5 Things to Know About Environmental Liability

Canada has a vast array of mineral and natural resources. There are various companies which are engaged in harnessing these resources to take the country forward. But in the process, a company crosses the line once in a while.

Environmental liability is defined as an obligation based on the principle that a polluting party should pay for any and all damages caused to the environment by its activities. In Canada, there is a strict liability if the damage can be attributed to a specific party.

The law imposes substantial duties on corporate officers and directors, without defining who they are. It is essential for people to know whether these duties and this environmental liability applies to them.

Thus, it is important to know about some nuances of environmental liability.

1. Compliance

There are obligations related to laws that have to be fulfilled by managers. These laws generally apply to the manufacturers. They are related to the release of chemical substances and disposal of toxic wastes. While creating a business plan, a company has to take into consideration the laws existing for the benefit of the environment as well as the potential changes that can come in.

The costs of coming into compliance can range from modest to acute depending upon the administrative requirements. The companies also have to maintain records, report to various entities, and train the employees handling these wastes.

2. Fines and Penalties

Fines and penalties are a part and parcel of any kind of law violation. But in this case, the laws have gone from a slap on the wrist to a noose around the neck. These fines can sometimes amount to millions of dollars. In some cases, if the fines levied are not enough or the company is not in a position to pay without going bankrupt or the non-compliance and rule breaking has been too severe, the concerned authorities can also face jail time.

3. Compensation obligations

Under common law and some state and federal statutes, companies may be obligated to pay for compensation of “damages” suffered by individuals, their property, and businesses due to use or release of toxic substances or other pollutants. These liabilities may occur even if a company is in compliance with all applicable environmental standards.

Subcategories of compensation liability include personal injury (e.g., “wrongful death,” bodily injury, medical monitoring, pain and suffering), property damage (e.g., diminished value of real estate, buildings, or automobiles; loss of crops), and economic loss (e.g., lost profits, cost of renting substitute premises or equipment).

4. Punitive Damages

In some cases, if the ruling court feels that compensatory payments area not enough, an additional fine for punitive damages is levied.

Unlike compensatory liability, the measure of punitive damages is not directly tied to the actual injuries sustained. Punitive damages are often many times larger than the costs of compensation; although rarely assessed, punitive damages in environmental litigation usually exceed $1 million.

5. Natural Resource Damage

In Canada, especially in Alberta, there is a large concentration of oil and gas and mining companies. Their incessant mining and digging can sometimes go beyond the prescribed limit or can cause harm to some other natural resource.

Damage to flora, fauna, land and air all come under the purview of natural resource damage.

These charges can not only dent the coffers of an organisation, but also can lead to a damage of reputation of a company. Know your risks in time by consulting lawyers proficient in environmental liability management.