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Our high-stakes case, appealing the imposition of infinite retroactive personal liability on directors for contamination they did not cause,  will be heard by the Environmental Review Tribunal starting October 28. Initial witness statements in Baker v Director, Ministry of the Environment were filed September 27, and make fascinating reading.  For example, Jane Glassco, the Ministry Director who issued the cleanup order, has admitted that the directors did not cause the pollution that they are now paying to clean up.

In other words, she claims that innocent former corporate directors and officers have ABSOLUTE LIABILITY for historic contamination, regardless of fault:

  1. whether or not the contamination occurred during their tenure, and
  2. whether or not the contamination is on property that the corporation (whose board they sat on) owned or occupied.

“41. I relied on section 18 of the EPA as the main authority to issue the Order. This section allows me to issue an order to anyone who is or was in management and control of an undertaking or property. I understand that directors and officers are presumed to be in management and control of the corporations. Furthermore, based on the MOE’s experience with the Site, the mitigation and remediation efforts at the Site were being managed by the senior managers (including the directors and/or officers) from both Northstar Inc. and Northstar Canada and were being overseen by the board of directors. As such, the directors and officers had management and control of the undertaking at the Site.

42. In relying on s.18 of the EPA, I am not alleging any fault on the part of the directors and officers. The directors and officers are being named because of their status as persons in management and control and because of the environmental imperative at the Site and in the Bishop Street Community.

43. I also relied on section 17 of the EPA as authority for issuing the Order. This section allows me to issue an order to any person who causes or permits the discharge of a contaminant. To be clear, I am not alleging that the directors and officers in any way caused the discharge of the TCE and chromium. However, once the magnitude of the contamination and the need for a long-term remediation effort became known, the directors and officers ought to have set aside and secured the funds necessary to complete the remediation. They did not set aside any amount of funds. They thus failed to take the necessary steps to prevent the discharge of contaminants in the long-term, which I understand falls under the definition of “permit”.”

For more information, see the Globe and Mail Report on Business article by Janet McFarland.

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