Canada: Precautionary Tale? BC Environmental Appeal Board Says "Polluter-Pays" And "Precautionary" Principles Not Applicable To The Permitting Process Under The BC Environmental Management Act

The British Columbia Court of Appeal in J.I. Properties Inc. v PPG Architectural Coatings Canada Ltd, 2015 BCCA 472 ("JI Properties") affirmed the "polluter pays" principle in the context of remediation cost recovery actions under the Environmental Management Act, SBC 2003, c 53 (the "EMA") However, in a recent decision by the BC Environmental Appeal Board it was held that neither the polluter pays nor precautionary principles apply to section 16 of the EMA which deals with granting permits for the discharge of waste.

In Toews v. British Columbia (Ministry of Environment) [2015] B.C.E.A. No. 25, the Environmental Appeal Board addressed, in part, the application of the precautionary principle and the polluter-pays principle to the interpretation of section 16 of the EMA which deals with granting permits for the discharge of waste. The Board confirmed that the polluter-pays principle was imported to Part 4 of EMA (i.e. the cost recovery framework) but refused to extend its application to section 16. The Board also distinguished the precautionary principle from a precautionary approach. The Board held that a cautious and technically rigorous approach should be adopted in assessing the potential risk of injury to human health and damage to the environment.

Facts

Between 1950 and 1954, Rio Tinto Alcan Inc. (formerly Aluminum Company of Canada) ("Rio Tinto"), established an aluminum smelter in Kitimat. Rio Tinto owned much of the land in the Kitimat valley and over time sold parcels to commercial and residential development. The residential lands retained an easement in favour of Rio Tinto allowing Rio Tinto the right to emit discharges into the air. Eventually, the Province moved to a "multi-media" approach to permitting, which resulted in a single authorization for permit holders to discharge different forms of waste. In 1999 Rio Tinto received a multi-media permit P2-00001 (the "Permit"), which authorized the discharge of effluent, emissions and waste. The permit specified a maximum daily discharge of 27 tons of SO2.

In or about 2007, Rio Tinto sought to amend the Permit in order to increase production at the Kitimat Smelter. In April 2013, pursuant to section 16 of the EMA, the Director amended the allowable emissions and increased the permissible amount to 42 metric tons per day subject to Rio Tinto's submission and implementation of an Environmental Effects Monitoring Plan ("EEMP") (the "2013 Amendment"). The Director confirmed specific impact threshold criteria in the fall of 2014 in a letter approving Rio Tinto's EEMP. This letter set out the "Key Performance Indicators", stipulating quantitative thresholds in relation to the impact on vegetation, on soils, and on water, but no such quantitative thresholds were set out in relation to human health.

In May 2013, Emily Toews and Elisabeth Stannus (the "Appellants") filed separate appeals against the decision of the Director, and Northern Region - Skeena, Ministry of Environment (the "Ministry"), to amend the Permit and the EEMP. Five other applicants also filed appeals. The Board held that the Appellants were indeed "person aggrieved" within the meaning of section 100(1) of the Act and allowed their request to appeal but declined to hear the merits of the five other appeals.

In October 2014, the Appellants applied to amend their appeal to include the 2014 letter. Unifor Local 2301 ("Unifor") also appealed the 2014 letter. The Board declined the amendment and to hear the appeal on procedural grounds stating that the fall of 2014 letter was not an appealable decision under the Act. Unifor successfully applied for judicial review [Unifor Local 2301 v. British Columbia (Environmental Appeal Board), 2015 BCSC 1592].

The British Columbia Supreme Court ("BCSC") determined, based on the standard of review of reasonableness, that it was unreasonable for the Board to have determined that Unifor should have appealed the Amendment increasing emissions as opposed to the 2014 letter outlining the Key Performance Indicators. To hold otherwise, the Court determined, would require anyone who thinks they may be adversely impacted by a second stage decision to bring a "prophylactic appeal" at the first stage.

