NIRB File No.: 08MN053 INAC File No.: N2008T0014 DFO File No.: 2008 MR QIA File No.: LUA-2008-008 November 4, 2016 Wayne McPhee Director, Sustainable Development Baffinland Iron Mines Corporation 2275, Upper Middle Road East Suite 300 Oakville, ON L6H 0C3 Sent via email: wayne.mcphee@baffinland.com Re: The Nunavut Impact Review Board’s 2015-2016 Annual Monitoring Report for the Mary River Project and Board’s Recommendations Dear Wayne McPhee: The Nunavut Impact Review Board (NIRB or Board) is hereby releasing its 2015-2016 Annual Monitoring Report for Baffinland Iron Mines Corp.’s Mary River Project (Monitoring Report) along with the 2016 Site Visit Report for the NIRB’s monitoring of the Mary River Project.1 The enclosed Monitoring Report is based on the NIRB’s monitoring activities as set out within the Mary River Project Certificate No. 005 and pursuant to Sections 12.7.1 and 12.7.2 of the Nunavut Land Claims Agreement. This report provides findings that resulted from monitoring of this Project that took place from October 2015 through September 2016. In discussing the results of the NIRB’s monitoring program for the Mary River Project (the Project) at its most recent meeting in October 2016, the Board’s membership expressed growing concern for the various enforcement actions that were required to be taken by regulators for the Project during the past year, as well as the well-publicized deteriorating relationship between the Baffinland Iron Mines Corp. (Baffinland or the Proponent) and the Qikiqtani Inuit Association regarding implementation of the Inuit Impacts and Benefits Agreement for the Project, and the number of environmental issues on site appearing to result from poor management practices which now requiring addressing. In recommending approval of the Mary River Project in 2012 following a detailed and extensive impact assessment process, the Board developed terms and conditions of Project Certificate No. 005 and the accompanying monitoring program to provide the rigorous environmental protection required to operate the Project while maintaining public confidence and support from local community members with ties to the area. In seeking 1 Appendix I of 2015-2016 Annual Monitoring Report P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Fax: (867) 983-2594 approval to implement the Early Revenue Phase for the Project, Baffinland indicated its intention to deliver “a first development phase with reduced upfront capital requirements and shortened construction duration such that production and revenue generation are able to commence sooner with the objective of facilitating the second, larger, Rail phase (as described in the FEIS) of the Project at a later date”2. Within its March 17, 2014 public hearing report for the Early Revenue Phase, the NIRB expressed its confidence that this first development phase could proceed if it is undertaken within the limits and mitigation measures included in the comprehensive additional and revised terms and conditions of Project Certificate No. 005. Though Baffinland has sought to approach development of the approved Mary River Project in phased approach, the commitments made by the Proponent for environmental protection and compliance have not diminished in importance; the Board strongly recommends that Baffinland devote sufficient time and attention to addressing the recommendations within this report to ensure full compliance with Project Certificate No. 005 is achieved. While Baffinland is currently seeking approvals for implementation of a second phase of development for the Project, the “Phase 2 Proposal”, the NIRB reminds the Proponent that strict adherence to the terms and conditions of Project Certificate No. 005 continues to be required while consideration of the Phase 2 Proposal is ongoing. By way of a motion carried during its regular meeting held in Arviat on October 26 2016, the Board has approved issuance of the following recommendations to assist Baffinland in achieving compliance with the Mary River Project Certificate and to ensure the NIRB has all information necessary to adequately discharge its mandate with respect to the monitoring provisions within Article 12 of the Nunavut Land Claims Agreement. 1. Recommendations based on the NIRB’s Review of the 2015 Annual Report Monitoring Sea Levels and Storm Surges at Steensby Port and Milne Inlet Baffinland is required pursuant to Conditions 1 and 83 of the Project Certificate to undertake monitoring of sea levels and storm surges at Steensby Port, and Milne Inlet using GPS and tidal gauges. Although Baffinland had previously reported within its 2013, 2014 and 2015 Annual Monitoring Reports to the NIRB that it installed tidal gauges at Milne Port in 2014, the Board notes that Baffinland has yet to retrieve any data from the gauge, and results of sea levels and storm surges at Steensby Port and Milne Inlet have not been provided for the last two (2) years. The submission of the required monitoring data will clarify whether implementation of additional mitigation measures are required to ensure that impacts of climate change on project infrastructure, including Milne port facilities are adequately minimized and mitigated. Further, should Baffinland continue to not provide the requested