In the Sale of Property, Responsibility for Removal and Remediation of Underground Storage Tanks needs to be clear

Written by Stan Berger, Fogler Rubinoff LLP

On January 9, 2020, the British Columbia Supreme Court in Walton v. Warren 2020 BCSC 19 found in favour of the Purchaser when an undiscovered underground storage tank required removal and site remediation following closing. This ruling was given despite the Purchaser having signed off on an inspection report prior to closing. The purchase and sale agreement provided that the Seller had to ensure that any underground storage tank (UST) located on the property be removed and the surrounding soil remediated. The Seller was responsible for all costs. The Seller had to provide written confirmation before the Completion Date from the tank removal contractor and relevant provincial and local authorities that the remediation complied with provincial or local government laws. The Purchaser had to obtain and approve an inspection report 6 weeks before the completion date. The report recommended that a specialist company survey and sweep the property to determine the presence of buried oil tanks. The Purchaser’s realtor arranged for a scan of the property free of charge. This was followed by a scanning company’s report stating there was no evidence of any UST. The contract closed on schedule and almost 3 years later the basement of the property flooded. During a necessary drain replacement a UST was discovered requiring its removal and remediation at a cost of $42,000. The Purchaser sued the sellers.

The Judge found that the existence of the UST was unknown to the Seller at the time of the sale. The Seller argued that their obligation with respect to responsibility for any underground storage tank ended upon the closing. The Purchaser completed the purchase being satisfied with the condition of the property. The judge disagreed finding in the Purchaser’s favour.

“[62] There is no language in the Addendum which could be interpreted as limiting the defendants’ obligations only to those USTs that were discovered prior to the Completion Date or to those USTs of which they were aware. [63] The Addendum does not include any conditional language. For example, it does not say that the defendants are to remove and remediate “any oil tank that is discovered prior to the Completion Date” or “any oil tank that they are aware of prior to the Completion Date”.

Moreover the survival clause in the agreement contained no exceptions.

The lesson here is that courts are disinclined to infer any limit on the responsibility of a party when the language in the contract isn’t clear.

This publication is intended for general information purposes only and should not be relied upon as legal advice.


About the Author

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.

How new technology is improving first responder safety

Written by Steve Pike, Argon Electronics

When the pressure is on to make quick decisions in emergency response situations, the value of practical personal experience is something that can never be underestimated.

But while the “human factor” remains an inestimable force, it is also essential that first responders have access to the appropriate technological support to enable them to work safely and effectively in the field.

In the US, the Department of Homeland Security (DHS) Science and Technology Directorate (S&T) works in close collaboration with the nation’s emergency response community.

Their recent projects have included the development of body-worn cameras that activate without responder manipulation, thermal sensors for firefighters that provide early detection of infrared radiation (IR), and wearable smart chemical sensors that warn responders of toxic exposure.

The International Forum to Advance First Responder Innovation (IFAFRI) brings together global industry and academia to identify common capability gaps within first response – in particular the ability to rapidly identify hazardous agents, and to detect, monitor and analyse hazards in real time.

More recently, an exciting array of new technologies have been put to use within the emergency services sector – including an eCall vehicle alarm system that delivers automated messages to emergency services following an accident, the deployment of drones for search and rescue, and the development of artificial intelligence (AI) solutions for firefighters.

Advancements in radiation safety training

New innovations in simulator detector technology for radiation safety training are also playing an important role in supporting first response personnel.

Unlike other forms of hazardous materials where the threat may be clearly evident, ionising radiation is a formidable and invisible force.

So it is even more vital that first responders are equipped with the correct tools, that they are skilled in interpreting the readings they obtain and that they are confident to act on that information.

Enhanced simulator training systems

Incorporating the use of simulator detector equipment in radiation training exercises offers an opportunity to significantly enhance the quality of a trainee’s learning experience.

The effectiveness of the training, however, will depend on a number of key factors.

Firstly there is the realism of the simulator’s user interface components (the visual display, indicators, switch panel, vibrator, sounder etc) which should be designed to match as closely as possible the look, feel and functionality of the actual device.

As trainees approach or move away from the simulation source, the response speed and characteristics of the simulation will also be important in providing an accurate depiction of the behaviour of the actual detector.

Also key, is the extent to which trainees are able to experience the practical applications of inverse square law, time, distance and shielding. Different shielding effects will need to be realistically represented, for example, as will the effects of user body shielding for source location.

The consistency and repeatability of the simulation will be vital in ensuring that trainees are able to repeat the same scenario, in the same location, and receive the same result – and that the readings obtained on different types of simulator are within the accepted tolerances of the actual detectors.

From the trainer’s perspective, the whole life cost of ownership of the device will undoubtedly be an important consideration.

It may be important, for example, that the simulator uses only the same batteries as the original detector, that it requires no regular calibration and that there is no need for costly and time-consuming preventative maintenance.

The development of innovative simulator detector technologies, such as Argon’s RadEye SIM, offers the opportunity for first responders to enhance the timeliness, precision and effectiveness of their response to radiological emergencies.

