Thank you Mr. Chairman.
My name is Steve Borell, I am the Executive Director of the Alaska Miners Association and I am testifying on behalf of the Association.
We are extremely pleased that you are holding a hearing on this bill. It is our opinion that World Heritage Site and Biosphere Reserve designations may be the single most important resource issue before the Congress this Session. For the past several years the presence of World Heritage Sites and Biosphere Reserves have been used to harass and block projects that are adjacent to these areas. This has occurred in Alaska, Montana, Australia, and Kamchatka, to list just a few.
It is well-known that the presence of World Heritage Sites (WHSs) or Biosphere Reserves (BRs) have been used by environmental groups to block projects. There is however another aspect that has not been recognized and is possibly even more dangerous. This involves use of WHSs or BRs by business competitors or foreign governments to block projects in the United States. It is therefore crucial that S.510 become law so that Congress, not the Executive Branch, can determine whether lands and waters of the United States are given international designations. The Alaska State Legislature recently passed and the Governor signed a Joint Resolution supporting this change to federal law.
USE OF WORLD HERITAGE SITES AND BIOSPHERE RESERVES TO BLOCK PROJECTS
Icy Bay Timber Harvest: In 1993 the Chugach Alaska Corporation, one of the 12 Regional Native corporations in Alaska, was working to obtain permits to harvest the timber from their private lands near Icy Bay on the Gulf of Alaska. After the U.S. Army Corps of Engineers issued Chugach Natives a "wetlands" permit under Section 404 of the Clean Water Act, a group composed of two individuals and four environmental organizations [Trustees for Alaska, Alaska Center for the Environment, Southeast Alaska Conservation Council, and Yakutat Resource Conservation Council] filed suit against the Corps in the Federal District Court of Alaska seeking a declaratory judgement and injunctive relief. One of the arguments given for blocking the project was that it was "adjacent to" the Wrangell-St. Elias National Park which was a United Nations designated World Heritage Site. The area being permitted was approximately 10 miles from the Park. The entire complaint was rejected by the District Court and by the 9th Circuit under appeal but there was a significant loss of time and cost to Chugach Alaska Corporation.
We are also aware of three instances where the presence of a World Heritage Site or Biosphere Reserve has been used to block development of mining projects. Each of the projects had been permitted under the laws of the responsible government or it was in the permitting process and it appeared that the mine would be permitted.
New World Mine: One of these projects is well-known by this Committee and involved the New World Mine which was to be built near Cooke City, Montana to the north of Yellowstone National Park. Because Yellowstone National Park is a UN designated World Heritage Site, then Assistant Secretary of Interior George Frampton invited the United Nations' World Heritage Committee to visit the area and determine whether the mine (an underground mine) should be allowed "adjacent to" the World Heritage Site. The committee determined that, no, it was not appropriate to have a mine there, even though mining had occurred in the area almost continuously since the mid-1800s. The Clinton Administration then used this recommendation of the committee as part of its justification for blocking the mine.
Jabiluka Project: A second mining example where World Heritage Site designation was used in an attempt to block a mine is occurring at this time in northern Australia. A new underground uranium mine being built near the 20 year old Ranger Uranium Mine, both of which are adjacent to the Kakadu National Park, a UN designated World Heritage Site. I understand that another panel member will address this topic so I will defer to that discussion. However, I do note that in this instance one of the tactics being used to stop the mine is international economic pressure against the German company that has contracted to purchase the mine's production.
Aginskoe Gold Project: The third mining example of a World Heritage Site being used to stop a project is also still in progress. This involves the Aginskoe Gold Project on the Kamchatka Peninsula in the Russian Far East, Alaska's neighbor across the Bering Sea. This example is particularly disconcerting. With inadequate food, medical services, etc. the people of Kamchatka have been and are in dire straits. They have been scrambling in an effort to develop their economy in every way possible. Today unemployment is between 50 and 70% and due to lack of fuel, electrical power is limited to six hours per day.
For more than 10 years during the Soviet era the Aginskoe underground gold project was explored and evaluated. During this time a village of 1100 people lived at the site and mined 45 km of underground entries, developing six mining levels within the ore zone while proving-up a 1 million ounce gold deposit. The ore and waste rock are low sulfur and therefore do not pose an acid rock drainage problem. All that is needed is a mill, tailings impoundment, office, maintenance shop, modern worker housing, etc. and the mine can begin operating.
