Appeal No. 96-078

 

Hearing: March 25, 1997
Date of Decision: April 10, 1997



IN THE MATTER OF Sections 84, 86, 87, 90, and 223 of the Environmental Protection and Enhancement Act (S.A. 1992, ch. E-13.3 as amended);

-and-

IN THE MATTER OF
an appeal filed by Hugh Weis of Superior Vet and Farm Supply against an administrative penalty issued on September 30, 1996, by the Director of Pollution Control, Alberta Environmental Protection to Superior Vet and Farm Supply for the contravention of Section 24(a) of the Pesticide Sales, Handling, Use and Application Regulation, Alberta Regulation 126/93.

Cite as: Superior Vet and Farm Supply v. Director of Pollution Control, Alberta Environmental Protection.

HEARING BEFORE

Dr. William A. Tilleman, Chair
Dr. Steve E. Hrudey
Dr. John P. Ogilvie

APPEARANCES

Appellant: Mr. Hugh Weis, Superior Vet and Farm Supply

Other Parties: Gilbert Van Nes, Environmental Law Section, Alberta Justice, representing Fred Schulte, Director of Pollution Control, Alberta Environmental Protection; and

Jock McIntosh, Alberta Environmental Protection; Patricia Gariepy, formerly with Alberta Environmental Protection

SUMMARY

The Department of Environmental Protection assessed a preliminary penalty of $9,000.00 against the Appellant for contraventions of the pesticides regulation. Following a meeting with the Appellant, the Director assessed a final penalty of $6,000.00. The Appellant eventually admitted contravening the regulations but urged the Board to reduce the penalty based on his innocence and/or lack of knowledge, or notice or deficiencies in vendor education received from Department officials.

The Board confirms the decision of the Director of Pollution Control.

TABLE OF CONTENTS
(Please note that the page numbers refer to the original document.
In this web document, they serve as hyperlinks to the relevant section.)



FINDINGS OF FACT 5
I. BACKGROUND 5
A. Approval Issued to Superior Vet and Farm Supply (SVFS) 6
B. Pesticide Sales, Handling, Use and Application Regulation 7
II. INVESTIGATION OF SVFS 10
A. Preliminary Assessment of Administrative Penalty 12
B. Final Assessment 14
III. LEGISLATIVE SCHEME 14
IV. FACTORS RELATED TO ASSESSMENT OF PENALTIES 17
CONCLUSIONS 19
I. JURISDICTION AND STANDING 19
II. ENVIRONMENTAL PROTECTION AND ENHANCEMENT ACT 19
III. ADMINISTRATIVE PENALTIES 21
A. The Purpose of Assessing Administrative Penalties 21
B. The Methodology for Setting Administrative Penalties 22
C. Legal Factors in Assessing Administrative Penalties 23

Importance of compliance with the regulatory scheme

23

Degree of wilfulness or negligence in the contravention

25

Whether or not there was any mitigation of the consequences of the contravention

26

Whether or not the person who receives the notice of administrative penalty has a history of non-compliance

26

Whether or not the person who receives the notice of administrative penalty has derived any economic benefit from the contravention

26

Any other factors that, in the opinion of the Director, are relevant

27
IV. ORDER 28
A.Administrative Penalty 28
B.Costs 29

FINDINGS OF FACT

I. BACKGROUND

[1] On October 8, 1996, Mr. Hugh Weis of Superior Vet and Farm Supply (Appellant) filed a Notice of Appeal dated October 7, 1996, with the Environmental Appeal Board (Board). The appeal relates to an administrative penalty assessed on September 30, 1996, for the contravention of section 24(a) of the Pesticide Sales, Handling, Use and Application Regulation, Alberta Regulation 126/93. According to the Notice of Administrative Penalty, the contravention was that:

On or about May 10, 1996, Superior Vet & Farm Supply sold Schedule 1 pesticides to a person who did not hold a Class 1 retail vendor approval or a wholesale vendor approval.

[2] In result, Superior Vet and Farm Supply (SVFS), a Division of Opportune Investments Ltd., received a preliminary assessment from the Pollution Control Division of Alberta Environmental Protection (Department) of $9,000.00, and a final assessment of $6,000.00.

