Imperial Oil suffered a set back yesterday when Mr. Justice Campbell of the Federal Court ruled that a key permit needed to build Imperial's Kearl facility was a nullity and that therefore a new permit would be needed and work could not -- lawfully -- proceed. This decision arises out of an earlier ruling that the environmental assessment that had been carried out was flawed and had to be re-done.
This second decision is actually likely more important that the first decision given what it says both about the risks companies run in not taking court cases seriously and also about how our environmental assessment process actually matters.
On the first point, Imperial Oil knew that the Pembina Institute was challenging the environmental assessment in Federal Court and was raising serious questions about its validity. Depsite this Imperial started devoting resources to the Kearl Project, largely banking on the fact that no court would actually making a ruling that could affect a major project or perhaps even banking on the idea that the work would be done before case was decided. This is a cynical ploy often followed by companies banking on the fact that the wheels of justice grind conservatively and slowly.
When the Pembina Institute won its case Imperial was dismayed when it received a latter from the Department of Fisheries and Oceans advising it that the authorizations that it had received on the basis of the flawed assesment were 'nullities' -- that is they were gone and worthless. Imperial was so upset that the Federal Government actually had the unmitigated gall to give effect to a court ruling that it then sued the Federal Government saying, in essessnce that (1) the Environmental Assessment really did not matter once the permit was granted and (2) that the earlier court decision was, in effect, trivia.
Imperial's first argument actually had some danger of suceeding given the complicated two-step that is Canada's approach to environmental assessent. Large projects often need dozens or in some cases hundreds of Federal permits and authorizations, sometimes given by numerous different departments. Rather than requiring each department to do its own assessment the Canadian Environmental Assessment Act essentially requires one assessment which then results in a recommendation to the Minister or agency that actually makes the decision. Imperial's argument was that under this system even if the assessment was flawed or done unlawfully since it was not the 'decision' the decision could stand.
Justice Campbell tersely dismissed both arguments. He held that the failure of the environmental assessment process meant that there was no ability for the Ministers or agencies to make the necessary decisions and therefore there was no authorization -- no assessment means no decision means no permit. The fact that Imperial had bulled ahead without regard for the ongoing court proceedings only meant that it had chosen to roll the dice and, well, lost.
What is crucial about this decision is that it affirms the principle that environmental assessment is not some 'add-on' or decoration to the process of turning Alberta into some vast open pit tar pit -- it is a vital part of government decision making and planning and without doing it right governments and companies cannot act.