For radiation safety instructors there is also the benefit of being able to create highly realistic and compelling radiation training exercises that are free from regulatory, environmental and health and safety concerns.


About the Author

Steven Pike is the Founder and Managing Director of Argon Electronics, a leader in the development and manufacture of Chemical, Biological, Radiological and Nuclear (CBRN) and hazardous material (HazMat) detector simulators. He is interested in liaising with CBRN professionals and detector manufacturers to develop training simulators as well as CBRN trainers and exercise planners to enhance their capability and improve the quality of CBRN and Hazmat training.

Researchers develop sponge for recovering oil from wastewater

Researchers at the University at Imperial College London and the University of Toronto have developed a cost-effective sponge that can soak up oil relatively fast (less than 10 minutes). The research article, found in the Journal Nature, describes an innovative surface-engineered sponge (SEnS) that synergistically combines surface chemistry, charge and roughness.  The sponge is adept at adsorbing crude oil microdroplets.

The team of chemical engineers led by Pavani Cherukupally sought to find a solution by turning to polyurethane foam, a common material used in everyday household items like mattresses. Although polyurethane foam has good oil absorption properties, it only works well under certain conditions of acidity, which can strengthen or weaken the affinity between oil droplets and the sponge.

“It’s all about strategically selecting the characteristics of the pores and their surfaces. Commercial sponges already have tiny pores to capture tiny droplets. Polyurethane sponges are made from petrochemicals, so they have already had chemical groups which make them good at capturing droplets,” said Cherukupally.  “The problem was that we had fewer chemical groups than what was needed to capture all the droplets.”

The researchers developed a coating that alters the foam’s texture, chemistry, and charge, thus making it more suitable for a broad range of situations. When viewed under a microscope, the coating contains hair-like particles of nanocrystalline silicon that act like fishing rods for the oil droplets.

“The critical surface energy concept comes from the world of biofouling research—trying to prevent microorganisms and creatures like barnacles from attaching to surfaces like ship hulls,” Dr. Cherukupally said in a statement.  “Normally, you want to keep critical surface energy in a certain range to prevent attachment, but in our case, we manipulated it to get droplets to cling on tight.”

The sponge can remove microdroplets of crude oil in less than 10 minutes.  An earlier version of the sponge the the research team developed was able to remove over 95% of the oil in the tested samples, but it took three hours to achieve to same level of removal.

When tested under four different scenarios of acidity, the coated foam soaked up between 95% and 99% of the oil in approximately 10 minutes.  One of the great aspects of the sponge is that it can be reused after being washed with a solvent to remove the oil.  The oil can be recycled.

8 Dangerous Goods myths and misconceptions—busted!

Contributed by LabelMaster

Remember Mythbusters? A couple of former Hollywood effects pros created one of the top shows on cable TV by debunking popular myths and misconceptions. They proved—over and over—that just because “everyone knows” something doesn’t make it true.

If there were a supply chain TV network, Dangerous Goods professionals could probably run their own version of Mythbusters. We hear myths and misconceptions all the time!

Labelmaster consultants Jay JohnsonAlicia Saenz and Jim Shimko helped compile this list of hazmat shipping myths, along with the facts and regulatory knowledge that busts them.

  1. As long as the box is UN rated and/or marked you can put anything in it. Um, no. UN-certified packaging is highly specialized, with packagings designed specifically for lithium batteries, air bags, chemicals and other materials.
  2. If you’re only shipping Limited Quantities by ground, you don’t need any training. Please don’t fall for this one! Anyone who handles hazmat—any kind of hazmat—is required to have up-to-date training, and if your teams’ training is out of date there’s a very good chance you’ll be fined. Heck, we even offer training specifically for shipping Limited and Excepted Quantities.
  3. Packages marked Limited Quantity or ORM-D shipping via ground are “not really regulated.” Yes, it’s true that the Limited Quantity, Excepted Quantity and ORM-D designations were created to be less burdensome than Fully Regulated shipments, but there are still lots of regulations that do apply to such shipments. (By the way, the ORM-D designation is being phased out by the end of 2020. Stay tuned.)
  4. Regulatory agencies are in cahoots with manufacturers to sell more labels and packaging. Sure, that’s why ICAO has three days of 12-hour meetings every year! Contrary to this conspiracy theory, the truth is we’re not crazy about rules changes, either—but we recognize that each change represents hundreds of hours of work by incredibly dedicated professionals who only want to make the supply chain safer.
  5. “They shipped it to me that way so it must be compliant, and I can just ship it again.” Yikes. 71% of hazmat pros surveyed in our most recent Global DG Confidence Outlook say their supply chain partners are not as compliant as they are. In Dangerous Goods transport, you can never assume anything—please check the regulations for everything you ship.
  6. You can ship anything in 4GV packaging. Maybe, but why would you? As Johnson explains, “Don’t make the exception the rule! You might be able to use 4G packages for the 99% of your shipments and use more expensive  4GV packagings for the 1% odd primaries.”
  7. Button cell lithium batteries aren’t really regulated. People who say this may mean button cells aren’t Fully Regulated, but there’s no such thing as “not really regulated.” Please don’t make the mistake of believing that any kind of lithium batteries can be shipped without regard to relevant lithium battery regulations.
  8. If you light a match in a porta potty, it will explode. Oops, sorry, that’s actually Mythbusters episode. But in case you were wondering … you’d need to be in a tightly sealed porta-potty filled with thick methane gas for it to be flammable, so you can light up without fear.

