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Ontario's Bill 133 Places Heavy Responsibilities On Top Management

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Navigating the challenges implemented by Ontario-Bill 133 should be in the forefront of the minds of Directors, Officers and their Counsel. The (Ontario) Environmental Enforcement Statute Law Amendment Bill 133, Act 2005 ('Bill 133' the 'Act') received Royal Assent and became law in Ontario on June 13, 2005.

Bill 133 brings about sweeping changes to the (Ontario) Environmental Protection Act, R.S.O. 1990, c.E.19 ('EPA') and the Ontario Water Resources Act, R.S.O. 1990, c.O.40, ('OWRA') 1. Director(s) and Officer(s) of Ontario Corporations are the 'regulated person' who has to explain a contravention of the Act to the Crown, face increased fines and longer sentences. The Crown also has, for the first time, definitions for sentencing.

Most Directors and Officers of small, medium and some large sized companies do not realize that they are defined as the 'regulated person' in the eyes of the law. Bill 133 has removed the shackles, weights and frustration that made enforcement and prosecution time-consuming, cumbersome and expensive. The changes to the Acts allow the ministry to focus their investigations at the corporate level of management, to find the answers concerning who was responsible, who had authority and who is accountable. The officers and directors of the company are now ultimately accountable for the control of contaminates.

Ontario Bill 133 has done an extreme makeover to the Ontario, EPA and the OWRA through adding sections and amendments. Powerful and subtle changes include: the removal of a 'due diligence defence' for top management of corporations, word changes to the Acts, new sweeping power and definitions for the courts as well as the enforcement branch. Commitment to Environmental Management Systems (EMS) by all levels of corporate personnel, especially top management, is key.

Duties of Directors and Officers

Wabamun Train Derailment - Will Ontario's Enviromental Penalties include owners of products spilled and those in control of the spilled products?

The law has overhauled the Ontario environmental enforcement regime and created onerous requirements for persons and companies in control of contaminates. Now, the director(s) or officer(s) of a corporation has a duty to 'take all reasonable care to prevent the corporation from discharging or causing or permitting' a contaminant in contravention of this Act, or the regulations or a certificate of approval, provisional certificate of approval, certificate of property use license or permit under this Act, from discharging into the natural environment. This is very specific, very broad based for industry, and can be very far-reaching!

These stringent duties for Directors and Officers could see top management prosecuted for a failure to report a minor violation, a missed MISA sample, or a failure to comply with every condition in a certificate of approval (C of A), etc.1

New Reverse Onus for Directors and Officers

Prior to Bill 133, Directors and Officers had the advantage of a due-diligence defence and could only be held liable if they 'failed to take all reasonable care to prevent the corporation from causing or permitting' a discharge. The Crown had to prove 'beyond a reasonable doubt' that they failed to take such reasonable care. This no longer applies!

Since Bill 133, the Crown no longer has to bear the burden of proving that 'reasonable care' was not taken. The 'reverse-onus' amendments to the Ontario EPA section 194 and OWRA section 116 puts the onus on the Director(s) or Officer(s) of the company to prove that they 'fulfilled their duty'.

If the Director or Officer of a corporation is charged with an offence in connection with a 'specific contravention by the corporation', that 'regulated person' has the onus in the trial to prove that he or she carried out their duty in connection with that contravention. Bill 133 provided the Crown with structured definitions to determine the fines and sentences. If the Crown chooses to lower a fine, or sentence, they must give a reason for their decision.

Rosalind Cooper BSc, LLB Janet Bobechko BA, LLB, J.D.1

At a recent conference, two speakers and members of counsel Janet Bobechko BA, LLB, J.D.1 and Rosalind Cooper BSc, LLB, rcooper@tor.fasken.com2, stressed that top management can not ignore the amendments and additions that Bill 133 has placed in the (Ontario) Environmental Protection Act, (EPA) and the Ontario Water Resources Act, (OWRA). These changes can put unsuspecting executives into vulnerable positions. The new Environmental Penalties could be as high as $100,000.00 per day and the 'regulated person' may be required to pay, even if the person took all reasonable steps to prevent the contravention. E.g. Spill kits should be right for the task; training should be hands on and provide the 'skills' to stop a spill or release; response equipment and protocols should be upgraded to handle time-critical-issues.

