R. v. B. Cusano Contracting Inc. et al. Date:, 2011 BCPC 348

Citation: R. v. B. Cusano Contracting Inc. et al. Date: 20111110 2011 BCPC 0348 File No: 208513-1 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. B. CUSANO CONTRACTING INC., R.F. BINNIE & ASSOCIATES LTD., KINDER MORGAN CANADA INC., and TRANS MOUNTAIN PIPELINE L.P. EXCERPTS FROM PROCEEDINGS REASONS FOR SENTENCE OF THE HONOURABLE JUDGE C. BAGNALL Counsel for the Crown: J. MacAulay Counsel for the Accused B. Cusano: M. Braidwood Counsel for the Accused R.F. Binnie & Associates Ltd.: N. Hughes Counsel for the Accused Trans Mountain Pipeline L.P.: J.

Sullivan Place of Hearing: Vancouver , B.C. Date of Hearing: November 10, 2011 Date of Judgment: November 10, 2011 [ 1 ] THE COURT: Each of B. Cusano Contracting Incorporated, R.F.

Binnie & Associates Limited, and Trans Mountain Pipeline L.P. has entered a plea of guilty respecting the following charge, that on or about the 24th of July, 2007, at or near the City of Burnaby in the Province of British Columbia, it did introduce waste, to wit, synthetic crude oil, into the environment in such a manner or quantity as to cause pollution contrary to s. 6(4) and s. 120(3) of the Environmental Management Act . [ 2 ] The offence in question is a regulatory offence. It is not a criminal offence.

The pleas of guilty mean that the defendants admit that they did not take the necessary care to avoid what ultimately occurred. It is very clear on all of the information I have received that the defendants did not in any way deliberately cause pollution in Burrard Inlet. [ 3 ] The maximum penalty for this offence is a fine of $1,000,000.00. [ 4 ] The Crown and the three defendants agree on the following facts.

I am going to read most of the agreed statement of facts into the record because that has not been done yet and I think it should be clear on the record what I have taken into account and what exactly has been admitted. The Defendant Corporations [ 5 ] B. Cusano Contracting Incorporated is a British Columbia registered corporation. It was incorporated on May 8, 1989. B. Cusano Contracting Incorporated is a general contractor with operations based in Surrey. The core number of employees is approximately 10 with the potential for significantly increasing the company's workforce as work becomes available. B.

Cusano Contracting Incorporated, (hereafter "Cusano"), primarily provides construction services in the Lower Mainland. The company is privately owned. [ 6 ] R.F. Binnie & Associates Limited is a British Columbia registered corporation. It was incorporated on March 11, 1965. R.F.

Binnie & Associates Limited, (hereafter "R.F. Binnie"), provides civil engineering and project management services for small to large- scale projects. The company head office is in Burnaby with six other offices distributed throughout the province. The core number of employees is approximately 100. The company provides services to public and private sector clients throughout British Columbia. The company is privately owned. [ 7 ] Trans Mountain Pipeline L.P., (hereafter "TMPP"), is a limited partnership that was registered in and organized under the laws of Alberta on February 23, 2007.

TMPP is the owner of the Trans Mountain Pipeline, which connects crude oil and refined product sources in Alberta with refineries, terminals, and distribution centres in British Columbia and Washington State. TMPP succeeded Terasen Pipelines Trans Mountain Incorporated as owner of the Trans Mountain Pipeline on April 30, 2007. [ 8 ] All of the accused corporations and partnerships were in good standing with the appropriate corporate registries as of July 24, 2007, and continue to be so at the time of sentencing.

The Pipeline [ 9 ] The Trans Mountain Pipeline is 1,050 kilometres in length and has a diameter of 610 millimetres, which is about 24 inches, for most of that length. The Trans Mountain Pipeline can transport approximately 300,000 barrels of oil per day and can transport different products in batches rather than being limited to transporting one product type at a time. The Trans Mountain Pipeline runs through a variety of different environments, both urban and rural, wilderness and agricultural.

It has been in operation since 1953. [ 10 ] Kinder Morgan Canada Incorporated, (hereafter "Kinder Morgan"), operates a number of provincially and federally regulated pipelines in Canada. Kinder Morgan by way of a contract with TMPP is the operator of the Trans Mountain Pipeline. All actions taken by Kinder Morgan in regards to the Trans Mountain Pipeline and related pipelines are taken on behalf and under the control of TMPP. [ 11 ] The Trans Mountain Pipeline crosses the provincial boundary between Alberta and British Columbia.

Since it is an interprovincial pipeline, it is regulated pursuant to the federal National Energy Board Act and the National Energy Board Pipeline Crossing Regulations and is subject to the oversight of the National Energy Board, (hereafter "the NEB"). [ 12 ] The interprovincial pipeline sector is highly regulated. For a party to own and operate an interprovincial pipeline, a certificate of public convenience and necessity must be issued by the Federal Cabinet. Significant amendments to the certificate must be approved by Cabinet.

Pipeline construction, tolls for pipeline use, and pipeline operational changes are all subject to NEB review. [ 13 ] Among other destinations, the Trans Mountain Pipeline delivers crude oil and refined products to the Burnaby Terminal, located at 7815 Shellmont Street in Burnaby, British Columbia. Delivered products are stored at the Burnaby Terminal and distributed through separate pipelines to other local terminals. [ 14 ] One of those pipelines is the Westridge Delivery Line which delivers product to Westridge Marine Terminal, located on the shore of Burrard Inlet at the end of Cliff Avenue in Burnaby.

