1 2 WEK'EEZHII LAND AND WATER BOARD 3 4 RECONVENED PUBLIC HEARING 5 6 7 DIAVIK DIAMOND MINES INC. 8 WATER LICENCE RENEWAL 9 10 11 Panel Members: 12 Chairperson Violet Camsell- 13 Blondin 14 Member Joyce Rabesca 15 Member Alfonz Nitsiza 16 Member Joseph Judas 17 18 19 20 HELD AT: 21 22 Explorer Hotel 23 Yellowknife, NT 24 June 5th, 2007 25 Day 2 of 2

1 APPEARANCES 2 John Donihee )Board Counsel 3 Zaby Nevitt ) Board Staff 4 Patty Ewaschuk ) 5 6 Gord Macdonald )Diavik Diamond Mines 7 Brad Armstrong ) Inc. 8 9 Arthur Pape )Tlicho Government 10 Don MacDonald ) 11 Eddie Erasmus ) 12 13 Kathy Racher )INAC 14 David Livingstone ) 15 Charlotte Henry ) 16 Scott Duke ) 17 18 John McCullum )EMAB 19 20 Anne Wilson )Environment Canada 21 22 Bruce Hanna ) Department of 23 ) Fisheries and Oceans 24 25

1 APPEARANCES (cont'd) 2 3 Racheau Crapeau )Yellowknife Dene First 4 Nation 5 6 Florence Catholique )Lutsel K'e Dene First 7 Nation 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1 TABLE OF CONTENTS 2 Page No. 3 List Of Exhibits 5 4 5 Opening Comments 6 6 7 Presentation by INAC 11 8 Question Period 38 9 10 Presentation by Tlicho Government 81 11 Question Period 113 12 13 Final Submissions by Diavik 126 14 Final Submissions by INAC 143 15 Final Submissions by Tlicho Government 149 16 Final Submissions by EMAB 167 17 Final Submissions by DFO 171 18 Final Submissions by Environment Canada 172 19 Final Submissions by Yellowknives Dene First Nation 172 20 Final Submissions by Lutsel K'e First Nation 178 21 22 Reply by Diavik 184 23 24 Reporter's Certificate 186 25

1 LIST OF EXHIBITS 2 No. Description Page No. 3 6 Two-page chart provided by Diavik. 11 4 5 7 A CD with a full set of the CCME 6 guidelines on it. 112 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1 --- Upon commencing at 9:11 a.m. 2 3 THE CHAIRPERSON: Good morning. We'll 4 call the -- we'll convene this public hearing for the 5 Diavik water license renewal. We have a young fellow, 6 Charlie Catholique, who will do an opening prayer for us. 7 8 (OPENING PRAYER) 9 10 THE CHAIRPERSON: I understand Diavik 11 wants to -- wasn't comfortable with the response that one 12 of our Board member has, and Diavik wants to continue 13 with providing an explanation to Ms. Rabesca's statement 14 yesterday. 15 MR. GORD MACDONALD: Gord MacDonald with 16 Diavik. Thank you, Madam Chair. Ms. Rabesca, I don't 17 think I fully answered your question yesterday, and I'd 18 appreciate the opportunity to try and -- to try and 19 elaborate on that. 20 I recall three (3) questions in your -- in 21 your -- they were part of your full question, and I'd 22 like to try and address each of them. 23 The first one (1) you asked how can DDMI 24 assure the board that the environment will be protected. 25 We prepared a slide that -- that we're hoping might help

1 answer that question, and I think there's paper copies 2 that have been provided for everyone. 3 What this slide shows are the daily 4 concentrations of ammonia. It shows the -- the 20 5 milligram per litre level, which is the level that's 6 protective of Lac de Gras. And it shows Diavik's actual 7 daily performance since we started in 2003, right up 8 until a few days ago, actually. That's -- those are 9 these data down here. So, you can see that our actual 10 performance, our actual concentrations are well below any 11 level -- the level that would be protective of the 12 environment. 13 The other number -- the other line that 14 we've shown one here is at 12 milligrams per litre, and 15 this is the expert panel's estimate of the lowest 16 practical level that can be achieved over time. And you 17 can see that we're well below that as well. 18 And the expert panel's recommen -- this 19 lowest practical level is what we're suggesting could go 20 in the ammonia management plan and could change over 21 time. It could come down over time with new information. 22 But that we would always be -- the performance of the 23 mine would always be well below that level that's 24 protective of the environment. So that's the 20 25 milligrams per litre.

1 The next slide is the same -- the same 2 information, but put into the -- the other term that's 3 used -- that's been used in the discussion, which is the 4 -- is the maximum -- is the 30 day average number, so 5 it's the average -- that's where the -- here again, we've 6 got the 10 milligrams per litre, which is that level that 7 would be protective of the environment. 8 Now on the bottom of the graph, we've got 9 DDMI's actual performance as an average value, instead of 10 as the daily value. And you can see that those are well 11 below the levels that are protective of the environment. 12 And now we've got the 6 milligrams per 13 litre, which is the expert panel's estimate of the lowest 14 practical, and that we're also below those levels. And 15 again, that's -- that number could change over time with 16 new information. So we think that the -- that the best 17 way to provide protection to the lake is with both of 18 those numbers, that effluent quality criteria and a 19 moving lowest-practical level in a management plan. 20 The second question I heard from you -- I 21 heard you ask was about consistency in what Diavik is 22 asking for. DDMI has been consistent in recommending 23 that the 20 milligram per litre level is protective of 24 the environment, and that be the effluent quality 25 criteria. DDMI recommended this in December 2003 and

1 with the ammonium amendment application and continues to 2 recommend this now. 3 Finally, Ms. Rabesca, you asked why Diavik 4 requested this Hearing. Diavik requested this Hearing in 5 February, based on the expert panel's initial report. 6 And if you go back to the first slide, on the -- with the 7 maximum daily, that first report -- the expert panel was 8 recommending an effluent quality criteria around 6 9 milligrams per litre. That's -- that's right down here, 10 and that's below levels that we were actually performing 11 at currently. And if you look on the daily average 12 values, it was around 3 milligrams per litre, which was 13 down here. 14 So the levels that were -- that came out 15 in the first expert panel report were below levels that 16 we were currently operating at, and -- and we really 17 didn't believe that we could achieve those levels. 18 The panel revised its estimates, after 19 considering all of the stakeholders inputs and revised 20 those numbers to the current 6 and 12. And DDMI agrees 21 with the panel, that these represent the best estimates 22 today. 23 With the discussions yesterday and the 24 discussions since that first -- first panel report came 25 out, I think DDMI and the expert panel are also in full

1 agreement on the measures, on the ammonia management 2 measures that need to now be taken. Thank you very much. 3 I hope that helped. 4 MS. JOYCE RABESCA: Thank you, Gordon. I 5 have no more questions regarding that. 6 THE CHAIRPERSON: Is there any more 7 questions of Diavik; Board members? 8 Okay, so we have Indian Affairs next to 9 make the presentation. I want to say something about the 10 agenda today. We have Indian and Northern Affairs Canada 11 to make a presentation and there will be questions on 12 their presentation. 13 Also, following that, will be Tlicho 14 Government and questions on their presentation. And on 15 item number 6 of the agenda closing statement, there's 16 been a recommendation to have Diavik Diamond Mines make 17 their closing statement first, then followed by INAC, 18 Tlicho Government, Lutsel K'e Dene First Nation, other 19 interveners and then close off with DDMI and then Chair's 20 closing remarks. 21 Any comments on that? 22 23 (BRIEF PAUSE) 24 25 MR. JOHN DONIHEE: Madam Chair...?

1 THE CHAIRPERSON: John...? Mr. 2 Donihee...? 3 MR. JOHN DONIHEE: Thank you, Madam 4 Chair. John Donihee. I just would like to suggest that 5 we mark that -- the two-page chart that Mr. MacDonald 6 just referred to as an exhibit. I think we're up to 6, 7 Exhibit 6, in this proceeding, just so that we have that 8 for the record. 9 10 --- EXHIBIT NO. 6: Two-page chart provided by Diavik. 11 12 THE CHAIRPERSON: Whenever you're ready, 13 Ms. Racher. 14 15 PRESENTATION BY INAC: 16 DR. KATHY RACHER: Good morning, 17 everyone. And thank you for the opportunity to present 18 today. Before I begin, I wanted to correct a serious 19 omission on my part yesterday. I neglected to mention 20 the presence of one of our colleagues from the 21 Headquarter Region, Mr. Doug Paget (phonetic) who is in 22 audience hiding out and depressed that the Senators lost 23 last night. So he could be seen crying, probably, in the 24 background. He's the Acting Director of Minerals in INAC 25 at headquarters and an important part of our team.

1 I also wanted to elaborate on the expert 2 witness that we brought with us today. Her name is Susan 3 Roe. She's found right here, and she'll be available for 4 questions at the end of my presentation as -- as well as 5 -- as part of the INAC team. 6 Her position is the Head of Environmental 7 Quality Guidelines and Protocol Development as part of 8 the National Guidelines and Standards Office for 9 Environment Canada. And she's a federal representative 10 to the Technical Secretariat to the Canadian Council of 11 Ministers of the Environment Water Quality Task Group. 12 And I'll identify in my talk where her kind of expertise 13 comes in -- comes in handy. 14 So for my presentation I decided that the 15 easiest way to go would be to go through our November 16 2006 recommendations; the ones that were specifically 17 with respect to ammonia issues only. 18 And what I'm going to do with each of 19 those three (3) recommendations that are to do with 20 ammonia, I'm going to go through, just briefly, the -- 21 the basis that we -- upon which we made the 22 recommendation in the first place, and then after that, 23 review any work or new evidence that we've seen since 24 November 2006. And then, after that, summarize any 25 changes to our recommendations from last year. And then

1 I'll have a few concluding remarks. 2 3 (BRIEF PAUSE) 4 5 In November 2006 INAC's first 6 recommendation was that a requirement be included in the 7 Renewed Water Licence for water samples from SNP 1645-19, 8 which is close to the effluent lake mixing zone. That 9 samples from that area be non-toxic to Hyalella azteca as 10 determined by the ten (10) day water only toxicity test 11 for Hyalella azteca developed under the Record of 12 Agreement. 13 And I found it kind of interesting. 14 Yesterday, we were focussing on really big things. We 15 were focussing on explosives and how to manage thousands 16 and thousands of litres of water and things like that. 17 But this morning, I want to re-focus us on a very small 18 -- the very small organism... 19 20 (BRIEF PAUSE) 21 22 What was I saying? I have no idea. Okay. 23 So why is it important to test this very small and very 24 funny looking organism, Hyalella. 25 Well, Hyalella, as I discussed last

1 November, Hyalella represents aquatic organisms that are 2 sensitive to ionized ammonia. So this is where we get 3 into the chemistry seminar on ammonia. 4 Ammonia toxicity has been pretty -- is 5 pretty contentious because there are two (2) forms of 6 ammonia. There is an un-ionized form as shown in blue 7 and an ionized form shown in red. And in water, these 8 two (2) forms go back and forth. Chemically, they can 9 move from one to the other quite rapidly in water and the 10 amount that you have of one form or the other form 11 depends on the pH and the temperature of the water in 12 which the ammonia is present. 13 Now, these two chemical forms of ammonia, 14 although they can inter- -- they can move between one 15 form and the other, they are different enough that each 16 form has different toxicity profiles for certain 17 organisms. So, for example, rainbow trout are most 18 sensitive to the un-ionized form of ammonia. They're not 19 very sensitive to ionized ammonia. 20 Hyalella, on the other hand, is most 21 sensitive to ionized ammonia and not as sensitive to un- 22 ionized ammonia. 23 And the reason why this is relevant and 24 why I brought Hyalella up to begin with, was that under 25 the conditions of Lac de Gras at the pH and temperature

1 in Lac de Gras, almost 99 percent -- over 99 percent of 2 the ammonia will be found in the ionized form. 3 Okay. Now, in Diavik's licence currently 4 there is requirement for the company to test rainbow 5 trout for toxicity. To test -- actually -- sorry. To 6 test the effluent for its toxicity to rainbow trout, and 7 this is a very common condition of many licences -- many 8 water licences. 9 Now, one of the -- one of the things that 10 Diavik has raised over the addition of Hyalella as a 11 toxicity test organism is that Hyalella isn't found in 12 Lac de Gras and so, therefore, who cares whether the 13 effluent is toxic to Hyalella. But I would point out, of 14 course, that Rainbow Trout is also not found in Lac de 15 Gras, although, as we found yesterday, the reason that 16 both of these organisms might not be found there is 17 because of the potential alligators who might have eaten 18 all of these things. 19 The point is not that we're protecting 20 Rainbow Trout in particular, not that we're protecting 21 Hyalella in particular - these organisms are 22 representatives. Rainbow Trout are representing the 23 sensitivity of fish in general to un-ionized ammonia. 24 Hyalella is meant to represent in general the sensitivity 25 of a number of aquatic organisms to ionized ammonia.

