Husky will pay fines totaling $3.82 million

UPDATE

Husky entered guilty pleas today on federal and provincial charges related to a 2016 oil spill in Saskatchewan and says it will pay fines totaling $3.82 million.

Husky subsidiary Husky Oil Operations Limited was fined $2.5 million under the federal Fisheries Act and $200,000 for a violation of the federal Migratory Birds Convention Act. It was fined $800,000 under the Saskatchewan Environmental Management and Protection Act and assessed a 40% victim impact surcharge of $320,000.

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BACKGROUND
Husky Oil Operations Ltd. has entered three guilty pleas in connection to the oil spill into the North Saskatchewan River on July 20 and 21, 2016.

Husky plead guilty to two federal counts: allowing the deposit of a deleterious substance, crude oil, under s.40(2) of the Fisheries Act, and one count of permitting a substance harmful to migratory birds under the Migratory Birds Convention Act.

Husky Oil Operations Ltd. also entered a guilty plea on one provincial count for violating the Environmental Management and Protection Act.

The guilty pleas are to amended informations covering the dates July 20 and July 21. The Crown indicated they were withdrawing the seven counts against Husky Oil Operations Ltd. of not taking reasonable measures to prevent the deposit of a deleterious substance under s. 40 (3)(e) Fisheries Act. As well, all the federal charges filed against the parent company Husky Energy Inc. have been withdrawn.

The pleas were entered Wednesday morning in Lloydminster provincial court before Judge Lorna Dyck.

After pleas were entered, Crown prosecutor Matthew Miazga began his lengthy presentation on the agreed statement of facts filed in the case, outlining the events leading up to and during the oil spill.

Victim impact statements took place soon after. Chief Wayne Semaganis of Little Pine read a joint victim impact statement on behalf of Little Pine, Red Pheasant and Sweetgrass. Chief Clint Wuttunee of Red Pheasant and Chief Paskemin of Sweetgrass were not present but councillors were there to represent those First Nations; those First Nations had filed written victim impact statements.

Chief Semaganis pointed to their treaty rights to hunt, trap and fish, and pointed to the impacts of contamination to the First Nations to the fish in the river as well as the water supply.

“The cleanup of contamination is inadequate and incomplete,” said Semaganis. He pointed to significant losses of traditional and non traditional uses of their land.

Two more victim impact statements were filed and read in court, one from the city of North Battleford and the other from the city of Prince Albert, both outlining the impact of the disruption to their water delivery and other services.

It is a lengthy day of court proceedings, with sentencing submissions still to take place. Judge Dyck indicated this morning that she expects to hand down a sentence this afternoon.

Following are the impact statements.

City of North Battleford’s Impact Statement

Thank you for the opportunity to comment upon the impact that the Husky Spill had on the community. The City of North Batlleford had claims in the millions of dollars and the oil spill was very difficult upon our residents, local businesses, staff, emergency and fire services. It even impacted the appearance of the community as we were not able to water our parks and green spaces, or sweep our streets.

As well, the City of North Batlleford continues to be impacted. Over a year later, our Utility Department and Water Treatment operators are still managing an additional filtration plant and portable water service line from the Town of Batlleford. The impact was dire, ongoing and will cause long lasting changes to procedures and processes.

Husky has been diligent, assuming responsibility to mitigate the damages, as well as taking measures to prevent this from occurring again.

I trust this is the required information.

Jim Puffalt

City Manager

Victim Impact Statement of Little Pine First Nation, Red Pheasant Cree Nation and Sweetgrass First Nation

Injuries and Impacts Caused by the Spill and Inadequate Cleanup

As a result of Spill, and the delayed response to the Spill, and the incomplete and inadequate efforts to contain and cleanup the Spill, the Defendants caused extensive damages to the environment on, in and around the Reserve Lands, and to downstream users of the River, including The First Nations.

Immediately following the Spill, the public was ordered by the Saskatchewan government to stop drinking the River water.  Many municipalities, including municipalities in close proximity to the Reserve Lands, such as North Battleford, were forced to shut off their water intakes from the River.  Some municipalities were forced to use old water reservoirs and to issue boil-water advisories.

On July 27, 2016, the Saskatchewan Water Security Agency (“WSA”) warned the public not to eat fish from the River and to limit swimming, water-skiing. They also cautioned the public not to allow pets or livestock near the water.

On August 19, 2016, the Defendants reported that the Spill had already caused “impacts on birds, small mammals, invertebrates and reptiles; fish impacts in the spill affected area; and impacts to shoreline downgradient of the spill”.  In fact, the “impacts” included the oiling and killing of this wildlife.  Dead wildlife included burbot, suckers, walleye and fish of unknown species, crayfish, double crested cormorants, ducks, other waterfowl, and mink.  There was extensive oiling of wildlife, as well as beaver lodges.

