United States: Successor Liability for Environmental Liabilities

by Julie Vanneman, Director, Cohen & Grigsby

What happens when one company acquires the assets of another, then—many years later—receives a demand to participate in the clean-up of a contaminated site based on the acquired company’s long-ago shipment of materials to the site? 

As a general rule, the buyer of assets in an asset acquisition does not automatically assume the liabilities of the seller. However, under the doctrine of successor liability, a claimant may be able to seek recovery from the purchaser of assets for liabilities that were not assumed as part of an acquisition. This claim may be employed in cases involving environmental liabilities, especially when the original party is defunct or remediation costs are greater than the original entity’s ability to pay for the cleanup.[1]

Courts have taken different positions on whether state law or federal common law governs the determination of successor liability for claims under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), known also as Superfund. This distinction may have little practical effect because federal common law follows the traditional state law formulation. Notably, though, when evaluating successor liability under federal law, and specifically environmental laws like CERCLA, the doctrine may be more liberally applied because of policy concerns about contamination.[2]

Under the successor liability doctrine, a buyer can be held responsible for liabilities of the seller if one of four “limited” exceptions applies:

(1) the successor expressly or impliedly agrees to assume the liabilities; (2) a de facto merger or consolidation occurs; (3) the successor is a mere continuation of the predecessor; or (4) the transfer to the successor corporation is a fraudulent attempt to escape liability.

K.C.1986 Ltd. P’ship v. Reade Mfg., 472 F.3d 1009, 1021 (8th Cir. 2007) (citing United States v. Mex. Feed & Seed, Co., Inc., 980 F.2d 478, 487 (8th Cir. 1992)). A fifth exception, the substantial continuity exception, is a broader standard,[3] but most circuit courts do not apply it in CERCLA cases.[4]

Exception 1, express or implied assumption, must be analyzed in terms of the specific asset agreement in question. Exception 4, fraud, is generally employed in circumstances where the acquired company shifts its assets to avoid exposure to another entity.[5]

Courts have addressed the main issue of successor liability by asking whether the transaction is simply the handing off of a baton in a relay race (successor liability) or whether the new company is running a separate race (no liability).[6]  Examining factors relevant to the remaining elements—numbers 2 (de facto merger) and 3 (continuation)—helps answer the question. Under the doctrine of a de facto merger, successor liability attaches if one corporation is absorbed into another without compliance with statutory merger requirements. A court would look at whether there is a continuity of managers, personnel, locations, and assets; the same shareholders become part of the acquirer; the seller stops operating and liquidates; and the acquirer assumes the seller’s obligations to continue normal business operations.[7]  The “mere continuation” theory “emphasizes an ‘identity of officers, directors, and stock between the selling and purchasing corporations.’”[8]

Given the high stakes that can be involved with CERCLA cleanups, assessing prospects for applying the successor liability doctrine could be an important part of the liability analysis.


[1] See, e.g., James T. O’Reilly, Superfund and Brownfields Cleanup § 8:16, at 360 (2017-2018 ed.) [hereinafter O’Reilly] (“Mergers, sales of assets, and changing corporate names does not remove potential CERCLA liability.”).

[2] See O’Reilly § 8:16; see also, e.g.In re Acushnet River & New Bedford Harbor Proceedings re Alleged PCB Pollution, 712 F. Supp. 1010, 1013-19 (D. Mass. 1989) (in the CERCLA context, concluding that successor liability applied where there would be “manifest injustice” if one of the companies could “contract away” liability for PCB contamination).

[3] See K.C.1986 Ltd. P’ship v. Reade Mfg., 472 F.3d 1009, 1022 (8th Cir. 2007)

[4] See Action Mfg. Co. v. Simon Wrecking Co., 387 F. Supp. 2d 439, 452 (E.D. Pa. 2005).

[5] See, e.g., Eagle Pac. Ins. Co. v. Christensen Motor Yacht Corp., 934 P.2d 715, 721 (Wash. Ct. App. 1997). This exception is rarely used. Restatement (Third) of Torts:Prod. Liab. § 12 cmt. e (Am. Law Inst. 1998).

[6] See, e.g.Oman Int’l Fin. Ltd. v. Hoiyong Gems Corp., 616 F. Supp. 351, 361-62 (D.R.I. 1985).

[7] Asarco, LLC v. Union Pac. R.R. Co., No. 2:12-CV-00283-EJL-REB, 2017 WL 639628, at *18 (D. Idaho Feb. 16, 2017).

[8] United States v. Mex. Feed & Seed Co., 980 F.2d 478, 487 (8th Cir. 1992)  (quoting Tucker v. Paxson Mach. Co., 645 F.2d 620, 626 (8th Cir. 1981)).

This article was first published on the Cohen & Grigsby website.

About the Author

Julie counsels and represents clients in a range of environmental and litigation matters. She assists clients with day-to-day environmental compliance concerns and provides enforcement defense counseling, particularly with solid waste and groundwater issues. Her extensive background in CERCLA matters includes serving as legal counsel for clients involved in remediation initiatives at complex Superfund sites as well as litigating cases through multiple phases, including discovery, allocation negotiations, and alternative dispute resolution. Julie’s litigation practice encompasses not only environmental matters, but also insurance coverage actions and other commercial and business disputes.

