There’s been a major breakthrough in creative sentencing for environmental crimes in Alberta, with the Alberta Energy Regulator ordered to use an open-bidding process, rather than hand-selecting beneficiaries.

The creative sentencing mechanism allows judges to order penalties beyond fines when a company is found guilty of illegally polluting the environment. These penalties often include funding reclamation activities, scholarships or research projects.

Recipients of funds via creative sentences are usually selected behind closed doors by legal counsel, in a secretive system.

This was the case in 2010, after Syncrude Canada Ltd. was found guilty in the death of 1,600 ducks that landed on an oilsands tailings pond.

The University of Alberta, the Alberta Conservation Association and Keyano College were all approached privately about the prospect of receiving creative sentencing funds before being awarded $2.45 million in funding as part of Syncrude’s sentence.

But in response to a new ruling the Alberta Energy Regulator will take a different approach to creative sentencing in Syncrude’s latest conviction.

An open-bid process for new Syncrude conviction

On January 2, 2019, Syncrude was fined $2.75 million — including $950,000 in creative sentencing — for a 2015 incident in which 31 great blue herons were found decomposing in an abandoned pond that had been used for tailings waste.  

The pond, which was not in use but had not been reclaimed for several years, was situated 300 metres from a heron rookery containing 26 nests in a densely wooded area.

Details of the heron deaths in a statement of fact prepared during the course of legal charges being brought against Syncrude.

In his ruling, Judge Charles D. Gardner directed the Alberta Energy Regulator to post a request-for-proposal within seven months on the government’s purchasing website.

Proposals must improve the environment in the areas of wildlife, migratory pathways, sustainability and reclamation in Alberta.

“I like the creative sentencing approach,” said Barry Robinson, a Calgary-based lawyer with Ecojustice.

“I think the open bidding is a positive step to making the most effective use of creative sentencing dollars.”

Creative sentencing used since the ’90s

Alberta has used creative sentencing for environmental crimes extensively — at least 92 times since 1993. Environmental crimes are prosecuted by the Alberta government but in 2014, responsibility for prosecution of the energy sector was handed over to the province’s energy regulator. The AER uses creative sentencing as well.

Creative sentencing is designed to address the root cause of a crime, remediate environmental damage and put money back into the communities where the infraction occurred.  

The biggest beneficiaries to date have been Alberta’s universities and colleges, which receive funding to conduct environmental research and support scholarships. The Canadian Association of Petroleum Producers and the Alberta government have also been beneficiaries.

In his ruling, Judge Gardner specified beneficiary organizations must not have been in a conflict-of-interest relationship with Syncrude over the last 24 months.

It’s unknown if the open-bidding process will become the norm for creative sentencing under the Alberta Energy Regulator, but the January ruling sets a strong new precedent.

The court order allows the regulator to approach beneficiaries to apply for funds under the open-bid process, but recipients are required to submit a formal request.

Creative sentencing passed off as ‘corporate social responsibility’

The new ruling also stipulates resulting projects must be identified as funded by court order.

Projects funded by creative sentencing are rarely identified as resulting from an environmental conviction.

Convicted companies are often listed as ‘sponsors’ or ‘donors.’

For this reason, the new language requirement is welcome to Chilenye Nwapi, a research fellow at the Canadian Institute of Resources Law, who has critiqued creative sentencing for easily being passed off as corporate social responsibility.

He finds the new creative sentencing order “largely positive.”

“The order quite rightly ensures that Syncrude does not benefit reputationally from funding any creative sentencing project,” he said. “The order provides for transparency and accountability by requiring the [Alberta Energy Regulator] to file a report to the court describing any projects awarded together with the terms of the award.”

The court order also allows, for the first time, that for-profit organizations may be beneficiaries.

Nwapi takes issue with the court provision that the regulator “may” give preference to not-for-profit organisations in the procurement process.

“To ensure that the funds are used judiciously, the order should have mandated preferential treatment for not-for-profit organisations,” Nwapi said in an emailed statement.

How Syncrude and Friends Benefitted from ‘Creative Sentence’ in 2010 Oilsands Duck Deaths

Syncrude convicted twice for breaking same laws

Syncrude pleaded guilty in the January 2019 conviction for the 2015 deaths of 31 herons.

Court documents indicate the company failed to disclose the existence of a sump pond in its waterfowl protection plan.

The omission is troubling in light of the company’s high-profile 2010 conviction where it was found Syncrude failed to deploy bird deterrents when a storm drove birds down in 2008.

Following that 2010 conviction, the University of Alberta’s Colleen Cassady St. Clair was awarded creative sentencing funds to conduct bird-protection research.

As a part of that research Cassady St. Clair made six science-based recommendations for Syncrude to incorporate into its waterfowl protection plan and that included the documentation of all ponds in the plan area.

In 2019 Syncrude announced new measures to protect birds, including increased monitoring of water basins and improved deterrent systems.