1 They're representative species. And the reason why these 2 species have been chosen is because they're very 3 practical. In the lab, you can culture Rainbow Trout. 4 You can have it in the lab; it's easy to maintain. It's 5 easy to test; that's why people test it. Same with 6 Hyalella. 7 Other species of fish, including a lot of 8 northern species, some people have tried to culture them 9 in labs and it's very -- it can be very difficult. This 10 is why we've chosen Hyalella because it represents 11 organisms sensitive to ionized ammonia and it's an easy 12 lab animal to work with. 13 The next question I addressed last 14 November is why did we ask to test Hyalella at SNP1645- 15 19. This station is a station that's routinely monitored 16 by Diavik; it's found in the mixing zone. So here we 17 have a representation of Lac de Gras, which looks pretty 18 tiny in comparison to this big pipe but this is not to 19 scale. The effluent comes in from the North Inlet Water 20 Treatment Plant and is released into Lac de Gras with 21 lots of mixing in this area. And this the area from 22 which INAC believes samples should be taken and proven to 23 be non-toxic to Hyalella. 24 Currently, Diavik is testing the raw 25 effluent at station 18 for its toxicity to Rainbow Trout.

1 And, traditionally, in licenses, this is -- this is where 2 we ask people to do toxicity testing is traditionally on 3 the raw effluent. 4 So why have I asked to do it on the mixing 5 zone sample? Well, it turns out that there are chemicals 6 in the effluent that are routinely found in the effluent: 7 sodium and potassium; non-toxic chemicals on their own, 8 they're not a worry at all, but these particular ions are 9 protective for Hyalella. 10 So in their presence, Hyalella is not very 11 sensitive to the effects of ammonia but as the sodium and 12 potassium get diluted out -- because there is very little 13 of these chemicals in Lac de Gras -- then the sensitivity 14 of Hyalella is much, much higher. 15 And this is why -- if we tested the 16 effluent for toxicity to Hyalella, we wouldn't see 17 effects to -- of ammonia very well. And what we're 18 trying to do with the toxicity testing is to see -- is to 19 represent whether there is too much ionized ammonia in 20 the sample and whether it's going to affect organisms 21 that are sensitive to ionized ammonia. 22 Now, again, Diavik has pointed out that 23 there is always sodium and potassium ions in the 24 effluent. And in their May 30th submission to the Board, 25 they actually provide us with some graphs that show that

1 there is always sodium and potassium found in the 2 effluent; these protective ions for Hyalella are always 3 found there. So why bother testing for toxicity to 4 Hyalella is going to be not so sensitive to sodium and 5 potassium. 6 Well, I'm just going to go back to this -- 7 this example for a second and make the point, once again, 8 that this isn't about protecting Hyalella, in particular, 9 just like it's not about protecting Rainbow trout, in 10 particular. 11 These tests exist and are required so that 12 we can get a feeling -- these are representatives of what 13 other organisms; other benthic organisms and other fish 14 might feel or experience as a result of the effluent 15 coming out here. And we're using standard lab animals to 16 do that. And I have another point on -- on this in a 17 second. 18 Okay, so let's -- that's the review of -- 19 of the recommendation, and let's review some of the new - 20 - new evidence. So, in the November hearing last year, 21 Diavik had committed to doing some trial tests with 22 Hyalella in 100 percent lake water and also in a mixture 23 of 5 percent effluent in lake water. 24 This sample was meant to represent 25 conditions in the mixing zone, and Diavik came through on

1 this and did perform this test and provide the results to 2 all of us. 3 Now, before getting into the details of 4 the tests, with which we had some problems with the 5 results of these tests -- not the results, but in the way 6 the tests were done. 7 I will just highlight the LC50 value. So, 8 if you recall, LC50 is the lethal concentration so -- at 9 which 50 percent of organisms will die. And it is simply 10 a convenient way that toxicologists like to talk about 11 different chemicals to compare the toxicity of one 12 chemical to another. 13 The higher -- the higher the number -- the 14 higher the LC50 number, the less sensitive the organism 15 is to that particular chemical. So, as you can see, the 16 results showed that in 100 percent lake water, this is 17 Lac de Gras water, the Hyalella was quite sensitive with 18 an LC50 of about one (1) milligram per litre. 19 In the mixing zone sample the result was 20 an LC50 of eighteen (18) milligrams per litre. 21 Based on this result, Diavik concluded, 22 once again, that why would we test with Hyalella when the 23 LC50 value that is showing up here that is representative 24 of the sensitivity of Hyalella in the mixing zone is much 25 -- is so much higher than the concentrations of ammonia

1 will be in the mixing zone. 2 So, again, why test with Hyalella? Why -- 3 why bother when apparently we know that Hyalella is going 4 to be fine? Well, to answer this you have to get back 5 to, once again, why we test organisms at all for toxicity 6 in the effluent. 7 Rainbow trout -- when we're testing 8 Rainbow trout in the effluent, why do we do that? We 9 know -- we know, apparently, from -- from toxicity tests 10 done elsewhere that Rainbow trout can survive in twenty 11 (20) milligram per litre -- water containing a large 12 concentration of ammonia. We know that. Then why do we 13 make Diavik and other companies around Canada routinely 14 monthly test for toxicity to Rainbow trout, for example? 15 The reason is, is that what we don't know 16 is how one chemical and another are going to interact in 17 the effluent. Tests in labs are done one (1) chemical 18 and one (1) organism at a time. What if you have 19 chemicals that interact in ways that scientists are 20 unaware of? These are biological systems and they're 21 very complicated, and scientists don't know all the 22 answers. And that's why we get them to test the effluent 23 directly for its toxicity to a living organism. 'Cause 24 living organisms are complex. 25 And, for that same reason, that is why we

1 -- we want to add Hyalella. The LC50 of Hyalella in any 2 combination of water -- it's not completely relevant to 3 the fact that testing organisms in the effluent is a 4 procedure -- is a practice we all do in order to make 5 sure that our predictions, the things that are tested in 6 the lab, are actually true. So, the proof is in the 7 pudding, and the proof is in the ability of the organism 8 to survive a real sample. 9 In addition, although it was good to see 10 that this initial test was -- was done, I detailed in 11 comments to the Board at the time that the protocol 12 followed by the lab, in this case, was not followed 13 exactly and, particularly, the analysis of the sample 14 chemistry was -- there was something strange in those 15 results that I -- I -- I didn't trust the -- the results. 16 As well, these samples were taken on -- on 17 one (1) day, and one (1) days samples, one (1) test, do 18 not a conclusion make. So our feeling -- INAC's feeling 19 is that these -- the results of the single test -- set of 20 tests was inconclusive. 21 So, does the trial toxicity testing, the 22 new evidence on Hyalella by DDMI change our 23 recommendation? And the answer is No. As we said 24 before, we -- we recommend testing toxicity against 25 Hyalella. We -- we feel that they should use the most

1 sensitive strain of Hyalella that the -- the experts have 2 suggested. And we would also recommend, though, 3 simplifying some of the conditions of the original test 4 to minimize cost to DDMI for the testing. 5 For example, we can reduce, safely reduce, 6 the number of replicates and also make the test a 7 pass/fail test for acute toxicity as it is for Rainbow 8 trout. So instead of going through the hard work of 9 determining an LC50 value, you just see if the Hyalella 10 survive or they don't; 50 percent of them, for example, 11 need to survive. It's the same kind of a situation that 12 is done currently for Rainbow trout. 13 As well, they can use samples that they 14 are already taking from SNP1645-19. These tests, one (1) 15 -- I guess, one (1) final point that DDMI made in their 16 May 30th submission was that why -- why are we testing 17 this benthic organism that is not in, or potentially not 18 in, Lac de Gras? 19 And they said, you know, why don't we test 20 the benthic organisms that are really in the lake? And 21 they are already doing that as part of their aquatic 22 effects monitoring plan, and that's a good point. And we 23 believe that actually both are needed because they both 24 have different purposes. 25 In this case, you do monthly toxicity

1 tests because then you get monthly results on the 2 toxicity of the effluent. The AEMP is not designed to 3 give monthly results. It's a yearly -- it's -- the 4 sampling is done several times per year, but it's only 5 analysed -- the data is only analysed on a yearly basis. 6 Recommendation number 2 from INAC in 7 November 2006. INAC recommends that the effluent 8 discharge limits for ammonia be set at ten (10) 9 milligrams per litre for the maximum average 10 concentration, and twenty (20) milligrams per litre for 11 the maximum daily grab concentration in the renewed water 12 licence. 13 The limits that we proposed were lower 14 than the limits adopted in the 2004 amendment to DDMI's 15 water licence and lower than the generic national water 16 quality guidelines for ammonia. 17 THE CHAIRPERSON: Excuse me, Ms. Racher. 18 DR. KATHY RACHER: Sure. 19 THE CHAIRPERSON: You're going a bit fast 20 for the translator and -- 21 DR. KATHY RACHER: Okay. 22 THE CHAIRPERSON: -- and I'm getting the 23 odd nod from them. 24 DR. KATHY RACHER: Okay. 25 THE CHAIRPERSON: Okay.

