MAC/20: Mines and Communities

Mining Company Gets Protection in Legislation Pushed by Daschle

Published by MAC on 2002-01-03

Mining Company Gets Protection in Legislation Pushed by Daschle

By Robert Pear

3 January 2002

WASHINGTON, Jan. 2 - A mining company in South Dakota has tapped a rich vein of influence on Capitol Hill, turning to the Senate Democratic leader to obtain valuable help for a project in his state.

With little debate, lawmakers agreed to relieve the company, Homestake Mining, of any legal liability that it might have for damage done to the environment in digging gold from the Black Hills over the last 125 years.

The company, which has excellent political connections and high-powered lobbyists, had been planning to close the mine this month. Scientists said it would be a good site for an underground physics laboratory. But Homestake, now owned by Barrick Gold of Toronto, insisted that it first had to be protected against lawsuits.

Senator Tom Daschle of South Dakota, the Democratic leader, was the chief sponsor of the bill under which the federal government will assume liability for any environmental damage. Representative John Thune, Republican of South Dakota, also claims credit for the legislation. President Bush has recruited Mr. Thune to run against South Dakota's other senator, Tim Johnson, a Democrat, as part of the Republicans' effort to regain control of the Senate.

The Homestake legislation was one of the "miscellaneous provisions" tacked onto the 2002 appropriations bill for the Defense Department. The House and the Senate approved the bill on Dec. 20, hours before adjourning for the year, and Mr. Bush is widely expected to sign it in a few days.

Mr. Daschle said the lab would be an economic boon to the small town of Lead (pronounced leed) and would create opportunities for scientific research on subatomic particles known as neutrinos that could yield insights into the nature of matter and the evolution of the universe.

Critics call the bill a sweetheart deal for the company and the state. Environmental groups and some members of Congress have expressed concern about the precedent that would be set if the government took over the liability.

Supporters of the science project said they needed three types of assistance from the government, federal assumption of liability, $281 million to convert the mine to a lab and several hundred million dollars to operate the lab.

Scientists and federal officials said the total cost to the government over 10 years could reach $500 million to $1 billion. That includes the cost of buying a neutrino detector and other equipment and conducting experiments. A spokesman for Mr. Daschle, Jay Carson, said the cost of the bill covering liability protection had been estimated at $50 million.

Officials at the National Science Foundation said they were apprehensive that, under the legislation, they might also have to contribute to the cost of cleaning up the site.

Mr. Carson said the senator rejected the criticism. "The legislation assures that the public interest will be protected," Mr. Carson said. "The project is contingent on grants from the National Science Foundation. An independent entity would inspect the site, and the Environmental Protection Agency can veto the project if it would endanger public health or the environment."

Homestake says the mine has been in operation since 1876, 13 years before South Dakota became a state. The company describes it as the world's oldest continuously operated gold mine.

The chairman of Homestake, Jack E. Thompson, said 1,250 tons of gold had been extracted since the company was formed by George Hearst, father of William Randolph Hearst, and his partners.

Scientists said the Homestake mine, 8,000 feet underground, would be valuable for research because it was shielded from cosmic rays and other radiation that interfere with experiments. About 200 people would work at the lab.

In recommending construction of a lab, John Bahcall, an astrophysicist at the Institute for Advanced Study in Princeton, N.J., said it could become "a gold mine for science discoveries about physics, astronomy, biology and geology."

But Representative Sherwood Boehlert, the New York Republican who is chairman of the House Science Committee, said the legislation was "a sweetheart deal for the Canadian company that owns Homestake and for the state of South Dakota."

"This bill," Mr. Boehlert said, "could saddle taxpayers with costly and unprecedented environmental responsibilities. The federal government will be financially responsible for activities it did not undertake at a piece of property it does not control."

Jay Tutchton, a lawyer in the Denver office of Earthjustice, a law firm that specializes in the environment, said: "The legislation is a huge gift to Homestake. It makes some sense as a local economic stimulus. But there are probably cheaper ways to stimulate the local economy."

Mr. Tutchton estimated that "Homestake is getting off the hook for $30 million to $40 million of potential liability, based on the experience of adjacent mines that were closed and became Superfund sites."

The mine tunnels, he said, can leak highly acidic water harmful to human health and to fish and other aquatic life. The mine includes two deep shafts, more than 500 miles of underground tunnels and machinery above ground that operates elevators that carry workers into the mine and remove the ore.

Under the Superfund law, owners and operators of mines and toxic dumps can be held liable for the costs of cleaning up the properties long after they have been sold or shut.

Daschle aides insisted that federal officials would have control over the project and could block it if environmental damage was found to be too extensive.

Patton Boggs, a law firm here, lobbied for the legislation on behalf of Homestake. Peter D. Robertson, a partner at the firm who was chief of staff at the Environmental Protection Agency under President Bill Clinton, said, "Our firm drafted the first several versions of the legislation."

Under the bill passed by Congress, the government will "assume any and all liability relating to the mine and laboratory, including liability for damages, reclamation, the costs of response to any hazardous substance" and closing the mine.

The bill says Homestake will not be liable to any person or to the government for "damages to natural resources or the environment" arising from use of the mine or the lab, regardless of when the damages occurred or were found.

Under the bill, the government promises to defend and indemnify, or reimburse, Homestake for any liability. But the government waives its sovereign immunity so that it could be sued by Homestake or the State of South Dakota.

Mr. Thompson said the company was not fully satisfied and might ask Congress for even greater protection against suits.

Democrats have generally opposed legislation to limit the damages that consumers can recover in civil suits. Dick Armey, the House Republican leader, said he found it paradoxical that Mr. Daschle had opposed limits on suits by future victims of terrorism but now supported such limits when they would help Homestake.

"You have Senator Daschle feigning moral outrage over limitations on liability in antiterrorism insurance," Mr. Armey said. "Yet he comes right back on behalf of a special interest in his own state and says, `I want liability limitations.' "

A spokesman for the foundation, Curt Suplee, said many other projects, reviewed and approved by the agency, had been waiting for years to receive their funds. Scientists working on those projects would be puzzled if the Homestake project "jumped ahead" of them, Mr. Suplee said.

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