Canadian Federal Bill C-15



OIL SPILL RESPONSE IN CANADA:CURRENT DEVELOPMENTS, PARLIAMENT’S BILL C-15 &THE ROLE OF THE MARINE ENGINEER
Prepared by Jeff Smith*for a meeting of the Vancouver Island Branchof the Canadian Institute of Marine EngineeringSeptember 15, 2005
Introduction
Marine oil spill response is, at once, both the most challenging and least exciting role for the marine engineer today. “Spill response” demands considerable technical knowledge and clear leadership. The development of good spill response prevention and contingency planning is the mundane, less attractive part of the work.
Oil spill prevention and response are entering what should be considered as a “third generation” of development. This third generation is driven by a combination of factors, including technical and legal advances.
To begin with, there were those limited measures provided for in Canadian and international law until the late 1960s. A second generation or phase of spill response was triggered by the M.V. Torrey Canyon spill off the southwest coast of England in 1967. This event, with others of the early 1970s, culminating perhaps in the widely reported M.V. Amoco Cadiz, M.V. Exxon Valdez and M.V. Braer incidents of the late 1970s through the early 1990s ushered in the second generation of pollution prevention and response. Canada’s response has been consistent with other OECD States and, notably, the requirements of the United Nations International Maritime Organization1. This second phase of development is now essentially complete. Legislation has been brought into force, industry compliance is generally being assured, and most maritime States have some proven ability to respond to large scale oil spills along their coasts. This second phase might be summarized by regarding it as the era of robust technical measures, coupled with the maturation of spill response measures, at least in developed countries.
Three developments are occurring which will bring the marine engineer into the third generation of spill prevention and response. They are:
(1) the increase in marine oil and gas exploration, recovery andtransportation by sea;Canadian Institute of Marine Engineering
(2) increasing national and international regulation of oil transport and delivery; and
(3) a heightened public and government understanding of the harmful effects of marine oil spills.2
This paper canvasses the law and regulation of oil spill prevention in Canada, with a view to explaining the pending changes in such third generation.
The Legislative Scheme in Canada
The regulation of the carriage and handling of oil in Canada’s marine industry falls more or less exclusively to the federal government or “Crown”. There are two reasons for this. First, oil spills may transcend provincial and international boundaries. Second, section 91(10) of the British North America Act, 18673 prescribes that the regulation of “navigation and shipping” in Canada is exclusively a matter for Parliament. As such, legislatures of the provinces are not “competent”, that is, do not have the required jurisdiction to regulate in respect of marine matters.4
The primary legislative vehicle for regulation of shipping and therefore of marine oil spills has been, until recently, the Canada Shipping Act, R.S.C. 1985, c. S-9 (the “Act”).5 The Act is supported by comprehensive “secondary” legislation – Regulations – which contain detailed prescriptions for technical and design matters in the marine industry. These range from the Air Pollution Regulations to the Steering Appliance & Equipment Regulations. All are worthy of occasional review by the marine engineer.
There has been much effort in recent years by Transport Canada, with help from the federal Department of Justice, to modernize the Canada Shipping Act’s comprehensive regulatory scheme. This is being done under the label of “CSA reform”.6 It is important to understand that the legislative drafting and consultative processes for this large scale amendment of the Act and many of its Regulations continues. At best, the process is only half complete. The Canada Shipping Act 2001 (CSA 2001) was proclaimed (i.e. enacted) on November 1, 2001. CSA 2001 is not yet in force. That is, CSA 2001 is not yet governing law in Canada. It will not be until comprehensive regulatory drafting and review is done, in order to ensure conformity of such “secondary legislation” with the new Act.
