R. v. West Coast Reduction Ltd. Date:, 2015 BCPC 207

Citation: R. v. West Coast Reduction Ltd. Date: 20150708 2015 BCPC 0207 File No: 233330-1 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Criminal Division REGINA v. WEST COAST REDUCTION LTD. EXCERPTS FROM PROCEEDINGS ORAL REASONS FOR SENTENCE OF THE HONOURABLE JUDGE M. GIARDINI Counsel for the Crown: T.C. Gerhart Counsel for the Defendant: G.A. Letcher; A.C. Akelaitis Place of Hearing: Vancouver , B.C. Date of Hearing: July 8, 2015

Date of Judgment: July 8, 2015 [ 1 ] THE COURT: I begin by noting that West Coast Reduction Ltd. has pled guilty to the following charge: . . . that on or about the 24th day of November, 2013, at or near Vanterm Berth 4, at or near 105 Commercial Drive North, in the City of Vancouver, Province of British Columbia, [it] did unlawfully deposit or permit the deposit of a deleterious substance, to wit: canola oil, into water frequented by fish, to wit: Burrard Inlet, contrary to section 36(3) of the Fisheries Act and thereby did commit an offence in violation of section 40(2) of the Fisheries Act. [ 2 ] The parties have presented the court with a joint submission.

The Crown and West Coast jointly submit that the appropriate fine in this case is $90,000 allocated as follows: $85,000 to be payable to the Environmental Damages Fund and $5,000 to be payable as a fine. The parties submit the $90,000 fine is appropriate and is consistent with the facts and circumstances in this case and the case authorities. Circumstances of Offence [ 3 ] I now turn to the circumstances of the offence. The parties presented a joint statement of facts not in dispute.

A copy of that joint statement has been marked as Exhibit 1 in these sentencing proceedings. [ 4 ] On November 23, 2013, at approximately 5:30 p.m., West Coast, through its employees, began to transfer the first of three different parcels of canola oil to a vessel. The transfer began using one of three underground piping systems. The particular piping system being used at that point was the centre system. On November 24, 2013, the transfer of the canola oil continued. At approximately 9:40 a.m., the transfer of the third of the three parcels of canola oil began.

However, at this point, the east piping system was being used to facilitate the transfer. At approximately 12:40 p.m. that day, a West Coast employee, who was the loading master, noticed a sheen of oil in the water next to Berth 4 during a routine system inspection. [ 5 ] West Coast employees immediately took action once the oil was discovered in the water. The loading pumps were stopped, the connection vaults were inspected, and a leak was discovered at a connection point on the first piping system that had been used, the centre piping system. The leak was stopped by tightening certain bolts.

West Coast employees followed spill procedures that had been put in place by the company. They deployed booms in the water to contain the oil. Additionally, they began the appropriate notification processes. [ 6 ] It was discovered that a leak had occurred at a connection point where a number of nyloc nuts, which appeared to be fully tightened, turned out to not have been fully tightened. Moreover, the connection vault in which the leak occurred was unable to contain all of the oil, because there was a crack in the bottom of the vault.

That led to oil leaking through the face of the dock. [ 7 ] I am advised that prior to each loading operation, West Coast employees have a standard procedure protocol to follow that requires employees to pressure test the piping system. This was done before the loading began in this instance; however, the leak was not discovered. [ 8 ] Part of West Coast's procedure requires that the connection vault lids be removed for inspection during the pressure test and during the pumping. That did not occur.

If it had occurred, and assuming the leak was present at the time, it would likely have been discovered before the pumping started. [ 9 ] Once the leak was discovered, Mr. Ken Ingram, the director of technical and environmental services, was immediately notified. He made his way to the site and was there within about 10 to 15 minutes of receiving the call. While en route to the site of the spill, or the leak, Mr. Ingram notified the coastguard of the situation. Mr.

Ingram, on arriving at the site, also called the Western Canada Marine Response Corporation to request that a clean-up crew be sent to the West Coast plant. As a result of that prompt response, the canola oil was confined to a limited area. [ 10 ] Mr. Ingram also began notification to the B.C. Ministry of Environment and Port Metro Vancouver. Mr.

Ingram completed documents whereby West Coast agreed to have the Western Canada Marine Response Corporation attend and take whatever steps necessary to address the canola oil spill at whatever cost. [ 11 ] The WCMRC, which is the acronym I will use for the Western Canada Marine Response Corporation, arrived at the site at approximately 3:30 p.m. on November 24, 2013, and began clean-up operations.

I am advised no oil migrated from the immediate vicinity of the dock and the vessel. [ 12 ] While WCMRC conducted its clean-up operation, West Coast and its employees also continued the spill response and recovery efforts in accordance with its protocols. West Coast deployed a sump truck to the dock and also brought down high-powered lights and a generator to assist in the clean-up efforts during the evening hours and overnight.