Remember—just because “everyone knows” something doesn’t make it true! If you ever have any questions about how to compliantly package, label, placard or document a Dangerous Goods shipment, call Labelmaster at 800.621.5808 to separate the facts from the myths.

Make sure your shipments are safe and in complete compliance with a full line of solutions from Labelmaster—a full-service provider of goods and services for hazardous materials and Dangerous Goods professionals, shippers, transport operators and EH&S providers.

University of Saskatchewan Professor provides insight on oil spill remediation

A December 9th train derailment near the near Guernsey, Saskatchewan resulted in a spill of an estimated 1.5 million litres of crude oil.  According to Canadian Pacific Railway, it will take a number of weeks to clean up the spill.  The  Canadian Transportation Safety Board stated that 33 oil tank cars and one hopper car derailed.  Guernsey is approximately 115 kilometres southeast of Saskatoon.

In an interview with Global News, soil science professor Steven Siciliano noted details about how fast oil was spilling out of tank cars could make a difference.  “If it’s slowly seeping, what happens is you can kind of imagine a sort of pancakes, so then it doesn’t go as deep. Whereas if it’s rapidly spilling, it can actually get deeper into the soil. And the deeper in the soil it gets, the harder and harder it can get to remediate,” said the professor in the interview.  He added the Prairies have glacial till soil, which means it is made up of large clay layers which make it hard for water and air to go through them and making clearing oil very difficult.

Prof. Steve Siciliano, U of  Saskatchewan

Professor Siciliano is the NSERC/FCL Industrial Research Chair in In Situ Remediation and Risk Assessment Director, CREATE Human and Ecological Risk Assessment Program at the University of Saskatchewan.  Current and recent research projects undertaken by Professor Siciliano include modelling and assessing the transfer of pollutants from soil to children, development of new soil toxicity test methods and approaches for Antarctic and the Arctic, and assessment of cardiovascular effects of metals and polycyclic aromatic hydrocarbons.

Siciliano added many regions don’t have soil that freezes, which means techniques used in other areas won’t be as successful at the derailment site. He said many technologies have been developed in places like Oklahoma, California and southern Ontario, but the soil in Western Canada is much different from those places.

In a 2017 article in the Conversation, Professor Siciliano provided insight into various methods for managing oil spills including in-situ remediation.  In the article he provides estimates for “dig-and-dump” versus in-situ remediation.  He estimated dig-and-dump costing $150 per cubic yard of soil or more ($300 per cubic yard) in remote areas whereas the pricetag for in situ remediation can be as little as $20 to $80 per cubic yard.

 

 

 

U.S. EPA Issues the Latest Revision to the Risk Management Program (RMP) Chemical Release Rules

Written by Pillsbury Winthrop Shaw Pittman LLP

The United States Environmental Protection Agency’s (U.S. EPA’s) revised Risk Management Rules, designed to reduce the risk of the accidental release of hazardous chemicals, have been published in the Federal Register.  The citation to this action is 84 FR 69834 (December 19, 2019).  The rule is effective on December 19, 2019, but also provides for some staggered compliance dates for emergency response exercises and updating certain risk management plan provisions.  These revisions were triggered by EPA’s review of several petitions for reconsideration of EPA’s January 13, 2017 amendments to the rules set forth in 1996 at 40 CFR Part 68, which implemented the chemical accident preventions provisions required by Section 112 (r)  of the Clean Air Act.  Many of the 2017 requirements have been rescinded by this action.

On November 21, 2019, the U.S. EPA released a pre-publication copy of its Reconsideration of the revised Risk Management Program (RMP) Rules. In an accompanying statement, the agency noted that it has taken steps to “modify and improve” the existing rule to remove burdensome, costly and unnecessary requirements while maintaining appropriate protection (against accidental chemical releases) and ensuring responders have access to all of the necessary safety information. This action was taken in response to U.S. EPA’s January 13, 2017 revisions that significantly expanded the chemical release prevention provisions the existing RMP rules in the wake of the disastrous chemical plant explosion in West, Texas. The Reconsideration will take effect upon its publication in the Federal Register.

Background
As recounted by the D. C. Circuit in its August 2018 decision in the case of Air Alliance Houston, et al. v. EPA, in 1990, the Congress amended the Clean Air Act to force the regulation of hazardous air pollutants (see 42 USC Section 7412). An initial list of these hazardous air pollutants was also published, at Section 7412 (b). Section 112(r) (codified at 42 USC Section 7412 (r)), authorized the U.S. EPA to develop a regulatory program to prevent or minimize the consequences of a release of a listed chemical from a covered stationary source. The U.S. EPA was directed to propose and promulgate release prevention, detection, and correction requirements applicable to stationary sources (such as plants) that store or manage these regulated substances in amounts determined to be above regulated threshold quantities. The U.S. EPA promulgated these rules in 1996 (see 61 FR 31668). The rules, located at 40 CFR Part 68, contain several separate subparts devoted to hazard assessments, prevention programs, emergency response, accidental release prevention, the development and registration of a Risk Management Plan, and making certain information regarding the release publicly available.  The U.S. EPA notes that over 12.000 RMP plans have been filed with the agency.

