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Bill 133 – The ‘Spills Bill’

The Environmental Protection Act (“EPA”) is the principal pollution control statue in Ontario and is used along with the Ontario Water Resources Act (“OWRA”) to prosecute for unlawful discharges (“spills”) to the environment. 

Both the EPA and the OWRA define what constitutes an unlawful discharge into the environment. Both the EPA and the OWRA contain penalty provisions for any individuals or corporations causing or permitting illegal spills or discharges.  The penalties include fines and possible incarceration for those convicted.

Impact of Bill 133

Bill 133 received Royal Assent on June 9, 2005.  Bill 133 proposes significant changes to the EPA and the OWRA.  Individuals, directors and officers should be wary of these changes.  The proposed changes will make it easier for the Ministry of the Environment to penalize corporations for causing discharges and spills into the environment.  Under Bill 133 corporations could still be penalized notwithstanding that they took all reasonable care to prevent a spill or were duly diligent.

The proposed amendments to the EPA and OWRA set out in Bill 133 include:

· implementation of “Environmental Penalties” (affecting “regulated persons” only)

· increasing directors and officers liability

· prohibiting the use of a due diligence defence against the imposition of Environmental Penalties

· requiring persons charged to demonstrate that they took all reasonable care to prevent a discharge (this is a reverse onus provision under the current regime the Crown is required to prove guilt)

· increased penalties including the option of jail time for polluters

· limiting the court’s discretion in assessing fines

· implementation of spill clean up cost orders enabling municipalities and the province to recover their costs of responding to a spill without engaging in a court action

· broader definitions of pollution and impairment

· requirement for pollution prevention plans (“regulated persons” only)

Some of the key changes proposed for the EPA and OWRA are discussed below.

Environmental Penalties

Environmental Penalties can be issued against “regulated persons”, a term that will be defined in the regulations. The government has stated on several occasions that “regulated persons” will be limited to industries currently regulated under the Municipal Industrial Standards for Abatement (“MISA”). These industries include the following major industrial sectors: organic chemical; inorganic chemicals; iron and steel; electric power generation; metal casings; pulp and paper; metal mining; and industrial minerals.

Environmental Penalties of up to $100,000.00 per day can be issued against corporations responsible for unlawful discharges. The amount of penalty will depend on the seriousness of the spill, if best efforts were used to prevent the spill from occurring, the actions taken to mitigate the discharge and prevent any recurrences. The Ministry will also consider whether a company has an environmental management system in place. These penalties will be imposed by the Ministry of the Environment shortly after a spill occurs.

In addition to being responsible for an Environmental Penalty, corporations can still be prosecuted and convicted under the EPA and OWRA. This may result in more fines and possible penal sanctions being imposed on top of the Environmental Penalty.

Environmental Penalties will be imposed even where the corporation took all reasonable steps to prevent the spill. These penalties will also be imposed regardless of whether the person held an honest and reasonable belief in a mistaken set of facts that, if true, would have rendered the contravention innocent. The legislation takes away any available defence to individuals and corporations including the defences of due diligence and mistake of fact. Environmental Penalties can be appealed to the Environmental Review Tribunal (“ERT”).

The reverse onus provision means that officers and directors of a corporation charged with a spill will be required to prove that the took “all reasonable steps to prevent the spill”.

Conclusion

Bill 133 broadens the definition of what constitutes an “unlawful discharge” and causes an adverse effect under the EPA and OWRA. Currently the threshold is when a contaminant “causes or is likely to cause” an adverse effect. This threshold is considerably lower in Bill 133 to when a contaminant “may cause” an adverse effect. However, where the discharge was authorized by the EPA or OWRA, the discharge is illegal only if the discharge caused or was likely to cause and adverse effect.

The proposed new definition will greatly increase the number of unlawful discharges that occur along with the number of reportable discharges. Under the proposed amendment the release of any contaminant into the environment, regardless of whether it is actually adverse or not, may be considered a chargeable offence. We are unable to determine how this new definition will be applied and interpreted by the Ministry of the Environment.

Failing to consider the issues raised under Bill 133 could have a significant impact on a corporations operations and result in increased liability for directors and/or officers. This is because the new regulatory measures being introduced effectively eliminates the common law defences of due diligence and honest mistake.

In light of the increased liability in Bill 133 we would recommend that companies dealing directly or indirectly with any hazardous substances, solid waste, liquid industrial waste or, sanitary sewage disposal, or that are discharging to the air, ground and surface water, review their environmental risk management practices. Failing to consider the responsibilities raised under Bill 133 could have a significant impact on a corporation’s operations and could result in personal liability for directors and/or officers.

Directors and officers will need some assistance in determining the potential environmental risks and liabilities facing their industries. For example an environmental risk analysis should be conducted so that directors and officers are familiar with the nature of its operations including among others:

· historic and current solid waste and liquid waste management practices, with identification of all historic landfill and lagoon sites

· procedures for hazardous materials and wastes

· discharges to air and ground and surface water

· spill and emergency plans and training, emergency and spill response equipment and procedures

· sanitary sewage disposal

· monitoring procedures and data management.

 Paula Lombardi

August 18, 2005 in Environmental | Permalink

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