Decision Date: December 23, 2015

Panel: Brenda Edwards, Tony Fogarassy, Daphne Stancil

Keywords: Environmental Management Act – ss. 1 – definition of “air contaminant”, 16, 102(2), 103; Public Notification Regulation – ss. 4(2), 6, 8; permit amendment; sulphur dioxide; precautionary principle; monitoring plan; fettering; procedural fairness; apprehension of bias; human health; acidification

In April 2013, the Appellants appealed a decision of the Director, Environmental Management Act (the “Director”), Ministry of Environment, to amend a permit held by Rio Tinto Alcan Inc. (“Rio Tinto”). The permit authorizes the discharge of effluent, emissions, and waste from Rio Tinto’s aluminum smelter located in Kitimat, BC. Rio Tinto sought the permit amendment in support of a project designed to modernize and increase the production at the smelter. Once the project is fully implemented in 2018, the smelter’s emissions of polycyclic aromatic hydrocarbons, fluorides, and particulate matter will be reduced, but its sulphur dioxide (SO2) emissions will increase.

The permit amendment was issued under section 16 of the Environmental Management Act (the “EMA”). Among other things, the amendment allows an increase in the smelter’s emissions of SO2: the previous limit was 27 tonnes per day; the new limit is 42 tonnes per day. The amendment also adds several conditions to the permit, including requirements to develop an environmental effects monitoring plan for the Director’s approval, to conduct public consultations regarding the monitoring plan, and to implement the monitoring plan once it is approved. The Director approved Rio Tinto’s monitoring plan approximately 18 months after he issued the permit amendment.

The Appellants made several changes to their grounds for appeal and the remedies they pursued, both before and during the appeal hearing. Ultimately, the Appellants requested an order setting aside or suspending the SO2 limit in the amended permit. They also requested that the Board order the Director to secure certain studies and conduct further public consultation regarding the potential impacts of the increased SO2 emissions on human health, soils, and vegetation, before rendering a decision on any future amendment to the permit.

In deciding the appeals, the Board considered three main issues:

1. Whether the process that preceded the issuance of the amendment was flawed due to breaches of natural justice or procedural fairness.

In deciding the first issue, the Board noted that it had conducted the appeals as a new hearing of the matter, and the evidence before the Board included information that was before the Director as well as new evidence. The new evidence included scientific studies, data, and investigations that were completed after the amendment was issued. The Board has broad remedial powers under the EMA, including the power to make any decision that the Director could have made. Consequently, any defects in the Director’s decision-making process were cured by the appeal process, and it was unnecessary to address the Appellants’ arguments alleging fettering, a reasonable apprehension of bias, or the adequacy of the Director’s reasons for granting the amendment. However, for greater certainty, the Board addressed those arguments.

In that regard, the Board found that there was no evidence that the Director’s discretion was fettered, either by a memorandum of understanding between the Province and Rio Tinto, or by having a “closed mind”, that pre-determined the appropriateness of an adaptive management approach to regulating SO2 emissions under the amendment. The Director understood that the memorandum of understanding was not binding, and the Director made it clear to Rio Tinto that taking an adaptive management approach did not presuppose any outcome for Rio Tinto’s application. In addition, there was no evidence that the Director ignored concerns that were raised by the public or stakeholders regarding Rio Tinto’s application, or that he failed to consider relevant information. When concerns were presented to him, he required further information from Rio Tinto if the existing information was inadequate.

The Board also found that the Appellants failed to establish that there was a reasonable apprehension of bias arising from a secondment agreement between the Province and Rio Tinto, in which Rio Tinto agreed to pay the Province the equivalent of the salary and benefits of a Ministry employee who was assigned to Rio Tinto’s application. The Board found that the secondment agreement was merely an administrative mechanism whereby the Ministry recouped the cost of having an employee work fulltime on Rio Tinto’s application, when that employee would otherwise have worked on many other assignments. At all times, the employee remained on the government payroll and worked in a Ministry office, and the Director conducted his performance reviews. The employee carried out his duties with respect to Rio Tinto’s application in the same manner as any other such application, with a few exceptions designed to protect against the very issues alleged by the Appellants – he did not provide a recommendation to the Director, as he normally would, regarding issues of compliance with the permit or the outcome of Rio Tinto’s application. Based on the evidence, the Board concluded that an informed person, knowing the facts and viewing the matter realistically and practically, would not conclude that there was a reasonable apprehension of bias.

In addition, the Board held that the Director was under no statutory or common law duty to provide the Appellants with reasons for his decision. Under section 16(7) of the EMA, the Director was obliged to provide written notice of his decision to the permit holder, and to publish notice in a prescribed manner. The Director did so, and he went further by providing written reasons for his decision. Given that the Director was not acting in an adjudicative capacity, and the Appellants were not parties before him, he had no common law duty to provide the Appellants with written reasons for his decision. Even if the Director had such a duty, the Appellants heard the Director testify at length about his reasons for granting the amendment. Any procedural defects in the Director’s decision-making process were cured by the appeal hearing.

