R. v. Teck Coal Limited, 2021 BCPC 118

Citation: R. v. Teck Coal Limited 2021 BCPC 118 Date: 20210326 File No: 35390-1 Registry: Cranbrook IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. TECK COAL LIMITED ORAL REASONS FOR SENTENCE OF THE HONOURABLE ASSOCIATE CHIEF JUDGE P. DOHM Federal Crown Counsel: C. Clarkson, by phone A. Switzer, by phone Counsel for the Defendant: A. Nathanson, by phone R. Peck, Q.C., by phone C. Denyaka, by phone B. Gilbride, by phone Place of Hearing: Fernie , B.C., via teleconference Date of Hearing: March 26, 2021 Date of Sentence: March 26, 2021 Introduction

[ 1 ] Teck Coal Limited has pled guilty today to two offences under s. 40(2) of the Fisheries Act, R.S.C. 1985, c. F-14 . Both offences are for unlawfully depositing a deleterious substance, specifically coal mine waste rock leachate, into water frequented by fish, contrary to s. 36(3) of the Act . One offence is in relation to the Fording River and the other offence is in relation to Clode Pond. Both offences cover the entire year of 2012. Circumstances [ 2 ] Teck Coal operates steelmaking coal mines in the Elk Valley in southeastern British Columbia where coal mining has been occurring since 1898.

The two Teck Coal mines where these charges occurred are the Fording River mine and the Greenhills mine, which have been operating since 1971 and 1981 respectively. Teck Coal is an indirect subsidiary of Teck Resources Limited, which acquired full ownership of these two mines in 2008.

Teck Coal employs thousands of people, most of whom live in the communities near the mines, specifically Elkford, Sparwood, Fernie and Crowsnest Pass. [ 3 ] The Fording River located near Elkford flows to the Elk River, which runs through Elkford, Sparwood and Fernie to its outlet, the Kootenay River at Lake Koocanusa, which spans the Canada and United States border. The reach of the 70-kilometre long Fording River located north of Josephine Falls is referred to as the Upper Fording River, which is 57.5 kilometres long.

Water affected by the Fording River mine and the east slopes of the Greenhills mine flows into the tributaries of the Upper Fording River and from there into the Upper Fording River itself. Water from the west slopes of the Greenhills mine flows into the Elk River. [ 4 ] Westslope Cutthroat trout is a fish “species of concern” both provincially and federally. It is the only native trout throughout much of Canada. It is the only fish species known to inhabit the Upper Fording River and its tributaries.

Josephine Falls, as a natural barrier to upstream fish, has protected the Westslope Cutthroat trout population in the Upper Fording River from hybridization with non- native Rainbow trout resident in the Fording River below the falls.

As a result, the Westslope Cutthroat trout in the Upper Fording River is one of the limited group of populations that have been identified as genetically pure, making it an important population for the Westslope Cutthroat trout conservation. [ 5 ] In 1971, Clode Settling Ponds were constructed to minimize sediment deposits in the Fording River associated with Teck Coal's mining activities. These ponds were built according to permits issued to Teck Coal and were not intended to be fish habitat.

However, Westslope Cutthroat trout did move between the Fording River and the Clode Settling Ponds through a creek running between them. In 2004, Teck Coal took measures to exclude fish from the Clode Settling Ponds, but those measures were not wholly effective nor well maintained, so the Westslope Cutthroat trout were able to access the Clode Settling Ponds. [ 6 ] In 2012, officers from Environment and Climate Change Canada identified that the fish barriers were not effective, such that throughout 2012 fish frequently made their way into Clode Settling Ponds.

In 2014, Teck Coal repaired and improved the fish barrier between the Fording River and the Clode Settling Ponds. [ 7 ] Coal mining at the Fording River and Greenhills mines requires the removal of large quantities of waste rock in order to reach underground seams of coal. This waste rock is stored in piles known as waste rock piles, which become substantial over time. In the Upper Fording River area, there are numerous waste rock piles over 100 metres high with a surface area in excess of 100 hectares.

