What Developers Should Know About New Brownfield Regs

In late December 2009, the Ontario Ministry of the Environment quietly adopted sweeping changes to the regulation of contaminated (and non-contaminated) sites. Some of the changes were extensively reviewed with stakeholders during the past several years; others were surprises. Out of more than 100 pages of Regulation 511/09 at EBR 010-4642, three standout  changes are new standards for how clean is clean, new rules for the movement of  “clean” surplus soil, and stricter standards for the conduct of qualified persons (QPs).

You can read Ontario Minister of Environment John Gerretsen’s take on the new rules here.

How clean is clean?

The most important change will be the new standards. The new Soil, Ground Water and Sediment Standards for use under Part XV.1 of the Environmental Protection Act, dated July 27, 2009, will officially come into effect on July 1, 2011. An additional 18 months is available in some circumstances, but banks and other stakeholders are already using them. These contain hundreds of changes. Most standards have become more stringent, especially in soil, and new parameters are added, such as total boron, hexane and 1,4 dioxane. This alone will make redevelopment more expensive for many sites.

Sites affected with petroleum hydrocarbons will be particularly hard hit. For example, the acceptable level of benzene in non-potable groundwater will plunge from 1,900 parts per billion (ppb) to 44. Equally important, criteria have now been adopted for dissolved hydrocarbons in non-potable water, where none existed before. Metals, chlorinated solvents, PCBs, pesticides: each group has some steep reductions mixed with some increases, especially in non-potable water.

The Ministry of the Environment (MOE) says that these increases will be partly offset by a simplified, Tier 2 approach to risk assessment, but consultants tell us that they have already found errors in the Tier 2 model.

Movement of clean soils

For many years, the MOE has talked about a Materials Management policy to regulate the movement of “clean” soils from one property to another. In the absence of such a policy, some MOE offices have argued that only “inert fill” can be moved from one property to another. Although this restrictive interpretation has rarely been followed in practice, it is now becoming the law.

This major feature of the new rules will increase costs for many construction projects, even those that don’t think they’re dealing with a contaminated site.

When the new Part XII to the regulation comes into force, every stockpile of soil will have to be separately analyzed. Only soils that have been sampled and proven to meet this new standard may still be freely transported. Soils with higher levels of contamination may only be transported to properties that are already contaminated, and were previously used as gas stations, garages, dry cleaners or industries, and therefore will always require a Record of Site Condition (RSC) before conversion to a more sensitive use. (s. 32 of the Regulation). Reports will be required to document and quantify all movements of soil on and off an RSC property. (see new s. 27 to 34 of Schedule A.) This should significantly increase the cost of disposing of surplus soils from construction projects.

How qualified is qualified?

A key theme of the 1996 and 2004 regulatory reforms was that environmental professionals, paid by the property owner, could and should bear the primary responsibility of documenting the status of contaminated sites. Ministry involvement was drastically reduced and focused on risk assessment. Canadian Standards Association standards (designed by multi-stakeholder groups heavily populated by engineers and geoscientists, and heavily reliant upon professional judgement) were accepted as the regulatory standards for environmental site assessments. QPs authorized to sign such documents were gradually limited to professional engineers and professional geoscientists, expecting that their respective regulatory bodies would ensure adequate quality control.

This has not worked reliably and now a third major set of changes will reduce MOE deference to the consulting community and re-establish a higher degree of ministry scrutiny. Reg. 511/09 makes significant “enhancements” to the RSC process: a quality control/audit process for RSC before they are acknowledged by the MOE; detailed regulatory standards for the Phase I and II Environmental Site Assessments (ESAs) that must underpin an RSC, replacing the CSA standards; and, conflict of interest rules for the QPs who must sign each RSC.

For example, each RSC will now be reviewed by Ministry staff within 30 business days. Some will have a desktop review; others will be reviewed in more detail. Defective RSCs will be rejected; acceptable ones will be “acknowledged,” and can then be relied upon. This process should improve the minimum quality of RSCs, at the cost of adding an additional six weeks. The quality of ESAs will also increase, although at a commensurate increase in price.

These “enhancements” were necessary because of a minority of environmental consultants, and the real harm that some clients have suffered as a result. Why else must a regulation bring in rules against conflicts of interest by QPs? Or specify in so much detail the steps they have to take in investigating a property?

As someone who has devoted many years to the development of multi-stakeholder environmental standards, it’s a little disappointing to see the MOE turn away from such standards. On the other hand, having spent far too much time suing negligent consultants, I am pleased to see the Ministry insist on better work from the engineering/ geoscientist community. If the professional regulatory bodies won’t control conflicts of interest and shoddy environmental work (and they haven’t), the MOE must do so. These additional specifications should better protect high quality consultants from undercutting by less careful competitors, and should help protect clients against the risk of shoddy investigations and reports.

Dianne Saxe is a Certified Specialist in environmental law and a certified mediator.