An example of what is needed to complete this overhaul of national shipping law can be found in the measures which will replace the Part XV pollution prevention provisions of the current Canada Shipping Act. Part 8 of CSA 2001 is intended to modernize pollution prevention. The present “Response Organizations and Oil Handling Facilities Regulations are to be replaced with detailed “Environmental Response Regulations”. However, the latter Regulations are only now at a draft stage. These Regulations take their impetus, in part, from “OPRC 1990”, the International Convention on Oil Pollution Preparedness, Response and Cooperation, 1990. The Convention came into force in May 1995. States who have ratified OIL SPILL RESPONSE IN CANADA:CURRENT DEVELOPMENTS, PARLIAMENT’S BILL C-15 & THE ROLE OF THE MARINE ENGINEERCanadian Institute of Marine Engineering the Convention must establish measures for dealing with pollution incidents, “either nationally or in co-operation with other countries”.7 Part of this includes a requirement for ships and offshore platforms to have spill response plans. These requirements are reflected in Canada’s current and draft regulations.
Canada found itself in the second generation of marine oil spill policy both when OPRC/IOPC 90 and the 1990 Public Review Panel on Tanker Safety and Marine Spills Response Capability completed its report.8 This Panel, as with the 1994 “Safer Ships, Cleaner Seas” report of Lord Donaldson’s committee following the stranding of the M.V. Braer in the Shetland Islands, was created in the face of public attention to oil transport and handling in Canadian waters.9 The
Marine Liability Act
Not all marine liability provisions in Canadian legislation are contained in the current Canada Shipping Act and CSA 2001. In 2001, the Marine Liability Act was again reintroduced to Parliament. It is special legislation drafted to modernize complex and outdated marine liability issues. It received Royal Assent on May 10, 2001 and many – but not all – provisions came into force on August 8, 2001.
It should be understood that the Marine Liability Act does not so much contain substantive liability measures as it sets out schemes for recovery in the event of loss of life, or injury or loss of property in marine settings. The Act, in other words, does not so much define liabilities as it prescribes how they are to be resolved between parties with interests in ships and marine cargo. The Marine Liability Act also provides for ship source oil pollution compensation and the division of liabilities between parties responsible for a loss. Moreover, the Marine Liability Act brings into Canadian law international conventions. Indeed, much of the overhaul of national marine and shipping law is being done to ensure conformity with international treaty protocols. Canada is, after all, a maritime trading nation.
Adding to the complexity of the Marine Liability Act, certain conventions such as the Hamburg Convention, which regulates the carriage of goods by sea, have not yet come into effect in Canada and are also to be modified for Canadian commercial purposes by specific provisions of the Act.
The current legislative scheme is this. Marine oil handling, spill prevention and spill response are governed by the Canada Shipping Act and the Oil Pollution Prevention Regulations in the case of ships and ship fuelling, and the Response Organizations and Oil Handling Facilities Regulations in the case of oil storage and fuelling facilities, and marine oil spill response.
Liability arising from marine oil spills is addressed in the Marine Liability Act. This Act includes provisions for administration of Canada’s Ship-source Oil Pollution Fund (“SSOPF”) and the International Oil Pollution Convention (“IOPC”) fund (1971). At their OIL SPILL RESPONSE IN CANADA:CURRENT DEVELOPMENTS, PARLIAMENT’S BILL C-15 & THE ROLE OF THE MARINE ENGINEERCanadian Institute of Marine Engineering simplest both funds operate to provide compensation for oil spill related losses. The former fund is usually administered by a lawyer, and has power under the Act to sue shipowners (and others) to recoup the fund’s payment to claimants.10
Statutory and other sources of liability for marine oil spills
The personal liability of the marine engineer for an oil pollution incident deserves separate consideration. That liability might result under the Criminal Code or the two Acts above, as well as under the Fisheries Act and provincial pollution and environmental protection legislation, such as British Columbia’s Water Act. Moreover, the controversial amendments to Canada’s Migratory birds Convention Act establish a new source of statute-based liability. Liability can also be “non-regulatory”, including from a breach of contract obligations and in “tort”, that is, negligence. The “duty of care” of a marine engineer varies from situation to situation and moment to moment. What is “reasonable” in some circumstances may not be in others. That context places the exceptional judgment and experience of the marine engineer at the fore. It is why his or her advice is valued during pollution planning, in response exercises and when dealing with incidents.