[3] The Appellant now appeals, pursuant to section 84 of the Environmental Protection and Enhancement Act (Act), for a reduction of the administrative penalty. Both the Appellant and Respondent Director of Pollution Control (Director) agree that the dispute before this Board rests on the quantum of the penalty, not whether there was a contravention of the regulations.

A. Approval Issued to Superior Vet and Farm Supply

[4] Opportune Investments Ltd., of which SVFS is a division, was issued Pesticide Vendor Approval No. 4736-01 on June 23, 1995. The Application submitted by SVFS upon which the Approval was based, asked the following questions of the applicant:

[5] In all cases, the Appellant answered "yes". On this basis, the responsible Director (J.C. Lack) issued the Approval, subject, inter alia, to the following condition:

[That the approval holder restrict the sales of pesticides] to holders of a valid Alberta Pesticide Vendor Approval.(1)

B. Pesticide Sales, Handling, Use and Application Regulation

[6]In 1987, the Canadian Association of Pesticide Control Officials (CAPCO) initiated a Minimum National Standard project to improve the consistency of pesticide education and certification programs across Canada. This Standard was developed by provincial certification officers from all provinces. The Standard is now complete and incorporates the minimum knowledge requirements that applicators and dispensers need to know to become certified in each province. It is assumed that certified application, where it is required, will follow approved, legally valid pesticide sales.

[7] On September 1, 1993, the new Act came into force. The associated pesticide regulations, the Pesticide Sales, Handling, Use and Application Regulation (2) and the Pesticide (Ministerial) Regulation (13), were then issued by the Lieutenant Governor in Council. Pesticides which are not included in these regulations are antimicrobials; those exempted from registration under the Pest Control Products Act (Canada) and those (other than DOMESTIC) with use directions that pertain only to the direct application of the pesticide to livestock.

[8] The sale, use, handling and application of pesticides in Alberta became regulated generally under the Act and its new pesticide regulations (Pesticide (Ministerial) Regulation and Pesticide Sales, Handling, Use and Application Regulation). Alberta Environmental Protection administers this legislation, and works closely with the Royal Canadian Mounted Police in investigations of misuse of restricted pesticides.

[9] All pesticides sold in Alberta must be registered under the Pest Control Products Act (Canada). A pesticide is now defined in section 1(uu) of the Act and it includes a herbicide, insecticide, fungicide, rodenticide and repellent.

[10] The Pesticide (Ministerial) Regulation groups pesticides into 4 schedules based primarily on the Pest Control Products Act (Canada) product label class designation. The schedule in which a pesticide is listed will determine who can sell and buy the pesticide, as well as any vendor requirements for pesticide display, storage and sales record keeping. The differences in classification relate to toxicity and risk factors:

Pesticide Schedules
Schedule 1 Primarily Restricted Class pesticides (includes fumigants, heavy metal fungicides, vertebrate toxicants and high risk pesticides).
Schedule 2 Bulk of Commercial Class pesticides (Agricultural, Industrial, Horticultural).
Schedule 3 Domestic Class pesticides.
Schedule 4 Domestic Class pesticides - Indoor or Personal Use (repellants, etc). Pesticides in this schedule are not subject to Approval and Dispenser Certification requirements.



[11] A person or business who sells or offers to sell a pesticide requires a Retail Vendor Approval. There are two types of retail vendor approvals.

[12] Under the Act, a person or business who sells a pesticide at wholesale (including the transfer or storage of pesticides) must have a Wholesale Vendor Approval. In Alberta, a Wholesale Vendor is required to:

[13] Among other things, a person who sells a pesticide at wholesale must:


[14] In terms of the end-user, a wholesale vendor may only sell pesticides to qualified users. The restrictions are that:

Schedule 1 or 2 pesticide may be sold only to:

[15] Failure to comply with the pesticide regulations is an offence and may result in enforcement actions; such was the history that brings this appeal to the Board.

II. INVESTIGATION OF SUPERIOR VET AND FARM SUPPLY (SVFS)

[16] On May 3, 1996, Department staff were informed that a wholesale vendor (SVFS) was selling Schedule 1 and 2 pesticides to a retail outlet that did not have the required class of approval to sell these pesticides.

