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 FALL 1999 |
Table of Contents
The Province
HAZARDOUS WASTE REGULATION
Ontario Minister of the Environment Tony Clement fired his first regulatory salvo in the battle to build credibility for the Harris government's environment portfolio. Reacting to an investigation of Philip Enterprises Inc. disposal practices at the Taro East landfill in Stoney Creek, Minister Clement announced a six-point plan. Part of the plan includes the promise to review and revise the hazardous waste manifesting and disposal regulation to be the toughest in Ontario history, with a view to strengthening and modernizing it to become comparable to, and compatible with, U.S. rules. The announcement included immediate amendments to Reg. 347 intended to close regulatory loopholes in hazardous waste definitions and practices.
The MOE investigation reported that Philip accepted large quantities of hazardous waste from CyanoKEM in Michigan, mixed the waste with concrete and dumped it in the Taro East landfill. Taro East is not licenced to accept hazardous waste. Philip had successfully persuaded the MOE that the waste, once mixed with the concrete, was stablized and was no longer hazardous waste as defined in Reg. 347.
The amendments to Reg. 347 make explicit that merely mixing hazardous waste with non-hazardous substances is not enough to deregulate the waste. The amendments finally give legal effect to the MOE's Registration Guidance Manual for Generators of Liquid Industrial and Hazardous Wastes. The guideline dealing with the classification and de-listing of hazardous industrial wastes, has been around since 1985.
Controversy continues to swirl around the Taro East site. The Philip practices were approved by the MOE. The investigation did not reveal any non-compliance by Philip. However, there are concerns about the long-term stability of the waste/concrete mixture. The Minister stated that the MOE will amend Philip's Certificate of Approval, and approvals for similar sites of concern. Were these amendments needed on an emergency basis? The MOE stated that the amendments merely clarify existing policy. Philip obtained its approvals under that policy. It is not clear whether the amendments will significantly change the MOE's legal authority, or the validity of Philips' actions.
The amendments to Reg. 347 make explicit that merely mixing hazardous waste with non-hazardous substances is not enough to deregulate the waste. The amendments finally give legal effect to the MOE's Registration Guidance Manual for Generators of Liquid Industrial and Hazardous Wastes.The guideline dealing with the classification and de-listing of hazardous industrial wastes, has been around since 1985.
In response to the investigation, the Minister noted that MOE policies and practices should have been stronger. We hope that the Minister's vactions signal the government's intention to revive environmental protection in Ontario, rather than a reflex response to criticisms of the MOE in the investigation's report. You can link to the amendments from Environmental Registry posting RA9E0005.
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The Courts
ENVIRONMENTAL DILIGENCE WARNING:
SUPREME COURT PRIES OPEN DOORS TO INVESTIGATORS
Companies and municipalities will have to pay closer attention to environmental management and documentation after a recent Supreme Court of Canada decision. In CanadianOxy Chemicals the Supreme Court gave environmental investigators broad search warrant powers to seize process records, plant operation and maintenance records, and employee training time both before and after the alleged offence.
The Supreme Court held that investigators could use the warrant to seize evidence intended to evaluate or disprove a company's due diligence defence. A search warrant allows investigators to unearth and preserve as much relevant evidence as possible. That evidence is not limited to evidence of the offence itself, but extends to evidence of extrinsic factors such as the accused's motive or the failure to exercise due diligence
The case arose under the federal Fisheries Act from a fish-killing discharge of chlorine into Vancouver's Burrard Inlet. The federal investigator, after several visits to the plant, made a written request to the company's lawyer for technical information to assess whether the discharge had been preventable. When the company gave only sketchy answers, the investigator obtained a search warrant and ultimately seized 139 items under the warrant, plus 73 additional items under the plain view doctrine. The investigator sought, among other things, effluent discharge records, effluent water quality sampling and analysis records, mechanical and instrument maintenance records, environmental control records, instrument calibration records and flow rate calculations covering an extended period of time before and after [the date of the alleged offence]. He also sought and seized other business records, correspondence, maintenance reports and company personnel records.
The company argued that the seizure of evidence should be limited to evidence of the offence only. The Supreme Court said that the Crown must be able to fairly seek and obtain evidence rebutting the accused's defences.
Willms & Shier helps Canada's leading industries evaluate legal compliance, due diligence and document control systems. Call John Willms or Donna Shier to hear how Willms & Shier can help protect your organization from environmental convictions and lawsuits.