The Westridge Delivery Line runs underground for approximately four kilometres from the Burnaby Terminal down to Westridge Marine Terminal over which it has a vertical drop of 134 metres. [ 15 ] As with the Trans Mountain Pipeline, TMPP is the facility owner of the Burnaby Terminal, the Westridge Delivery Line, (hereafter "the pipeline"), and the Westridge Marine Terminal. Similarly, Kinder Morgan is the operator for all of these facilities. Legal Obligations of the Defendants [ 16 ]

Section 112 of the National Energy Board Act prohibits persons from constructing facilities across, on, along, or under a pipeline or excavating using power-operated equipment or explosives within 30 metres of a pipeline without leave of the NEB.

Part I of the Regulations provides an exemption from the requirement to obtain leave of the Board where the person obtains permission from the pipeline company and abides by the requirements in

Part I of the Regulations. [ 17 ]

Section 4 of

Part I of the Regulations requires a party wishing to construct or install a facility within a right of way of a pipeline to obtain written permission from the pipeline company prior to construction. The party must accept the pipeline company's terms for conducting the construction set out in the permission document. The party must ensure that the construction work is carried out in accordance with the technical details set out by the pipeline company. [ 18 ] If the pipeline company suspends permission to the party for the construction activity, the party must cease work.

Unless otherwise agreed, the party must give the pipeline company at least three working days' notice prior to starting construction. [ 19 ] Prior to construction, the party must confirm with the pipeline company that the pipeline has been located in the areas where construction will occur and must ensure that it, as the party conducting the construction, understands the location markings. Lastly, the party must comply with the instructions of pipeline company field representatives regarding the procedures to be followed while working in the vicinity of the pipeline. [ 20 ]

Section 6 of

Part I of the Regulations requires that any party excavating within three metres of a pipeline not use a mechanical excavator unless the pipeline has been exposed by hand or the pipeline company directly supervises the excavation. [ 21 ]

Part II of the Regulations sets out the obligations of the pipeline company when responding to a party's request to carry out construction or installation of facilities or excavation within the right of way of the pipeline. [ 22 ]

Section 5 of the

Part II of the Regulations requires a pipeline company to submit for the NEB's approval detailed guidelines to be included in the company's permission to a party to carry out construction or excavation in the right of way of a pipeline. [ 23 ]

Section 9 of

Part II of the Regulations requires a pipeline company, on the request of a party to locate the pipeline, to inform the party of any special safety practices that must be followed while working in the vicinity of the pipeline. Further, the pipeline company

must use a suitable method to mark the location of the pipeline. [ 24 ]

Section 10 of

Part II of the Regulations requires the pipeline company to carry out such inspections as are necessary to ensure the continued safety of the pipeline during a period of excavation near the pipeline. [ 25 ]

Section 13 of

Part II of the Regulations requires the pipeline company to immediately report to the NEB any contravention of

Part I of the Regulations by a party and any activity of a party that the pipeline company considers to be a potential hazard to the pipeline. [ 26 ]

Section 14 of

Part II of the Regulations empowers the pipeline company to suspend its permission to a party to construct a facility where the pipeline company is satisfied unsafe construction practices have been or are being used. [ 27 ] These are the legal obligations that fell on all of the parties who are before the court in July, 2007. The Circumstances of the Offence [ 28 ] On March 8, 2006, R.F.

Binnie entered a contract with the City of Burnaby to provide engineering services in respect of the separation of sewage and storm services at a number of locations in Burnaby including a segment along Inlet Drive between Bayview Drive and Ridge Drive and I will refer to this now as "the Inlet Drive Project". [ 29 ] R.F. Binnie's contract with Burnaby required R.F.

Binnie, among other things, to design the Inlet Drive Project and to oversee the construction of the project to ensure that the contractor engaged for the project carried out its work in compliance and in conformity with the contract specifications and drawings for the Inlet Drive Project. [ 30 ] On January 10, 2007, R.F.

Binnie on behalf of the City of Burnaby applied to TMPP's predecessor, Terasen Pipelines, for permission to excavate near the pipeline which was necessary to complete the works for the Inlet Drive Project. [ 31 ] The segment along Inlet Drive required the excavation of approximately 350 metres of roadway parallel to the pipeline. The existing combined storm and sewer line was to be split into separate storm and sewer lines which also required the installation of some additional manholes. The project also required household connections to the new storm sewer that were to cross over the pipeline.

All of the work that was going to be done was in proximity to the pipeline. [ 32 ] The crossing application submitted included project drawings prepared by R.F. Binnie. Those drawings showed the centre of the pipeline offset 8.5 metres from the eastern residential property line for most of the segment along Inlet Drive.

The centre of the storm sewer to be installed was offset 11.3 metres from the eastern residential property lines, 2.8 metres from the centre of the pipeline. [ 33 ] Kinder Morgan on behalf of the pipeline owner approved the crossing application and prepared a crossing agreement for the City of Burnaby.

The crossing agreement included a number of detailed instructions for construction in the vicinity of the pipeline including requirements to comply with the Regulations, which I have already gone over in some detail, and Terasen's crossings department procedures. [ 34 ] The crossing agreement stated that the approval was not a review or approval of the design, engineering, or construction of the facilities.