[17] On May 3, 1996, Department staff contacted the company and requested strychnine (a Schedule 1 pesticide) sales records. Staff also informed the company that it was not allowed to sell this class of pesticides to a non-approved outlet. An employee of the company assured Department staff that no sales of strychnine had occurred. This statement proved later to be false.

[18] Department staff inspected a non-approved retail outlet on May 9, 1996, and found Schedule 1 and 2 pesticides in the store with shipping labels indicating that the product originated from SVFS (the Appellant). On May 10, 1996, Department staff requested a copy of the company's records of pesticide sales since January 1, 1995. A review of these records revealed that the company had sold a Schedule 1 or 2 pesticide to non-approved retail outlets a total of 27 times since January 1, 1995. The last sale occurred on May 10, 1996, after the company had been notified that their sales were contravening the regulation and after the Notice of Investigation had been served. The sale was for three different chemicals consisting of 21 containers sent to St. Paul Value Drugs, a company that was not authorized or approved to receive the chemicals.(4)

[19] In all, the Department's investigators had to request information on restricted sales at least 4 times between May 2, 1996, to May 10, 1996, before the Appellant, through its staff, released accurate information. This information revealed approximately two dozen regulatory infractions that did not, at the time, for whatever reason, lead to charges by the Department.

A. Preliminary Assessment of Administrative Penalty

[20] On August 6, 1996, the Director wrote to Mr. Weis of SVFS and informed him of the following:

"On the basis of the [investigation], I intend to assess an administrative penalty of $9,000.00 for 3 contraventions of section 24(a) of the Pesticide Sales, Handling, Use and Application Regulation (AR 126/93) pursuant to section 223 of EPEA, and as specified in section 1 of the Schedule to the Administrative Penalty Regulation (AR 143/95).

You may make an oral or written submission to me addressing any additional information relating to this incident of which we may not be aware, or comments relating to the amount of the assessment. Your submission will be considered before making a final assessment of the administrative penalty."

[21] A penalty assessment meeting took place on September 16, 1996, between the Director, his staff, including a legally trained compliance analyst(5) and the Appellant.

[22] At this preliminary assessment meeting, the Appellant stressed several issues, including his desire to be properly notified of approval vendor lists and other regulatory requirements including changes to laws in a timely fashion. The Appellant stated his "innocence" regarding infractions and blamed any failure to abide by the law on the inflexibility of his computer system, which does not tell him or his staff who is licenced to receive pesticides. Hence, arguendo, his innocence in shipping to non-approved vendors; the computer did not warn him or his staff not to ship. (6) In the words of the Appellant, to summarize the meeting and the mitigating factors:

"In the case of Superior Vet and Farm Supply, the offending products, sold to Saint Paul Value Drugs and Capital Drugs, Elk Point, Alberta, were recalled from those accounts and returned to our stock. At all times during the investigation and following due process, Superior Vet and Farm Supply cooperated to the fullest with the Department in making all sales records available. There was no intent at any time to make clandestine sales for profit and this fact was acknowledged by Mr. Fred Schulte during our September 16, 1996 meeting. So if the sale was "acknowledged" to be not for profit, can it be considered to be an innocent mistake. It is our contention here that this is the case and Superior Vet and Farm Supply has shown that it moved immediately in concert with the Department's wishes to have an inappropriately sold product returned to its warehouse. This was done as quickly as the circumstances would allow..."

[23][And, regarding the computer system]:

"Superior Vet and Farm Supply has taken recent further steps to enhance its computer system, recording in its computer memories those customers that do not possess pesticide vendor licences in order that shipment of any unapproved product to those outlets will no longer occur." (7)

B. Final Assessment

[24] On September 23, 1996, witness and enforcement official, Jock McIntosh of the Department, met with the Appellant to discuss non-compliance, the penalty, and to generally ensure future compliance.

[25] In result, a final assessment of $6,000.00 was issued by the Director on September 30, 1996. (8) From that assessment the Appellant initiated the appeal to this Board.