Canada takes final steps to ban Asbestos

by Paul Manning, Manning Environmental Law

Environment and Climate Change Canada, along with Health Canada, published the Prohibition of Asbestos and Products Containing Asbestos Regulations in the Canada Gazette, Part II on October 17, 2018.

These new regulations apply to any person who manufactures, imports, sells or uses asbestos or products containing asbestos.

Thetford, Quebec open pit asbestos mine

The regulations prohibit the import, sale and use of all forms of asbestos as well as the manufacture, import, sale and use of products containing asbestos, with a limited number of exclusions:

  • ongoing exclusions for
    • the transfer of physical possession or control of asbestos or a product containing asbestos to allow its disposal
    • the re-use of asbestos in existing road infrastructure into new road infrastructure or in asbestos mining site restoration
    • the import, sale or use of military equipment serviced overseas with a product containing asbestos if there were no technically or economically feasible asbestos-free alternatives available
    • the import, sale or use of asbestos and products containing asbestos for display in a museum or for use in a laboratory
  • exclusions until
    • December 31, 2022 for the import, sale or use of products containing asbestos to service equipment in nuclear facilities, or to service military equipment, if there are no technically or economically feasible asbestos-free alternatives available,
    • December 31, 2029 for the import and use of asbestos for chlor-alkali facilities using asbestos diaphragm technology

The regulations include:

  • permit provisions for unforeseen circumstances where asbestos or a product containing asbestos is used to protect human health or the environment, if there is no technically or economically feasible asbestos-free alternative available
  • permit provisions for the import and use of products containing asbestos to service military equipment and equipment in a nuclear facility, if there is no technically or economically feasible asbestos-free alternative available
  • provisions requiring the submission of reports from museums, laboratories, and military, nuclear and chlor-alkali facilities, as well as permit holders, who import, use or display asbestos or products containing asbestos. The preparation and implementation of an asbestos management plan is also required in most cases

The regulations do not apply to:

  • asbestos integrated into a structure or infrastructure before the day on which the Regulations come into force (such as asbestos integrated into buildings and civil engineering works), or to products containing asbestos used before the day on which the regulations come into force (such as equipment installed in a facility, vehicles, ships, and airplanes)
  • asbestos and products containing asbestos in transit through Canada
  • mining residues, except for certain high risk activities which are prohibited, including:
  • the sale of asbestos mining residues for use in construction and landscaping activities, unless authorized by the province, and
  • the use of asbestos mining residues to manufacture a product that contains asbestos

In addition to these regulations, the existing Export of Substances on the Export Control List Regulations (ESECLR) and Schedule 3 to the Canadian Environmental Protection Act, 1999 were amended to prohibit exports of asbestos, with a limited number of exceptions.  These provisions ensure that Canada continues to meet its export obligations under international conventions, including the Rotterdam Convention. The regulations and related amendments to the ESECLR come into force on December 30, 2018.

This article is republished and first appeared on the Manning Environmental Law website.

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About the Author

Paul Manning is the principal of Manning Environmental Law and an environmental law specialist certified by the Law Society of Upper Canada. Paul has been selected as one of the world’s leading Environmental Lawyers by Who’s Who Legal: 2016.

Paul advises clients on a wide range of environmental law issues and represents them as counsel before tribunals and the courts. His practice focuses on environmental, energy, planning and Aboriginal law.

Paul holds a Masters degree in Environmental Law and obtained an accreditation in the UK as an expert in Planning Law. He is on the Executive Committee of the National Environmental, Energy and Resources Law Section of the Canadian Bar Association. Paul has a special interest in renewable energy and climate change regulation and holds a Certificate in Carbon Finance from the University of Toronto.

Chemical hazard training using Simulator Detectors

by Steven Pike, Argon Electronics

The ability to deliver consistent, engaging and true-to-life chemical hazard detection training scenarios relies on regular access to realistic, hands-on equipment.

What’s vital is that these training tools replicate not only the readings and the responsiveness of real detectors, but that they also provide trainees with an authentic experience that recreates the potential challenges that they will face in actual incidents.

Training for CBRNe and HazMat threats

Planning exercises for modern-day CBRNe and HazMat threats has never been more complex, with the need to respond to anything from clandestine laboratory searches to major industrial incidents, chemical improvised explosive devices or terrorist threats.

And key to the success of any training scenario is the capacity for instructors to be able to create compelling training experiences that are straight-forward to set up and easy to repeat.

While training with Live Agents (LAT) can still have a role to play, it introduces a substantial degree of risk to instructors, students, their equipment and the environment – not to mention incurring greater cost, increased administrative effort and a heavier regulatory burden.

Simulant training is often viewed as presenting a safer “middle ground” for CBRNe and HazMat exercises, bringing with it the advantages of a more credible, real-life experience but at the same time reducing risk through the use of smaller, controlled quantities of substances.