On August 30, 2016, the James Smith Cree Nation reported that, according to sampling by them and the WSA, excessive levels of Contamination had impacted lake sturgeon spawning beds in the River.

In fact, the tissues of surviving fish, including Walleye, Northern Pike, Goldeye, Mooneye and Shorthead Redhorse have absorbed and been impacted by the Contamination.

The band members of The First Nations have observed many of these impacts, as well as the oiling of vegetation on the Reserve Lands and along the River.

As a result, since the Spill and deposit of Contamination caused by the Defendants, The First Nations’ uses of the Reserve Lands, the River and nearby Treaty 6 Lands, have been severely impacted.  The First Nations, and their band members, no longer:

hunt on or near Reserve Lands;

fish in the River adjacent to or near Reserve Lands;

trap on or near Reserve Lands;

farm on Reserve Lands, or, if they continue to farm, their crops and cattle are now at serious risk of being deemed unsafe, poisoned, inedible, and of no or diminished market value;

collect medicinal and other plants on Reserve Lands in the vicinity of the River, where they have been historically located;

drink water drawn from Reserve Lands, and instead many band members will only drink bottled water;

conduct traditional ceremonies on Reserve Lands in the vicinity of the River, where they were traditionally conducted;

use the River for recreation; and,

will be able to use large areas of the Reserve Lands adjacent to the River for human habitation.

Further, The First Nations have suffered all of the injuries noted under the heading “Cleanup Response”, above, including but not limited to:

Contamination was not cleaned up but rather remains on the Reserve Lands, in the River in concentrations that continue to threaten human and ecological health;

Impacts from dermal contact and ingestion of the Contamination;

Impacts to ecological health;

Impacts to traditional and non-traditional indigenous uses of the Reserve Lands and River;

Stigma of the Reserve Lands and River;

Diminution in value of the Reserve Lands; and,

Anxiety, fear, psychological and physical stress, financial impacts and inconvenience.

The First Nations would like to take steps to remediate its Reserve Lands, the River and the natural environment thereupon.  However, it lacks the funds to do so.  Moreover, the remediation of their own Reserve Lands and sections of the River may be incapable of completion, given the serious ongoing Contamination problem that exists on and under vast sections of the lands and River outside the Reserve Lands.  As the River waters continue to seasonally rise and fall, that Contamination will continue to be released from River sediments and will continue to contaminate the Reserve Lands, even after they have been cleaned up.

As a consequence, many of the injuries to traditional and non-traditional indigenous uses may be permanent.

However, we are absolutely clear about two facts.  First, based upon what we have seen with our own eyes, and also what our experts have told us, the cleanup of Contamination is inadequate and incomplete and our communities have been, and continue to be, impacted by a significant amount of Contamination that remains in the River, the Treaty Lands, the shoreline of our Reserve Lands and the upper reaches of our Reserve Lands. 

Second, those impacts have been, and continue to be, severe, and we know they have resulted in many, and significant, losses of traditional and non-traditional uses of our Reserve Lands.  The details of those impacts and losses have been set out above.

City of Prince Albert Victim Impact Statement

The Husky oil spill into the North Saskatchewan River in late July, 2016 has a significant impact on the City of Prince Albert. The City was directed to discontinue use of the North Saskatchewan River for the supply of water to its water treatment plant and was forced to find alternate sources to maintain the ability to provide safe potable drinking water to residents. The City was forced to implement its Emergency Operations Centre and go through extensive, time consuming, labour intensive efforts in order to put in works to provide alternate sources of water to the plant before the treated water in the city reservoirs ran out. The overall efforts included a coordination of resources that bridged Municipal, Regional and Provincial resources, numerous contractors and City Staff. The response was an intensive, stressful situation involving many parties, considerable risks and considerabie losses to individuals and businesses. Many or all of the direct and indirect costs have been submitted and reimbursed through Husky’s insurer or are in the process of being submitted and/or reimbursed. The intangible, and more difficult to quantify, costs have been outlined below, in addition to some of the previously mentioned direct and Indirect costs.

A. Direct Costs to the City of Prince Albert Corporation

These direct costs, initially paid by the City of Prince Albert, were charged to Husky or Husky's insurers.

1. City staff direct time and overtime. Staff time records will show that many in-scope and out-of-scope City employees were involved in responding to the crisis and providing an alternate water supply.

2. Consultant’s fees. The City’s staff persons were fully committed to their regular work plans prior to the crisis. The City hired Stantec and Morrison Herschfield to conduct engineering investigations and analysis for the evaluation of alternate surface and groundwater sources, provide guidance for water treatment operations, direct the sampling and analytical program to confirm the acceptability of the alternate raw water sources with the City’s existing water treatment plant. In addition, the consultants helped with the assessment of the City’s WTP to deal with oily particulates and dissolved hydrocarbons. The consultants provided support and direction in managing regulatory issues with the Water Security Agency and the Department of Fisheries and Oceans. The laboratory analytical costs, consultant travel and accommodation costs were significant.

