The Environmental Management Act, S.B.C. 2003, c. 53 [EMA] is a comprehensive piece of legislation in British Columbia that governs the management and remediation of contaminated sites. The aim of the legislation is to protect the environment and human health by ensuring that contaminated sites are properly managed and remediated. While the EMA provides for a whole host of guidance on the topic of environmental contamination, in this article, the basics of (1) who is responsible for remediation costs of a contaminated site, and (2) what remediation costs are recoverable are explored.

First, a contaminated site is a designation under the EMA for areas of land where the soil, sediment, water, or groundwater, contains quantities or concentrations exceeding the risk based or numerical criteria, standards, or conditions, set out in the Contaminated Sites Regulation, B.C. Reg. 375/96 [CSR]. Standards are for soil, water, vapour, etc., and the level of acceptable contaminants is in part dependent on the use of the site (i.e. agricultural, residential, industrial, etc.).

Potential contaminants are numerous, but an example of common water contaminants include copper, lead, and nitrite. The determination of whether a property is a contaminated site is made by the government. Once a site is determined by the government to be a “contaminated site” pursuant to s. 44 of the EMA, the government may order remediation of the site pursuant to s. 48 of the EMA, meaning the site will need to be brought in compliance with EMA standards.

Once the remediation of a site is ordered, the list of those liable for the remediation costs can be lengthy. This is because the EMA’s “polluter pays” regime permits parties to recover site remediation costs against current and previous owners and operators of a site that contributed to the contamination. The full list of those potentially responsible for remediation costs is set out under s. 45 of the EMA.

Owners of a site incurring remediation costs can bring litigation under the EMA against those potentially responsible for the contamination and the general principles of liability for remediation are set out under s. 47 of the EMA. Generally, the current owners of a site will bring litigation against previous owners or operators of the site or neighbouring sites if they were the “polluters”.

An important aspect of this litigation is that unlike most litigation, the corporate veil will not shield directors from liability under the EMA. Pursuant to s. 35 of the CSR, directors, officers, employees, or agents of a company are liable for remediation costs if it can be proven that they authorized, permitted, or acquiesced in the activity causing the remediation costs. As such, the net for liability under the EMA is cast broadly.

Section 47(1) of the EMA establishes that a person responsible for remediation is absolutely, retroactively, and jointly and separately liable for reasonably incurred costs of remediation, whether these costs are incurred on or off the contaminated site. However, section 47(1)(2) of the EMA allows the court to apportion liability among responsible parties if it can be established that one party was “more” responsible for the pollution than another.

While there are a number of costs that could arise from owning a contaminated site, the costs recoverable for remediation costs are not unlimited. The costs must be those reasonably incurred to remediate the contaminated site, whether incurred on or off the contaminated site. In addition to the actual costs incurred to remediate a contaminated site, s. 47(3) of the EMA defines “costs of remediation” to include but are not limited to:

• Costs of preparing a site disclosure statement.
• Costs of site investigation and report preparation.
• Legal and consultant costs for seeking contributions from other responsible persons.
• Fees imposed by various authorities.

Section 35(2) of the CSR outlines considerations for determining reasonable incurred costs, including:

• The price paid for the property.
• The due diligence of responsible persons.
• The amount and toxicity of contaminating substances.
• The involvement of persons in contaminating activities.
• Remediation measures implemented and paid for by each person.
• Other relevant factors for fair allocation.

The EMA focuses on bringing contaminated sites into compliance with its standards, which does not always mean the standard an owner wishes their site to be remediated to. If an owner wishes to remediate beyond EMA requirements, they can only recover these costs in tort.

A tort is a civil wrong that causes harm to another person or property, for which compensation can be sought. Torts relevant to contaminated sites include “nuisance”, where there is substantial interference with one’s use and enjoyment of a property, and “negligence”, arising where a person fails to exercise a standard of care that a reasonable person would exercise in similar circumstances, resulting in harm or injury to another person or property. Both nuisance and negligence can be pursued in conjunction with a cost-recovery action under the EMA.

Understanding the intricacies of the EMA and its provisions for cost recovery actions is crucial for anyone involved in the remediation of contaminated sites. Since liability for contamination can go farther than expected, it is recommended that parties on either side of a potential claim for remediation costs should consult with a lawyer as soon as they discover potential contamination.

If you have any questions about the EMA or how your property may be affected by it, please contact Miranda Wardman at [email protected].