But even in the most carefully managed of exercises, the use of simulants brings with it certain disadvantages. It can often restrict the breadth and variety of scenarios – for example, when they are required to be used in confined spaces, or where wind, temperature or training location can impact negatively on the learning experience.

It is also increasingly common for modern detectors to provide limited response to simulant sources, due to their highly developed interference rejection (IR) capabilities.

The good news though is that safe, high-quality and easily repeatable CBRNe/HazMat training needn’t be so complicated.

Simulator detectors for CBRNe and HazMat training

One solution that has revolutionized modern approaches to chemical detection training is the adoption of innovative and safe detector training aids that replicate the functionality of real devices.

These intelligent, electronic training tools place instructors in control, they are environmentally friendly, they can be set up in an unlimited variety of indoor and outdoor locations and they offer powerful after action review features.

Let’s now take a closer look at one specific example of a chemical hazard detector – the Smiths Detection LCD3.3 – and its simulator equivalent – the LCD3.3-SIM, also known in the USA as the M4A1 JCAD and M4A1 JCAD-SIM respectively.

The Smiths Detection LCD3.3

The Smiths Detection LCD3.3 is a person-worn device which is reported to be the most widely deployed chemical detector in use today.

It is used for the detection of Chemical Warfare Agents (CWAs) – including nerve, blood, blister and choking agents – as well as for the identification of a selected library of Toxic Industrial Chemicals(TICs). The detector also incorporates different operating modes ensuring optimal detection capability.

The detector is simple to operate, requires no calibration or routine maintenance and can log up to 72 hours of mission data for further analysis while user replaceable sieve packs reduce the need for factory based overhaul. A key benefit of this detector is its ability to specifically identify CWAs, however this advanced selectivity and makes simulant based training challenging.

The Argon LCD3.3-SIM

The LCD3.3-SIM is a training device that has been designed replicate the features and functionality of the actual LCD3.3.

The simulation detector responds to electronic sources that imitate the effects of chemical vapors, toxic substances and false positives and that realistically replicate the effects of wind direction and temperature, the depletion of sieve packs and batteries, confidence testing and the use of a survey nozzle.

With no requirement for simulants as part of training, there is zero possibility of environmental contamination or health and safety risk to instructors or students.

The device is compatible with a wide variety of other simulators (including simulators for the AP2C, AP4C, CAM, LCD3.2 and the RAID-M100) which means that multi-detector and multi-substance training can take place within the same scenario.

The inclusion of a remote control feature provides CBRNe and HazMat instructors with complete management of the exercise – from deciding on the effectiveness of decontamination drills, to simulating the effects of wind, temperature and persistency and the ability to instantly reset a scenario in readiness for a new exercise.

After Action Review (AAR) enables instructors to confirm that their students have set up and used the detector in accordance with the procedures for the real-life device. In the event of student error, the student performance reporting feature provides a detailed breakdown of their actions to assist with learning.

The use of innovative simulator detector training systems significantly increases personnel safety, as well as enhancing learning and easing regulatory pressures.

Such devices also place the instructor firmly in control of the exercise to ensure you’re delivering consistent, verifiable and measurable CBRNe/HazMat training outcomes.

This article was first published as a blog on the Argon Electronics website.

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About the Author

Steven Pike is the Founder and Managing Director of Argon Electronics, a world leader in the development and manufacture of Chemical, Biological, Radiological and Nuclear (CBRN) and hazardous material (HazMat) detector simulators.

What You Need to Know about Your Written Hazard Communication Plan

by Michael Collins, CIH, CSP, CIEC, GLE Associates

The United States Occupational Safety and Health Act (OSHA) requires employers to maintain a written hazard communication plan that effectively protects workers from potentially harmful chemical exposure in the workplace. On the surface, the requirement sounds simple, yet failure to meet this requirement is the second most commonly cited OSHA violation.

Here’s what you need to know to ensure you comply with this simple, critical OSHA requirement.

Who Needs a Written Hazard Communication Plan?

OSHA regulation 1910.1200 requires all employers with hazardous chemicals in their workplaces to prepare and implement a written hazard communication plan. This applies, according to the regulation, “to any chemical which is known to be present in the workplace in such a manner that employees may be exposed under normal conditions of use or in a foreseeable emergency.”

There are some exclusions to the requirement, including ingredients in food, certain pesticides, and distilled spirits. In most cases, the excluded chemicals are covered by other regulations. For full information, visit OSHA’s hazard communications page.

What are the Key Requirements of the Written Hazard Communication Plan?

Employers are responsible for developing and maintaining a written hazard communication program for the workplace that includes:

  • Safety Data Sheets (SDSs) for each chemical present
  • Lists of hazardous chemicals present, referenced in each case to the appropriate SDS
  • Appropriate labeling of containers of chemicals in the workplace
  • Labeling of containers of chemicals being shipped to other workplaces
  • Preparation and distribution of SDSs to employees and downstream employers
  • Development and implementation of employee training programs regarding hazards of chemicals and protective measures, which must be provided at the time of the employee’s initial assignment, as well as whenever a new chemical hazard is introduced to the work area
  • The methods the employer will use to inform employees of the hazards of non-routine tasks, and the hazards associated with chemicals contained in unlabeled pipes in their work areas

Employers are further responsible for making the written hazard communication program available, upon request, to employees and their designated representatives.

