The Corporation of the Town of Marathon - Order to prevent discharge of contaminants

Description of Instrument

A Director of the Ontario Ministry of the Environment, Conservation and Parks (ministry) intends to issue a Director’s Order under the following sections of the Environmental Protection Act (EPA) to the Town of Marathon requiring continued ongoing site work at the former mill site in Marathon:

• EPA section 18 - Order for Preventative Measures,
• EPA section 132 - Order to Provide Financial Assurance
• EPA section 196 - Order of Consequential Authority

The order is to be issued on consent with consent of the town, which is waiving its right of appeal.

Under the EPA, the Director may require a person to take certain actions and environmental measures to protect the natural environment and to prevent, decrease or eliminate adverse effects, including the discharge of a contaminant into the natural environment.

The proposed conditions of the order are related to obligations of a 2011 settlement agreement between the ministry, Tembec Inc., and other parties that provided for the implementation of remedial and preventative measures work to ensure environmental protection for the long-term. The order contains requirements that provide for the continuation and updating of this environmental work, and includes, but are not limited to, the following:

1. On-going long-term groundwater monitoring and sampling program at the property until such time the ministry determines it is no longer necessary.
2. An annual groundwater monitoring and sampling report that will interpret the results of the monitoring program and contain any recommended changes based on the results.
3. Registration of the order on title for the property and requirements that a copy of the order be provided to any future interested purchaser of the site to create awareness of ongoing site requirements until such a time that they are deemed no longer necessary by the ministry.
4. A requirement that financial assurance be provided to the ministry to ensure that long-term monitoring requirements are implemented. In accordance with ministry policies, the town will not be required to provide financial assurance; however, this requirement will be effective on any subsequent owner in the event of a sale of the site. The amount of financial assurance required will be determined in accordance with the ministry’s guidelines for any remaining monitoring work at site.

It is the Director’s opinion that it is in the public’s best interest to require the town, and any subsequent owner of the site, to undertake the work required by the order (as specified in the attached draft Director’s Order), to prevent or reduce the risk of a discharge of a contamination into the natural environment from the environment or undertaking.

Background

Under the terms of a 2011 Settlement Agreement between the Ministry of the Environment, Conservation and Parks, Tembec Inc. and other parties, Tembec agreed to carry out certain environmental work with respect to the former mill property in Marathon. This work included long-term monitoring of groundwater and submission of financial assurance (FA) to the ministry to guarantee that environmental work is carried out at the mill site.

Under the settlement, Tembec may sell the property provided that the purchaser is acceptable to the ministry, and the purchaser replaces the FA held in respect of the property, unless the ministry agrees otherwise.

Conditions of the settlement provide that Tembec will be released from its obligations if it sells the property to a purchaser that is acceptable to the ministry. The agreement does not release Tembec, or any other person from unknown environmental issues that might be discovered in the future, and associated obligations.

The Town of Marathon has proposed to acquire the former mill property from Tembec and is seeking the ministry’s acceptance as a purchaser, in accordance with the terms of the 2011 settlement agreement.

The town will seek court approval for its proposed purchase of the property. In support of its proposal, the town will consent to the issuance of the order and confirm that is assuming the environmental obligations associated with the properties that are subject to the order.

The FA currently held by the ministry for the mill property will be returned to Tembec. Tembec will continue to be responsible for completion of work associated with the industrial sewage works, which is not being sold at this time, and the ministry will continue to hold FA associated with this work.

In order to protect the natural environment and to prevent, decrease or eliminate adverse effects it is important that the work described in this order be undertaken, including the provision of appropriate financial assurance for long-term monitoring.

The town will not be required to replace the FA associated with the groundwater monitoring for the former mill site. In Ontario, municipalities are not normally required to provide FA as they are not subject to bankruptcy and financial insolvency to the same degree as individuals or private companies. Municipalities also have permanency of place which prevents them from walking away from local issues.

In the event of a future sale of the property, any future owner will be required to provide FA to the ministry to guarantee outstanding groundwater monitoring requirements at the site.

The order is binding to any future owners of the property.

Further background information and details on work order conditions can be found in the link to the draft Director’s Order.