Decision Date: March 20, 2015

Panel: Alan Andison, Brenda Edwards, Tony Fogarassy

Keywords: Environmental Management Act – s. 14; permit; contaminated soil; landfill; drinking water; delegation; jurisdiction; public consultation

The Shawnigan Residents Association (the “Association”), the Cowichan Valley Regional District (the “Regional District”), John and Lois Hayes, and Richard Saunders appealed a permit issued by a delegate acting on behalf of the Director, Environmental Management Act (the “Delegate”), Ministry of Environment (the “Ministry”). The permit was issued under section 14 of the Environmental Management Act (the “Act”). The permit authorizes Cobble Hill Holdings Ltd. (“Cobble Hill”) to operate a soil treatment and landfill facility on Cobble Hill’s property located approximately five kilometres south of, and upslope from, Shawnigan Lake. The Shawnigan Lake watershed provides drinking water to thousands of people who rely on surface water and groundwater sources, and the Regional District operates water supply systems in the watershed. The facility is adjacent to a rock quarry operated under a Mines Act permit, by a company that shares some common corporate directors with Cobble Hill. The Mines Act permit requires reclamation of the quarry.

The permit specifies the characteristics of the soil that may be accepted and landfilled at the facility. Among other things, the permit prohibits the disposal of hazardous waste. The facility is designed to process contaminated soil through bioremediation, if appropriate, or landfilling. Bioremediation is a process whereby organisms render contaminants harmless or less toxic. Soil that cannot be bioremediated will be encapsulated in engineered cells with leachate collection and leak detection systems. The cells will be placed in areas of the quarry where mining has been completed. The permit authorizes Cobble Hill to deposit and bury up to 100,000 tonnes of contaminated soil per year. The permit also regulates the characteristics of the treated effluent that may be discharged to an ephemeral stream that flows into Shawnigan Lake via Shawnigan Creek. Treated effluent must meet the most stringent of the provincial guidelines for aquatic life protection and drinking water use. The permit contains numerous other conditions, including requirements for Cobble Hill to: submit an environmental procedures manual to the Delegate for approval; drill two additional groundwater monitoring wells and provide the drill core results to the Delegate; monitor and report on groundwater, effluent and air emissions; and, provide financial security.

The Appellants raised numerous grounds for appeal. In general, the Appellants submitted that neither the facility’s site, nor its design, nor the permit requirements would protect domestic water supplies, fish habitat, and human health. The Appellants submitted that there was insufficient information to determine whether the environment and human health would be protected from risks associated with the facility. The Appellants also raised concerns about the Delegate’s jurisdiction to issue the permit, the adequacy of the Ministry’s consultations about the proposed facility, whether the Delegate properly exercised his discretion in issuing the permit, whether Cobble Hill can be trusted to operate the facility in compliance with the permit, and whether the Ministry will enforce the permit. The Appellants requested that the Board rescind the permit.

The Board conducted the appeals as an oral hearing which continued over 31 hearing days with 29 witnesses, including nine expert witnesses. Over 100 documents were tendered as evidence. The evidence before the Board was materially different from the evidence that was before the Delegate. After the permit was issued, further investigations occurred, new expert reports were prepared, two new monitoring wells were drilled, the facility’s environmental procedure manual was prepared, further works were added to the facility, and monitoring results became available. Consequently, the Board not only reviewed the Delegate’s decision-making process, but also assessed the merits of the permit based on all of the evidence.

In deciding the appeals, the Board addressed the following issues:

1.) Whether the Director’s letter delegating certain powers to the Delegate authorized the Delegate to consider the permit application and issue the permit.

The Board reviewed the Director’s letter of delegation and the relevant provisions of the legislation, and concluded that the Delegate was acting within the scope of his authority.

2.) Whether there were errors in the Ministry’s consultation process.