What Hazards Does the Standard Protect From?

Chemicals can pose a wide range of health hazards, including but not limited to:

  • Irritation
  • Sensitization
  • Carcinogenicity
  • Flammability
  • Corrosion
  • Reactivity

The written hazard communication plan helps protect workers from these and other risks associated with exposure in the workplace.

How to Prepare Your Written Hazard Communication Plan

Writing a hazard communication plan is not overly complicated, but it’s critical that you get it right. Start by collecting data on all potentially hazardous chemicals in use at your work site. Make a list of them. Gather SDSs for each chemical, and reference the SDS for each one inside the master list.

Identify which workers experience exposure risk during the course of their workday, as well as in foreseeable emergency circumstances. Develop an information and training program to ensure workers understand the hazards present in their workplace, as well as appropriate protective measures for those hazards. And, conduct personal air sampling for these chemicals to establish OSHA-required Negative Exposure Assessments (NEAs).

Many employers prefer the confidence and ease of hiring an experienced firm like GLE to prepare an OSHA-compliant written hazard communication plan on their behalf and conduct NEAs.

 

This article was first published on the GLE Associates website.  GLE is an integrated architecture, engineering, and environmental consulting firm, headquartered in Tampa, Florida, with offices throughout Florida and the Southeastern United States.

 

HAZMAT Training – Precautions to Consider

By Ryan Henry, HazSim

Training is an essential priority for any subject that we wish to become proficient in. The HAZMAT training field is no exception to this. However, due to the serious and strenuous nature of HAZMAT response, it is important to safely execute training in a way that doesn’t damage our gear or our health.

Often times one of the most costly things we can do to our response gear is ruining it while in training, rendering it useless during an actual event. Ripping and tearing your issued PPE during a training that, let’s face it could have been planned better, hurts no one but our own members. From bunker gear scraping across a concrete truck bay to a plastic CPC being torn from an ultra-impossible scenario that our training officer threw together can become costly and wasteful.

I may strike a nerve with this one, so prepare yourself now. I feel that most chemicals we commonly deal with as HAZMAT responders can be mimicked with much safer alternatives – rather than using the real things. Many times training facilities or classes boast the fact that live agents are used, and this peaks much interest for the student.

Degrading our PPE for the sake of real meter readings and visual cues is a costly degradation to bestow upon gear that you will decon and possibly re-don in the near future and assume it will protect you adequately. Visual cues are able to be exaggerated, and meter readings manipulated without exposing your gear, and potentially yourself, to harmful materials that every day becomes part of a long list of carcinogens.

Another consideration during training is that of your gas detection equipment. It is no secret that gas detection equipment can be very costly, and sometimes hard to replace. While learning how to use and interpret your detectors efficiently is imperative; a mistake while training could render some out of service for quite some time. We are always looking for ways to make detection more realistic, whether through cross sensitivity or simulation. Sometimes, however, an overzealous approach to making meter equipment respond to atmospheric stimuli – can end up costing us in burned sensors, and possible damage to our front line equipment. Simulation is the future of training, and gas detection is no exception to this.

Time and time again, especially in this glorious age of the internet we are in, we are bombarded with self-proclaimed subject matter experts, who claim their tactics are the only way, or that their way of approaching specific problems is pretty much be all end all. Sifting through these mirages and other facades can prevent us from potentially wasting time, or not being open to other ways of thought about particular subjects.

These statements are true not only for HAZMAT, but fire, and pretty much any other subject if you look hard enough only. It’s great to try new tactics, and store them in your toolbox for the next time the alarm goes off, however, keep an open mind. While I love my leather helmet, I am very open to the possibility that technology may be to the point where I need to hang it on a wall and choose safety over looks.

In closing, training in a necessity for all of us no matter what industry we are in. From oil and gas to emergency response, staying up to date on our skills and tactics is a must if we are to remain successful. Keep an open mind, and protect your equipment. These are the biggest keys to remember while training. Or you may find yourself with an expensive bill, and a rookie who really didn’t learn anything.

This article was first published on the Hazsim website.

 

 

 

Mesothelioma Awareness: Asbestos and Occupational Safety

by Sarah Wallace, Mesothelioma + Asbestos Awareness Center

For many years, the natural mineral known as asbestos was used in constructing buildings, insulation, roofing, and homes. Asbestos is heavily regulated in the United States today, but many people are still exposed daily to asbestos containing materials (ACMs) that still exist in buildings, structures, and homes. During demolition, DIY, or renovation projects, asbestos can become friable and people are then susceptible to inhaling the small fibers. When asbestos becomes lodged in the body, specifically in the lining of the lungs, abdomen, or heart, it can lead to lung cancer or mesothelioma.