Recovery efforts by both WCMRC and West Coast continued throughout that night and into the next day. [ 13 ] Representatives from the Ministry of the Environment and Port Metro Vancouver also attended at the dock on November 24, and West Coast fully cooperated with the representatives of the Ministry of the Environment. [ 14 ] The recovery of the spilled oil continued until about 2 a.m. on November 26, 2013. At that time, the vessel that was being loaded was cleared to leave. West Coast continued to monitor the progress of the clean-up and containment.

In addition, it participated in a conference call with regulators and a local First Nation that might have been affected by the oil leak.

[ 15 ] West Coast monitored the containment boom that had been put in place and the surrounding area. On a daily basis, it provided written reports via email to the regulators and to the First Nation. During that period, no further oil was observed. The booms were finally removed on or about December 19, 2013, when Environment Canada advised West Coast that the booms could be safely removed. [ 16 ] I am advised that 1,800 litres of canola oil was recovered from the affected area in the harbour. West Coast incurred approximately $47,000 in direct costs to WCMRC in response to the incident.

Additionally, West Coast retained an environmental consultant to review the situation and to advise on the need for any further remedial actions. The report that was prepared at West Coast's cost was shared with other parties. Information about West Coast [ 17 ] I am next going to review information regarding the company, the offender in this case. West Coast is a privately held company incorporated under the provisions of the British Columbia Company Act . It owns and operates an agricultural recycling plant located at 105 North Commercial Drive, Vancouver, British Columbia.

The plant is located in an industrial area of the Vancouver Port on the south shore of Vancouver harbour. West Coast's operations include the processing and recycling of materials into useful products and the operation of on-site tankage dock and pumping facilities used for handling canola oil for export. Canola oil is an edible product that is produced in the Canadian prairie provinces from canola seed. [ 18 ] West Coast transfers canola oil to vessels at Vanterm Berths 4 and 5.

The transfer of canola oil from the West Coast storage tanks to the vessels at the dock is effected by a system of underground pipes and above ground hoses.

At the time of the November 24, 2013, incident, the underground piping system was made up of three parallel steel pipes which were individually contained in steel sleeves, which were in turn encased in reinforced concrete. [ 19 ] West Coast employees on the ship-loading crew are part of the West Coast tallow department and are specially selected to be a part of the ship-loading crew after gaining two or three years' experience in other areas in the tallow department.

The members or the ship-loading crew are selected for the ship-loading crew as they demonstrate an understanding of the critical functions of the tallow department and ship loading. Once promoted to the ship-loading crew, there is a period of apprenticeship during which new members shadow more experienced members. The ship-loading crew works in teams and monitors and crosschecks each other's work. [ 20 ] Prior to the November 24, 2013, event, West Coast had in place written ship-loading standard operation procedures.

These procedures require that prior to ship loading, pressure testing of the piping system be done to identify any leaks in the system. As noted, the pressure test was conducted prior to the loading of the vessel in this case. The written procedures also require regular inspection of the piping system during the loading of canola oil, which includes the inspection of the connection vaults. There is also a procedure to conduct regular inspections of the water around the vessel being loaded. West Coast's Response to Leak [ 21 ] I will briefly review what West Coast did after the incident occurred.

Almost immediately after the November 24 incident, West Coast began an internal investigation. Mr. Ingram conducted the investigation, and prepared a report and recommendations.

The incident review report and an update to ship-loading procedures was voluntarily provided by West Coast to Environment Canada, to the British Columbia Ministry of Environment, and to Port Metro Vancouver in early January 2014. [ 22 ] In the immediate time period after the November 24, 2013, event, West Coast identified and corrected an issue with the nyloc nuts used to tighten the flange connection bolts and inspected and repaired the concrete containment vaults, including hydrostatic testing.

West Coast also undertook a review of third party ship-loading terminals and procedures to ensure that West Coast's ship-loading procedures themselves were consistent with the best practices in the industry. This entailed West Coast management and other personnel going to two ship-loading facilities in California.

West Coast determined that their ship-loading procedures were consistent with the best practices in the industry. [ 23 ] Additionally, the chief executive officer of West Coast held a four-hour meeting with senior management and West Coast ship- loading and related personnel in early January 2014 to review the November 24 incident. The review included issuing of a letter to all employees signed by Mr. Glotman, the president and chief executive officer. In

summary, that letter set out: how very seriously West Coast viewed the incident that occurred on November 24, 2013, its commitment to its obligation to protect the environment and to ensure safe handling of product, and its commitment to making sure the employees understood their responsibilities in this regard. [ 24 ] The CEO made it clear West Coast would not tolerate any failure to follow its standard operating procedures and anyone found not to be following the standard operating procedures could be subject to potential disciplinary action.

