From West Coast Environmental Law

When Randy Saugstad realized that clearcut logging by forestry giant Tolko was probably going to affect the water he uses to raise cattle on his ranch, he went to the B.C. Ministry of Forests, Lands and Natural Resource Operations.

“We know,” they told him. “But we don’t have the power to stop them logging.”

They explained that B.C.’s forestry laws turned over the final decision about whether to log upstream from his ranch to Tolko’s foresters. Randy’s fears were later realized and his stream wrecked, so he sued Tolko, ultimately forcing the company to settle for an undisclosed amount (although the company continues to deny responsibility).

The B.C. government is in the process of conducting a review of professional reliance, so we have a chance to change some provincial laws to make sure that decisions are made in the best interest of British Columbians, and not corporations. This review is being headed by Mark Haddock, a long-time environmental lawyer and former West Coast staff member, who has previously written critically of the professional reliance model.

Currently, government staff are interviewing representatives of organizations with experience in professional reliance. But public consultations started December 1, 2017 and will continue until January 19th, 2018.

Professional reliance v. conflict of interest

Broadly, the term “professional reliance” refers to any situation in which the government relies upon industry-paid professionals — such as biologists, archaeologists, engineers, geoscientists and environmental scientists — to conduct studies, monitor activities, and more.

However, in cases ranging from sewage management to pesticide regulation to forestry, B.C. laws often go further — turning government decisions over to those private professionals, and restricting the ability of the government to intervene when things go wrong.

B.C.’s Forest Practices Board, a government-created watchdog, warned in 2015 that:

In recent years, [we have] seen situations arise where forestry development was putting local environmental and community values at risk, yet district managers could do little to affect the development and protect the public interest. … [C]onflicts between resource-users could have been avoided if district managers had the authority to intervene to ensure operations would meet local management objectives and respect tenured interests.

Don’t get me wrong — generally professionals are educated, dedicated and highly competent people. As a lawyer, I am a professional. In most cases, professionals aim to use their skills in the service of their clients and with an eye to making the world a better place.

But although I respect my fellow lawyers, I wouldn’t want a lawyer hired by a mining company to have the last word on that company’s legal obligations to protect fish from toxins. That’s what we have judges for — to decide between different interpretations of the law. And yet, engineers and specialists hired by mining companies have final sign-off on how close the companies can build to a fish-bearing stream.

Professionals are important sources of expertise and information. But when they actually have free reign to make decisions about their employer’s use of public resources, this looks, to many people, like the fox guarding the hen house (or perhaps just paying for its security).

Proponents of professional reliance argue that professionals have training, oversight and accountability, so they can apply rules intended for the protection of human health or the environment just as well (and sometimes better) than government professionals.

They argue that government’s role is to set the standards and then monitor to make sure that those standards are met, ensuring that there are consequences if they aren’t.

Experience in B.C. has shown that there are a number of problems with that theory — from weak environmental standards that allow professionals to trade off environmental values against economic values, to documented cases of corporations cherry-picking their professionals, to the government’s failure to enforce when standards aren’t met.

This post focuses on just one fundamental flaw with corporate professionals taking over government approval functions: the assumption that professionals can be objective in applying legislative rules, especially when they do so for a client with a vested interest in a particular outcome.

Behaviour economics and professional reliance

In The (Honest) Truth about Dishonesty, behavioural economist Dan Ariely gives a firsthand account of his experience as a paid expert witness in a court hearing. Before doing so, he reviewed the transcripts of testimony given by some of his colleagues in past trials:

… I was surprised to discover how one-sided their use of the research findings was. I was also somewhat shocked to see how derogatory they were in their reports about the opinions and qualifications of the expert witnesses representing the other side — who in most cases were also respectable academics.

Ariely nonetheless agreed to testify and was “paid quite a bit to give my expert opinion.” He became aware that the lawyers were “trying to plant ideas in my mind that would buttress their case.”

