Dealing with Environmental Issues on the Construction Project, November 16, 2011


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Environmental issues arise frequently on construction projects in Alberta. These issues can be complex and can result in regulatory investigations, litigation or significant unwanted publicity for project owners. This seminar by the Blakes Environmental Group will provide an overview of this rapidly changing area of the law and a discussion of best practices.

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Dealing with Environmental Issues on the Construction Project, November 16, 2011

  1. 1. Its Not Easy Being Green: Dealing with Environmental Issues on the Construction Project Dufferin Harper November 16, 2011 Overview• 1) Key Environmental Policies, Procedures and other Due Diligence Issues• 2) Assessing Environmental Risks, including: i) Operational environmental issues ii) Previously unknown contamination iii) Development of brownfield sites• 3) Regulatory Issues: (permitting/licensing/siting)• 4) Environmental Stewardship Issues/Shifts in Corporate Culture: i) Nuisance (light, noise) ii) LEED certification 1
  2. 2. 3 Types of Environmental Liability• Person sues another person for harm done to the first person (“civil liability”)• Violation of a regulatory statute such as the EPEA or municipal by-law (“quasi-criminal liability”)• Being subject to a Ministerial Order requiring something be done re: a particular situation (“ministerial order liability”) Who can be liable for latter two types of liability?• Property owners (past, present, future)• Property managers and developers• Landlords/Tenants• General contractors/project managers• Subcontractors• Waste receivers 2
  3. 3. EPEA Definition of ‘owner’• “owner”, with regard to land, means – The registered owner of the land – A purchaser of the land whose interest as a purchaser is shown on the certificate of title to that land, or – A tenant or other person who is in lawful possession or occupation of the land EPEA Definition of ‘person responsible’• “person responsible” when used with reference to a substance or thing or a thing containing a substance means – the owner and a previous owner of the substance or thing – every person who has or has had charge, management or control of the substance or thing, including, without limitation, the manufacture, treatment, sale, handling, use, storage, disposal, transportation, display or method of application of the substance or thing – any successor, assignee, executor, administrator, receiver, receiver-manager or trustee of a person referred to above – a person who acts as the principal or agent of a person referred to above 3
  4. 4. Definitions in Part 5 of the EPEA: ‘Release of Substances’• “owner of a substance” means the owner of the substance immediately before or during the release of the substance.• “person having control of a substance” means the person having charge, management or control of the substance. Environmental Protection Order (EPO) (s.113 of EPEA)• Can be issued against a person responsible for a release, where AENV is of the opinion that: – a release may occur, is occurring or has occurred and – the release may cause, is causing or has caused an adverse effect 4
  5. 5. Risk Management Strategies• Risk Avoidance• Risk Control• Contract Management• Risk Transfer• Insurance Environmental Policies and Procedures• Companies need to set up an effective environmental management system (“EMS”) that covers both their own operations as well as the operations of their contractors/sub-contractors before they begin construction activities!!• EMS provides the basis for a due diligence defence 5
  6. 6. R. v. Sault Ste. Marie (1978 SCC decision)– City hired a contractor to dispose of municipal waste– Leachate from the waste site entered into adjacent creek– Both the contractor and City were charged with violation of the Ontario Water Resources Act– If the defendant “can and should control the activity at the point where pollution occurs, then it is responsible for the pollution”.– “A municipality cannot slough off responsibility by contracting out the work”– Due diligence may be established where “the accused exercised all reasonable care by establishing a proper system to prevent commission of the offence and by taking reasonable steps to ensure the effective operation of the system”. Hallmarks of an Effective EMS Plan Act Do Check 6
  7. 7. Common Environmental Construction Exposures1. Spills/releases of oil, fuel or chemicals2. Surface water run-off involving oil, fuel, chemicals or silt3. Air emissions (dust/fumes)4. Noise5. Finding/exacerbating existing contamination 1. Spills and Releases• EPEA refers to a release• “release” includes to spill, discharge, dispose of, spray, inject, inoculate, abandon, deposit, leak, seep, pour, emit, empty, throw, dump, place and exhaust ’• s. 109 of EPEA (1) No person shall knowingly release or permit the release into the environment of a substance in an amount, concentration or level or at a rate of release that causes or may cause a significant adverse effect. (2) No person shall release or permit the release into the environment of a substance in an amount, concentration or level or at a rate of release that causes or may cause a significant adverse effect. 7
