Environmental penalties five year review
This report reviews environmental penalties from January 2012 to December 2015. An environmental penalty review is required every five years under the Environmental Protection Act and the Ontario Water Resources Act.
Executive Summary
This report reviews environmental penalties from January 2012 to December 2015. An environmental penalty review is required every five years under the Environmental Protection Act and the Ontario Water Resources Act.
Environmental penalties are administrative monetary penalties that can be imposed by the ministry when certain industrial facilities spill or have unlawful discharges to water or land. These penalties are one of the many ways Ontario encourages quick and effective compliance.
Environmental penalties apply to 143 facilities in the nine industrial sectors found in the Ministry of the Environment and Climate Change’s Effluent Monitoring and Effluent Limits regulations. This Environmental Penalty Five Year review covers data from January 2012 to December 2015.
The primary goal of environmental penalty orders is to encourage quick and effective compliance. Staff feedback has indicated the use of environmental penalties continue to be useful toward achieving quick and effective compliance for land and water violations that occur at about 140 Effluent Monitoring and Effluent Limits sector companies. The Province is considering assessing other opportunities to broaden the application of environmental penalties.
The review found that the effect of environmental penalties and the work of the Environmental Enforcement and Compliance Branch of the ministry are complementary and there has been no impact on prosecutions. The ministry may also take facilities that are subject to environmental penalties to court for alleged violations of environmental laws if the nature of the incident warrants. Between 2012 and 2015 the ministry has conducted five prosecutions where the ministry had the option of proceeding with both an environmental penalty and prosecution. The five prosecutions resulted in convictions for acute toxicity violations, a spill/discharge, and monitoring/reporting violations resulting in fines totalling $320,000.00.
The ministry received an Application for Review under the Environmental Bill of Rights requesting expansion of the application of the environmental penalty regulations made under the Environmental Protection Act’s Ontario Regulation 222/07, the Ontario Water Resources Act’s Ontario Regulation 223/07 and the companion spills prevention and contingency plan regulation (Ontario Regulation 224/07) to include provincially regulated oil transmission pipeline spills. In light of this request, the ministry will work with stakeholders in considering how to broaden the application of the environmental penalty regime.
Ontario Community Environment Fund
The Ontario Community Environment Fund uses money collected from environmental penalties to support environmental improvement projects in the watershed where a violation or environmental impact occurred.
From 2012 until 2015, 45 projects have received $842,714.07 from the fund. Money has been granted to Indigenous communities, conservation authorities, schools, municipalities, and incorporated non-profit organizations across 21 different watersheds. These projects have delivered environmental benefits including: planting over 106,000 trees; shrubs and plants; restoring over 62 acres of land; and engaging over 1,300 volunteer hours.
Ontario Community Environment Fund grant recipients have included:
- Water First Education and Training Inc., which received grants to help improve drinking water in five Ontario First Nation communities by involving local students in water-science education and tree planting in the Central Abitibi, Goulais, Little Pic, Montreal and Sydenham watersheds.
- Environmental Defence Canada Inc., which received $23,462 to bring the Blue Flag program to the Cobourg beach. Blue Flag is a voluntary, international eco-label that is awarded to beaches and marinas that meet strict criteria.
- The Credit River Anglers Association, which received a total of $77,986 to plant 20,450 trees along the Credit River. These two projects have helped to improve fish habitat and water and air quality in the Credit River watershed.
A list of projects funded in 2017 is available on the Ontario Community Environment Fund website.
Actions Taken Since 2012 Review
The first environmental penalties review included the period August 1, 2007 to December 31, 2011, although no environmental penalty orders were issued in 2007. The review concluded that staff were applying environmental penalties correctly, but could increase the use of this compliance tool in a more consistent and effective manner. Enhanced staff training and guidance to increase understanding about when and how to use environmental penalties was identified as an appropriate mechanism to obtain consistency.
As a result of this recommendation, the process for implementing an environmental penalty order has been simplified and additional staff training has been provided.
