Appeal No. 97-026

Date of Decision: May 22, 1998

IN THE MATTER OF Sections 84, 85, 86, 87, 89, 91, 92 and 93 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 Mr. Nazmin Nurani and Ms. Zeini Virji-Nurani, with respect to the refusal of Application No. BC 97-0003 for a Universal Beverage Container Depot by the Director of Action on Waste, Alberta Environmental Protection.

Cite as: Nurani and Virji-Nurani #2 v. Director of Action on Waste, Alberta Environmental Protection.

TABLE OF CONTENTS

BACKGROUND  1
SUMMARY OF EVIDENCE 3
   The Appellant; 3
        Mr. Nazmin Nurani 3
   The Department 4
        Mr. Jerry Lack, Ms. Jean-Eve Mark and Ms. Betty Teichroeb 4
   The Intervenors 5
       Mr. Badur Kherani, an officer of 425167 Alberta Ltd., operating as Bottle Bin Bottle Depot; Mr. Young Kil Kim, an officer of Y & S Recycling Ltd., operating as Capilano Bottle Depot; Mr. Ahmed Saleh, co-owner of Triple H Bottle Depot Ltd.; Mr. Timothy Mastel-Marr, a director and co-manager of 338802 Alberta Ltd., operating as the Strathcona Bottle Depot and the Millwoods Bottle Depot; Dr. Bruce W. Taylor, Taylor Environmental Consulting Ltd.; and Ms. Audrey Jones, Traffic Engineer, City of Edmonton 5
THE BOARD'S ANALYSIS 8
CONCLUSION 11

 

BACKGROUND

[1] On July 7, 1997, Mr. Nazmin Nurani and Ms. Zeini Virji-Nurani (the Appellants), separately filed a Notice of Appeal with the Environmental Appeal Board (the Board) with respect to the failure of Mr. Jerry Lack, Director of Chemicals Assessment and Management Division, Alberta Environmental Protection (the Director) to approve Application No. BC 97-0003 for a Universal Beverage Container Depot. The Application submitted by Mr. Nurani and Ms. Virji-Nurani was for a depot at Block 6, Lot 7, Plan 822-0320 (54 Street and 56 Avenue), Edmonton, Alberta, to be known as the Roper Bottle Depot.

[2] On August 22, 1997, the Environmental Appeal Board issued its Report and Recommendations(1) to the Minister of Environmental Protection recommending that an Approval be granted to Mr. Nazmin Nurani and Ms. Zeini Virji-Nurani with respect to Application No. BC 97-0003. The Minister agreed with the Board's recommendations on September 2, 1997.

[3] On September 10, 1997, the Alberta Bottle Depot Association requested, pursuant to section 92.1 of the Environmental Protection and Enhancement Act(2), that the Board revoke its decision and direct a new hearing on this matter.

[4] On September 26, 1997, the Board wrote the parties setting a hearing date of October 6, 1997, to hear oral submissions from the parties currently involved as to why the Board should reconsider its decision. However, pending a court decision as to whether the Board had jurisdiction under the Act to reconsider its decision, the Board adjourned the hearing sine die.

[5] Following the Minister's acceptance of the Board's Report and Recommendations, the Director of Chemicals Assessment and Management Division, Alberta Environmental Protection, issued Approval No. 97-BCD-022 (the Approval) to Mr. Nazmin Nurani and Ms. Zeini Virji-Nurani on October 3, 1997, for the operation of a Beverage Container and Recycling Depot.

[6] On October 6, 1997, a Notice of Appeal was filed with the Environmental Appeal Board by Mr. Ronald Kruhlak on behalf of the Alberta Bottle Depot Association (Mr. David Custer, President) appealing the decision of the Director and requesting that the Approval be revoked as well as making formal application for a Stay of the decision.

[7] On November 27, 1997, the Court of Queen's Bench rendered its decision(3). On the matter of rehearing Mr. Justice Gallant said:

"The Applicants have not satisfied me that under the facts of this case the Board does not have jurisdiction, by reason of being functus officio or otherwise, to hold a rehearing to reconsider its decision which resulted in the prior Report and Recommendations. Accordingly, I hold that the Board is not functus and does have jurisdiction to hold the rehearing. Having so decided, it is not necessary for me to deal with the balance of the issues raised.