He explains:

They did not do it forcefully or by saying that certain things would be good for their clients. Instead, they asked me to describe all the research that was relevant to the case. They suggested that some of the less favorable findings for their position might have some methodological flaws and that the research supporting their view was very important and well done. They also paid me warm compliments each time that I interpreted research in a way that was useful to them. After a few weeks, I discovered that I rather quickly adopted the viewpoint of those who were paying me. The whole experience made me doubt whether it’s at all possible to be objective when one is paid for his or her opinion.

Ariely’s candid account of his own experience is supported by the wide range of behavioural economic studies that demonstrate that such interactions are only human.

Ariely writes:

One other common cause of conflicts of interest is our inherent inclination to return favors. We humans are deeply social creatures, so when someone lends us a hand in some way or presents us with a gift, we tend to feel indebted. That feeling can in turn color our view, making us more inclined to help that person in the future.

Ariely recounts a study which attempted to measure the impact of a financial gift on appreciation of art. The participants were told that their payment for participating in the study was being sponsored by an art gallery (“Third Moon” or “Lone Wolfe”). They were then shown a series of sixty paintings and asked to rate how much they liked or disliked each, while they were hooked up to a brain imaging scanner (an fMRI). Each picture displayed a small logo of an art gallery — including some from Third Moon or Lone Wolfe galleries — as if the pictures had been provided by those galleries.

As you might suspect, when researchers examined the ratings they found that participants gave more favorable ratings to the paintings that came from their sponsoring gallery… You might think that this preference for the sponsoring gallery was due to a kind of politeness … [but] the brain scans showed the same effect; the presence of the sponsor’s logo increased the activity in the parts of the participants’ brains that are related to pleasure… This suggested that the favor from the sponsoring gallery had a deep effect on how people responded to the art.  And get this: when participants were asked if they thought that the sponsor’s logo had any effect on their art preferences, the universal answer was “No way, absolutely not.”

This study suggests that indebtedness actually changes the way that people perceive the world — and that they don’t realize it. It also found that increasing the amounts of payments to the participants increased this bias.

Of course, proponents of professional reliance might argue that the participants in the study were not professionals (art critics for example). And that’s true. But professionals are still human, and professionals can be very influenced by personal factors. For example, one well-publicized study showed that judges (highly trained professionals) are much more likely to grant parole to defendants at the beginning of the day, or after a snack, than those who appear before them when they are hungry.

Our legal system (with a few exceptions) has always required that a government decision-maker be unbiased and, in particular, not receive a financial benefit from his or her decision.

And yet under many B.C. environmental and public health laws, professionals who are paid by a party with a definite interest in the outcome are making key decisions. For example, in the controversial Shawnigan Lake contaminated soil debacle, neither the government nor the Association of Professional Engineers and Geoscientists of B.C. had any issue with the project’s engineers actually having an ownership interest in the project.

Where next?

Critics of professional reliance refer to professionals who do what their paying client wants as “biostitutes.” While there are undoubtedly professionals who are less than professional, I think the challenges of professional reliance are much broader and more difficult to counter than a few bad actors.

If government establishes a standard but leaves it to industry professionals to interpret it, then even well-intentioned professionals may start to interpret ambiguities in favour of clients, rather than the public interest. That’s not a slur on professionals — professionals are supposed to problem-solve for their clients within the bounds of the law.

At the same time, the B.C. government has spent almost two decades downsizing the departments responsible for regulation, monitoring and enforcement (a trend which actually began in the final years of the previous NDP government). As a result, it would be difficult to turn all environmental and public health decisions back over to government.

Mark Haddock’s challenge is to balance the fundamental difficulties of professional reliance (as implemented in B.C.) with the resources available to government. Fortunately, his past report includes some general principles — suggesting, for example, that government should retain legal authority for decisions with particularly important consequences for human health and the environment.

The behavioural economics research, as well as basic principles of unbiased decision-making, suggest that one important issue for the review to grapple with is whether professionals employed by industry players can ever be neutral — let alone pro-public health and pro-environment.

