Solid Waste & Recycling

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Due Diligence Defence Redefined

The Supreme Court of Canada decision in CanadianOxy Chemicals Limited v. Canada has, to a degree, turned the idea that a defendant can control its own defence on its head. The waste management industr...


The Supreme Court of Canada decision in CanadianOxy Chemicals Limited v. Canada has, to a degree, turned the idea that a defendant can control its own defence on its head. The waste management industry should note the now elevated regulatory oversight powers and the nature of the availability of warrants have been changed. Detailed information on company operations, previously difficult to obtain, will now be more easily obtained through the use of lawful search warrants.

Due diligence

Environmental offences are generally referred to as “strict liability offences.” Once the Crown has proven that an incident has occurred (such as a spill or discharge) the accused must prove “due diligence” or that it did everything that it could to prevent the incident, in order to avoid a conviction.

In preparation of defence, a company or individual accused of an environmental offence would normally call witnesses to testify that preventative measures were taken. Corporate records would be scoured in an effort to produce a paper trail to demonstrate that liabilities were assessed and action plans were put in place. Such documents would often include environmental manuals, checklists for the use of staff at sites, or external audits of procedures and activities.

“CanadianOxy Chemicals Limited v. Canada has, to a degree, turned the idea of the traditional defence of due diligence on its head.”

In many cases, the Crown attempts to bolster its case by calling witnesses or presenting documentary evidence to show that the defendant was not duly diligent. Traditionally, the Crown was at a disadvantage; the accused always had more intimate knowledge of its operations and was not required to voluntarily disclose all evidence (i.e., things that might show lack of due diligence). The Supreme Court of Canada decision in CanadianOxy changed this.

CanadianOxy

In CanadianOxy a plant operated by the accused discharged chlorine into local waters and this resulted in the death of a number of fish. The incident occurred when a power line was struck by a falling tree and resulted in a power outage. (The accused reported the incident.)

An investigator obtained a search warrant to review documents related to the occurrence. However they were not all copied and another order for a warrant to “re-seize” documents was obtained. As a result, a number of documents were used by the Crown to demonstrate that the accused had not satisfied the due diligence defence.

The Supreme Court of Canada, in a unanimous seven-judge decision, held that the Criminal Code provisions for search and seizure warrants were broad enough to allow the Crown to obtain documents to aid the defence of due diligence. The Court found that denying the Crown the ability to gather evidence in anticipation of such a defence would have “serious consequences” on the function of the justice system. The Court also acknowledged that the powers set out in the Criminal Code do not authorize “fishing expeditions” and that the gathering of evidence to disprove the due diligence defence did not fall under such a category.

Implications

The decision of the Supreme Court of Canada has implications for the entire country and foreign waste management companies with businesses here. While the Crown has been able to use similar evidence in the past, the decision in Canadian Oxy means that detailed information, previously difficult to obtain, will now certainly be available through the use of search warrants.

As it’s increasingly common for landfill operators, for instance, to have onsite regulatory officials, the regulator often has access to a large amount of information on such operations. In Ontario the practice of requiring onsite officials is reflected in numerous Certificates of Approval. These officials have intimate knowledge of site operations and likely have a good sense of what documents or other evidence might exist that could be used to disprove due diligence.

The message to those who carry out activities that could have some environmental liability is, once again, to maintain vigilance so that activities conform to environmental standards. Any written record that indicates otherwise can be held up to intense scrutiny in court and may form the basis of a rejection of a claim that due diligence was exercised.


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