III. LEGISLATIVE SCHEME

[26] The Act established this Board to hear appeals from individuals or corporations who have complaints with decisions of Department officials. Section 83 of the Act states:

83(1)There is hereby established the Environmental Appeal Board consisting of persons appointed by the Lieutenant Governor in Council.

(2)The Board shall hear appeals as provided for in this Act or any other enactment.

(3)The Board may convene a panel of Board members to conduct a hearing of an appeal and appoint a person to chair the panel...

[27] The purposes of the legislation establishing and governing the Board are found in section 2 of the Act. These purposes are:

2 The purpose of this Act is to support and promote the protection, enhancement and wise use of the environment while recognizing the following:

(a)the protection of the environment is essential to the integrity of ecosystems and human health and to the well-being of society;

(b)the need for Alberta's economic growth and prosperity in an environmentally responsible manner and the need to integrate environmental protection and economic decisions in the earliest stages of planning;

(c)the principle of sustainable development, which ensures that the use of resources and the environment today does not impair prospects for their use by future generations;

(d)the importance of preventing and mitigating the environmental impact of development and of government policies, programs and decisions;

(e)the need for Government leadership in areas of environmental research, technology and protection standards;

(f)the shared responsibility of all Alberta citizens for ensuring the protection, enhancement and wise use of the environment through individual actions;

(g)the opportunities made available through this Act for citizens to provide advice on decisions affecting the environment;

(h)the responsibility to work co-operatively with governments of other jurisdictions to prevent and minimize transboundary environmental impacts;

(i)the responsibility of polluters to pay for the costs of their actions;

(j)the important role of comprehensive and responsive action in administering this Act.

[28] Section 24(1)(a) of the Pesticide Sales, Handling, Use and Application Regulation (126/93) restricts the sale of Schedule 1 and 2 pesticides:

24(1)The holder of a wholesale vendor approval may sell at wholesale (a)a pesticide listed in Schedule 1 or 2 only to the holder of
(i)a wholesale vendor approval, or
(ii)a Class 1 retail vendor approval
(emphasis added)

[29] Section 223 of the Environmental Protection and Enhancement Act enables the Director to require a person to pay an administrative penalty. Where the Act or regulations are contravened, the Administrative Penalty Regulation(9) sets out a method of calculating the penalty to be assessed. Appeals to this Board from section 223 assessments come via section 84 (k) which reads:

[A notice of appeal may be submitted]:
84(k)where the Director requires a person to pay an administrative penalty under section 223, [by] the person to whom the notice is directed...

[30] Included in the consideration of a pesticide penalty appeal are the requirements of the Pesticide Sales, Handling, Use and Application Regulation that make a wholesale vendor a responsible party to ensure that sales occur only to persons who are authorized, under the Regulation, to acquire chemicals controlled by the Regulation.

[31] The regulatory scheme requires a wholesaler to base sales decisions on adequate information before delivery of the chemical so that management of the regulated material is clearly controlled. The implementation of enforcement obligations in the Act are often based on a minimum regulatory review, casting a deliberate spotlight upon self-monitoring and requiring prudently informed approval holders to act carefully before carrying out the activity authorized by the approval.

IV. FACTORS RELATED TO ASSESSMENT OF PENALTIES

[32] The Administrative Penalty Regulation (143/95) allows a maximum penalty to be assessed in respect of a contravention. The deeming provision provides that:

3(3)--- The maximum administrative penalty that may be charged in respect of a contravention is $5000 for each day or part of a day on which the contravention occurs or continues.

[33] The Director has a discretion in assessing a penalty, but the discretion must be exercised from the starting point of a Table that requires determination of the Variation From Regulatory Requirements and the Potential for Adverse Effect. Section 3(1) of the Regulation establishes Step One:

3(1)--- Subject to subsections (2) and (3), the amount of an administrative penalty shall be the base penalty calculated by the Director in accordance with the following Table:

  Variation from Regulatory Requirements
  Major Moderate Minor
Potential
for
Adverse
Affect
Major $5000 $3500 $2500
Moderate $3500 $2500 $1500
Minor $2500 $1500 $1000

[34] In making a final determination, the Director begins with the Table (of Minor to Major Factual determinations). He then may raise or lower the penalty based on section 3(2), a provision that creates Step Two:

3(2)--- In a particular case the Director may increase or decrease the amount of the administrative penalty from the base penalty after considering the following factors:

(a)importance of compliance with the regulatory scheme;

(b)the degree of wilfulness or negligence in the contravention;

(c)whether or not there was any mitigation of the consequences of the contravention;

(d)whether or not the person who receives the notice of administrative penalty has a history of non-compliance;

(e)whether or not the person who receives the notice of administrative penalty has derived any economic benefit from the contravention;

(f)any other factors that, in the opinion of the Director, are relevant.