Even though the use of asbestos has decreased dramatically in the United States since the late 20th century, mesothelioma is still the leading occupational cancer. This is because the disease can take up to 50 years to develop, and those who were exposed to asbestos prior to the 1980s are still being diagnosed today. On top of that, professionals who work in different industries that have a history of asbestos use, such as construction, manufacturing, and shipyard work, are still at risk of exposure they may come into contact with materials and products made before regulations were put in place. Due to the microscopic size of asbestos fibers and ambiguity around where the toxin could have been used in the past, it’s important for workers to stay educated on where asbestos might be hiding and what safety precautions to take on the job.

Occupations most at risk and how to stay safe:

Construction Workers– Because asbestos was used heavily in the construction of homes and other buildings, many construction workers have been exposed to asbestos, and they are still at risk for exposure. With ACMs still existing in buildings, approximately 1 million construction workers could still be vulnerable to asbestos annually. Today, professionals in the construction industry are at risk for first-hand exposure more than any other profession. Workers in multiple trades including roofers, carpenters, electricians, and masonry should be aware of asbestos as they work.

In order for workers to protect themselves, professionals in these fields should take the precaution of wearing the proper masks during any type of construction project. Understanding the age of the building and what asbestos looks like is also important because this could help workers know the risks associated with a certain structure, making them less vulnerable to exposure. Keep in mind that asbestos can exist in a variety of products including drywall, shingles, ceiling tiles, and insulation, so even those participating in DIY projects should be aware of where their health and safety could be at risk.

Firefighters– Asbestos fibers can be released into the air when a building or home catches on fire. This puts first responders like firefighters in danger of inhaling the toxin in the process of putting out a fire. This leaves firefighters at risk to develop peritoneal mesothelioma, which originates in the lining of the lungs after being inhaled.  While the initial danger to firefighters is the fire itself, even after the flames are put out, asbestos could be present in the air as the structure cools off. Firefighter equipment is designed to keep out hazardous materials like asbestos, but many people do not understand that certain risks persist even after the initial fire is put out. Asbestos fibers can attach to clothing, leading to the possibility of second-hand exposure for those who might come in contact with any type of clothing used at the scene of the fire.

In order to limit exposure to asbestos particles, firefighters should wear a certified self-containing breathing apparatus (SCBA) mask that covers the mouth and nose in order to protect themselves while on the job. They should also keep masks on even after the fire has been put out while debris is cooling, because asbestos fibers could still be in the air. To eliminate risks of exposure for family, friends, and colleagues, firefighters should also remove their gear before leaving the scene and wash off before returning home.

 Shipyard Workers– At one time, asbestos exposure was a large risk for laborers and those employed on ships. Due to the mineral’s strong and heat resistant attributes, was often used for things like boilers and steam pipes on Navy ships and shipyards. As a result, many shipyard laborers were exposed to asbestos, especially if they worked as electricians, painters, machinists, or “asbestos insulators.” This is one of the reasons veterans make up about 30 percent of mesothelioma diagnoses in the United States.

Shipyard workers are less likely to be exposed first-hand to asbestos today, but anyone working with older shipbuilding materials or piping should be aware of the possible risks and wear the appropriate masks to limit inhaling fibers. Workers who have been exposed in the past should let their primary care doctor know and stay up-to-date on appointments. Symptoms of mesothelioma specifically can often go undiagnosed because they are similar to symptoms of the flu, manifesting as a cough at first and eventually leading to shortness of breath and fever. If you know that you have been exposed, paying careful attention to your health and communicating with your doctor could lead to an early diagnosis, improving prognosis and life expectancy.

Preventing asbestos-related disease

 If you come across asbestos on the job, contacting a professional who knows how to handle the material will be the best way to move forward. No amount of asbestos exposure is safe, and handling the mineral should be taken seriously before proceeding with a project. Mesothelioma is a deadly but preventable cancer, if the correct steps are taken by employers and employees. Although asbestos has been heavily regulated over time, there is still not a ban on the material in the United States. Taking the time to check labels before using any products and educating others in your industry on how to protect themselves are sure ways to help bring an end to mesothelioma and other health issues caused by asbestos.

 

Court Upholds Decision That The Ministry May Order Current And Former Owners, And Tenants To Delineate Contamination That Has Migrated Off-Site

Article by Stanley D. Berger and Albert M. Engel

Fogler, Rubinoff LLP

On September 4, 2018, Ontario’s Divisional Court released its decision in Hamilton Beach Brands Canada, Inc. v. Ministry of the Environment and Climate Change, 2018 ONSC 5010, dismissing an appeal of a September 1, 2017 decision of Ontario’s Environmental Review Tribunal (Hamilton Beach Brands Canada Inc. v. Ontario (Environment and Climate Change), 2017 CanLII 57415 (ON ERT)) in which the Tribunal upheld the Ministry’s jurisdiction to order current and former owners and tenants of a contaminated property to delineate contamination that has migrated to off-site properties. The Tribunal’s decision also found that the Ministry had jurisdiction to make an order regarding existing, ongoing and future adverse effects, that the adverse effects do not have to be related to the potential off-site migration of a contaminant, nor must the contaminant be on an orderee’s property at the time the order is made and that the order may require work on-site and off-site to address an adverse effect.

