Changes coming for high-risk and abandoned industrial facilities in BC

As the next step in BC’s multi-year Public Interest Bonding Strategy¹ initiative, the BC government has introduced Bill 29, which proposes amendments to the Environmental Management Act that may affect current and future owners of large industrial projects in the mining, forestry, oil and gas, energy, manufacturing and other sectors.

The proposed amendments expand reporting requirements from owners of “high-risk” industrial projects and expand provincial directors’ powers to require reporting from facility owners and operators, impose decommissioning and closure plans, and require financial security. As our previous update² indicated, these changes are intended to uphold the existing “polluter pays” principle and ensure the responsibility for industrial site cleanup is placed with owners, rather than taxpayers. Significantly, the changes are expected to apply not only to abandoned facilities, but to current and future industrial facilities in a broad range of sectors.

Proposed changes to the EMA

Bill 29’s proposed amendments to the EMA largely focus on the decommissioning and closure of industrial sites. Bill 29 defines a “responsible person” as a person who owns or is in control of or responsible for the use of a facility, and also includes a person who has an estate or interest in a facility. 

Under the proposed amendments, a provincial director may serve decommissioning and closure-related orders and other financial assurance requirements on responsible persons for specified facilities. Many industrial facilities may be subject to these orders, as Bill 29 defines “specified facility” broadly to include any facility used for a prescribed industrial or commercial purpose or activity that could cause pollution or contamination after site closure.

Under Bill 29, if a director considers it reasonable and necessary to reduce the risk of post-closure pollution and contamination at a specified facility, the director may require the responsible person to:

• disclose information about the operations and activities, substances on-site, property and assets, and financial circumstances (including liabilities, debits and obligations);
• prepare and submit decommissioning and closure plans prior to closing the site; 
• decommission and close the facility within a prescribed period after operations have ended; and
• provide security in the amount and form and subject to conditions the director specifies, to ensure performance of decommissioning and closure responsibilities.

Failure to comply with any of these orders may result in the minister making an order to restrict, modify, or prohibit operations or activities at the specified facility. 

As well, Bill 29 authorizes the government to:

• enter abandoned facilities to deactivate and close industrial sites, without any legal liability; and
• recover any costs incurred from the process above on an unlimited basis, including expenses related to government employee wages, government equipment and vehicles, consulting and professional services, and third-party goods and services contracted or purchased.  

The costs may be imposed on an “accountable person,” which includes the owner of the abandoned facility, or a responsible person. Each individual who is deemed “accountable” will be jointly and separately liable, and a director may register liens against the facility and the accountable person’s personal property.

Implications for industry and next steps

Bill 29 will undergo a second reading when the BC Legislative Assembly resumes sitting in the fall. The BC government has stated that it will engage with affected industries as it develops regulations and will include a transition period to give industry time to adapt.³

Until amendments to the EMA are enacted and regulations have been developed, the full extent of the changes to financial assurance and closure plan requirements for large industrial projects remains uncertain. The proposed changes grant provincial directors significant flexibility to request information about a facility and financial circumstances, impose requirements related to decommissioning and disclosure plans, require financial security, and recover costs related to abandoned facilities. However, given the BC government’s stated objective of targeting high-risk industries and facilities, it is reasonable to expect that abandoned projects and projects with a documented history of environmental concerns will be targeted first for enforcement.  

The author wishes to thank Lexynn Kwan, law student, for her help in preparing this legal update.