One possible solution is having industrial players pay the cost of evaluating their proposals, but having the professionals employed by and accountable to the government. This may not entirely remove the bias towards the company ultimately paying your bill, but it would create a competing legal and employment obligation to publicly elected officials.

At West Coast Environmental Law we propose that:

• Government (and not industry) select the professionals from a pre-approved list of qualified professionals. Professionals who deliver biased or poor quality work could be removed from the list. A similar system is already used for professionals working with contaminated sites.
• Except where specialized expertise is required, there’s a lot to be said for making the selection random, so that industry cannot influence government staff in the selection.
• The professional would sign a retainer agreement with the government, not the proponent, and government would have the ability to dismiss poorly performing professionals and/or remove them from the pre-approved roster. Conflict of interest rules would prevent the professional from working for the company whose project is under consideration (although the professional might well still do work for clients within the same industry).
• All documents prepared by the professional should be owned by the government – which then makes them available to the public under Freedom of Information laws (unlike the current professional reliance model, under which key documents are sometimes kept from the public).

What do you think? Would government-employed/industry-funded professionals help address concerns about the bias of industry-funded professionals? What do you think should be done to ensure that professionals protect the public interest, and not just the interests of industry? Tell us in the comments below.

Public consultations will continue until January 19, 2018.  Please let the government know what you think of professional reliance.  Click here to fill out a brief survey or here for information on sending detailed submissions.

Image: Premier John Horgan visits the Rio Tinto Alcan smelter in Kitimat. Photo: Government of B.C. via Flickr

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This piece originally appeared on the West Coast Environmental Law Alert Blog.

Revelations about the amount of corporate money coming to the B.C. Liberals — not to mention RCMP investigations — have many people asking: what are these companies getting in return?

It’s a good question. After all, corporations are not supposed to spend their shareholders’ money without a reasonable expectation of a return. The different political parties are increasingly aware that voters have these questions.*

At a general level, it does seem that B.C. Liberal donors have done well in terms of government contracts.

And there have been specific calls to set aside the approval of the Woodfibre LNG project in Squamish (based on donations from Woodfibre that seem to have been illegally funneled through individuals), to re-examine logging in endangered caribou habitat by B.C. Liberal donor, Canfor, and calls on the B.C. Liberals to return funds received from Kinder Morgan and its allies (given the controversial decision to approve its pipeline and tankers project).

Corporate Donations and the Culture of (Environmental) Law Enforcement

But corporate benefits received in return for donations do not have to be about a particular government approval or a contract. Companies can also believe that their donations will result not in a particular decision, but in a more favourable regulatory culture — one that doesn’t ask hard questions or impose harsh consequences.

Over the years we have devoted many of our Environmental Law Alerts to looking at a major drop in the Province’s enforcement of environmental laws, with convictions under environmental statutes at a fraction of what they were prior to 2003.**

We have applauded the government for rolling out some new enforcement tools, but we remain very concerned that polluters in B.C. believe there are few consequences for failing to comply with our province’s environmental laws.

Arguably, one major beneficiary of that lax environmental enforcement is the number one B.C. Liberal donor: Teck Resources Ltd. Since 2008 the company has donated more than $1.5 million to the B.C. Liberals (and $60,000 to the B.C. NDP), thanks to B.C.’s loose laws on corporate donations.

Premier Christy Clark and Lt. Gov. Steve Point award Norm Keevil (centre), chair of Teck Resources, with the Order of B.C. Since 2010 Keevil has personally donated $65,585 to the B.C. Liberals. Photo: Government of B.C.

Teck Resources Compliance Issues

At first blush, it may seem surprising to suggest that Teck Resources is benefiting from a decline in environmental enforcement. After all, in early February 2016, Teck Metals Ltd. pled guilty to a number of charges related to polluting fish bearing waters, and was fined $3 million for Fisheries Act offences and a further $400,000 for Environmental Management Act offences.