The crossing agreement also required that the depth and location of the pipeline was to be verified by hand digging or hydrovac water excavating equipment in the presence of a pipeline company inspector. [ 35 ] A preconstruction meeting was required to take place with a pipeline company inspector to discuss any concerns, to accurately locate the pipeline, and to discuss safety techniques and how to safely work around the pipelines.

The new storm sewer line and any manholes were to have a minimum horizontal separation from the pipeline of 1.5 metres. [ 36 ] On February 27, 2007, the City of Burnaby signed the crossing agreement. On March 1, 2007, Terasen Pipelines, the predecessor to TMPP, signed the crossing agreement. [ 37 ] Kinder Morgan stamped the project drawings with notes and instructions regarding the crossing agreement. The information was similar in content to that described above in the body of the agreement.

Among the information added was a stamp stating, "All information is subject to field verification by a Kinder Morgan Canada inspector." The agreement also included contact information for Kinder Morgan employees to arrange inspection. [ 38 ] On March 27, 2007, the City of Burnaby and Cusano signed a contract for, among other things, the construction of the Inlet Drive Project. Cusano was responsible for excavating Inlet Drive and installing the storm sewer system in the vicinity of the pipeline according to the plans completed by R.F. Binnie. [ 39 ] Under the construction contract, R.F.

Binnie acting as agent for the City of Burnaby was, among other things, to provide general supervision services in respect of the Inlet Drive Project which are defined in the construction contract to mean taking such steps within the scope of R.F.

Binnie's authority reasonably required by good practices for the execution of the work in accordance with the plans, specifications, drawings, and design. [ 40 ] The construction contract provided, among other things, with respect to Cusano's obligations, that Cusano was to have "complete control of the work" and, subject to Burnaby's rights to give directions through R.F. Binnie, Cusano was solely responsible for the means, methods, techniques, sequences, and procedures for coordinating the various parts of the works.

In addition, one paragraph of the construction contract provided that Cusano was responsible for locating all underground utilities and structures at the place of work. [ 41 ] On March 28, 2007, Cusano sent B.C. One Call a notice of intent to excavate on Inlet Drive. Cusano subsequently received drawings from several utilities companies.

[ 42 ] On July 6th or 7th, 2007, Cusano advised the Kinder Morgan inspector that Cusano planned to commence work on Inlet Drive on July 12, 2007, but did not expect to be crossing the pipeline at that time. The Kinder Morgan inspector advised Cusano that the inspector only required three days' notice prior to any construction crossing the pipeline. On July 12th, 2007, Cusano was notified by the Kinder Morgan inspector that he was on site for a meeting.

Cusano advised him that commencement of construction had been postponed to July 16, 2007. [ 43 ] On July 16, 2007, Cusano was on site and ready to start construction. The asphalt on Inlet Drive needed to be cut away. A trench needed to be dug for the storm sewer and the storm sewer installed.

Although some telephone messages had been exchanged between Cusano and Kinder Morgan, no preconstruction meeting had been scheduled and no such meeting had been held and, of course, this is critical to what occurred. [ 44 ] Before excavation commenced, the foreman for Cusano compared a newly provided services map with the project plans. He observed that the newly provided map showed the pipeline curving up onto Inlet Drive in a sweeping manner just northeast of Bayview Drive, north of manhole 20, rather than the sharp turn marked on the project plans.

If the newly provided map was correct, then the planned construction work was going to be in conflict with the pipeline location. The foreman for Cusano observed no further conflicts with the pipeline location on the services map or project plans. [ 45 ] Cusano raised their concern about the location of the pipeline with R.F. Binnie.

Kinder Morgan was informed of the potential conflict of the project with the pipeline and Kinder Morgan was requested to attend to locate and mark the pipeline in the area of the discrepancy. [ 46 ] In the mid-afternoon of July 16, 2007, a Kinder Morgan inspector attended and used an electromagnetic instrument to accurately locate a 30-metre stretch of the pipeline where it turned from Bayview Drive onto Inlet Drive. The pipeline location was consistent with the newly provided service map, not the project plans prepared by R.F. Binnie and approved by Kinder Morgan.

The Kinder Morgan inspector marked the pipeline location with spray paint. Cusano and R.F. Binnie did not ask the Kinder Morgan inspector and the inspector did not offer to locate the rest of the pipeline to the south of manhole 20 along Inlet Drive. [ 47 ] Before leaving the project site on July 16, 2007, the Kinder Morgan inspector and the Cusano foreman spoke about the pipeline location and the work Cusano was seeking to begin.

The Kinder Morgan inspector agreed Cusano could start work on manhole 20 and 21 on Inlet Drive, south of the discovered area of conflict. [ 48 ] TMPP believes the inspector indicated that the balance of the work would need to wait until such time as the crossing agreement was amended to reflect the changes. Cusano believes the inspector indicated that the work would have to wait in the area which was the subject of the amendments to the crossing agreement, but that work to the south could continue.

The Kinder Morgan inspector did not advise Cusano that a preconstruction meeting should be scheduled or that the remainder of the pipeline along Inlet Drive should be marked. [ 49 ] R.F. Binnie, as the overseeing engineer on behalf of the City, had an individual inspector attend on site each day during the construction of the Inlet Drive Project and each day, the R.F. Binnie inspector inspected Cusano's work to ensure it conformed with the design. [ 50 ] On July 16, 2007, the R.F.

