Environmental Review Tribunal
Tribunal de l’environnement
ISSUE DATE: February 15, 2018
CASE NO.: 11-125
PROCEEDING COMMENCED UNDER section 140(1) of the Environmental Protection Act, R.S.O. 1990, c.E.19, as amended
Appellant: Nagata Auto Parts Canada Co., Ltd. (ERT Case No. 11-125)
Appellant: Nortel Networks Limited/Corporation Nortel Networks Limited (ERT Case No. 11-126)
Respondent: Director, Ministry of the Environment and Climate Change
Subject of appeal: Order regarding the maintenance and operation of a groundwater extraction and treatment system, the name of a qualified Consultant to carry out the work of a clean-up plan and the discharge of volatile organic compounds, trichloroethylene and its breakdown products from operations impacting groundwater
Reference No.: 3250-8J4J3G
Property Address/Description: Site 1) Concession 3, PT Lot 15 RP 33R13850 Parts 3 to 5 Site 2) Concession 3, PT Lots 14 & 15 RP 33R12879 Parts 1 & 2 Site 3) Concession 3, PT Lots 14 & 15 RP 33R12879 Parts 3 to 9, and Site 4) Concession 3, PT Lot 15 RP EER13850 Parts 6 to 8
Municipality: County of Middlesex
ERT Case No.: 11-125
ERT Case Name: Nagata Auto Parts Canada Co., Ltd. v. Ontario (Environment and Climate Change)
Heard: January 19, 2018 by telephone conference call
APPEARANCES:
Parties
Counsel
Nortel Networks Limited/Corporation Nortel Networks Limitee
Alexandria Pike
Nagata Auto Parts Canada Co., Ltd.
Laird French
Director, Ministry of the Environment and Climate Change
Justin Jacob
Freightliner Properties Ltd.
Aaron Atcheson
The Corporation of the City of London
Geoffrey Belch and Lynn Marshall
ORDER DELIVERED BY HUGH S. WILKINS
REASONS
Background
1This Order is regarding a proposed settlement of an appeal. It arises from a Director’s Order from the Ministry of the Environment (now the Ministry of the Environment and Climate Change (“MOECC”)) requiring work to be done at a contaminated site in the County of Middlesex (“County”).
2Until 1994, Nortel Technology Limited/Nortel Technologie Limitee (together with its relevant successor companies referred to as “Nortel” in this Order) carried on business at a property in the County. Nortel’s property was subdivided into four sites in 1997, with Nortel retaining ownership of Site 1 (Concession 3, PT Lot 15 RP 33R13850 Parts 3 to 5). Site 2 (Concession 3, PT Lots 14 and 15 RP 33R12879 Parts 1 and 2) is now owned by Nagata Auto Parts Canada Co., Ltd. (“Nagata”) and is occupied by London Automotive and Manufacturing. Site 3 is owned by the Corporation of the City of London (“City”) (Concession 3, PT Lots 14 and 15 RP 33R12879 Parts 3 to 9). Site 4 is owned by Freightliner Properties Ltd. (“Freightliner”) (Concession 3, PT Lot 15 RP EER13850 Parts 6 to 8). Collectively, Sites 1, 2, 3 and 4 are referred to as the “Sites” in this Order.
3In 1999, Nortel paid for the installation of a groundwater extraction and treatment system to address groundwater contamination on Sites 1 and 2. The system operated under Certificate of Approval No. 5590-5J9TE4. A consultant was retained to manage the system and to provide annual monitoring program reports to the MOECC.
4When reviewing annual reports in June 2009, technical staff at the MOECC questioned the effectiveness of the system and its ability to keep contamination from migrating from Sites 1 and 2. On October 7, 2009, Provincial Officer Don Hayes issued Provincial Officer’s Order Number 6548-7WJKV4 (“Provincial Officer’s Order”) to Nortel, Nagata, the City and Freightliner concerning the impacts of contamination from volatile organic compounds (“VOC”) and trichloroethylene (“TCE”) and its breakdown products at various locations on the Sites. It required Nortel to retain a consultant to prepare a plan containing an assessment of the system’s effectiveness, an evaluation of potential offsite contaminant migration, a delineation of the area, location and extent of contamination, and an assessment of groundwater quality down gradient of the areas of contamination.
5On October 26, 2009, Nortel requested a review of the Provincial Officer’s Order by the Director. On October 29, 2009, Director’s Order No. DO-6548-7WJKV4 was issued to Nortel confirming the Provincial Officer’s Order in its entirety. On November 17, 2009, Nortel filed a Notice of Appeal with the Environmental Review Tribunal (“Tribunal”).
6On July 26, 2011, the Director informed the Tribunal that she intended to revoke her Order and that she had already issued a new Order on July 20, 2011 to replace it. This new Order was Director’s Order No. 3250-8J4J3G (“Director’s Order”). It too was appealed by Nortel and also by Nagata.
7While the 2011 Director’s Order is substantially similar to the 2009 Order, it addresses additional concerns about the Sites. Among other things, the Director’s Order requires that Nortel and Nagata prepare and obtain MOECC approval of a work plan for specified locations of groundwater impacts at the Sites in order to prevent or reduce the risk of discharge of contaminated groundwater into the natural environment and to prevent, decrease or eliminate any adverse effects that might result from such a discharge in, on or under the Sites.