ONTARIO'S ENVIRONMENTAL ASSESSMENT AND APPEAL BOARDS COMBINE
The merger of the Environmental Assessment and Appeal Boards appears to be complete. The Boards now share offices, a Chair (Carl Dombek) and a new, informative Web Site. The site includes a summary of recent decisions, an archive of past decisions, Rules of Practice and a hearings calendar. The Board has even made decisions, hearings calendar and Rules available for download in Palm Pilot format.
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The Feds
NEW CEPA PASSES: TO TAKE EFFECT IN 2000
Bill C-32, the new Canadian Environmental Protection Act, received Royal Assent on September 14, 1999. The new Act will not take effect until proclamation by the government, likely during the first quarter of 2000. Federal Environment Minister Anderson had threatened to drop the Bill rather than take Senate changes back to the House. Despite a controversial debate, the Senate made no changes.
Environment Minister David Anderson announced that $57 million will be added to the environmental protection budget next year to be spent in the implementation of the New CEPA- much of the funding will go towards accelerating the assessment of some 23,000 substances to determine whether they are toxic. You can find a link to the full text of Bill C-32 on theWillms & Shier website.
BIOTECHNOLOGY, AGRICULTURE AND ENVIRONMENT: UPDATE
Summary: Genetically altered plant and animal products have quickly become a significant contributor to agriculture, and a significant portion of Canada's domestic crops are grown from genetically altered stock.
There are a number of vocal opponents of the use of biotechnology in food production and products. Activists are lobbying for strict rules, labeling or prohibitions, and are about to launch antitrust lawsuits. Consumer protests and boycotts have caused some food processors to voluntarily prohibit genetically altered components in their food products.
The Canadian Government supports the application of biotechnology in the agriculture industry through grants and subsidies.
Biotechnology products have been shown to have some harmful health and environmental effects (allergens can be transferred; pesticide-secreting crops can be toxic to benign insects as well as target pests).
Proposed regulations will soon transfer responsibility for environmental assessment of biologically enhanced food, drugs and cosmetics from Environment Canada to Health Canada. In practice, assessment chores will be shared with Agriculture Canada's Canadian Food Inspection Agency.
The Main Issues
Modern biotechnology, according to the United Nations Food and Agricultural Organization, encompasses tissue culture, immunological techniques, molecular genetics and recombinant DNA techniques in all facets of agricultural production and agro-industry.
The most controversial of these technologies are the recombinant DNA techniques of genetic manipulation and transgenetics. Products are sometimes referred to as Genetically Modified Organisms (GMO). Gene manipulation means engineering an organism's own genetic makeup intended to speed up natural selection to promote beneficial characteristics. Benefits include creating a healthier, pest-resistant organism, or stimulating the organism to secrete or produce nutrients or medications.
Transgenetics is the introduction of genetic material from one species into the genetic structure of another species. Inserting genetic material from wild broccoli or halibut into the genetic framework of tomato plants increases their cold tolerance.
The scope of modern biotechnology does not include traditional animal breeding or plant hybrids. Modern biotechnology is 60 years old, but has only really taken off in the last 10 or 15 years.
Genetic engineering in animals extends to cloning (Dolly the Sheep) and the development of 'improved' species i.e. the University of Guelph's Enviro-Pig, intended to be a less prolific and stinky manure producer.
What Are the Concerns?
Environmental and health groups are concerned about the undetectable nature and pervasiveness of biotechnology in food. On the tangible side, they are worried about unintended side effects, such as the inadvertent mutation of superpests and superweeds, allergic reactions and cancer. Allergens can be transferred between species. Soya beans crossed with Brazil nuts provoked a reaction in people allergic to nuts.
Some critics fear that the pharma-chem giants like Monsanto are bent on dominating the world agri-business through vertical integration, from genetically engineered seeds to fertilizers and pesticides, akin to the way MicroSoft is alleged to have tried to dominate software. They argue that the pharma-chem giants are unscrupulous and will use any means possible to eliminate competition and capture markets. Activists plan to launch a salvo of antitrust lawsuits shortly (see below).
There are ethicists, who believe that such tinkering with Mother Nature is unholy.
Others are justice critics, who insist on "right to know" regulation - open and unbiased research; notice to farmers, food processors, and consumers that genetically manipulated organisms were used somewhere along the line.
What Are The Facts?
In Canada, the federal government highly encourages biotechnology in agriculture. There has been $700M in subsidies so far - $400M from the feds, $250M from provinces other than Ontario and $50M for a National Biotechnology Strategy. According to critics, little has been earmarked for risk assessment or environmental fate or epidemiological research. Ontario has taken no role or position.
In 1999, 35% of Ontario corn and soya crops (up from 15% in 1998) will be grown from genetically modified seeds. 60 to 70% of Ontario's canola crop this season will be herbicide resistant.
