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Appeals from the Forest and Range Practices Act 2017

 
2017-FRP-002(a) Glory Pit Mines Inc. v. Government of British Columbia

Decision Date: September 20, 2017

Panel: Alan Andison

Keywords: Forest and Range Practices Act - s. 52(1); contravention; unauthorized timber harvesting; administrative penalty; consent order

Glory Pit Mines Inc. (“GPM”) appealed a determination issued by the Acting District Manager (the “Manager”), Selkirk Resource District, Ministry of Forests, Lands, Natural Resource Operations, and Rural Development (the “Ministry”). The Manager determined that GPM had contravened section 52(1) of the Forest and Range Practices Act (“FRPA”) by harvesting Crown timber without authorization. The Manager levied an administrative penalty of $17,887.30 against GPM for the contravention.

The matter arose from GPM’s timber harvesting activities in 2015. GPM held a licence to cut Crown timber for the purpose of mineral exploration. However, during the logging operations, GPM’s faller cut 1.2 hectares outside of the area covered by GPM’s licence to cut.

Following an investigation by the Ministry, the Manager concluded that GPM had harvested 601.5 cubic metres of Crown timber without authorization. The Manager also concluded that the defence of due diligence did not apply, because GPM did not take reasonable steps to ascertain the boundaries of the area covered by the licence to cut. The Manager levied a penalty consisting of $14,887.30 to remove the estimated economic benefit that GPM had received from the contravention, plus an additional $3,000 to act as a deterrent.

GPM appealed the determination to the Commission. GPM acknowledged that it had contravened section 52(1) of the FRPA, but argued that the penalty should be reduced to $3,000 because GPM received no economic benefit from the contravention.

Before the appeal was heard, GPM and the Government negotiated an agreement to resolve the appeal. Based on the parties’ agreement, the Commission issued an order confirming that GPM had contravened section 52(1) of the FRPA, and varying the penalty by reducing it to $7,000.

Accordingly, by consent of the parties, the appeal was allowed in part.

2016-FRP-003(a) Tolko Industries Ltd. v. Government of British Columbia

Decision Date: August 8, 2017

Panel: Alan Andison

Keywords: Forest and Range Practices Act – ss. 46(1), 52(1); Forest Planning and Practices Regulation – s. 37; administrative penalty; landslide; ecological values; material adverse effect; consent order

Tolko Industries Ltd. (“Tolko”) appealed a determination issued by the District Manager (the “Manager”), Okanagan Shuswap Natural Resource District, Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”). The Manager determined that Tolko contravened section 37 of the Forest Planning and Practices Regulation (the “Regulation”) and sections 46(1) and 52(1) of the Forest and Range Practices Act (the “FRPA”) in relation to a landslide that occurred below Tolko’s cutblock and associated roads. The Manager levied an administrative penalties totalling $12,000 against Tolko for the contraventions.

The matter arose from a landslide that occurred in April 2012, in the vicinity of Sugar Lake about 50 km east of Vernon, BC. Between August 2011 and February 2012, Tolko harvested a cutblock in the area. Originally, the harvesting rights for the cutblock were held by Weyerhaeuser Company Limited (“Weyerhaeuser”), which had constructed the logging roads in the cutblock in 2002 and 2003. The harvesting rights were transferred to Tolko in 2004. The road permit was transferred to Tolko in 2005.

Tolko reported the landslide to the Ministry after being alerted to it by a resident. The landslide occurred downslope from the area Tolko had harvested, and the associated roads. The landslide caused soil and timber to slide downhill, causing scouring of a stream channel, soil damage, and the loss of Crown timber and regenerating trees.

Following an investigation by Ministry staff, and after giving Tolko (and Weyerhaeuser) an opportunity to be heard, the Manager concluded that Tolko’s forest practices caused the landslide. An inadequate number and placement of drainage structures on the logging roads directed increased water flows towards the area where the slide originated, and Tolko’s clearcut logging of the cutblock increased the timing and peak flow of runoff during a period of warm weather, all of which triggered the landslide. The Manager also concluded that Tolko did not take all reasonable care to prevent the contraventions, and therefore, the defence of due diligence did not apply. The Manager decided to impose the following penalties: $2,000 for contravening section 52(1) of the FRPA; $5,000 for contravening section 46(1) of the FRPA; and $5,000 for contravening section 37 of the Regulation.

