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The results of a tailing pond breach at the Mount Polley in central British Columbia are pictured on Aug. 4, 2014.Reuters

The B.C. government's management of the mining industry is failing to protect the environment against significant risk, Auditor-General Carol Bellringer has concluded after a two-year investigation that found a regulatory regime defined by too few resources, infrequent inspections and a lack of enforcement.

The auditor's office is calling on the province to create an independent agency to manage compliance and enforcement "to reduce the risk that unfortunate and preventable incidents like Mount Polley don't happen again."

Ms. Bellringer's staff had almost completed an audit of compliance and enforcement in mining in British Columbia when the tailings-pond dam at the Mount Polley copper and gold mine near Williams Lake breached in the summer of 2014, causing one of the worst environmental accidents in Canada's history of mining.

The dam failure spilled approximately 25 million cubic metres of waste water and tailings into nearby water systems and lakes in central British Columbia.

That incident led the audit team to focus on the performance of the B.C. Mines Ministry as a regulator of the industry.

Auditor general report on mining sector

Ms. Bellringer said it became clear that the ministry's economic interest in boosting the sector created a conflict because the ministry's role in promoting mining development is "diametrically opposed to compliance and enforcement," she wrote.

Ms. Bellringer also took aim at British Columbia's Ministry of Environment, saying it, too, has failed in regulating the industry.

"We found almost every one of our expectations for a robust compliance and enforcement program … were not met," she wrote.

Responding to the scathing report, Mines Minister Bill Bennett said he accepts most of the Auditor-General's criticism. "We actually agree with the central opinion that is expressed in this report that our compliance and enforcement regime … in terms of our legislation, our policies and the oversight of engineers, is in need of significant improvement."

But on the central recommendation for an independent regulator, Mr. Bennett wavered, saying he thinks the measures already under way to create a separate board of compliance and enforcement – one that would be internal to government – will be sufficient. However, he added, the proposed change has not been ruled out.

As well, Mr. Bennett expressed discomfort with the report's conclusion that better regulation could prevent an incident such as the Mount Polley dam failure. "[The authors of the report] just beg to be disagreed with by government, because they do create liability issues for us, and in some cases they are just not fair to the public service."

An expert panel retained by the government concluded in 2015 that the Mount Polley tailings pond breached because the dam design failed to account for an unstable foundation, but the flaw was compounded over the many years that the dam was repeatedly raised to accommodate a growing lake of toxic waste.

Mr. Bennett noted on Tuesday that the panel concluded that no amount of government inspections would have detected the fault.

While the technical cause of the dam failure has been identified, the question of liability is still not resolved. A law enforcement investigation headed by the B.C. Conservation Officer Service continues and could yet lead to charges or fines.

New Democratic Party Leader John Horgan said Mr. Bennett should resign because of his responsibility for a ministry that did not provide effective regulation. "I don't think it gets much worse than this," he said of the report.

At a minimum, Mr. Horgan said, the government must adopt the recommendation to create independent oversight of the industry. "You can't be the promoter and the regulator at the same time."

The Auditor-General also criticized the government for failing to publicly disclose that it has not collected enough security deposits from the industry to cover potential mining accidents. Ms. Bellringer said the shortfall amounts to $1.2-billion, and Mr. Bennett promised to take action to ensure that those deposits are collected.