information Act, and from the deposition of key government employees, it’s now clear that EPA’s frequent, intensive and ongoing engagement with ENGOs (environmental non-government organizations) and anti-mining activists in planning and executing its BBWA study and CWA 404(c) strategy occurred in violation of federal laws intended to provide for open, honest and transparent decision-making.”

End draws nigh

Steptoe & Johnson LLP, a respected international law firm that is representing the Pebble Partnership in the FACA case, also must feel confident that a positive outcome for its client is drawing nigh.

Steptoe, which has a reputation for being able to solve complex problems with a governmental aspect, has agreed to cap its fees to finish up the FACA court battle with EPA at US$1 million.

“The significance of today’s announcement is we now have certainty that Northern Dynasty will have the financial and professional resources necessary to pursue its legal case against EPA to a final conclusion,” Thiessen explained.

If that conclusion results in a victory for Pebble, Steptoe will get a bonus payment for its success.

Thiessen said the firm’s willingness to cap its legal fees at $1 million reflects its confidence in Pebble’s FACA case.

Notwithstanding the new fee arrangement, Pebble continues to seek a resolution to its impasse with EPA that forestalls litigation.

If the trial runs its full course without an earlier settlement, Northern Dynasty anticipates a final judgment in January.

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