For the above reasons, I will not exercise my discretion in favor of granting the order applied for. The application for an order in the nature of prohibition is refused."

[8] The Board held a preliminary meeting on January 13, 1998, in Edmonton to deal with whether or not the Board should proceed with reconsideration of the Board's prior Report and Recommendations on appeal 97-026 related to Roper Bottle Depot. This meeting was held pursuant to sections 87 and 92.1 of the Act.

[9] On January 29, 1998, the Environmental Appeal Board issued a Decision(4) deciding to proceed with a new (de novo) hearing to consider if the Director was correct in denying Mr. Nurani's application to operate a bottle depot.

[10] On February 17, 1998, the Board wrote to the parties setting a hearing date of April 7, 1998, and requested written submissions which were subsequently received. The hearing was subsequently rescheduled and held on April 29, 1998, at the Board's office in Edmonton.

SUMMARY OF EVIDENCE

The Appellant

Mr. Nazmin Nurani

[11] Mr. Nazmin Nurani described the methods he had used to select the location of his proposed depot which is on the corner of 54 Street and 56 Avenue. He worked with the City of Edmonton Planning Department and with Statistics Canada to determine projections for the population of South Edmonton. His studies had determined that the part of Edmonton south of the North Saskatchewan River is the fastest growing section of the city. He, therefore, concentrated his efforts on this part of the city. The 1995 census conducted by Statistics Canada showed that this part of the city has a population of 244,874 as of May 14, 1995. In addition, Mr. Nurani noted that there is a substantial population living on the south eastern outskirts of Edmonton which could be served by a depot at the location he had selected. Since the guidelines used by the Director in determining the population requirements for a depot specify that there should be an urban population of 40,000, he concluded that South Edmonton could support six depots. There are five depots in operation so he assumed that there was a requirement for another depot.

[12] He examined the zoning of South Edmonton and selected his site because it is in the southeast part of the city where projections of population growth show favourable growth patterns. He stated that, since the Minister had approved the previous decision of the Board, he has purchased the site and that it has been rezoned to accommodate a bottle depot. He noted that the site, being 0.847 ha. in area has ample space to allow him to expand the depot to a full service depot accepting waste oil, newsprint, cardboard and recycling residential and light industrial wastes. He stated that he plans to develop the depot into a full service recycling depot.

[13] Mr. Nurani testified that the depot would be operated by himself and his wife. She will be responsible for the day-to-day operation and he will be responsible for the administration. His wife has had fifteen years of experience in managing a retail convenience store with annual sales volume of approximately $1,000,000. He has had seven years experience as a systems analyst in the education, health care and pipeline fields.

[14] Mr. Nurani stated that he and his lenders are heavily involved financially and that the delay caused by the request for a rehearing is onerous.

The Department

Mr. Jerry Lack, Ms. Jean-Eve Mark and Ms. Betty Teichroeb

[15] Ms. Esbaugh presented the three Department witnesses as a panel. Mr. Lack noted that he was the Director who refused the application for approval submitted by Mr. Nurani. He said that his decision was based on information provided by and recommendations made by Ms. Mark and Ms. Teichroeb.

[16] The evidence given by Ms. Mark and Ms. Teichroeb described the history of used beverage container collection in Alberta and the methods used in examining the proposed depot site and market area and in assessing whether the application should be approved. Ms. Teichroeb described her examination of the site proposed for the depot. She drove to the nearby depots and noted the driving distance. She also measured the point-to-point distance on a map. She examined the City of Edmonton data on the population of the southeast section of Edmonton and particularly that area within a three kilometer radius of the proposed site. Ms. Teichroeb said that she only considered the beverage container recycling part of the business and put no weight on the additional recycling operations that Mr. Nurani planned to conduct. She did this because the depot must be viable as a beverage container operation before it can get into other forms of recycling.

