Changes to the Environmental Act cover contaminated sites, not spills

When considering forthcoming changes to the clean-up standards applicable to contaminated sites under Part XV.1 of the Environmental Protection Act (EPA), it is important to understand these standards do not generally govern regulatory clean-up obligations for spills or legal obligations at common law.
Mark Samis, vice president of operations for Environmental Solutions Remediation Services, made the observation, seconded by Gabrielle Kramer, environmental lawyer and partner at Borden Ladner Gervais, in response to a news item in Canadian Underwriter on Feb. 9.
The article discussed new regulations under Part XV.1. It cited a source who suggested that insurance companies, if they are involved in a site clean-up, should clean it up based on the new standards, even though the new regulations are not in force until later this year.
It is important to distinguish between obligations with respect to contaminated sites, to which Part XV.1 of the EPA and the new clean-up standards apply, and Part X of the EPA, which governs spills, Samis said.
There is no legal obligation to remediate your own property, unless there is a risk to human health, off-site migration onto another property, a regulatory order has been issued against the property owner or the site is being redeveloped for a more sensitive land use. As long as a domestic fuel spill remains onsite, the Technical Standards and Safety Authority (TSSA) has jurisdiction, Samis notes.
Part XV.1 addresses contaminated sites or Brownfield sites. These sites are usually impaired as a result of the impact of onsite, daily commercial or industrial operations.  The standards under Part XV.1 are intended to facilitate redevelopment of Brownfield sites and are used by property owners to restore their sites to conditions acceptable for re-development and/or sale.
Except in relation to specialized policies – such as remediation cost cap insurance and other pollution coverages – the new standards are less likely to govern the cleanup that will be required by the applicable policy, Samis says. Exceptions may include when the property, either onsite or off-site, is already contaminated.
Spills, by contrast, are covered under Part X of the Act and generally require a return to pre-existing conditions where practicable, as outlined in section 93 of the EPA, he adds.
Under Part X, the Standards in Part XV.1, do not usually apply – unless the property cannot be returned to its pre-existing condition, either because of physical impediments, or technical/financial impracticality, Samis says.
The regulatory obligation to return a spill site to pre-existing conditions (when possible) is consistent with legal obligations at common law and the insurance principal of making the injured party whole, but with no betterment.
Finally, insurers’ obligations are governed by the policy wordings and their contractual duty to their insureds, Samis says. They do not have direct legal liability for cleanup under the EPA.