data, the NIRB could require the mitigation on a precautionary basis. Recommendation 1: The Board requests that Baffinland provide its rationale for not submitting tidal gauge monitoring results to NIRB, and where applicable, identify or clarify any site-specific conditions that may have limited the Proponent’s efforts to retrieve data from the tidal gauge located at Milne Port since 2014. The Board also requests that Baffinland provide information on how it intends to address these limitations in subsequent monitoring periods to ensure that sea levels and storm surges are adequately monitored. It is requested that this rationale, information and available monitoring data be submitted to the NIRB within 30 days’ receipt of the Board’s 2 Baffinland Letter to NIRB Re Request to Amend Project Certificate No.005-Mary River Project (January 10, 2013 ) P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 2 of 12 Fax: (867) 983-2594 recommendations, with an accompanying discussion regarding any observed changes in sea levels, storm surges, and other climate related effects across key project locations. Submission of Quarry Management Plans Baffinland reported within its 2015 Annual Monitoring Report that it had submitted a quarry management plan, and several blasting management plans for the following quarry sites: Q7, Q11, Q18, Q19, Km 104, Km 97, Km 2, D1Q1, D1Q2, Q1 and QMR2; however the Board notes that blasting management plans for two (2) quarry sites (Q18 and P1) were not appended within the 2015 Annual Monitoring Report submission to the NIRB. The Board considers the submission of these site-specific management plans important for demonstrating that all sources of potential contamination will be adequately monitored. Recommendation 2: The Board requests that Baffinland address this information gap by submitting the blasting management plans for quarry sites Q18 and P1 within 30 days’ receipt of the Board’s recommendations. Potential Suspension of Sulphur Dioxide Monitoring Baffinland is required pursuant to Condition 8 of the Project Certificate to ensure that Sulphur dioxide (SO2) and Nitrous dioxide (NO2) emissions remain within predicted levels at the Mine site, Milne Port, and at Steensby Port, and where applicable, within limits established by all relevant guidelines and regulations. Baffinland referenced the submission of its 2015 Gaseous Emission Monitoring Report (Appendix K1) as addressing compliance with this condition, and noted that emission monitoring for SO2 and NO2 were undertaken in each quarter of 2015 at Milne Port and the Mine site respectively. The NIRB notes that at both sites, SO2 levels have been low throughout the year and do not exceed the 1-hour or 24-hour limits. The NIRB further notes that the referenced report contains three (3) recommendations with respect to the ongoing air quality program, with a recommendation specifically stating that Baffinland “discontinue all continuous SO2 monitoring at both sites”. Recommendation 3: The Board requires that the details of any contemplated changes to the ongoing air quality monitoring program, including rationale for the potential suspension of any monitoring parameters (e.g., SO2 and NO2), be provided to the NIRB and other authorizing agencies prior to terminating such monitoring activities. The NIRB requests that Baffinland provide an update on this matter within its 2016 Annual Report. Fish Health Monitoring Baffinland indicated on page 62 of the 2015 Annual Reporting that, in 2015, the Core Receiving Environment Monitoring Program (CREMP) approach was transitioned from a characterizationbased study to an effects-based approach. Additionally, Baffinland concluded within its 2015 Annual Report to the NIRB that larger and faster-growing juvenile arctic char that were found at Camp Lake compared to the reference lake in 2015, and that no ecologically meaningful differences in the health of juvenile or adult arctic char were indicated between the 2015 and baseline periods at Camp Lake. The NIRB notes that the conclusion of no health effects in arctic char or other fish population was not fully substantiated in the Annual Report, including in the Marine Environmental Effects Monitoring Program (MEEMP) report, and that Baffinland only utilized morphometric (length, size, weight, and age) and metal bioaccumulation trends in ascertaining fish health from the control and impact areas. The NIRB also notes that other key biochemical parameters which are important indicators of fish health have not been included in the CREMP, which brings into question the validity of the conclusion of no effects on Arctic char populations. P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 3 of 12 Fax: (867) 983-2594 Recommendation 4: The Board requests that Baffinland consider improvements to its Core Receiving Environment Monitoring Program (CREMP) to further substantiate its conclusion of no mine-related effects on fish population. For example, one way this could be addressed is by monitoring biochemical changes and sub-lethal effects in fish populations, using markers of oxidative stress, status of antioxidant enzyme activities and conducting histopathology of gills, livers and gonads, to monitor mine-related effects in the aquatic