Record Environmental Penalty: Fisheries Act Fines In Québec May Impact All

On December 19, 2014, after pleading guilty to 45 counts for infringements of the Fisheries Act 1. and its Metal Mining EffluentRegulations,2. Bloom Lake General Partner Limited ("Bloom Lake") was penalized some $7.5 million. The investigation by Environment Canada into Bloom Lake's operations was the largest undertaken to date and resulted in both the largest Canadian penalty for environmental infractions and the biggest contribution to the Environmental Damages Fund ("EDF").3. Given that all but three of the counts were governed by the Act's former penalty regime, the new regime that was brought into force on November 25, 2013 basically did not apply. The penalties for each charge followed a pattern typical in a plea negotiated situation under the Act's former regime: a relatively small fine and a much larger payment into the EDF. Had the new regime applied, the quantum of the penalty imposed upon Bloom Lake could have been significantly higher.

Facts

Bloom Lake, a subsidiary of Cleveland-based Cliffs Natural Resources Inc., operated an iron ore mine near Fermont, Quebec. On the basis of publicly-available material, an Inspector's Direction was issued for the Bloom Lake mine site on December 15, 2010. On September 7, 2011, given that Bloom Lake had failed to implement the measures required by the 2010 Inspector's Direction, Environment Canada initiated a formal investigation, which included the execution of search warrants at Bloom Lake's mine site and corporate offices (in Montreal), undertaken by over 25 agents who compiled a vast and comprehensive evidentiary record.

Environment Canada concluded that from April 2011 to September 2014, Bloom Lake had committed hundreds of infractions of both the Act and the Regulations. The brunt of the infractions stemmed from Bloom Lake's mishandling of its mining effluent (e.g. design and operation of its tailings ponds, overflowing water retention structures, and lack of water drainage facilities on the mining site).

More specifically, Environment Canada's investigation revealed that: (i) there had been a breach of the mine's Triangle Tailings Pond dam whereby, over the course of seven days, there had been a release of over 200,000 cubic meters of deleterious materials into fish-bearing waters; (ii) there had been a release of some 14,500 liters of ferric sulfate into water frequented by fish; (iii) Bloom Lake had, on several occasions, not informed the Department of Fisheries of certain releases of...