Many of these piles were established prior to Teck Coal's acquisition of these particular mines. [ 8 ] As a result of the removal and exposure of waste rock to precipitation and oxygen, selenium, calcium and other naturally occurring elements found in the waste rock are released, carried in surface or groundwater, and ultimately deposited into

a) tributaries and then into the Fording River,

b) the Fording River directly, or

c) other water bodies within the Elk Valley watershed. How long this process takes depends on a number of factors, but for larger waste rock piles, it can be years. [ 9 ] Selenium is an essential nutrient necessary for cellular function in many organisms, but high levels can be harmful and toxic to the organism, which fish and wildlife consume.

High selenium levels in fish tissue can result in harmful effects such as fry that die shortly after hatching and deformities in hatched fry. [ 10 ] Coal mine waste rock also contains dissolved calcium carbonate, which can result in the precipitation of calcite on stream and riverbeds.

Although also a naturally occurring process, it is accelerated by the presence of waste rock piles and at certain levels, the precipitation of calcite can change the characteristics of stream beds by binding rock and gravel together to adversely affect fish utilization and the quality of fish habitat. [ 11 ] In 1995, when it was discovered that surface coal mining appeared to be mobilizing soluble selenium into the Fording River, there were approximately 990 million bank cubic metres of waste rock placed in the Fording River and Greenhills mines.

That amount had increased to approximately 2.2 billion bank cubic metres by 2008 when Teck Coal increased its ownerships in those mines. By 2011, that amount had increased to 2.5 billion and in 2012 an additional 123 million bank cubic metres of waste rock was placed in the Upper Fording River watershed as part of the Fording River and Greenhills operations. [ 12 ] The release of selenium and calcium carbonate waste rock requires long-term, adaptively managed solutions that are regionally focused because it affects the Elk Valley watershed downstream from the waste rock piles.

Understanding the release of selenium and designing measures to prevent and treat it have been studied for years by experts, including study and research funded by Teck Coal, which has also created its own research and development group to study the issue and find solutions on both a regional and long-term basis. [ 13 ] In 2012, when Environment and Climate Change Canada conducted multi-week Westslope Cutthroat trout sampling and testing, they discovered that a certain number of fish had selenium concentrations in the range associated with adverse effects in both the main Clode Settling Pond and between the main Clode Settling Pond and the Upper Fording River.

They also observed calcite deposits in the Fording River and in tributaries supporting the habitat of the Upper Fording River Westslope Cutthroat trout population. [ 14 ] Teck Coal was aware selenium and calcite could be environmentally harmful prior to 2009. Teck Coal acknowledges that it committed the two offences charged by permitting the deposit of a deleterious substance, specifically coal mine waste rock leachate, into

the Fording River and the main Clode Settling Pond, which was water frequented by fish, continuously throughout the period January 1 to December 31, 2012. Teck Coal admits that in 2012, it did not exercise all due diligence to prevent, or have in place a comprehensive plan to address, the deposit of that deleterious substance into those waters. [ 15 ] Since 2012, Teck Coal has taken significant steps and made substantial improvements to address the release of selenium, calcite and other constituents from the waste rock in order to reduce their presence in the Elk Valley watershed.

Some of these include the following: 1) The creation of an independent expert panel to provide advice and assistance for producing a strategic plan for the sustainable management of selenium at the Elk Valley coal mines. This plan included the Valley-Wide Selenium Management Action Plan, which at the time of its creation, contemplated that managing future selenium release would require approximately 3.9 billion dollars in capital spending over 75 years. 2) As a result of an environment ministerial order, Teck Coal created the Elk Valley Water Quality Plan that was approved by the minister in 2014.

This 20-year plan resulted from a consultation process that involved regulators including Environment and Climate Change Canada, the Ktunaxa Nation, scientists, local governments, U.S. government representatives, environmental groups, other coal companies, community members and other stakeholders.

