Lindsay Newland Bowker For World Mine Tailings Failures January 19,2022 compiler@www.worldminetailings failures.org Stonington Maine
Mt Polley TSF Failure 2014
A Judge has ruled in favor of Factory Mutual Insurance Company company who insured business interruption losses and business property damage losses on the 2014 catastrophic failure at Mt. Polley on a premium that cost Imperial $545k per year according to an article by Mike Casell, Stockwatch, released today.
Factory Mutual, a domestically regulated “regular” (not a captive) global insurance company and one of very few insurers who insure tailings facilities as business property, denied applicability of the $250M limit on “loss by earth movement”, (e.g. a landslide or earthquake or other natural phenomenon undermining a soundly formed responsibly managed structure and causing its loss or damage( my description not coverage language)). A $10 million limit for business interruption was upheld but with the insurers right to recover its outlay from Imperial’s successful suit of $109 M paid mainly by one of 3 engineering firms with roles under contrat to Imperial over the life of the TSF. All but a small amount was paid by Knight Piesold’s (KP) successor after KP resigned in frustration that Imperial was not following its guidance. The third firm was on duty for only a few months just before the failure after the conditions causing failure were well advanced. As an aside, important to note that the role of the firm held liable by the court in Imperial’s lawsuit against its engineers, was not primary to the underlying causes of failure but limited only to its advice on the stability of the deviation Imperial had already undertaken due to lack of non pag materials in its new pit. That change was already initiated and advanced by Imperial before KP’s successor took over the role. Two employees of that company most directly involved with Imperial have already been stripped of their right to practice in disciplinary hearings. A third venerable engineer who has made endless contributions to best knowledge and best practice is still pending a hearing on disciplinary charges but in my view, charges should have been dismissed long ago.
sketch of failure path
After Knight Piesold’s resignation in 2011, the issue was whether the upstream raises initiated by Imperial due to the unavailability of suitable materials to continue the original centerline design. The engineer whose hearing is still pending opined that continuing the modified design would complicate closure and its cost but could be continued without a substantially elevated risk. The unidentified lacustrine layer under a section of the tsf as originally designed would still have been there and perhaps still have brought down the dam if it had proceeded according to original plan, ( my analysis. not reviewed by any experts)
Ideally every operator should have sufficient insurance to cover the total replacement cost of its largest facility anywhere in the word due to earth movement by natural causes and as no total loss of a facility due to natural unforeseeable causes has so far occurred anywhere ( the knowledge existed in Chile about the vulnerability of upstream structures at the time of the earthquakes in the 60’s) it shuld be ofere at a reasonable premium. I would suggest that $545k was an excessive premium for a portfolio of only two TSFs ( Red Chris and Mt Polley) given the actual history of TSF failures worldwide exclusive of any third part liability coverage. (We know from Imperials own NI43 101 disclosures that it had been going bare on all third party liability insurance due to cost for some time prior to failure). Provided the facility at failure met the same conditions as apply to loss of other business property this insurance should be very cheap for any facility that is designed and operated in accordance with best practice and best knowledge. The risk of loss or damge is considerably higher than a large building of comparable construced volume but it is hard to believe a $545K annual remium was justifed.
Economically Mt Polley Was Always on Shaky Ground
World Mine Tailings Failures has established that the rate of catastrophic TSF failures since 2000 is.09 per bn metric tons of mineral production..and that is all “not by act of god”. I would like to see the premium rating work and loss experience that justified the premium charged to Imperial. Additionally, Canada is very highly rated both by this insurer and by the world bank as safe for investors and insurers.
Tuesday’s decision also came with one other piece of bad news for Imperial Metals. The judge ruled that Factory Mutual was entitled to share in the amounts that Imperial Metals recovers from third parties, such as the engineering firms. It is not clear what this amounts to in dollar figures, but presumably Factory Mutual will recover at least some of the money it paid out. ” ( Mike Cassell, Stockwatch” Market)
Thus, out of Imperials self reported $395M in losses only a max of $10 m is covered by insurance ( business interruption) and the insurer is entitled to receive $108 millin of that. reducing Imperials maximum recovery and resulting in an uninsured loss of $277 M.
Bowker Associates, Science & Research In The Public Interest, is an independent non profit providing self initiated pro bono analysis on key issues with a potential for massive adverse environmental impact .
Bowker Associates has been an internationally recognized and cited voice in analysis of all significant tailings failures since 1915 mainly through and for reserach insittute World Mine Tailings Failures.
In 2017 Lindsay Bowker was princial author of her third major work on the economics of tailings failures. Bowker, L.N.; Chambers, D.M. In the Dark Shadow of the Supercycle Tailings Failure Risk & Public Liability Reach All Time Highs. Environments 2017, 4, 75. http://www.mdpi.com/2076-3298/4/4/75 A peer reviewed journal published investigation of the cowboy economics of the supercycle and the resulting escalation on the number and magnitude of catastrophic failures.
