Canada’s New Rules For Shipping Waste And Dangerous Goods

Article by Mr Waldemar Braul and Mr Neal Smitheman

Canada’s regulatory regime for shipping waste and dangerous goods is undergoing a major overhaul. The first changes were introduced on March 31, 2000, and many others are planned for 2002. The changes affect not only shippers of waste and dangerous goods, but also virtually all parties involved in generating and treating these substances. The new rules will be especially important for transporters involved in international shipments.

The March 31, 2000 changes were enacted under Canadian Environmental Protection Act, 1999 (CEPA 1999). The most significant changes of waste and dangerous goods are described below.

Exporters and importers must now apply for and obtain permits before shipping hazardous waste. These formal permits replace the more informal consent letters required under the old legislation. As was the case with consent letters, permit applicants must satisfy numerous conditions prescribed by the Export and Import of Hazardous Waste Regulations. These conditions include proof of adequate insurance and documentation stating that regulators of receiving facilities (i.e., in the state of import) have given their "prior informed consent".

The permit system introduces new conditions for exporting and importing hazardous waste. The new conditions pertain to:

• waste reduction plans - the Minister of Environment may require a Canadian exporter to submit and implement a plan for reducing wastes;
• environmentally sound management - the Minister may refuse to issue a permit if he or she is of the opinion that the waste or material being imported or exported will not be managed in an "environmentally sound manner" (even though the receiving state has given its "prior informed consent"); and
• Canada’s international obligations - the Minister may, with the approval of the Cabinet, prohibit an export or import if it conflicts with Canada’s international obligations. This provision was likely written in anticipation of Canada enacting the so-called Basel Convention ban (which prohibits shipments of hazardous waste from OECD to non-OECD countries).

Stricter requirements are not limited to permit conditions. Regulators may also impose new requirements in "environmental protection compliance orders". Regulators will find these orders particularly attractive for imposing measures to prevent or remediate releases occurring during shipments and at receiving facilities. Significantly, persons named in these orders cannot rely on the due diligence defence to avoid liability.

CEPA 1999 also enhances the powers of citizens to take enforcement action. The new "environmental protection action" enables a person who believes that an offence has been committed to apply to the Minister of the Environment to have the alleged offence investigated. If the Minister fails to conduct an investigation or conducts an investigation in an unreasonable manner, the person may bring a court action against the alleged offenders. A successful applicant is entitled to any number of remedies, including legal costs, implementation of an environmental plan, and injunctive relief.

The predecessor to CEPA 1999 held directors and officers personally liable for directing, authorizing, acquiescing to, or assenting to an act of the corporation which contravenes the Act. CEPA 1999 maintains this principle and also imposes a positive duty on directors and officers to take reasonable care. This higher, positive duty should be a central consideration for how corporations involved in the hazardous waste industry govern themselves.

Environment Canada is currently developing regulations which will be enacted in stages, starting later this year and extending through 2002.

Environment Canada is well-advanced in developing new regulations for both the treatment and imports of PCBs. A portion of these regulations will likely cover materials with 2-50 ppm (lower than the standard 50 ppm). The PCB regulations may come into effect later this year.

Pre-CEPA 1999 legislation essentially defined waste to include recyclable materials. CEPA 1999 distinguishes between "hazardous waste" and "hazardous recyclable material", and contemplates unique regulations for each category. Environment Canada proposals for new "hazardous waste" regulations represent a substantial departure from the current regime found in the Export and Import of Hazardous Wastes Regulations. Environment Canada held public consultations in late 2000 and early 2001 on the proposals, and will likely issue a new set of proposals late in 2001 or early 2002, to be followed by another round of public consultations.

Environment Canada, recently released the Amendment of the Export and Import of Hazardous Wastes Regulations: Initial Consultation Summary Report, which summarizes consultations held to date on proposed amendments to the Export and Import of Hazardous Wastes Regulations under CEPA 1999. Environment Canada will likely issue a new set of proposals later in 2001 or early 2002, to be followed by another round of public consultations.

Unlike its predecessor, CEPA 1999 allows the federal government to control shipments of non-hazardous waste (i.e. solid and domestic waste). These new controls can apply to both international and inter-provincial/territorial shipments. Again, the regulatory details are the subject of regulations which are currently being drafted. Environment Canada is considering a broad range of new controls, i.e., "prior informed consent" documentation, insurance, and manifest rules presently found in the hazardous waste regime.

Prior to CEPA 1999, Transport Canada had primary responsibility for regulating both "hazardous waste" and "dangerous goods" domestic shipments. A change of responsibility is underway. Transport Canada will remain the primary regulator for "dangerous goods", but key functions respecting "hazardous waste" will fall to Environment Canada, especially once the new "hazardous waste" regulations are enacted. Environment Canada’s role will be further enhanced once regulations are enacted for "non-hazardous waste" and "hazardous recyclable material".

Transport Canada has prepared a ‘clear language’ draft of the Transportation of Dangerous Goods Regulations (TDGR), which will be enacted in co-ordination with the above-noted new "hazardous waste" regulations. The new clear language TDGR was published in the August 15, 2001 edition of Canada Gazette II. The federal government proposes that the TDGR will come into force August 15, 2002.

The drafting changes mostly seek to improve clarity, a welcome relief to users of the existing TDGR. The clear language TDGR, however, was not created for merely cosmetic purposes. Substantive new changes are found throughout, especially in the new rules respecting low threat consignment, new shipping documents, safety marks and emergency response assistance plans.

Some industries will likely face the need to re-train staff to ensure an effective transition to the new TDGR. Therefore, even if shippers are shipping only "dangerous goods" (as opposed to "hazardous waste" or "hazardous recyclable material") they should be aware of the changes in the new clear language TDGR.

The federal rules governing domestic and international shipment and treatment of waste and dangerous goods waste have recently changed and will continue to evolve in the coming years. These changes follow a decade of little law reform. As a starting point for understanding the new changes, shippers and those who arrange for shipments of hazardous waste should focus on the Minister’s new powers to issue permits, orders and prohibitions which came into effect on March 31, 2000.

New CEPA 1999 regulations should also be closely monitored. The new regulations which will likely have the broadest practical effects are those pertaining to PCBs, inter-provincial shipping rules, definitions of and controls for "hazardous waste" and "hazardous recyclable materials", and criteria for assessing whether a proposed receiving facility uses "environmentally sound management". In the larger term, special rules for shipments of non-hazardous waste are anticipated.

If there is any certainty in the changes, it is found in the new TDGR, which will likely be brought into effect in mid-2002. The substance of the new "dangerous goods" rules, when compared to changes to the "hazardous waste" regimes, is more settled. Nonetheless, the new TDGR introduces many changes which at the very least will require new operational responses by industry and perhaps reviews of contracts concerning shipments and care of dangerous goods.