Ontarios government has finalized regulations that its says set the toughest penalty regime in Canada for those companies that spill, a further measure taken to protect the provinces water sources.
Industry needs to take every precaution to prevent our environment and, more specifically, our drinking water from being polluted, Environment Minister Broten said, adding that the aim of the penalties is to encourage companies to comply with environmental laws. Now it’s the law of the land that if you spill, you pay.
The new regulations:
— outline the scope, assessment and implementation of environmental penalties;
— outline how funds raised through penalties can be used for community environmental projects;
— describe the requirements for spill prevention and spill contingency plans; and
— formalize the requirements for notifying the ministry of a spill.
The regulations also outline how funds raised through penalties can be used.
A community environment fund was created by the Environmental Enforcement Statute Law Amendment Act passed in June 2005 to help communities affected by spills with environmental remediation and restoration projects. Projects considered for funding would represent projects over and above those directly related to spill cleanup, as industry is already required by law to pay all such costs.
These penalties, similar to those in New Jersey and California, apply to the companies in nine industrial sectors operating 148 facilities in Ontario that have been responsible for a significant number of spills to land and water each year. The ministry consulted extensively with industry representatives, environmental, community and health groups on the regulations that make the legislation effective.
Industrials spills affect the quality of life in Ontario communities, said Broten. Were confident that environmental penalties will reduce the number and severity of spills and protect Ontarians’ health and the environment.
Environmental penalties regulations will help to reduce industrial spills in Ontario by giving the Ministry of the Environment the power to impose monetary penalties on companies that spill to land and water. Additional regulations require facilities subject to environmental penalties to prepare spill prevention and contingency plans and codify spill reporting requirements already in practice.
The Environmental Enforcement Statute Law Amendment Act, formerly Bill 133, passed in June 2005, amended the Environmental Protection Act (EPA) and the Ontario Water Resources Act (OWRA). These amendments allow the Ministry of the Environment to impose financial penalties in response to unlawful industrial spills, unlawful discharges and other related environmental contraventions.
Previously, the ministry could only attempt to prosecute those responsible for serious spills. Court actions will continue to be necessary in some circumstances, but such proceedings can be lengthy and expensive. Environmental penalties give the ministry a remedy that can be applied swiftly, to encourage quick and effective compliance with Ontario’s environmental laws.
The regulations, filed on June 6, outline the facilities, and the types of violations that will be subject to environmental penalties, as well as how the penalties will be calculated and how the funds raised can be used. Penalties will be assessed for the violations identified in the regulations starting August 1, 2007.
Industrial Facilities Subject to Environmental Penalties
Environmental penalty regulations will apply to 148 facilities in nine Municipal Industrial Strategy for Abatement (MISA) industrial sectors whose operations discharge directly into a surface water body. The nine MISA industrial sectors include petroleum, iron and steel, industrial minerals, inorganic chemicals, organic chemicals and pulp and paper. They also include metal mining, metal casting, and electric power generation facilities.
Environmental penalties will not apply to municipalities, agricultural operations or food processing facilities and will only apply to land and water violations at this time.
The facilities that are subject to environmental penalties account for a significant portion of reported industrial spills to land and water from year to year. In 2003, these operations accounted for 30 per cent of reported industrial spills to land and 64 per cent of reported industrial spills to water. In 2004, they accounted for 30 per cent of reported industrial spills to water and 37 per cent of reported industrial spills to land.
Calculation of Environmental Penalties
The amounts assessed against companies that violate the law will be based on a number of factors related to the type of violation and the seriousness of the violation. Types of violations include improper reporting and record-keeping, exceeding discharge limits of certain substances and unlawful spills. Average penalties are expected to be about $1,000 for administrative violations and $10,000 to $20,000 for unlawful spills and spill-related violations.
The amount of an environmental penalty would be determined by an assessment of:
— the gravity, or the seriousness of the violation and its consequences
— the monetary benefit, if any, that the facility gained from non-compliance with Ontarios environmental laws and
— the number of days the violation continues.
The presence of a toxic substance in an unlawful spill or unlawful discharge increases the gravity portion of the penalty by 35 per cent. The Environmental Penalties – Code of Toxic Substances provides a list of 113 toxic substances that would result in such an increase.
Caps, Reductions and Settlement Agreements
There are some caps on penalties to ensure the penalty framework system is not punitive, but provides a deterrent to violating Ontario’s environmental laws.
While most major violations, like unlawful spills, are not capped, failing to report a spill is capped at a $100,000 for multi-day violations. All minor violations are capped at $60,000 or the calculation for a 180-day violation, whichever is less.
The gravity portion of the penalty can be reduced by up to 35 per cent if, at the time of the violation, preventative and mitigative measures to prevent spills and other violations had been taken, and an environmental management system was in place.
Entering into a settlement agreement can lead to a reduction in an environmental penalty amount through an investment in an environmental project. Such a project must be undertaken at the facility in violation, and must take the facility beyond compliance with the law while aiming to yield environmental and/or human health benefits.
Facilities would be eligible for reductions of up to 100 per cent of penalty amounts for minor violations and up to 75 per cent in reductions for major violations. Any amounts assessed as a monetary benefit the facility gained from the violation, are not included in any calculations for any caps or reductions.
Phased Approach to Implementation
Penalties will be phased in, allowing industry 16 months to fully adapt to the penalty structure. In the first phase, starting August 1, 2007, penalties will apply only to major violations such as spills and discharge exceedences. In the second phase, to be implemented December 1, 2008, other violations will also be subject to penalties. These violations include failure to have or operate in accordance with any industrial sewage works approval.
Community Environmental Fund
Revenue collected from environmental penalties will be deposited into a Special Purpose Account. All revenue collected will be made available to communities impacted by spills for remediation, restoration and related purposes. Environmental proposals from co
mmunity organizations will be accepted every year and will be assessed by technical experts to ensure they meet the criteria. As the Environment
al Protection Act already requires polluters to compensate for losses or damages that result from spills, the fund will not be required for compensation of the victims of spills and spill-related violations.
The ministry consulted widely with industry, environmental community and health organizations and the public during the development of the Act and the regulations.
Consultations identified a high level of interest in the process and included a consultation paper outlining objectives and guiding principles that was posted on the Environmental Bill of Rights Registry (EBR), and broad based regional consultations.
The regulations now in place were developed with the input of a stakeholder working group. Draft regulations were also posted on the EBR and all comments were considered as the regulations were finalized.
Contact 416-325-4000 or 1-800-565-4923 or visit www.ontario.ca/environment