Syncrude Sentencing Sends Serious Message to Canadian Companies

December 16, 2010

On Friday, October 22, Provincial Court Justice K. Tjosvold determined that the $3 million sentencing proposal presented by the Provincial and Federal Prosecutors and Syncrude was “fit and proper” punishment for offences stemming from the deaths of approximately 1600 migratory birds in Syncrude’s Aurora Settling Basin (tailings pond) in April 2008.  The sentence is believed to be the largest fine for a single environmental offence in Canadian history.

The $3 million award is divided into a $300,000 fine for the federal offence under the Migratory Birds Convention Act, 1994 (the maximum fine for that offence in 2008) and a $500,000 fine for the provincial offence under the Environmental Protection and Enhancement Act (also the maximum fine for that offence). Half of the provincial $500,000 fine will be directed to the creation of a program for bird protection and monitoring at Keyano College located in Fort McMurray. Syncrude has until November 1 to pay the fine portion of the sentence.

However, the fines made up less than 1/3 of the total award, as the majority of the sentence ($2.2 million) involved a creative sentencing order. Under the creative sentencing portion of the sentence, $1.3 million was directed to the University of Alberta to conduct an Avian Protection Study that will look at improving bird deterrence programs and $900,000 will be used to purchase lands in the Golden Ranches Conservation Area east of Edmonton to provide habitat for migrating and nesting waterfowl.

Although some commentators may question the extent to which a $3 million fine truly resonates with a corporation the size of Syncrude, the judge and the federal and provincial enforcement authorities insist that a serious message has been sent. In approving the sentencing proposal, the judge expressly considered the deterrent effect of this sentence both on Syncrude specifically, and on the industry in general. The sentence shows a definite willingness on the part of environmental prosecutors to seek maximum penalties for specific offences, and also emphasizes how the creative sentencing components of environmental cases have taken on added significance in recent years, as the focus of sentencing has shifted from punishment to a broader goal of restoration.

Corporations heeding the message from the Syncrude sentence should also be aware that with the passage in June 2009 of the Federal Environmental Enforcement Act (in our March 2009 edition of EnviroNotes! Bruce McMeekin outlined some of the key components of the Enforcement Act) future breaches of the same provision of the Migratory Birds Convention Act, 1994 under which Syncrude was convicted will be subject to a new and significantly revised sentencing regime. The Enforcement Act provides for increased minimum fines for large corporations who commit serious repeat offences (up to a maximum of $12 million) and imprisonment. The Enforcement Act also sets out aggravating factors a sentencing judge must consider such as: the damage caused and its extent; the offender’s moral blameworthiness; the offender’s profit or intended profit in committing the offence; whether the offender was warned not to commit the offence; the offender’s history of non-compliance; and the offender’s subsequent conduct. A court must give reasons if it decides not to increase a fine when there are aggravating factors present.

The Enforcement Act also draws a distinction between individuals and large and small corporations (revenues of $5 million or less) in determining the appropriate maximum sentence. In situations such as the Syncrude case where more than one bird was harmed, the Enforcement Act establishes that cumulative fines can be levied for each individual. In addition, the Enforcement Act imposes an affirmative duty of care to ensure compliance on directors and officers that did not exist before. In addition, under the Enforcement Act a public registry for corporate offenders is created and if convicted, corporations must notify shareholders (in the form directed by the court) of the facts of the offence and punishment.

Given these significant new increases and additions to the Enforcement Act the sentence in the Syncrude case (at least in respect of the Federal offence) may be viewed as rather modest in comparison to what is now available to federal prosecutors under the revised regime.


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