He made it clear that protection of the environment was the responsibility of everyone, including management and line staff. [ 25 ] In addition, West Coast accelerated the timing of infrastructural renewal and an upgrade to the ship-loading pipeline system. It is important to note that this upgrade did not provide any additional operating capacity. It essentially resulted in improvements to the integrity of the pipeline system and reduced potential risk points. The pipeline infrastructure project cost West Coast over $1 million, and an additional $500,000 is to be spent in July of this year.

Previous Convictions [ 26 ] West Coast has two previous convictions. The first was on October 1, 1998. West Coast pled guilty to a violation of s. 35(1) of the Migratory Birds Regulations and was sentenced to a fine of $2,500 and, further, to an order to pay Her Majesty the Queen in the Right of Canada as represented by the Minister of the Environment an additional $22,500 to be spent on programs for the conservation and protection of migratory birds that frequent coastal British Columbia. [ 27 ] The second conviction was on November 7, 2002.

At that time, West Coast pled guilty to a violation of s. 35(1) of the Migratory Birds Regulations and was sentenced to pay a fine of $1,000 and, further, to pay to Her Majesty the Queen in the Right of

Canada as represented by the Minister of the Environment a further $14,000 for research on the great blue heron and for purposes of the conservation and protection of migratory birds in British Columbia. The Applicable Law and Legal Principles [ 28 ] Section 36(3) of the Fisheries Act provides that: No person shall deposit or permit the deposit of a deleterious substance of any type in water frequented by fish or in any place under any conditions where the deleterious substance or any other deleterious substance that results from the deposit of the deleterious substance may enter any such water.

Deleterious substance is defined in s. 34(1). It is admitted for the purposes of this sentencing that canola oil is a deleterious substance. [ 29 ] Section 40(2) provides that every person who contravenes subsection 36(1) or subsection 36(3) is guilty of an offence punishable on

summary conviction and liable, for a first offence, to a fine not exceeding $300,000 and, for any subsequent offence, to a fine not exceeding $300,000 or to imprisonment for a term not exceeding six months or both. [ 30 ] The parties presented me with the following case law for my consideration. The Crown relied on R. v. Terroco , 2005 ABCA 141 ; on R. v. Brown , 2010 BCCA 225 ; on R. v. All Seasons Mushroom Inc. , an unreported decision of Judge Hicks dated April 24, 2015, Surrey Registry No. 202917-1; and on R. v.

The Greater Vancouver Regional District , an unreported decision of Judge McLean dated April 4, 2014, Vancouver Registry File No. 217720-1. [ 31 ] West Coast relied on R. v. First Pro Shopping Centres Inc. , 2006 BCPC 231 ; R. v. British Columbia (Minister of Transportation) , 2005 BCPC 492 ; R. v. Corner Brook Pulp and Paper Limited , an unreported decision of Judge Gorman of the Provincial Court of Newfoundland & Labrador dated June 18, 2010, Corner Brook Registry No. 1309A00748; R. v. Telus , 2003 BCPC 445 . [ 32 ] In R. v.

Terroco , the Alberta Court of Appeal set out the general principles to consider in sentencing in cases involving the environment. The legislation in Alberta is the Environmental Protection and Enhancement Act . I will come back to the decision in a moment, but I pause to note that our Court of Appeal in R. v. Brown , 2010 BCCA 225 , noted at paragraph 13 that Terroco is the leading case on the principles of sentencing for environmental offences. In Brown , Mr. Justice Tysoe noted that the sentencing principles for environmental offences require a special approach.

The court should focus on the areas of culpability, past involvement with the authorities, acceptance of responsibility, and harm and deterrence. [ 33 ] At paragraph 14 of Brown , Mr. Justice Tysoe, again citing Terroco , noted that "deterrence is a key component of sentences for breaches of environmental protection statutes." [ 34 ] I now turn to the principles and factors identified in Terroco , which are as follows: culpability, prior record and past involvement with the authorities, acceptance of responsibility and remorse, damage/harm, and deterrence. [ 35 ] I will deal with each of those factors.

I begin with culpability. There was no dispute between the parties that West Coast was culpable. However, both parties noted that culpability does not occur in a vacuum. There is a range of culpable behaviour, and while the situation on November 24, 2013, could not be characterized as a near miss, the parties agreed the situation that occurred was one in which West Coast was at the lower end of culpability rather than at the higher end.

Given the information provided during this sentencing hearing, I agree with that characterization. [ 36 ] In Terroco , the court noted that "the degree of culpability must be determined by virtue of a rigorous assessment of what actually occurred," and that "sentencing judges should critically examine the facts and attempt to place the offender at an appropriate point on the sliding scale of culpability." [ 37 ] It is clear that certain steps could have been taken by the employees who were working that day that might have prevented or reduced the leak that occurred.