Under this plan, Teck Coal agreed to design, construct and operate a series of active water treatment facilities and it has committed to conducting ongoing monitoring programs covering water quality, groundwater and local and regional aquatic effects, together with environmental studies. 3) Since 2012, Teck Coal has increased its efforts and corresponding spending to address water quality in the Elk Valley.

From 2011 to the end of 2020, it has spent almost one billion dollars on water quality- related measures and its water quality plan contemplates spending over 2.2 billion dollars in the next 10 years. 4) Teck Coal has commissioned and contributed to important selenium research including significantly advancing the development of “saturated rock fill technology” for treating water. 5) In 2012, Teck Coal commissioned a multi-year study of the Upper Fording River Westslope Cutthroat trout population. 6) At the end of last year, Teck Coal agreed to implement 11 measures resulting from a directive issued by Darin Conroy, an officer with Environment and Climate Change Canada and an inspector appointed under the Fisheries Act , to improve water quality and prevent calcite deposition in the Elk Valley in waters affected by the Fording River and Greenhills mines.

As a result of that direction and various permits issued under the Elk Valley Water Quality Plan, Teck Coal plans to, and is required to, implement significant additional water treatment capacity over the next three years including the commissioning of two further facilities, which will bring total water treatment capacity to 47.5 million litres per day from the present capacity of 7.5 million litres per day. Teck Coal is also planning to construct another saturated rockfill facility, which by the end of 2022, will increase total water treatment capacity to 77.5 million litres per day.

This tenfold increase in treatment capacity over the next three years will materially reduce selenium and nitrate going into the Elk Valley watershed. Community Impact [ 16 ] The Elk and Fording River valleys are the traditional territory of the Ktunaxa Nation. They have provided a community impact statement read out today by Vickie Thomas, the operational director of the Ktunaxa Nation Council Lands Sector.

The statement identifies the “Ktunaxa philosophy of stewardship of the land and the water, is the recognition that we are part of the land, and that our connectedness to it requires that we have respect for all living things as anything that affects one, affects everything else. Ktunaxa believe that they must care for all living things, and in doing so we must ensure that the water is clean and pure as it is the giver of life.

We also believe that we must ensure that the land is properly stewarded, which translates to ‘our people care for the land, the land cares for our people’." [ 17 ] As for the impacts of selenium and calcite, the statement identifies the compromising of water quality, concerns about the quality and safety of the fish and for Ktunaxa consuming them, and contamination of fish, impairing their historical fishing rights. [ 18 ] The statement attaches a beautiful, informative, coloured illustration of Ktunaxa “lifeways” drawn by Darcy Luke and Marisa Phillips, two talented Ktunaxa artists.

It symbolizes “’ ‘Ktunaxa being Ktunaxa on the land’, and the tangible and intangible connection between the land, the water and all living things.

This interconnectedness means nothing in isolation; for example, if the water is impacted- so in turn is everything else.” Position of the Parties [ 19 ] When Teck Coal committed these offences in 2012, the maximum financial penalty that could be imposed was 1 million dollars but the Fisheries Act provides that each day an offence is committed constitutes a separate offence. [ 20 ] Counsel have jointly recommended the imposition of a total monetary payment of 60 million dollars. That equates to approximately $80,000 per day for every day of 2012.

Decision [ 21 ] In support of this recommended sentence, counsel have pointed out specific facts and made a number of submissions, including the following: [ 22 ] First, Teck Coal has committed serious violations of the Fisheries Act in that they involve multiple deposit dates over an entire year. However, at the same time, Teck Coal regularly reported the rates and constituents of the deposits to the authorities prior to and during the offence period, so the deposits were not deceptively or surreptitiously committed.

Also, the joint submission recognizes the negotiated agreement between Teck Coal and the Public Prosecution Service of Canada that the charges would be limited to the year

2012 rather than the 2009 to 2019 timeframe that had initially been approved by the Crown. [ 23 ] Second, there has been very serious damage and harm from the selenium and calcite arising from the waste rock piles. That is apparent from the selenium found in the tissues of some of the Westslope Cutthroat trout in the range associated with “adverse effects” and the observations of the precipitation of calcite binding rocks and gravel together, which can adversely affect fish utilization and the quality of fish habitat.

