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The long-awaited Environmental Penalties Regulation, O.Reg. 222/07, comes into force today. This is an administrative penalties regime for environmental offences like the civil penalties widely used in the US. It has not previously been used in Ontario environmental law.

In the new system, environmental penalties (EPs) for contraventions will be imposed by the Director (MOE staff) instead of by the courts. There is no presumption of innocence, and no protection against double jeopardy.

Who?

For now, EPs will apply only to companies in nine industrial sectors (MISA-type companies) that discharge effluent to surface watercourses or to private sewage works. In the first Phase, these “regulated persons” will be subject to EPs for spills and unlawful discharges; in Phase II (target, Dec. 1, 2008), these same persons will also be subject to EPs for a wide range of other contraventions. The regulation does not state when EPs will be extended to other sectors of the economy.

How Much?

Despite pleas that the EP system be simple, transparent and predictable, penalty calculations are still complex and discretionary, and involve several novel concepts. For example, what spills “have the potential” to cause material discomfort? What contraventions will “interfere with the Ministry’s capacity to protect and conserve the natural environment”? What amount of penalty is “consistent with promoting internal discipline among regulated persons”?

The basic elements of each penalty will be: one charge to strip away the monetary benefit of non-compliance, plus one charge to reflect the gravity of the incident. Each may require more arithmetic than most lawyers are accustomed to. The monetary benefit calculation, for example, includes such delights as [? c[(1+r(1-?))t (1 + ? ) t]] [1- ?].

Most people will find it easier to get their teeth into the element of gravity. The starting point will be an elaborate chart, which classifies each offence into one of three types. The individual incident will be classified as “less serious”, “serious” or “more serious”. Both classifications are plugged into Table 4 to give a range for the penalty. This is grossed up per the duration of the offence. The Director picks an amount within the range, based on the Guideline; then the haggling begins. Offenders can qualify for discounts by showing due diligence, and/or by agreeing to spend at least three times as much on “beyond compliance” projects.

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