In response to the catastrophe in at the West Plant, the U.S. EPA issued substantial amendments to these rules, covering accident prevention (expanding post-accident investigations, more rigorous safety audits, and enhanced safety training), revised emergency response requirements, and enhanced public information disclosure requirements. (See 82 FR 4594 (January 13, 2017).) However, the new administration at the U.S. EPA, following the submission of several petitions for reconsideration of these revised rules, issued a “Delay Rule” on June 14, 2017, which would have extended the effective date of the January 2107 rules until February 19, 2019. On August 17, 2018, the Delay Rule was rejected and vacated by the D.C. Circuit in the aforementioned Air Alliance case (see 906 F. 3d 1049 (DC Circuit 2018)), which had the effect of making the hotly contested January 2017 RMP revisions immediately effective.

Reconsidering the January 2017 Revision
On May 30, 2018, the U.S. EPA issued a notice of proposed rulemaking (see 83 FR 24850) to reconsider the reinstated RMP revisions and amendments, and the agency has now decided the issues raised in this rulemaking. Basically, it appears that the U.S. EPA is returning the rules to their pre-January 2017 stage and format. Over the years, these rules have been amended with some frequency, and the agency argues that these actions have all been discretionary once it finalized the basic 1996 version. Accordingly, it is acting well within its discretion to revise and rescind large portions of the 2017 amendments. Obviously, this is a complex regulatory program, but here are some highlights. The 2017 revisions to the Risk Management Program have been rescinded regarding safer technologies and alternatives analysis, third-party audits, incident investigations, and information availability. The U.S. EPA is also modifying regulations relating to local emergency coordination, emergency response exercises, compliance dates and public meetings. In addition, “this action rescinds almost all the requirements added in 2017 to accident prevention program provisions,” including again third-party audits. No longer will incident investigations be required to include a “root cause analysis,” or to consider a “near miss” that never resulted in an accidental release. The emergency response amendments are modified to allow facilities to share only that technical information necessary to implement the local emergency response plan. The agency and many commenters were concerned that the earlier rule risked the exposure of national security information. However, some of the 2107 changes to required public meetings have been retained. Finally, the U.S. EPA will establish new compliance dates to reflect these actions.

In the preamble, the U.S. EPA recognizes that the spate of recent chemical plant incidents has created concerns with these topsy-turvy regulatory proceedings. The agency points out that in several well publicized cases, these rules would not even have been applicable because the chemical release at issue was not a substance listed as a hazardous air pollutant in the statute or the implementing regulation, or in threshold quantities. Also, in the West fire and explosion, the Bureau of Alcohol, Tobacco Firearms and Explosives (ATF) believes that the cause was not an accident, but a deliberate act. Finally, the U.S. EPA argues that it is unfair to burden all covered plants with a complicated and costly regulatory program when it is clear to the agency that only a handful of chemical plants are the source of the great majority of complaints.

What’s Next?
With revised Risk Management Rules now published in the Federal Register, these actions will likely be subject to another judicial challenge. The U.S. EPA has made a strong case that it is acting well within its statutory authority and consistent with the Administrative Procedure Act. However, the challenges will be serious and substantial.

This article has been republished with the permission of the author.  It was first posted on the Pillsbury Winthrop Shaw Pittman LLP website.


About the Author

Anthony B. Cavender provides guidance and counseling relating to enforcement and compliance.  He has represented clients in Superfund matters, and in RCRA and Clean Water Act enforcement proceedings.  He is a Senior Counsel in the firm’s Houston office and a member of the Environmental & Natural Resources practice section. His practice focuses on the Clean Water Act, the Resource Conservation and Recovery Act and Superfund. Before joining Pillsbury, Anthony was a member of the legal department of Pennzoil Co., specializing in these areas as well as general corporate legal matters. He served on various energy industry committees and trade associations.

Supreme Court of Canada finds two forest-product companies must pay for remedial work

Written by Peter Brady and Claire Seaborn, McCarthy Tétrault

On December 6, 2019, the Supreme Court of Canada (“SCC”) found in R v Resolute FP Canada Inc., 2019 SCC 60 (“Resolute”) that two forest-product companies, Resolute and Weyerhaeuser, are on the hook to pay for remedial work at a waste site in Northwestern Ontario.

Resolute and Weyerhaeuser are successors of the companies that abandoned the waste site decades ago. They sought to rely on an indemnity agreement from 1985 between the Government of Ontario and their predecessor companies to argue that they were not responsible for the site’s monitoring and maintenance.

