What should a new Sio Silica bid look like?

They’re back. Sio Silica, refused a licence to operate a silica sand subsurface extraction operation on the basis of several uncertainties identified in a public review conducted by the Manitoba Clean Environment Commission, has submitted a modified proposal aimed at addressing those uncertainties.

One intriguing departure from their previous approach is the signing of a Memorandum of Understanding with Long Plain First Nation to lead an “Indigenous environmental review” of the project that will ensure Indigenous knowledge, values and environmental stewardship are central to the review. (Another intriguing feature is the dual role of a local elected official as an officer of the company.)

The details of company’s Indigenous-led process will no doubt be revealed over the coming weeks, but the apparent degree of rigour contemplated would be a step forward for Indigenous participation in project reviews, and may prove to be instructive for Ottawa’s review of “nation-building” projects. It is widely recognized that Indigenous knowledge and values can be a useful contribution to environmental review processes.

Once the contents of the MOU become known, we will have a better idea of the nature of the “due diligence” (investment?) process envisaged. Regardless of the outcome of the company’s Long Plain-led initiative, the province will still be required to conduct a thorough public review of the project, hopefully including the government’s own appointed but heretofore hibernating Clean Environment Commission.

Sio Silica should be commended for returning with a proposal that attempts to address the concerns upon which its first attempt foundered.

But the return of Sio Silica forces us to consider some public policy issues left unaddressed by the previous review.

The new proposal is for a staged development, starting slow with lots of monitoring and testing, while ramping-up production; in effect, an in situ experiment.

Will the licence specify what happens when problems are encountered?

Is there then to be a modified plan filed, and must that plan go through a further public-review process? Risk assessment will be at the centre of both determining if this approach is licensable at all, and if so how any risks that might be revealed will be evaluated; and what happens if the risks are deemed to be too high; and so deemed by whom? Risk assessment includes risk tolerance and therefore depends very much on where you sit (or live).

The company’s own website extols the value of high-grade silica sand in a number of high value uses. We have already licensed one silica sand mine and a third company is exploring yet another deposit. Before we essentially give away this strategic mineral with a high probability of greatly increased future value, we would be well advised to revisit our traditional, rather loose approach to allocating our mineral resources.

The world has changed a great deal since the rejection of Sio Silica’s previous proposal. The cosy world of a seamlessly integrated North American economy is gone. We need to be much more strategic, and hard-nosed about managing and allocating our resources.

Should we be concerned about how this potential strategic mineral is to be deployed?

Sio Silica is focusing on high-end usage; and has promised that none of the resource will find its way into shale oil and gas “fracking,” a promise that, of course, should be an enforceable term of any licence.

However, unless the value-added takes place in Manitoba, project value to the province, in the overall scheme of things, will be modest.

If there is approval of a project the question of financial assurance —not often well handled in the past as evidenced by the many “orphan” sites that have had to be rehabilitated at public expense — will have to be addressed. How big a bond — and not just a token — should the company post to account not only for eventual shutdown, but also mitigation if something goes wrong as production ramps up?

A public relations push is underway. Company ads vaguely reference “billions” in economic development and “thousands” of jobs, perhaps implying that this one project will usher in a tidal wave of investment. Perhaps. At the end of the day licensing is not a popularity contest.

What provisions should be made for quantifying company aspirations and promises, and providing for revisions if not met? Just how contingent ought we to make our environmental licensing?

We expect our government to steward our resources wisely; and that now means taking a much more aggressive, forward thinking and holistic approach to environmental licensing.

It means environmental protection but also much, much more.

It means maximizing value for Manitobans (and Canada). We need a strategic minerals policy before we allocate the resource, not after its all been given away.

In a fast changing trading environment, we need to shift gears, and fortunately, since our current legislation is based on the principles of environmental assessment, we need not change our laws to do so.

None of this implies Sio Silica cannot meet whatever conditions might be required for project approval; or for that matter, that the province will grab the nettle, and decide to address thorny but critical public policy issues that have been sidestepped in the past; although if not now, when?

Norman Brandson is the former deputy minister of the Manitoba departments of environment, conservation and water stewardship.