[35] Essentially, the Director can modify the penalty assessment based on the history generally and compliance history specifically; guilt or innocence (good faith in the efforts to comply); the character and degree of injury or potential injury or interference with protection to the environment; economic benefit (if any) resulting from the violation. Finally, there is a "catch all" phrase of any other factor that may be relevant. In other words, the Director may look at any other matter that justice and fairness require.

CONCLUSIONS

I. JURISDICTION AND STANDING

[36] This appeal is a direct challenge to the decision of the Director. Both the appeal, and the underlying decision of the Director appear to have been filed or decided and properly made in law: the Director's decision to assess the penalty pursuant to section 223 of the Act and the Appellant's challenge of the penalty pursuant to section 84 of the Act. Both parties are properly before this Board given the definitions of "party" found in section 1(f) of the Environmental Appeal Board Regulation.(10) The Board therefore has jurisdiction to hear the appeal.

II. ENVIRONMENTAL PROTECTION AND ENHANCEMENT ACT

[37] Certain provisions of the Act have already been referred to earlier in this decision. For purposes of reaching our conclusion, the Board is mindful of the legislative alternatives given to the Board in reviewing the Director's decision. Section 90(3) states:

90(3)---In its decision the Board may

(a)confirm, reverse or vary the decision appealed and make any decision that the Director whose decision was appealed could make, and

(b)make any further order the Board considers necessary for the purposes of carrying out the decision.

[38] In general, the Board believes that the Director's decision should be sustained if the discretion exercised by the Director in interpreting the regulations is supported by substantial evidence when based on a review of the whole record and the evidence before us. We recognize that the Director has been given a range of several thousand dollars in assessing penalties in the regulatory matrix and we defer to the expertise of the Department and its delegation of discretionary powers to assess a penalty, as long as we are satisfied that the Director:

  1. made appropriate inquiries into the factual basis for the penalty;
  2. stated in a written decision his findings of fact with considered reasons to support the penalty based on the regulatory matrix and associated discretionary factors;
  3. that his reasons reflect a considered response to the evidence before him as well as the contention of the Appellant; and
  4. that the Appellant had a reasonable opportunity including adequate notice to furnish relevant evidence to contradict the Department's evidence and to explain the facts from the Appellant's perspective.

[39] That said, the Board would consider changing or reversing the decision of the Director if the evidence before us did not in a particular case meet the goals of the Act, or if one of the above factors was neglected by the Director.

III. ADMINISTRATIVE PENALTIES

A. The Purpose of Assessing Administrative Penalties

[40] One of the key purposes of the Act is the protection of the environment, which is essential to the integrity of ecosystems, human health and the well-being of society (section 2(a)). The Act achieves these goals by creating both "criminal" penalties and, in this case, a "civil" penalty option.

[41] The Board believes section 2(a) of the Act is confirmable by the assessment of civil penalties in appropriate cases, to ensure deterrence, some form of retribution, and restitution in the form of compensation or partial compensation for the expenses incurred by the government in the investigation of offences.

[42] The Board believes the amount of the penalty must reflect the regulatory matrix and associated criteria, and that, while the issue of whether or not the Appellant has derived an economic benefit is important to the final determination of penalties, the Board believes that to achieve the goal of deterrence, the penalty must also be high enough so that those who violate the law without reasonable excuse will not be able to "write off" the penalty as an acceptable trade-off for the harm or potential harm done to Alberta's environment.

[43] The Board is aware that this Appellant, SVFS, believes, pro tanto that:

"[a] fine more in line with the ultimate monetary value of the transgression is acceptable - [to him]...".