The decision was split 4-3. The majority of judges found that the indemnity agreement did not protect the companies from the province’s remediation order. As a result, Resolute and Weyerhaeuser, and not the provincial government, were found to be responsible for the costs of compliance.

History of industrial activity, contamination and adverse health effects at the site

The history of this case dates back to the 1960s when a pulp and paper mill operated in Dryden, Ontario. The mill bleached paper using a process that involved mercury, which was dumped into the nearby English and Wabigoon rivers. The mercury waste flowed downstream, which resulted in harm to health of some local residents (including members of the Grassy Narrows and Islington First Nations) the closure of a commercial fishery and damage to the region’s tourism industry.[1]

In the mid-1970s, a company called Great Lakes Forest Products was interested in buying the properties where the pulp and paper mill were located from its owner, Reed Ltd. In an effort to ensure the mill remained operational and provided local jobs, the Government of Ontario entered into an indemnity agreement with Great Lakes Forest Products in 1979. Under the indemnity agreement, Great Lakes Forest Products agreed to spend $200 million to expand and upgrade the mill, and the Government of Ontario agreed to cover the costs of past pollution above $15 million.[2]

Meanwhile, the Grassy Narrows and Islington First Nations commenced litigation regarding the mercury contamination in 1977 that ended with a settlement in 1985. When the settlement was reached, the Government of Ontario granted a new 1985 indemnity agreement to Reed Ltd., Great Lakes Forest Products Limited and their successors and assigns for the mercury contamination.[3]

Ontario Ministry of the Environment issues a remediation order in 2011

Twenty-six years later, on August 25, 2011, Ontario’s Ministry of the Environment issued a remediation order for environmental monitoring and maintenance at the waste site where the mill had operated in Dryden, Ontario (“Remediation Order”).[4]

The Remediation Order was issued as a “Director’s Order” under what is now s. 18 of Ontario’s Environmental Protection Act, and imposed three main obligations:

  1. to repair certain site erosion, perform specific groundwater and surface water testing, and file annual reports containing specified information;
  2. deliver to the Ministry of the Environment the sum of $273,063 as financial assurance in respect of the waste disposal site; and
  3. to “take all reasonable measures to ensure that any discharge of a contaminant to the natural environment is prevented and any adverse effect that may result from such a discharge is dealt with according to all legal requirements.”[5]

The property’s ownership had changed several times in that period. The Remediation Order was issued to two former owners of the property: Bowater (which later became Resolute) and Weyerhaeuser.

Weyerhaeuser and Resolute successful in courts below

In May 2013, Weyerhaeuser sought a declaration from the Superior Court of Justice that the 1985 indemnity agreement required the Government of Ontario to compensate for all of the costs of complying with the Remediation Order.[6] Resolute intervened. Ontario submitted that it was not responsible for compliance costs.

All three parties moved for summary judgment. The motions judge held that the 1985 indemnity agreement applied to the Remediation Order and granted summary judgement in favour of Weyerhaeuser and Resolute.[7] Ontario appealed.

The Ontario Court of Appeal agreed that the 1985 indemnity agreement applied to the Remediation Order; however, it applied that decision only to Weyerhaeuser and found that Resolute had assigned its benefit under the agreement.[8]

SCC decision: the 1985 indemnity agreement does not cover the Remediation Order

By a narrow margin of 4-3, SCC overturned the courts below and found that the 1985 indemnity agreement did not apply to Remediation Order, thereby leaving Resolute and Weyerhaeuser on the hook to pay for remediation costs.

The majority’s key findings include:

  • The 1985 agreement only provided an indemnity for claims brought by “third parties.” The provincial government was a party to the 1985 agreement, and therefore cannot be considered a third party.
  • The 1985 agreement was intended to cover only “pollution claims” (a term defined in the agreement). The Remediation Order is not a “pollution claim” since it requires monitoring and maintenance to prevent more pollution, and is not intended to stop ongoing pollution.[9]
  • The 1985 agreement must be considered in the context of prior indemnities and the settlement with Grassy Narrows and Islington First Nations. This context indicates that the 1985 indemnity agreement should apply more narrowly and was not intended to provide protection against the costs of regulatory compliance.[10]

While the “polluter-pays principle” is not referenced explicitly in the decision, the SCC has interpreted the 1985 indemnity agreement in such a way as to hold successor companies liable for past environmental contamination, as opposed to requiring the provincial government to foot the bill.

Parallels to the recent decisions in Orphan Wells and HBBC

The Resolute decision comes less than a year after the SCC released its decision in Orphan Well Association v Grant Thornton Limited, 2019 SCC 5 (“Orphan Wells”), another case in which a successor entity was liable for historic environmental cleanup costs.

In Orphan Wells, the SCC held a bankrupt energy company’s estate liable for abandonment and reclamation obligations for certain old oil and gas wells. These environmental responsibilities were found to take priority over obligations to pay back creditors in the case of insolvency or bankruptcy. Like in Resolute, the SCC in Orphan Wells overturned the appellate court below and reached a decision ensuring that taxpayers were not left paying for environmental remediation.

Please refer to the article, “Redwater – SCC Delivers the Final Word”, for an in-depth summary and analysis of the Orphan Wells decision.

