To The Subcommittee on Energy and Mineral Resources, Committee on Resources, U.S. House of Representatives A Hearing on "Availability of Bonds to Meet Federal Requirements for Mining, Oil and Gas Projects."
Published: July 23, 2002
My testimony starts from the premise that the public's interest is served by the availability and use of surety bonds, and other financial guarantees, so that extractive industries, like mining companies meet all federal and state requirements for cleaning up pollution and reclaiming sites. As a starting point, it is critical that whatever financial instrument we use to set aside funds for cleanup, it comes in the form of a rock-solid, irrevocable guarantee. To do otherwise, as some mining companies have recommended, is to put the public, communities and other natural resources at risk. Therefore, from the perspective of the public and taxpayer interest, it is important that we explore and mandate all forms of guarantees, not just bonds. But we must not allow mining companies to use financial instruments such as corporate pledges that are not guaranteed. To allow the use of such instruments, as we have seen in too many examples in recent years, would be to potentially transfer the risk of cleanup to the taxpayer.
In the era of ENRON and Worldcom, it is more important than ever to protect the public from hidden costs and surprise liabilities. Cleaning up a mine site should be a cost of doing business. If the mining company cannot guarantee funds for cleanup, then it should not be permitted to mine.