Binnie inspector was aware that the project plans and certain services maps were in conflict with each other at the northern portion of the Inlet Drive Project and that the actual location of the pipeline at the northern portion was different than portrayed on the project plans in the original services maps. In fact, the R.F. Binnie inspector hand-drew the redesign for the addendum to the crossing agreement based on the actual pipeline location determined by the Kinder Morgan inspector on July 16. [ 51 ] Cusano contracted R.F. Binnie to perform and R.F.

Binnie did perform the survey layout of all the work along Inlet Drive. Cusano then used the survey information to plot on the ground the areas to be excavated. Cusano first cut the asphalt at offset locations on either side of the storm and sewer lines. The asphalt was approximately 18 inches deep. Cusano then proceed to excavate the trench. [ 52 ] On July 17, 2007, the addendum to the crossing agreement was completed. The addendum included the R.F. Binnie drawing showing the revised location of the pipeline near the intersection of Inlet Drive and Bayview Drive.

Cusano believes that on July 18, 2007, the Kinder Morgan inspector attended at Inlet Drive, but work did not proceed in the area of the amendments to the crossing agreement and the inspector left the site. At this time, an excavator was on site. [ 53 ] Prior to leaving, the Cusano foreman and the Kinder Morgan inspector discussed Cusano working in a southerly direction from manholes 20 and 21. TMPP believes the Kinder Morgan inspector did not attend the site on July 18 or have such discussions about what work Cusano could do. [ 54 ] On July 18, 2007, Cusano continued with construction of the project.

None of the parties required that a preconstruction meeting occur even with the knowledge of the discrepancies regarding the pipeline location confirmed by the Kinder Morgan inspector on July 16. [ 55 ] On July 23, 2007, Cusano arranged with Kinder Morgan to have an inspector attend on Inlet Drive to be on site on July 25, 2007, and to inspect work at the pipeline crossing.

Cusano intended to use a hand excavation or a hydrovac to expose the pipeline under the supervision of a Kinder Morgan inspector for all locations where the storm serves crossed the pipeline. [ 56 ] From July 18 to July 24, 2007, Cusano, under the oversight of R.F. Binnie, proceeded to excavate a trench parallel to the pipeline and to install a new storm sewer in a southerly direction away from manhole 20 towards manhole 24 and Ridge Drive in reliance on the project plans prepared by R.F. Binnie. Connections to the households were to be made once the parallel portion was completed.

The pipeline was not exposed by Cusano during this work. The R.F. Binnie inspector was aware Cusano was carrying out construction on Inlet Drive without a Kinder Morgan inspector being present. [ 57 ] Based on the attendance by the Kinder Morgan inspector on July 16, 2007, Cusano's discussion with the Kinder Morgan

inspector on that date, and Cusano's subsequent construction activities, R.F.

Binnie assumed that the Kinder Morgan inspector was aware of the construction work underway and that he would be visiting the site to conduct inspections at a time and frequency as he saw fit in the circumstances. [ 58 ] Other than the communication referenced above, at no time did Cusano request Kinder Morgan to attend to complete the location of the pipeline, to hold a preconstruction meeting, or to inspect the excavation work, nor did the Kinder Morgan inspector complete the locating of the pipeline, hold that meeting, or inspect Cusano's excavation work.

At no time subsequent to July 16, 2007, did TMPP or its contractor, Kinder Morgan, direct Cusano or R.F. Binnie to stop work due to their failure to have a preconstruction meeting or to have the pipeline properly located. [ 59 ] On July 24, 2007, Kinder Morgan acting on behalf of TMPP used the pipeline to transport Albian heavy synthetic crude oil from the Burnaby Terminal to the Westridge Marine Terminal and onto a ship.

On July 24, 2007, Cusano continued with construction of the storm line at the southern end of the Inlet Drive Project in the 7200 block of Inlet Drive near Ridge Drive. [ 60 ] At Ridge Drive, the project plans showed both the eastern property line and the pipeline location shifting east toward Ridge Drive and curving away from Inlet Drive. As Cusano, with R.F.

Binnie's oversight, continued with construction, it discovered that a manhole necessary for the project design, and that was shown on the project plans as pre-existing, was, in fact, not at that location. [ 61 ] A discussion took place on site between a representative of the City of Burnaby and R.F. Binnie that an additional manhole needed to be installed at this location. Installing that additional manhole required Cusano to widen the trench to the east towards the pipeline.

If the centre of the pipeline was offset 8.5 metres from the property as illustrated on the project plans and services maps, there would have been room to install the manhole without disturbing the pipeline. [ 62 ] The manhole would, however, be within 1.5 metres of the pipeline and thus in contravention of the crossing agreement with TMPP. Neither Cusano nor R.F. Binnie contacted Kinder Morgan to inform Kinder Morgan of the plan to install a manhole within 1.5 metres of the pipeline. [ 63 ] Cusano, under R.F. Binnie's direction, began to widen the trench.

At approximately 12:30 p.m. as a Cusano excavator operator was widening the trench for the installation of the additional manhole, the Cusano excavator pierced the pipeline. Pursuant to his training, the excavator operator attempted to cover the puncture in the pipe with the bucket of his excavator in order to contain the escape of oil. This led to a second puncture.

The punctures were approximately four inches by six inches and they were spaced about four feet apart. [ 64 ] Cusano was operating on the understanding that no Kinder Morgan inspector was required for the preconstruction meeting or required for supervision of any of the work along Inlet Drive other than for the perpendicular crossings of the pipeline. Prior to the puncture, nobody observed any indication that the excavation or construction was close to the pipeline. No one from Cusano nor R.F.