environment. The NIRB requests that the Proponent support its conclusions regarding mine-related effects on fish health beyond reliance on morphometric parameters (length, size, weight, and age) and metal bioaccumulation trends in assessing effects; further consultation with experts from Fisheries and Oceans Canada and/or Environment and Climate Change Canada may assist in this regard. While the Board recognizes that the 2015 CREMP report indicated that iron concentrations were elevated at the Camp Lake system (CLT1), the NIRB notes that excessive iron uptake can induce cellular injuries, oxidative stress, lipid peroxidation and alteration in antioxidant enzyme activities, which can subsequently threaten fish health at the population level. It is requested that Baffinland highlight updates to its CREMP and include an expanded discussion of any conclusions made regarding mine-related effects on fish populations in the next Annual Monitoring Report. Terrain Stability Regarding permafrost degradation and identification of sensitive landforms pursuant to Conditions 25 and 28 of the Project Certificate, Baffinland indicated in its 2015 Annual Report to the NIRB that additional geotechnical investigations were undertaken in 2015 at Milne Port as well as at other site areas, and that there was no observable site conditions were identified that would represent concerns regarding dyke stability in the Project area. The Board also notes that Baffinland had previously reported within in its 2013 Annual Report to the NIRB that in September 2014, the Tote Road and borrow sources were subject to geotechnical inspections which reported that several of the borrow pits had been excavated into thaw-sensitive or ice-rich soils. Of the 101 locations investigated along the Tote Road, 7% of sites were ranked as requiring a higher priority for stabilization. The NIRB notes that Baffinland’s 2015 Annual Monitoring Report as submitted to the NIRB does not contain any specific details or information regarding what measures have been undertaken since 2014 to address the terrain issues noted through these geotechnical investigations, which are required to comply with Conditions 25 and 28 of the Project Certificate. Recommendation 5: The Board requests that Baffinland provide information on the terrain stability status of the locations along the Tote road and the borrow pits previously identified for stabilization in 2014. Where applicable, Baffinland should provide descriptions of the specific mitigation measures undertaken to address permafrost degradation and terrain stability within the Project area. It is requested that this information be incorporated into Baffinland’s next annual report to the NIRB. Terrestrial Environmental Monitoring Program On page 73 of the 2015 Terrestrial Environment Annual Monitoring Report (Appendix L2 of the Proponent’s Annual Report), Baffinland reported that it discontinued the following monitoring programs in 2015: vegetation abundance monitoring vegetation and soil base metals sampling; exotic invasive plant species monitoring; den surveys; and roadside waterfowl survey, all of which were prescribed by terms and conditions 34 through 39, 55a, and 65 through 74 of the Project Certificate. Baffinland provided its rationale for discontinuing these programs within the P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 4 of 12 Fax: (867) 983-2594 2015 Annual Terrestrial Environment Monitoring Report and noted that the decision to discontinue these programs was informed through discussion with the TEWG; the Board, however, notes it was not informed of these changes by Baffinland prior to suspension of these monitoring programs. The NIRB reiterates the need for Baffinland to proactively communicate with the NIRB and other authorizing agencies including affected communities prior to discontinuing such monitoring activities. As the requirements of the terms and conditions of Project Certificate No. 005 have not changed, Baffinland must also provide sufficient justification regarding how these updated monitoring practices still comply with the terms and conditions mandating the monitoring activities. Recommendation 6: The Board requests that Baffinland provide sufficient justification for the suspension of the selected terrestrial monitoring programs listed on page 73 of its 2015 Terrestrial Environment Annual Monitoring Report, with an accompanying discussion of what implications these changes may have on providing data for long-term monitoring of valued ecosystem components. The Board further requests that Baffinland clarify whether it liaised with the local hunters and trappers organizations, community members and authorizing agencies prior to suspending the selected terrestrial monitoring programs in 2015, and further describe how any such engagement was carried out. Evidence of any support received from parties regarding changes to monitoring programs must also be substantiated. Finally, Baffinland must demonstrate how it has continued to meet the requirements of Project Certificate terms and conditions 34-39, 55a, and 65-74 and how it intends to ensure continued compliance going forward. It is requested that this information be provided within 30 days’ receipt of these