Tolko appealed the Manager’s determination on the basis that the Manager erred in determining a causal connection between Tolko’s forest practices and the landslide. Tolko also argued that the Manager imposed too high of a due diligence standard, and erred in assessing the penalties. Tolko requested that the Commission reverse the determination, or alternatively, refer the matter back to the Manager with directions.
Before the appeal was heard by the Commission, the parties negotiated an agreement to settle the matter. The parties agreed that Tolko had contravened section 37 of the Regulation by failing to ensure that its timber harvesting did not cause a landslide that had a material adverse effect on legislated ecological values, and that a penalty of $8,000 was appropriate in the circumstances. By consent of the parties, the Commission varied the Manager’s determination as agreed to by the parties.

Accordingly, by consent of the parties, the appeal was allowed in part.

2016-FRP-004(a) Weyerhaeuser Company Ltd. v. Government of British Columbia

Decision Date:
June 27, 2017

Panel: Alan Andison

Keywords: Forest and Range Practices Act - s. 58.2; Forest Practices Code of British Columbia Act – s. 67(1); Forest Road Regulation - s. 9(1)(c)(iv); landslide; forest road; contravention; administrative penalty; consent order

Weyerhaeuser Company Ltd. (“Weyerhaeuser”) appealed a determination issued by the District Manager (the “Manager”), Okanagan Shuswap Natural Resource District, Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”). The Manager determined that Weyerhaeuser contravened section 9(1)(c)(iv) of the Forest Road Regulation (the “Road Regulation”), section 67(1) of the Forest Practices Code of British Columbia Act (the “Code”), section 37 of the Forest Planning and Practices Regulation (the “Planning Regulation”), and sections 46(1) and 52(1) of the Forest and Range Practices Act (“FRPA”). The Manager levied administrative penalties totalling $14,500 against Weyerhaeuser for the contraventions.

The matter arose from a landslide that occurred in April 2012, in the vicinity of Sugar Lake about 50 km east of Vernon, BC. Between August 2011 and February 2012, Tolko Industries Ltd. (“Tolko”) harvested a cutblock in the area. Originally, the harvesting rights for the cutblock were held by Weyerhaeuser, which had constructed the logging road to the cutblock in 2002 and 2003. The harvesting rights were transferred to Tolko in 2004, and the road permit was transferred to Tolko in 2005.

Tolko reported the landslide to the Ministry after being alerted to it by a resident. The landslide occurred downslope from the area Tolko had harvested, and the associated road. The landslide caused soil and timber to slide downhill, causing scouring of a stream channel, soil damage, and the loss of Crown timber and regenerating trees.

Following an investigation by Ministry staff, and after giving Weyerhaeuser (and Tolko) an opportunity to be heard, the Manager concluded that Weyerhaeuser’s road construction was a primary cause of the landslide. An inadequate number and placement of drainage structures on the road directed increased water flows towards the area where the slide originated. Consequently, Weyerhaeuser contravened the Code and the Road Regulation, which were in force when the road was built.

In addition, the Manager found that Tolko’s clearcut logging of the cutblock also contributed to the landslide by increasing the timing and peak flow of runoff during a period of warm weather. However, the Manager found that the landslide, and resulting damage to Crown timber and the environment, were potential liabilities to Weyerhaeuser that were accruing as of the date when it transferred the harvesting rights and road permit to Tolko. As such, Weyerhaeuser also contravened the FRPA and the Planning Regulation, despite that fact that this legislation was not in force when the road was built.

In addition, the Manager concluded that Weyerhaeuser did not take all reasonable care to prevent the contraventions, and therefore, the defence of due diligence did not apply. The Manager imposed the following penalties: $2,000 for contravening section 9(1) of the Road Regulation; $500 for contravening section 67(1) of the Code; $5,000 for contravening section 37 of the Planning Regulation; $5,000 for contravening section 46(1) of the FRPA; and, $2,000 for contravening section 52(1) of the FRPA.