Binnie observed the pipeline prior to the puncture. [ 65 ] Crude oil sprayed from the pipeline forming a geyser varying between roughly 20 and 40 feet in the air for approximately 25 minutes. Approximately 224,000 litres of oil from the pipeline were introduced into the environment during this time.

The geyser sent oil through the air and onto residential properties and dwellings primarily to the west of Inlet Drive. [ 66 ] As Inlet Drive is located on a hill above Burrard Inlet, the released oil began to run down the trench into the Burnaby combined sewers down Inlet Drive and perpendicular roadways and into storm drains down towards Burrard Inlet.

Reservoirs in the storm sewer system overflowed and oil was released from storm sewer outlets into Burrard Inlet. [ 67 ] The oil was introduced into the marine environment primarily via an underwater storm drain outfall located approximately 100 metres from shore and approximately 100 metres to the west of the Westridge Marine Terminal.

A secondary location for release of oil into the marine environment was at the Kask Creek outfall east of the Westridge Marine Terminal with oil entering the creek bed and continuing onto the foreshore and into the marine environment. [ 68 ] Approximately 78,000 litres of oil reached Burrard Inlet.

Of the 224,000 litres of oil released into the environment, approximately 210,000 litres were recovered. [ 69 ] A subsequent survey of the pipeline at the rupture location showed that the actual centre of the pipeline was approximately one metre further west than what was shown on the project plans, a difference that brought the pipeline closer to the new storm sewer line than what was indicated on the project plans. The Nature of the Pollution [ 70 ] The oil introduced into the environment was Albian heavy synthetic crude oil produced in Alberta.

Albian heavy synthetic crude oil is a dark brown viscous odorous liquid. It is a complex hydrocarbon mixture of paraffins, napthenes, aromatics, and sulphur compounds. Albian heavy synthetic crude oil is flammable and is not soluble in water. However, crude oil rarely ignites due to its low vapour pressure. [ 71 ] Synthetic crude oil can have severe acute effect on plant and animal life. By coating surfaces, the oil can disrupt the transmission of oxygen, water, and light to plants and animals. It may cause physical fouling of aquatic organisms. [ 72 ] Synthetic crude oil also contains toxic contaminants.

Federal investigators tested the impact of the Albian heavy synthetic crude on fish in November, 2007. They reported a 96-hour LC50 of 1.9 percent for young Coho salmon in seawater. This means in seawater containing 1.9 percent Albian heavy synthetic crude oil, it would be expected that 50 percent of the young salmon would suffer mortality within 96 hours. [ 73 ] Synthetic crude oil can also have significant chronic impacts on both plant and animal life. These impacts include decreased

growth and reproductive success rates and can have severe impacts on the individual organism, its local population, and the community structure in marine and freshwater environments. The oil is not readily biodegradable and thus has the capacity to have a long-lasting presence and effect. [ 74 ] Oil has both short and long-term effects for migratory birds. The short-term effects are the physical symptoms caused by external oiling. The matting of feathers causes a loss of buoyancy and thermal insulation.

Longer term effects are caused by ingestion of the oil which can lead to organ damage and reduced egg production among other things. The Nature of the Environment [ 75 ] Inlet Drive is a major thoroughfare connecting Hastings Street to the West and Barnet Highway to the east. Residential single family dwellings are present on either side of Inlet Drive. The rupture occurred on a hill less than one kilometre from Burrard Inlet. [ 76 ] The shoreline at that location of Burrard Inlet is mixed use with industry alongside parkland. The Westridge Marine Terminal is located on the shoreline area.

Adjacent to the west are the Shell Canada pier and industrial operations. Adjacent to the east is public access including the Barnet Marine Park. [ 77 ] A seasonal freshwater creek, Kask Creek, located just east of the Westridge Marine Terminal, drains from the slope below the spill area and into Burrard Inlet. The creek is not classified as fish-bearing, but it does discharge into the inlet invertebrate organisms that are eaten by the fish. [ 78 ] Burrard Inlet is a diverse marine environment with foreshore, intertidal, and coastal water environments.

The inlet has a wide variety of plant and animal species frequenting its marine environment. Large numbers of migratory birds use the inlet for seasonal migrations in the spring and the fall. A much smaller number of birds use the inlet year round. The general public, including commercial interests and individuals, have access to and use the Burrard Inlet marine environment. The Investigation [ 79 ] This incident was jointly investigated by officials from the British Columbia Ministry of Environment and Environment Canada.

The investigation included attendances at the location of the ruptured pipeline, the surrounding vicinity, and the Burrard Inlet marine environment. [ 80 ] Contaminated areas were sampled, photographs taken, numerous witnesses interviewed, large volumes of documents requested and reviewed, and experts consulted. Separate investigations were also undertaken by the Transportation Safety Board on behalf of the NEB and by WorkSafeBC. The Impact of the Spill [ 81 ] Approximately 11 residential properties had significant amounts of oil from the spill deposited on them.

The deposits ranged from extreme oil contamination on residences and surrounding soil and vegetation on four or five properties, to relatively minor impacts on the other properties. As a result of the spill, approximately 250 persons voluntarily left their homes immediately after the spill. Five households remained evacuated for four months or more while remediation efforts were made by TMPP. [ 82 ] Initially following the oil release, a strong hydrocarbon odour presided in adjacent areas. Odours in the spill area reduced quickly as the cleanup proceeded.