The first review also recommended continued monitoring and reporting on the use of environmental penalties to promote consistent and effective implementation and, the ministry will continue this monitoring and reporting. Environmental penalty annual reports allow the ministry to routinely review the use of environmental penalties and trends to evaluate their effectiveness.
Environmental Penalty Orders Issued from 2012–15
The data for this review covers the four year period from 2012 to 2015 inclusive, consistent with the previous five year review which considered environmental penalties issued for the four year period from 2008 and 2011. Environmental penalties came into effect in August 2007, but no penalties were issued in 2007.
The review shows that the ministry issued the same number of penalties, compared to the previous five year review. Between January 1, 2012, and December 31, 2015, 62 environmental penalty orders were issued for 110 violations, totalling $671,661.03.
| Year | Number of Orders Issued | Number of Violations included in Orders | Total Penalty Value |
|---|---|---|---|
| 2007 | 0 | 0 | $0.00† |
| 2008 | 6 | 7 | $69,583.40 |
| 2009 | 13 | 19 | $112,143.20 |
| 2010 | 33 | 74 | $430,112.90* |
| 2011 | 10 | 32 | $167,642.95 |
| 2012** | 16 | 20 | $195,457.40 |
| 2013 | 13 | 27 | $113,781.20 |
| 2014 | 18 | 29 | $189,713.83 |
| 2015*** | 15 | 34 | $172,708.60 |
| Total | 124 | 242 | $1,451,143.48 |
† Legislation just introduced.
* The scope of violations expanded in December 2008 to include non-compliance with monitoring and reporting requirements. The ministry was able to issue environmental penalties for these types of violations starting in 2009. Many of the violations occurred in 2009, but the environmental penalty orders were issued in 2010.
** An environmental penalty in 2012 was adjusted downward after an appeal to the Environmental Review Tribunal. This reduced the 2012 annual amount from $216,457.50 to $195,457.00 ($21,000 reduction).
*** In 2015, an environmental penalty order for $12,233.25 was issued to Essar Steel Algoma Incorporated for two violations. This company is now in bankruptcy so payment status is on hold pending the bankruptcy process.
Environmental Penalty Orders Issued by Violation Type (Effluent Monitoring and Effluent Limits Sectors)
The types of contraventions to which environmental penalties are applied include limit exceedances, acute toxicity, monitoring and reporting violations, and spills/discharges (Figure 1). The total number for each type of violation referenced in the following section relates to regulated facilities in one of the nine Effluent Monitoring and Effluent Limits sectors.
Figure 1: Environmental penalty order by violation type, percentage of total number of violations (110) from 2012 to 2015
Limit Exceedance
A limit exceedance refers to the maximum, or in some cases minimum, discharge/emission level as identified in an environmental approval, order, regulation or other instrument. Some limit exceedances pertain to a contaminant, such as nickel, which may result from an exceedance of a daily or monthly limit. Exceedances of limits for operating parameters, such as temperature or pH may result from continuous monitoring with any departure above the limit being considered a reportable exceedance. These operating parameters, while important on their own, also serve as an indicator to identify issues with effluent quality.
There were 299 limit exceedance violations pertaining to a variety of regulatory limits for contaminants reported during the period from January 1, 2012 to December 31, 2015 (Figure 2). Reported limit exceedance violations have been steadily declining since 2008.
Of the reported exceedances, consisting of either an isolated single event or a number of exceedances related to a specific event (e.g., same day) or one cause (over several sampling events), 48 (were addressed through an environmental penalty order, a further 21 through provincial officer’s orders, and 230 through voluntary abatement. Violations are assessed on a case-by-case basis to determine which abatement tool is most appropriate for obtaining quick action to mitigate the effects of the violation, achieve compliance with environmental laws and improve environmental performance in the immediate and long term. Voluntary abatement may be used, for example, when an exceedance is very low or if adverse weather conditions were the cause of the violation. Referrals to the ministry’s Environmental Enforcement and Compliance Branch were made for four of the incidents.