1 DR. KATHY RACHER: I apologize. There 2 have been a lot of talk about the water quality 3 guidelines, the CCME guidelines, by Diavik and by others. 4 So, I wanted to spend a few minutes to talk a little bit 5 about what the water quality guidelines are and what they 6 mean, for the information of the Board. 7 And this is also the reason why we invited 8 Susan Roe from the Guidelines Office to come in case you 9 had questions specifically for her as an expert. 10 The water quality guidelines for Canada 11 are developed through the Canadian Council for Ministers 12 of the Environment and this is termed the CCME. 13 There are representatives from the Federal 14 Government within this organization, both from 15 Environment Canada and from INAC. And there 16 representatives of the territories and the provinces all 17 sit on this council and the task groups that are part of 18 this council. 19 The CCME does a lot of different kinds of 20 work for the goal of protecting the environment. The 21 Canadian water quality guidelines are just one (1) of 22 their jobs. These quotes are from the CCME documents to 23 describe what the guidelines are meant to do. So: 24 "Guidelines are numerical limits or 25 narrative statements based on the most

1 current scientifically defensible 2 toxicological data available for the 3 parameter of interest. Guideline 4 values are meant to protect all forms 5 of aquatic life and all aspects of the 6 aquatic life cycle." 7 Obviously, that's a big task. In order to 8 explain further, I wanted to give the Board a short 9 example of how these guideline values are set. And keep 10 in mind this is an example and it's just to -- just for 11 clarification purposes. 12 The CCME does not have a lab. The CCME 13 does not do its own testing of organisms for toxicity. 14 Instead, they rely on the literature. So, they rely on 15 scientists in Federal Government labs, provincial labs or 16 in universities to -- who are doing, as part of their own 17 research, tests on various aquatic species with various 18 contaminants. 19 And what the CCME does then is scans all 20 of the scientific literature and for every organism finds 21 what the toxicity has been -- what toxicity has been 22 measured for that organism to a given contaminate. So, 23 here on the bottom, we have increasing toxicity 24 essentially, so more -- it takes more of a, for example, 25 ammonia to kill a Mayfly than it does to kill a Brown

1 trout. 2 And they'll look at a whole bunch of 3 species and including -- you see, there's more than one 4 (1) trout species; there's Brown trout and Rainbow trout, 5 Chinook salmon and Coho salmon, because even close 6 relatives in the fish family can have different 7 sensitivities to different toxins or chemicals. 8 They'll look at all these different 9 species and then they'll look for the one (1) that's the 10 most sensitive. Their goal is that the final guideline 11 value should protect the most sensitive life stage of the 12 most sensitive species over the long term. And that's 13 pretty conservative. That's quite a goal. 14 So, they won't just look at adult Rainbow 15 trout, they'll look at tests done on baby Rainbow trout, 16 on larva, to -- and see which is the most sensitive. 17 After that, they also apply a safety factor to -- to 18 account for things that they may not -- they may have 19 missed. 20 So that's pretty impressive, the work that 21 the CCME does. Why wouldn't we simply adopt the national 22 guideline for ammonia? Well, that's a very valid 23 question. And our answer is -- is that because of all 24 the data that -- that has been collected on all sorts of 25 different species, there is none of this scientifically

1 defensible toxicological data that was used in setting 2 the last ammonia guideline collected; none of it was done 3 under conditions similar to Lac de Gras with respect to 4 temperature, pH and conductivity. 5 As I said before, the CCME does not have 6 its own lab. It relies on what other researchers choose 7 to do and the conditions in which they choose to do their 8 tests. In this case, although I could show you pages and 9 pages of data from all of this, there is nothing that was 10 done at the temperature, pH or conductivity that we find 11 in Lac de Gras. 12 There was nothing done on any northern 13 species of fish and there was nothing done on organisms 14 that are most sensitive to ionized ammonia which is the 15 predominant form of ammonia in Lac de Gras. 16 It is for these reasons that we didn't 17 want to just adopt the national guideline as it was. And 18 the CCME is not opposed to this. To quote: 19 "While adoption of generic water 20 quality guidelines represents the 21 primary procedure for establishing 22 numerical water quality objectives, the 23 presence of unique water quality 24 characteristics or species assemblages 25 at certain sites may necessitate the

1 derivation of site adapted water 2 quality objectives." 3 In other words, the CCME says, if you've 4 got a condition that we haven't thought of, then you need 5 to re-look at the guideline. Don't just adopt what we 6 say. 7 INAC's recommended discharge limit for 8 ammonia was based on what we knew, what we know, about 9 the unique conditions at Lac de Gras and was, therefore, 10 put forward as more protective of the environment at this 11 -- at this site. 12 There's been a lot of talk about 13 protective and it struck me yesterday how great it would 14 be if we could say with 99.923 percent confidence that we 15 knew what EQC value would be protective of all the 16 species in Lac de Gras. 17 Again, this is a biological system for 18 which we don't have a ton of data. It's a very 19 complicated system and so we don't have the 99 plus 20 degree of confidence. 21 What is protective? Many arguments can be 22 made on that but, quite frankly I don't know what would 23 be protective of every species in Lac de Gras -- under 24 the conditions in Lac de Gras. I know more protective. 25 I know that by -- by at least considering what we do know

1 about the unique conditions at Lac de Gras, we can be 2 more protective. And then after that there's some 3 uncertainty. We don't know how much change to the water 4 quality of Lac de Gras is going to cause an effect on the 5 species that are found in Lac de Gras. 6 And that's, I believe, what the Board 7 understood as well and why you've been looking at the 8 lowest effluent criteria practical at site. In the 9 absence of 99.99 percent confidence lower is better. 10 So, the new evidence that has been given 11 since November 2006, has to do with work on the lowest 12 effluent criteria practical at site. 13 Now when we looked at this and whether it 14 would affect our original recommendation, we took two (2) 15 considerations. The first one, we looked at the 16 credibility and utility of the ammonia review panel of 17 experts review and subsequent recommendations and, 18 secondly, we looked at the appropriateness of setting an 19 effluent discharge limit based on what is operationally 20 achievable at site. 21 Diavik has argued that perhaps in the 22 latter case that it is not an appropriate way to set an 23 effluent discharge limit. 24 Here, in a nutshell, is INAC's opinion of 25 the expert panel process and the conclusions.

1 We found the process and conclusions to be 2 fair. The experts were clearly knowledgeable and we 3 found them to be independent and unbiased. 4 We found the process and the conclusions 5 to be extremely thorough and the experts demonstrated 6 excellent knowledge of the site and came up with some 7 workable options. 8 We found the process to be quite 9 reasonable. The options endorsed by the panel seemed to 10 require minimal changes to water treatment or associated 11 mine activities. There was no million dollar treatment 12 plants to be installed. 13 We found the process to be transparent. 14 Stakeholder comments seemed to be 15 adequately addressed. Our own were, certainly. 16 And we appreciated the effort that the 17 panel put in to addressing the concerns of Diavik itself, 18 considering that Diavik is the operator of the site. 19 So, in summary, we had no problem with the 20 recommendations of the expert panel. We believed that 21 what the expert panel came up with as far as what was 22 achievable on site, we felt that those were reliable 23 numbers. 24 So, the next consideration was whether it 25 was appropriate to set limits more stringent than

1 Canadian water quality guidelines. 2 Again, I'd like to quote the experts. The 3 Canadian Council Ministers of the Environment says: 4 "that for waters of superior quality or 5 that support valuable biological 6 resources, the CCME non-degradation 7 policy states that the degradation of 8 the existing water quality should 9 always be avoided." 10 And I don't think anyone argues that. Lac 11 de Gras is a water of superior quality. 12 Secondly, another quote: 13 "For ecosystems of superior quality, 14 impairment to guideline concentrations 15 is not advocated." 16 The CCME is saying, essentially, it is 17 okay to set limits that are more stringent than the 18 guidelines that they put out. 19 As well, the CCME recognizes that in 20 certain cases there is insufficient information on the 21 physical, chemical and biological characteristics of the 22 receiving water system that are available to modify the 23 generic water quality guidelines to consider site 24 conditions. 25 The development of manufacturing processes

1 that reduce the production of waste products and improve 2 the performance of waste water treatment systems are 3 normal research and development activities that are 4 actively pursued by all responsible corporations and 5 government organizations. 6 And I think there is no question that we, 7 in this room, represent responsible corporations and 8 government organizations. The Board has been making 9 efforts to look into what the best treatment and/or 10 management options would be to get the lowest amount of 11 ammonia, in this case, sent out into the environment. 12 And Diavik, itself, has embraced doing what is necessary 13 and what is practical to reduce the level of 14 contamination of Lac de Gras. 15 The debate seems to be not on whether this 16 is the right thing to do, the debate seems to be on how 17 to do it. Diavik has embraced this but would prefer that 18 -- that the -- the lowest practical on-site -- effluent 19 quality criteria on site be something that they agree to 20 as an objective in their ammonia management plan; that we 21 leave it to them that they do have the interests of the 22 environment at heart and that we leave it to them, as a 23 responsible corporation - which I believe they are - to - 24 - to -- to do this through management practices. 25 The Board and INAC seem to be going in the

1 direction of wanting to set a firm limit that is 2 enforceable as -- as part of an effluent quality limit 3 that must be met at the end of pipe. 4 INAC prefers this option, the latter 5 option, just for the sake of clarity, but also because 6 the one (1) management plan on its own is not enough. It 7 needs to be linked to the objectives that DDMI is trying 8 to achieve in the management plan; needs to be linked to 9 a firm limit in the licence. 10 Both are what we need. We need objectives 11 in the management plan and we need a firm limit that will 12 make it clear to all parties what is okay to come out of 13 the end of the pipe and what is not okay. 14 And it's not uncommon to set effluent 15 discharge limits based on what's the lowest achievable, 16 or what's practical and achievable onsite. It is 17 practiced in other jurisdictions. 18 In -- in my intervention, I brought up two 19 (2) examples: One (1) is the Canada Metal Mining 20 Effluent Regulations. We appeared to have a bit of a 21 disagreement over what the regulations were based on, but 22 I will maintain that the Regulations provide for the met 23 -- in the metal mining effluent regulations, there's a 24 provision for, these are the limits that companies must 25 meet at the end of pipe for a number of different

1 parameters, predominantly metals. 2 And many of these -- and many things were 3 taken into consideration when those numbers, those 4 limits, were made, but one (1) of the things was simply 5 what companies -- what the -- what 50 percent of the 6 companies in Canada were already able to achieve. And 7 there was no mention of how they achieved it. There was 8 -- there was no telling people that they had to have 9 certain treatment technologies or certain management 10 practices. 11 It was just noted that 50 percent of the - 12 - or 50 percent of the companies were able to achieve at 13 the end of pipe a certain concentration of metals and, 14 therefore, the Canadian Government said, well, everybody 15 should be able to achieve that then. The other system is 16 the -- the US system which is very interesting and a very 17 entrenched way of doing things. 18 The -- under the National Pollutant 19 Discharge Elimination System in the US, for a given 20 project, limits are bas -- limits are based on two (2) 21 things, two (2) things are looked at: One (1) is the use 22 protection limit, but that sort of correlates to the 23 guideline limit, so what -- what's the maximum that you 24 can put into a lake before you begin to have effects on 25 human, fish and wildlife?

