Can the Company Pay Your Fine for an OHS Offence?

An ON company stored chemical waste in drums near its manufacturing facility. Over time, the storage drums deteriorated and the waste leaked into the ground. The company and two directors were convicted of numerous environmental violations. The trial court fined the company $120,000 and each director $12,000. The trial court also barred the company from “indemnifying”—that is, paying or reimbursing—the directors for their fines. The appeals court ruled that the trial court had no right to ban the company from indemnifying its directors. The Ontario Business Corporations Act (Act) spells out when companies can, can’t and must indemnify officers and directors. So as long as the corporation met the Act’s indemnification requirements, the trial court couldn’t order the company not to indemnify its directors for the fines, the appeals court ruled [R. v. Bata Industries Ltd.].