EPA botched oversight of permits for PolyMet mine, internal investigation finds

The U.S. Environmental Protection Agency (EPA) botched its oversight of permits for what would be Minnesota's first copper-nickel mine, according to the findings of an internal investigation.

The report from the EPA's inspector general, released Wednesday, describes a flawed review of two permits issued for the $1 billion mine that Toronto-based PolyMet Mining Corp. wants to build near Babbitt and Hoyt Lakes. PolyMet is owned by Swiss mining giant Glencore.

The findings add more regulatory uncertainty to the stalled mine. Many of the permits issued for the mine have been stayed or are under review. And in light of the new EPA review, environmentalists are now calling on Minnesota regulators to revoke the mine's water pollution permit.

"This report confirms that the PolyMet water permit was rushed and the public was kept in the dark by its own [Minnesota Pollution Control Agency] about EPA staff concerns, resulting in a weak permit that endangers people downstream," said Elise Larson, an attorney with the Minnesota Center for Environmental Advocacy.

According to the report, EPA's Region 5 office in Chicago, which oversees Minnesota's enforcement of federal pollution laws, violated standard operating procedure when it didn't write out its concerns about the strength of PolyMet's water permit in a letter to the state. Instead, the federal agency ran down the list over the telephone with staff of the Minnesota Pollution Control Agency (MPCA). The permit concerns went unresolved, the report said, and the MPCA issued the permit in late 2018.

The EPA office also ignored three formal requests by the Fond du Lac Band of Lake Superior Chippewa for notice of the potential impact the polluted copper mine discharge would have on downstream water quality, as federal law requires. The band lives on the St. Louis River downstream from PolyMet's proposed mine site.

Federal law requires the EPA to notify downstream states if it determines effluent from a project could affect the states' water quality standards — a determination the Chicago EPA office "repeatedly declined" to make, the investigation found. That blocked the band from "the process by which it could formally voice its concern," the report said.

The inspector general recommended that the EPA's Chicago office provide written input of the water pollution permits and commit to determining downstream impacts.

That is not enough, say environmentalists who want the permits pulled.

Fond du Lac Band spokeswoman Rita Karppinen issued a statement saying the band thinks the water permit violates federal law and that the report "confirms that EPA did not follow its normal process during review" of PolyMet's water permit and left many of the EPA's concerns "unresolved at the time of Permit issuance."

"The Band is also pleased that the OIG [Office of Inspector General] acknowledged that the EPA did not properly or meaningfully consult or address the Band concerns with respect to the Project's downstream impacts on the Band's waters," the band said in the statement.

Chris Knopf, executive director of Friends of the Boundary Waters Wilderness, called the treatment of the Fond du Lac Band "a brazen act of environmental injustice that breaks the law and is an affront to basic decency."

A state Court of Appeals judge has already stayed the water permit at issue pending a Minnesota Supreme Court decision on the company's permit to mine, a decision expected within a few months.

The issue of ignoring the Fond du Lac Band involves a permit the U.S. Army Corps of Engineers issued to PolyMet to dredge and fill 900 acres of wetlands. The band successfully sued the EPA in federal court over that matter. Last month, the Corps suspended that permit so the EPA can finally determine whether discharge from the copper mine will pollute the tribe's water.

PolyMet spokesman Bruce Richardson said the EPA is addressing the report's recommendations.

"Our project meets all state and federal water quality standards and that is how we intend to operate the project," he said.

Some of the same irregularities touched on in the EPA watchdog investigation were vetted in Ramsey County District Court last year, in a probe focused on the MPCA's part in the permit review. The judge largely cleared the MPCA of wrongdoing.

When asked to respond to the inspector general's new report, MPCA spokesman Darin Broton referred to the court decision "that the MPCA did not deviate from its standard practices when it issued the PolyMet permit."

The EPA watchdog investigation was triggered in 2019 by whistleblower Jeffry Fowley, a retired Boston EPA water lawyer. Fowley was armed with documents that Minnesota environmental nonprofit WaterLegacy obtained through a records request. The Fond du Lac Band joined the complaint.

The EPA investigation expanded in a nationwide audit of the agency's handling of such water pollution permits. The inspector general's report also found fault with oversight by EPA's Region 3 office in Philadelphia.

In an interview, Fowley said his complaint was confirmed. "They engaged in this crazy procedure of reading comments over the phone," Fowley said.

To WaterLegacy counsel Paula Maccabee, the report signals a new chapter for the nation's top protector of the environment following the Trump administration's aggressive dismantling of regulations.

"The EPA is back in the game," Maccabee said.

Jennifer Bjorhus • 612-673-4683