Environmental regulators across Canada appear to be naming
directors and officers of companies personally liable for
environmental orders more frequently, particularly in situations of
corporate bankruptcy or insolvency. Directors and officers should
consider all available management strategies and actions to avoid
the issuance of environmental orders and, if environmental orders
are made, that the company has sufficient assets in place to cover
Legislation and "person responsible" for
The concept of "person responsible" for environmental
liability is broadly defined in environmental legislation across
Canada to potentially include current and past directors and
officers. Joint, several or retroactive liability may be imposed,
and any one or more of the "persons responsible" may be
named. Importantly, contracts do not alter regulatory liability as
a "person responsible".
Recent cases in Ontario and Alberta, including Baker v.
Ministry of the Environment, illustrate the potential scope of
an environmental regulator's jurisdiction to order current
and/or former officers and directors to cover remediation costs.
Since liability for remedial orders is joint and several, if the
corporation has no assets to cover the remediation costs they may
become payable from the officers and directors personally and there
likely will be no source from which to recover the funds expended.
Levying remediation costs against management of a polluting company
does not necessarily accord with the polluter pays principle, but
this is not a consideration in no-fault remedial orders.
Directors and officers must therefore be duly diligent when it
comes to the environmental affairs of their corporations and take
steps to protect both the environment and themselves. In general,
these steps might include engaging environmental consultants,
identifying the company's past, present or potential future
environmental liabilities, assessing potential personal
environmental liabilities and taking action to ensure the
environmental liabilities are both addressed and monitored.
Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
The Imperial Oil refinery pled guilty to one offence for discharging a contaminant, coker stabilizer, thermocracked gas, into the natural environment causing an adverse effect and was fined $650,000...
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