However, it is also clear that while there was an error, if I may call it that in terms of how the responsibilities were carried out, it was not a wilful error. It was certainly not due to any lack of diligence on the part of West Coast as an employer. [ 38 ] The next factor is prior record and past involvement with authorities. I have already noted that West Coast has two prior convictions.

I note the last conviction was 13 years ago and 11 years had passed in 2013 during which West Coast had not had any convictions with respect to environmental laws or regulations. [ 39 ] In Terroco , the court noted a prior conviction can be an aggravating factor. However, the prior convictions have to be considered in context. I note there are prior convictions, but I note there has been a considerable gap and passage of time since the last conviction. [ 40 ] The next factor is acceptance of responsibility.

There is no doubt whatsoever that West Coast has swiftly and completely accepted responsibility for what occurred on November 24, 2013. I will comment on that in a moment. There is also no dispute that a guilty plea was entered at the earliest possible opportunity. Crown counsel was at pains to note that in matters such as this it takes time to process the charges and to consider next steps.

He was satisfied that in this case West Coast had acted promptly and that it had entered an early guilty plea. [ 41 ] West Coast fully cooperated with the relevant authorities, including the Ministry of the Environment and the WCMRC. Not only did it cooperate at the time, it continued to cooperate by providing documents that it prepared or commissioned to the relevant authorities. It also made it clear that, whatever the cost, it was willing to bear it. [ 42 ] At the same time, it began an internal investigation into the cause of the incident on November 24, 2013. It also took additional

steps to review its procedures and to bring home to its management and staff the importance of following West Coast procedures designed to protect the environment. Moreover, West Coast put its money where its mouth is by accelerating the timing of infrastructural renewal and upgrade to the ship-loading pipeline system that it uses. It did so at considerable cost. Approximately $1 million has been spent to date; another $500,000 will be spent later this summer for a total of $1.5 million. It is notable that the project undertaken by West Coast did not provide additional operating capacity.

It simply updated the existing system, made it safer, pinpointed, identified and addressed points of risk. It also paid $47,000 in direct costs to WCMRC to deal with the immediate effects of the leak. [ 43 ] In my view, the steps taken by West Coast are commendable and are the steps that any good corporate citizen would undertake in the circumstances. Those steps should be taken into account in the sentencing process. [ 44 ] The next factor is damage or harm.

Terroco makes it clear that the existence, potential, and duration and degree of harm are factors that ought to be considered in sentencing for environmental offences. Even if there is no actual harm, the potential for harm is a relevant consideration. [ 45 ] In this case, fortunately, the spill was not widespread. It was quickly contained due to the reaction of West Coast and the involvement of WCMRC almost immediately. It appears, on the information I have been provided, that there was no appreciable damage to fish or wildlife in the surrounding area. [ 46 ] The last factor is deterrence.

In Terroco , the court said a key component of sentences imposed for breaches of environmental protection statutes should be specific and general deterrence. When considering specific deterrence, a judge should consider remorse, acknowledgment of responsibility, cooperation, and similar factors. The court also noted that the penalty imposed should have a deterrent effect on others in the industry.

The court said that "the starting point for sentencing a corporate offender must be such that the fine imposed appears to be more than a licensing fee for illegal activity or the cost of doing business." However, it also noted the other side of the coin is that the sentence should not result in economic inviability. The penalty ought to be more than a slap on the wrist but less than a fatal blow. [ 47 ] Before turning to the sentence in this case, I want to say a few words about joint submissions.

The British Columbia Court of Appeal has written a number of detailed and considered decisions on the issue of joint submissions. It has made it clear that sentencing judges always have a discretion about whether they accept joint submissions or not. However, that discretion must be exercised judicially and judiciously, I might add. Several cases, in fact, one recent case issued by Mr. Justice Williams of the B.C. Supreme Court deal with the process that judges should follow in considering joint submissions.

It is important to consider the range of sentence and then to consider whether the sentence being jointly proposed fits within that range. I do not need to review any more of the procedural steps to be taken by a judge, in the event that a judge feels that a sentence does not fall within the appropriate range, because I am satisfied, on the basis of the numerous cases provided by counsel, that the penalty being jointly sought in this case falls within an appropriate range of sentence?

I am going to accept their joint submission. [ 48 ] Accordingly, I impose a fine of $5,000 and a further amount of $85,000 payable to the Environmental Damages Fund, so the total monetary penalty to West Coast will be $90,000. [ 49 ] The Crown prepared an order relating to the $85,000. I will to sign the order that the amount of $85,000 must be paid to the Environmental Damages Fund on or before September 8, 2015, and the $5,000 fine must be paid on or before September 8, 2015. (REASONS CONCLUDED)