1 The second is to look at technology-based 2 limits, so this is again, what is practical or 3 achievable. And achievable in the sense of what are 4 companies in a certain industry able to achieve already, 5 by whatever means that they use and what happens is both 6 of these limits are decided on for a particular project 7 and water body and then the most stringent is chosen in 8 order to minimize loadings to the environment. I'm far 9 too excited about this topic to slow down. 10 THE CHAIRPERSON: We can tell you are 11 sincere in your work. 12 DR. KATHY RACHER: Pardon me? 13 THE CHAIRPERSON: We can tell you are 14 sincere in your work. 15 DR. KATHY RACHER: Finally, INAC believes 16 that by considering effluent discharge criteria that our 17 "as protective of the environment as possible" with 18 minimal changes to current water treatment practices, the 19 Wek'ezhii Land and Water Board is dutifully fulfilling 20 their legislated mandate of providing for the 21 conservation, development and utilization of land and 22 water resources in a manner that will provide the optimum 23 benefit, generally, for all Canadians and, in particular, 24 for the residents of its management area. 25 In some ways it feel like the Wek'ezhii

1 Board has done Diavik a favour by setting up this expert 2 panel that was truly tremendous and I think -- I think 3 Diavik has already thanked the panel for a number of the 4 recommendations that the panel brought forward that 5 Diavik is happy to implement. 6 Do the conclusions of the ammonia expert 7 panel change our original recommendation from last 8 November and in this case, Yes. 9 INAC supports the Wek'ezhii Land and Water 10 Board in setting effluent discharge limits for ammonia 11 that are more stringent than those previously recommended 12 by INAC, as long as those limits are both practical and 13 achievable on the Diavik mine site and I think that has 14 been demonstrated. 15 Finally, INAC endorses the recommendations 16 and conclusions of the expert panel with respect to the 17 determination of the lowest practical effluent criteria 18 for ammonia at Diavik. 19 The third and last recommendation we had 20 last year in November: INAC recommends that the renewed 21 water license require DDMI to perform the toxicity 22 testing with round whitefish as outlined in the record of 23 agreement. There has been no new evidence with respect 24 to this recommendation in the intervening time and, 25 therefore, it stands as a current recommendation.

1 Finally, INAC, through the water resources 2 division, has initiated a collaboration with the National 3 Guidelines and Standards office and Environment Canada to 4 research more suitable limits for ammonia in northern 5 waters. This has long been recognized as a gap in the 6 knowledge of the CCME and it is recognized -- it is 7 recognized that the guideline needs to be revisited for 8 ammonia. 9 INAC will continue to update the Board as 10 to any new information in this regard as it becomes 11 available. Thank you. 12 THE CHAIRPERSON: Thank you, Ms. Racher. 13 Can we take a ten (10), fifteen (15) minute break from 14 here and we'll begin with questioning from the Tlicho 15 Government. 16 17 --- Upon recessing at 10:05 a.m. 18 --- Upon resuming at 10:24 a.m. 19 20 THE CHAIRPERSON: Good morning, can we 21 reconvene this hearing again, please. I understand that 22 we have some people that are leaving this afternoon and 23 I'm just wondering if I can make a comment about that. I 24 know we're going to go until about 5:00 this afternoon. 25 This afternoon we have some closing

1 comments to make, so keeping in mind that people need to 2 catch their flight and that, I'd like to recommend that 3 in making your closing comments, if you can keep it to 4 about ten (10), fifteen (15) minutes. It's because 5 people need to catch flights. Okay, massi. 6 We have Tlicho Government next to ask 7 questions of INAC's presentation. 8 9 QUESTION PERIOD: 10 MR. ARTHUR PAPE: Thank you, Madam 11 Chairman. Arthur Pape for Tlicho Government. Madam 12 Chairman, I have a few questions for Dr. Racher. 13 Dr. Racher, when you were doing your 14 slides, there was one (1) -- the slide that's headed -- 15 "Is it appropriate to set limits more stringent than 16 Canadian water quality guidelines" and I wasn't -- I had 17 a little difficulty being exactly -- being perfectly 18 clear on what you were suggesting to the Board. 19 You read a quote that says, 20 "For waters of superior quality or that 21 support valuable biological resources, 22 The Canadian Council of Ministers of 23 the environment non-degradation policy 24 states that the degradation of the 25 existing water quality should always be

1 avoided." 2 Are you saying, Dr. Racher, that this non- 3 degradation policy should apply to Lac de Gras? 4 DR. KATHY RACHER: Kathy Racher, DIAND. 5 Yes, I -- I am. Apparently I did a double negative there 6 but yes, the non-degradation policy would apply to Lac de 7 Gras. Lac de Gras is an un-degraded lake and that is the 8 definition, I believe, of -- of water of superior 9 quality. 10 MR. ARTHUR PAPE: Arthur Pape. And just 11 to followup there, does the -- does the non-degradation 12 policy exist or coexist with the guidelines and -- and 13 how are the two (2) supposed to act together; the -- the 14 national guidelines and -- and if you would just go back 15 again for us. 16 You've got the national guidelines and 17 you've got the suggestion that the guidelines shouldn't 18 always apply in particular circumstances and then you've 19 got the non-degradation policy. 20 How, as you understand it, do those three 21 (3) different policy approaches, how do they -- how do 22 they live together and -- and what -- what -- what do you 23 understand as -- as the way that a body like the Board 24 should use all three (3) of those different guidelines or 25 -- or -- or sets of principles?

1 DR. KATHY RACHER: The CCME advocates the 2 maintaining water quality and improving water quality; 3 that -- hence the non-degradation policy. If the water 4 is not degraded, then it should be maintained in that 5 state; in the most pristine state possible. 6 There are some water bodies whose levels 7 are currently higher than some of the guideline values. 8 And, in those cases, the CCME would recommend improving 9 the water quality back down to the level of the 10 guidelines. 11 The guidelines are not intended to be 12 pollute-up-to numbers. What that means is that the 13 guidelines are not intended -- that it's okay, put -- put 14 whatever you want in the lake, but just don't pass these 15 numbers; that's not the intention of the guidelines. 16 These are the maximum numbers that the -- that the CCME 17 would like to see in the water quality in order to 18 protect the environment. 19 So, basically, they're not pollute-up-to 20 numbers. And for waters that are -- are -- have water 21 quality concentrations that are much below the 22 guidelines, the CCME recommends keeping them at that 23 level, at a lower level than the guidelines if possible. 24 MR. ARTHUR PAPE: Thank you. Arthur Pape 25 again. Dr. Racher, you talked about -- if I understood

1 you, you recommended to the Board that on -- on behalf of 2 INAC you were saying that the Board should rely on a non- 3 degradation policy approach and set EQCs at the lowest 4 practical and achievable number and use that kind of 5 approach. 6 And are you saying that that is -- in the 7 circumstances of Lac de Gras, are you saying that that is 8 a way to be more protective of the environment? Is that 9 what you were saying? 10 DR. KATHY RACHER: Yes. That's what I'm 11 saying. I'm following the notion that degradation of 12 existing water quality should always be avoided. 13 MR. ARTHUR PAPE: Dr. Racher - Arthur 14 Pape again - you also talked about toxicity testing and 15 you explained to us some of the different kinds of tests 16 that have been done and have been required under the 17 licence. and you mentioned three (3) different types of 18 testing, if I understood, both on lake trout, on -- on 19 trout and on Hyalella and on Round Whitefish. 20 And, first is a general questions. Are 21 you -- are you advocating that even if the Board sets 22 EQCs based on lowest achievable numbers and non- 23 degradation approach, are you advocating that toxicity 24 testing will still be required in the future on a regular 25 basis?

1 DR. KATHY RACHER: Kathy Racher. Yes. 2 Toxicity testing for the trout and Rainbow Trout, 3 Hyalella and I believe the licence already calls for 4 toxicity testing on Daphnia, another tiny organism, would 5 continue regardless of what EQC levels the Board set. 6 The reason why we do those tests is 7 because, as I said before, we don't know what the 8 interactions are in the effluent between all of the 9 different chemicals and constituents are. We don't know 10 how the mix affects biological organisms. And so we -- 11 we rely -- we -- we -- we try to make things as low as 12 possible in the effluent, but we just can't know for sure 13 that something about the mix or some -- some other 14 situation will -- will occur that will affect living 15 organisms. 16 A good example of this that I meant to 17 mention in my talk came from another mine in the 18 Northwest Territories where the -- the mine had effluent 19 quality limits that were being met. They met all of the 20 -- I -- I think it was ten (10) different metals and 21 other parameters that they had to get to certain effluent 22 quality limits. And they always met them. They did. 23 However, the toxicity tests kept failing, 24 the Rainbow Trout kept dying, and it was a surprise. So 25 even though we had tried to under -- we tried to know

1 what was the best thing to limit in the effluent, 2 clearly, we didn't know; the fish told us that there was 3 something else going on. 4 In that case, it turned out that there was 5 something in the groundwater -- not as a result of any 6 fault of the company, however, there was something in the 7 groundwater that was causing the fish to die. But that 8 was very valuable information to have and information we 9 only have through actual testing as opposed to relying on 10 lab numbers. 11 MR. BRAD ARMSTRONG: What mine was that, 12 Dr. Racher? 13 DR. KATHY RACHER: That was the Con Mine, 14 Miramar Con. It was just -- it was just three (3) or 15 four (4) years ago. Sorry, that was Kathy Racher. 16 MR. BRAD ARMSTRONG: Dr. Racher, just 17 continuing along this line. 18 Are there still disagreements or are there 19 issues that have not yet been settled by agreement 20 between the applicant Diavik and INAC or some other 21 Interveners about what toxicity testing should continue 22 to be required under a renewed license, if and when a new 23 license -- a renewed license is issued. 24 DR. KATHY RACHER: Kathy Racher. The 25 existing license calls for toxicity testing of Rainbow

1 Trout and Daphnia magna, and I don't believe that Diavik 2 has any problem with continuing those tests. 3 I guess the only one that they disagree 4 with is our recommendation to add the testing of Hyalella 5 for the reasons that I outlined; that they -- they 6 disagree with that. 7 The third recommendation was about 8 toxicity testing of Whitefish. Now I should make clear 9 that we did not intend that testing Round Whitefish be a 10 routine toxicity test done by the lab -- or done, sorry, 11 by Diavik. It would be more of a study, a research 12 study, as opposed to a routine test. Just to clarify 13 that. 14 MR. ARTHUR PAPE: And, Dr. Racher, how did 15 the whole concept of tests for Round Whitefish come to be 16 an issue with respect to the Diavik operation? 17 DR. KATHY RACHER: It was brought up 18 during the mediation over the 2004 amendment to the 19 license. It was part of the Record of Agreement. 20 Because ammonia effects were still unclear 21 several years ago and they haven't become clearer since 22 then, it was recommended during the process that Diavik 23 test on a northern species of fish, which would be the 24 Round Witefish was the one chosen since there was some 25 evidence that it might be quite sensitive to ammonia.

1 That's how Diavik, by signing the 2 Mediation Agreement, I had assumed that they would 3 fulfill their commitment to testing the round -- Round 4 Whitefish from Lac de Gras to the effects of ammonia just 5 to see how sensitive that species is. 6 MR. ARTHUR PAPE: And I gather that what 7 you're saying is that that commitment hasn't yet been 8 fulfilled? 9 DR. KATHY RACHER: No, it has not. Kathy 10 Racher. 11 MR. ARTHUR PAPE: And, Dr. Racher, are you 12 suggesting to the Board, that the Board should make that 13 testing a requirement under a new license, a requirement 14 in relation to ammonia issues. 15 DR. KATHY RACHER: Kathy Racher. Yes, I 16 am recommending that. Diavik committed to doing this 17 many years ago and it has not been done and it will 18 provide some very valuable information as to the 19 sensitivity of a northern species of fish to ammonia; 20 information we don't currently have. 21 MR. ARTHUR PAPE: Thank you. Those are my 22 questions, Madam Chairman. 23 THE CHAIRPERSON: Any questions from 24 EMAB? 25 MR. JOHN MCCULLUM: No questions.

