Canada: R. v. Syncrude Canada Ltd. 2010 ABPC 229 — A Case of Overstated Significance?

1. Introduction

On June 25, 2010 Syncrude Canada Ltd. ("Syncrude") was found guilty on two charges arising out of the death of approximately 1,600 ducks in its settling pond in Northern Alberta. The charges were brought pursuant to Alberta's Environmental Protection and Enhancement Act, (the "EPEA") and Canada's Migratory Birds Convention Act (the "MBCA").¹ Both the EPEA and the MBCA provide statutory "due diligence" defences.² Syncrude raised a number of additional defences including an act of God, abuse of process and officially induced error.

This decision has received considerable media attention. It is being heralded as a monumental victory for environmentalists and by some commentators as devastating to the oil sands industry. Some commentators have gone further to suggest that this decision undermines any comfort that businesses can take from the fact that they have an environmental approval for their operations. In our opinion, this decision is not as menacing to industry as some of the commentators would lead us to believe.

The message in this decision is not that tailings ponds are illegal or contrary to the prohibitions in environmental legislation nor is it that companies must achieve a standard of perfection to prevent waterfowl from coming in contact with the hazardous substances contained in tailings. To the contrary, the message is simply that companies are obligated to take all reasonable measures to avoid foreseeable harm to wildlife and, at a minimum, to comply with the requirements of their environmental plans and approvals.

2. Background

As part of its oil sands operations in the Fort McMurray region of northern Alberta, Syncrude operates a large settling basin, the Aurora Settling Basin (the "Basin"). The Basin is a large artificial pond, approximately the size of 640 football fields,³ used to extract water from the tailings that result from the processing of the tar sand deposits. The tailings, which are deposited into the Basin by large pipes, are generally composed of water, sand and bitumen that remain after the processing of the oil sands. The Bitumen is a viscous material with the consistency of roofing tar and is found throughout the Basin as strands, lumps and mats. Bitumen mats on the surface can trap waterfowl that land on the basin leading to almost certain death.

Deterring waterfowl from the Northern Alberta oil sands tailings ponds presents many challenges due to the proximity of the Athabasca River and Peace Athabasca Delta, because tailings ponds are indistinguishable from natural water bodies for many species of birds and because tailings ponds are warmer than other water bodies in the area and, as result, tend to thaw earlier and become preferential landing sites in the early spring break up. Expert evidence during the trial indicated that some waterfowl will die in the oil sands tailings ponds regardless of deterrence efforts and even more birds will die without effective deterrents.

3. Facts

Approximately 1,600 ducks died on April 28, 2008, after they landed on the Basin. The migratory birds got stuck in the tailings and sank to the bottom. The Basin was constructed and maintained with the approval of the Alberta Government pursuant to Syncrude's mineral surface lease which requires compliance with Division 2 of Part 2 of the EPEA respecting approvals, registrations and certificates. In addition, Syncrude received Environmental Resources Conservation Board approval for the Aurora mine required under Sections 10 and 12 of the Alberta Oil Sands Conservation Act. According to the decision, Syncrude obtained a combined EPEA approval for both its Mildred Lake and Aurora mines effective June 24, 2007 and pursuant to paragraphs 6.1.76, 6.1.77 and 6.1.78 of that approval, was required to submit to the Government of Alberta a Waterfowl Protection Plan.⁴ This plan was to include techniques and procedures for comprehensive waterfowl deterrent and monitoring programs.

The Fort McMurray area where the Basin is located is a region second only to the Prairie Parklands in importance for migratory birds during breeding season and the area lies beneath the Central and Mississippi Flyways for migratory waterfowl.⁵ In Northern Alberta, waterfowl spring migration is closely tied to the break-up of water bodies because most species of waterfowl depend on water for rest and foraging stopovers. Waterfowl usually migrate in April and May and as cited in this judgment, some research suggests that break-up in the oil sands region may occur as early as March 31 and migratory birds may appear as much as two weeks earlier than that.⁶

Syncrude submitted to the Government of Alberta as required pursuant to its licences and approvals a combined 2007 Waterfowl Protection Plan for its Mildred Lake operation and Aurora mine (the "Plan") indicating that it had a Bird and Environmental Team ("BET") consisting of 8 employees providing full weekly coverage, 67 scare cannons, 27 effigies, 17 rafts and 13 boats.⁷ The Plan had not been approved by the Government of Alberta, but Syncrude did not receive notice of this until after the April 28, 2008 incident.

In the spring of 2008, neither Syncrude's BET team leader, nor the team itself had any formal training in dealing with bird behaviour or deterrence and the team members were only scheduled to work Monday through Thursday each week. When BET arrived to begin work in spring of 2008, they only had access to one truck, whereas in previous years they had access to as many as four trucks. The evidence at trial established that Syncrude did not commence deploying deterrence until April 14, 2008. As a result, Syncrude did not have sound cannons deployed on the perimeter of the Basin before the birds were discovered on April 28, 2008. In fact, the Plan called for cannons to be placed no further than 240 metres apart on land or water and the evidence produced at trial revealed that Syncrude did not have enough cannons to achieve this density.⁸

As a comparison, the court looked at the procedures of two competitors. In 2008, Shell Albian Sands commenced setting up its deterrence program on March 24 and land cannons were placed on April 3 and between April 14 and May 1 floats were tested and set up was completed. Suncor's cannon deployment was initiated on April 8.⁹

4. Syncrude's Position

Syncrude's advanced the following arguments at trial included the following:

1. With respect to the federal charge, the Crown had failed to prove that Syncrude's activities were unlawful since the company was acting pursuant to provincial licences, permits, leases and approvals.
2. With respect to both charges, that it had established that it used due diligence to avoid the contamination of birds in its tailings pond.
3. It was impossible for Syncrude to prevent birds from landing on its tailings pond and the defence of impossibility should apply.
4. The proceedings were an abuse of process because Syncrude complied with all required approvals, permits, licences and leases.
5. The matter was too small to be of public interest and the doctrine of de minimus should apply to prevent a conviction.
6. The death of the ducks was the result of an Act of God and therefore no conviction should be entered.