Another product widely in use (25% of Ontario crop) is RoundUp Ready soya beans. RoundUp is a Monsanto herbicide that kills practically any plant it encounters except Monsanto-developed RUR soya beans.
Industry Canada is the lead agency. Agriculture Canada is a booster for biotechnology, while it's Canadian Food Inspection Agency (CFIA) is the only regulatory watchdog a potential conflict of interest. CFIA will hold a major role in the imminent regulatory revamping of biotech environmental assessment. (See below)
What Have Been the Reactions So Far?
The Ontario farming community has kept at least 20% of all corn crops BT-free, to sustain a population of pests that will not force a resistant mutation. This is one of the conditions imposed on the agro-chem manufacturers by CFIA.
The Ontario government is picking up the threads of the biotechnology policy that has been under intermittent development for about 10 years.
In response to public concern, Gerber and Heinz have promised that their North American baby foods will not include genetically altered material. Some other food processors have refused to take this altered material as well.
Consumer protest/boycott is strongest in Europe, and has forced Nestle, Cadbury, Marks & Spencer, Sainsbury (a U.K. supermarket chain), McDonald's Restaurants (U.K.) and Unilever to state that they will have none of it in their products/stores. Japanese brewers Kirin and Sapporo have sworn off bioengineered malting barley.
Canada has instituted a project to establish voluntary labeling standards through The Canadian Council of Grocery Distributors and the Canadian General Standards Board. Under the Food and Drugs Act, labeling is mandatory when nutritional changes are made to the product, or to alert consumers of possible health concerns such as the presence of food allergens. Canada is also a member of the Codex Alimentarius Commission, an international standards setting body for food. Through its Food Labelling Committee, which is chaired by Canada, Codex is developing international guidelines for the labelling of foods derived from biotechnology.
Activists are planning to file antitrust lawsuits in as many as 30 countries in the next few months. Opponents of biotechnology, including Greenpeace and the Foundation on Economic Trends, charge that agro-chem companies, grain traders and processors are using biotechnology to dominate world agricultural markets.
Perhaps in response, Monsanto announced on October 4, 1999 that it will not market so-called Terminator seeds sterile seeds that would require farmers to purchase a new stock of seeds each year.
The European Union has enacted regulations for mandatory labeling of novel foods, including foods containing or made from genetically modified organisms. Other countries have attacked this strategy as a non-tariff trade barrier.
Canada is a signatory to the international Convention on Biological Diversity. Article 19.4 calls for a protocol to address potential risks to biodiversity. Canada, the U.S., and four other exporters of agricultural products are lobbying to exempt agricultural products from the BioSafety Protocol.
Canada will participate in the upcoming World Trade Organization negotiations in Seattle. Canada advocates the creation of a WTO working party on biotechnology to evaluate existing rules for trade in genetically enhanced products.
New Food, Drug and Cosmetic EA Regulations Coming
Responsibility for assessing environmental impacts of food, drug and cosmetic biotechnology products is about to pass to CFIA and the Department of Health. This consolidation of environmental and health assessment responsibility will take effect under regulations proposed this summer under the Food and Drug Act. Pursuant to these regulations, and the passing of the new Canadian Environmental Protection Act (CEPA), food, drug and cosmetic biotech products will be exempt from CEPA's New Substances Notification Regulations. These products will be assessed for health and environmental impacts under new Environmental Assessment Regulations under the Food and Drug Act. The proposed regulations were published in the July 3, 1999 Canada Gazette Part I. Biotechnology products include foods, drugs and cosmetics that are microorganisms, cultured cells or transgenetic animals or products derived them or from genetically altered plants.
CFIA will carry out the environmental assessment of the animal or plant, while Health Canada will assess the products hopefully reducing duplication. Proponents will pay fees to offset government assessment costs.
EMISSIONS TRADING PILOTS GENERATING REDUCTIONS
While the federal government and stakeholders consult on emission reduction strategies, provincial government/industry partnerships have begun pilot emission credit trading programs. Greenhouse gas credits and NOX VOCs credits are being traded as commodities.
Reductions of acid rain and smog emissions should be purchased from regional 'airshed' sources, to ensure that local air quality is improved. Greenhouse gas trading is not currently restricted geographically - in theory carbon dioxide reductions in South America can be purchased by Ontario generators. The goal is the reduction of global warming not local air quality.
