Loyola University Chicago School of Law, JD 2019
Compliance professionals all over the country are paying close attention to the Trump administration’s deregulatory campaign. While deregulation in finance has received the most media attention, the uranium mining industry has been a quiet beneficiary of the President’s new regulatory scheme.
Trump Administration Deregulation
When the Trump administration announced that it would be shrinking the protected lands around Bears Ears National Monument, critics claimed that the move was in response to corporate lobbying. Trump’s Secretary of the Interior, Ryan Zinke, denied the claims—only to have the Washington Post report that a uranium mining firm, Energy Fuels Inc., lobbied the department on the issue last spring. The Bears Ears decision is part of a larger move by the administration to spur domestic uranium production in response to the Pentagon’s calls for increased weapons production.
Effects of deregulation
Approximately 85% of the worlds uranium is imported from just ten countries including Canada, Kazakhstan and Australia. Advocates argue that, domestic uranium mining will allow the United States to maintain energy independence as states increasingly turn to nuclear energy as a large-scale alternative to fossil fuels.
Critics of the administration claim that an increase in domestic production of uranium will lead to environmental contamination, toxic spills, cancer, and other illnesses. In addition, the move will have significant impact on the Native American community, which is still dealing with the effects of uranium mining in their lands. From 1944 to 1986, mining companies extracted uranium from Native American lands to fuel the Cold War weapons race. Mining took place in or near land belonging to the Oglala Sioux, Laguna Pueblo, and Navajo to name a few. When the Cold War ended, these same companies abandoned over 4,000 mines, leaving Native American communities to deal with the health and environmental issues associated with uranium mining.
Critics also argue that refocusing on maintenance of the nuclear arsenal is a foolish regression to Cold War thinking, and flies in the face of disarmament progress made by past administrations.
Role of the Compliance Officer
As the regulatory space changes, it is good practice for compliance professionals in the uranium mining business to re-evaluate their programs to address current issues. In particular, modern compliance professionals would benefit from developing a new compliance program with an eye to ethical development. Developing an ethical compliance program for uranium mining may raise eyebrows, indeed a compliance professional may be more inclined to simply ensure their company is obeying the laws and regulations regardless of the ethical implications. This short-sighted approach to regulatory compliance can expose a company to reputational risks and subsequently a loss of revenue.
The uranium mining industry’s negative reputation and unethical practices have exposed the industry to greater scrutiny, stricter regulation, and loss of revenue in the form of delayed permits and lawsuits. Accordingly, a compliance program that seeks to be more ethical and lessen uranium mining’s environmental impact will not only avoid fines, but also garner less negative media and legislative attention. Furthermore, a compliance officer who takes environmental, and health issues into consideration when developing a modern compliance program will put their company in a better position during negotiations.
For example, the history of uranium mining in Oglala Sioux lands created great opposition to modern uranium mining efforts. When the Nuclear Regulatory Agency inquired into granting a permit to Crow Butte Resources, the tribe went on record contesting the permit. They also submitted their own environmental assessment. For the Oglala Sioux, uranium mining has been the source of environmental contamination, toxic spills, cancer, and other illnesses. These are issues the Oglala and many other Native American tribes still deal with today.
However understandable, this opposition will undoubtedly cost the mining company time and money to resist. This is a cost that can be avoided, or at least mitigated, by adopting socially conscious compliance programs that steer a company to ethically resource its mining. By adopting ethical compliance programs, companies can help assuage fears and build confidence in operations that do not devastate local populations. This approach is obviously one that looks to long-term growth rather than short-term gain—however, the modern business landscape is one that increasingly favors long-term development. Indeed, investors and customers find companies with socially conscious compliance programs appealing because they recognize the long-term growth potential of such companies.
Whenever a market experiences new growth, it is best practice for a compliance officer in finance to re-evaluate their risk assessments and compliance programs to make sure their employees make trades based on good research rather than overly optimistic projections. As the market for uranium grows, companies will try to take advantage of this expansion. However, sometimes this enthusiasm can lead to ill informed decisions based on bad or poorly understood data. Research shows that access to information is not enough to guarantee good compliance decisions. Instead, data must be combined with information literacy.
The current administrations deregulation of uranium mining has raised well founded environmental, social and health concerns. Compliance professionals are in a unique position to both address these concerns, and to support their companies’ bottom line.