Until recently, the accepted scheme to regulate oil spill liability in Canada was in a technical-regulatory compliance sense under the Canada Shipping Act and in an enforcement sense under the Fisheries Act. The enactment of Bill C-15 this year adds considerably to the toolbox of enforcement and prosecution measures available to the federal government.
At first glance, Bill C-15 seems an imprecise way to deal with the problem of marine oil spills. The name of the Bill itself is somewhat oblique: An Act to Amend the Migratory Birds Convention Act, 1994 and the Canadian Environmental Protection Act, 1999.11
Bill C-15 is “remedial” legislation. It is intended to address the problem of marine oilspills affecting seabirds in Canada’s 200 nautical mile exclusive economic zone. This problem is considered particularly serious on Canada’s east coast, where it is said that some 300,000 seabirds are oiled every year by ship tank washing and illicit bilge pumping.
What does Bill C-15 do? The following are obvious:
(1) extends government reach for purposes of enforcing the Bill into the Canadian EEZ. This was a primary goal of “conserving” seabirds under the Bill, and is a measure that directly targets the foreign flag vessels passing through Canada’s extended offshore jurisdiction;
(2) markedly increases the penalties for oil spill incidents that cannot be defended or justified by the taking of “due diligence” measures by marine operators, marine companies, ship’s offices and corporate executives. Terms of imprisonment are prescribed. Fines of up to $1,000,000 are also available under the Bill, with the added feature of a tonnage based fine: where a ship OIL SPILL RESPONSE IN CANADA:CURRENT DEVELOPMENTS, PARLIAMENT’S BILL C-15 & THE ROLE OF THE MARINE ENGINEERCanadian Institute of Marine Engineering involved in a punishable incident is greater than 5,000 tonnes, minimum fines of $100,000 and $500,000 must be applied. These fines extend beyond a corporate shipowning entity to persons involved in the management and operation of the offending ship;12 and
(3) changes the standard or threshold of liability with which a person or company accused of “depositing a substance harmful to seabirds” must defend themselves. In ordinary criminal law statutes, the state – the government prosecuting an alleged offender – bears all the “burden” of proof. In the case of Bill C-15, that standard – and thereby the presumption of innocence” ordinarily applied in criminal matters – is changed. A person accused of an offence under Bill C-15 bears the burden – once the person is “tied” by evidence to the fact or actual occurrence of the spill – to establish that he or she took all reasonable measures. In other words, an accused will need to establish that he or she exercised “due diligence” to prevent a spill or (more broadly) the deposit of a harmful substance.
Bill C-15 is not particularly clear on what constitutes a “substance harmful” to migratory seabirds. Oil in all of its forms in our industry in an obvious example. But what of those substances harmful to a fisheries habitat, but not to seabirds themselves, and vice versa? Canola oil is an example of the latter. It is a bulk product carried in large volumes for export from Vancouver. It is not harmful to fish or fisheries habitat. However, like all other organic (plant derived) oils, it can be harmful to seabirds by interfering with the insulative properties of their feathers.
In the face of this, sound advice to the marine engineer (and marine industry managers) is simple: put in place training, technology and continually improved measures to safeguard oil (and other harmful products), to prevent spills and to respond effectively when an incident does occur. How government and industry has developed to deal with the last of these issues we now consider.
Response Organizations
It is not simply enough to recognize that the government of Canada mandated has required the creation of response organizations capable of dealing with marine oil spills of up to 10,000 tonnes.13 What are the organizations, and how do they function?