Figure 2: Limit Exceedances (Contaminants) Reported by Facilities (2012-15)
In addition, there were 69 limit exceedances between 2012-15 pertaining to operating parameters, such as temperature, pH and dissolved oxygen. Nine of these incidents were addressed through environmental penalty orders and two through director’s orders. The remaining 58 of these incidents were generally short term in nature and were effectively and efficiently addressed through voluntary abatement. The two limit exceedances addressed by the director’s order were also referred to Environmental Enforcement and Compliance Branch.
Between 2012 and 2015, 57 limit exceedance violations (contaminant limits and operating parameters) have been addressed using environmental penalty orders, with a penalty value of $151,896.03.
Acute Toxicity
Acute toxicity is an effluent monitoring sample that fails an acute lethality test for rainbow trout or Daphnia magna (water flea). Facilities reported 71 acute toxicity violations between 2012 and 2015 (Figure 3). The total number of reported acute toxicity violations at regulated facilities has decreased by about 55% since the first review.
Thirty-five acute toxicity violations, which may relate to a single event (e.g., same day) or one cause (over several sampling events), were addressed through environmental penalty orders, one through a provincial officer’s order and the remaining 35 violations through voluntary abatement. Four incidents were referred to the Environmental Enforcement and Compliance Branch.
A total of 35 environmental penalty orders for acute toxicity violations, or about half, were issued between 2012 and 2015, with a penalty value of $277,225.00.
Figure 3: Acute Toxicity Violations Reported by Facilities (2012-15)
Monitoring and Reporting Violations
Monitoring and reporting violations include failure to report a spill as required by legislation or failure to take a sample, as required by an environmental compliance approval or by a regulation. These types of violations interfere with the ministry’s ability to regulate discharges to the environment.
Between 2012 and 2015 all eight monitoring and reporting violations resulted in three environmental penalty orders, representing 7% of the overall violations that received an environmental penalty order (Figure 1). Seven of the violations were related to monitoring and one to reporting. The value of monitoring and reporting violations ranged from a minimum of $1,625.00, for failing to monitor a limit exceedance, to $25,500.00, for a reporting requirement violation where a company did not promptly report a spill to the ministry. This had the potential to interfere with the ministry’s capacity to protect the natural environment, but did not result in an adverse effect. Overall, monitoring and reporting violations totalled $49,875.00 (2012-15).
Spill Prevention and Contingency Plan Violation
In 2012, an environmental penalty order was issued to address non-compliance with the requirements in section 91.1 of the Environmental Protection Act, whereby the company failed to develop a spill prevention and contingency plan reduce the risk of pollutant spills and avert or correct any adverse effects from such spills. The facility appealed this environmental penalty order for $42,000 to the independent Environmental Review Tribunal.
The Environmental Review Tribunal noted that the Director received a toxicological analysis after the environmental penalty order was issued, which indicated the discharge could not have caused an adverse effect. Therefore, the Environmental Review Tribunal amended the seriousness of the contravention from very serious to serious thereby lowering the total penalty amount to $21,000.00. This was the only environmental penalty order appealed during this review period (2012-15).
Spills and Discharges
Most spills involve an accidental, abnormal or inadvertent release of a pollutant discharged into the natural environment from or out of a structure, vehicle or other container. A spill or discharge is subject to an environmental penalty order if the spill or discharge is determined to be a violation.
There were 1,017 spills to land and water reported by facilities subject to the Effluent Monitoring and Effluent Limits regulations between 2012 and 2015. The majority of the spills were liquid spills; 646 of all spills were initially to land and the remainder entered a watercourse. The largest number of spills was reported between 2013 and 2015 with slightly fewer spills reported in 2012 (Figure 4).
Nine hundred and fifty-five of the spills were assessed to have no or minimal anticipated impacts. Over a third of these reported spills can be described as small quantity spills or leaks confined to the company property that were cleaned up quickly, did not require ministry field response because they were contained, and did not impact the natural environment. A voluntary abatement approach is often the appropriate approach for these types of spills.