However, this is just the tip of the company’s environmental non-compliance iceberg. Recently the B.C. Ministry of Environment released data on its 2015 efforts to monitor compliance under the Environmental Management Act (B.C.’s main law dealing with pollution). Two Teck-affiliated companies feature prominently.

Teck Coal Ltd. was inspected 58 times, and was found to be acting illegally in 46 of those inspections (i.e. 79 per cent of the time). Unfortunately, the data released does not tell us much about what type of non-compliance was occurring (although most of the inspections were considered “medium” or “high” priority, and we know from the Auditor General report discussed below that Teck’s non-compliance is a major concern for Ministry of Environment staff). Since we only have the data for 2015, we cannot say much about trends over time.

Of the identified non-compliance, the Ministry of Environment staff responded with an “advisory” (essentially a note to file) 67 per cent of the time, and provided a more detailed written warning 22 per cent of the time.

The remaining 11 per cent (5 incidents) were referred for further action, but at time of writing the government’s environmental violations database gives no information about what happened as a result. We know that between 2006 and the beginning of 2016 Teck Coal Ltd. has had just four tickets for $575 each issued against it (totaling just $2300).

Teck Metals Ltd. was inspected 12 times, and was out of compliance with its permits on seven, or 58 of those inspections. Five inspections resulted in advisories, and two in written warnings. In the past (and since 2006), Teck Metals has had previous convictions under the Fisheries Act and Environmental Management Act (2013) and avoided a third conviction (under the Environmental Management Act) in 2011 by participating in a restorative justice process through which it agreed to pay $325,000. It also had a single ticket issued against it in 2006 for $575.

Not all Teck companies had such a poor track record in the inspections. Teck Highland Valley Copper Corporation was inspected four times in 2015 and was in compliance at all four inspections. Teck’s Galore Creek Partnership also had four inspections, all of them clean.

Teck Resources is a huge operation, of course, so it’s not surprising that it has far more inspections than any other company in the government’s 2015 data. But Teck Coal’s non-compliance rates are well above average (on average the Ministry inspections found 60 per cent non-compliance). Indeed, it appears that the number of inspections carried out of Teck Coal reflects Ministry concern about this fact.

Auditor General Concerns

In 2016 B.C.’s Auditor General issued a damning report on enforcement of environmental requirements related to mines by the Ministries of Environment and of Energy and Mines. She wrote about the enforcement culture of the Ministries (which assumes voluntary compliance by mining companies) and the underfunding of compliance efforts:

We understand that [the Ministry of Energy and Mines’] collaborative strategy is viable in some circumstances, but it assumes that the majority of mining companies are willing to comply voluntarily. As we found for most of the mines we reviewed for this report, this is not the case. For the inspections reports we reviewed, there were incidences of non-compliance in most cases.

Based on her figures and our own research, we estimated that from 1990-1994, almost 10 per cent of pollution permits issued under what was then the Waste Management Act had some kind of compliance and enforcement action each year. From 2010-2014 that figure, for permits under the Environmental Management Act, was just above 2 per cent.

Auditor General Bellringer*** also provides an example of the clout that Teck Resources seems to have with the current B.C. government. The report used Teck Coal Ltd.’s permit to expand its Line Creek Mine in the Elk Valley as a case study.

After Ministry of Environment staff noted that the expansion would exacerbate a serious selenium contamination issue in the region, and refused to authorize the permit, Cabinet stepped in:

Subsequently, a decision was made by government to approve the permit under section 137 of EMA. This clause, which allows Cabinet to approve a permit where it is in the public interest to do so, had never been used before…

We also found that the Line Creek Expansion Permit has a site performance objective for selenium that allows five times the amount set in B.C.’s water quality guidelines for aquatic fish.

We concluded that government, in granting the permit, did not publicly disclose the implications these permit levels will have in this area where the expansion will extend the life of this mine for an additional 18 years and produce an additional 3.5 million tonnes of coal annually.

