Canada: $3.8M Fine For Pipeline Oil Leak

Last Updated: June 27 2019
Article by Paula Lombardi

On June 12, 2019 Husky Oil Operations ("Husky Oil") pled guilty to one count under section 36(3) of the Fisheries Act and one count under section 5.1(1) of the Migratory Birds Convention Act.

The charges were the result of a leak of approximately 225,000 litres of blended heavy crude oil from one of Husky Oil's pipelines that occurred between July 20 and 20, 2016. It was estimated that approximately 90,000 litres of the heavy crude oil migrated to and entered the North Saskatchewan River near Maidstone, Saskatchewan. The company has been fined $2.5 million for contravening the Fisheries Act and $200,000 for contravening the provisions of the Migratory Birds Convention Act, 1994.

The provincial court Judge Dyck accepted a joint recommendation on the appropriate amount of the fine to impose on Husky Oil. In the decision Judge Dyck stated, "This case has been a difficult and challenging one for a number of reasons." and noted that while two alarms went off, they were neither recorded nor reported to senior staff.

Environment and Climate Change Canada's National Environmental Emergencies Centre ("NEEC") responded to the July 2016 spill. Environmental emergency officers provided regulatory oversight of the remediation and clean-up activities and were onsite from July 22, 2016 until early October 2016. The NEEC has also conducted annual visits of the area following the release to assess the water and shorelines in the area following the spring ice breakup.

Husky Oil estimated spending more than $ 140 million on the cleanup in a news report following the hearing.

Three Indigenous communities in the area filed victim impact statements claiming that the cleanup was insufficient. The spokesperson for these communities stated that birds, wildlife and fish in the area continue to suffer the effects of the contamination and the First Nations have lost the traditional use of their lands.

As a result of the federal conviction, the company's name will be added to the Environmental Offenders Registry.

The fine will be directed to the Environmental Damages Fund and used to support projects relating to the conservation and protection of fish and migratory birds within the North Saskatchewan and/or Saskatchewan Rivers (and the area watersheds). The prosecutor with Public Prosecution Service of Canada stated that:

"Various groups (including) non-government organizations, universities, Indigenous organizations, municipal and provincial governments can apply with projects to put that to use for the purposes that we set out in the sentencing order and that was relating to the remediation of habitat and research relating to fish and migratory birds."

The Environmental Damages Fund is administered by Environment and Climate Change Canada. It was created in 1995 to provide a mechanism for directing funds received as a result of fines, court orders, and voluntary payments to priority projects that will benefit our natural environment.

The company's name will also be added to the Environmental Offenders Registry, which contains information on convictions of corporations obtained under federal environmental laws.

In addition to the guilty plea to the federal offences, the company also pled guilty to one count under the provincial Environmental Management and Protection Act, 2010. Husky was fined an additional $800,000 under the Saskatchewan Environmental Management and Protection Act and assessed a 40% victim impact surcharge of $320,000.

The province is anticipated to be releasing its report on the spill in the next few days.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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