recommendations. Hydrodynamic modelling in the Milne Inlet Port area Baffinland indicated within its Shipping and Marine Wildlife Management Plan that it has developed a baseline sampling program to provide effective monitoring of physical and chemical effects of ballast water discharges, sewage outfall, and bottom scour by ship props pursuant to Conditions 83(a) through 87 of the Project Certificate. Baffinland further noted within the aforementioned Plan that the collected data would be used as input to a hydrodynamic model to monitor sediment re-distribution at the Milne port site, and for ballast water dispersion modeling. While Baffinland indicated within its response to comments received on the 2015 Annual Monitoring Report that the ballast water dispersion model has been re-run as an empirical model as described in CORI (2015),3 the NIRB notes that the document referenced as CORI (2015) was neither submitted as an appendix to the 2015 Annual Monitoring Report or in response to comments by the Qikiqtani Inuit Association (QIA) on the 2015 Annual Monitoring Report. In addition, Baffinland’s 2015 Annual Monitoring Report did not provide any evidence of when and how it utilized more detailed bathymetry from Milne Inlet to model the anticipated ballast water discharges from ore carriers prior to commercial shipment in 2015, nor was discussion included regarding what extent the results from modeling were used to update ballast water discharge impact predictions, including when and how additional sampling was undertaken to validate the model and associated monitoring plan. Recommendation 7: The Board requests that Baffinland provide the referenced publication (CORI, 2015) titled “Preliminary estimates of seasonal ballast water dispersal at Milne Inlet, Baffin Island” and supporting information regarding the status of 3 Coastal and Ocean Resources Inc. (CORI), 2015. Preliminary Estimates of Seasonal Ballast Water Dispersal, Milne Inlet, Baffin Island. Prepared by International Tsunami Research Inc., North Saanich, British Columbia. Prepared for Sikumiut Environmental Management Limited (SEM), St. John’s, NL. 21pp. P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 5 of 12 Fax: (867) 983-2594 the hydrodynamic modelling results. The Board also requests that Baffinland provide details as to how and when it utilized additional bathymetry from Milne Inlet to model the anticipated ballast water discharges from ore carriers prior to commercial shipment in 2015, including discussion of how results of the model were used to update impact predictions regarding ballast water discharge. It is requested that this publication, the update and any pertinent reports or results be provided to the NIRB within 30 days’ receipt of these recommendations. Accidents and Malfunctions Pursuant to Condition 174, Baffinland and the Canadian Coast Guard are required to provide spill response equipment and annual training to Nunavut communities along the Project’s shipping route to potentially improve response times in the event of a spill. Baffinland indicated within its 2015 Annual Monitoring Report to the NIRB that it conducted a spill training exercise in August 2015 at Milne Port, and that a ‘Spill at Sea Response Plan’ was finalized with input from various stakeholders in 2015. However, the Board notes that the Proponent did not provide any information regarding the provision of annual training to communities along the shipping route, nor was any mention made of equipment having been provided to these communities. It is currently unclear as to whether and how the Canadian Coast Guard or affected communities have been involved in these efforts to date by Baffinland. Recommendation 8: The Board requests that Baffinland provide the NIRB with an update regarding how it has complied with Project Certificate term and condition 174 to date, further highlighting its future plans to provide spill response equipment and annual training to Nunavut communities along the shipping route. In addition, a discussion should be provided as to how the training and equipment are expected to help improve upon response times in the event of a marine spill. It is requested that this update be provided within 30 days’ receipt of these recommendations, and that additional information pertaining to any training sessions held to date including materials provided to affected communities be included within the Proponent’s next annual reporting to the NIRB. Adaptive Strategies for Dust Deposition The NIRB notes that the Roads Management Plan (Appendix J9, Part 1) submitted by Baffinland as part of the 2015 Annual Report to the Board was missing the referenced appendix entitled “Attachment A-Dust Management Protocol” and other appendices (B through D). The referenced documents (Appendix A through D of Appendix J) were noted to be blank and missing content. The NIRB also notes that the ‘Dust Management Protocol for the Mary River Project Roads’ submitted as Part 2 of the 2015 Road Management Plan, and Section 8 of the 2015 Air Quality and Noise Abatement Management Plan have yet to be updated with information that reflects the Board’s 2015 recommendation to specify within an updated Plan which mitigation measures and adaptive management measures would be