Bill 133, the Environmental Enforcement Statute Law Amendment Act, 2005, became law on June 13, 2005.  Bill 133, which is intended to encourage spills prevention and get "tough on polluters", was introduced last fall after widely publicized spills into the St. Clair River occurred from industrial facilities near Sarnia. 

Key provisions of Bill 133 impose a new environmental penalties regime, expand directors' and officers' duties, reduce the adverse effect threshold, increase fines and require regulated industries to implement spill prevention and contingency plans.  Stakeholder consultations regarding the regulations required to implement many of Bill 133's key provisions are expected to begin shortly.
 
Environmental Penalties

Bill 133's environmental penalties regime will allow Ontario's Ministry of the Environment (the "MOE") to impose penalties if a regulated person causes an unlawful discharge into the environment.  The MOE has indicated that the regulations will target industrial facilities already subject to the Municipal/Industrial Standard for Abatement regulations (that is, approximately 140 facilities in the petroleum refining, iron and steel, pulp and paper, metal mining, metal casting, organic chemical, industrial minerals, inorganic chemical and electric power generating sectors).

Penalties can require payment of as much as $100,000 per day and will be assessed by the MOE and not by the courts.  These penalties may be imposed by the MOE in addition to quasi-criminal prosecutions in the courts for the same unlawful discharge.  The penalties regime also imposes liability regardless of fault.  In other words, the regime is one of absolute liability and allows for the imposition of a penalty even if the corporation took all reasonable care to prevent the discharge.  Due diligence will not be a defence and will only be considered to determine the amount of the penalty.  Bill 133 also puts the onus on the corporation to prove that the discharge did not have the potential to harm the environment.  These absolute liability and reverse onus provisions were contentious for many of the industrial stakeholders participating in Bill 133's legislative process. 
 
Directors' and Officers' Duties

Prior to Bill 133, directors and officers had a statutory duty in Ontario to take all reasonable care to prevent the corporation from causing an unlawful discharge to the environment.  Bill 133 expands this existing statutory duty to require that directors and officers also take all reasonable care to prevent the corporation from contravening:  (i) administrative orders under the Environmental Protection Act and the Ontario Water Resources Act, and (ii) obligations with respect to approvals, notification of unlawful discharges and hazardous waste management.  Bill 133 also confirms that directors and officers have the onus at trial of proving that they took all reasonable care.

Adverse Effect Threshold

Another significant amendment will make it easier for the MOE to issue environmental penalties and preventive measures orders.  Prior to Bill 133, existing statutory provisions generally required that, in order to prove a contravention or authorize MOE action, an adverse effect in the environment must be likely to occur.  Bill 133 reduces this threshold in the context of environmental penalties and preventive measures orders so that it is now sufficient if an adverse effect may occur.  These amendments cause increased uncertainty as to when an unlawful discharge has occurred and when preventive measures may be required.

Another contentious amendment is that Bill 133 provides a new definition of "deemed impairment" in the Ontario Water Resources Act so as to align it more closely with the threshold in the federal Fisheries Act.  For example, the quality of water will now be deemed to be impaired if a scientific test indicates that the discharged material is toxic.  This means that the Crown will not have to prove that the discharged material actually impaired the quality of the water into which it was discharged.

Fines

Bill 133 imposes increased fines and establishes new maximum sentences and sentencing considerations.  Fines for general offences would more than double.  Maximum fines for serious offences will be set at $6,000,000 for first offences by corporations.  Sentencing considerations include aggravating factors such as failure to co-operate with the MOE or take prompt mitigation measures.

Spill Prevention and Contingency Plans

Bill 133 requires regulated industries to develop and implement plans to prevent or reduce the risk of a spill or to prevent, eliminate or ameliorate any adverse effects that result from a spill.

 

For further information, contact Alex Pike or Sarah Powell of Davies Ward Phillips & Vineberg LLP at 416-863-0900.

Davies Ward Phillips & Vineberg LLP, with over 225 lawyers, practises nationally and internationally from offices in Toronto, Montréal, New York  and Paris, and is consistently at the heart of the largest and most complex commercial and financial matters on behalf of its North American and overseas clients.

The information and comments contained herein are for the general information of the reader and are not intended as advice or opinions to be relied upon in relation to any particular circumstances. For particular applications of the law to specific situations, the reader should seek professional advice.