[44] But we do not believe his argument is deducible to the industry or to society generally, particularly, with industries that are self-regulating and self-monitoring in their efforts to protect the environment. While a reduced fine might be proper in other circumstances, it is not proper in cases where the Appellant, (a) knew of the law's existence but ignored it, (b) refers accountability determination to other employees when justifying the misconduct, or, (c) attempts to conceal violations from investigators. All three types of conduct violate principles found in sections 2(f), (j) of the Act.

B. The Methodology for Setting the Penalty

[45] Section 3(1) of AR 143/95 establishes as Step One the matrix to be used by the Director in assessing the penalty. First, the Director looks at the particular facts before him to determine the variation from regulatory requirements in reaching a base penalty. The range of options, in $500.00 increments, is from "major" to "minor". In the case before us, the Director determined that SVFS fell into a moderate variation from the regulatory requirements primarily on the basis of concerns over tracking and control of Schedule 1 and 2 pesticides. For reasons discussed below in Section C, we agree with the final decision of the Director. [46] In determining Step One, the Director attempts to determine the potential for "adverse effect", a term defined in section 1(b) of the Act:

1 In this Act,

(b)"adverse effect" means impairment of or damage to the environment, human health or safety or property;

[47] Reading the Act and the Pesticides and Administrative Penalty Regulations together, we conclude that measurable environmental harm is not a necessary prerequisite for a penalty to be appropriate.

[48] In the case before us, the Director determined again that the potential for adverse effect was moderate, on the basis that strychnine, a highly regulated substance, has the potential for serious adverse effects if access is uncontrolled and/or if improper use occurs. Again we agree.

[49] Accordingly, the result of Step One is a $2,500.00 base penalty assessment for each offence: the result of a moderate variation by SVFS from the regulatory requirement resulting in this case in a moderate potential for an adverse effect. The Board agrees with the base penalty assessment in Step One, and we now proceed to Step Two to see if the penalty was increased properly.

C. Legal Factors in Assessing Administrative Penalties

IMPORTANCE OF COMPLIANCE WITH THE REGULATORY SCHEME

[50] At stake here is public confidence in the management of government programs involving restricted chemicals. Exhibit 6 to the appeal was a package of regulatory information that the Appellant acknowledged receiving. Under the category "Update for Class 1 Retail and Wholesale Vendors", the following statement is made:

The "Gatekeeper"

"Gatekeeper" is the term commonly associated with a function of a retail pesticide vendor. As a pesticide vendor, you are the last point of contact with the product before it enters the domain of the user. It is very important to ensure that this end user is familiar with the hazards of the product, its handling and correct method of application. To this end, the province requires the following certified dispensers at each outlet:

  • Class 1 Retail Vendor must employ at least one certified Class 1 Retail Pesticide Dispenser
  • Class 2 Retail Vendor must employ at least one certified Lawn and Garden Dispenser or a Class 1 Retail Pesticide Dispenser.

The dispenser should also have a good knowledge of pesticides and be prepared to answer purchaser questions at the time of sale draw to the purchaser's attention to any health, hazard or environmental impacts identified on the product label.

Some points about the "Gatekeeper" role are:

  • minimizing human health and environmental hazards
  • fostering a "level playing field" among pesticide vendors and users
  • informing the purchaser of regulatory requirements and any other important information at the time of sale
  • ensuring that the purchaser buys the most appropriate product for the job at hand.

Alberta Environmental Protection views the "gatekeeper" role as an important function of the vendor system and is committed to working with industry to promote and, where necessary, improve this role.

[51] The Board agrees that the vendor is the "gatekeeper" of the pesticide distribution system and that the scheme, managed primarily by industry, broke down, in this case, with the full knowledge of the Appellant.

[52] In particular, the regulated substance in this case is strychnine, one of the principal substances used to beneficially control predation or damage caused by certain wildlife. Among the evidence that we heard in this appeal (11), however, was that strychnine can lead to substantial deaths of non-target wildlife, like raptors. In other words, non-target wildlife (or domestic animals) can be poisoned or killed directly by feeding on baits laced with strychnine or indirectly as the victims of secondary poisoning by feeding on carcasses of target animals previously poisoned. On balance, these unfortunate circumstances, made possible by uncontrolled and non-traceable sales of toxicants like strychnine, increase the penalty.