In upholding the Tribunal’s decision, the Divisional Court found that there is no geographical constraint limiting orders to the source property of the contamination and quoted the Tribunal’s observation that “contamination and adverse effects are not constrained by the boundaries of a property, either in initial discharge or because of migration”. The Divisional Court also found that the Tribunal’s interpretation of the Ministry’s order-making jurisdiction is consistent with the Brownfield regime since protection from orders is extinguished under the regime when contaminants migrate from a property that was subject to that regime.

The former appliance manufacturing plant on McFarland Drive that is the property in question in the  Hamilton Beach Brands Canada, Inc. v. Ministry of the Environment and Climate Change, 2018 ONSC 5010 (Phtoto Credit: Jason Parks/Picton Gazette)

The order provisions of s.18(2) of the Environmental Protection Act, R.S.O. 1990, c.E.19 were at issue in this case. This is the first Divisional Court decision interpreting the geographic extent of the powers set out in s.18(2). The decision confirms that the powers are expansive and should be considered by any current, former or prospective owner or tenant of a contaminated property. We will continue to monitor this case should it be appealed further.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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About the Authors

Mr. Berger has practiced regulatory law for 37 years. He represents nuclear operators and suppliers, waste management operators, renewable energy operators, receivers-in-bankruptcy, municipalities and First Nations. He was an Assistant Crown Attorney in Toronto for 8 years, Senior counsel and Deputy Director for Legal Services/Prosecutions at the Ministry of the Environment for 9 years and Assistant General Counsel at Ontario Power Generation Inc for 14 years.
He is the author of a quarterly loose-leaf service published by Thomson Reuters entitled the Prosecution and Defence of Environmental Offences and the editor of an annual review of environmental law.
Mr. Berger was the President of the International Nuclear Law Association (2008-2009) and the founder, and President of the Canadian Nuclear Law Organization.

Mr. Engel practice all aspects of Environmental and Renewable Energy Law. He advises clients in the development and operation of renewable energy projects, regulatory compliance and civil causes of action.He represent clients before Ontario’s Environmental Review Tribunal and all levels of court. He assist clients with defences to environmental and other regulatory prosecutions, appeals of environmental orders and civil litigation involving environmental issues including contaminated lands.

Mr. Engel has a Masters degree in Environmental Studies and is Certified by the Law Society of Upper Canada as a Specialist in Environmental Law.

Environmental Consultant’s Disclaimer of Liability to Vendor effective against Third Party Purchaser

by Stanley D. Berger, Fogler Rubinoff

On July 23, 2018 the Court of Appeal for Newfoundland and Labrador in the case of Community Mental Health Initiative Inc. v. Summit Lounge Ltd. 2018 NLCA 42 upheld summary judgment dismissing a purchaser’s claim against two engineering companies (consultants) alleging negligence in the conduct of a Phase 1 Environmental Site Assessment performed for the vendor. The agreement between the consultants and the vendor and the final report both indicated that the assessment was prepared solely for the benefit of the vendor and that the consultants accepted no responsibility for any damages suffered by any third party. Significantly, the plaintiff-purchaser had knowledge of the disclaimer, having been provided with a copy of the final report by its real estate agent prior to the closing of the transaction. The Court of Appeal referred to the Supreme Court of Canada’s decision in Edgeworth Construction ltd. v. N.D. Lea & Associates Ltd. [1993] 3.S.C.R. 206 as well as decisions from appeal courts in Ontario Wolverine Tube (Canada) Inc. (1995) , 26 O.R. (3d) 577 and B.C., Kokanee Mortgage M.I.C. Ltd. 2018 BCCA 151 and summarized the legal principles as follows: (at par. 23) “… an express disclaimer of liability can be an effective bar against a claim by a third party who relied on work in the knowledge of the disclaimer. Permitting third parties to rely on reports which are expressly protected by a disclaimer would undermine the ability of contracting commercial parties to govern their own affairs.”

IMPLICATIONS FOR REAL ESTATE TRANSACTIONS AND ENVIRONMENTAL CONSULTANTS?

The long established principle of privity of contract i.e. that the rights and obligations in a contract apply only to the parties to the contract have been further tested by this decision. For engineering consultants, the decision highlights the importance of exacting express disclaimer clauses restricting responsibility for the reporting information to the party retaining them. For purchasers of real estate, it reinforces the necessity of obtaining indemnities from the vendor for undiscovered contamination or if that is not realistic, retaining an independent environmental consultant to verify any consulting reports given to them by the vendor.

This article was first published on the Fogler Rubinoff LLP website.