The Board found that the Ministry conducted extensive consultations about the permit application over a two-year period, involving two phases. In the initial phase, the permit application and a draft Technical Assessment Report prepared by Cobble Hill’s consultant were posted on the internet. Notice of the permit application was posted in a local newspaper and on site. Consultation letters were sent to other Ministries, local First Nations, local public interest groups including the Association, and local agencies such as the Regional District, the Vancouver Island Health Agency, and the Public Health Officer. Three public meetings were held. The Delegate required Cobble Hill’s consultant to respond to issues raised during these initial consultations.

In the second phase, the Ministry took the unusual step of making a draft permit publicly available and seeking input on it. The draft permit was sent to all individuals, groups, and agencies that had previously provided comments. In addition, the draft permit was available on the Ministry’s website and at the Shawnigan Lake Community Center. As a result of the comments and new site investigation data that were received during this phase, Cobble Hill’s consultant revised the Technical Assessment Report and the facility design.

The Board found that, to the extent that there were any flaws in the initial consultation phase due to the evolving nature of the Technical Assessment Report and the facility design, they were corrected during the second phase. The Delegate went well beyond the notification and consultation requirements in the Public Notification Regulation, and the usual consultation undertaken on permit applications. This ground for appeal was dismissed.

3.) Whether the Delegate properly considered the information obtained during the review process and properly exercised his discretion by making appropriate investigations, considering relevant information, and by applying relevant policies, in an unbiased manner.

The Board dismissed this ground for appeal after considering several sub-issues. The Board held that the Delegate properly considered the reports prepared by Cobble Hill’s consultant for the permit application. The Board found that the Delegate was aware that Cobble Hill’s consultant was acting as an “advocate” for the permit application. The fact that the consultant was an advocate for the application, that its original reports were revised in response to questions and concerns, and that it was still owed money by Cobble Hill, did not disqualify it from being a “qualified professional.”

The Board also found that the Delegate was aware of the test for considering whether to issue the permit under section 14 of the Act. Specifically, when assessing the potential for harm to drinking water resources, the correct approach is to be “prudent and cautious,” and where the permitted activity poses a threat of serious or irreversible damage to the environment, a rigorous analysis of the application is required, including a comprehensive investigation of the site.

Regarding the potential social and economic impacts of the permit, the Board found that the Delegate considered the values associated with water resources in the watershed, and the concerns raised about the potential impacts of the facility on residents’ wellbeing and economic livelihood.

The Board considered the applicability of the Hazardous Waste Regulation, and the Ministry’s guidelines and protocols regarding contaminated sites and municipal landfills, to the permit application. The Board found that the Delegate was not bound by them, and in any case, they were considered by the Delegate, to the extent that they were helpful in assessing the permit application.

Regarding the Appellants’ allegation that the Delegate relied on inaccurate or incomplete information, the Board found that the Delegate did not solely rely on the information provided by Cobble Hill’s consultant, and the Delegate took care to consider contrary information. The Delegate made appropriate inquiries, was aware of the remaining uncertainties about the site’s geology and hydrogeology, and he addressed those uncertainties requiring Cobble Hill to provide further information and drill additional monitoring wells.

Additionally, the Board found that the Delegate evaluated the input that was received through the consultation process, and he made several changes to the draft permit as a result of that input. The Delegate was aware of the public’s concerns about the facility. However, the Board found that public opposition, in the absence of evidence of environmental impacts or risks to human health, is not a proper basis for refusing a permit under the Act. The Board noted that the Delegate included a requirement in the permit for an Advisory Committee. Given the high degree of public concern regarding the permit, the Board directed that the Committee should include representation from the Residents Association and/or other interested community members, as chosen by the Delegate.

Further, the Board found that the Delegate did not fetter his discretion, and there was no evidence that he was either biased in favour of the permit or colluded with Cobble Hill.

4.) Is the site suitable for the facility?

The Board found that, if the site alone was the sole protector of the environment and human health, the Board would rescind the permit or send it back for further site investigation. However, the site’s geology is just one type of protection, and the evidence established that the bedrock provides some protection to groundwater. Based on the evidence, the Board found that the site is suitable for the facility, provided that the facility design provides adequate primary protections, and the permit requirements provide additional “checks and balances” to protect the environment and human health.