1 THE CHAIRPERSON: Any questions from DFO? 2 MR. BRUCE HANNA: No questions. 3 THE CHAIRPERSON: Any questions from 4 Environment Canada? 5 MS. ANNE WILSON: No questions. 6 THE CHAIRPERSON: Any questions from Dene 7 -- the Yellowknife Dene First Nation? 8 Any questions from North Slave Metis 9 Alliance? 10 Any questions from Lutsel K'e Dene First 11 Nation? 12 Any questions from Deninu Kue First 13 Nation? 14 Any questions from the public? 15 Any questions from DDMI? 16 MR. BRAD ARMSTRONG: Thank you, Madam 17 Chair. It's Brad Armstrong. I have a few questions for 18 Dr. Racher. 19 Dr. Racher, you have mentioned the CCME 20 guidelines and you -- I take it you confirm that this 21 Board, when considering this application, that those CCME 22 guidelines are the appropriate guidelines to be looking 23 at as water quality standards? 24 Do you agree with that? 25

1 (BRIEF PAUSE) 2 3 DR. KATHY RACHER: The -- the information 4 provided by the CCME with respect to the Canadian water 5 quality guidelines are -- are meant to be helpful. 6 They're meant to be helpful to Boards, such as yourself, 7 trying to make these kinds of decisions. CCME does not - 8 - these are not imposed in regulation. This is not 9 something that the CCME says you must do in all cases; do 10 exactly what we have written down. 11 CCME says this -- this is the information 12 that we have, that we have put together. It is a 13 reasonable level of -- of protection for most water 14 bodies. But they recognize very strongly that there are 15 site-specific cases. And they have a full -- fulls -- 16 full document on how to decide on a site-specific level; 17 how to adapt the guidelines to a site-specific situation 18 for -- for waters that have -- that have different -- 19 unique characteristics, is what they say, or unique 20 species or species assemblages, which means a combination 21 of species. 22 They recognize that you can't have one (1) 23 value that is good for every single water body in Canada. 24 And they recommend doing a site -- looking at things site 25 specifically.

1 So it is a piece of information that is 2 intended to be used in this process, but judgment needs 3 to be used in adapting these guideline values. 4 MR. BRAD ARMSTRONG: This is Brad 5 Armstrong, Madam Chair. These -- these guidelines, Dr. 6 Racher, are the guidelines which have been used to 7 develop water quality derived discharge limits in -- in 8 mines generally in the north. For instance, INAC in May 9 in its presentation with respect to the Snap Lake Mine 10 you'll recall made recommendations on discharge limits 11 and those recommendations were based on the CCME 12 guidelines, were they not? 13 DR. KATHY RACHER: I wasn't part of -- of 14 that particular intervention but, from what I've read, 15 yes, they were used as a basis, as part of the 16 information for making a recommendation in the Snap Lake 17 case; keeping in mind, of course, that Snap Lake is a 18 different kind of lake than Lac de Gras. 19 MR. BRAD ARMSTRONG: Thank you, Dr. 20 Racher. Brad Armstrong. You recognize that this Board 21 has to consider some water quality guidelines in its 22 decision. INAC has not presented any other water quality 23 guidelines for this Board to look at in these 24 proceedings, have you? 25 The only guidelines on the table here are

1 the CCME guidelines, isn't that correct? 2 DR. KATHY RACHER: I think I've provided 3 -- Kathy Racher -- I think I've provided the Board with a 4 case for adapting the guidelines in a site-specific way. 5 I came up with a value that -- of the ten (10) and twenty 6 (20) based on a site-specific adaptation of the 7 guidelines. 8 But, as I said in my talk, this is one (1) 9 consideration for a guideline but setting something more 10 stringent, based on other considerations such as an 11 attempt to minimize degradation to the lake by requesting 12 a limit based on what is achievable on site, is a perfect 13 -- in INAC's opinion, is a perfectly reasonable thing to 14 do and the CCME also does not oppose setting guidelines 15 more stringent. I would not want to see the Board set a 16 guideline that was less stringent than the Guidelines, 17 but certainly more stringent is not a problem with INAC 18 or the CCME, I believe. 19 MR. BRAD ARMSTRONG: Madam Chair, Brad 20 Armstrong. 21 Dr. Racher, your calculations of ten (10) 22 and (20) were derived based on the CCME water quality 23 guidelines with an adjustment for site specific criteria; 24 that is the soft water in Lac de Gras. You confirmed 25 that the ten (10) and twenty (20) that you calculated

1 were derivations based on achieving the CCME water 2 quality guidelines with the site-specific factor built in 3 for the soft water, isn't that correct? 4 DR. KATHY RACHER: Um, I used the -- I 5 guess the -- the basis of how -- how water got -- the 6 Canadian water guidelines are set. They're set to 7 protect the most sensitive species at the most sensitive 8 stage of life of that species. And so, yes, I based it 9 on that premise; that is the goal of the Canadian Water 10 Quality Guidelines. 11 And, keeping in mind, of course, that the 12 most sensitive life stage of the most sensitive species 13 is just what you happen to know in a laboratory sense 14 about what's the most sensitive species. The most 15 sensitive species that I could find in the literature at 16 this time was Hyalella in four waters like Lac de Gras. 17 Are there more sensitive species? I have no idea. 18 MR. BRAD ARMSTRONG: I'm sorry, Madam 19 Chair, Brad Armstrong. You used the -- you followed, in 20 fact, the Golder's -- Golder's study did a calculation of 21 discharge limits based on water quality guidelines. You 22 understand -- just while we're talking about this, Dr. 23 Racher, let me just confirm, I understand you're not an 24 expert in aquatic toxicology. 25 This is not your area of expertise, isn't

1 that correct? 2 DR. KATHY RACHER: I would call myself an 3 expert in scientific method. Kathy Racher. 4 MR. BRAD ARMSTRONG: Brad Armstrong, Madam 5 Chair. Your expertise, I think -- your education, Dr. 6 Racher, is in chemistry. Will you concede that you are 7 not an expert in aquatic toxicology or biology? 8 DR. KATHY RACHER: I concede that I'm not 9 an expert in -- Kathy Racher. I'm not an expert in 10 saying my name. 11 I am not an expert in aquatic toxicology. 12 I have no particular degrees in aquatic toxicology. 13 I -- my CV is on the record. I have 14 experience in chemistry and bio-chemistry, microbiology. 15 I have studied pathogenic or disease-causing bacteria, 16 among other things. I -- that I hold -- I hold 17 publications and even a patent in a number of different 18 areas. 19 So, no, I'm not an expert in aquatic 20 toxicology but I put myself forward as an expert in 21 scientific method and looking at things critically. 22 MR. BRAD ARMSTRONG: Thank you, Dr. 23 Racher. Just -- just to confirm. The process of 24 deriving discharge limits based on water quality 25 objectives begins with determining what water quality

1 objective you should be trying to achieve in the 2 receiving environment. 3 Do you agree with that? 4 DR. KATHY RACHER: Sorry, I missed just 5 the beginning of that question. Could you repeat it, 6 please? 7 MR. BRAD ARMSTRONG: Well, you recognize 8 that they're -- in the general guidelines on setting 9 EQCs, one approach is to set discharge limits derived 10 from achieving water quality objectives. 11 Do you recognize that? 12 DR. KATHY RACHER: Kathy Racher. Yes, you 13 have to know what you are wanting in the lake. So that 14 would be the water quality objective; that is, what do 15 you want long term the water quality of your lake to be. 16 And then you can calculate what should and shouldn't come 17 out of the end of pipe in order to maintain a certain 18 level of water quality in the lake. 19 MR. BRAD ARMSTRONG: Thank you, Dr. 20 Racher. Brad Armstrong. And the calculations of 10 21 milligrams per litre average and 20 milligrams per litre 22 average, those discharge limits are derived by some 23 calculations which conclude that if the effluent stays 24 below those levels, that the water quality objectives in 25 the lake will be met.

1 Isn't that correct? 2 DR. KATHY RACHER: Kathy Racher. You 3 haven't defined what the water quality objective is. And 4 I think that is the -- that's the crux of a lot of our 5 debate, is -- is -- is what is protective. Yesterday 6 Gord Macdonald said that what he considered to be 7 protective was what was not acute -- acutely or 8 chronically toxic to aquatic organisms in the lake. 9 Another definition might be the -- to do 10 with the non-degradation of maintaining or not changing 11 the water quality based on the fact that we don't know -- 12 we don't have a direct relationship between a change in 13 water quality and what the effect actually will be. So, 14 what is the water quality objective. That's a matter of 15 debate. 16 MR. BRAD ARMSTRONG: Thank you, Dr. 17 Racher. Dr. Racher, you did calculations. You 18 calculated that achieving -- maintaining the effluent 19 discharge limit at an average of ten (10), you calculated 20 that that would achieve a water quality objective. 21 You know what that objective is. You did 22 the calculation. You're coming back to me saying what 23 are the water quality objectives. You've done a 24 derivation. I suggest to you you've done a derivation 25 based on the water quality objective which you think

1 should be met and calculated back to determine that if 2 the ten (10) and the twenty (20) are achieved, that the 3 water quality objective in the lake will be maintained. 4 That's how -- that's what you've done, 5 isn't it? 6 7 (BRIEF PAUSE) 8 9 DR. KATHY RACHER: Kathy Racher. The 10 calculation that I did was with the purpose of avoiding 11 any adverse effects that we knew through the literature 12 would occur to the most sensitive species that I was 13 aware of or that anyone seems to be aware of. 14 Water quality objective is something 15 different. The Board may have a different view of what 16 the objective is for the level of water quality in Lac de 17 Gras than I do. But I was not -- it was not based on the 18 water quality objective. It was based on protecting 19 against an adverse effect against a poor little Hyalella 20 and/or similar species. 21 MR. BRAD ARMSTRONG: Dr. Racher, when you 22 did your calculations of ten (10) and twenty (20), you -- 23 you haven't -- you haven't changed the calculations which 24 you did for thee -- to derive the ten (10) and twenty 25 (20)? You recall in your -- in the intervention in

1 November you had some pages deriving the ten (10) and 2 twenty (20), and you haven't changed those calculations, 3 have you? 4 DR. KATHY RACHER: Kathy Racher. No, I 5 haven't changed anything. 6 MR. BRAD ARMSTRONG: Dr. Racher, you 7 talked about testing of whole effluent and toxicity 8 testing. And toxicity testing is generally done, I think 9 you accepted, on the whole effluent; that is you take the 10 effluent before it leaves the pipe and you test it to 11 determine whether that effluent itself it toxic. 12 Do you agree with that? That's the 13 general approach, is to test the effluent itself? 14 DR. KATHY RACHER: Kathy Racher. Yes, 15 that is the most traditional use of toxicity testing of 16 effluent. Yes. 17 MR. BRAD ARMSTRONG: Thank you, Dr. 18 Racher. And -- and the theory there is that if the 19 effluent itself is not toxic, that it should not be toxic 20 in the environment because it is diluted. 21 And, in this case, the calculation is that 22 it is diluted by about fifteen (15) times within a fairly 23 small mixing zone. Isn't -- that's the theory; that if 24 it's not toxic in the effluent, it should not be toxic 25 once it -- once it is diluted in the lake; isn't that

