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Amendments coming to the Environmental Management Act: British Columbia to introduce more robust regulation of the decommissioning and closure of industrial facilities

March 26, 2024

In April 2022, the BC Ministry of Environment and Climate Change released a discussion paper on its Public Interest Bonding Strategy, an initiative aimed at ensuring that owners of large industrial projects – as opposed to taxpayers – pay for the full costs of environmental clean-up and reclamation, even if projects are abandoned.[1] The strategy was implemented in part due to the recent instances of companies becoming unwilling or unable to complete their environmental clean-up and reclamation activities, highlighting the need to review how the Province approaches financial assurance.[2]

The first phase of the strategy involves a review of financial assurance mechanisms under the Environmental Management Act and the Mines Act, with a focus on the foreseen clean-up and reclamation costs for existing active and new projects that pose a high environmental and financial risk. In the second phase, the unforeseen clean-up costs under a broader range of statutes, including the Land Act, Forest Act, and Environmental Assessment Act, will be reviewed with the aim of improving co-ordination of financial assurance across ministries.

The first phase of this initiative is now underway with the introduction of Bill 29, the Environmental Management Amendment Act, 2023 which received royal assent on November 8, 2023.

The amendments introduce a new division to the Environmental Management Act that targets the decommissioning and closure of “specified facilities” which include facilities used for things such as chemical or electrical activities, mining, metal smelting, petroleum and natural gas drilling, waste disposal, transportation operations, and wood and paper related industries and activities.

Among other things, the amendments authorize a director to order an owner or operator of a specified facility to prepare a decommissioning and closure plan to lessen the risk of pollution or contamination after closure of the facility. The amendments further authorize the minister to issue a stop work order if a person fails to comply with orders relating to a decommissioning and closure plan and specify costs that can be recovered by the government for decommissioning and closure of abandoned facilities.

Perhaps the most significant effect of the amendments is that they permit a director to order that an owner or other responsible person provide security to ensure to performance of its decommissioning and closure obligations. If a director determines that a facility has been abandoned, the director may carry out actions authorized by regulation for the purpose of decommissioning and closing the abandoned facility. If the costs incurred by the government in carrying out those actions exceed the amount of the security, if any, then they become a debt due by the facility owner or a person who was a “responsible person” to the facility immediately before operations ceased. These amendments are a significant step in the enhancement of the legal framework of the “polluter pays” principle – the principle that those who are responsible for certain forms of pollution must bear the costs of managing it to prevent damage to human health or the environment. It also increases the potential costs and liability of owners and other responsible persons operating these types of facilities.


[1] Public Interest Bonding Strategy – govTogetherBC

[2] Discussion Paper – Public Interest Bonding Strategy (PIBS) (gov.bc.ca)

Expertise

Important Notice: The information contained in this Article is intended for general information purposes only and does not create a lawyer-client relationship. It is not intended as legal advice from Harper Grey LLP or the individual author(s), nor intended as a substitute for legal advice on any specific subject matter. Detailed legal counsel should be sought prior to undertaking any legal matter. The information contained in this Article is current to the last update and may change. Last Update: March 26, 2024.

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