Currently there are two pilot emissions rading programs operating in Canada PERT and GERT. PERT, spearheaded by Ontario industries, primarily targets NOX VOC smog precursors. GERT, led by British Columbia, includes national industry associations and government agencies, and is aimed at reducing greenhouse gas (GHG). Canada's Climate Change Voluntary Challenge and Registry Inc. (VCR Inc) registers and monitors progress toward achievement of voluntary commitments. The VCR will register trades submitted by participants.
Emissions trading is not part of the formal regulatory compliance framework. However, companies that participate in reducing emissions through these programs will be given credit for their reductions when legislative schemes are enacted.
Commodity exchanges are gearing up for anticipated emissions trading bonanza.
Emissions trading programs permit generators to purchase emissions credits from other participants, instead of requiring the generator to change its own processes or install additional pollution controls. For example, a generator could pay a municipality to capture methane produced by the municipality's landfills and that otherwise would be vented to the atmosphere. Methane has a higher GHG rating than carbon dioxide large volumes of carbon dioxide emissions can be offset eliminating smaller volumes of methane emissions. The net effect on climate change is arguably the same. Alternatively, the generator could purchase emission reductions from a company that has undergone an energy efficiency retrofit of its operations. The retrofit has lowered the company's fossil fuel requirements and reduced the company's contribution to GHGs.
Canada's pilot programs have already registered major purchases and sales of emissions credits, across provincial and national boundaries. For example, under the PERT program, Ontario Hydro received $400,000 for the sale of 538 tons of emission reduction credits in the State of Connecticut. Hydro 'earned' these credits by using new equipment and processes to cut current operating emissions by that amount. Under the GERT program, Hydro's successor Ontario Power Generation Inc. is buying almost 90,000 tonnes of CO2 emission reductions expected during 1999 when hydroelectrically-generated power at Star Lake displaces fossil fuel-based power currently generated on the Avalon Peninsula in Newfoundland.
PERT - Pilot Emissions Reduction Trading Project
PERT is an industry-led initiative evaluating emission reduction trading as a tool to assist in the reduction of smog and other air pollutants in the Windsor-Quebec corridor. PERT is based on a similar program in the Northeastern U.S.. About 30 industries from Ontario and the U.S., have signed the PERT Letter of Understanding with the MOE. The agreement was recently extended to March 31, 2001. PERT is developing principles and program elements for creating, recognizing and trading Emission Reduction Credits (ERCs). These ERCs are to be readily marketable and will count toward regulatory or voluntary emissions limits in Ontario and adjoining jurisdictions.
On October 26, 1999, Ontario Power Generation Inc. announced that it was seeking a PERT review of its proposed 2.5 million tonne purchase from U.S. alternative power producer ZAPCO. The emission reduction credits come from landfill gas collection systems operated at over 20 sites in the U.S. during 1998, 1999 and into 2000. According to Ontario Power Generation Inc., this transaction also helps produce other environmental benefits by displacing higher greenhouse gas emitting electric power production and improving regional air quality in the eastern U.S. and Canada. Ontario Power Generation Inc. has committed to voluntarily stabilizing its emissions at 1990 levels of 26 million tonnes of CO2 equivalent, from 2000 onwards. By subtracting these emission reduction credits from its actual emissions, OPG takes the position that it will meet its voluntary commitment at a lower cost than it could achieve by controlling its own emissions. Critics are outraged at OPG's plan to purchase $15-$20 million of credits in the next year to offset its excess pollution.
GERT - Greenhouse Gas Emission Reduction Trading Pilot
GERT is a government/industry pilot launched in June 1998 to develop practical experience with a market-based approach to meeting the Kyoto greenhouse gas (GHG) reduction targets. The project is designed to provide industry, governments and other organizations with the opportunity to buy and sell emission reductions. Atmospheric concentrations of GHGs, primarily carbon dioxide, methane and nitrous oxide, have been rising. GERT is intended to promote cost-effective GHG reductions.
Under GERT, buyers and sellers of emission reductions submit documentation on traded projects to a multi-stakeholder committee for review. If the emission reductions satisfy the GERT requirements, they are registered and will be eligible for recognition against future compliance obligations.
GERT partners include a number of provincial governments and private sector partners including the Canadian Association of Petroleum Producers, Canadian Gas Association, Canadian Pulp and Paper Association, Canadian Electricity Association, as well as a number of other industry associations and public interest groups.
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Engagements of Note
Special Acknowledgement
Willms & Shier recognizes the courageous and humanitarian acts of Kirk Walstedt and other members of the Walstedt family during the tragic multi-vehicle accident on Highway 401 in Essex. We offer our deepest sympathies to those involved in the accident, and to their families.
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| Revised: April 10, 2001. ©Willms & Shier Environmental Lawyers LLP, 2004. |
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