5.) Will the facility, as designed, protect the environment and human health?

The Board found that the facility design evolved, before and after the permit was issued, to improve environmental protection. The design takes a proactive approach to environmental protection through screening, management and storage of soils, the use of cell liners and barriers to prevent groundwater from contacting contaminated soils, the separation of water that has contacted contaminated soils from non-contact water, the treatment of contact water, the inclusion of a leachate detection system, and a sophisticated drainage system. The design was modified to address the risk of flooding and to manage storm water events. The permit includes requirements for sampling and monitoring, to ensure that the facility operates as designed.

Based on the evidence, even if there are continuous fractures beneath the quarry, a contaminant leak from the landfill would no longer be contaminated by the time it reached the lake. The evidence also indicated that any contaminant leak would extend 500 metres at most, and could be cleaned up, albeit at considerable expense. The Board was satisfied that the drainage system at the site addresses surface water and keeps non-contact water separate from contact water, which is subject to treatment. Further, should any treated contact water reach the ephemeral stream or Shawnigan Creek, it will be diluted to render it harmless.

However, the Board acknowledged that there is always a risk that a design component may fail. To minimize the identified risks, the Board directed that the facility’s environmental procedures manual be amended to prevent the re-use of cell liner in the event that a cell is deconstructed and moved. In addition, blasting is to be prohibited while liners are being installed. Finally, a permanent roof must be constructed over the soil management area, to reduce the amount of precipitation that contacts the contaminated soil. As there is no wheel washing facility at the site, the Board directed the Delegate to amend the permit to require that the wheels of soil transport vehicles be rinsed before leaving the site. The Board concluded that, subject to these directions, the facility design would protect the environment and human health.

6.) Will the conditions and requirements of the permit ensure that the facility operates in a manner that protects the environment and human health?

The Appellants submitted that the permit does not address the harm caused by increased traffic travelling to and from the facility, and the dust and noise from trucking soil to the facility. However, the Board found that there was no evidence to substantiate those concerns, and the Delegate may amend the permit to address those matters if they arise in the future.

The Appellants also submitted that the permit requirements for sampling, monitoring, and financial security are inadequate. The Board found that the sampling and monitoring requirements reflect a cautious and careful response to environmental risks. The monitoring program will be adjusted to address the changing site conditions over time. However, the Board found that, in applying a cautious approach, it was appropriate to direct the Delegate to amend the permit to require water quality monitoring in the ephemeral stream immediately following a storm event greater than 1-in-200 years.

The Board found that the permit’s financial security requirements are adequate to address the present and future risks associated with the facility. Cobble Hill has posted security in the amount of $220,000. This amount was determined by an independent accountant, and there was no evidence that it is insufficient. Moreover, the amount must be reviewed every five years, and may be reassessed more frequently if the Delegate decides that is warranted. The requirement for security to be replenished within 60 days of its use provides an additional guarantee that sufficient money will be available to address any issues that might arise from the facility.

7.) Is Cobble Hill a suitable entity to be named to the permit?

The Appellants submitted that Cobble Hill is an unreliable operator, based on events that occurred before and after the permit was issued, and it should not be trusted to operate the facility in compliance with the permit. However, the Board found that there was no basis to conclude that Cobble Hill is unreliable or should not be trusted to comply with the permit.

8.) Does the Ministry lack the resources and/or intent to enforce the permit?

The Board found that, to date, the Ministry had been actively ensuring compliance with the permit. The Delegate has required additional testing and investigation under the permit, and required or approved changes which resulted from the new data. The Ministry has received, reviewed and approved reports required under the permit, and required further work to address concerns regarding the water treatment system. The Board found that the Delegate has demonstrated that he has the ability to enforce the terms of the permit, and he is actively doing so.

In conclusion, the Board confirmed the permit, subject to the Board’s directions to the Delegate to amend or add requirements to the permit. The appeals were dismissed.