MRO & The Law: Knock knock! It’s the environmental inspector

Bold new inspection and enforcement initiatives across the country are making it more important for Canadian companies to comply with environmental and waste management legislation, regulations and guidelines. Failure to comply can cost thousands (and even millions) of dollars in fines and cleanup orders.

Increased attention from both the public and media has put added pressure on governments to take action on environmental issues. This is not only making legislative changes more common, but also making those changes more sudden and unpredictable.

For instance, the contamination of the water supply of a single city, as evidenced by the Walkerton water crisis in Ontario, can change treatment policies across the country. A smoggy summer, like the one Toronto endured last year, not only resulted in stricter air-pollution regulations, but also spurred politicians to start targeting new industries, such as construction firms, to lower their emissions. Similarly, the threat of terrorist attacks has changed the way hazardous materials are stored and secured.

In addition, to appease public perception and media criticisms that deregulation and free-trade accords like NAFTA have exacerbated governments’ abilities to protect the environment, public officials across Canada are stepping up efforts to fight polluters in ways and areas that were unprecedented up until now.

Crime and punishment

There is environmental and waste management legislation at the federal, provincial and municipal levels, and all three levels are willing to enforce regulations. Those companies that do not keep up with rapidly changing legislation are at risk of facing financial penalties.

A clear example of this is the case of a well-known Alberta-based company that recently went “off-side” as a result of an employee not knowing enough about environmental legislation. This employee exported a product that, under section 7 of the Ozone-Depleting Substances (ODS) regulations, cannot be legally sent out of the country.

This mistake cost the company $30,000 and, perhaps more importantly, tarnished its perfect environmental record.

Examples like this are not restricted to larger companies, since they also affect smaller ones, like a B.C. construction firm that was fined $97,000 after water runoff from its building site caused serious damage to local wildlife. The B.C. government charged the company after it was proven that the runoff had reached a nearby creek and caused damage to the aquatic wildlife by increasing the water’s pH level.

What makes it even more difficult for companies regulated under various levels of government is that, though they all want industry to lower pollution, their approaches tend to follow very different philosophies.

The federal government, for example, is combining tough Canadian Environmental Protection Act (CEPA) regulations with a willingness to work with offenders and non-offenders in the industry sector, to promote a more cooperative relationship.

“In addition to taking actions under the Canadian Environmental Protection Act to protect the health and environment of Canadians,” says environment minister David Anderson, “voluntary measures such as a Memorandum of Understanding are also an effective means of accelerating the reduction of toxic substances and other pollutants released to the air, water and land.”

In contrast, the Ontario Ministry of the Environment announced draft Administrative Monetary Penalties (AMP) Regulations, which would introduce fines for infractions such as failure to submit reports on time or non-compliance with certain operating conditions.

“Administrative penalties,” says Ontario environment minister Elizabeth Witmer, “will send a strong message that no one will be able to disregard even the most basic environmental laws.”

The Ontario government also recently passed precedent-setting changes to the regulations that govern hazardous waste. These changes, which include a first-ever online registration system and more rigorous reporting requirements, will affect 16,000 Ontario hazardous waste generators directly and many more indirectly.

Furthermore, since fall 2000, the provincial environment ministry SWAT Team has completed more than 700 inspections in a variety of areas, including hazardous waste transfer and processing facilities, recycling organizations in the industrial, commercial and institutional sectors, and hazardous waste haulers.

“Finally they are showing the industry that the environment ministry has some authority,” says Mitchell Gibbs, manager of emergency services at TEAM-1 Environmental Services Inc. of Hamilton, Ont. “SWAT will dissect your operation and no operation is safe from their powers.”

This emphasis on punishment is likely to have a profound effect on businesses affected by new legislation and enforcement methods. In Ontario alone, the number of orders issued to companies for the first six months of 2001 went up 58 per cent. In that period, the number of charges laid on companies also went up from 670 to 825.

“We try to work with companies as well, but right now what we are focusing on is making sure that we are not letting polluters off the hook,” says Mark Rabbior, spokesperson for the Ontario Ministry of the Environment. “Our objective is to protect the environment, and compliance with the law is not optional; it is mandatory.”

The British Columbia Ministry of Water, Land and Air Protection has also recently released new plans that focus on the development of environmental standards and public reporting. The most significant initiative will be a major reform of B.C.’s current environmental assessment process.

Other affects on industry

Companies across the country are not only being forced to pay for breaking the law, they are also likely to start paying for the costs of disposing of their products.

“The environment ministry’s ‘cost recovery’ program will cost Ontario industry alone approximately $11 million per year,” says Damian Basset, president and CEO of Corporations Supporting Recycling (CSR) of Toronto.

Another new trend created by public concern with the environment is an overlapping in jurisdictions, as governments try to broaden their areas of influence concerning environmental legislation.

Basset’s organization anticipates the introduction of regulations for the trans-boundary movement of solid waste (including waste export reduction plans) related to the federal government legislating areas that provinces had previously regulated exclusively. He also expects to see new import-export regulations for hazardous waste, and Environmentally Sound Management (ESM) standards.

Managers may be liable

It is also important to note that in many instances it is management, even if it is not directly responsible, that can be criminally charged for the actions of employees.

That was the case last year when the owners of a B.C. company were charged under the province’s Waste Management Act with illegal storage of special waste and failure to comply with a pollution prevention order. If convicted, the owners face a maximum penalty of $1 million and up to six months in jail.

The biggest problem for companies that have to deal with environmental issues and waste management then becomes how to best keep up-to-date with ever-changing environmental laws. Even in today’s world, with powerful information tools such as the Internet, that can still prove to be a very difficult goal.

“The challenge is now less one of ‘Can we get the information?'” says Richard Sydor, M.SC., P. Eng., a senior hydrogeologist at Stantec Consulting Ltd. of Kitchener, Ont. It’s more about “how we sift ‘good information,’ how do we sort and store it, and how do we efficiently retrieve and absorb the important aspects?”

The difficulties with “sifting” through the information are multiplied three-fold when companies have to deal with various levels of government. While it is important to keep abreast of new legislative trends by using resources like government web sites, specialized media can provide up-to-date information on new legislation
and details of case studies of companies dealing with compliance issues.

By providing employees with resources such as industry publications, newsletters and environmental compliance reports that provide current information about new regulations and legislative trends, as well as a subsequent specialized analysis, companies can take important steps to prevent the potential loss of thousands of dollars in fees and fines.

In the end, using government resources, and complementing them with expert advice from specialized print and on-line media, may prove the most effective way of ensuring that a company does not become the next case study in an environmental compliance report.

The author, contributor Juan Pablo de Dovitiis, would like to thank EcoLog Information Resources Group of Toronto (www.ecolog.com) for contributing case studies and other data in the preparation of this article.