Measurements indicated no short or long-term impacts on air quality. [ 83 ] The oil released into Burrard Inlet impacted approximately 17 kilometres at the inlet's shoreline to varying degrees. Fifteen kilometres of the shoreline required remediation which was performed by TMPP and its contractors. The most heavily affected area was 2,500 metres of shoreline between the Shell jetty marine terminal to the west and Barnet Beach at Barnet Marine Park to the east. [ 84 ] Ninety-five percent of the oil that entered Burrard Inlet was captured in the 1,200 metre shore area between those two areas.

Primary acute impact on the shoreline environment was the oil physically coating plant and invertebrate life and substrate such as boulders, logs, and sediments. [ 85 ] Immediate habitat loss included remedial removal of heavily oiled seaweed from portions of the most impacted area in the vicinity of the Westridge Terminal. There was likely a loss of intertidal fauna such as starfish, barnacles, and limpets in this area as well. [ 86 ] Sediments in the heavily impacted areas showed contaminant concentrations from the oil in multiples of government ambient guidelines.

While concentrations were lower at areas removed from the discharge area, distant oil deposition areas such as Maplewood Flats on the North Shore side of Burrard Inlet had elevated crude oil compound concentrations in sediments in excess of government ambient guidelines. [ 87 ] Samples taken from Burrard Inlet in the vicinity of the introduction of the oil to the marine waters four hours after the spill revealed certain compounds of the oil to be up to 12 times the acute toxic levels for marine invertebrates.

Samples taken from Kask Creek three days after the spill showed the oil spill had rendered the creek acutely toxic to invertebrate fish food organisms. [ 88 ] Approximately 20 Canada geese, classified as migratory birds, sustained injury through oil coating their feathers. The geese were captured and treated and all survived. [ 89 ] Some beaches and shoreline areas remained closed into November, 2007. As of May, 2010, the intertidal seaweed habitat impacted in the heavily oiled area had recovered.

The water column showed no residual chemical impact from the spill. [ 90 ] Sediments in the heavily impacted area between the Shell jetty marine terminal to the west and Barnet Beach at Barnet Marine Park to the east continued to show the presence of some chemical compounds from the released oil. Red rock crabs in the heavily

impacted area had contaminants in their tissues that were released by the spill though the levels were rather low.

It is expected that natural biological and physical degradation processes will continue to break down and eliminate those remaining spill impacts. [ 91 ] The synthetic crude oil from the pipeline was introduced into the environment, including the impact at residential and Burrard Inlet areas, in such a manner and quantity as to substantially alter or impair the usefulness of the environment, and this means that the introduction of the synthetic crude oil into the environment caused pollution as defined in the Environmental Management Act .

The Response of the Accused Corporations [ 92 ] Kinder Morgan on behalf of TMPP had comprehensive contingency plans to deal with potential oil spills in the vicinity of each of its terminals. In particular, it had a facility response plan setting out detailed procedures for all aspects of an emergency response at or in the vicinity of Westridge Marine Terminal.

Kinder Morgan held regular emergency drill sessions to ensure that its employees were familiar with that plan and the procedures and steps to be followed. [ 93 ] In respect of the incident, Kinder Morgan's rapid implementation of the plan served to significantly mitigate the effects of the oil released into the marine environment. Kinder Morgan was first notified of the incident through a call from R.F. Binnie within minutes of the breach. Kinder Morgan staff were notified and representatives were dispatched to the scene. [ 94 ] Within an hour of the spill, the spill response was substantially underway.

In that time, Kinder Morgan on behalf of TMPP had: (

a) briefed its senior staff on the rupture and the mobilization of the emergency response; (

b) established an incident command centre to coordinate the response activities and disseminate information to stakeholders; and (

c) notified the Transportation Safety Board on behalf of the National Energy Board and the British Columbia Provincial Emergency Program, which proceeded then to notify all of the other necessary parties. [ 95 ] Kinder Morgan on behalf of TMPP deployed a large number of third party contractors to contain and collect the released oil. Containment was made by way of a number of floating booms including a series of booms engaged between Westridge Marine Terminal and the Shell Canada pier where the bulk of the oil was released into the inlet.

Those booms kept the oil from going further into Burrard Inlet and kept the oil from flowing back to the shore. [ 96 ] Water skimmers and vacuum trucks were deployed to retrieve the crude oil floating on the ocean surface and land. A protective boom was placed to the west of Westridge Marine Terminal to protect the foreshore of Barnet Park. [ 97 ] Later in the afternoon of July 24, 2007, Kinder Morgan provided critical information on the spill response and public safety to the media.

Following that, Kinder Morgan issued almost daily updates to the impacted community regarding the status of the cleanup. [ 98 ] Kinder Morgan assisted in the evacuation of the residents in the area. Where homeowners were displaced from their homes, they were provided with housing at no cost until such time as they were able to move back into their homes. [ 99 ] Cleanup efforts took place almost continuously for the first 72 hours after the rupture.

Following the initial intensive response, Kinder Morgan retained contractors engaged in extensive shoreline cleanup efforts for several months coupled with thorough environmental testing by several environmental consultants.

