The Environmental Management Act, S.B.C. 2003, c. 53 (“EMA”) and the Contaminated Sites Regulation, B.C. Reg. 375/96 (“CSR”) provide the regulatory framework for identifying and allocating liability among persons responsible for the remediation of contaminated sites in British Columbia. There are two avenues by which a person may become liable for the costs of remediation under the EMA: 1) in a civil, cost recovery action brought by another person who has incurred costs of remediation and is suing to recover them; and/or 2) by way of an order made by the director pursuant to the EMA (i.e., an order of the Ministry of Environment), requiring the person to investigate or remediate a contaminated site. The civil cost recovery provision is, by far, the most common way persons attract liability under the EMA.
Pursuant to section 47(5) of the EMA, any person who has incurred reasonable costs of remediation in relation to a contaminated site can sue to recover such costs from any statutory “responsible person”. Such “responsible persons” (if there is more than one) are absolutely, retroactively, jointly and separately liable for all of the reasonably incurred costs of remediation. In addition, “costs of remediation” include not only the costs associated with the physical removal or risk-assessment of the contaminants in question, but also the costs of carrying out environmental investigations at the site.
Liability under section 47(5) of the EMA is “absolute”. No “fault”, “negligence” or any “wrongdoing” in the traditional sense is necessary to establish a claim. It is also “retroactive”, meaning that one can be liable for contamination that occurred prior to the EMA and the CSR (and the predecessor legislation) coming into force. In fact, responsible persons can be liable for the costs of remediation incurred by any person in relation to a contaminated site even if, at the time, the person had a permit allowing them to introduce contaminants into the environment.
Given that liability among responsible persons in a cost recovery action is also “joint” and “separate”, each “responsible person” may be looked to for the full cost of clean-up, regardless of the extent of that person’s involvement with the property or its contamination. The court will, however, apportion reasonably incurred costs of remediation among responsible persons in a cost recovery claim as the court considers fair. However, since liability is joint, if certain responsible persons are impecunious, those that are not may ultimately end up paying more than their allocated share.
Subject to specific exemptions set out in section 46 of the EMA and Part 7 of the CSR, all current and previous “owners” and “operators” of a “contaminated site” are persons responsible for remediation of the site. In circumstances where contaminants migrate from one site to another, subject to an exemption, all current and previous owners of the source site are also persons responsible for remediation of the site contaminated by the migrating contaminants from the source site. In addition to “owners” and “operators”, those who produced, transported or arranged for transport of a substance and who by, contract, agreement or otherwise, caused the substance to be disposed of, handled or treated in a manner that, in whole or in part, caused the site to become a contaminated site, are also “persons responsible” for remediation of the site and any sites impacted by contaminant migration from the source site.
Although a person cannot attract responsible person status under the EMA on the basis of him or her assuming that status pursuant to a contract (unless the person meets the definition of “responsible person” in the EMA), those who are not responsible persons under the EMA can nevertheless assume liability for the costs of remediation by way of contract (vis-à-vis the other contracting party). Therefore, given the wide net cast by the “responsible person” designation, current/previous owners and operators, along with directors, officers, employees or agents of corporate responsible persons may be exposed to significant regulatory liability with respect to remediation costs and as a result, should seek professional advice concerning their degree of risk, along with strategies that can be designed and implemented to minimize their exposure.
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