1 correct? 2 DR. KATHY RACHER: Kathy Racher. Yes, 3 that -- that is correct. 4 MR. BRAD ARMSTRONG: And with respect to 5 Hyalella; and this is -- this is something which you 6 presented in one of your slides in November, the effluent 7 is not toxic to Hyalella, isn't that correct? 8 In fact, your -- one (1) of your slides 9 indicated that the effluent would only be toxic to 10 Hyalella if it was as high as 100 milligrams per litre; 11 i.e., five (5) times the current EQC. 12 So my question is: Will you just confirm 13 your evidence in November that the effluent is not toxic 14 to Hyalella? 15 DR. KATHY RACHER: Kathy Racher. The 16 effluent with the levels of sodium and potassium that are 17 -- that were -- that are typically, shall we say, found - 18 - although those values do change -- is not predicted to 19 be as toxic to Hyalella as it is, for example, to Rainbow 20 Trout. However, I will point out that's a prediction and 21 the test actually on whole effluent with Hyalella has 22 only been done one (1) time, so it's -- I would say that 23 it's not conclusive. 24 MR. BRAD ARMSTRONG: Dr. Racher, the - 25 - just one (1) last question on Hyalella. If it is not

1 toxic in the effluent, then the expectation would be that 2 once you take the effluent and dilute it fifteen (15) 3 times, that it will still not be toxic to Hyalella. In 4 fact, it's not toxic -- you referred to trout. You'll 5 agree with me it's not toxic to trout; there's never been 6 a finding of toxicity to trout. 7 But if the effluent is not toxic to 8 Hyalella in its undiluted form, the expectation would be 9 that once it is diluted when it hits the lake it will not 10 be toxic to Hyalella. 11 DR. KATHY RACHER: Kathy Racher. No, 12 that isn't actually what I said and it's -- I don't 13 agree. 14 What I said was is that due to the 15 relatively high concentrations of sodium and potassium in 16 the effluent, the toxicity of Hyalella to ammonia is 17 masked, essentially. We don't see it because these ions 18 are at very high concentrations in the effluent and 19 they're protective in this sense. That's why Hyalella's 20 sensitivity is very low here. 21 When the effluent is diluted, the sodium 22 becomes diluted, the potassium becomes diluted and so 23 obviously does the ammonia become diluted. 24 However, the relationship between the 25 sodium, potassium and ammonia it's -- in scientific terms

1 we say it's not a linear relationship. So there's not a 2 linear relationship between the sodium concentration, the 3 potassium concentration, and the effects of ammonia. 4 It's not a 1:1 relationship. 5 So even though the sodium and potassium 6 are being diluted, and the ammonia is being diluted, the 7 ammonia toxicity -- the protection of these ions is going 8 down and the toxicity to ammonia is going down as the 9 concentrations go down. However, the protection goes 10 down faster than the ammonia toxicity. It's not -- they 11 don't go down at the same rate. It's not a 1:1 12 relationship. It's not a linear equation. 13 So when the effluent is diluted in the 14 mixing zone the Hyalella sensitivity increases 15 dramatically but the level of -- so the effects of 16 ammonia are still toxic to Hyalella in -- even though 17 they've been diluted from the effluent. 18 So in this case -- and this is -- I admit, 19 this is an odd case that when the effluent is diluted the 20 toxicity increases to this organism rather than 21 decreases, which is it does with -- in almost every other 22 case. Admittedly, it's an odd case but it holds true in 23 this case. 24 MR. BRAD ARMSTRONG: I'm going to try this 25 with you once again, Dr. Racher.

1 You take the whole effluent and it's not 2 toxic to Hyalella, then you dilute it fifteen (15) times 3 with water. And I'm suggesting to you that the 4 hypothesis -- you talk about scientific method -- the 5 hypothesis is that when you take the effluent not toxic 6 to Hyalella and dilute it fifteen (15) times that it will 7 not be toxic to Hyalella once it's diluted. You don't 8 accept that proposition? 9 DR. KATHY RACHER: Kathy Racher. No, you 10 do not understand the um -- the equation -- the 11 relationship between sodium, potassium, protection and 12 ammonia toxicity. It is not a 1:1 relationship. You 13 dilute the protection fifteen (15) times but you only 14 dilute the toxicity to Hyalella maybe five (5) times. 15 MR. BRAD ARMSTRONG: Sorry, Dr. Racher. 16 The ammonia is being diluted fifteen (15) times too, 17 isn't it? 18 DR. KATHY RACHER: The ammonia is being 19 diluted fifteen (15) times, but the effect on the 20 organism has not been reduced fifteen (15) times in 21 comparison to the concentrations of these protective 22 ions. 23 24 (BRIEF PAUSE) 25

1 MR. BRAD ARMSTRONG: Sorry, Brad 2 Armstrong. I want to take you to your written submission 3 which was presented May the 23rd. And if I could take 4 you to page 5 of your written submission. And on page 5 5 you refer to non-degradation. And I want to suggest to 6 you that you have presented no evidence -- and there is 7 no evidence -- you presented no evidence that with the 8 EQCs of ten (10) and twenty (20). 9 And those are EQCs, Dr. Racher, which have 10 been agreed to my INAC. INAC agreed to the 20 milligrams 11 per litre in 2004. INAC accepted the 20 milligrams per 12 litre in the Snap Lake licence was protective of the 13 environment, and INAC continued to -- to support those 14 levels in November. 15 I am suggesting to you that you have 16 presented no evidence here to suggest that if -- that the 17 effluent at those levels, or the effluent at actual 18 levels, has caused any degradation to Lac de Gras. 19 20 (BRIEF PAUSE) 21 22 DR. KATHY RACHER: Kathy Racher. Water 23 quality degradation would show up in the aquatic effects 24 monitoring plan. Has there been degradation of water 25 quality? I can't, off the top of my head, say. Part of

1 the reason, unfortunately, that we can't say is because 2 the baseline data, which would tell us what the non- 3 degradative state of Lac de Gras was, is not robust or 4 reliable. 5 Has the lake changed? Has the water 6 quality degraded? I don't know because we don't have a 7 perfect estimate of the original conditions of Lac de 8 Gras. 9 MR. BRAD ARMSTRONG: Dr. Racher, you've - 10 - you've presented no -- no calculations or -- or 11 evidence to suggest that the -- the EQCs of ten (10) and 12 twenty (20) need to be lowered in order to prevent 13 degradation. You -- you've presented no information to 14 suggest that those EQCs ought to be modified by -- to 15 protect against degradation. 16 Isn't that correct? 17 DR. KATHY RACHER: Kathy Racher. Putting 18 less of a chemical into a water body, by necessity means 19 that there will be less degradation. Will there be any 20 degradation of Lad de Gras due to the presence of a mine? 21 Probably. I don't think anyone is naive enough to think 22 that you can have such a development and not have some 23 degradation. 24 What we're trying to do is avoid as much 25 degradation as is reasonably possible. And so has there

1 been degradation? Will these EQC levels lead to 2 degradation? I don't see how they couldn't. It's all 3 about minimizing that degradation. CCME says it should 4 be avoided. 5 MR. BRAD ARMSTRONG: Dr. Racher, you've 6 done no calculation, have you, with respect to 7 degradation? You've done no calculation; presented no 8 calculation to the Board suggesting degradation. 9 Isn't that correct? 10 DR. KATHY RACHER: Kathy Racher. No, I 11 haven't done any such calculation, nor to my knowledge 12 has Diavik. 13 MR. BRAD ARMSTRONG: Thank you, Dr. 14 Racher. 15 Now, in your -- at page 5 you talk about 16 pollute up to -- up to values. And I want to suggest to 17 you that this notion of "pollute up to" simply has no 18 relation in reality to the situation of Diavik. You 19 know, Dr. Racher, for instance, that Diavik -- and you 20 saw it in the November presentations -- that Diavik does 21 not pollute up to the EQC values. You know that Diavik 22 maintains its parameters at well below the EQCs and you 23 know that Diavik has maintained ammonia levels at well 24 below the twenty (20) when that was set in 2004. 25 So there really isn't any concern about

1 "pollute up to" issues in this case, is there? 2 DR. KATHY RACHER: Kathy Racher. That's 3 exactly why I don't understand why we're having this 4 argument. Why -- why do the -- why do the EQCs have to 5 be so high if Diavik doesn't have a problem meeting lower 6 ones? 7 Yes, I understand that Diavik has 8 consistently been lower and that is exactly why I do not 9 understand why we have to argue about the criteria. 10 MR. BRAD ARMSTRONG: Dr. Racher, I want to 11 go to your last paragraph on page 5 with respect to 12 setting EQCs. And you say setting EQCs based on what is 13 practical -- you said it in your -- in your submission -- 14 you say that is hardly uncommon. Now the MMER guidelines 15 -- you recognize that the -- MMER regulations I should 16 say -- set in them specific discharge limits for various 17 parameters. 18 Do you understand those guidelines? Have 19 you read those regulations? 20 The witness is nodding "yes," Madam Chair. 21 It's Brad Armstrong. And do you not 22 understand, Dr. Racher, that those -- the limits set in 23 there were based on best available treatment technology 24 for factors such as TSS, phosphorus, et cetera. 25 Were you engaged at all in the development

1 of the MMER regulations? Do you have any direct 2 familiarity with how those discharge limits were set? 3 DR. KATHY RACHER: Kathy Racher. I 4 personally was not involved. We have representatives of 5 INAC who have been involved, from our headquarters' 6 region who -- with whom I discussed the MMER regulations 7 and how they were set. 8 And my understanding is is that the values 9 are set using a great deal of different pieces of 10 information and it's not simply down to one practice or 11 one technology. There are a number -- there were a 12 number of considerations, many of which I read out 13 yesterday, from the reference that Diavik provided in 14 their May 30th submission. 15 MR. BRAD ARMSTRONG: Dr. Racher, if I 16 suggested to you that the specific discharge limits set 17 in the MMER are all based on best available treatment 18 technology -- you have not studied the way those were set 19 to a sufficient degree to tell this Board -- now, you're 20 before a Board here, dealing with a large mine, are you 21 able to tell this Board that those limits were not set 22 based on best available treatment technology? Or are you 23 just sort of throwing this document out there and saying, 24 Well, gee, maybe these were done this way or maybe they 25 were done that way?