Ms. Bowker was principal author of two other seminal works one looking at root causes of failures Bowker, L.N.; Chambers, D.M. Root Causes of Tailings Management Failures: The Severity of Consequence of Failures Attributed to Overtopping 1915–2015. In Proceedings of the Protections 2016, Fort Collins, CO, USA, 14 June 2016. [Google Scholar]
In 2015 Bowker Associates compiled all known accouns of all TSF faiures in recorded history analyzing these data in the context of global mining economics 1910-2010 ( Risk, Economics and Public Liability of TSF Failures, Bowker/Chambers July 2015) The third annual update of this globally referenced and used compilation was just released at Researchgate. (https://www.researchgate.net/publication/324594429_World_Tailings_Dam_Failures_From_1915_-_as_of_Mar_31_2018)
In 2014 Bowker Associates commissioned Dr. David Chambers to undertake two technical works: (1) development of technical go no go criteria for vetting mine applications tp://lindsaynewlandbowker.wordpress.com/2014/01/05/a-new-statutory-regulatory-framework-for-responble-sulfide-mining-should-this-mine-be-built/ and (2) a case study of Maine's Bald Mountain, an un mined low grade high risk VMS deposit demonstrating the efficacy and accuracy of two risk assessment tools in vetting mine proposals https://lindsaynewlandbowker.wordpress.com/2014/02/28/mountain-x-would-you-issue-a-permit-to-this-mine/
In Maine, Bowker Associates has deeply engaged and been a public voice in the Searsport DCP LPG Tank, The Cianbro proposal for a Private East West Toll Road, JD Irvings rolling pipeline of Bakken crude to its plant in St. John and review of Phase II plans at The Callahan Superfund site in Brooksville, Maine, and Maine's revisitation of mining in statute and regulation...
Our only “client”: is always “the pubic interest”.
Our model is to focus on only one or two issues at a time so that we have a substantive command of the relevant field as our foundation for ongoing engagement. Our core work is in envirommental risk management, science and technology as well as bringing any available “best practices” models to the fore. The legal and regulatory history/best models are also a major thrust of our work in building and evaluating public policy.
Director/Principal Lindsay Newland Bowker, CPCU, ARM is a recognized expert in Environmental Risk Management., Heavy Construction Risk Management and Marine and Transit Risks and has more than 3 decades of engagement in buiding public policy.
Appointed by Governor Mario Cuomo to New York State Banking Board (served 1986-1996); President New York Chapter Chartered Property and Casualty Insurers; Environmental Committee, Risk and Insurance Management Society; Director, Convenor/Co-Chair Bermuda Market Briefing "From Captive to Cats" Hamilton Bermuda.
Published Articles of Significance
The Risk Economics and Public Liability of Tailings Facility Failures, co-authored with David M. Chambers, July 2015
Beyond. Polarization: Superfund Reform in Perspective, Risk & Insurance Managing Risk For Loss Prevention & Cost Control (Jan. 24, 1997).
Lead Hazards and Abatement Technologies in Construction: A Risk Management Approach CPCU Journal 1997
Employee Leasing: Liability in Limbo Risk Management June 1 1997
Environmental Audit Privilege and the Public interest Risk & Insurance Managing Risk For Loss Prevention & Cost Control, April 1997
Asbestos:Holes In Abatement Policies Need To Be Plugged, Lloyd’s Environmental Risk International, May 1993
Editor Published Letters Evironmental Risk Management
Beware of Facile Policies Like Fetal Protection Business Insurance 1995(?)
High Court Review May Increase Sale of Bank Annuities Business Insurances August 8, 1995
Professional Profiles
Protecting the Big Apple’s Core Managing Risk For Loss Prevention & Control
December 1996
Major Career Highlights
First rigorous analysis showing Relationship Between declining ore grades and TSF Failures of increasing consequence ( July 2015)
FIrst Documentation that Gentrification Has Same Impacts as Unassisted Displacement from Urban Renewal Sites
Direted Court Ordered EIS of FHA Mortgage Scandal
Created Nation's First Homeownership Program for Low Income People (SHIP)
Created Earliest Geographic Information Systems Using Defense Technology Developed By IBM
Designed and Conducted Parallel Census Count to Show Systematic undercount in minority neighborhoods
Documented Bias in ISO Territory Rating Plans for Private Passenger Auto Insurance Using ISO's own Rating Techniques
Demonstrated Inherent Bias in Mortgage Policies of Banks With Inner City Branches
Demonstrated that NY Telephones Plan for Area Code Split To accommodate anticipated cell phone demand was not efficient and would exhaust in 5 years ( which it did)
Undertook First Systematic Evaluation of Child Protective Services Caseload Using Multi Variate Analyic Techniques
Developed Child Protective Caseload Management and Tracking System (CANTS) and directed implementation in 4 client states including Illinois, Florida and New York
Created and Ran Office of Risk Management for NYC DEP the Nations largest Water & Sewer Authority .
Designed, Created and Administered Nation's First Owner Controlled Insurance Program (OCIP)for High Risk Tunneling
Education
Masters NYU Graduate School of Public Administration
BSC New School For Social Research
Maine Public Schools Deering High School
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