Each Response Organization is to be established “by industry”, that is, the commercial interests most closely involved with oil storage, transport, handling and delivery. In general, the Response Organizations (“ROs”) are both self regulating, and have substantial autonomy to raise fees from users to maintain response ability. Industry will or may be both an owner in the RO, and a possible user, paying fees for oil handling through the Bulk Oil Cargo Fee scheme of the Regulations, or for the costs associated with a specific spill response. ROs are found in central Canada (the Great Lakes), in the Maritimes and in British Columbia. In OIL SPILL RESPONSE IN CANADA:CURRENT DEVELOPMENTS, PARLIAMENT’S BILL C-15 & THE ROLE OF THE MARINE ENGINEERCanadian Institute of Marine Engineering theory, there should exist a similar “full scale” RO for Canada’s north, but exemptions in the Regulations, together with any present lack of oil transport up to 10,000 tonnes and the practical reality of Arctic operations have resulted in a less pronounced spill response posture north of the Arctic.
On Canada’s west coast, the designated RO is Burrard Clean Operations (“BCO”). Its mandate is clear:
BCO is on call 24 hours a day, 7 days a week to respond to spills. In fact, history has shown that many spills occur during long weekends or holidays. Regardless of the time or location,
BCO can help. BCO relies on a network of contractors and the commercial fishing fleet to assist with spills.
Geographic Area Covered
Situated in the Vancouver area, BCO is able to quickly respond to spills in the southern Strait of Georgia, Burrard Inlet or in the Fraser River. Because BCO’s mandate is to protect all of BC’s navigable waters, much of BCO’s spill response equipment inventory is located throughout the rest of the province. This ensures a timely response to spills, regardless of their location.14
It is useful to compare the plans and procedures of Burrard Clean with those of its maritime equivalent, Eastern Canada Response Corporation (“ECRC”). ECRC has a wider geographic area in which it must operate – encompassing the Great Lakes and the eastern seaboard – thus relying on devolved storage facilities and a distributed response plan. Local commercial interests therefore must arguably be better placed to initially provide for themselves in the event of a spill, or at least up to 2,500 tonnes.15
The Regulations require more than a competent RO. They mandate prevention and response measures almost to the individual level, whereby all but the smallest oil transfer facilities are required to have a response plan in place, to update it annually and to report on changes to such a plan, in addition to routine spill incident reporting. Here, the development of the plan, and its testing, could fall to the marine engineer. It is not just ships and their carriage of oil which concern our profession.16 The land-sea “interface” for oil handling and transfer is a vital part of what the marine engineer is called to understand.
From Response to Planning – What Lies Ahead for the Marine Engineer
The Canadian marine engineer is called on to understand and make decisions in the application of technology. Increasingly he or she must know the context of the operating environment; that Canada competes globally in the trading of resources and their movement by sea. What this means is that the regulatory “environment” driven by commercial and socio-political factors, must be taken into account. Compliance was never a “letter of the law” affair for the marine engineer, simply because the judgment to be made – both for the OIL SPILL RESPONSE IN CANADA:CURRENT DEVELOPMENTS, PARLIAMENT’S BILL C-15 & THE ROLE OF THE MARINE ENGINEERCanadian Institute of Marine Engineering technical and operating sides of the house – was too complex and cast in other considerations.
The marine engineer must therefore have a basic grounding in Canada’s international obligations. These obligations, in turn, are found for many of us in domestic law and operations –most recently Bill C-15. It is from an understanding of the legal regime that the engineer can take into account his vessel (or facility) and its local operating context. To do this, the changes in technology of oil spill prevention measures, equipment and response systems need to be understood. The more important role of “human factors”, however, is the most important factor for the marine engineer to consider, that is, how those factors affect planning and the application of resources to spill prevention and how actual incidents will be dealt with.
The increased exploration for oil (and gas), coupled with an expanding Canadian economy but guarantee continued public and government attention to the safe handling of oil and spill response. How the challenges of spill prevention and response are met will continue to be foremost for the marine engineering community to provide the needed leadership.