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About the Author

Mr. Stanley Berger serves as the Partner at Fogler, Rubinoff LLP. Mr. Berger joined the law firm of Fogler Rubinoff on July 4, 2013. Before joining Fogler Rubinoff, he served for 14 years as Assistant General Counsel to Ontario Power Generation Inc (OPG). In that capacity he provided legal services on licensing, environmental assessment, regulatory compliance, liability, security, decommissioning and waste management to the Nuclear Division of OPG.  Mr. Berger provided strategic legal advice and representation on aboriginal litigation and participated in First Nation settlement negotiations. Prior to joining OPG, he served as the Deputy Director of the Law Division for Prosecutions for the Ontario Ministry of Environment. In that capacity he managed the prosecution staff and helped shape prosecution policy. 

Setting New Legal Standards And Timelines: Alberta’s Remediation Regulation

Article by Alan Harvie, Norton Rose Fullbright Canada LLP

Alberta Environment and Parks (AEP) has amended regulations that will require all contamination caused by spills that are reported to regulators after January 1, 2019 to be delineated and assessed as soon as possible through a Phase 2 environmental site assessment that meets AEP’s standards and that is then either remediated within two years or subject to an approved remedial action plan with an approved final clean-up date. These are significant departures from the current requirements.

On June 1, 2018 the Remediation Certificate Amendment Regulation was passed into law under the Environmental Protection and Enhancement Act (EPEA). It amends the existing Remediation Certificate Regulation in a number of important ways, including changing the name to the Remediation Regulation.

Groundwater monitoring wells

The Remediation Regulation will be administered by the Alberta Energy Regulator (AER) for contamination at upstream oil and gas sites, such as wells, pipelines and facilities, and by AEP for all other sites.

Under the EPEA, a person responsible for the release of a substance into the environment that causes or has the potential to cause an adverse effect is under a legal duty, as soon as they know about the release or ought to have known about it, to report it to regulators. They must also, as soon as they know or ought to have known about the release, take all reasonable measures to repair, remedy and confine the effects of the substance, remove or otherwise dispose of the substance in such a manner as to effect maximum protection to human life, health and the environment and restore the environment to a condition satisfactory to the regulators.

Although persons have always been legally required, under the EPEA, to clean up spills, historically there was no legal requirement as to how a person was to assess contamination or any specific time limit as to how long a person could take to remediate the spill as required by the EPEA. This has now changed.

New timelines

The Remediation Regulation requires that a person responsible for a spill that is reported after January 1, 2019 must:

  • As soon as possible, either remediate the spill to meet the criteria set out in the Alberta Tier 1 and 2 Soil and Groundwater Remediation Guidelines and submit a report to the regulators about the remediation or undertake a Phase 2 environment site assessment of the site that meets the requirements of AEP’s Environmental Site Assessment Standard.
  • If the site cannot be remediated to the satisfaction of the regulators within two years, then the person responsible for the spill must submit a remedial action plan (RAP) that complies with AEP’s Alberta Tier 1 and Tier Soil and Groundwater Remediation GuidelinesEnvironmental Site Assessment StandardExposure Control Guide and Risk Management Plan Guide.
  • The RAP must include a period of time for completion of the remediation that is acceptable to the regulators.
  • The person responsible must take the remedial measures set out in the approved RAP by such time.

New legal standards

The Remediation Regulation previously incorporated into law the requirements to use the Tier 1 and 2 Soil and Groundwater Remediation Guidelines for obtaining a remediation certificate under the EPEA. It now requires that the Guidelines also be followed for assessing contaminated sites and therefore eliminates some historical practices in which persons responsible for spills used other clean-up guidelines or criteria.

The Remediation Regulation also requires the use of the Environmental Site Assessment Standard. The Standard sets out how contamination is to be vertically and horizontally delineated and assessed. The Remediation Regulation requires that this work be done within two years.

If the spill cannot be remediated within two years, then a RAP which meets the Exposure Control Guide and the Risk Management Plan Guide, and which has been approved by the regulators, must be in effect at the end of the two-year period. For some large contaminated sites, it may be challenging to fully delineate the contamination, develop a RAP and have the regulators approve it within two years. Furthermore, the clean-up under the RAP must have a stated end point.

Abandoned oil well equipment

These changes diverge from historical practices where, in some cases, contamination delineation has taken several or more years, and remedial actions, if any, have not been well planned and have had no fixed end point.

Implications

The implications of the Remediation Regulation for persons responsible for contamination are such that they will no longer be able to ignore or may only be able to slowly proceed with assessing contamination or simply monitor it over the long term. Concrete steps must now be taken according to set time periods and such steps must comply with AEP’s guidelines and standards.

Next steps

As mentioned, the new requirements to delineate and remediate a site apply only to spills reported on or after January 1, 2019. Before then, AEP is expected to release further guidance, host stakeholder workshops and potentially amend the Remediation Regulation.

 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

This article was first published on the Norton Rose Fulbright Canada LLP Website.

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About the Author

Alan Harvie is a senior partner at Norton Rose Fulbright Canada LLP and practices out of the Calgary office.  He has practised energy and environmental/regulatory law since 1989 and regularly deals with commercial, operational, environmental and regulatory issues, especially for the upstream oil and gas, energy, waste disposal and chemical industries. He is a member of our energy and environmental departments.

