Natural Resource Damages:After the Canfor decision

NEERLS Pre-DOJ DaySeptember 29, 2005

Tony CrossmanMiller Thomson LLP

To say the law on this question is unsettled is vastly to understate the situation. The parties in this lawsuit, and we ourselves, have ventured far into unchartered waters. We do not think plaintiffs could reasonably have been expected to anticipate where this

journey would take us.”

US District court of Appeal in SS Zoe Colocotroni, 628 F. 2d 652 (1st Cir. 1980) at p687

Canadian history of environmental damage claims

Nestucca Oil spill in US waters

affecting Canadian resources

Birds and fish affected

Claim in US Settlement Fund established for

restoration and enviro. projects

The Canadian experience- The Ship Sun Diamond

Federal crown sought to recover its cleanup costs to mitigate an oil spill in Vancouver harbour

Damages awarded for the water cleanup in addition to costs to clean up Crown owned beach and foreshore

Reference to the parens patriae principle

US natural resource damage claims

CERCLA OPA, 1990

response to Exxon Valdez

Parens patriae Public trust

Canfor decision

BC Crown sued for fire damage to forest 1,500 hectares Cost of fire fighting and

restoration of forest Loss of stumpage

revenue from harvestable trees

Loss of non-harvestable trees set aside for environmental reasons in sensitive areas

Canfor decision

Province did not plead or lead evidence as to “environmental damage” at trial - only claimed commercial loss

SCC: Province only able to recover cost of fire fighting and restoration Did not plead environmental damage claim Did not lead evidence as to environmental loss

Crown’s basis for a claim

Parens patriae Protector/ guardian

of the environment

Public trust Trustee of the

environment

Land owner Legal owner of land

Canfor decision implications

Government can claim for environmental damage

“…there is no legal barrier to the Crown suing for compensation as well as injunctive relief in a proper case on account of public nuisance, or negligence causing environmental damage to public lands, and perhaps other torts such as trespass, but there are clearly important and novel policy questions raised by such actions.”

“…[T]here is no reason to neglect the potential of the common law, if developed in a principled and incremental fashion, to assist in the realization of the fundamental value of environmental protection.”

Implications Possible expansion of

the public nuisance doctrine

can be used not only for injunctive relief but also for compensation

Possible acceptance of the public trust doctrine in Canada

CL Causes of Action

Public nuisance - yesNegligence - yesTrespass - perhapsPrivate nuisance - ?Strict liability - ?A new tort ??

Implications SCC recognised that

these findings had potentially broader implications

Role of guardian of the environment may also carry with it fiduciary-like duties over the environment

“[T]here are clearly important and novel policy questions raised by such actions. These include the Crown’s potential liability for inactivity in the face of threats to the environment, the existence or non-existence of enforceable fiduciary duties owed to the public by the Crown in that regard…”

Statutory causes of action ?

CEPA Fisheries Act

BC Environmental Management Act

Valuing environmental damage

SCC noted that BC’s factum identified at least 3 components of environmental loss that could be measured: Use value – associated with the benefits that flow from direct use of

the natural environment Passive use of existence value – associated with the benefits that

flow from eihter indirect enjoyment or the preservation of the environment

Inherent value – the value the ecosystem has beyond its usefulness to humans

Methods for quantifying the value:   market valuation, restoration or replacement cost, contingent valuation, behavioural use valuation

Valuing damage to natural resources

SCC:   Crown's claim for an "environmental premium” of 20% of commercial value is arbitrary and simplistic

The challenges of proving a claim: expensive time-consuming complex (baseline, causation, impacts from other

causes, etc)

Who should be able to claim?

Federal crownProvincial crownMunicipalities

“…the municipality is, in a broad sense, a trustee of the environment for the benefit of the residents in the area of the road allowance and, indeed, for the citizens of the community at large.” (Scarborough v. REF Homes Ltd quoted by Binnie J in Canfor)

First Nations

Should we have a statutory cause of action?

Rely on CL causes of actionRely on existing statutory causes of

actionCreate a new statutory cause of action

What should this look like?

How should we value environmental damage?

US experience CERCLA regulation – a formula Many different methods Evidence is very costly to gather No accepted method – battle of the experts

“Man has lost the capacity to foresee and to forestall. He will end by destroying the

earth.”

Albert Schweitzer

Case study