DEGREE OF WILFULNESS, OR NEGLIGENCE IN THE CONTRAVENTION

[53] The Appellant urges the Board to believe his mistake was innocent. Alternatively, and more forcefully, he argues that the non-approved vendors in this case were trained and subject to other professional requirements, to track strychnine and to otherwise keep the relevant information available for the regulators, should they require it. So, presumably, the Appellant maintains he was not negligent in making or acquiescing to his employee's behaviour respecting the unauthorized sales to a drug store.

[54] At best the behaviour of the Appellant can be labelled wilful blindness. At worse, it was wilful, period. His company has a record of over two dozen regulatory breaches in the past two years. In this particular case, it took four different visits and several phone calls from Department investigators to receive the truth regarding unauthorized sales.

[55] As the saying goes, a lie is halfway around the world before the truth gets his boots on. So it is also with unauthorized and untraceable sales of restricted chemical toxicants, like strychnine. Subsequent efforts to mislead and detour investigators aggravated the breach. This speaks more of wilful behaviour than innocence.

[56] There was no mistake of law or of fact in this case. Ignorance of the law, therefore, does not excuse the Appellant.

[57] The Board concludes that the uncooperative behaviour, misleading and false statements, and the attempt to conceal the misconduct are serious aggravating factors that warrant significantly increasing the penalty.

WHETHER OR NOT THERE ARE ANY MITIGATION OF THE CONSEQUENCES OF THE CONTRAVENTION

[58] The Board was led to believe all of the restricted chemicals were voluntarily recalled by the Appellant. We believe the Appellant. This is a mitigating factor, but only moderately, since a recall is an action that would clearly be required and forthcoming in any event.

WHETHER OR NOT THE PERSON WHO RECEIVES THE NOTICE OF ADMINISTRATIVE PENALTY HAS A HISTORY OF NON-COMPLIANCE

[59] SVFS received an approval to sell restricted pesticides on June 23, 1995. Since that time, the company has violated the regulatory scheme several times. However, since no charges have previously been laid, this factor and these considerations are not applicable to either mitigate or aggravate the penalty amount.

WHETHER OR NOT THE PERSON WHO RECEIVES THE NOTICE OF ADMINISTRATIVE PENALTY HAS DERIVED ANY ECONOMIC BENEFIT FROM THE CONTRAVENTION

[60] The Appellant argued that his company received essentially no economic benefit, or a marginal benefit, from the unauthorized sales. From the evidence presented to us, we agree. However, given the intent of the Appellant to benefit over the last two years by selling pesticides to more than one non-approved vendor, we feel, on balance, that there should be no adjustment up or down due to the ultimate nominal economic benefits received.

ANY OTHER FACTORS THAT, IN THE OPINION OF THE DIRECTOR, ARE RELEVANT

[
61] The Appellant argued that the Department's list of Approved Pesticide Vendors (Exhibit 7) should be more accessible, and regularly updated and distributed to approval holders. Thus, it is argued, the Department was unfair. The Department countered the argument by stating: (1) the onus is on all Wholesale Vendors to ensure their buyers are licenced, and, (2) that up-to-date lists are generated and provided on a need-only basis.

[62] The Board agrees with the Appellant that the "Approved Pesticide Vendors" (which was not up-to-date when presented to the Board during the hearing) should be reviewed, updated, and sent to each approval holder annually. In this case, however, and given particularly the compliance history of the Appellant, we do not feel an updated and regular distribution of the list would have made a difference.

[
63] Essentially, while the Board believes good faith efforts to comply would be a relevant consideration normally contemplated by the discretion found in section 3(2)(f) of the regulation, we do not believe the facts of this case allow us to rely on good faith efforts or on any other factor to mitigate the penalty.