implemented in the event of high threshold level of dust deposition, exceeding levels predicted in the FEIS or FEIS Addendum. Recommendation 9: The Board requests that Baffinland provide the NIRB with the identified documentation as absent within the 2015 Annual Report, and further clarify why the 2015 Air Quality and Noise Abatement Management Plan was not updated as required by the Board’s 2015 recommendation regarding which specific adaptive management measures that would be implemented in the event of high threshold level of P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 6 of 12 Fax: (867) 983-2594 dust deposition, exceeding levels predicted in the FEIS or FEIS Addendum. It is requested that these missing documentation be provided within 30 days’ receipt of these recommendations, and that the required update to Section 8 of Air Quality and Noise Abatement Management Plan be included within the Proponent’s next annual report to the NIRB. 2. Recommendations from Authorizing Agencies’ Comments on 2015 Annual Report Effects of Construction Noise on Marine Mammal Presence The Qikiqtani Inuit Association (QIA) noted that Baffinland’s 2015 Annual Monitoring Report did not include additional documentation required to demonstrate compliance with the Fisheries Act authorization pertaining to the effects of construction noise on marine mammal presence. Recommendation 10: The Board requests Baffinland provide a copy of its construction noise monitoring report, which is to include information regarding compliance with the requirement of the Fisheries Act authorization including effects of construction noise on marine mammal presence. It is requested that this information be provided within 30 days’ receipt of these recommendations. Shipping and Marine Wildlife Management Plan The QIA noted that the current version of the Shipping and Marine Wildlife Management Plan (SMWMP) did not provide specific timelines for the implementation of an anti-fouling system, and was lacking information pertaining to how Inuit from potentially-impacted communities are involved in the interpretation of results from the ongoing monitoring program. Recommendation 11: The Board requests that Baffinland revise its Shipping and Marine Wildlife Management Plan (SMWMP) through engagement with the Marine Environment Working Group (MEWG), and provide updated information within the SMWMP regarding the timelines for the implementation of an anti-fouling system, including an action plan to integrate Inuit from potentially-impacted communities in the interpretation of results from the ongoing monitoring program. It is requested that this be included within the Proponent’s next annual report to the NIRB. Further, the Government of Nunavut - Department of Environment (GN-DOE) recommended that the SMWMP be updated to include methodology that will provide a reliable baseline and monitoring information for polar bears at the sub-population scale that may be impacted by the Project. Recommendation 12: The Board requests that Baffinland follow-up with the recommendations of the Government of Nunavut-Department of Environment and the Marine Environment Working Group on Polar Bear monitoring, and that it revise the Shipping and Marine Wildlife Management Plan (SMWMP) to include methodology for Polar Bear monitoring. It is requested that this revision be reflected in an updated SMWMP, and included within the Proponent’s next annual report to the NIRB. Migration of Inuit and non-Inuit residents and Inuit Employee Turnover Rate The QIA indicated that Baffinland’s 2015 Annual Monitoring Report did not provide sufficient data regarding in-migration and out-migration of Inuit and non-Inuit residents within the North Baffin Local Study Area (LSA). The QIA also noted that information regarding employee P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 7 of 12 Fax: (867) 983-2594 residence, housing and migration status were not available for 2015 as required pursuant to Condition 133 of the Project Certificate. Recommendation 13: The Board requests that Baffinland, in consultation with the Qikiqtaaluk Socio-Economic Monitoring Committee, develop robust indicators to measure and survey the in-migration and out-migration of Inuit and non-Inuit residents in the North Baffin Local Study Area. The Board requests that this survey be conducted, and an assessment of the Project’s Inuit employee turnover rate undertaken on an annual basis. Results of the survey should be provided and incorporated in the Proponent’s next annual report to the NIRB. Non-Inuit LSA residents and Contractor Employees The QIA requested that Baffinland provide data for non-Inuit residents and contractors’ employees who reside in the local study area, including information regarding Baffinland’s Inuit employee payroll. Recommendation 14: The Board requests that Baffinland consult with the Qikiqtani Inuit Association (QIA) in discussing priorities regarding monitoring of non-Inuit residents and contractor employees in the local study area (LSA), and where applicable, provide information regarding Baffinland’s Inuit employee payroll, in order to provide an understanding of the expansion of the local market for consumer goods and services within the LSA. It is requested that this