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Holding Imperial Oil to account, establishing polluter-pays

Imperial Oil Ltd. v Quebec (Minister of the Environment)

October 30, 2003

In 1918, Imperial oil built a petroleum products depot on the south shore of the St-Lawrence River in Levis, Québec. In 1979, Imperial sold the property to a purchaser that demolished the fuel processing facilities and sold the site to a residential real estate developer.

In 1994, property owners noticed signs of hydrocarbons and tests revealed the presence of mineral oil and grease in the soil in excess of criteria for residential use of land. Owners of the contaminated lots filed lawsuits against their vendor and against the City of Levis which had issued the building permits.

The Minister of the Environment issued an order requiring Imperial Oil, as the former owner and operator of the site, to have a soil characterization study performed by an independent expert at its expense. It also required that a report including recommended decontamination measures, but fell short of ordering the performance of decontamination work. Imperial refused to carry out the order and challenged it before the Administrative Tribunal of Québec.

The Administrative Tribunal rejected both arguments and confirmed the order, but on appeal, the Superior Court quashed the order on the basis that the extent of Imperial’s obligations under this order had been greatly underestimated in terms of costs and scope of decontamination work.  The Court of Appeal reaffirmed the order and Imperial appealed to the Supreme Court of Canada.

We intervened at the Supreme Court of Canada on behalf of Friends of the Earth Canada. The SCC upheld the order and commented that the polluter pays principle encourages sustainable development, by assigning polluters the responsibility for address contamination they are responsible for and imposing on them the direct cost related to the pollution caused by their activities. (Imperial Oil Ltd. v Quebec [Minister of the Environment], 2003 SCC 58.)

By putting a direct cost on pollution, the polluter pays principle has the power to change corporate behaviour. In order for the polluter pay principle to be effective in the long-term, it is critical that our laws recognize that the responsibility for cleaning up contamination doesn’t end with the sale of a property. Ecojustice wanted to represent Friends of the Earth Canada, because this case touched on both of those issues.

What does this victory mean?

Forcing Imperial to pay clean-up costs was not just a victory for the town of Levis. Rather, by requiring the company to pay, the SCC firmly enshrined the polluter-pays principle in Canadian law and affirmed that the duty a clean-up pollution doesn’t end with the sale of a property.


Friends of the Earth