Yet, as the 2019 conviction shows, the contaminated sump pond that led to the death of the 31 herons was not incorporated into Syncrude’s waterfowl protection plan.

“We were all aware that some ponds were not included,” Cassady St. Clair told The Narwhal. “I advocated that we needed to get all the ponds on that list.”

“It’s an unfortunate situation that’s easy to judge in hindsight,” she said, adding some of these facilities have been in operations for decades, spanning a changing regulatory environment. “It’s harder to predict these things than it is to spot them in the rear-view mirror.”

Cassady St. Clair said she is “delighted” with the open-bid process, adding it is new for Alberta but resembles what happens at the federal level.

Syncrude spent $16 million to remediate the sump pond in 2016.

“Our perspective is we’ve agreed to the fines and are saddened by what happened,” said Syncrude spokesperson Will Gibson.

– With files from Carol Linnitt

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The lethal mix of migratory birds and oilsands tailings ponds are in the news again this month.

On September 20 we learned another 123 birds died or will be euthanized after landing on a Suncor tailings pond. And on September 27, Syncrude Canada will appear in court for failing to prevent the deaths of blue herons at an Alberta oilsands site, the very same crime the company was convicted of in 2010 after an estimated 1,600 ducks met the same fate on one of its tailings pond.

Convictions like Syncrude’s are supposed to help to prevent the deaths of waterfowl on oilsands sites. So why are we here again?

The outcome of the 2010 trial, in which Syncrude was found guilty of both federal and provincial crimes, resulted in a $3 million penalty, the lion’s share of which — $2.45 million — was handed out to a small group of beneficiaries in the largest “creative sentence” in Alberta’s history.

For certain crimes, judges can order creative sentencing penalties over and beyond fines; they can include reclamation activities, scholarships or research projects, for example. Creative sentencing projects are meant to compensate for harm caused by the crime and prevent similar incidents from occurring in the future.

A deeper look at what happened to the $2.45 million provides a glimpse into the intriguing world of creative sentencing and how companies like Syncrude, along with a tightknit network of organizations, can quietly benefit from environmental crimes while avoiding public scrutiny.

Companies Can Look Charitable Through Creative Sentencing

My research team at Mount Royal University (co-investigator Gillian Steward and research assistants James Wilt and Cassie Riabko) found creative sentencing beneficiaries are usually hand-selected by both prosecution and defence and presented to the judge for consideration. There is no opportunity to apply for creative sentencing funds and no rationale is provided to the public as to why certain candidates are chosen over others — though our research shows connections to offending companies sure can help.

We studied 83 creative sentences for environmental crimes in Alberta and found a closed system where sentencing goals were not made public and much information is not in the public domain. This includes final financial reports and even some of the final creative sentencing projects themselves.

Creative sentences certainly take more work for the Crown to put together. In Alberta, they have been praised for providing quick funding to charitable organizations —the University of Alberta is the leading beneficiary —and for attempting to compensate for environmental harms through education, research and conservation projects. But creative sentencing fines have also been directed to wealthy industry groups including the The Canadian Association for Petroleum Producers and even to a government department.

How #Syncrude and Friends Benefitted from ‘Creative Sentence’ in 2010 #Oilsands #DuckDeaths https://t.co/7cLOF6hbyn #AbLeg @jpaskey

— DeSmog Canada (@DeSmogCanada) September 22, 2017

Our analysis shows there is a troubling lack of transparency around the public recognition of funds that may obscure the fact that companies are funding these projects as the result of a criminal conviction, rather than an act of generosity.

For example, many sentences portray convicted companies as “sponsors” or “donors.”

In 1999, Hub Oil was found guilty after an explosion killed two workers and was ordered to pay for two named scholarships at the Southern Alberta Institute of Technology.

Although the creative sentence was explicitly part of Hub Oil’s conviction, the company is listed as a “sponsor” of the scholarships on the institute's website — meaning a possible reputational boost for what is seen publicly as philanthropy.

The same holds for the listing of The Devon Canada Corporation Bursary at Olds College; this came from a $60,000 creative sentence ordered after Devon was convicted under Alberta’s Water Act.

The Beneficiaries of Syncrude’s $2.45 Million

Three beneficiaries were awarded funds in Syncrude’s creative sentence: the University of Alberta ($1.3 million), Keyano College ($250,000) and The Alberta Conservation Association ($900,000). Each of these organizations had previously received creative sentence funding and Syncrude was a donor or had done contract work for each. (In the case of U of A, the donations were to other parts of the university.)

Groups at the forefront of environmental change were not chosen. For instance, Ecojustice, the environmental law group that first brought the charges against Syncrude in 2010, did not receive creative sentencing funds.

The bulk of Syncrude’s creative sentence went to research into improving bird monitoring and deterrent systems in the oilsands. The award was perhaps puzzling given prosecutor Susan McRory spoke at length during Syncrude’s sentencing hearing about the company’s failure to use existing research into bird deterrence. (It hadn’t deployed any bird deterrents by April 28 when ducks died on a frothy tar-like mat, despite knowing birds migrate in that month.)