1 Do you have specific information? 2 Can you say to this Board that they were 3 set based on best practices versus best available 4 treatment technology or not? 5 DR. KATHY RACHER: Kathy Racher. What I 6 read out yesterday and is on the transcript -- I don't 7 have it in front of me now -- was what the -- what was in 8 a specific section of the MMER where it described the 9 number of different things that were considered in 10 setting those regulations. 11 One of the things that they mentioned is 12 that they looked at a number of companies. Say they had 13 a hundred companies in the metal mining industry and they 14 looked at what was being achieved in terms of effluent 15 quality for metal parameters at the end of pipe for a 16 hundred of these companies and then they ranked them. 17 And then they said oh, well -- and then 18 they took sort of an average of the upper 50th -- the 19 upper 50. So the ones that were able to put out effluent 20 of the highest quality, higher than the other 50. And 21 they said Well, if these companies were able to do this 22 then this should be a generally achievable value for all 23 companies to -- to use. 24 I saw no mention in there the -- that they 25 were based on specific treatment technologies or on

1 specific management practices. It's a combination at 2 each site; what each site chooses to do. I did not see 3 anything in there that said that there was a specific 4 technology associated with it. 5 Frankly, I don't understand the line of 6 questioning and what point Diavik was trying to make in 7 their submission and what point your trying to make now. 8 MR. BRAD ARMSTRONG: Thank you, Dr. 9 Racher, and I'll tell you what the point is, and I'll 10 tell the Board. 11 The MMER guidelines, Dr. Racher, were set 12 based on treatment technologies. And when you're setting 13 EQCs -- in accordance with the guidelines which have 14 always been followed by this Board and by INAC in setting 15 EQCs, you can set an EQC based on a proven treatment 16 technology, that's recognized, but not on best management 17 practices. 18 And, Dr. Racher, when it comes to those -- 19 these 50 percent of the companies which were looked at 20 for the MMER, you don't know, do you, whether those 21 companies were achieving the limits that they were 22 achieving through the use of treatment technologies, that 23 is treatment plants? You simply don't know what 24 technologies those companies were using, do you? 25 DR. KATHY RACHER: Kathy Racher. I think

1 it's irrelevant what combination of treatment technology 2 or practices they were using. Do I have specific 3 knowledge of the upper 50th percentile of companies? No. 4 It's irrelevant. 5 This was something they were able to do -- 6 to achieve and my only point in bringing that up was when 7 INAC was looking at this we kind of thought well, you 8 know, what is -- what do people do when they're deciding 9 on effluent quality limits. There's a range of things 10 that they're based on. 11 DR. BRAD ARMSTRONG: Dr. Racher, it's 12 interesting that you say that the technologies are 13 irrelevant because the guidelines which this Board has 14 always adopted and which INAC has always supported 15 indicate that in looking at EQCs, you look at water 16 quality-based objectives and then you also look at the 17 application of best available treatment technologies. 18 And you're here today saying that the use of treatment 19 technologies and this concept of best available treatment 20 technologies is irrelevant. 21 You heard from the expert panel yesterday 22 with respect to their approach to this issue and they 23 looked at best available treatment technologies. 24 Are you here today saying that the 25 consideration of best available treatment technologies is

1 irrelevant to determining EQCs? Are you throwing out the 2 guidelines which you've always used? 3 DR. KATHY RACHER: Kathy Racher. Give it 4 a break. Really. That's not it at all what I said. 5 What I said what was irrelevant was what the 50th 6 percentile of those companies used to achieve something. 7 I don't -- you know they -- they may -- 8 they were able to achieve something that came out of the 9 end of pipe. Good for them, whatever they did. 10 And as far as INAC is concern -- 11 concerned, the expert panel looked at the Diavik site in 12 great detail and came up with some fabulous 13 recommendations and then came up with you know what, we 14 think that Diavik can reliably 15 to -- you know, almost 100 percent assured that Diavik 16 will never exceed these certain EQCs. This is feasible. 17 And really, frankly, what you do to 18 achieve those EQCs I do believe is your business. But I 19 think what we've heard is that certain EQCs are 20 achievable. I believe those values. I believe what the 21 panel has said. If the Board wishes to set EQCs 22 according to what the panel has said, then INAC will 23 enforce those. 24 MR. BRAD ARMSTRONG: Thank you, Dr. 25 Racher. In the MMER guide -- the MMER regulations you

1 submit have no limits on ammonia do they? 2 DR. KATHY RACHER: Kathy Racher. That's 3 correct and typical in metal mining there are no -- 4 ammonia is not a big issue. 5 MR. BRAD ARMSTRONG: And, Dr. Racher, the 6 reason for that is because there is no best available 7 treatment technology for ammonia; isn't that correct? 8 DR. KATHY RACHER: Sorry, the reason -- 9 the reason that it wasn't included in the MMER -- sorry, 10 it's Kathy Racher -- the reason ammonia wasn't included 11 in the MMER was because there's no best available 12 treatment technology, is that what you said? 13 MR. BRAD ARMSTRONG: Yes, I did. 14 DR. KATHY RACHER: I believe it wasn't 15 included in the MMER because it wasn't as important as 16 other metals were. I mean ammonia is a problem that 17 we've been seeing in -- in diamond mines, but also in 18 municipal waste water practices for which there are, I 19 presume, best available technologies in the municipal 20 sector. 21 MR. BRAD ARMSTRONG: Dr. Racher, in the 22 document you presented yesterday as Exhibit 4 which is an 23 INAC document 2002, there's a review of treatment 24 technologies and it says this; I'm quoting: 25 "No technology that can be described as

1 BAT (phonetic) can be attributed to 2 ammonia removal from effluents in the 3 diamonds industry in the NWT." 4 That's the INAC 2002 document. Do you 5 recognize that statement? 6 DR. KATHY RACHER: Kathy Racher. Yes. 7 That's why it suggested a combination of treatment 8 technologies and best management practices -- controlled 9 -- 10 MR. BRAD ARMSTRONG: Thank you, Dr. 11 Racher. 12 DR. KATHY RACHER: -- control source. 13 MR. BRAD ARMSTRONG: Thank you. It's 14 Brad Armstrong. 15 THE CHAIRPERSON: Mr. Armstrong, you have 16 additional questions to -- to ask, because we need to get 17 on with the Tlicho presentation as well. 18 19 CONTINUED BY MR. BRAD ARMSTRONG: 20 MR. BRAD ARMSTRONG: Yes, Madam Chair. I 21 just have a few -- a few more questions to -- to ask. 22 Dr. Racher, you in your -- page 5, again, on your 23 submission, you refer to the US EPA approach. And I'm 24 going to ask you to accept that you are not an expert in 25 the US EPA approach and you're not really able to advise

1 the Board in any real detail how the US EPA approaches 2 the setting of effluent quality criteria or discharges. 3 You have -- let me ask you this question: 4 Have you ever been in setting discharge criteria under US 5 EPA regulations or guidelines? 6 DR. KATHY RACHER: Kathy Racher. No, I 7 have never been involved in setting US EAP regulations or 8 guidelines. I brought it up as an example, and the Board 9 and its experts are -- just so that you could be aware of 10 it and you're welcome to look it up for yourselves or 11 have your experts do that for you if you need more 12 information. 13 14 (BRIEF PAUSE) 15 16 MR. BRAD ARMSTRONG: And Dr. Racher, just 17 a final couple of questions. Your last slide talked 18 about INAC developing -- working on some water quality 19 objectives, et cetera. You understand, Dr. Racher, that 20 under the Northwest Territories Waters Act the -- the 21 Minister of Indian Affairs can -- can set a -- a guide -- 22 standards for water quality and standards for -- for 23 effluent discharges? 24 Are you familiar with those provisions of 25 the Waters Act?

1 DR. KATHY RACHER: Kathy Racher. Yes, I 2 am. 3 MR. BRAD ARMSTRONG: And INAC has not set 4 water quality guidelines in the Northwest Territories and 5 it has not set discharge standards in the Northwest 6 Territories, has it? 7 DR. KATHY RACHER: Kathy Racher. That's 8 correct. 9 MR. BRAD ARMSTRONG: Brad Armstrong 10 again. But what INAC has done generally is, in its 11 interventions with respect to mining projects, has -- has 12 followed a -- a set of guidelines for developing EQCs 13 which takes into account water quality objectives and 14 technology. You accept that? 15 DR. KATHY RACHER: Kathy Racher. Yes, I 16 do. 17 MR. BRAD ARMSTRONG: It's Brad Armstrong 18 again. Dr. Racher, the Auditor General of Canada was 19 quite critical of INAC for not setting water quality 20 guidelines or standards. And they're quite critical 21 because it makes the job of this Board much more 22 difficult and makes the job of applicants such as -- as 23 Diavik much more difficult because INAC has not done what 24 it can do to provide some certainty. 25 And it's -- it's correct, isn't it, that

1 despite the Auditor General's report of 2005, INAC has 2 still not established water quality standards or -- or 3 discharge standards applicable in the Northwest 4 Territories? 5 DR. KATHY RACHER: Kathy Racher. We have 6 -- our response to the Auditor General, in that case, was 7 that we would be -- we would first do a review of what 8 practices have been used by various Boards to set limits 9 and to find out -- to do a survey, really, or -- and a 10 discussion paper on what are the options for setting 11 standards. Whether we should have one standard that 12 applies to every single water body in the Northwest 13 Territories; if we should develop regional standards, or 14 if things should be as a case by case basis. 15 And I believe at the last Board forum 16 there was an update on our progress on this, that we have 17 completed a discussion paper with options on what to do 18 about this. Because, you're right, it -- and the Auditor 19 General was also right, it does create confusion for 20 proponents and it makes it so that we're having this 21 argument here when, really, you know, we should have 22 decided in a holistic fashion what the water quality 23 objectives were overall in the Northwest Territories. 24 What do the people of the North want to see their water 25 quality to be at or remain at.

1 But this work is still underway and at the 2 next Board forum, I will be giving a talk on -- a 3 detailed talk on that. But, this is a discussion that 4 INAC wishes to have with the Boards first to decide a way 5 for -- together before we release some of our ideas 6 publicly. 7 MR. GORD MACDONALD: And finally, Dr. 8 Racher, while we wait for INAC to do its homework on that 9 issue, the only appropriate thing to do, in these 10 circumstances, is to follow generally accepted water 11 quality standards and guidelines. 12 You agree with that? That we -- that for 13 this Board, there are generally accepted guidelines and 14 standards which should be carefully considered by this 15 Board in making its decisions on this application and on 16 others? 17 DR. KATHY RACHER: Kathy Racher. Until 18 INAC does its homework, I believe that the Board, and 19 especially in this case, is well informed, has had, you 20 know, the benefit of lots of good technical interventions 21 and expertise, and expert Board staff to decide what are 22 the appropriate things to consider when setting effluent 23 quality limits. 24 And that it is up to the Board to use its 25 best judgment with the evidence that it's heard to make

1 limits that they think are appropriate. 2 MR. GORD MACDONALD: Thank you, Dr. 3 Racher. Thank you, Madam Chair. I have no further 4 questions. 5 THE CHAIRPERSON: Thank you INAC for your 6 presentation. Massi. 7 Do we have any questions from the expert 8 panel? 9 MR. ADRIAN BROWN: None. 10 THE CHAIRPERSON: Do we have any questions 11 from Board staff or counsel? 12 MS. PATTY EWASCHUK: Yes, Madam Chair, I 13 have two (2) questions. 14 The first one is about Round Whitefish. 15 And I think the current licence requirement, which is in 16 the SNP - the Surveillance Network Program - is, I 17 thought, for a routine. It's requiring routine testing 18 of Round Whitefish side by side to compare the toxicity 19 to Rainbow Trout. And not routine. 20 So -- and the licence says -- or the SNP 21 says it's subject to the availability of the test 22 species. And Diavik has reported that -- that they have 23 had difficulty getting test species. And they said in 24 the November hearing that this is now a very large 25 project and they want to do it as a joint project with