Between 2012 and 2015, the ministry issued nine environmental penalty orders (Figure 1), with a value totalling $182,977.50, for spills or discharges where a violation has been identified (may impair the quality of waters). Two of the spills involved a toxic substance as listed in the Environmental Penalties – Code of Toxic Substances which increased the gravity component of these environmental penalty orders by a factor of 1.35.
Figure 4: Number of Spills by Facilities (2012-15)
Environmental Penalty Orders by Sector (2012-15)
All sectors, with the exception of inorganic chemicals and metal casting, received environmental penalty orders between 2012 and 2015 (Table 2). Environmental penalty orders issued, by sector, include:
- 26 in electric power generation,
- 26 in pulp and paper,
- 24 in metal mining,
- 22 in iron and steel,
- 7 in petroleum,
- 3 in industrial minerals, and
- 2 in organic chemical.
As illustrated in Table 2, issuance of environmental penalty orders varies between sectors. For example, facilities with acute toxicity violations were issued environmental penalty orders most frequently in the pulp and paper and electric power sectors. Limit exceedance violations were issued environmental penalty orders most frequently in the metal mining, electric power, and iron and steel sectors. The pulp and paper sector received the most environmental penalty orders for monitoring and reporting violations, while the iron and steel sector received the most environmental penalty orders for spills/discharges. The distribution of environmental penalties issued by sector has remained consistent since the first review.
| Sector | Acute Lethality | Limit Exceedance | Monitoring/Reporting | Spill Prevention Contingency Plan | Spill/Discharge | Total | % Total |
|---|---|---|---|---|---|---|---|
| Electric Power Generation | 9 | 14 | 2 | 1 | 0 | 26 | 24% |
| Industrial Minerals | 0 | 3 | 0 | 0 | 0 | 3 | 3% |
| Inorganic Chemical | 0 | 0 | 0 | 0 | 0 | 0 | 0% |
| Iron and Steel | 2 | 14 | 0 | 0 | 6 | 22 | 20% |
| Metal Casting | 0 | 0 | 0 | 0 | 0 | 0 | 0% |
| Metal Mining | 5 | 16 | 1 | 0 | 2 | 24 | 22% |
| Organic Chemical | 2 | 0 | 0 | 0 | 0 | 2 | 2% |
| Petroleum | 5 | 2 | 0 | 0 | 0 | 7 | 6% |
| Pulp and Paper | 12 | 8 | 5 | 0 | 1 | 26 | 24% |
| Grand Total | 35 | 57 | 8 | 1 | 9 | 110 | 100% |
Environmental Penalty Amounts
Companies may seek up to 35% reduction in their penalties if they can demonstrate actions taken to prevent or mitigate the violation and for having an environmental management system in place. When determining the final penalty value, the ministry looks at efforts to prevent spills and unlawful discharges and how quickly a company worked to clean them up. This encourages facilities to put pollution prevention measures in place and improve their environmental performance.
Between 2012 and 2015, 62 environmental penalty orders for 110 violations resulted in $671,661.03 in total penalties.
Between 2012 and 2015, the amount per environmental penalty order, including reductions, ranged from $960.00 (one limit exceedance violation) to $73,125.00 (nine acute lethality violations). The smallest environmental penalty amount, including reductions, issued for a single violation was $650.00, for a limit exceedance, and the largest was $44,500.00 for a single spill.
Between 2012 and 2015, environmental penalty order reductions ranged from $0 to $18,000.00 per violation, with an average reduction of $1,017.88. Reductions were requested for 86% of the violations and total reductions equalled $111,967.12.
In summary, between 2012 and 2015, environmental penalty orders totaled $783,628.15 with total reductions of $111,967.12 resulting in a net value of $671,661.03.