The issue of ongoing regulatory liability for contamination for “non polluters” and/or successor companies was also front and center in the Hamilton Beach Brands Canada, Inc.  v Ontario (Ministry of the Environment and Climate Change), 2018 ONSC 5010 (“HBBC”).

In HBBC the Ontario Ministry of Environment issued an Order to three parties to take steps to delineate and monitor (with the potential for future remediation) ground water contamination that had migrated from an industrial property to surrounding commercial, residential and municipal lands. The contamination had occurred decades early through actions of a prior lessee of the property. The Orderees were a corporate successor of a prior owner of the property, the current owner and the current Lessee of the property.

The Ontario Environmental Review Tribunal (“ERT”) dismissed the appeal of the Order, rejecting the argument that the Order under s. 18 of the Ontario’s Environmental Protection Act could not apply to off site contamination that was not caused by the Orderees.[11] The Ontario Divisional Court, on Review, upheld the ERT decision holding that there is no geographical constraint limiting orders to the source property of the contamination.[12] Leave to appeal to the Ontario Court of Appeal was sought and refused.[13]

What comes next

The Resolute decision has not quite ended the series of legal disputes that have plagued this Dryden, Ontario site for decades, but has provided clarity on how the 1985 indemnity agreement ought to be interpreted.

In a statement, Resolute indicated that it would continue its monitoring of the site and posting of financial assurance while an appeal of the Remediation Order proceeds to the ERT.

We can help

Our team at McCarthy Tétrault has experience navigating the legal and regulatory uncertainties that arise in environmental matters. If you would like more information on these developments and their potential impact on your business, we can help. Please contact Peter Brady or Claire Seaborn with any questions or for assistance.

[1] R v Resolute FP Canada Inc., 2019 SCC 60 at para 4.

[2] R v Resolute FP Canada Inc., 2019 SCC 60 at para 9.

[3] R v Resolute FP Canada Inc., 2019 SCC 60 at para 13.

[4] R v Resolute FP Canada Inc., 2019 SCC 60 at para 20.

[5] R v Resolute FP Canada Inc., 2019 SCC 60 at para 20.

[6] R v Resolute FP Canada Inc., 2019 SCC 60 at para 22.

[7] Weyerhaeuser Company Limited v Ontario (Attorney General), 2016 ONSC 4652.

[8] Weyerhaeuser Company Limited v. Ontario (Attorney General), 2017 ONCA 1007. Note that in dissent, Justice Laskin had found that the 1985 indemnity agreement only applied to claims brought by third parties, and not regulatory claims by governments.

[9] R v Resolute FP Canada Inc., 2019 SCC 60 at para 14-28.

[10] R v Resolute FP Canada Inc., 2019 SCC 60 at para 30.

[11] Hamilton Beach Brands Canada Inc. v. Ontario (Environment and Climate Change), ERT Case No. 17-025.

[12] Hamilton Beach Brands Canada, Inc. v Ontario (Ministry of the Environment and Climate Change), 2018 ONSC 5010.

[13] The Ontario Court of Appeal refused leave on December 12, 2018: http://www.ontariocourts.ca/coa/en/leave/2018.htm#refused.

This article has been republished with the permission of the authors.  It was first published on the McCarthy Tétrault ‘s website.


About the Authors

Peter Brady  is a partner in McCarthy Tétrault ‘s Litigation and Mining Groups and co-head of the firm’s National Environmental, Regulatory & Aboriginal Group. He regularly advises and represents clients in all legal aspects of regulatory litigation, with particular emphasis in the areas of environmental law, occupational health & safety law, mining law, and extractive industry projects. Peter also has significant experience in anti-corruption compliance, investigations, and due diligence for transactions involving Canada, Indonesia, China, the USA, and Africa.

Claire Seaborn’s litigation practice focuses on commercial disputes, public law and regulatory matters. She draws from her experience in the public and private sectors in Canada, the United States and the United Kingdom. Claire’s involvement in high-profile and high-stakes files has sharpened her ability to advocate for her clients and provide sound legal advice.

What is the difference between external & internal radiation exposure?

Written by Steven Pike, Argon Electronics

Radiological incidents where there is the potential for the release of ionising radiation can occur in a wide variety of scenarios – be it a fire in an industrial facility, a transportation accident that involves radioactive materials or the deliberate use of a radiological dispersal device (RDD).

Any accident or incident that involves a radiological hazard can place significant operational demands on first response teams as well as placing those personnel at risk of exposure to potentially dangerous levels of ionising radiation.

Radiation exposure refers to any situation in which the body is in the presence of radiation.

In order to keep radiation doses at a level that is low as reasonably achievable (ALARA) it is vital that first responders both minimise the time that they spend in affected areas and that they maximise the distance between themselves and the radiation source.

When we consider the concept of radiation exposure it is important to bear in mind not just the type of radiation that is being emitted, but also the route by which that radiation enters the body.

A commonly held image of radiation is that it emanates from a source device and strikes the outside of the body – in what’s known as external exposure.