On December 18, 1996, just as Kinross Gold Corporation and it partners were about to complete project financing for Aginskoe, the Volcanoes of Kamchatka World Heritage Site was established through the United Nations. Many of the people of Kamchatka supported the World Heritage Site designation because they had been told that it would become a attraction to draw commerce and tourism to the area. However, immediately upon designation of the WHS, the Environmental Defense Fund, Pacific Environment & Resources Center and the Sierra Club, began a full-court press against the Aginskoe Project. This was done by attacking support which was to be provided by OPIC (Overseas Private Investment Corporation), a U.S. government agency which provides political and business risk insurance to companies investing abroad. The project had been approved for OPIC insurance but then due to pressure from the environmental community, the approval was withdrawn.
In its attempt to show that the mine would have no adverse impact on the WHS, Kinross sponsored a tour of the Aginskoe Project for the UNESCO WHS Committee. The subsequent November 1997 report written by the Committee concluded that there would be minimal impact from the mine. That report is still sitting in the UN awaiting final endorsement.
The consequences: between $40 and $50 million of investment has not occurred in this depressed area of the Russian Far East; 258 Russians and their families have been denied the benefits that come from high quality jobs; the local communities have been denied the economic multiplication that occurs when such a project is developed; nearly 4 years have been lost; and in today's economy project financing may not be possible even with OPIC insurance. A World Heritage Site has again been used to block beneficial economic development.
DANGER FOR ALASKA AND U.S. COMMERCE
For more than 8 years the National Park Service, in conjunction with various environmental groups, has been working to establish a so-called Beringia International Park, World Heritage Site and Marine Biosphere Reserve to include the existing conservation system units in Alaska, part of the Chucotka Peninsula of Russian Far East and the Bering Sea between. These UN designations would provide one more avenue for blocking development on adjacent lands. Whether the adjacent lands are federal public lands, State-owned lands or private Native lands, projects on any of these lands would be in jeopardy. An area of Alaska nearly the size of the entire State of Texas is already in Congressionally designated parks, preserves, wilderness, etc. and is therefore closed to mineral development. These UN designations would effectively close much of what remains open.
Furthermore, the northwest part of Alaska is very rich in coal, zinc, copper, gold, and other minerals. For development in this area, a railroad would be required to connect the area with a deep water port on Norton Sound east of Nome. Because the existing conservation system units surround these deposits, such a railroad would require that Congress approve a right of way across up to three existing conservation units, depending on the route. If a UN designated World Heritage Site or Biosphere Reserve had to be crossed, would UN approval also be required?
In the mid 1980s an Act of Congress was required to secure a right of way across Cape Krusenstern National Monument for the road from the Red Dog Mine to the coast. Today Red Dog is the largest zinc mine in the world and has more than 470 employees, 57% of which are shareholders of the land owner, the NANA Regional Corporation, one of the Alaska Native corporations. If a Beringia International Park and UN designated WHS and BR had been in place when that road was being debated, it is likely that in addition to environmental opposition, we would have seen opposition from zinc producers from around the world. It is not far fetched to believe that they would have even assisted the environmental opponents of the project, for their own financial benefit. We feel that this kind of vulnerability will be created if international designations are allowed.
Furthermore, we are concerned that as the Clinton Administration approaches the next election, the Administration will designate ANWR, the so-called Beringia or other parts of Alaska as World Heritage Sites or Biosphere Reserves. If this occurred it would add a tremendous burden on any prospect of opening ANWR and establishing a railroad or other infrastructure that is essential for development of the coal and mineral deposits of northwestern Alaska. The Administration has listed several sites including ANWR and Cape Krusenstern as potential candidates for designation.
We urge that S.510 be passed at the earliest possible time so the U.S. Congress will become part of the process to establish any international designation of lands and waters of the United States.
[Steven C. Borell is the Executive Director of the Alaska Miners Association, a non-profit membership organization with approximately 1000 members and a registered professional engineer in Alaska, Colorado and North Dakota with over 25 years of mining experience in various states, Canada and South America]