In addition, harm was caused in the Upper Fording River, which has unique conservation concerns arising from the genetically pure Westslope Cutthroat trout in that location, and those fish are a species of concern both provincially and federally. There is also the harm identified by the Ktunaxa Nation in their traditional territory.

All this harm and damage is an admitted aggravating factor. [ 24 ] Third, by its early guilty pleas, Teck Coal has accepted responsibility for its conduct, and in doing so, it has saved years of court time that would have been required for what would have been a very detailed, technical and complex prosecution. I agree with counsel that this is a significant mitigating fact. [ 25 ] Fourth, Teck Coal has made significant efforts and spent some substantial sums to address the adverse effects caused by the waste rock from its mines.

Those efforts and sums predate the offences and have continued and increased considerably after them in order to comply with permit and direction requirements. In particular, Teck Coal has made lasting commitments to address and improve water quality in the Elk Valley watershed and those commitments will continue in the future. [ 26 ] Fifth, at the time of these offences, Teck Coal did not have any prior conviction record, and it was cooperative throughout the investigation of these offences including providing substantial documentary, witness, and expert evidence beyond what was obtained by the investigators.

Since 2012, Teck Coal has incurred two new infractions under the Environmental Management Act for which it also took responsibility. These subsequent offences are not aggravating facts, but they have some limited relevance to assessing deterrence. [ 27 ] Sixth, the extensive materials provided by Teck Coal and its indirect parent company, Teck Resources Limited, establish it is of good corporate character. That has been recognized in prior decisions of this court ( R. v. Teck Coal Limited , Cranbrook Registry 32307-1, October 5, 2017, and R. v.

Teck Coal Limited and Maxam Explosives Inc. , Cranbrook Registry 31839-1, May 8, 2017) and there is good reason for that. It is apparent by the many acts and financial contributions it has made to benefit communities and causes locally, nationally and internationally. It is consistently recognized as one of the most sustainable and socially responsible corporations in Canada and the world. The presence today of senior officials from Teck Coal indicates not just putting a face to the company, but also to reflect the seriousness Teck Coal attaches to this matter and its remorse for its actions.

The company has offered a formal apology for these offences and there is genuine remorse. Teck Coal's core values include being environmentally responsible and its extensive efforts and sums support that. Teck Coal has also supported initiatives with indigenous peoples including most recently signing a joint management agreement with the Ktunaxa Nation for the conservation of more than 700 hectares of land purchased by Teck Resources in 2013.

Under the agreement, the Ktunaxa Nation and Teck Resources agree to jointly manage the land for conservation purposes, protecting significant fish and wildlife habitat. [ 28 ] Seventh, the fine and payment orders are substantial to meet the important sentencing considerations of deterrence and denunciation in environmental cases but Teck Coal does have the ability to pay the amounts submitted. [ 29 ] The law requires me to accept the joint submission on sentencing unless it would bring the administration of justice into disrepute and is contrary to the public interest. “Rejection denotes a submission so unhinged from the circumstances of the offence and of the offender that its acceptance would lead reasonable and informed persons, aware of all the relevant circumstances, including the importance of promoting certainty in resolution discussions, to believe that a proper functioning of the justice system had broken down.

This is an undeniably high threshold” ( R. v. Anthony-Cook , 2016 SCC 43 at para. 34 ). [ 30 ] In my view, that threshold cannot possibly be met in this case. When I consider all the circumstances and the submissions of counsel, I find the joint submission is not contrary to the public interest, nor would it bring the administration of justice into disrepute. It recognizes the aggravating and mitigating facts, satisfies the principles of sentencing particularly in relation to environmental offences ( R. v. Terroco Industries Ltd. , 2005 ABCA 141 , and R. v.

Brown , 2010 BCCA 225 ), and it is consistent with other cases provided by the parties in support of the position they have taken. The fines and payment order are significant to reflect the nature of the offending behaviour, the harm caused and the need to address the sentencing principles of deterrence and denunciation. I am satisfied the penalties to be imposed will be a significant deterrent for Teck Coal.

