Canadian Companies Face Environmental Enforcement in Canada and the US

Posted by on Oct 13, 2020 in Blog | 0 comments

Environmental Enforcement stories tend to get attention.  Sometimes it’s an indication of a trend or enforcement initiative, or it may be that a case has reached a conclusion.  Regardless, they are usually interesting unless, of course, it hits too close to home.

The two enforcement cases below couldn’t be more different.  The first case was interesting because we have been following the ongoing enforcement at dry cleaners in Canada… the second because it crosses the border and it has some interesting history.

Dry Cleaner Ordered to Pay $10,500.00

The first environmental violation was under the Tetrachloroethelene, or PERC, Act.  Like most other similar violations, this was not due to a release to the environment; it was administrative in nature.  This violation was the result of a container of wastewater that was discovered at a dry cleaner during inspection.  The container exceeded the allowable storage timeframe.

The Government of Canada’s Enforcement Notification states, “On September 30, 2020, 9626735 Canada Inc. (doing business as Mega City 1 Hour Cleaners), located in Scarborough, pleaded guilty in the Provincial Court of Ontario to two charges under the Tetrachloroethylene (Use in Dry Cleaning and Reporting Requirements) Regulations, made pursuant to the Canadian Environmental Protection Act, 1999.”

The Government’s notification also states that the dry cleaner will be placed on probation and ordered to pay three outstanding contravention tickets totaling more than $1,800.00.

This fine pales in comparison to what a Canadian Company had to pay for violating US Environmental Laws.

Canadian Company Pays under Superfund

A Canadian firm is liable under the US Superfund or Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and must pay $32 million.  The liability is associated with a site in the United States.  As with many of these Superfund sites, this site has a complex history.

My colleague, Jeffrey Bolin, Senior Environmental Scientist in our US Office, explained CERCLA this way.  “CERCLA or Superfund is a very tough and complex US law.  The law was established to make sure those responsible for pollution were paying to clean up sites and not leaving them abandoned for taxpayers to pay the bill.  For those sites without a viable owner, the “Superfund” would pay for the remedy.  Money was raised using taxes on chemical and petroleum companies (this fee is no longer collected).  The liability under CERCLA is joint and several, which means it is very easy to become a liable party, even if you only owned the property for a few minutes, so to speak.  CERCLA also has a provision for treble damages, which means if the EPA remediates the site, they can sue the responsible parties for three times the cost.”

Here are the facts and some history about the site as provided by Court House News.

If you don’t want to read the history below, the long and short of it is the mine operator, Sterling Centrecorp, must pay $32 million to cover the government’s cleanup costs at a gold mine in the Sierra Nevada Mountains.  The site contaminated local groundwater with arsenic.

History of the Mine Operation

Between 1934 and 1943, the Lava Cap Gold Mining Corporation (LCGMC) owned and operated the Lava Cap Mine.

Activity at the mine, essentially, ceased when, then, President Franklin Roosevelt’s War Production Board (Board) ordered non-essential mines (those not producing metals needed for the war effort) to cease so energy could be directed to other essential mining operations.  This was known as Order L-208.

Mining Operations

Mining provides essential materials for our society, but old sites in particular can be source of potential pollution (Photo by Dominik Vanyi on Unsplash)

On June 30, 1945, the Board revoked Order L–208.  However, LCGMC never resumed mining operations.  In 1952, LCGMC was acquired by Sterling, a Canadian corporation then known as Goldvue Mines Limited, through its wholly-owned subsidiary, Keystone Copper Corporation (Keystone).  Sterling took no actions at the Mine for decades.

Log Dams Fail

In 1979, one of the log dams (built decades ago) to contain the mill tailings (containing arsenic) partially collapsed, triggering a release of contaminated waste into the local water system.

Following the collapse, the Central Valley Regional Water Quality Control Board investigated complaints by the Mine’s downstream neighbors regarding the pollution and issued a Cleanup and Abatement Order (CAO) to Keystone, as title holder to the Site.  The CAO instructed Keystone to stop the discharge immediately and provide a report detailing needed improvements to the structural integrity of the dam.

No Action Taken

Neither Keystone nor its parent company, Sterling, conducted the required evaluation of the dam.  The dam remained in poor condition through the remainder of Keystone’s ownership of the Mine.  Through Keystone, Sterling eventually sold the Mine to an entity controlled by Stephen Elder in 1989.

In 1997, catastrophic flooding completely collapsed the log dam and washed an estimated 10,000 cubic yards of arsenic-contaminated mill tailings into the local water system.  Following this event, the EPA and the California Department of Toxic Substances Control (California DTSC) conducted an extensive response action under CERCLA to remove hazardous materials from the Site and to protect local residents from the contamination.  The EPA officially designated the Site as a Superfund site in January 1999.

Ordered to Pay $32 Million

In the end, Sterling was ordered to pay the $32 million to cover the cleanup costs.

The case was argued and submitted on October 25, 2019, in San Francisco, California (Ninth Circuit Court), and was filed on October 5, 2020.

There are many more details to this case, and you can read the entire case: United States of America and California Department of Toxic Substance Control v Sterling Centrecorp Inc. and Stephen P Elder, Elder Development.

These cases, though very different, demonstrate how environmental management has changed drastically over the years and why environmental issues should be taken seriously.

If you need assistance with an environmental management issue up to and including litigation support, feel free to contact me at 519-948-7300, Ext. 114.

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