Don’t Rely on Workers to Develop Environmental Compliance Procedures

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Under the Fisheries Act, a company had to report the weight of fish it purchased. A weigh master filled out a tally sheet he designed himself to record the amount of snow crab the company was buying. Two government officials also recorded the weight but underreported the total by 5,000 pounds. Before the offloading process was done, another worker took over for the weigh master. He submitted a purchase slip based not on the weigh master’s correct number from the tally sheet but on the incorrect number from the officials. As a result, the company was charged with making a false statement to the government under the Fisheries Act. The court convicted the company, noting that it neither had a system to ensure that the weight was correctly reported nor provided training to weigh masters on properly recording the required information [Walsh v. HMQ].

THE PROBLEM

When a company is charged with an environmental violation, it can avoid liability by proving that it exercised “due diligence”—that is, that it took reasonable steps to comply with the law and prevent violations. Although the required reasonable steps will vary depending on the situation, at a minimum, a company must have formal procedures and policies in place to ensure environmental compliance and proper training for workers on those policies and procedures. The Walsh case is a good example of how a company can be found liable when it lacks these basic compliance components and instead relies on informal procedures, such as allowing workers to use forms they’ve designed themselves and fill out official government forms without the proper training.

THE EXPLANATION

As noted above, what constitutes “reasonable steps” will depend on the specific circumstances of the case. But when you read court decisions analyzing due diligence defences in environmental prosecutions, you see that courts expect companies to take certain basic steps to prove due diligence. The company’s due diligence defence in the Walsh case failed because it missed the boat on two of these steps:

Formal compliance policies and procedures. The company knew it was required to accurately report the weight of any fish it bought. But it didn’t have a system or procedures in place for recording the weight, submitting the appropriate forms and ensuring that the forms were accurate. In fact, the tally sheet the weigh master used to record the snow crab’s weight was one he’d designed himself. So the only system in place, observed the court, was an informal practice that the workers themselves adopted on their own.

The company should have set up formal procedures to ensure compliance with the reporting requirement. For example, it should have created a tally form like the homemade one used by the weigh master and required workers to use it for comparison and checking purposes. It should have also required weigh masters to compare the numbers they recorded to those recorded by government officials to verify the accuracy of the recordings. And it should have established some sort of “cross-check” procedure for situations in which two different weigh masters were involved in a vessel’s offloading, added the court.

Training. Given the lack of formal procedures for accurately reporting the required weights, it’s no surprise that the company didn’t provide any instructions or training to weigh masters to ensure that the correct information was recorded on purchase slips.

THE LESSON

The company can’t rely on workers to develop their own environmental compliance procedures. It must have a formal EHS program that contains specific procedures and policies designed to satisfy environmental requirements. And the duty to ensure that the company has such a program falls on the shoulders of you and your fellow officers. Although not required by the environmental laws, voluntary standards such as ISO 14001 and best practice call for the implementation of an environmental management system with five key components:

1. The development and adoption of an environmental policy to which senior management is committed;

2. A planning process that identifies all of the environmental aspects of a facility’s operations and legal and other requirements, and establishes a set of clearly defined objectives and targets for environmental improvement as well as programs to achieve those objectives and targets;

3. An implementation and operation system that includes procedures for operational controls of environmental impacts and programs for training, awareness and competence among all workers;

4. Creation of a system of checking that includes reporting of non-compliance, taking corrective and preventive action and recordkeeping with regard to environmental management and compliance; and

5. A management review process through which senior management reassesses the suitability, effectiveness and adequacy of the system at appropriate intervals to assure continuous improvement.

SHOW YOUR LAWYER

Walsh v. HMQ, [2010] NLTD 77 (CanLII), April 14, 2010