However the radioactive material from radiation also has the ability to deposit its energy in our internal organs through the process of ingestion, injection, absorption or inhalation – what is termed internal exposure.

What is external radiation exposure?

External radiation exposure occurs when part or all the body is exposed to a penetrating radiation field from an external source. In some cases this radiation will be absorbed by the body, while in others it may pass straight through.

Any source outside of the body that emits ionising radiation can pose an external radiation exposure hazard – be it in the form of a beta source, neutron source or gamma source.

How extensive this hazard is depends on the amount of exposure received, the duration of the exposure, the energy of the emitted radiation and the total amount of radioactive material that is present.

All ionising radiation sources produce an external radiation field, however some radiation fields are so so small that they pose no radiation risk at all – for example in the case of low and moderate energy beta radiation emitters such as Tritium (H-3), Nickel-63 (Ni-63) or Phosphorus 33 (P-33).

Other sources of ionising radiation – such as the gamma sources Caesium-137 (Cs-137) and Cobalt-60 (Co-60) – are able to produce much more powerful external radiation fields, so care must be taken to shield the source and monitor exposure.

What is internal radiation exposure?

Internal radiation exposure occurs when a radioactive material is released into the environment in the form of a solid, liquid or gas.

It is then able to enter the body through the route of ingestion through the digestive tract, inhalation into the respiratory airways, percutaneous absorption through the skin or penetration via contamination from a wound.

Radioactive materials that are incorporated into the body will emit radiation as they decay. In addition, that individual will continue to be exposed to radiation until such time as those radioactive materials have been excreted in the form of either urine or faeces.

Specific radioactive materials have a tendency to target specific organs depending on their unique chemical properties.

The radioactive isotope strontium, for example, shares similar properties with calcium, which means it tends to accumulate in calcium-rich areas of the body such as bones.

Radioactive caesium shares properties that are similar to potassium, which means it tends to distribute throughout the body.

Radio-iodine, meanwhile, tends to concentrate in the thyroid gland in the same manner as non-radioactive iodine (and the effects of which were evidenced after the Chernobyl nuclear accident where there was a marked increase in the number of thyroid cancer cases among children.)

Any exposure to ionising radiation in the context of a radiological emergency – and even if it is only for short periods of time – can increase the chance of both short-term and long-term health impacts for first responders.

In any situation where there is deemed to be a radiation hazard it will be crucial to ensure that emergency personnel are sufficiently trained in managing the risks, that they are adequately equipped and that they are appropriately protected.


About the Author

Steven Pike is the Founder and Managing Director of Argon Electronics, a leader in the development and manufacture of Chemical, Biological, Radiological and Nuclear (CBRN) and hazardous material (HazMat) detector simulators. He is interested in liaising with CBRN professionals and detector manufacturers to develop training simulators as well as CBRN trainers and exercise planners to enhance their capability and improve the quality of CBRN and Hazmat training.

Urgent Canadian Action is needed on PFAS — the Forever Chemicals

Written by Bev Thorpe and Fe de Leon for the Canadian Environmental Law Association

The class of chemicals called PFAS (Per- and Polyfluoroalkyl Substances) are often referred to as ‘the forever chemicals’ because they are highly persistent in the environment and will take hundreds if not thousands of years to disappear from the soil and groundwater where they accumulate.  The Netflix film, The Devil We Know, and the newly released film, Dark Waters, have brought these chemicals to popular awareness.  As we now know, two substances in this chemical class – PFOS and PFOS – are the focus of multi-million dollar lawsuits due to the cover up of data demonstrating health impacts such as increased cholesterol, kidney cancer, testicular cancer, low birth rates, thyroid disease, and weakened immunity.  Over 99% of all Canadians tested by Health Canada’s biomonitoring surveys, have PFOA and PFOS in their blood and other organs including communities in the far north.  Producers of PFOS and PFOA voluntarily stopped production in 2002 resulting in a slight decrease of these two PFAS in sampled populations, but other PFAS are now turning up in Canadians. Yet the Canadian regulatory response to this crisis is lacking urgency and transparent communication with impacted communities.

PFAS is widely present because  for over sixty years these chemicals have been used as stain, oil and water repellant chemicals in  clothing, carpets, grease-proof paper, ski wax, cookware and cosmetics and also widely used in firefighting foam and other industrial applications.  Their widespread use raises the question why it took so long to highlight the risk to human health and wildlife and why regulatory response has been so slow.  This is partly because scientists lacked the analytical capability to measure these chemicals in the environment until recently.  At the same time, PFAS, as with thousands of chemicals were historically allowed on the market with no toxicological screening requirements.  Even today, most new  PFAS, which industry is now switching to as replacements for PFOA and PFOS, lack full toxicological data yet they remain unregulated and on the market.

In Canada most uses for PFOS were prohibited in 2016 aside from exemptions for specific uses.  In 2012, the federal government concluded that PFOA was an ecological concern. But Health Canada maintains that PFOS and PFOA are not a concern for human health at current levels of exposure.  Most recently in June 2019 Transport Canada allowed airports to use PFAS-free firefighting foam, which shows a more precautionary approach as it targets the whole class of PFAS, but this is only a start.  There are over 5,000 PFAS in use and they are just as persistent in the environment as PFOS and PFOA, with many known to be highly mobile in rivers, lakes and groundwater.  None of these are restricted in Canada.