[17] Ms. Mark and Ms. Teichroeb noted that their recommendation to the Director was that it should not be approved. Under cross examination by the Appellant and under questioning from the Board, they were unable to describe in any detail how they determined whether a bottle depot was viable. They do not have access to financial information for the individual depots. The only information they have is the volume of returned containers.

The Intervenors

Mr. Badur Kherani, an officer of 425167 Alberta Ltd., operating as Bottle Bin Bottle Depot; Mr. Young Kil Kim, an officer of Y & S Recycling Ltd., operating as Capilano Bottle Depot; Mr. Ahmed Saleh, co-owner of Triple H Bottle Depot Ltd.; Mr. Timothy Mastel-Marr, a director and co-manager of 338802 Alberta Ltd., operating as the Strathcona Bottle Depot and the Millwoods Bottle Depot; Dr Bruce W. Taylor, Taylor Environmental Consulting Ltd.; and Ms. Audrey Jones, Traffic Engineer, City of Edmonton

[18] Mr. Kruhlak called his six witnesses as a panel.

[19] Mr. Kherani testified that his depot is the closest to the proposed Nurani depot, being approximately 2.5 kilometers away. He estimated his business may be affected by as much as 50% by the establishment of that depot although he did not provide any evidence of this. He said that when the Millwoods depot opened in late 1994, his volume of business decreased by 28%. The present volume is still below that of 1994.

[20] Mr. Kim noted that the Capilano depot is located 3.5 kilometers north of the proposed depot on 90A Avenue. He testified that 30% of his customers come from the Millwoods area. He estimates that he will lose most of this business if the proposed depot were approved although he gave no financial information that would substantiate this estimate.

[21] Mr. Saleh noted that the Triple H depot is approximately 5 kilometers from the proposed depot. His customers come from all over the south side, particularly from Millwoods on the east and Southgate on the west. He estimates that roughly half his customers come from Millwoods. He testified that his depot is approximately 2 kilometers from the Millwoods depot and that when it opened the volume of containers received at his depot were cut approximately in half. He said that, although he is more than 3 kilometers from the proposed depot, his business will be affected by attracting his Millwoods customers to the closer depot.

[22] Mr. Mastel-Marr noted that both his depots, Millwoods and Strathcona, are approximately 5 kilometers from the proposed depot. He said that the business of the Millwoods depot would be affected by the operation of the proposed depot, but did not specify the extent of the effect. He said he realized the opening of the Millwoods depot had a significant effect on neighbouring depots but the depot was established by a request for tenders by the Department, who had identified the need for an additional depot in southern Edmonton.

[23] All the depot owners said that they provided some other services in addition to receiving empty beverage containers such as accepting newsprint and cardboard. They all said these services were provided as a convenience to their customers and they contributed little if anything to the depot revenues.

[24] Ms. Jones testified that the population projections relied upon by Mr. Nurani for southeast Edmonton would probably not be realized for some twenty years. However, under cross examination, she accepted the data presented in the letter (Tab 5, Exhibit 3) from Mr. Peter Ohm, Acting Senior Planner, Suburban Planning Section, City of Edmonton. Mr. Ohm's letter, dated August 15, 1997 states in part:

"..... The Meadows residential area which is located south of Whitemud Drive between 34 Street and Highway 14 will become the principal location for new suburban development in the southeast portion of Edmonton over the next several years.

An Area Structure Plan (ASP) has been adopted as a general guide to development in The Meadows and provides that six residential and one industrial neighbourhood will eventually be developed within the area of the Plan. The projected build out population for the six residential neighbourhoods within The Meadows ASP is 51,000 persons.

Three of the residential neighbourhoods within The Meadows, being Larkspur, Wild Rose, and Silverberry, have Neighbourhood Structure Plans (NSP) in place. The NSP refines the development concept contained within the ASP for a neighbourhood and provides the basis for future districting (zoning), subdivision, servicing and housing development. Accordingly, large portions of two of these neighbourhoods have been developed. Development of the third neighbourhood (Silverberry) may begin as soon as 1998. The combined projected population for the three neighbourhoods is approximately 24,000 persons. Build out of these neighbourhoods will likely occur over next 10 years."

