The Ontario Ministry of the Environment ("MOE") recently published final environmental penalties ("EP") regulations under the Environmental Protection Act (the "EPA") and the Ontario Water Resources Act ("OWRA") (O. Reg. 222/07 and O. Reg. 223/07, respectively) and several related guidance documents. The regulations support the implementation of the EP provisions of the Environmental Enforcement Statute Law Amendment Act, 2005 (known as "Bill 133"), which allow the MOE to impose monetary penalties in response to unlawful spills and discharges and related violations under the EPA and OWRA. The EP regulations apply to facilities in the nine Municipal/Industrial Strategy for Abatement ("MISA") industrial sectors and similar facilities that discharge sewage to surface watercourses or private sewage works.
The EP regime has been controversial since its inception. Penalties of up to $100,000 per day will be assessed by the MOE and may be imposed in addition to prosecutions for the same violation. The regime is one of absolute liability: due diligence will not be a defence. The regime also places the onus on the regulated person to prove that a contravention did not occur (the MOE is only required to show it is more likely than not that a contravention occurred).
The EP regulations come into force on August 1, 2007 but will be implemented in two phases. Beginning August 1, 2007, EPs may be applied to major violations such as unlawful spills and related reporting failures. From December 1, 2008, EPs may be applied to minor violations such as failure to comply with an order to ameliorate an adverse effect.
The EP for a violation will be calculated based on the number of days the violation continues, the monetary benefit the regulated person gained from non-compliance and the type of contravention and its level of seriousness (the "gravity component"). In considering the gravity component of the EP, the MOE will take into account a number of factors including compliance history, toxicity of the substance and the extent of delay in complying. The gravity component of the EP will be reduced where an eligible environmental management system is in place and other prevention or mitigation measures were taken (such as installation of an alarm system). Entry into a settlement agreement requiring investment in "beyond compliance projects" may also result in a reduction of the gravity component of the EP (by up to 100% for minor violations and 75% for major violations).
Regulated persons subject to the EP regulations are also required to prepare spill prevention and contingency plans by September 1, 2008 pursuant to the Spill Prevention and Contingency Plans regulation (O. Reg. 224/07). A guideline document for implementing this requirement has also been released. Spill prevention and contingency plans prepared in accordance with the regulations (either as required or voluntarily) allow for certain exemptions from the broad spill reporting obligation introduced under Bill 133, which applies to every spill of a pollutant (pre-Bill 133, the reporting requirement was triggered if the spill caused or is likely to cause an adverse effect). Exemptions from the spill reporting requirements are set out in O. Reg. 675/98 as amended by O. Reg. 225/07. A guide to reporting spills and discharges and the exemptions of O. Reg. 675/98 has been released as well.
The regulations and guidelines are available on the Environmental Bill of Rights Registry, www.ebr.gov.on.ca, EBR Registry Number RA06E0013. Additional background information is available in Davies' earlier flashes on Bill 133 of June, 2005 and October, 2006.
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