Although the court reviewed the elements of each offence and whether in fact Syncrude had violated the provisions of the EPEA and MBCA, the main issue was whether Syncrude had taken all reasonable steps to ensure that waterfowl would not be contaminated in its Basin, regardless of whether or not they could ensure absolutely against wildlife contamination.

The court determined that Syncrude had failed to establish the defence of due diligence. Pursuant to its EPEA approval, Syncrude was obligated to have in place a system to prevent waterfowl from landing on the tailings pond and to ensure effective operation of that deterrent system. Specifically the court held that, "Syncrude did not deploy the deterrents early enough and quickly enough. This failure can be attributed to the absence of an effective documented procedure, inadequate training and expertise, the reduction in staff, the late hiring dates, delay in getting staff to work and not having equipment ready soon enough.... There [was] no evidence to suggest that these acts or omissions were in any way the product of scientific or expert analysis."¹⁰

Contrary to Syncrude's submissions, the court held that it was not impossible for Syncrude to comply with the law. In making this determination the court looked at both offenses and the defence of due diligence and ruled that Syncrude could have acted lawfully under the relevant statutes by using due diligence to deter the birds from the Basin. The court conceded that there is no existing industry standard for waterfowl deterrence but accepted as examples of reasonable alternatives, evidence that Shell and Suncor were able to commence deployment in April of 2008 and these operators had more comprehensive written procedures, oversight by individuals with appropriate training and advance planning and preparation equipment. The court acknowledged that while no one could make certain that waterfowl did not land on the Basin on April 28, 2008, the point was that the probability could have been reduced. In short, the court held that Syncrude did not establish a proper system to ensure that wildlife would not be contaminated by the Basin or take reasonable steps to ensure the effective operation of such a system.

Syncrude also argued the defence of "abuse of process". Such a defence may be found in a regulatory context where the accused reasonably believed, on the basis of representations by a senior government official that if it took certain steps and action by a specified date there would be no prosecution and the accused then proceeded to take the action.¹¹ The court found that there was no evidence to suggest that Syncrude was promised that, even if it failed to take all reasonable steps to deter birds from its tailings ponds, it would not be prosecuted.

Syncrude further argued the doctrine de minimis non curat lex, in that the law should not concern itself with such a trivial matter, claiming their deviation was a small trifle and if continued would weigh little or nothing on the public interest and should therefore be overlooked.¹² The court dismissed this defence by citing jurisprudence establishing the importance of environmental protection and the collective responsibility. The media attention and publicity of this trial is also arguably further evidence that the offences were not considered trivial by the community at large.

5. Comments

Syncrude argued that by finding the company guilty of the offences would effectively make tailings ponds, which are an essential part of the refining process for Alberta's oil sands, illegal. We fail to see how this decision has this result. By the courts multiple concessions that even a perfect and scientifically advanced waterfowl deterrent plan may have failed to prevent the April 28, 2008 incident, they acknowledged the potential exposure for liability and have set a standard for oil sands operators to take all reasonable steps to ensure such an incident is avoided. The impact of the decision is to force companies to review and update their environmental policies to ensure they are doing their due diligence to prevent contamination or at least the likelihood of contamination. Even though, some might argue that the death of 1,600 ducks is a minor incident with minimal long term effects, the point made by the court was that Syncrude's violation of provincial and federal legislation resulted from Syncrude placing itself in the impossible position to comply with its Plan.

One can further speculate that the outcome of this decision may have been different had the Government of Alberta notified Syncrude prior to the April 2008 incident that the Plan was not approved and had Syncrude complied perfectly with such Plan. If these had been the facts, Syncrude may have been able to establish the defence of due diligence.

The environmental impact of oil sands development cannot be denied and this decision has received considerable publicity, bringing this issue to the forefront of public debate. For the oil sands industry, the ducks and the environment, one can only hope that the resulting public pressure from the notoriety of this decision may force the Government of Canada, the Province of Alberta and the oil sands companies to put more effort into waterfowl deterrent research and perhaps regulatory change which is sensitive to the reality of the industry and the markets.

6. What's Next for Syncrude?

The court has yet to rule on what penalties and fines are to be imposed on Syncrude. The court is scheduled to make the determination on August 20, 2010.

The author wishes to acknowledge and thank Nicholas Hughes for his contribution to this article.

Footnotes

1 R.S.A. 2000, c. E-12 [EPEA] and S.C. 1994, c.22 [MBCA].

2 EPEA, supra note 1, s. 229 and MBCA, supra note 2, s. 13(1.8).

3 2010 ABPC 229 at para. 2 [Syncrude].

4 Syncrude, supra note 3 at para. 4.

5 Ibid. at para. 7.

6 Ibid. at para. 11.

7Ibid. at para. 23.

8 Ibid. at para. 111.

9 Ibid. paras. 35, 36 and 117.

10 Syncrude, supra note 3 at para. 126.

11 Syncrude, supra note 3 at para. 145.

12 Syncrude, supra note 3 at para. 162. The court cited as authority the Supreme Court of Canada decision of Gonthier J., Ontario v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031 at para. 55.

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