[25] Dr. Taylor was an employee of the Department for approximately 20 years, resigning as Director, Action on Waste, in 1994. He testified that the managed beverage container return system in Alberta is very successful and has been used as a model for systems in other jurisdictions, particularly California and British Columbia. He said that the guidelines used by the Director in locating depots ensures the depots will be viable and the public will be served effectively. He noted that the rate of return of beverage containers in Edmonton is approximately 80%. He concluded that the Director had acted properly in refusing the Nurani's application for a bottle depot.

[26] Mr. Kruhlak submitted as an exhibit (Exhibit 14(5)) the records of the volumes of containers received by the intervening depots for the complete years 1991 to 1996 and for part of 1997. While the Board and the parties were free to review these documents he asked that these documents be treated as confidential and sealed.

THE BOARD'S ANALYSIS

[27] The issue before the Board is to determine whether the Director acted properly and in full recognition of the provisions of the Act(6), particularly section 2(b)(7), in refusing the application for Mr. Nurani's proposed depot.

[28] The Board recognizes that the bottle depot system for the collection of empty beverage containers in Alberta is a managed system. The Department has developed guidelines regulating the establishment, location and operation of bottle depots to maintain the effectiveness of the system from both economic and environmental points of view. Under this system it is only natural that an established bottle depot will object to a new depot entering the market place. However, this understandable self-interest in limiting competition must be weighed against the broader public interest of protecting the environment which occurs by getting as many used bottles and other recyclables as possible to recycle facilities. There must be sufficient depots to provide convenience to the public and to protect the environment, but not so many that the members of the system suffer unduly economically. This is the balance that the Director must maintain and which is reflected in the provisions of the Regulation(8) that the Director is charged with administering.

[29] In the written submission of the Director it states :

"The Application was reviewed pursuant to Alberta Environmental Protection's guidelines for a beverage container depot ("the guidelines"). The guidelines were established pursuant to section 18 of the Beverage Container Recycling Regulation, A.R. 128/93." (9)

[30] In the Director's letter of June 27, 1997(10), the Department refused Mr. Nurani's application for a Universal Beverage Container Depot for the following reasons:

1. The application did not identify an unserviced population or sufficient growth in population supporting the need for a new beverage container depot in that area.

2. The proposed operation would have a significant negative impact on many of the surrounding depots.

3. The proposed site did not meet the guidelines(11) in place for consideration for an urban beverage container depot. The proposed site is within 3 km of an existing depot which suggests that the target market is already being serviced.(12)

[31] Applying this reasoning to the case of the Appellant, the Board notes that using the 40,000 population required by the guidelines for sustaining a depot, there is sufficient population now in South Edmonton (some 245,000) to support six depots. As Mr. Nurani notes, this population base is increased by those who live on the fringes of the city and who would use a depot conveniently located in the city.

[32] Regarding the claims made by the five existing depots in South Edmonton that the establishment of the Roper depot would cause them financial problems, the Board examined the data submitted by the five depots on the volume of containers collected in 1991 to 1997 (Exhibit 14). These figures show quite wide fluctuations (plus or minus 25%) in the total volumes collected by the Strathcona, Capilano, Triple H and Bottle Bin depots in 1991 to 1994 which is prior to the establishment of the Millwoods depot in the fall of 1994. In 1995, after the Millwoods depot was in operation the total volume collected by the five depots increased by more than 25% over the 1994 total volume and a similar increase was recorded for 1996. This indicates to the Board that the establishment of a new depot draws in new business and that the new depot does not draw all its business from existing depots.

[33] In light of the above analysis, the Board does not believe that the five existing depots will experience drastic financial harm with the establishment of the Roper depot. There will, undoubtedly, be some effect in the first year or two of its operation, but this should be recovered shortly. This is particularly so given the growth in the population in the area as demonstrated by Mr. Nurani's research. The Board accepts his evidence on this point and finds the Director's decision downplayed, unduly, this actual and projected population growth in the area. The Board concludes that if the Roper depot is established at the 54 Street and 56 Avenue location, the protection of the environment will be better served and the six depots will be economically viable.