For Canadian adults, our main exposure to PFAS is via household dust, ingestion of food and air – in fact studies of air in Vancouver homes found levels of PFAS were twenty times higher than air outside the homes due to PFAS inside the homes.  Children, infants and toddlers are most at risk from PFAS exposure due to hand-to-mouth contact with PFAS treated products.  In addition, Canadian research has demonstrated PFAS in the leachate and air of landfill sites, due to the amount of PFAS in the clothing, carpets and consumer goods that have been discarded into landfills over the years and which are now leaching these chemicals into the environment.  PFAS are found in the air and effluent from wastewater treatment sites as well as in the sewage sludge which can be spread on land.

If this situation seems worrying, it is.  We lack full transparency of where contamination sites are in Canada and full accountability for who is responsible for the cleanup. Remediation is expensive and technically challenging which may partly explain such inaction.  The region downstream of Hamilton airport has still not been cleaned up eight years after high levels of PFAS contamination were discovered.  The extent of contamination in Canada is difficult to know, unlike the disclosure afforded to US citizens by many US state regulatory bodies.  The use of PFAS in firefighting foam at military bases, airports and refineries is increasingly acknowledged to be a common source of  water contamination but public information is absent on site specific monitoring data or even if groundwater wells are being monitored.  In December 2018 Health Canada released Canadian Drinking Water Guidelines for PFOS and PFOA which are substantially weaker than US based guidelines and to date British Columbia is the only Canadian province to establish provincial drinking water regulations.

We urgently need to see federal and provincial governments take action to phase out the entire class of PFAS in consumer and industrial use; strengthen Canadian drinking water standards to be more protective of children’s health and radically increase public right to know about the presence of PFAS in consumer products, local drinking water, and discharges into our communities. Tackling these forever chemicals requires an informed and coordinated public response which has sadly been lacking to date.

This article has been republished with the permission of the authors.  It was first published on the CELA website.


About the Authors

Bev Thorpe is an environmental consultant and principle author of CELA’s reports on PFAS.  Bev works with advocacy networks, companies and governments to advance an economy without the harm of hazardous chemicals.  She is a long time member of the Coming Clean network in the USA and she works with European and Asian networks.

Fe de Leon is a researcher with the Canadian Environmental Law Association (CELA) and has worked extensively on toxic substances particularly in the Great Lakes Basin, on the federal chemicals management plan and on international efforts to address persistent toxic substances through the Stockholm Convention on Persistent Organic Pollutants, the Great Lakes Quality Agreement, and a global treaty to address mercury.

Mind the GAP: Excluded Pollution Conditions in Environmental Insurance Policies

Written by Carl Spensieri, Vice President, Environment, Berkley Canada

BACKGROUND

Your Company excavates and transports contaminated soils on a redevelopment project. Being an experienced contractor, you implement several best management practices to reduce the amount of dust and odour you generate while doing this work. Further, you even implement a truck inspection and washing process to reduce soil tracking on nearby streets by way of truck traffic. In short, you are a good Contractor!

Unfortunately, your work still generates some dust and odours and neighbouring property owners complain to the municipality and the environmental regulator when they find dust on their cars and lawns.

MIND THE GAP

Despite your best management practices, the Owner of the redevelopment project receives a statement of claim from the nearby property owners. In addition, the Owner is issued a fine by the environmental regulator for allowing contaminants (dust) and odour to escape into the environment. The Owner, in turn, issues a demand letter requesting that you pay for defence costs and the environmental fine.

Thankfully, you buy a Contractor Pollution Liability (CPL) policy.  Can you identify the GAP?  The majority of CPL policies sold in Canada do not cover this exposure!

THE DETAILS

In general, CPL policies define POLLUTION CONDITION to mean:

the discharge, release or escape of any solid, liquid, gaseous or thermal irritant or contaminant, …, into or on land, any structure on land, the atmosphere or any watercourse or body of water, including groundwater.

Do you think dust and odour fall within this definition? While the above noted definition is very broad, the majority of CPL Policies sold in Canada introduce the following restriction:

 …provided such discharge, release or escape is unexpected and unintended …

Given all the actions taken the by the Contractor to manage the dust and odour risk, it is not possible to suggest the dust and odours generated while excavating and transporting are unexpected and unintended. This results in no cover being afforded for this claim.

THE SOLUTION

The solution is simple. Ensure your CPL policy does not include this restriction. When buying CPL insurance in Canada it is important to understand not all policies are created equal. Failing to recognize this GAP could cost you and your clients!


About the Author

Carl is a licensed professional engineer in the Province of Ontario with 20 years of experience in environmental liability assessment, management and insurance. He is a business leader focused on driving profitable growth through innovative specialty insurance solutions.  He is considered a positive business disruptor that seeks to deliver the best outcomes for his clients. Berkley Canada is a specialty insurance carrier.