Canada: News In The Legislature And In The Courts

The Department of Fisheries and Oceans recently proposed Bill C-45, the Fisheries Act, 2007 (New FA). It is designed to revoke and replace the 138-year old Fisheries Act, modernize the way fisheries are managed, protect aquatic ecosystems and ensure the long-term sustainability of Canadian fisheries. However, if enacted, the New FA would retain many core features of the existing Fisheries Act, including the prohibition of the harmful alteration, disruption or destruction (HADD) of fish habitat and of the deposit of deleterious substances in waters frequented by fish. The New FA would modify the existing Act’s environmental provisions to report to certain authorities an occurrence or likely occurrence of an unlawful HADD or deposit of a deleterious substance; to take all reasonable corrective measures concerning a reportable HADD or a deposit of a deleterious substance; and to comply with requirements regarding exposure to civil liability as a result of a HADD or a deposit of a deleterious substance. Violations of the HADD and deleterious substance deposit provisions would continue to be handled by the courts, although alternative measures agreements would be an option for persons alleged to have committed an offence; these persons could negotiate a return to compliance with the Department of Fisheries and Oceans.

For more information, see www.dfo-mpo.gc.ca/media/infocus/2006/20061213_e.htm.

The Ontario government has proposed potential changes to Ontario’s brownfields regime. This proposal addresses, among other things, some barriers to brownfields redevelopment, including potential liability both under the Record of Site Condition (RSC) framework and for the remediation of abandoned mines on Crown land. The proposal relating to the RSC framework includes clarifying certain "re-openers" (the qualifications to the limited protection from administrative orders that RSCs offer). For example, the document considers changing the re-opener that allows the Ministry of the Environment (MOE) to issue an order against an RSC holder if historical contamination migrated from the RSC property to another property after the certification date. This change would prohibit such orders if, for example, a certain procedure was followed to obtain the RSC and if the concentration of the migrated historical contamination does not exceed the site condition standards that would apply to the property with the most sensitive use in the vicinity. The proposal also considers amending the Mining Act to limit the liability of private persons who participate in the rehabilitation of Crown-held abandoned mines in Ontario.

The MOE is accepting written comments until February 15, 2007. For more information, see www.ene.gov.on.ca/envregistry/029222ea.htm.

On January 11, 2007, the MOE proposed amendments to Ontario Regulation 347 that would effectively ban the burning of "waste-derived fuel" for comfort heating or heating for materials. This ban would take effect immediately upon the amendments coming into force for all facilities except those that had received a certificate of approval issued before January 11, 2007, under section 9 of the Environmental Protection Act, authorizing this activity. For these facilities, the amendments would take effect on June 1, 2009. The ban would not apply to waste-derived fuel sites in designated areas in northern Ontario or to agricultural operations that burn their own used oil.

Written comments on the amendments can be submitted to the MOE until February 10, 2007. For more information, see www.ene.gov.on.ca/envregistry/029109er.htm.

The Securities and Exchange Commission recently issued an administrative cease and desist order, settling a significant case involving alleged misstatements by a major chemical company regarding environmental reserves. The SEC order, In re Ashland Inc. and William C. Olasin, found that Ashland violated reporting, record keeping and internal control provisions of the Securities Exchange Act of 1934 regarding its environmental reserve practices. The order also found that Ashland’s former director of environmental remediation caused the violations by improperly reducing Ashland’s cost estimates for remediating environmental contamination at dozens of sites. Ashland allegedly used these improperly reduced estimates to determine its environmental cash reserves and, as a result, materially understated its environmental reserves and overstated its net income in public filings. Under the settlement, Ashland is required to strengthen its internal controls for determining environmental reserves and to retain an independent auditor and outside firm to review its policies, procedures and internal controls for determining environmental reserves and for soliciting and investigating internal complaints. This settlement signals the SEC’s strengthened enforcement of environmental disclosure, making it even more important for internal controls to rigorously consider and review the basis for environmental reserves (and revisions to environmental reserves). For more information, see
www.sec.gov/litigation/admin/2006/34-54830.pdf or www.sec.gov/news/digest/2006/dig112906.txt.

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