  8. 8. What to do when a release occurs• S. 110 of EPEA – Duty to report a release• S.112(1) of the EPEA – Duty to: – (a) take all reasonable measures to • (i) repair, remedy and confine the effects of the substance, and • (ii) remediate, manage, remove or otherwise dispose of the substance in such a manner as to prevent an adverse effect or further adverse effect, and – (b) restore the environment to a condition satisfactory to the Director [of the AENV].• Potential violation of Calgary Sewer Service Bylaw 24M96 and duty to report a release of ‘waste’ to City of Calgary (waste is set out in Schedule “A” to Bylaw)• Do you have an adequate spills/release policy in place including regulatory and environmental site professional contact numbers? 2. Surface Water Run-off• Potential violation of Fisheries Act• Potential violation of release provisions of the EPEA• Potential violation of Calgary Drainage Bylaw 37M2005 – Prohibits release of Prohibited Material into the Storm Drainage System – “Prohibited Material” means any Substance that may, directly or indirectly, obstruct the flow of Water within the Storm Drainage System or may have a Negative Impact, and includes, but is not limited to: • (i) soil, sediment, waste or other solid matter; • (iv) gasoline, motor oil, transmission fluid, and antifreeze; • (v) solvents; • (vi) paint; • (vii) cement or concrete wastes; • (viii) sawdust, wood, fibreboard or construction material; • (xii) Hazardous Waste; • (xiii) Industrial Waste• Do you have policies in place to deal with remediation of spills involving the above substances including how to minimize/avoid the substances entering into waterways and stormwater systems? 8
  9. 9. 3. Air Emissions• Potential violation of release provisions of the EPEA• Potential violation of the Calgary Community Standards Bylaw 5M2004 – 42. “A person shall not engage in any activity that is likely to allow smoke, dust or other airborne matter that may disturb any other Person to escape the Premises without taking reasonable precautions to ensure that the smoke, dust or other airborne matter does not escape the Premises.”• Do you have policies in place to minimize air emissions? Noise• Potential violation of release provisions of the EPEA (definition of substance includes sound and vibration)• Potential violation of ss. 26-39 of Calgary Community Standards Bylaw• Do you have an adequate noise reduction policy, including activities during the day, evening and night? 9
  10. 10. 4. Previously Unknown Contamination• “Person Responsible for the contaminated site”, means – a person responsible for the substance that is in, on or under the contaminated site, – any other person who the Director considers caused or contributed to the release of the substance into the environment, – the owner of the contaminated site, – any previous owner of the contaminated site who was the owner at any time when the substance was in, on or under the contaminated site, – a successor, assignee, executor, administrator, receiver, receiver- manager or trustee of a person referred to above, and – a person who acts as the principal or agent of a person referred to above• Effect is that a person finding previously existing contamination or upon whose land the contamination exists may become responsible for its remediation Indicia of previous contamination• rusted barrels/containers• stained or discoloured soil• fill material containing debris or household trash• non-earthy smells• oily residue• groundwater sheen• construction and demolition material• underground piping, UST/LUST• Do you have an adequate contamination identification policy, including what to do once contamination or potential contamination is uncovered? 10
  11. 11. Steps to minimize liability when dealing with third parties1. Screen Contractors - Contact references - History of environmental non-compliance? - Repeat screening, even if you have used them before (management can change)2. Written Agreements - Can’t generally contract out of liability, but contracts do show the parties intentions • R v. Abitibi Consolidated Inc. [2000] N.J. No, 153 - Require contractor to comply with environmental laws, company’s EHS program - Require contractor to have adequate training and show proof of that training - Require contractor to indemnify your company (for more than contract fee) - Ensure contractor is adequately insured - Require that your company be added as a named insured3. Supervise the Contractor - Adequately supervise contractor • Brantford (City) v. 1602356 Ontario Inc., [2006] O.N.C.J. 5• Follow-up is one of the best means of ensuring environmental policies are being adhered to and ensuring due diligence is met Minimizing liabilities involving hazardous wastes• Ensure appropriate labeling and transportation by approved haulers using approved containers• Follow-up with waste hauler when disposing of contaminated materials (i.e. require tipping manifests be provided)• A generator of hazardous wastes may have a higher duty of care to ensure proper disposal than a generator of non-hazardous wastes “the standard of care is to create and communicate sufficient accurate information to enable receivers of the waste to handle that waste safely and to minimize the risks related to handling those materials.” (Wainright v. G-M Pearson) 11
  12. 12. Brownfield Liability• Canadian Brownfields Network• EPEA - Contaminated Sites – Tier I, Tier II, Remediation Guidelines – Exposure Control sites• City of Calgary Brownfield Strategy (2007)• Brownfield redevelopment is still in its infancy in Canada, especially in areas with alternative land options• The 4 factors needed for Brownfield development: – Demand for the property – Aggressive developer – Risk tolerant government – Risk tolerant financer Permitting and Siting• Federal/Provincial environmental assessments• Location vis-à-vis adjacent waterways and other environmentally sensitive areas• Pre-construction investigation (Phase I and II ESAs)• Presence of Wetlands – temporary or permanent• Presence of species at risk /endangered species• Seasonal construction issues and impact on wildlife• Location vis-à-vis bird migrations/preferred flight areas 12
  13. 13. Shifts in Corporate Culture• Sustainability – Calgary Sustainable Building Policy CS005 • The City of Calgary was the first jurisdiction in Canada to adopt a sustainable building policy in 2004 which commits all City-owned buildings undergoing major renovations to meet or exceed the silver level of the LEED standard. New construction >500 m2 to meet or exceed gold level of LEED standard.• Recycling/paperless offices• Reduce and reuse• LEED Certification (Leadership in Energy and Environmental Design)• Light pollution (s.43 of Community Standards Bylaw 5M2004) Questions? 13