Although the Act (Bill 133) has received Royal Assent, the provisions of the Act related to EPs (Environmental Penalties) will be proclaimed into law (after written policy-proposal submissions have been received by December 25, 2005 and) once supporting regulations have been developed and approved3.

During consultation on Bill 133, the government announced 'its intention' that by regulation environmental penalties would be applied to facilities that fall within the nine industrial sectors governed by the Municipal/Industrial Strategy for Abatement - MISA - regulations4.

Don't be surprised if Environmental Penalties are extended to cover all spills creating adverse conditions similar to the August 2005, transportation disaster (train derailment) at Wabamun, Alberta.

The imposition of an environmental penalty on a person does not prevent the same person from being prosecuted for an offence in respect of the same contravention. (This was referred to at the conference as 'double-dipping' and is viewed as unconstitutional and will be challenged in court2.

The Director for the Ministry of Environment may issue an order requiring a 'regulated person' (corporate Director or Officer) to pay a penalty. If the 'regulated person' fails to comply, the order that requires payment can be registered with the courts, the director for the Ministry of Environment 'by order' can suspend any certificates of approval, etc. and may refuse to issue any further certificates of approvals. Politely put, the site could be shut down and the impact to business could be severe.

Goals for Environmental Management

Top management executives who have not followed or fully supported the needs of response personnel at the ground level need to revisit or develop an effective EMS that provides cooperation and understanding of the new goals. Front line managers who can't free up personnel from the day-to-day commitments need to revisit the consequences of today's new legislation. All levels of management should consider revisiting the legislation requirements with counsel to get a clear understanding about the impact of Bill 133.

Recommendations

  1. Search for legal counsel, who are certified as 'Specialists in Environmental Law' by the Law Society of Upper Canada, to review the corporation's status, to explain legislative changes (first hand) to top management and to be retained as legal counsel.
  2. Develop a registered or non-registered EMS if it is not already in place. The EMS should be structured with a common sense approach, flexible enough to upgrade the plan as gaps are identified and forgiving to allow changes after the plans have been tested or an event has occurred. A practical guide booklet (small) for dealing with and implementing the essentials is ISB0-921347-55-3 published by the Canadian Standards Association, (CSA) Toronto (Etobicoke), Ontario.
  3. Use ISO 14000 to revise or develop a registered or non-registered Environmental Management System. ISO 14000 (4.4.7) Emergency Preparedness is a structured and common sense approach for developing an EMS. ISO 14000 (4.4.7) states: "The organization (location) shall establish and maintain procedures to identify potential for and respond to accidents and emergency situations, and for preventing and mitigating the environmental impacts that may be associated with them. The organization (location) shall review and revise were necessary, its emergency preparedness and response procedures in particular after the occurrence of accidents or emergency situations. "The organization (location) shall also periodically test such procedures where practicable."
  4. Examine your existing Environmental Management Systems as a 'working tool' to improve a location's ability to communicate and increase response capability. Revisit your present EMS, procedures, effectiveness of response equipment, supplies, training, and focus on for example:
    • Training programs should teach the skill-levels-required to evaluate chemical properties/conditions and provide controls to slow, divert and contain spills and releases entering the natural environment.
    • Training standards should be tempered to provide response capability versus response awareness when dealing with the conditions of the site, as well as, the risks, hazards and escalating factors of all chemicals and processes on site.
    • Location-specific plans, chemical-specific procedures and skills should provide response capability, and be based on the location's knowledge, experience and training of site personnel.
    • Engineered controls, response supplies and response skills should be practical, effective and tested against routine and worst-case-scenario scales of impact.
    • Internal and external resources should have coordinated-capability, realistic response times and proven skills to handle major events.
    • Specialized response equipment should be purchased to match the location's need for immediate and effective response, such as: front end loaders, response boats, as well as, light weight industrial vacuum-pump units5. small portable (polishing) oil/water treatment systems6. mobile/portable tanks or bulk storage systems, capable of being transported by lightweight ground carriers, watercraft and small helicopters.