The matter was remitted back to the Board for reconsideration in accordance with the BCSC's reasons. Unifor originally appealed the Letter of Approval on six grounds, one of which is that the Director erred in concluding that the Environmental Effects Monitoring Plan adequately protected human health and the environment. Of particular concern to the union, was the impact of the plan on the health of its union members at the Rio Tinto smelter. On re-hearing, the Panel found that Unifor was a "person aggrieved" within the meaning of section 100(1) of the Act [Unifor Local 2301 v. British Columbia (Ministry of Environment) [2015] B.C.E.A. No. 22]. The merits appeal does not appear to have been heard to date, nor is the matter listed in Boards hearing lists for 2016.

Following the BCSC's decision on Unifor, the Board voluntarily decided to reconsider its decision on the Toews and Stannus' appeals of the 2014 letter which were heard together [Toews v. British Columbia (Ministry of Environment) [2015] B.C.E.A. No. 21] (despite neither having appealed the Boards decision to decline to hear their original appeals of the 2014 letter). In the appeal on the merits [Toews v. British Columbia (Ministry of Environment) [2015] B.C.E.A. No. 25] the Appellants argued, in part, that the Director failed to apply, or improperly applied, the "precautionary principle or approach" and the "polluter pay principle" in exercising his discretion under section 16 of EMA.

The Board's Decision

The Polluter Pays Principle

The Board held that while it had previously determined that the polluter-pays principle was to be incorporated into Part 4 of EMA, with respect to liability for remediating contaminated sites (and upheld by the Supreme Court of Canada in Columbia Hydro and Power Authority v. British Columbia (Environmental Appeal Board), 2005 SCC 1), this appeal did not involve "contaminated sites" within the meaning of the EMA. By implication, the Board declined the applicability of the polluter-pays principle to the permitting process for the discharge of waste.

As the Appellants appeared to have abandoned this argument, the Board did not give any further details as to what distinguished the cost recovery regime from the permitting of waste discharges.

The Precautionary Principle

In discussing the application of the precautionary principle or approach to the interpretation of section 16 of EMA, the Board relied on its previous decisions wherein it held that the precautionary principle did not inform the interpretation of the permitting provisions in the EMA. In reviewing the general application of the precautionary principle and approach, the Board noted that phrases such as "precautionary principle" and "precautionary approach" although used in international treaties and Canadian environmental studies, have no uniform definition and, are not found in the EMA or its predecessor. Referring to the definition of the principle by the Supreme Court of Canada in 114957 Canada Ltée (Spraytech, Société d'arrosage) v. Hudson (Town), 2001 SCC 40, the Board further concluded that there is a difference between the precautionary principle and a precautionary approach. It held that had the legislature intended that decision makers apply either of the principles in exercising their discretion to approve permits for waste discharge, they would have drafted the legislation accordingly.

In reviewing the SCC's comments, the Board observed that the precautionary principle has been characterized by the Supreme Court of Canada as an "emerging" principle of international law. The Panel determined that none of the decisions before it stood for the principle that the precautionary principle is a widely accepted principal so as to become customary international law that should inform the interpretation of Canadian environmental statutes. The Board confirmed that because the EMA creates a scheme that addresses the competing interest of permitting waste to be introduced into the environment but also requiring protection of the environment, the "cautious" approach should be adopted in assessing applications to emit waste:

... a cautious approach is not the same as a "zero tolerance" approach. The Act provides a legislative scheme that authorizes the introduction of waste into the environment provided that any risk to the environment can be properly controlled, ameliorated and, to the extent possible, eliminated.

Conclusion

This decision clarifies that these international law principles cannot be randomly used and are only applicable to the extent they are domesticated by legislation. Further, where they are imported in a statute, there may not be a blanket application of those principles to the entire legislation. In such scenarios, interpretation and construction principles will be applied to determine which projects or processes the principles are meant to apply. This will vary from one statute to another and in different jurisdictions.

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