8During the course of the above-noted events, Nortel obtained protection under the Companies’ Creditors Arrangement Act (“CCAA”). Since January 14, 2009, it has been subject to the oversight of the Ontario Superior Court of Justice (Commercial List) (“Superior Court”) with respect to issues regarding its insolvency.
9The Parties updated the Tribunal as the matter proceeded through the courts under the CCAA. Over this time period, the Tribunal convened numerous telephone conference calls (“TCCs”) at which it was informed of the Parties’ efforts to resolve the matters and at which procedural issues were addressed. Orders staying the Director’s Order were issued and the Tribunal granted party status to the City and Freightliner.
10On December 18, 2017, a TCC was held at which the Director and Nortel informed the Tribunal that they had a reached a settlement with respect to the Nortel appeal (Tribunal File No. 11-126). They requested the scheduling of a settlement TCC at which the proposed settlement would be presented to the Tribunal and the dismissal of that proceeding considered. As part of the proposed settlement, Nortel agreed to withdraw its appeal and the Director agreed to have the Director’s Order revoked as against Nortel. The proposed settlement arises from an agreement, dated November 6, 2017, that was reached between the MOECC and Nortel with respect to the MOECC’s claim in the CCAA proceedings. That agreement was approved by the Superior Court on November 28, 2017. Negotiations regarding a settlement of the Nagata appeal are ongoing and a settlement of that appeal is not being presented to the Tribunal at this time.
11As required under Rule 198 of the Tribunal’s Rules of Practice (“Rules”), Nortel notified the Tribunal and the other Parties by letter on December 19, 2017 that it proposed withdrawal of its appeal. Although the Director did not notify the Parties in writing of the proposed revocation of the Director’s Order as against Nortel, Nortel did indicate the Director’s support to have the Director’s Order revoked in its December 19, 2017 letter and the Director did give verbal notice at the December 18, 2017 TCC to all the Parties of her intention that it be revoked.
12On January 19, 2018, the Tribunal convened a settlement TCC at which it considered the proposed settlement. During the call, Freightliner asked to withdraw as a party to the proceeding, which the Tribunal acknowledged. As Freightliner was not an Appellant, its withdrawal was not subject to Rules 198 to 201.
Relevant Legislation and Rules
13The following are the relevant provisions of the Environmental Protection Act (“EPA”) and the Tribunal’s Rules:
Purpose of the Act
3.(1) The purpose of this Act is to provide for the protection and conservation of the natural environment.
Tribunal’s Rules
Termination of Proceedings
A Proponent or Applicant who proposes to withdraw an application, an Appellant who proposes to withdraw an appeal, or a Director, Risk Management Inspector or Official, Authority or municipality who proposes to revoke a decision that is the subject of the appeal shall notify the Tribunal, other Parties, Participants and Presenters by letter. Any Party, Participant or Presenter who objects to the proposed withdrawal of an appeal or revocation, with the exception of the revocation of an order made under section 74 of the Ontario Water Resources Act, shall notify the Tribunal and the other Parties, Participants and Presenters within ten days of the date of the letter.
Where there has been a proposed withdrawal of an appeal as part of a settlement agreement not objected to by any Party that alters the decision under appeal, the Tribunal shall review the settlement agreement and consider whether the agreement is consistent with the purpose and provisions of the relevant legislation and whether the agreement is in the public interest. The Tribunal shall also consider the interests of Participants and Presenters. After consideration of the above factors, the Tribunal may decide to continue with the Hearing or issue a decision dismissing the proceeding.
Where a Director, Risk Management Inspector or Official, Authority or municipality proposes to revoke a decision that is the subject of an appeal, the Tribunal shall consider whether the proposed revocation is consistent with the purpose and provisions of the relevant legislation and whether the proposed revocation is in the public interest. The Tribunal shall also consider the interests of Parties, Participants and Presenters. After the consideration of the above factors, the Tribunal may decide to continue with the Hearing or issue a decision dismissing the proceeding.
Issues
14The issues to be addressed are whether the Tribunal should accept the proposed withdrawal of the appeal brought by Nortel, accept the proposed revocation of the Director’s Order as against Nortel, and dismiss the corresponding proceeding under Rules 201 and 202.
Discussion, Analysis and Findings
15The Tribunal’s Rules require the Tribunal to consider whether a proposed withdrawal of an appeal (under Rule 201) and a proposed revocation of an order (under Rule 202) are consistent with the purpose and provisions of the EPA and whether they are in the public interest. In these regards, the Tribunal must also consider the interests of parties, participants and presenters. The Tribunal has the discretion either to continue with a proceeding or to dismiss it.