Weyerhaeuser appealed the determination to the Commission.

Before the appeal was heard, Weyerhaeuser and the Government negotiated an agreement to resolve the appeal. They agreed that, although Weyerhaeuser made best efforts in constructing the logging road, Weyerhaeuser had contravened section 67(1) of the Code in the circumstances related to the landslide. In constructing the logging road, Weyerhaeuser allowed water to flow onto potentially unstable slopes and soil material, in contravention of section 9(1)(c)(iv) of the Road Regulation. The parties agreed that a penalty of $8,000 was appropriate in the circumstances. Consequently, the Commission ordered that the determination was varied, and the total penalty was reduced from $14,500 to $8,000, in accordance with the parties’ agreement.

By consent of the parties, the appeal was allowed in part.

2016-FRP-001(a) Forest Practices Board v. Government of British Columbia (M.G. Logging & Sons Ltd., Third Party)

Decision Date: February 10, 2017

Panel: Alan Andison, Howard Saunders, Reid White

Keywords: Forest and Range Practices Act – ss. 52(1), 52(3), 71; Administrative Orders and Remedies Regulation – s. 13(2); unauthorized timber harvesting; reserved timber; administrative penalty; past contraventions; corporate director; biodiversity value

The Forest Practices Board (the “FPB”) appealed a determination issued by the Acting District Manager (the “Manager”), Prince George Operations, Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”). The Manager determined that M.G. Logging & Sons Ltd. (the “Company”) contravened sections 52(1) and 52(3) of the Forest and Range Practices Act (the “FRPA”) by cutting and removing Douglas-fir trees that were to be retained according to a timber sale licence (“TSL”) held by the Company. The Manager levied an administrative penalty of $3,500 against the Company for the contraventions.

The TSL authorized the Company to harvest Crown timber in an area within the Prince George Forest District. The TSL specified that all Douglas-fir trees must be retained except were retention would impede road building, felling, decking or safety. In early 2013, the Company cut and removed, without authority, most of the Douglas-fir on the site while harvesting under the TSL.

Following an investigation by Ministry staff, and after giving the Company an opportunity to be heard, the Manager concluded that the Company’s sole director, Mr. Goncalves, was instructed by Ministry staff during a pre-work meeting, and was reminded during harvesting, that the Douglas-fir were not to be harvested. Mr. Goncalves admitted that he instructed the Company’s logger to harvest Douglas-fir. 522 Douglas-fir stumps were found on the site, including 135 stumps harvested after Mr. Goncalves was warned. 281 cubic metres of Douglas-fir were unlawfully harvested. Allowing a 10% reduction for incidental damage that may normally occur during harvesting, the Manager concluded that the volume of unauthorized harvest was 253 cubic metres.
 
In calculating the penalty, the Manager considered the factors listed in section 71(5) of the FRPA. The Manager found that there were no previous contraventions of a similar nature by the Company, the magnitude of the contravention was significant because the Douglas-fir trees were reserved for biodiversity reasons, the contraventions were repeated and deliberate, and Mr. Goncalves cooperated with the investigation but made no effort to correct the contraventions. The Manager also found that the Company received an economic gain of $509.60 from the contravention. The Manager calculated the maximum penalty to be $50,600 (253 cubic metres multiplied by $200), based on section 13(2) of the Administrative Orders and Remedies Regulation (the “Regulation”). Taking into account the circumstances and the objective of deterrence, the Manager decided to impose a penalty of $3,500.

The FPB appealed the Manager’s determination on the basis that the penalty was far too low. The FPB submitted that the penalty should be increased substantially to reflect the seriousness of the contravention, particularly based on new evidence regarding the environmental values that were affected by the unauthorized harvest. The FPB also argued that the Manager should have considered evidence of previous contraventions of a similar nature by Mr. Goncalves personally and other companies he controlled. In addition, the FPB submitted that the Manager failed to properly calculate the maximum penalty under section 13(2) of the Regulation, and the $3,500 penalty was too low to compensate the Crown for its ecological losses.

