Mining company officers and directors have no shortage of business responsibilities–from setting a strategic direction for their company to navigating industry changes. However, there’s one responsibility that transcends business and enters the realm of the personal: the duty of care imposed by Ontario’s Environment Protection Act (EPA) on company officers and directors.
The potential liability under the EPA could be overlooked, for the simple reason that the environmental focus for most mining companies is on their site rehabilitation requirements under the Mining Act. It’s important, however, to look beyond these requirements. If you are an officer or director of a company, you should know that the penalties for violations of the EPA are potentially severe–from heavy fines to jail terms for repeat offences–and that you may be liable even if you have no direct involvement in the breach.
The good news is that there are some straightforward steps you can take to significantly mitigate this risk.
Duty to take reasonable care
The EPA requires you, as an officer or director, to take all reasonable care to prevent your company from breaching the Act in any way. In particular, you need to take reasonable care to prevent specified types of breaches, such as by contravening requirements of a certificate of approval or discharging contaminants.
Whether or not you intended to break environmental laws is not a factor in being held liable. In fact, you may not have been personally involved at all in the actions that lead to a breach of the EPA. It’s merely enough that you failed to take reasonable care to avoid the offence.
So how do you ensure that you’ve taken the proper preventative steps, especially when you may not have direct control over actions that could lead to a violation? The most effective step is to set out a positive, precautionary action plan that you can later rely on to show that you took reasonable care to prevent your company from committing an EPA breach. Such a plan is typically referred to as an environmental management system (EMS).
An EMS is a documented series of systems and procedures designed to prevent breaches of the EPA. Your EMS will be unique to your company and its operations, but should have certain core elements to ensure you meet your obligations.
* Risk identification: The EMS should identify the risks that your company’s activities pose relating to potential EPA breaches, especially relating to critical breaches such as the discharge of contaminants.
* Best practice risk controls: The EMS should set out the measures your company will take to control and mitigate these risks. These measures should reflect the best practices in the mining industry and should include a detailed incident response plan, including the protocol to be followed in the event of a discharge or spill.
* Environmental compliance oversight: To avoid gaps in environmental compliance responsibilities, one employee should be named to be responsible for overall environmental compliance, including the effective operation of the EMS.
* Regular training: All employees should be trained, and periodically retrained, in operation of the EMS. This training does more than simply provide further evidence of reasonable care–it decreases the likelihood of an EPA breach occurring, and if a breach does occur, increases the likelihood of mitigating any resulting damage.
* Regular reports: The employee responsible for the EMS should provide you and other officers and directors with regular written reports on the operation of the EMS. This allows you to identify any potential weaknesses in the EMS that may be revealed over time. The employee should also provide you with a detailed report if a breach occurs, setting out the steps taken to respond to it and the steps put in place to ensure that the breach is not repeated.
* Regular review: The mining industry is constantly changing, and so will best environmental practices. Your company may also make significant changes to its operations that necessitate changes to your EMS. For these reasons, you should ensure your EMS is reviewed regularly and kept up-to-date to reflect what’s happening in your industry and your company.
While the Environmental Protection Act’s sanctions can be personally severe for officers and directors, the establishment and proper maintenance of an EMS goes a long way to meeting the reasonable care standard that the Act requires.
Robert Warren is a partner at WeirFoulds LLP in Toronto, practising in the field of public law advocacy. He has extensive experience before provincial and federal regulatory agencies, and on appeals and judicial review applications; his experience extends to policy matters. Robert can be reached at 416-947-5075 or [email protected].