Husky has day in court, fines imposed

Husky Oil Operations Ltd. has been penalized $3.82 million after entering 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, blended heavy crude oil, contrary to s.40(2) of the Fisheries Act, and one count of permitting a substance harmful to migratory birds, blended heavy crude oil, 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.

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The guilty pleas cover the period July 20 and 21, 2016. The charges had initially covered a longer period but amendments were agreed to which reduced the date frame to those two days.

The Crown withdrew 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 As well, all federal charges filed against the parent company Husky Energy Inc. have been withdrawn.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. She accepted the sentence recommendations, which were a joint submission from the federal and provincial Crown as well as the defence.

On the federal charges, Judge Dyck imposed a fine of $2.5 million on the Fisheries Act count, or $1.25 million for each day July 20 and 21. The sentence falls within the range; the charge carries a minimum fine of $100,000 and a maximum of $4 million for each day for this offence.

On count nine, the migratory birds charge, Dyck went along with the joint submission to impose a $200,000 fine. Both fines are payable to the Environmental Damages Fund which goes to benefit the environment.

The penalty imposed on the provincial count was a fine on the provincial count of $800,000, or $400,000 per day. The provincial surcharge was $320,000, for a total penalty of $1.12 million. This also fell within the range with the judge noting the maximum sentence is $1 million per day. The money here would go to the Impacted Sites Fund set up to clean up environmentally impacted sites.

The fines are payable immediately, said Judge Dyck. Various other standalone orders were also made.

In her remarks, Judge Dyck found the conduct of Husky towards the lower end of the scale. This was not an intentional act, she said. There were two previous convictions against Husky, both related to improper operations of sewer systems in Ontario; Dyck called these of limited application in this case. Judge Dyck also acknowledged the guilty plea taking place prior to a trial date being set, as well as changes to practises and procedures by Husky as evidence of corporate remorse and contrition.

Judge Dyck also noted the harm done by the spill as outlined in the agreed statement of facts. Judge Dyck was of the view that the need for general deterrence was a significant sentencing factor in this case.

It was a lengthy proceeding for all parties in the case Wednesday morning. Provincial Crown prosecutor Matthew Miazga and federal Crown prosecutor Carol Carlson delivered a lengthy presentation in the morning on the agreed statement of facts filed in the case, outlining events leading up to and during the oil spill. The spill near Maidstone on July 21 saw 225,000 litres of oil escape into the North Saskatchewan River. It was acknowledged the spill came about because the pipeline buckled due to ground movement. 

Victim impact statements were then entered soon after. Chief Wayne Semaganis of Little Pine read a joint victim impact statement on behalf of Little Pine, Red Pheasant and Sweetgrass. Councillors from Red Pheasant and Sweetgrass were also present.

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

Semaganis cited the damage to fish and waterfowl, and said First Nations members no longer hunt on or near reserve lands, no longer fish in the river, no longer trap on or near reserve lands, no longer farm on reserve lands, no longer collect medicinal and other plants in the vicinity of the river, and no longer drink water drawn from reserve lands. Instead, band members drink bottled water, said Semaganis.

Semaganis also described the anxiety, fear, physical stress and inconvenience. He also called the cleanup of the contamination “inadequate and incomplete.”

Two more victim impact statements were filed, one from the city of North Battleford and the other from the city of Prince Albert. Those outlined the impact of the disruption to their water delivery and other services to both cities.

North Battleford’s statement noted they were unable to water their parks and green spaces, and the water treatment operators had to manage additional filtration plant and a water service line from the town of Battleford.

The impact was “dire, ongoing and will cause long-lasting changes to procedures and processes,” the statement read.

The statement from Prince Albert was longer. They were forced to discontinue use of the North Saskatchewan River and find alternatives. The statement described an “intensive and stressful situation” and also cited other disruptions including the closure of recreational services and car washes.

Following a break, federal Crown prosecutor Stephen Jordan presented the joint submission on the federal counts against Husky. Jordan noted the guilty plea was a mitigating factor that shows remorse.

“Husky has accepted responsibility, they have taken steps to make sure this never happens again,” said Jordan. However, he also pointed to the importance of the North Saskatchewan River as a factor.

Miazga spoke at length on the provincial count. He called the Husky case the “most complicated file” he’s ever been involved in, even more than a murder trial, and noted the “huge learning curve.”

Miazga referred to the numerous case management hearings held, and said a trial would have lasted weeks. Judge Dyck noted a trial would have lasted between two to four weeks.

Of the spill, Miazga said there has “never been an incident in Saskatchewan such as this.” Regarding the financial penalty, Miazga suggested preference be given for the funds to go to Sask. based organizations.

Husky’s lawyer Brad Gilmour began his submissions with an apology from Husky Oil Operations Ltd. for the damage caused and to those affected. 

"There's no question this was a serious and significant event and Husky is sincerely regretful for both the occurence itself and the impacts its had to the environment and the communities downstream." 

Gilmour spent considerable time outlining Husky’s response to the spill, saying it should be seen as a “model” response. He also outlined changes brought in by Husky in the aftermath of the spill.

Gilmour noted Husky updated its procedures for investigating alarms and those have been implemented across the Saskatchewan gathering system. The revised procedures require an investigation into all incidents where dual leak alarms occur with a maximum analysis period of 30 minutes. If the cause of the dual alarm is not determined within that time the control room operator must shut down the pipeline section, said Gilmour.   

Husky has also made changes to control room operations and added three positions, implemented control room management plans that includes documentation and the clarification of roles and responsibilities, and revised the shift change process.

Husky also created a new position called a Senior Spill Preparedness and Response Advisor whose sole functiion is to oversee policies and procedures for spill preparedness and response. Six new boats have been added as well for spill response.

These responses “clearly demonstrate an acceptance of responsibility on behalf of Husky,” said Gilmour.

Gilmour also said Husky acknowledges the incident “resulted in actual harm,” he said. It had “impacts on downstream communities as well as the environment.” Gilmour also acknowledged likely fish or bird mortalities as a result of the spill.

While there was actually harm, that harm had been remediated, he noted. Gilmour said Husky “has expressed remorse for the incident and has taken responsibility since the incident.”

After sentencing concluded in the afternoon, Husky vice-president of pipelines Duane Rae told reporters the company was taking full responsibility for the spill.

"From the outset we accepted full responsibility for the spill, and we repeated that today in court. We recognize that the spill had a significant impact on communities in the North Saskatchewan River and we're deeply sorry for that. And we've been working hard since that day to try and set things right."

He thanked the downstream communities and Indigenous groups for their understanding, saying the cleanup was a "testament to the cooperation and support that we've received from the communities."

"We do understand there are people who think we could have done better. We hope to demonstrate through our actions that we've learned from this incident and we are making things better."

In speaking to reporters, Jordan explained some more about the Environmental Damages Fund to which the federal fines will be paid.

"Various groups, non-government organizations, universities, Indigenous organizations, municipal and provincial governments can apply with projects to put it to a use for the purposes set out in the sentencing order which is related to the remediation of habitat, habitat and research related to fish and microorganisms."    

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