The Commission found that administrative penalties are intended to encourage compliance with the legislation, by providing specific deterrence in respect of the contravener as well as general deterrence in respect of the industry. In addition, administrative penalties for unauthorized timber harvesting have the purpose of compensating the Crown for loss or damage to its resources. These overall purposes, in addition to the specific factors under section 71(5) of the FRPA, should be considered when assessing administrative penalties.

Regarding the relevance of the maximum penalty in assessing the appropriate penalty, section 71(2) of the FRPA states that a penalty may be levied that “does not exceed a prescribed amount”, and in this case, the prescribed amount is calculated under section 13(2) of the Regulation. However, the Commission noted that there are three different ways to calculate the maximum under section 13(2), and the resulting maximums vary depending on which formula is used and the circumstances of the case. Also, there is no legal requirement to calculate the maximum penalty before assessing an administrative penalty, and the maximum penalty is of questionable relevance in determining the seriousness of the contravention. The Commission concluded that the factors listed in section 71(5), and the objectives of deterrence and compensation, provide a more suitable framework for assessing administrative penalties.

Next, the Commission considered whether previous contraventions by Mr. Goncalves in his personal capacity, and by closely related companies of which he was the controlling mind, should be considered “previous contraventions of a similar nature by the person” for the purposes of section 71(5)(a) of the FRPA. A violation ticket was issued to Mr. Goncalves in 2013 for unauthorized harvesting of Crown timber, and a compliance notice was issued to M.G. Logging Ltd. in 2010 for mismarking timber. Mr. Goncalves is the sole director of M.G. Logging Ltd.

The Commission found that a previous “contravention” includes any compliance or enforcement action recorded by the Ministry. A violation ticket is clearly a “contravention”. The Commission also found that official warnings and compliance notices are contraventions, although the weight given to them in a penalty determination will vary with the circumstances. Regarding the meaning of “by the person” in section 71(5)(a) of the FRPA, the Commission found that this phrase is limited to the person who is the subject of the determination, and not directors or officers of a corporate person, or other corporations. However, the Commission held that it is consistent with the objectives of encouraging compliance, and deterring non-compliance, to consider previous non-compliance by a director, an officer, or a closely related company. However, to ensure procedural fairness, the person who is going to be the subject of the determination should be notified, before the penalty is determined, that such past contraventions are being considered, so that the person may make submissions at the opportunity to be heard.

In the present case, the Commission found that the violation ticket issued to Mr. Goncalves in 2013 involved circumstances in which he did not direct the unauthorized harvesting, but it showed that he had previous experience with unauthorized harvesting and he had not been deterred from future noncompliance. The Commission found that the compliance notice issued to M.G. Logging Ltd. in 2010 was not sufficiently relevant to warrant consideration in the present penalty assessment.

Turning to the factors under section 71(5) of the FRPA, the Commission agreed with the Manager’s findings that there were no previous contraventions of a similar nature by the Company, that the magnitude of the contravention was significant, and that Mr. Goncalves cooperated with the investigation but made no effort to correct the contravention. Based on new expert evidence regarding the environmental impact of the contravention, the Commission found that the Douglas-fir trees were ecologically important to the local area, which is near the northern limit for Douglas-fir, and it would take 50 to 100 years for the environment to recover. The Commission also found that the contraventions were continuous and repeated, and there was a high to very high degree of deliberateness, especially regarding the 135 trees harvested after Mr. Goncalves was reminded to retain Douglas-fir. Regarding the economic benefit from the contravention, the Commission estimated that the Company actually lost $2,144.38 based on the stumpage paid on the merchantable volume of Douglas-fir harvested.

Considering all of those factors, and the objectives of deterrence and compensating the Crown for the loss of resources and environmental values, the Commission decided that the penalty should be increased as follows: $6,000 for deterrence; plus $21,128.76 for compensation for lost biodiversity values. Loss of timber values was not included in this penalty, because that loss was addressed through the stumpage was paid by the Company.

Accordingly, the Commission varied the Manager’s determination by increasing the penalty to $27,128.76. The appeal was allowed.

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