be included within the Proponent’s next annual report to the NIRB. Project Infrastructure in Watercourses Indigenous and Northern Affairs Canada (INAC) commented on Baffinland’s 2015 Annual Monitoring Report, noting specifically that 11 of 34 fish-bearing in-water crossings had minor issues that would require monitoring and potentially mitigation. INAC also reported on the potential for the crossing at BG-01 to become impassable in the future. Recommendation 15: The Board requests that Baffinland develop an action plan for the identified fish-bearing crossings, and that it prioritize those crossings with potential to become impassable in the future (e.g., BG-01). It is requested that updated information regarding the status of the affected fish-bearing crossings, including BG-01 be provided and incorporated into Baffinland’s next annual report to the NIRB. Terrestrial Environment and Marine Working Groups The Board notes that Project Certificate No. 005 required the establishment of the Terrestrial Environment Working Group (TEWG) and Marine Environment Working Group (MEWG) to ensure parties with appropriate expertise work with the Proponent to identify priorities for the establishment of baseline conditions, and predictions of potential impacts to the terrestrial and marine environment especially where deficiencies in data were identified through the NIRB’s Final Hearing for the Project. Recognizing the recent changes reported by Baffinland regarding discontinuation of selected terrestrial monitoring programs, and the deferral of aerial and acoustic marine mammal surveys during the 2016 shipping season, the Board believes it is necessary for Baffinland to improve on its efforts to effectively consult and engage with members of these working groups, and adopt a consensus-based or quorum decision-making process to the extent practicable prior to implementing changes to its ongoing terrestrial and marine monitoring programs. Should the NIRB determine that the working groups are an ineffective means in delivering the required collaborative and precautionary approach to project P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 8 of 12 Fax: (867) 983-2594 monitoring, the Board may be required to further reconsider the associated Project Certificate terms and conditions. Recommendation 16: The Board requests that Baffinland ensure that the Terms of Reference for both the Terrestrial Environment Working Group (TEWG) and Marine Environment Working Group (MEWG) appropriately reflect the organizations that are involved in the working groups, and if necessary provides additional clarity to expected level of participation for the various groups participating. Baffinland should also detail in its meeting notes how meetings are structured to allow for meaningful engagement. Consideration should be given to adoption of a consensus-based or quorum decisionmaking process to ensure that the record properly reflects parties’ full contributions and inclusion of expertise, prior to implementing any changes to ongoing terrestrial and marine monitoring programs. It is requested that any specific changes to ongoing terrestrial and marine monitoring programs be reported directly to the NIRB on an ongoing basis. 3. Recommendations Based on NIRB’s 2016 Site Visit Recognizing that the Mary River Project continues to be in the early years of mining operations with implementation of its Early Revenue Phase, Baffinland has indicated its position that there are a number of terms and conditions contained within Project Certificate that are not applicable or which have not been completely adopted by Baffinland for other reasons at this time. Below is a summary of the issues noted during the NIRB’s July 2016 site visit, and the NIRB’s recommendations to address identified issues of potential non-compliance with the terms and conditions of Project Certificate No. 005: Used Tires During the 2016 site visit, it became evident that used tires have become a significant waste stream across the Project sites, particularly around the mine site and Milne Port. While the NIRB Project Certificate does not contain specific terms and conditions for addressing this particular waste stream, the management measures committed to by Baffinland in the Final Environmental Impact Statement, Environmental Protection Plan, and Waste Management Plan indicate that used tires were expected to be stockpiled for shipment offsite (e.g., re-treading, reuse, or disposal). Alternatively, in 2011 as part of the design of the Mine Site Landfill/Landfarm Site Layout Plan submitted to the Nunavut Water Board, used tires would be disposed of on-site in a segregated area within the landfill facility. During the 2016 site visit, a designated used tire storage area was not found within the landfill and used tires were found to be inconsistently stockpiled at different locations across the Project sites visited. On October 7, 2016, Baffinland provided an update to the NIRB via email on the status of used tires, noting that it is currently reviewing options for tire storage and will develop a preliminary plan in time for submission with the 2016 NIRB Annual Report. The NIRB reminds the Proponent that the environmental assessment, predictions and assumptions