You spill you pay

The Ontario Ministry of Environment (MOE) proudly introduced Bill 133 as a tool that increases the ability of the MOE's Enforcement Branch to promote environmental protection and compliance with Ontario's environmental protection laws, while moving financial burdens of pollution from those affected to those responsible.

Ontario Bill 133, has removed the constraints from the Ontario Enforcement Branch and the Crown so they can now move swiftly and effectively to put a true dollar value on contraventions that resulted from poor management practices, weak structure and clouded decision making. Examples of these may include: 'ignorance of the law, no plans, poor levels of prevention, preparedness and response capability, commitment through token efforts and lip-service.'

It is clear accountability in the eyes of the Ontario MOE and Crown, that required, Emergency/Contingency Plans, and Environmental Management Systems should be driven by organization's highest level of management. It is also evident that the Director(s) and Officer(s) are the highest levels of responsibility, authority and accountability that can best be chosen as 'the regulated person' to explain the contravention and tell the judge how they were in compliance with their duties or ultimate responsibilities.

Dr. David Colby (Acting Medical Officer of Health, Municipality of Chatham-Kent), stated: "We can't tolerate anything less than zero spills into drinking water...in Ontario"7. Sarah Winterton (Environmental Defence), said: "Bill 133 will provide a simpler approach to collect and recover money from environmental damages; encourage companies to develop new innovative approaches to protect our environment; and target companies that damage the environment."8

References

  1. Parts of this article appeared in the conference presentation, "Moving from Concern to Compliance: Understanding Your Liability Exposure Under Bill 133" by Janet Bobechko BA, LLB, J.D jbobechko@goodmancarr.com, 'Certified Specialist in Environmental Law' of Goodman and Carr, LLP, presented at The Canadian Institute's 8th Annual 'Environmental Law & Regulation in Ontario' conference; along with reference to (Ontario) Bill 133.
  2. Parts of this article appeared in the conference presentation, "Nuts and Bolts of an Effective Spills Management and Response Program", by Rosalind Cooper, BSc, LLB, rcooper@tor.fasken.com,'Certified Specialist in Environmental Law' @ Fasken Martineau DuMoulin LLP; presented at The Canadian Institute's 8th Annual 'Environmental Law & Regulation in Ontario' conference; along with reference to (Ontario) Bill 133
  3. (Ontario, Canada) Ministry of Environment; EBR Registry number:- PA 05E0036, Type of Posting: 'Policy' status 'Proposal'. Comment Period: 45 days, Terminated December 25, 2005. Contact Person: Karen Pawlowski, Policy Analyst Land Use and Water Policy Branch, 135 St. Clair Avenue, W. 6th Floor Toronto, Ontario, M4V 1P5, Phone; (416) 314-7138, Fax; (416) 326-0461.
  4. Ministry of Environment, Technical Brief, September 2005, Environmental Enforcement Statute Law Amendment Act (Bill 133) - Immediate Requirements, Section; Administrative Amendments (4).
  5. Portable Vacuum-Pump system with vacuum truck capability; www.invirodrum.com
  6. Polymer-filter polishing systems for removing gross and dissolved hydrocarbons (0il) from water. www.emrp.ca
  7. & 8. June 9, 2005 Backgrounder 'You spill you pay' BILL passes third reading. Quotes from some presenters at Standing Committee hearings on Bill 133 found on the web. http://www.ene.gov.on.ca/envision/news/2005/060902mb.htm
Cliff Holland, Spill Management Inc.

Published in the Environmental Science and Engineering Magazine