At the same time, the joint submission gives weight to the efforts and sums Teck Coal has taken and will continue to take to make the necessary changes to address the environmental concerns arising from the deposit of waste rock from their mines.

The joint submission is the product of very experienced counsel engaging in many, many hours of resolution discussions to resolve what would have most likely been the largest environmental trial in Canadian history, quite possibly lasting years and consuming hundreds of days of valuable court time. [ 31 ] I find the joint submission to be a fit and appropriate sentence in all the circumstances.

Accordingly, I make the following orders: [ 32 ] Teck Coal Limited is to pay a total monetary payment of 60 million dollars of which: On Count 1, one million dollars ($1,000,000) shall be paid as a fine pursuant to s. 40(2) of the Fisheries Act , R.S.C. 1985, C. F-14 (the “Count 1 Fine”). On Count 1, 29 million dollars ($29,000,000) shall be paid pursuant to s. 79.2 (

f) of the Fisheries Act , R.S.C. 1985, C. F-14 to the “ Receiver General of Canada in trust to the Environmental Damages Fund” for the purpose of conservation and protection of fish and fish habitat (the “Count 1 EDF Payment”). On Count 2, one million dollars ($1,000,000) shall be paid as a fine pursuant to s. 40(2) of the Fisheries Act , R.S.C. 1985, C. F-14 (the “Count 2 Fine”). On Count 2, 29 million dollars ($29,000,000)shall be paid pursuant to s. 79.2 (

f) of the Fisheries Act , R.S.C. 1985, C. F-14 to the “ Receiver General of Canada in trust to the Environmental Damages Fund” for the purposes of conservation and protection of fish and

fish habitat (the “Count 2 EDF Payment”). [ 33 ] I also recommend that: A portion of the Count 1 EDF Payment and/or the Count 2 EDF Payment be allocated to one or more First Nations in the Kootenay Region of British Columbia to be used for projects designed to enhance, restore or conserve fish or fish habitat; A portion of the Count 1 EDF Payment and/or the Count 2 EDF Payment be allocated to one or more First Nations in Canada outside the Kootenay Region to be used for projects designed to enhance, restore or conserve fish or fish habitat.

A portion of the Count 1 EDF Payment and/or the Count 2 EDF Payment be allocated to one or more Canadian schools, colleges, education institutions or universities to be used for research, development, or studies related to the understanding of issues related to the enhancement, conservation, or restoration of fish or fish habitat; The remaining portion of the Count 1 EDF Payment and the Count 2 EDF Payment be used for projects designed to enhance, restore or conserve fish or fish habitat in British Columbia. [ 34 ] I further order that Teck Coal Limited pay the Count 1 Fine, the Count 2 Fine, the Count 1 EDF Payment, and the Count 2 EDF Payment by March 26, 2022 and deliver them to the Clerk of the Court of the Provincial Court of British Columbia with the later of these two payments to be paid out in accordance with the terms of this Order. [ 35 ] I will end these reasons with the following concluding message of encouragement and guidance from the Ktunaxa Nation community impact statement directed I feel specifically to Teck Coal: Steps toward reconciling with Ktunaxa can be achieved through the concept of ‘giving back to the land’.

In the Elk Valley coal mining context, ‘giving back’ suggests a powerful drive towards monitoring of ongoing and future impacts, restoration of ecology and culture relationships, and rigorous stewardship. [ 36 ] The efforts and sums Teck Coal has put forth to date and will be required to continue to do so in the future, including the recent agreement they reached with the Ktunaxa Nation for the large land conservation, provide hope and confidence that Teck Coal has heard this message loud and clear, and will continue to be an environmentally responsible corporate citizen in the future. [ 37 ] Lastly, thank you counsel for your exceptional work not just today but in coming to a fair and reasonable resolution of a very difficult and challenging set of circumstances.

The Court greatly appreciates all your efforts. (REASONS FOR SENTENCE CONCLUDED)