completed for the Mary River Project and associated Early Revenue Phase, were based on the contents and commitments in Baffinland’s Final Environmental Impact Statement to ship tires off site for disposal. The Board notes that additional information related to the storage and disposal of tires has, and will continue to be provided to the Nunavut Water Board as part the water licensing and compliance process for the Project. Recognizing that Baffinland has noted that it is currently reviewing options for managing the disposal of used tires generated on P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 9 of 12 Fax: (867) 983-2594 site, the Board requests that care be taken to revisit the impact predictions and commitments filed in support of the Project, as the NIRB will be required to consider this information when determining whether additional direction or reconsideration of Project Certificate terms and conditions may be warranted. Recommendation 17: The Board requests that Baffinland provide an explanation as to why the used tire management measures committed to in the Final Environmental Impact Statement (FEIS) and FEIS Addendum for the Mary River Project and Early Revenue Phase, which stated that used tires would be stockpiled for shipment offsite (e.g., retreading, reuse, or disposal), are not in place onsite. In addition, the Board requests that Baffinland clarify why used tires are not properly segregated in an on-site landfill facility as committed to within the Mine site Landfill/Landfarm site layout plan submitted to the Nunavut Water Board in 2011. It is requested that this information be provided within 30 days’ receipt of these recommendations. Waste Landfill At the time of the 2016 NIRB site visit, most the protective mesh around the landfill area was completely removed from the supporting poles, similar to previous NIRB site visit observations in 2014 and 2015. The NIRB further notes that the condition of the fencing around the landfill at the time of the 2016 site visit had not significantly improved compared to previous years as Baffinland had yet to install a more durable fencing material consistent with best practices, and as recommended by the Board in 2014 and 2015. However, on October 7, 2016, Baffinland provided an update via email to the NIRB regarding the status of the landfill, noting that plastic mesh and a new eight-foot high litter fence constructed of wooden pallets were installed in August, 2016 around the active area of the landfill facility. Recommendation 18: The Board requests that Baffinland adhere to industry best practices for landfill operations, including maintenance of landfill litter fences to ensure waste materials are not dispersed offsite. It is further requested that Baffinland continue to evaluate its need for an upgraded litter fence around the active areas of the landfill in the light of changing environmental conditions at site. It is requested that an update regarding implementation of this recommendation be provided within the next annual report to the NIRB. Uncontrolled Seepages from Waste Rocks During the tour of the waste rock dump that occurred as part of the NIRB’s 2016 site visit, the Monitoring Officer noted uncontrolled seepage of site contact water from the piles of potentially acid generating waste rock into the adjacent tundra. The Monitoring Officer observed that the waste rock storage area as currently constructed lacked appropriate water management structures required to properly divert or intercept overland runoff from the waste rock dump to the nearby sediment pond. As the runoff management structures which Baffinland had committed to installing in the Final Environmental Impact Statement (FEIS) and FEIS Addendum for the Mary River Project and Early Revenue Phase (i.e., bermed channels) were not in place at the time of the 2016 site visit, Baffinland is not in compliance with Conditions 17 and 46 of NIRB Project Certificate No. 005. Recommendation 19: The Board requests that Baffinland provide an explanation for the uncontrolled seepage of site contact water from the piles of potentially acid generating waste rock into the adjacent tundra, with an indication why mitigation measures and structures which Baffinland committed within the Final Environmental Impact Statement P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 10 of 12 Fax: (867) 983-2594 (FEIS) and FEIS Addendum to installing for the Mary River Project and Early Revenue Phase were not in place at the time of the NIRB 2016 site visit. Additionally, the Proponent is to provide a discussion of how it will ensure that site contact water is managed around the waste rock piles, and how discharge from the waste rock dump will be properly contained and channeled, and not allowed to flow into the adjacent tundra. It is requested that this information be provided within 30 days’ receipt of these recommendations. Landfarm - Contaminated Snow, Soil and Synthetic Liners At the time of the 2016 site visit, the NIRB Monitoring Officer noted no improvement with respect to the removal of synthetic liners and windblown debris from the site. In addition, waste tires were observed near the landfarm area. As noted in the previous 2015 site observations and most recent 2016 site