* Jeffrey J. Smith, Barrister and Solicitor. The opinions expressed herein are solely those of the author and do not represent the views or policy of any other person or organization. jjsmith@uniserve.com Tel: 604 603 3015 1
“IMO”. See the IMO website at URL: www.imo.org See especially the “Marine Environment” and “Publications” pages. See especially the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto (“MARPOL 73/78”). A Canadian engineer, Mr. Bill O’Neil, served as IMO Secretary–General until 2004. 2 Consider the loss of the tanker M.V. Prestige with more than 70,000 tonnes of oil, off Spain’s north-west coast in November 2002. 3See The Constitution Act, 1867, 30 & 31 Vic. C. 3 (U.K.). 4 Land based and land originating spills are a different matter and do ordinarily fall to provincial regulation. Consider also B.C.’s marine oil spill response plan, at URL: www.gov.bc.ca/eeeb/marineoilplan/oilpl.html 5 A current, amended edition of the Act is most readily viewed at URL:http://laws.justice.gc.ca/en/S-9/6 See Transport Canada’s website at URL: www.tc.gc.ca/marinesafety/rsqa/csa2001regrefsite/menu.htm. There were a variety of rationales for broad reform, notably for carriage of passengers and goods by sea through a more uniform compliance with international commercial practice and treaty obligations, and because of court judgments. Consider, for example the Athens, Hague-Visby and Hamburg Conventions for the carriage of passengers and goods at sea, to which Canada is a State signatory. OIL SPILL RESPONSE IN CANADA:CURRENT DEVELOPMENTS, PARLIAMENT’S BILL C-15 & THE ROLE OF THE MARINE ENGINEERCanadian Institute of Marine Engineering 7 See URL: www.imo.org/home.asp 8 See David Brander-Smith, Denise Therrien and Stan Tobin. “Protecting our water,” Final Report of the Canada Public Review Panel on Tanker Safety and Marine Spills Response Capability, (September 1990, Government of Canada). 9 London, HMSO, 1994. 10 See also the Ship-source Oil Pollution Fund Regulations. Consider also the case of the Irving Whale, for which compensation was sought by the Government of Canada against both the SSOPF and the IOPC Fund. The government had raised the vessel (a tank barge) in 1996, at a cost of $42,000,000. It was unsuccessful in its claims against the Funds, because the claims were time barred (i.e. brought too late). See Canada v. J.D. Irving, (December 21, 1998) No.T-1625-97 (F.C.T.D.). For a useful history of the Irving Whale affair, see URL: www.ucs.mun.ca/~rsexty/business8107/irving.htm 11 A Bill in Parliament ceases to be called such, and becomes an enactment upon receiving Parliament’s approval at “Third Reading”. An Act then receives “Royal Assent” and comes into force automatically or, if provided for in the Act, by later order of the cabinet. Bill C-15 received Royal Assent on May 19, 2005 and came into force thereafter. It is important to note that Bill C15 amended two statutes, and that those statutes need to read in light of such amending changes. See http://laws.justice.gc.ca 12 There also some unique penalty provisions in Bill C-15. These include a court directed environmental audit of a polluting organization and a means to require payment of compensation to persons with losses from a pollution incident. See section 12 of Bill C-15. 13 There has been criticism that a 10,000 tonne response “regime” is not sufficient, and that resources to deal with a major spill in Canada are not well situated. See the West Coast Environmental Law Association’s critique, now somewhat dated, at URL: www.bcen.bc.ca/bcerart/Vol6/oilspill.htm See also the Greenpeace website, at URL: www.greenpeace.se/esperanza/English/pics.htm 14 Burrard Clean Operations’ website has useful information. See URL: www.burrardclean.com See also the Coast Guard’s Pacific Region website, at URL: www.pacific.ccg-gcc.gc.ca/er/index_e.htm 15 See ECRC’s website at URL: www.ecrc.ca 16 See the Oil Pollution Prevention Regulations of the Canada Shipping Act, Part 5, “Shipboard Emergency Plans and Declarations” at URL: http://laws.justice.gc.ca/en/S-9/SOR-933/52161.html#rid-52339 OIL SPILL RESPONSE IN CANADA:CURRENT DEVELOPMENTS, PARLIAMENT’S BILL C-15 & THE ROLE OF THE MARINE ENGINEER

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