3. Contractors. Canadian Dewatering and Uhited Rentals were contracted to provide the labour and equipment for the pumps and hoses providing water from the South Saskatchewan River and the Little Red (Spruce) River. The services of several construction companies were utilized to construct temporary works.

4. Material acquisitions. To provide water using the alternate sources it was necessary to acquire sand and sand bags for the temporary impoundment, raw water sampling equipment,

5. Expendables such as fuel. The pumps and generator light systems used diesel fuel. Fuel trucks were making regular (every eight hours) trips refueling all the equipment.

6. Reductions in water sales to entities that were shut off from the Prince Albert distribution system such as the rural users, bulk-truck (water crane) sales.

7. Security Services were required to monitor and mitigate the risk of inappropriate behavior around each alternate water line supply source.

8. Rental of required equipment to pump water from the retention pond on the golf course for application to the greens to mitigate dry conditions and restore the health of the turf.

9. Rental of required equipment and the hauling of water so that the ice making process remained on schedule at the Art Hauser Centre to prevent the loss of revenue associated with any delay to the start of the season'.

10. Loss of Revenue at the Kinsmen Water Park due to the closure of the facility.

B. Indirect Costs to the City of Prince Albert Corporation

1. Projects not completed or delayed by the City as resources were redirected to the water crisis.

For example: back lane work, building and development permit approvals. The crisis occurred during the peak of construction season. Equipment and resources that would normally be used for planned projects were pulled from those projects to respond to the water crisis.

2. Loss of water sales as citizens reduced demand. Citizens were encouraged to conserve water through the crisis even when the alternate sources were put in place. Conservation efforts were critical to maintaining water service through the event but also had the effect of reducing income to the City generated through water sales.

3. City Spray Parks were closed during the crisis in order to conserve water. The closure of these locations during the peak of our Summer Playground Program significantly reduced attendance in comparison to previous seasons and limited the provision of our regular summer recreation activity options for the community.

C. Direct Costs Experienced by Community Businesses and Members of the Public

1. Laundromats were shut down.

a. Employee salaries lost

b. Profit losses

2. Car washes shut down.

a. Employee salaries lost

b. Profit losses

D. Indirect Costs Experienced 'by Community Businesses and Members of the Public

1. Salary losses experienced by City Aquatics employees.

2. Salary losses from businesses that were shut down.

E. Intangibles Experienced by the City of Prince Albert Corporation, Community Businesses and

Members of the Public

1. City staff vacation not taken at planned or preferred times. The crisis occurred during the time many families would plan to take vacation with school out for the summer. Staff undoubtedly felt stress from family members when planned vacations were canceled.

2. City staff spent many days working long hours working to implement temporary infrastructure and process changes at the water treatment plant to ensure that water service was maintained throughout the event. City staff also expended many hours to ensure coordination between Rural Municipalities, Department of Highways, private contractors, citizens, internal departments, provincial agencies to maintain all operations as per operating permits and regulations. The stress experienced by staff members, and their families, lasted for months as the event, from the City’s perspective, continued until the Water Treatment Plant was returned to using water from the North Saskatchewan River and all the works cleaned up. In addition to the stresses directly resulting from the event, are the stresses of integrating back into normal City operations and expending considerable time and effort to catch up on operations that continued on throughout the event with fewer staff members available.

3. Stress related to concern of potentially no water for fire-fighting, hospitals and care facilities, schools, public institutions. Water treatment and distribution utility officials bear the stress of providing a critical municipal water service that can have tremendous disastrous impacts if the supply is interrupted, or in this case, potentially terminated. The direction to cease drawing from the North Saskatchewan River, and the use of a tenuous supply from the alternate sources added to this stress.

4. Stress related to employee uncertainty due to the closure of the Kinsmen Water Park. Many of our employees are University Students and their employment with the City during the Kinsmen Water Park season serves as one of their main sources of annual income.

5. Emergency meetings for elected officials. Elected officials no doubt felt the same stress of the water supply being interrupted or terminated. As the crisis continued, concerns about providing the alternate supplies in freezing conditions were very real and required exhaustive research of options and planning.

6. Tourism impacts

a) Hotels were not permitted to use their pools.

b) Restaurants prohibited from serving water.

c) City pools, spray parks and water park were shut down.

d) Citizens would have been less likely to invite guests to the city.

e) Overall reduction of visitors directly affects the local economy due to the associated decrease in visitor spending.

Jeff Da Silva

Engineering Services Manager

 

 

 

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