visit, the protocol related to proper management and disposal of synthetic liners entrenched in contaminated soils does not appear to have been addressed pursuant to the Board’s 2014 and 2015 recommendation. On September 28, 2016, Baffinland provided new updates via email to the NIRB regarding the condition of the landfarm, noting that the large piles of liner were removed in early September and placed in open seacans for disposal off site. In addition, Baffinland indicated that other debris that included the quatrex bags containing soil and other refuse (including small quantities of wood, garbage, and plastics) were sorted and removed for proper disposal. Recommendation 20: The Board requests that Baffinland continue to adhere to industry best practices for landfarm operations, including for management of contaminated snow and waste synthetic liners. It is further requested that Baffinland address the improper storage of used tires near the landfarm area. It is requested that an update regarding steps taken to address this recommendation be provided within the next annual report to the NIRB. Aesthetic Quality The Monitoring Officer observed poor aesthetic quality of the project area during the 2016 site visit, and noted the need for general cleanup of areas with unused materials, steel pipes, tires, metals, salt bags, wooden materials, synthetic materials, drums particularly around contractor laydown areas, the incinerator, and other locations. While all such instances of improper waste storage may not pose an immediate threat to the surrounding environment, such instances reflect poor waste management practices which are not reflective of industry best standards employed at other operating mines in the Territory. The NIRB notes the need for the Proponent to adopt industry best practices for maintaining visual and aesthetic quality of the Project area. Recommendation 21: The Board requests that Baffinland take immediate steps to address the general clean-up required on site across all project areas, and plan for nearterm removal of unused scrap materials, tires and synthetic materials currently stored temporarily at various project locations in order to improve the visual quality of the site as well as prevent potential impacts to the surrounding ecosystem from improper storage and uncontrolled dispersal of wastes. It is requested that an update on steps taken to better manage wastes and general site condition, including a plan for removal of miscellaneous scrap materials, be provided within 30 days’ receipt of these recommendations. P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 11 of 12 Fax: (867) 983-2594 Terrain Stability at Sewage Outfall Area As noted during the 2016 site visit, some areas within the vicinity of the sewage outfall area showed signs of terrain instability, and could pose a fall risk to workers unfamiliar with the site. Recommendation 22: The Board requests that Baffinland provide a response regarding how it plans to address the terrain stability issues noted at the sewage outfall area in relation to impacts resulting from freshet events or spring thaw. It is requested that this information be provided within 30 days’ receipt of these recommendations. In summary, the NIRB’s annual monitoring report presents a snapshot of efforts made by the Proponent to achieve compliance with the terms and conditions of Project Certificate No. 005 and the various commitments made by Baffinland Iron Mines Corporation regarding how the Mary River Project will be operated. The NIRB’s monitoring program and the Monitoring Officer for the Mary River Project are in place to regularly observe site operations with consideration for the accuracy of predictions made in the environmental impact assessment for the Project and observed outcomes. The Board also considers the Proponent’s compliance with its regulatory obligations generally and the terms and conditions of NIRB Project Certificate No. 005 specifically. The Board encourages Baffinland to remain in regular communication with the NIRB through its Monitoring Officer, and with authorizing agencies responsible for Project oversight, to ensure compliance with the requirements of the NIRB Project Certificate No. 005 and the various licences, permits and approvals issued for the Project. It is in the Proponent’s best interest to address all issues raised in the NIRB’s annual monitoring report in as timely a manner as possible. For items requiring follow-up action by Baffinland, the NIRB respectfully requests that a response be provided within the timeline set out for each of the above recommendations. Should you have any questions or require further clarification regarding the Board’s recommendations or the NIRB’s monitoring program for the Mary River project, please contact the undersigned directly at (867) 983-4603 or samuno@nirb.ca Sincerely, Solomon Amuno, PhD Technical Advisor II Nunavut Impact Review Board cc: Todd Burlingame, Baffinland Iron Mines Corp. Mary River Distribution List Enclosure (1): The Nunavut Impact Review Board’s 2015 – 2016 Annual Monitoring Report for Baffinland Iron Mines Corp.’s Mary River Project (October 26, 2016) P.O. Box 1360 Cambridge Bay, NU X0B 0C0 Phone: (867) 983-4600 Page 12 of 12 Fax: (867) 983-2594