Baffinland railway may be “dead,” Pond Inlet group declares

Committee alleges QIA is in a conflict of interest


The existing mine site at Mary River, from which Baffinland is now allowed to extract and ship up to 4.2 million tonnes of iron ore. The company wants regulators to change the rules to allow the shipment of up to 12 million tonnes via a railway to Milne Inlet. (IMAGE FROM BAFFINLAND SUBMISSION TO NPC)

The existing mine site at Mary River, from which Baffinland is now allowed to extract and ship up to 4.2 million tonnes of iron ore. The company wants regulators to change the rules to allow the shipment of up to 12 million tonnes via a railway to Milne Inlet. (IMAGE FROM BAFFINLAND SUBMISSION TO NPC)

This illustration shows the type of embankment that Baffinland would likely have to use for its proposed Mary River to Milne Inlet railway. (BAFFINLAND IMAGE)

This illustration shows the type of embankment that Baffinland would likely have to use for its proposed Mary River to Milne Inlet railway. (BAFFINLAND IMAGE)

The controversial 110-kilometre railway that Baffinland Iron Mines Corp. wants to build between the Mary River iron mine and its port at Milne Inlet “may be dead in its tracks,” says a Pond Inlet hamlet committee.

In a statement released near the end of December, when Nunatsiaq News had shut down for the holiday period, the committee, which represents the Hamlet of Pond Inlet and the Mittimatalik Hunters and Trappers Organization, said they have “mounted a challenge” to Baffinland’s railway proposal.

“The Pond Inlet Hamlet Council, together with hunters and trappers organizations from several communities, have written letters, passed resolutions and submitted technical documents opposing the proposed railway,” the Pond Inlet statement said.

If it were ever constructed, the Milne Inlet railway would become the first railway north of the treeline in Arctic Canada.

It’s part of Baffinland’s ever-changing phase two expansion proposal, the first version of which dates to October 2014.

In the latest proposal, Baffinland wants government regulators to change the rules governing its operations at Mary River to allow the production and shipment of up to 12 million tonnes of ore each year through Milne Inlet, a big increase from the 4.2 million tonnes a year they’re allowed to ship through that route now.

At first, Baffinland proposed to transport that ore to Milne Inlet by increasing the number of haul trucks they use from 22 to 75.

But in February 2016, Baffinland said they now want to ship their ore by rail, in a project that would involve five diesel-electric locomotives and 176 rail cars, with five or six trains running each day at speeds of between 60 and 75 kilometres an hour, plus bridges, sidings and a railway embankment.

At first, Hamlet of Pond Inlet representatives appeared to welcome the new proposal, especially after Baffinland backed away from a proposal to ship ore for up to 10 months of the year, which would have involved punching vessels through sea ice in the earlier months of winter.

Pond Inlet committee dead set against railway

But now, the hamlet and the local hunters and trappers association oppose the railway scheme, and said so at informal public meetings in Pond Inlet held this past Dec. 4 and Dec 5 by the Nunavut Planning Commission.

After the proposal bounced like a pinball around the regulatory system for nearly three years, the issue heated up this past fall, when Baffinland’s expansion plan landed once again before the planning commission.

The planning commission must amend the North Baffin Regional Land Use Plan to allow the use of a railway inside the Mary River to Milne Inlet transportation corridor.

That’s because Nunavut’s regulatory rules state that any proposed development must conform to an existing land use plan before it can move to the Nunavut Impact Review Board for an environmental and socio-economic assessment.

But even before the railway scheme is moved to the review board, opponents of the proposal in Pond Inlet are using the land use planning process to oppose it on environmental and socio-economic grounds.

The local Mary River Phase Two Review Committee, which includes Pond Inlet residents appointed by the municipal government and by the hunters and trappers organization, say they oppose the railway for three main reasons:

• If built, the railway and its high embankment would create a barrier for hunters travelling in the area by snowmobile or dog team.

• If built, the railway would act as a barrier to migrating caribou and do serious damage to the already dwindling caribou herds in the area, and would damage other wildlife species.

