Holding Poor Environmental Records Against Companies

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On May 17, the Ontario government introduced Bill 68, the Open for Business Act, 2010, which is designed to streamline government services and cut so-called “red tape.” One of the environmental highlights of this Bill is proposed amendments to the Ontario Environmental Protection Act (EPA) and the Ontario Water Resources Act (OWRA) that would adopt a risk-based approach for approvals and streamline the approval process.

The Ministry of the Environment (MOE) estimates that the risk-based approach to environmental approvals and an online application process would reduce application costs for companies by as much as 25%. But there’s a dark-side to the proposed changes, too.

Use of “Past Conduct”

The MOE posted a discussion paper on the proposed changes to the environmental approvals process in the Environmental Registry. In this paper, the MOE notes that although it currently has the ability to suspend or revoke a Certificate of Approval, it doesn’t have explicit authority to do so based on an approval holder’s compliance history. The MOE wants to have the explicit ability to refuse, suspend or revoke an approval for reasons of non-compliance. This ability would be used against those facilities that “continually and chronically show a disregard for environmental laws.”

To that end, Bill 68 would add the following clause to the EPA: “The Director may suspend, revoke or refuse to issue an environmental compliance approval if the past conduct of the holder of the approval or the applicant, or, if the holder or applicant is a corporation, of its officers and directors, affords reasonable grounds to believe that the person will not engage in the activity in accordance with this Act, the Ontario Water Resources Act or the regulations made under either of those Acts.”

The MOE’s discussion paper implies that this power will be used against companies that habitually commit environmental violations. But the actual language in the bill seems broader. It says the Director can suspend, revoke or refuse to issue an approval if, based on the company’s or its officers’/directors’ past conduct, it has “reasonable grounds” to believe the company won’t comply with environmental requirements. So could the Director refuse to issue an approval because a company has one environmental violation from 10 years ago? Because one of its officers was convicted of an environmental offence while working for a different company? Because the company had an environmental incident in another country?

In addition, the bill refers to “past conduct”—not prior convictions. So could prior environmental incidents be held against a company even if it wasn’t charged with violations based on those incidents?

What Do You Think?

On its face, it seems reasonable to consider a company’s entire environmental compliance record when deciding whether to issue it an environmental approval. But does the language in Bill 68 go to far? Tell me what you think!