1 other companies or with government or with other funders. 2 You, today, said that you saw it, I think, 3 as a one-time research project and not something -- I 4 think what the licence said about routine is just that if 5 they -- if it's hard to get the test subjects that you 6 would do it as often as possible, concurrently with the 7 Rainbow Trout. So what you said today seemed to be that 8 it was a one time study. 9 So I wondered if you could expand on what 10 that might look like. 11 DR. KATHY RACHER: Katy Racher. Yeah, I 12 guess the distinction I was trying to make is that the 13 Hyalella toxicity tests that we were recommending is 14 ready to go and ready to implement as a routine toxicity 15 test. It can be started right away. 16 Whereas the Whitefish testing, I guess a 17 one-time thing is not really what I meant. I just meant 18 to distinguish it in the sense that there isn't a routine 19 test available, that I know of, for testing Whitefish. 20 That I'm aware of. 21 And the collection of the Whitefish from 22 the -- the larvae from Lac de Gras, the culturing in -- 23 in a lab and testing them, as far as I know, that is not 24 a routine -- there's no routine protocol for that yet. 25 Therefore, the first step would have to be

1 just -- just trying it. You know, just trying -- making 2 a sincere effort to -- to do that test as -- as we did 3 with the Hyalella protocol, and then testing it to see if 4 it could become a routine test or not. 5 MS. PATTY EWASCHUK: Thank you. And to 6 clarify, by -- I think I misused the routine. I meant 7 regular. Not routine to suggest this is easy to do. 8 Okay, that answers my question. 9 My last -- second and last question is 10 trying to understand a little more about the CCME 11 guidelines and how it fits in as it certainly is far from 12 my area of experience. 13 It seems that the CCME guidelines didn't 14 specifically -- don't seem to specifically point out 15 issues with ionized ammonia and its toxicity to Hyalella. 16 In -- in my other experiences with 17 ammonia, it has been -- I had the impression unionized 18 was the big bad guy to watch out for. And also the CCME 19 guidelines don't specifically point out these issues 20 you're talking about with sodium and potassium and the 21 complexity of how this all works. 22 And I'm wondering, is that a shortcoming 23 of the CCME guidelines, or is it simply that they're 24 flexible enough to allow this type of information to be 25 incorporated into any proponents calculations.

1 (BRIEF PAUSE) 2 3 MS. SUSAN ROE: Susan Roe, Environment 4 Canada. Kathy has asked me to respond on behalf of -- of 5 her. 6 With regards to the Canadian water quality 7 guidelines for ammonia, the answer to your question is -- 8 is sort of -- it's -- it's 'yes' to both of those. The - 9 - the Canadian water quality guidelines for ammonia were 10 derived according to the state of the best science 11 available at the time. 12 It was -- the complexities of sodium, 13 potassium are -- are not fully documented in the 14 scientific literature at this time. And they're 15 particularly not documented for every lake across the 16 country. 17 So, in recognition of the fact that these 18 and other site-specific characteristics can vary across 19 the country, the CCME has allowed, in their site-specific 20 guideline documentation, to recognize that the national 21 values will need to be modified from time to time to take 22 into account these very local characteristics. 23 DR. KATHY RACHER: Kathy Racher. I just 24 wanted to add to that, that the ammonia guideline was 25 last derived and set, I think it's seven (7) years ago

1 now -- 1999 or 2000. So, any information that has been 2 available in the scientific literature between then and 3 today is not in that guideline. 4 They just undertake to revise these 5 guidelines on a periodic basis. So, yeah, they -- they 6 use the best information they have at that moment in 7 time. And if it wasn't available, then they have to wait 8 for the next revision. 9 MS. PATTY EWASCHUK: So the next 10 guideline might look different -- the guideline for 11 ammonia might look different than it does now? 12 MS. SUSAN ROE: Yes. 13 MS. PATTY EWASCHUK: Thank you. 14 MR. JOHN DONIHEE: John Donihee for the 15 Board. I just -- I just have one (1) question. Some of 16 the questioning and, in fact, some of the evidence 17 provided over the last day or so has tended to treat the 18 words "guidelines" and "standards" as though they're 19 synonymous but, you know, the -- the Statute, the 20 Northwest Territories Waters Act refers to standards and 21 your presentation gave us a definition of the word 22 "guidelines." 23 I'm presuming that, at least within your 24 areas of expertise, you have a definition or some kind of 25 an explanation of what the difference between a

1 "standard" and a "guideline" might be as -- as you use 2 that terminology. 3 I wonder if you could help the Board just 4 by providing that -- that distinction for us? 5 MS. SUSAN ROE: Susan Roe, Environment 6 Canada. Yes, I can certainly appreciate how those terms 7 -- those two (2) terms can be very confusing because they 8 are often used synonymously. In addition, I might throw 9 in "objective" and "criteria" as well can be -- can be 10 used and made very confusing. 11 With regards to the CCME water quality 12 guidelines program, the guidelines are considered as 13 voluntary tools that can be used for water management. 14 They are not legally binding unless a particular 15 jurisdiction or -- or legal body, such as this Panel, can 16 incorporate them into regulations or, for example, water 17 licences in which case they do become legally 18 enforceable. 19 The reason for that is, of course, the 20 Canadian Constitution in that the -- the -- the authority 21 over water bodies rests within the individual provinces 22 and territories and other government -- and other 23 governments. 24 The -- a standard, in contrast, as you 25 mentioned, is considered legally binding and -- and

1 worked into -- into legislation. 2 MR. JOHN DONIHEE: Thank you very much. 3 THE CHAIRPERSON: Any questions from 4 Board members? Okay. So thank you very much then, INAC, 5 for your presentation. 6 7 (BRIEF PAUSE) 8 9 THE CHAIRPERSON: The next presentation 10 we have is the Tlicho Government. 11 12 (BRIEF PAUSE) 13 14 THE CHAIRPERSON: Okay, you can proceed. 15 16 PRESENTATION BY TLICHO GOVERNMENT: 17 MR. ARTHUR PAPE: Madam Chairman, I'm 18 Arthur Pape, counsel for the Tlicho Government at this 19 hearing. The presentation for the Tlicho Government -- I 20 have with me at the table today, Eddie Erasmus, who is 21 the Director of the Lands and Resources Protection 22 Department of the Tlicho government, and Don MacDonald. 23 And the presentation is going to be driven by Don 24 MacDonald and there may be a couple of questions that 25 I'll ask him at the end.

1 The focus of the Tlicho government's 2 presentation today is to assist the Board with respect to 3 the decisions that the Board is required to make for any 4 renewal licence that it decides should be issued to 5 Diavik and, particularly, with respect to issues 6 concerning ammonia; that's the focus of the hearing and 7 the focus of the presentation, those aspects of a renewal 8 licence. 9 And particularly the issues the Board is 10 faced to make -- forced to make and required to make 11 under the Statute, and in light of the very serious 12 unresolved issues and the disputed questions with respect 13 to how to carry out the Board's mandate and the terms on 14 which Diavik should be authorized to continue its diamond 15 mining operation at Lac de Gras. 16 The focus for the Board's consideration 17 needs to be found in the two (2) major sections of the 18 MacKenzie Valley Resource Management Act, which set out 19 the considerations and objectives. And those, of course, 20 are in Section 58.1 and Section 60(1) and Section 60.1 of 21 the Act. And -- the MacKenzie Valley Act. And those 22 operate together with sections of the Northwest 23 Territories Water Act. I'll make a legal submission 24 about those things when I do the closing remarks. 25 For purposes of the presentation, the

1 important thing is that the Board is mandated by the 2 Statute to address its mind to the concept of 3 conservation. 4 It's -- it's required to regulate the use 5 of land and water and the deposit of waste to provide for 6 conservation and development and utilization of land and 7 so on. And it's required to consider the importance of 8 conservation to the well being and way of life of the 9 Aboriginal peoples of Canada and particularly, in this 10 case, the Tlicho. 11 And the Board is required to consider 12 traditional knowledge and scientific information that's 13 made available to it. 14 So the Board has a very substantial record 15 here in this hearing that bears on these issues. And 16 that includes the substantial presentations that were 17 made in evidence in the hearing of this matter that was 18 commenced in November at Behchoko and the evidence that 19 was given by Elders and hunters and the Grand Chief and 20 the Chiefs and the former Grand Chief, so much of it 21 focussing on the importance of Lac de Gras in the 22 seasonal round, the caribou hunt, the continuing way of 23 life of the Tlicho people and the foundation for their 24 harvesting rights and stewardship responsibilities under 25 the Tlicho agreement.

1 And, of course, when you're thinking about 2 all these things, the context is made all the more 3 important by recalling that these sections of the 4 MacKenzie Valley Act, in fact, are derived from the 5 Tlicho agreement. And they have the power of the Land 6 Claims Agreement and the Land Claims and Self-Government 7 Agreement behind them. And they're not things that any 8 government or parliament can change just because it wants 9 to. They are things that must be in the Act and must be 10 considered by the Board because first and foremost 11 they're found in the Tlicho agreement. 12 So the presentation today is to help the 13 Board carry out those responsibilities. And, of course, 14 the reason that -- that the Board is holding this hearing 15 is because it's one thing to say the words; for example, 16 the importance of conservation and consider that, it's 17 another to make sense of it. 18 And you've heard a very -- you have in 19 front of you some matters on which there is real 20 agreement. And you have in front of you very substantial 21 disagreements between these parties about what should be 22 done and how you should exercise your jurisdiction. 23 The point of this presentation is not to 24 make an argument about that or a submission, but to 25 provide you more evidence about these issues. The Tlicho

1 Government's witness providing evidence at this stage is 2 Don MacDonald. 3 Don MacDonald has been the prime -- 4 primary technical expert for the Tlicho Government on the 5 matters relating to ammonia and some other technical 6 matters under the license for a long time. Don MacDonald 7 has a very long history with the ammonia issue and this 8 water licence. 9 Don MacDonald was involved in the setting 10 of the first -- the terms -- in -- in the writing of the 11 terms of the first water licence and with the process of 12 the -- that lead to the amendment of the water license 13 around ammonia and has been developing technical 14 assistance and guidance for the Tlicho Government in it's 15 participation in these processes. 16 Don MacDonald is an aquatic biologist. 17 He's a private consultant. His practice has gone on for 18 years. He works in Canada and the United States in a 19 broad number of situations. You have his curriculum 20 vitae from the first hearing. 21 But he focusses particularly on ecological 22 risk assessment on natural resources, damage assessment 23 and on environmental quality guidelines development. 24 These are his areas of expertise. 25 And in his presentation, he's going to

1 discuss with you the history of the terms in the existing 2 licence and the EQCs, the dispute about ammonia and how 3 it got resolved, and the issues that are outstanding now 4 about how the Board should approach the question of 5 setting terms and conditions in the licence and 6 particularly with regard to what should be in effluent 7 quality criteria, standards that the Board will set in 8 the license, and what should be done through an approved 9 ammonia management plan and how all those things should 10 be done in a way that takes proper consideration of the 11 importance of conservation for the Tlicho. 12 So I'll turn it over to Mr. Macdonald to 13 go through his presentation and at the end of it I'll 14 have a couple of questions for him to focus on particular 15 issues. 16 MR. DON MACDONALD: Madam Chair, members 17 of the Board, I want to thank you for the opportunity to 18 present evidence to you today on this issue. My 19 presentation will focus on five (5) primary areas. I'll 20 start by defining some of the terms that are important 21 for us to understand as we go through this process. 22 I'll then try to reiterate some of the 23 guiding principles that were considered by the Northwest 24 Territories Water Board when the original water licence 25 was developed. I'll then provide an overview of the

1 approach that was used at -- at th