16Prior to the settlement TCC, Nortel filed the Affidavit of Leanne Burns, which was sworn on January 8, 2018. She is an environmental engineer at Golder Associates Ltd. (“Golder”). Among other tasks, Golder was retained by Nortel to undertake investigatory and risk assessment work at two critical areas on the Sites (identified by Ms. Burns as the “Swale Area” and the “Nagata Area”). In her affidavit, Ms. Burns states that Golder’s risk assessments of these two areas concluded that there are no remaining unacceptable risks to human receptors with the exception of risks to onsite utility maintenance workers, landscape maintenance workers and indoor workers (in any future building) in specific areas of the Sites. She states that potentially unacceptable ecological risks are limited to onsite terrestrial plants and soil organisms. In her affidavit, Ms. Burns states that risk management measures have been identified to address these risks and that groundwater monitoring is proposed. She states that the identified risk management measures are:
potential mitigation related to any future construction of buildings (e.g., soil vapour intrusion mitigation requirements) in specific areas of the Sites;
implementation of a health and safety plan with respect to utility workers in specific areas of the Sites; and
a barrier to site soils (soil or hard cap) to address risks related to landscape workers and ecological exposure in a specific area of the Sites.
Ms. Burns states that the investigations and risk assessments conducted by Golder satisfy the requirements of the Director’s Order “to a significant extent” and that under the current land use, only the implementation of the proposed risk management measures and monitoring is required. In her affidavit, she confirms the sufficiency of settlement funds proposed in the proposed settlement to undertake the future risk management measures and monitoring activities proposed in Golder’s risk assessment reports.
17In its submissions, Nortel states that it is insolvent and its assets will be distributed in accordance with the Court’s directions in the CCAA proceedings. It submits that it has spent significant resources to address the items in the Provincial Officer’s Order and the Director’s Order. It submits that the risk assessments that it has undertaken confirm that impacts could remain in place with limited risk and that any risks can be addressed through the management measures set forth in the risk assessment reports. It submits that the risk management measures and monitoring are the only remaining items of work to be done under the Director’s Order and that they are not significant. Nortel states that under the proposed settlement it will pay the MOECC approximately $3,000,000, which it submits is more than sufficient to address the outstanding work under the Director’s Order.
18The Director filed affidavits sworn by Todd Fleet and Jeffrey Markle, both dated January 17, 2018. They support the proposed revocation of the Director’s Order. Mr. Fleet is the District Engineer in the MOECC’s London District Office and Mr. Markle is a hydrogeologist employed there. They each state that they have reviewed Golder’s environmental risk assessments and are satisfied that they provide acceptable approaches to protecting the environment and human health in respect of the Sites. Mr. Fleet states that he is of the opinion that Nortel’s site investigations, assessments and reports “substantially satisfy” the environmental requirements of the Director’s Order and that the funds to be provided to the MOECC under the proposed settlement “are sufficient to implement the risk management measures described in the risk assessments”. He states that they will enable the MOECC to ensure that groundwater and soil contamination at the Sites are addressed and that measures will be taken that will be protective of the environment and human health. Mr. Markle adopts these statements made by Mr. Fleet.
19The Director submits that the focus of the Director’s Order was to identify the contamination and environmental risks in specific areas of the Sites, which has been done. She submits that the proposed revocation of the Director’s Order as against Nortel is a pre-condition for allowing funds to be provided to the MOECC under the proposed settlement for the purpose of addressing the environmental issues on the Sites. She submits that these funds provide for work that will ensure that the contamination that is the subject of the Director’s Order will be managed and/or remediated. She submits that the proposed settlement is consistent with the polluter pays principle and that, absent the settlement, such funding may not be made available. The Director submits that the proposed revocation and appeal withdrawal support the MOECC’s mandate to protect the environment and human health, are consistent with the purpose and provisions of the EPA and are in the public interest.
20None of the Parties oppose the proposed withdrawal of Nortel’s appeal and the proposed revocation of the Director’s Order as against Nortel. There are no participants or presenters in this proceeding.
21Taking into account the provisions of the Director’s Order, the work that has already been completed by Nortel, Nortel’s insolvency, and the funding that will be provided under the terms of the proposed settlement for further work to be undertaken at the Sites, the Tribunal finds that the proposed withdrawal of the Nortel appeal and revocation of the Director’s Order as against Nortel are consistent with the purpose and provisions of the EPA. The Tribunal also finds that they are in the public interest. The Tribunal notes with concern that there are outstanding risks to human health and the environment at the Sites, but is satisfied by the assurances of both of the Director’s experts and of Nortel’s expert that the funding to be provided will be sufficient to address these outstanding issues and to ensure the protection and conservation of the natural environment.
22The Tribunal accepts Nortel’s withdrawal of its appeal, revokes the Director’s Order as against Nortel, and dismisses the proceeding in Tribunal Case No. 11-126 pursuant to Tribunal Rules 201 and 202. Tribunal Case No. 11-125 (the Nagata appeal) remains open.
ORDER
23The withdrawal of Nortel’s appeal is accepted and the Director’s Order as against Nortel is revoked. The corresponding appeal (Tribunal Case No. 11-126) is dismissed.
Director’s Order Revoked in Part
Appeal 11-126 Dismissed
“Hugh S. Wilkins”
HUGH S. WILKINS
MEMBER
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Environmental Review Tribunal
A constituent tribunal of Environment and Land Tribunals Ontario
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