Shoreline and water testing continued after 2007 to ensure the effectiveness of the remediation efforts. [ 100 ] In addition to the marine and foreshore response, Kinder Morgan on behalf of TMPP engaged numerous contractors to clean, remediate, and restore the residential properties affected by the incident and engaged environmental consultants to ensure the safety and decontamination of those properties. [ 101 ] Approximately 830,000 kilograms of contaminated soil were treated and removed, which soil contained approximately 130,000 litres of oil.

The remediation was performed to the satisfaction of the Ministry of the Environment which issued a series of certificates of compliance regarding the condition of the Inlet Drive neighbourhood. [ 102 ] The spill response and remediation was a massive effort for which vast resources were expended on behalf of TMPP. Roughly $15,000,000.00 was spent on the remediation and environmental testing. Millions more were spent in remediating and restoring the real and personal property impacted by the oil spill.

As of the present day, TMPP has completed all remediation and monitoring programs required by government agencies arising from the oil release. [ 103 ] Prior to the puncture of the pipeline on July 24, 2007, TMPP believed that the National Energy Board mandated process coupled with Kinder Morgan's crossing agreement and locating process would prevent third party damage to the pipeline. Kinder Morgan on behalf of TMPP has taken steps to adjust its pipeline protection program in light of what took place on that day.

Among other things, Kinder Morgan formed a committee with a mandate to continually review the process and implement industry best practices for pipeline protection. [ 104 ] Those are the facts as agreed to by all of the parties. Analysis [ 105 ] I wish to comment briefly respecting the fact that the Crown and the defendants agree that a particular sentence is appropriate here. This is commonly referred to as a joint submission.

The law in this province is that a sentencing judge should place significant weight on the agreement of experienced counsel who have carefully considered the circumstances giving rise to the charges. [ 106 ] Counsel have undertaken their various roles in diligent fashion and have clearly considered the facts that are engaged here from all angles, if I may express it informally, and I hope that is clear from my lengthy recitation of the facts.

[ 107 ] I do place significant weight on the fact that all parties agree about the sentence which is appropriate here. It must be said, though, so that it is clear, the decision respecting the sentence to be handed down, in spite of the agreement of counsel, is a decision of the court. [ 108 ] I adjourned sentencing on the day that I heard submissions in order to consider the circumstances with care and I have now had the opportunity to do that. My decision takes into account, but is independent of, the agreement of counsel.

I have also had the opportunity now to read all of the written arguments helpfully provided to me by counsel and all of the cases referred to by counsel, although I do not intend to refer to all of the cases in the course of delivering these reasons. [ 109 ] In R. v. Givens , [1998] B.C.J.

No. 2939 the court sets out the factors which ought to be considered in sentencing in a case such as the one at bar and they are as follows: the nature of the environment damaged, the extent of the damage, the criminality of the conduct, the extent of attempts to avoid the injury, any remorse that is shown, the size of the corporation which has committed the offence, whether profits resulted from the conduct which caused the damage, and also whether the corporation has a record for similar conduct. [ 110 ] It was and is very important to me that the corporations that I am sentencing today were not represented by counsel alone during these proceedings.

The companies, in my view, did not appear before the court as faceless entities, if I can express it that way, but each corporation was represented in court by the person who is taking responsibility for the actions of the corporation. These people were present in court: the founder and president of B. Cusano Contracting Incorporated, Biagio Cusano; the vice president and CEO of R.F. Binnie & Associates Limited, Michael Richardson; and the assistant general counsel for Kinder Morgan Canada Incorporated, Peter J.

Forrester, on behalf of Trans Mountain Pipeline. [ 111 ] Factors specific to this case that I have considered include the following. - None of the corporate defendants is a repeat offender. These are first offences for each company. - Pleas of guilty were indicated to the court well in advance of the commencement of the time set aside for trial.

Four-and-a-half months had been set aside for the court to hear the trial of these charges and those four-and-a-half months may now be devoted to other cases - Pleas of guilty recorded by these corporations indicate that the defendants take responsibility for their actions and this is, in effect, remorse.

This signals to the court that the lack of diligence that resulted in this oil spill will not be repeated. - All parties responded immediately and appropriately to the spill of pollution at the time including the man who was operating the excavator. - The nature of the pollution and the volume of the spill are, of course, of grave concern to the community and therefore to the court. - The effect on some members in the neighbourhood close to the breach of the pipeline can only be described as extreme. - No one intended to profit from the acts which caused the spill and, in fact, what occurred was quite the opposite.

This is not the sort of case where pollution is deliberately caused in order to cut costs or to avoid troublesome precautions. [ 112 ] There was no benefit which flowed to any of the defendants from the pollution here. The spill was, on the contrary, an accident which could and should have been avoided. Culpability for each of the defendants is at the low end of the spectrum. A combination of small errors by each party created the event.

There were misunderstandings, there were erroneous assumptions, but there was not even what might be referred to as real negligence and there was certainly no deliberate wrongdoing. Care was taken, but not enough care. [ 113 ] Other courts have had occasion to deal with this sort of behaviour. This is what the court in R. v. United Keno Hill Mines Limited , [1980] Y.J. No. 10 had to say at paragraph 21. The severity of punishment should be directly related to the degree of criminality inherent in the manner of committing the offence.