Environmental Penalties and Prosecutions
Prosecutions related to environmental violations are initiated by the Environmental Enforcement and Compliance Branch which conducts investigations of alleged violations to determine if there is sufficient evidence for the laying of charges. The majority of the referrals occurred in the metal mining, pulp and paper, and iron and steel sectors (Table 3) and included seven limit exceedance violations, four spill/discharges, three acute toxicity violations, and two monitoring/reporting violations.
| Sector | Number of Referrals per Violation Year (2012) | Number of Referrals per Violation Year (2013) | Number of Referrals per Violation Year (2014) | Number of Referrals per Violation Year (2015) | Number of Referrals per Violation Year (Total) |
|---|---|---|---|---|---|
| Electric Power Generation | 1 | 0 | 0 | 0 | 1 |
| Industrial Minerals | 1 | 0 | 0 | 0 | 1 |
| Inorganic Chemicals | 0 | 1 | 0 | 0 | 1 |
| Iron and Steel | 0 | 1 | 1 | 0 | 2 |
| Metal Casting | 0 | 0 | 0 | 0 | 0 |
| Metal Mining | 2 | 2 | 2 | 1 | 7 |
| Organic Chemicals | 0 | 0 | 0 | 0 | 0 |
| Petroleum | 0 | 1 | 0 | 0 | 1 |
| Pulp and Paper | 1 | 0 | 1 | 1 | 3 |
| Total | 5 | 5 | 4 | 2 | 16 |
Between 2012 and 2015:
- There were no cases where a regulated person was prosecuted for the same violation for which an environmental penalty order was issued.
- There were three cases where Environmental Enforcement and Compliance Branch investigated violations for which an environmental penalty order was issued but no further enforcement action was taken.
- The ministry conducted five prosecutions where both an environmental penalty and prosecution could have been pursued.
The five prosecutions resulted in convictions for acute toxicity violations, a spill/discharge, and monitoring/reporting violations resulting in fines totalling $320,000.00.
Provincially Regulated Oil Transmission Pipeline Spills
The ministry received an Environmental Registry Application for Review on June 17th, 2015 requesting expansion of the application of the environmental penalty regulations made under the Environmental Protection Act Ontario Regulation 222/07 and Ontario Water Resources Act Ontario Regulation 223/07 and companion spills prevention and contingency plan regulation (Ontario Regulation 224/07) to include provincially regulated oil transmission pipeline spills. Pipelines that cross provincial boundaries are federally regulated.
Oil transmission pipelines entirely within a province are regulated provincially. In Ontario, the Technical Standards and Safety Authority acts as the lead agency for all petroleum based environmental occurrences resulting from a spill, leak, or discovery of a contaminant at sites under its jurisdiction provided the spill remains on-site. The ministry is the lead agency that responds to off-site spills (e.g., private property).
Fuel safety regulations strive to prevent loss of life, personal injury, property and environmental damage by controlling safety hazards in the transportation, transmission, distribution, dispensing and storage of fuels such as natural gas, fuel oil, propane jet fuel and gasoline. Licenses are issued under these regulations to gasoline service stations, propane facilities, oil and gas transmission systems and distributors of natural gas and oil. Ontario Regulation 210/01 – Oil and Gas Pipeline Systems, made under the Technical Standards and Safety Act applies to provincially regulated oil transmission pipelines.
Subsection 2(1) of Ontario Regulation 210/01 applies to the design, construction, operation and maintenance of oil and gas industry pipeline systems that convey, (a) liquid hydrocarbons, including crude oil, condensate, liquid petroleum products, natural gas liquids and liquefied petroleum gas; and (b) gas.
Subsection 2(2) of Ontario Regulation 210/01 does not apply to, (a) piping in natural gas liquid extraction plants, gas manufacturing plants, and mines; or (b) oil refineries, terminals, other than pipeline terminals, and marketing bulk plants.
Under Ontario Regulation 210/01 “pipeline” means a pipe that is used for the transmission or distribution of oil and gas and includes fittings, valves, controls, compressor stations, pressure regulating stations, meter stations and pump stations, but does not include the pipe, fittings, valves or controls of the end user.