2. What is the proper legal test for considering whether to grant a permit amendment under section 16 of the EMA?

The Appellants argued that the Board should apply the precautionary principle in interpreting section 16 of the EMA. However, the Board found that if the legislature had intended the precautionary principle to be applied by decision-makers under the EMA, the legislature could have expressly indicated that, and it has not. The primary judicial decision that the Appellants relied on involved Australian legislation which expressly adopts the precautionary principle and requires it to be applied to decision-making, unlike the EMA. The other judicial decisions cited by the Appellants provided no assistance in interpreting section 16 of the EMA. Moreover, the Board found that the EMA does not contemplate that permits may only be approved or amended if the result will be zero risk to the environment. The EMA deals with the competing interests of permitting waste to be introduced into the environment while also imposing requirements for the protection of the environment. In assessing the merits of the amendment, the Board decided to take a “cautious” approach involving a comprehensive technical analysis of the potential harm that the emissions may cause to human health and the environment. Harm or damage that may be caused by the emissions should be controlled, ameliorated and, where possible, eliminated. However, not all harm or damage will be eliminated, given that the permit allows the emission of “air contaminants”, which is defined in the EMA as including substances that are capable of causing injury to human health and/or damage to the environment.

In addition, the Board found that section 16 of the EMA does not require the consideration of cumulative effects of SO2 emissions from other facilities that may (or may not) be built in the area sometime in the future. The Board also held that the polluter pay principle does not apply in interpreting section 16 of the EMA.

3. Whether the information before the Board was adequate to confirm the issuance of the amendment under section 16 of the EMA.

The Appellants submitted that there was insufficient evidence to conclude that the amendment provided adequate protection for human health, soil and vegetation from the impacts of the increased SO2 emissions. The Appellants argued that the main technical report that the Director relied on, and other information he considered, was scientifically inadequate or contained gaps regarding the potential impacts of the emissions. The Appellants and Rio Tinto provided expert evidence on those matters. The Appellants also argued that the public consultation process which was conducted before the Director issued the amendment was inadequate.

The Board found that the modernized smelter will have new 60-metre high stacks and other works which will disperse the SO2 emissions differently than in the past. Regarding impacts on human health, the emissions modelling in the technical report predicted that SO2 concentrations, even at the maximum of 42 tonnes per day, will be well below U.S. EPA standards 99% of the time in the residential and commercial areas of Kitimat. The Appellants’ expert witness agreed that the technical report accurately predicted SO2 levels. An independent professor of medicine reviewed the technical report, and concluded that the SO2 increases “can be considered trivial in terms of health effects”. The Northern Health Authority and BC Centre for Disease Control concluded that the technical report’s approach was acceptable, its conclusions were generally consistent with the wider scientific literature, and mitigation efforts were appropriate. The Appellants’ evidence did not establish otherwise. The Board concluded that the Appellants failed to establish that the amended SO2 limit should be set aside or suspended, or that the Director should be ordered to obtain further information regarding human health risks. The Board agreed with the Director that the risk to human health is acceptable, but should be monitored to confirm whether the actual impacts match the predicted impacts.

Regarding impacts on soils, the Board found that the evidence of the Appellants’ expert witness was largely discredited in cross-examination, and should be given little to no weight. The Appellants failed to establish that the analysis in the technical report regarding predicted impacts on soil, or the provisions in the monitoring plan with respect to soils, were flawed. Based on the evidence, the Board found that the risk to soils from the increased SO2 emissions is acceptable, but should be monitored to confirm whether the actual impacts match those that were predicted.

Regarding impacts on vegetation, the Board found that the Appellants failed to establish that the analysis in the technical report regarding predicted impacts on vegetation, or the provisions in the monitoring plan with respect to vegetation, were flawed. Based on the evidence, the Board found that the risk to vegetation is acceptable, but should be subject to monitoring to confirm whether the actual impacts match those that were predicted.

Finally, regarding the adequacy of the public consultation process, the Board found that Rio Tinto complied with the applicable notification provisions in the Public Notification Regulation. Rio Tinto also complied with, and went beyond, the additional notification and consultation requirements that the Director imposed. Rio Tinto conducted several public meetings, and consulted with a wide range of government agencies, public health agencies, and community stakeholders regarding the application for the amendment. The Appellants’ testimony confirmed that they were aware of Rio Tinto’s application and the public meetings and information that were available to them, but they chose not to attend the public sessions or obtain information packages. After the public meetings had concluded, one of the Appellants expressed concern to Rio Tinto about the emissions, and Rio Tinto met with her on a statutory holiday to discuss her concerns, even though Rio Tinto was not obliged to do so.

For all of those reasons, the Board confirmed the permit amendment, and dismissed the appeals.