As well, we expected MoE’s permits to reflect the polluter-pays principle. We found, however, that under the Line Creek Expansion Permit, the mine company is charged only about $5,000 a year for emitting selenium pollution. This is not reflective of the known environmental impact of selenium. [emphasis added]

What Teck Resources Gets

Clearly, Teck Resources does not get a “get out of jail free” card (metaphorically speaking, since environmental offenders almost never actually go to jail). Teck Metals has been convicted and has paid fines. Teck Coal has been subjected to a high level of scrutiny by Ministry of Environment inspectors (but no major penalties as yet).

However, the evidence suggests that non-compliance with environmental regulations is business as usual for Teck Resources, and that is troubling. And on one occasion the government used an unprecedented power to override its own staff and allow the company to expand its operations dramatically, despite an ongoing pollution problem.

It’s important not to suggest that this is corruption. Donations in this case were given to the B.C. Liberal Party, not to individual politicians, and not in return for any particular decision. I believe that B.C.’s elected politicians, of whatever party and including the B.C. Liberals, want to do what they think is the right thing and do not believe themselves to be influenced by the fact that their party received a generous donation from Teck Resources.

However, the careers and campaigns of B.C. Liberal politicians have benefited from the powerful companies that the government is responsible for regulating. They have personal relationships with officials from those companies, formed through personal access at expensive fundraisers.

It is a fundamental legal principle of fairness that a government decision-maker should be unbiased, having no interest in the decision before him or her. Indeed, this requirement is so fundamental to the law, that a decision-maker must avoid even a credible appearance of bias. The fact that a large resource company with a poor environmental compliance record has made significant donations (i.e. more than $1.5 million since 2008) to the political party currently forming the government invites questions.

The courts have not generally applied the principle of bias to elected officials, instead accepting political donations as a legal part of the electoral system. In the U.S., where some judges are elected, a judge who has received campaign contributions may need to step down (or “recuse” his- or herself) from hearing a case involving that donor. However, that is because of the nature of judges — that they are supposed to apply the law without favour — and politicians have not been held to the same standard.

But I don’t think there’s any doubt that these types of large corporate donations do give rise to an appearance that some corporate interests have more influence over cabinet Ministers and the resulting government regulatory culture than individual voters. That’s a big problem — raising fundamental questions about our basic democratic institutions and our notion of equality before the law.  Are decisions about our lands, air and water, about the sustainability of our communities, being made in the interests of the public, or of large corporate donors?

In the end, the fact that many of us are asking these questions — and that there are no ready answers — is probably a good enough reason to get rid of corporate donations.

*  The B.C. Greens are ahead of the curve on this one, having pledged to go without corporate or union donations. The B.C. NDP has pledged to ban corporate and union donations if elected. And the B.C. Liberals are playing catch-up, with a panel appointed to investigate possible legal changes, but no specific promises.

**  The Ministry of Environment disputes our figures for convictions (but not tickets, so far as we understand), but has not provided alternative figures. 

***  As an aside — isn’t that a great name for an Auditor-General?  Very Dickensian (but more subtle than “Whistleblower”).

Image: Christy Clark during a tour of the Copper Mountain Mine. Photo: Province of B.C. via Flickr

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

At West Coast Environmental Law we're gratified that Suncor, one of Canada's largest oilsands companies, has taken the time to read — and publicly disagree with — our recent report, Payback Time.

Payback Time examined the risks to Suncor and other Canadian fossil fuel companies of lawsuits brought by the victims of climate change outside of Canada. 

Suncor responded with a blog post entitled "What to do when everyone is the problem" that cleverly attempts to downplay Payback Time as just one of several efforts to single out a culprit for climate change. Suncor then argues that we are all to blame, suggesting that singling Suncor out for special blame is simply wishful thinking on the part of equally blame-worthy polluters (i.e. the general public).

Some groups are quick to single out individual countries, based on GHG emissions volumes generated within their borders. Others point the finger at specific industrial sectors which generate significant GHG emissions. Some lay the blame squarely on corporations which produce energy [linking to Payback Time] from fossil fuel sources. 

