AG report on wetland capping at Muskrat Falls reveals government communication breakdown
Auditor general says there were 'numerous missed opportunities'
The Newfoundland and Labrador auditor general has released her report on the provincial government's failure to meet a deadline to cap vegetation around the Muskrat Falls reservoir in order to curb the risk of methylmercury getting into the food chain.
The 36-page report, released Thursday afternoon, reveals a breakdown in communication in and between the Department of Municipal Affairs and Environment, other areas of government and Nalcor Energy led to the deadline passing without the physical mitigation of the methylmercury risk.
"We did find numerous missed opportunities to understand and manage the urgency of the wetland capping timeline," said auditor general Denise Hanrahan in an interview with CBC News.
Wetland capping is done to mitigate the risks posed by country flooding during hydroelectric projects like Muskrat Falls. As trees and other vegetation break down during flooding, they release methylmercury which can contaminate fish and other food sources.
In April 2018, an independent advisory committee comprising representatives of Labrador Indigenous groups who live downstream of Muskrat Falls unanimously recommended targeted wetland capping at a cost of $30 million.
The report notes that representatives from the provincial government and Nalcor, who were non-voting members of the committee, wanted the project to proceed without any physical mitigation measures.
According to the report, government's decision-making process regarding the recommendation of the independent advisory committee did not begin until late November 2018. In January 2019, the government asked Nalcor to proceed with wetland capping, but the company's engineering consultant said it was too late. The reservoir was flooded later that year.
"We could not determine a plausible reason for why the decision regarding wetland capping could not have been done in a more timely manner," said Hanrahan.
Indigenous Affairs office refuses to participate
The report says the current provincial Office of Indigenous Affairs and Reconciliation refused to participate in the report.
"The senior management also did not acknowledge their responsibility for the audit subject matter and the terms of the audit, including audit objective, scope, and approach," reads the report.
The provincial government declined an interview request from CBC News, but in a statement said the Department of Environment and Climate Change fully co-operated with the report.
"As of the end of August 2021, there have been over 2,380 samples analyzed and weekly sampling continues and we will continue to monitor. At no time have levels presented a risk to public health," said the statement.
The statement also said the government has convened a Monitoring and Health Management Oversight Committee to help mitigate risk.
Communication breakdown
Hanrahan noted that the audit did not find that the government intentionally missed the deadline to proceed with the capping, but rather blamed a breakdown in communications and a slow decision-making process.
"Sometimes something as simple as a phone call, if an issue had been escalated, may have changed the course of the decision making process," she said.
According to the report, numerous parties, including Nalcor and the independent advisory committee, contacted the government regarding the timeline for wetland capping during the summer of 2018, but the request was placed on hold.
"A call between a senior official at Nalcor and a senior official in government may have resulted in wetland capping options being identified," said the report.
The report says that the Department of Municipal Affairs and Environment failed to adequately brief the Cabinet Secretariat, Premier Dwight Ball, and others on the urgency of the deadline for wetland capping.
The report also identified communication deficiencies within the Department of Municipal Affairs and Environment itself, saying then deputy minister of Municipal Affairs and Environment Jamie Chippett repeatedly failed to appropriately address the deadline.
The report says there are conflicting accounts of whether Andrew Parsons, who was acting minister of municipal affairs and environment from April 2018 to November 2018, and Graham Letto, who was appointed to the position in November 2018, were briefed on the urgency of the deadline.
Failure to consult
Concerns about methylmercury poisoning of the water and food supply downstream of Muskrat Falls sparked protests in 2016. Work on the project stopped temporarily and dozens of protestors were arrested.
The independent advisory committee was created in 2016, and released a series of recommendations in 2017 and 2018.
In April 2019, a year after the committee recommended wetland capping, Nalcor offered the $30 million that had been earmarked for the project to the NunatuKavut community council, the Nunatsiavut government and the Innu Nation.
NCC and the Innu Nation took $10 million each, but Nunatsiavut President Johannes Lampe called the payment "hush money."
Lampe pleaded with the government to hold off on the flooding.
"Take into consideration the culture, the way of life and the health of the Inuit," he said in July 2019.
In November 2020, U.S. researcher Ryan Clader raised the alarm about high methylmercury levels in the Muskrat Falls reservoir, but Jim McCarthy — a senior biologist with Wood Environmental Infrastructure Solutions — said levels were not nearly high enough to cause concern.
Opposition decries 'incompetence'
PC Opposition leader David Brazil called the findings in the report "alarming."
"It makes you think that it was a deliberate attempt to slow the process down until it got to a point where they could say 'we approve it,' but then it was too late to do what needed to be done," he said.
Brazil also criticized the Office of Indigenous Affairs and Reconciliation and Minister Lisa Dempster for not participating in the investigation, and called on Premier Andrew Furey to provide more information.
"The auditor general, all due respect, has an incomplete file."
Interim NDP Leader Jim Dinn said the report showed "gross incompetence" within government.
"They could've made a decision that could've saved this province tens of millions of dollars."
He said he is flabbergasted that the Office of Indigenous Affairs and Reconciliation did not participate in the audit.
"There's no excuses, no reason that I can think of as to why that department would not cooperate and find out the answers, especially since this had been approved by Indigenous groups."
He said Dempster should resign.
"Someone's got to answer for this."