Mr. Harvie also has significant legal experience in acting for the oil and gas industry in commercial transactions and regulatory matters, including enforcement proceedings, common carrier and processor applications, forced poolings, downspacings and holdings, rateable take, and contested facility, well and pipeline applications. He has also dealt extensively with commercial, environmental and regulatory issues concerning thermal and renewable power plants, electrical transmission and distribution lines, tourism and recreation projects, forestry, mining, agriculture, commercial real estate, industrial facilities, sewage plants, hazardous waste landfills and treatment facilities, transportation of dangerous goods and water storage reservoirs.

Mr. Harvie regularly advises clients about environmental assessments and permitting, spill response, enforcement proceedings, contaminated site remediation, facility decommissioning and reclamation, chemical compliance (DSL, NDSL, MSDS and HMIRC), nuclear licensing, crude-by-rail projects and product recycling and stewardship requirements.

 

New Technology on Track to Vitalize Confined Space HazMat Training

by Steven Pike , Argon Electronics

Teams operating in confined spaces within hazardous industrial buildings or process facilities understand all too well the importance of adhering to strict health and safety regulations.

The hazards that confined spaces present can be physical or atmospheric in nature – from the risks of asphyxiation or entrapment to exposure to extremes of temperature or the release of toxic chemicals.

Confined Space Entry

According to the Census of Fatal Occupational Injuries, on average two people die in the US every day as the result of incidents that take place within confined spaces.

In many cases too, it is not just the victim who is at risk, but the rescuer or first responder who may be unaware of the hazard they are about to encounter.

Directives such as the Occupational Safety and Health Administration (OSHA), the Control of Major Accident Hazards Regulations (COMAH), the Dangerous Substances and Explosive Atmospheres Regulations (DSEAR), Atex and many others all have a pivotal role to play in ensuring safety.

But despite the emphasis on prevention, any potentially harmful chemical release, and specifically one that occurs within the context of a confined space, will require personnel who are skilled and confident to handle a variety of complex challenges.

With these challenges in mind, a new app-based multigas simulator technology, specifically designed for use in confined space settings, is scheduled for release in late summer 2018.

And the new system looks set to deliver an enhanced level of realism for industrial HazMat training scenarios.

Applying CWA Technology to Industrial HazMat Training

The use of simulation technology for chemical warfare agent (CWA) training is already well established, with intelligent, computer-based training aids such as Argon Electronics’ PlumeSIM and PlumeSIM-SMART systems currently in use by military forces around the world.

The launch of PlumeSIM in 2008 provided CWA and CBRN instructors with a simulation package that enabled them to use their laptops, in conjunction with a map or images, to plan a diverse range of field and table-top exercises.

The type of substance, whether a single or multiple source and an array of environmental conditions (such as wind direction and speed) could all be easily configured. And the innovative technology enabled whole exercises to be recorded for after action review (AAR) and future contingency planning.

In 2016 came the introduction of PlumeSIM-SMART – which offered similar capabilities to PlumeSIM but replaced the use of simulator devices in the field with the simplicity of a mobile phone.

The ability to transform a mobile phone into a look-alike gas detector was to prove especially practical (and budget-friendly) for high-hazard industrial organizations and municipal responders.

And using mobiles offered some additional and unexpected benefits in that it enabled field exercises to take place in any location.

Realistic Multigas Training

The newest addition to Argon’s simulation technology portfolio has been devised for specific use within the training environs of confined spaces and multi-level buildings.

The device will offer HazMat instructors the flexibility to simulate specific levels and concentrations of gases, whether these be in the form of a gas escape or a dangerous device (or devices) concealed within a building.

It will also be highly configurable to enable instructors to select the use of either single or multigas sensors within their training scenarios.

The hardware will be identical to that currently available for CWA training and toxic industrial response training. It has also been configured to interact with existing hand-held gas detection simulators, such as PlumeSIM-SMART, to provide an enhanced level of realism and a more focused training experience.

Simulation sources will be able to be set to emit a signal that replicates the conditions of a particular substance, a low level or oxygen or an explosive atmosphere.

And as students move around the training environment, their display readings will adjust accordingly to simulate an event such as a breached alarm.

The latest detector also promises to overcome the issues posed by communications interference within buildings where GPS technology can often be limited.

Working in confined spaces within industrial complexes can present a daunting array of hazards, both for the staff operating within the facilities and for the emergency teams charged with first response.

The continued development of simulator technology can help to address these challenges by providing realistic, hands-on training opportunities that replicate real-life conditions.

This article was originally published in the Argon Electronics website.

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About the Author

Steven Pike is the Founder and Managing Director of Argon Electronics, a world leader in the development and manufacture of Chemical, Biological, Radiological and Nuclear (CBRN) and hazardous material (HazMat) detector simulators.

In use worldwide, Argon simulators have applications for training and preparedness within civil response, the military, EoD, unconventional terrorism / accidental release, and international treaty verification, with a growing presence in the nuclear energy generation and education markets. We have been granted a number of international patents in this field.