Accidents, innocent mistakes, and not reasonably foreseen events are less damnable than wilful surreptitious violations. If a corporation surreptitiously dumps toxic waste in wilful disregard of regulations, a harsh sanction is required. Similarly, if a corporation is aware of the environmental damage being caused by their operations and does nothing to rectify or abate the problem, the Court is justified in accrediting such corporate conduct with a high degree of criminality. [ 114 ] In another seminal case in this area, R. v.

Terroco Industries Limited , 2005 ABCA 141 , the court said this: Culpability should be a dominant factor in sentencing for environmental offences. The EPEA provides that the maximum sentence for intentional acts is twice that for unintentional acts. On some occasions the Crown will come close to establishing that the release was intentional. Conversely, there are acts which cause harm despite the exercise of due diligence which provides an absolute defence.

In between these two extremes are a myriad of circumstances ranging from cases of recklessness to those where the defence of due diligence failed but the evidence showed a near miss. It is evident that offences which involve recklessness will call for more severe penalties than those which are near due diligence misses. The degree of carelessness is a factor in sentencing for environmental offences.

Due diligence in sentencing for environmental offences is to be assessed on a sliding scale: the more diligent the offender, the lower the range of fit sentences; alternatively, the less diligent the offender, the higher the range of fit sentence. [ 115 ] In a paragraph shortly thereafter the court said: The degree of culpability must be determined by virtue of a rigorous assessment of what actually occurred.

Sentencing judges should critically examine the facts and attempt to place the offender at an appropriate point on the sliding scale of culpability ranging from offences where due diligence was a near miss to those where the Crown's ability to establish intent to release is a near miss. Once that point is determined it becomes an important factor in the determination of a fit sentence.

[ 116 ] It is important in this sentencing process to also keep in mind the results which have already obtained for the defendants. I note, for example, that B. Cusano Contracting Incorporated is a much smaller company than R.F. Binnie & Associated Limited. Trans Mountain Pipeline L.P. has already, as I have indicated, spent in excess of $15,000,000.00 addressing the damage caused by this spill and steps have been taken which will almost certainly ensure that such an event will not occur again.

Each company has already experienced extraordinary financial detriment as a result of this event and each will be penalized further by the sentence I hand down today. [ 117 ] The sentence proposed by all counsel includes a financial cost which is on the high side relative to similar cases.

The sentence proposed includes a large contribution by each defendant to the Habitat Conservation Trust Foundation, which will mean that the bulk of the monies that will be paid by the corporations will be used to address environmental issues including conservation and enhancement of biodiversity, fish and fish habitats, wildlife and wildlife habitats. [ 118 ] The sentence proposed also includes an educational component which will serve, hopefully, to increase awareness of just how much care must be taken with pollution and therefore to avoid similar events in the future.

It is proposed that Trans Mountain Pipeline L.P. will pay $100,000.00 to the British Columbia Common Ground Alliance to fund public DigSafe BC! workshops and to allow the alliance to expand its awareness of utilities and contractors who have previously engaged in unauthorized excavation, and also to fund communication with contractors about damage prevention.

Information about the alliance is contained in Exhibit 2 in these proceedings. [ 119 ] On the basis of all of these factors and a careful consideration of counsel's submissions and of all of the materials filed, I have concluded that sentence should be as proposed by counsel. Sentence, therefore, will be as follows. [ 120 ] With respect to Count 1, B. Cusano Contracting Incorporated will pay a fine of $1,000. Time to pay will be extended for 60 days. [ 121 ] With respect to Count 7, R.F. Binnie & Associates Limited will pay a fine of $1,000.

Time to pay will be extended for 60 days. [ 122 ] With respect to Count 21, Trans Mountain Pipeline L.P. will pay a fine of $1,000. Time to pay will be extended for 60 days. [ 123 ] I am going to make the following orders. Pursuant to s. 127(1)(

e) of the Environmental Management Act , each of B. Cusano Contracting Incorporated, R.F. Binnie & Associates Limited, and Trans Mountain Pipeline L.P. will pay the additional sum of $149,000.00 to the Habitat Conservation Trust Foundation within 60 days. [ 124 ] Having regard to the nature of the offence and the circumstances surrounding its commission, I order Trans Mountain Pipeline L.P., pursuant to s. 127(1)(

i) of the Environmental Management Act , to pay the B.C. Common Ground Alliance the sum of $100,000.00 for the purpose of identifying parties engaged in construction or excavation, organizing and planning DigSafe BC! workshops, and raising awareness about damage prevention for those undertaking excavations near underground utilities for the purpose of prevention of a repetition of the offence or the commission of other offences under the Environmental Management Act , and that sum is payable within 60 days. [ 125 ] Mr.

Macaulay, you wish to direct a stay of proceedings with respect to all other matters? [ 126 ] MR. MACAULAY: That is correct, Your Honour, all counts save those on which the guilty pleas were entered -- [ 127 ] THE COURT: Yes. [ 128 ] MR. MACAULAY: -- Counts 1, 7, and 21. [ 129 ] THE COURT: Thank you. [ 130 ] MR. MACAULAY: All other, the Crown directs a stay of proceedings. [ 131 ] THE COURT: All right. As a final comment, I wish to express my appreciation to all of the counsel involved in this case, those who are here today and those who have appeared on other occasions.

I express my appreciation to each of them for their professionalism, for their care of the public interest, the interests of the defendants, and the interests of justice. Their submissions, written and oral, the thorough and articulate statement of the facts, and the precedents referred to were of great assistance to me, and I thank you. [REASONS FOR JUDGMENT CONCLUDED]