• Pond Inlet has seen few benefits from the Mary River mine’s existing operation and Inuit employment rates “have been dismal in recent years,” falling to 12.5 per cent of the workforce, a long way from the 25 per cent target that Baffinland agreed to.

“While no other mines in Nunavut have achieved an Inuit-majority workforce, no project in recent years has suffered from such a poor Inuit participation rate,” the committee said.

The Pond Inlet committee also says they don’t trust Baffinland’s promise to avoid through-the-ice shipping.

“With the railway delivering greatly increased amounts of ore to port, residents are concerned that it’s just a matter of time before the company insists it requires year-round shipping,” the Pond Inlet committee said.

Is QIA in a conflict of interest?

And they also take aim at the organization that’s supposed to defend the interests of Inuit on development issues, the Qikiqtani Inuit Association, saying the QIA is in a conflict of interest.

“To the extent that benefits and resources are directed to persons and activities that are not related to mitigating the social and environmental costs of resource development, QIA is in a conflict of interest, having a vested and institutional interest in supporting and encouraging resource development and the revenues it generates…,” the committee said in a written submission to the planning commission.

That’s because the QIA would make a lot more money than it does now from an expansion of iron ore production at Mary River, through royalty arrangements contained in its Inuit impact and benefit agreement with Baffinland and through other sources of revenue, such as gravel quarrying.

“Funds received by QIA can also go to operating and related expenses and can benefit the elected officials of QIA and others, in ways inconsistent with the principle of contributing “to achieving and maintaining a standard of living equal to other Inuit in Nunavut and to Canadians,” the committee said in its submission.

They also say that the QIA lacks transparency in communicating what it does with the revenues it receives from Baffinland.

“The only way that the extent and nature of this apparent conflict can be determined is through complete transparency, something that is, with respect to the income and expenditures of QIA, not available to Inuit in the region.”

They acknowledge that the QIA has used Mary River money to develop some social and cultural programs, but that without an adequate level of transparency, it’s impossible to assess “the extent and nature” of the QIA’s alleged conflict of interest.

They also say that the QIA should be held to the same standards of accountability and transparency that Baffinland must abide by.

And they urge the planning commission to be conscious of the QIA’s alleged conflict of interest when considering the QIA’s submissions to the commission.

QIA defends itself

To defend itself from Pond Inlet’s conflict of interest allegation, the QIA provided the planning commission with a supplementary submission.

In it, the QIA lists its legal responsibilities under various articles of the Nunavut Agreement and states that they “strive to balance Inuit interests in environmental protection with advantageous outcomes for Inuit.”

The QIA said all Mary River royalties must go into a special pot of money called the “legacy fund,” and that the QIA is not allowed under its bylaws to either terminate the fund or avoid contributing to it.

“No part of the capital of the legacy fund can be touched by QIA. Therefore royalty payments cannot be used by QIA for other purposes,” the QIA said.

The income generated by investment of the legacy fund goes into another pot of money that the QIA calls its “benefits fund.”

They’ve already used money from the benefits fund to pay for programs related to culture and children, two priorities they developed after consulting Inuit throughout the Qikiqtani region, the QIA said.

In 2018, that fund will generate $1.5 million that the QIA will distribute throughout the region, but in its Dec. 12 submission, the QIA did not list any Pond Inlet-specific contributions.

“QIA is accountable and transparent. Each year our annual report outlines the programming and funding available to Inuit,” the QIA said.

Baffinland actually has a project certificate, dating to 2012, that allows a railway. But it’s for a southern route leading to Steensby Inlet on Foxe Basin. The company has so far chosen not to implement that plan.

It’s not clear when the planning commission will rule on Baffinland’s request for a land use plan amendment for the Milne Inlet corridor.

But the company says it wants to start construction on the railway as early as the fall of this year.

Pond Inlet’s submissions were developed with technical help from Frank Tester of the University of British Columbia, Vincent L’Herault of the Université du Québec à Rimouski, and Warren Bernauer, a lecturer at the University of Manitoba.

Pond Inlet Review Committee Submission to the Nunavut Planning Commission by NunatsiaqNews on Scribd

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