The ministry’s regulatory mandate for spills arises largely out of Part X of the Environmental Protection Act, which requires spills to be reported forthwith. Spills are reported to the ministry’s Spills Action Centre. As part of the Environmental Registry request, the ministry reviewed the pipeline spills reported to the Spills Action Centre. This initial analysis encompassed all reported pipeline spills but did not refine the data specifically for the Ontario Regulation 210/01 regulated community. The ministry obtained a list of the Ontario Regulation 210/01 regulated community from the Technical Standards and Safety Authority and analyzed all pipeline spills reported to the Spills Action Centre for these companies between 2010 to 2016 to determine the practicability of expanding the application of the environmental penalty regulations and spills prevention and contingency plan regulation to provincially regulated oil transmission pipeline spills.
The analysis determined the type of spills reported to the Spills Action Centre for companies on the Technical Standards and Safety Authority’s regulated company list were not regulated under Ontario Regulation 210/01 because they did not meet section 2 as stated above, and/or the definition of a pipeline reproduced above. In addition, the Technical Standards and Safety Authority carries out inspections and licenses new or existing pipelines and other structures that dispense, transmit, distribute or transport gasoline-related products, compressed natural gas or propane. Technical Standards and Safety Authority also provides special approvals, audits registered contractors and investigates incidents and reports of non-compliance.
The pipeline spill analysis of the Technical Standards and Safety Authority regulated company list found one spill from a provincially regulated oil transmission pipeline (Ontario Regulation 210/01) in September 2013.
Conclusions and Recommendations
1. Monitoring and Reporting on Environmental Penalties
The use of environmental penalties continues to be useful toward achieving compliance for land and water violations that occur at approximately 140 Effluent Monitoring and Effluent Limits sector companies. Between August 1, 2007 and December 31, 2015, 124 environmental penalty orders have been issued for 242 violations totalling $1,451,143.48.
Recommendation #1: It is recommended the ministry continue to monitor and report on the use of the environmental penalty tool to promote consistent and effective implementation.
2. Application of Environmental Penalties
The application of environmental penalties is limited to land and water violations occurring at Effluent Monitoring and Effluent Limits sector facilities. Staff feedback has indicated the use of the tool is beneficial toward achieving compliance and should be considered for broader application.
Recommendation #2: It is recommended that the ministry consider assessing the broadening of the application of environmental penalties to sectors outside of the Effluent Monitoring and Effluent Limits regulations and to include other violations, such as air and waste violations. This would be further developed through discussion with stakeholders.
3. Environmental Penalties and Prosecutions
Since the introduction of environmental penalties in 2007 to the end of 2015, there have been no instances where an environmental penalty order was issued with a prosecution for the same violation resulting in a conviction. The effect of environmental penalties and the work of the Investigations and Enforcement Branch of the ministry are complementary and there has been no impact on prosecutions.
Recommendation #3: It is recommended that the ministry continue to monitor the effect environmental penalties have on prosecutions.
4. Provincially Regulated Oil Transmission Pipeline Spills
The ministry received an Environmental Bill of Rights Application for Review requesting expansion of the application of the environmental penalty regulations made under the Environmental Protection Act Ontario Regulation 222/07 and Ontario Water Resources Act Ontario Regulation 223/07 and companion spills prevention and contingency plan regulation (Ontario Regulation 224/07) to include provincially regulated oil transmission pipeline spills. The pipeline spill analysis of the Technical Standards and Safety Authority regulated company list did find one spill from a provincially regulated oil transmission pipeline (Ontario Regulation 210/01) in September 2013.
Recommendation #4: It is recommended the ministry consider broadening the application of the environmental penalty regime to include provincially regulated oil transmission pipeline spills. This would be further developed through discussion with stakeholders.
5. Internal Staff Training and Promotion
Following the recommendation to enhance ministry use of environmental penalties, the process for implementing an environmental penalty order was simplified, and staff training has been provided.
Recommendation #5: It is recommended the ministry continue to engage staff in the application of environmental penalties through staff training opportunities.