51 Trends and approaches in environmental regulation of mining Until the 1970s

51 trends and approaches in environmental regulation

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5.1 Trends and approaches in environmental regulation of mining Until the 1970s, most countries did not have sound environmental regulation – they largely let companies work without requiring them to prevent or clean up pollution. Undoubtedly, the world had made much progress since then. The paradigm has shifted from the ‘pollutee suffers’ to the ‘polluter pays’ principle. 82 There is now consensus that polluters – rather than societies – need to bear the cost of pollution. Reflecting this consensus, environmental regulation has become more stringent around the world in the past decades. 83 While there are tensions between the objectives of attracting investment into mining and protecting the environment, evidence shows that it is possible to have both strong environmental regulation and a favourable investment environment in mining. For instance, several Latin American countries – Argentina, Bolivia, Chile and Peru – adopted competitive mining regimes aiming to attract investment into mining in the 1990s, and at the same time strengthened environmental provisions in their laws or constitutions. 84 Mining investor surveys and other studies show that in countries with stable political and legal institutions, strict environmental regulations do not affect companies’ decisions, although this may not be necessarily true for politically unstable countries. 85 This finding is more applicable to multinational mining companies, which need to comply with environmental regulation in different jurisdictions – typically, more stringent regulation in developed countries – and thereby accumulate experience in meeting higher regulatory standards than is typically present in developing countries. However, mining companies from developing countries are more sensitive to environmental regulations. 86 Apart from raising regulatory standards, more governments are experimenting with or using non- traditional approaches to environmental regulation, such as performance standards and economic instruments. Traditionally, governments have used prescriptive approaches to environmental regulation (also called technology standards), which specify concrete technologies to be used for mitigation of pollution. In contrast, performance-based regulation specifies targets for environmental performance. Whereas technology standards are more effective in industries with a high degree of technology standardization, performance-based regulatory standards work better in situations where technologies and environmental conditions differ significantly from one project to another. Under performance standards, the decision on how to mitigate pollution is left to companies, thus allowing space for technological innovation. For example, rather than specifying the angle of the slope for landforms made up of piled up waste rock, the government of Quebec, Canada, specifies a factor of stability for such landforms.
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