McRory said Syncrude even failed to used its own research from the 1980s that predicted “an event similar to what happened in this case.”

A duck on Syncrude's Aurora tailings pond. Photo: Todd Powell, Alberta Fish and Wildlife

Despite this, University of Alberta professor Colleen Cassady St. Clair had impressed the judge as an expert witness for the prosecution. She was awarded a $1.3 million creative sentence to research and provide advice to industry on how to improve bird monitoring and deterrent systems for birds in the oilsands. She was also ordered to work with an industry advisory committee and to make all research public.

Cassady St. Clair hired dozens of researchers who in turn produced research used to make 43 scientific recommendations to industry. Syncrude was court-ordered to respond to St. Clair’s report but was also told it could choose to implement recommendations if they were “reasonable, reliable and cost effective.”

In a written response, Syncrude mentioned 21 of the 43 recommendations, avoiding any mention of specific cautions against the use of lasers for bird deterrence and the use of berms to attempt to separate more toxic from less toxic tailings.

Cassady St. Clair said she told Alberta Justice that Syncrude’s response was vague and seemed to be part of a risk management process. The ministry did not appeal the company’s response although the court gave it the right to.  The bird monitoring program was privatized and largely out of public view.

In an interview Cassady St. Clair said she remains hopeful the recommendations will positively impact bird monitoring and management.

“I think it could have a ripple effect over time,” she said.

Of fresh charges against Syncrude for bird deaths on a sump pond, she told CBC there were other bodies of water that needed to be monitored on these sites.

The Alberta Conservation Association (ACA) was given $900,000 to purchase land west of Edmonton known as Golden Ranches with the goal of preserving waterfowl habitat.

ICYMI: What You Need to Know About NAFTA’s Investigation into Oilsands Tailings Leaks

The award came through a contact: ACA's corporate lawyer* worked for the firm that Syncrude was using. She set up for the ACA to provide a proposal as to what it would do to compensate for the loss of waterfowl. Compensating for harm is one of the goals of creative sentencing. (Another Syncrude case lawyer declared his conflict of interest to the court as a board member of a partnering organization for that land purchase.) At the time, the ACA didn’t know if the property owner would sell indicating the speed at which the proposal had to go before the judge.

Syncrude is listed as a donor on a sign near the purchased property and, in a separate project, is listed as a sponsor of the Alberta Conservation Association “Discover Guide.”

Keyano College, located in Fort McMurray, received $250,000 to develop a new wildlife management diploma program. In its creative sentencing proposal to the court, Keyano said the program would include Indigenous and part-time students.

But after surveying industry partners, Keyano discovered companies prefered to hire general environmental managers with wildlife expertise, rather than wildlife managers.

In its final report to Alberta Justice, Keyano did not mention Indigenous students. It did note that the college requested a change to the creative sentence to allow it to embed new wildlife courses into its existing environmental management program rather than developing a new diploma program. But we were unable to find a new creative sentencing order in the public domain. The college said 33 students had graduated from the newly enriched program as of 2016.

Keyano also recorded an unspent $29,143 from the creative sentence would be put toward a research project conducted in partnership with Syncrude. No court response to this proposed partnership exists in the public record.

Where To Go From Here?

Looking back, Syncrude’s creative sentence can be said to be investing in research and education — but given the new Syncrude charges, it didn’t seem to address weaknesses in the system: identifying reasons for and preventing bird deaths on oilsands water sites. Perhaps, the notion of preventing migratory birds from landing on tailings ponds some 640 football fields in size is just not doable. But companies are obliged to try.

Looking back, we found the overall creative sentencing system is one that operates in haste. Beneficiaries who are privately approached by the Crown scramble to put relevant proposals together between conviction and sentencing dates but when changes are made after the fact, that’s kept out of the public domain. Many mentioned a fund with wide latitude that organizations could apply to would be a good idea. Alberta Environment is considering that idea, too.

Perhaps more troubling, is the system of close ties that binds friendly beneficiaries to offending companies. Ultimately, with no specific direction from the court otherwise, companies and beneficiaries can credit creative sentence projects like philanthropy, rather than a court-ordered punishment.

If the court considers a creative sentence in the blue heron case perhaps it should strongly consider ordering research into eliminating tailings ponds altogether.

*Owing to author error, a previous version of this article incorrectly stated that a lawyer on the Alberta Conservation Board helped pave the way for a creative sentence proposal. It was the ACA corporate lawyer who helped pave the way for a creative sentencing proposal in the Syncrude 2010 case, and not an ACA Board member. The ACA Board was not involved in the creative sentence. We regret the error. 

Image: Dead mallard drakes on Syncrude's Aurora tailings pond. Photo: Todd Powell, Alberta Fish and Wildlife

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.