[64] As stated earlier, the Appellant (repeatedly) reminded the Board that Alberta's licenced pharmacists require similar, if not greater instruction and study in pharmacology and toxicology, and that we should therefore accept pharmacological credentials and waive environmental regulatory requirements. If this particular reasoning were followed a priori, one reaches the easy conclusion that interested pharmacists would be the first class of vendors to take the test (which would logically require little or no additional study) and the last group of individuals to expect an exemption from regulatory requirements (having been subject to previously rigorous licensing and other professional requirements in their own field).

[65] Waiver of professional requirements, in order to circumvent regulatory requirements, is not a subject for this Board.

[66] The Director's final assessment was $6,000.00 reached on the basis of a $2,500.00 Step One determination and $500.00 Step Two increase. The total was then multiplied by two counts to reach the final assessment of $6,000.00.


IV. ORDER

[67] The decision of the Director in this case is supported by substantial evidence both in the record and in the appeal hearing. The decision was certainly not arbitrary, nor was it an abuse of discretion. It was a proper decision and the Board confirms it.

A. Administrative Penalty

[68] The Appellant is ordered to pay $6,000.00 in accordance with Payment Information on the Notice of Administrative Penalty. Payment is due on or before May 10, 1997.

B. Costs

[69] No award of costs.


Signed and Dated on April 10, 1997, at Edmonton, Alberta.

Dr. William A. Tilleman, Chair

Dr. Steve E. Hrudey

Dr. John P. Ogilvie





Footnotes

1. Condition #2 of Approval No. 4736-01 issued June 23, 1995.

2. Alta Reg. 126/93 now 24/97

3. Alta Reg. 127/93 now 43/97

4. Exhibit 8 - the restricted products included strychnine, Rozol Liquid, and Dri-kill. The latter chemical, Dri-kill, has since been deregulated which, according to the Director, accounts for the decline in $3000.00 from the preliminary assessment ($9000.00) to the final penalty assessment ($6000.00).

5. At the meeting, this analyst (P. Gariepy) did not present a business card indicating her membership in the Alberta Law Society (her evidence was that she did not have a business card). The Appellant argued that he should have been advised of Ms. Gariepy's legal training, yet admitting at all times that he always had the right to have counsel present, and that no one discouraged him from bringing or using counsel. The Appellant argued before us that his rights to counsel were abused even if he elected not to use counsel until the appeal, and then, in a limited fashion and even if he had an adequate opportunity to make written and/or oral submissions to the Director, which he did. The Appellant admitted the offence throughout theseproceedings; the Appellant has repeatedly offered to us that liability has never been an issue. thus, the Board can not see how counsel would have made a significant difference, particularly given the chances SVFS had to explain their case. (Indeed, the Appellant did retain Mr. D. Stachnik of Cook Duke Cox to review the written submission of Mr. Weis before sending it to the Board.)

Given, however, the role played by the Department's compliance analyst, the Board encourages the Director in the future, to notify recipients of preliminary assessments of the legal training of the Director's staff attending the "penalty conference". to be sure, many of the issues discussed at this meeting require some legal understanding: civil penalties and their statutory role in general; specific assessments of penalties and the relationship of underlying facts and circumstances; unique regulatory requirements in penalty cases and the discretion exercised by the director to make and/or vary the assessment, including significant issues such as wilfulness, diligence and issues of reasonable behaviour.

6. Throughout the appeal hearing, the Appellant stressed the importance of the "credit hold" function of his computer. Apparently, the only mechanism in place (before the violation) to warn SVFS of unauthorized sales was the "credit hold" usd by the company's software. But the Board feels "credit hold" would most logically aplly to questions of solvency and financial responsibility. We do not see the reasonableness in using a credit hold function to regulate sales of pesticides to non-approved users.

7. written submissions of the Appellant, pages 1, 2, 6.

8. The penalty was reduced from $9000.00 due to the more recent deregulation of Dri-Kill pesticide.

9. Alta. Reg. 143/95 as amended.

10. Environmental Appeal Board Regulation 114/93

1--- In this Regulation(f) "party" means
(i) the person who files a notice of objection that results in an appeal
(ii) the person whose decision is the subject of the notice of the objection, and
(iii) any person who the Board decides under section 9(2) should be allowed to make representations in respect of the sbuject matter of the notice of objection.

11. Sworn evidence of J.McIntosh.

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