The hard, undeniable truth is that all of us, as fortunate members of the developed world, are complicit when it comes to GHG emissions…

We have heard the message that we are all responsible for climate change over and over again, and at a certain level this is true — but, we are not all equally responsible for climate change.

Suncor's rhetoric conveniently side-steps questions of who should pay for the damage caused by climate change (and what portion) and whether major greenhouse gas emitters might be held legally responsible for climate change (which was the actual focus of Payback Time).

Producer liability

Suncor argues that fossil fuel companies should not be held responsible because they are not causing the bulk of greenhouse gas emissions — it's just their product, they aren't the ones burning/consuming it: "Up to 80 per cent of GHG emissions from each barrel of oil are produced at the point of consumption." The company makes this point even more clearly in an earlier blog post that accused researcher Richard Heede's ground-breaking Carbon Major's report of "scape-goating" fossil fuel companies:

In the study, all GHG emissions resulting from the consumption of the companies' energy products by consumers and businesses have been erroneously attributed to the companies themselves.

As we've explored in previous OSQARs, 70-80 per cent of GHG emissions occur from combusting fossil fuels in our planes, trains and automobiles.

Heede's study, of course, is quite upfront about the fact that it is attributing the greenhouse gases from burning fossil fuels to the companies that extracted, processed and sold those fossil fuels.

And why not? A fossil fuel company sells each barrel knowing that the vast majority of it will be burnt, and contribute to global warming. Suncor's product is non-renewable, greenhouse gas producing oil.

The law expects the manufacturers of products to be responsible for their products when the product is used as intended. Tobacco companies didn't (in the end) escape liability (even from the victims of second hand smoke) by pointing out that it was the individual cigarette smokers that lit up. Asbestos manufacturers didn't win their cases on the grounds that no one forced people to put asbestos into their homes, thank you very much.

Society as a whole saw jobs created, collected tax dollars and bore at least some of the blame, for the harm caused by both tobacco and asbestos. And yet this did not absolve the manufacturers of responsibility for the damage caused by their product.

So yes, we are all responsible for greenhouse gas emissions, but fossil fuel companies are much more responsible, and benefit financially in a much more significant way, than most of us.

While it's hard to picture a world where no one uses energy products, it's relatively easy to imagine a world where energy from fossil fuel products plays a much more limited role. We can make insulation without asbestos, and we can produce energy without burning fossil fuels. Incorporating the full costs of producing fossil fuels into the business model for energy companies is a reasonable proposition, and the law of torts offers one pathway to accomplish this.

David Grossman, in his classic 2003 paper, Warming up to a not-so-radical idea: Tort-based climate change litigation, gave several reasons why it is appropriate to hold fossil fuel companies and other large-scale emitters, instead of the users of the fossil fuels:

·       Individual consumers such as drivers and users of electricity do not contribute "substantially" to climate change and would not meet the standards for legal causation.

·       Individual consumers have few meaningful alternatives to fossil fuels and the products that rely upon them.

·       Tort law's goal of reducing the cost of accidents would be furthered by holding liable producers who can incorporate the various costs of climate change into the prices of their  products.

The reality is that Suncor's product and operations are already causing tens of billions of dollars in damages globally, and the company and its shareholders benefit financially. The full cost of their product is not reflected in its cost. One cannot keep up that business model and not expect calls for compensation. This isn't about scape-goating — it's about equity, making sure that the polluter pays and the practical reality that paying for climate damages is going to cost a lot.

Interestingly, Greenpeace International recently made the same point in a blog post, Payback time for big polluters? — citing our report — Payback Time and our calculations about Suncor's possible liability. They conclude: "In the coming weeks we will have more information to share with you about how we are helping people to hold the big polluters accountable."

The discussion of who should pay for climate change may happen in the courts, it may happen in legislatures or parliaments around the world, or it may happen in international negotiations, but Suncor should not be surprised when it happens.

This article originally appeared on the Huffington Post.

Image Credit: Kris Krug

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.