[34] Moreover, the evidence provided by the Intervenors on the financial effect of the Roper depot on their businesses was not convincing. They did not provide any financial evidence of substance to support their claims that their businesses would be reduced.

[35] The Board believes that Mr. Nurani has studied the operation of the proposed Roper depot carefully and concludes that the establishment of this depot, with its plan to expand its business to handle other materials in addition to returned beverage containers, will enhance the environment. Not only will it meet the long term plans of the City of Edmonton to reduce the quantities of waste in the waste stream going to the landfill, but it will generate additional recycled materials consistent with section 2(b)(13) of the Act.

[36] The Board recognizes that the Director has developed guidelines to maintain the viability of the existing bottle depots. However, guidelines are only meant to serve as guides. They should not be rigorously applied to the extent that the environmental purposes of the Act fail. The Board notes that Ms. Teichroeb testified she did not consider, nor give any weight to the plans of Mr. Nurani to accept recyclable materials in addition to beverage containers. Her testimony regarding her consideration of the market area proposed for the Roper depot were strongly influenced if not totally dominated by the three kilometer guideline. In view of these factors, the Board believes that the Director inappropriately applied the guidelines in the case of the proposed Roper depot.

CONCLUSION

[37] The Board concludes that Application No. BC 97-0003 should be approved and an approval for the establishment of the Roper Bottle Depot be issued by the Director.

[38] This involves a request for reconsideration. The Board has reheard the matter de novo, hearing the evidence and argument of all parties. The Board has come to the same conclusion as the original panel and for similar reasons. Given this conclusion, there is no basis on which to set aside the previous Report and Recommendations, which will stand, along with the Minister's approval. An appeal of the Director's approval of this project, based on the Minister's acceptance of the Board's Report and Recommendations is outstanding, and will be dealt with by the Board in subsequent proceedings.

Dated on May 22, 1998, at Edmonton, Alberta.

Dr. John P. Ogilvie, Panel Chair
Dr. M. Anne Naeth
Mr. Ron V. Peiluck

 


FOOTNOTES

1. Nurani and Virji-Nurani v. Director of Action on Waste, Alberta Environmental Protection, August 22, 1997, EAB File No. 97-026.

2. Environmental Protection and Enhancement Act (S.A. 1992, ch. E-13.3 as amended).

3. Reasons for Judgment of the Honourable Justice Gallant dated November 27, 1997, page 23.

4. Alberta Bottle Depot Association request for reconsideration, re: Nurani and Virji-Nurani v. Director of Action on Waste, Alberta Environmental Protection, January 29, 1998, EAB File No. 97-026 & 039.

5. Exhibit 14: 1994 - 1997 Return Statistics Summary and 1994 - 1997 Total Gross Income for Mill Woods Bottle Depot (April 21, 1998); 1991 - 1997 Total Gross Income and 1991 - 1997 Return Statistics Summary for Strathcona Bottle Depot (April 21, 1998); 1991, 1993 - 1997 Return Statistics Summary and 1991, 1993 - 1997 Total Gross Income for Capilano Bottle Depot (April 21, 1998); 1991 - 1997 Return Statistics Summary and 1991 - 1997 Total Gross Income for Triple H Southside Bottle Depot (April 21, 1998); 1991 - 1997 Return Statistics Summary and 1991 - 1997 Total Gross Income for Bottle Bin Depot (April 21, 1998) sealed.

6. Supra, note 2.

7. 2 The purpose of the Act is to support and promote the protection, enhancement and wise use of the environment while recognizing the following:...

(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; ...

8. Beverage Container Recycling Regulation AR 128/93.

9. Written Submission of the Director, page 3, #11.

10. Letter of June 27, 1997 from J.C. Lack, Director, Chemicals Assessment and Management Division, Alberta Environmental Protection to Ms. Zeini Virji-Nurani and Mr. Nazmin Nurani.

11. Exhibit 15, Tab 35, Guidelines for Application for Universal Beverage Container Depots.

12. Exhibit 15, Tab 34, Beverage Container Depot Standards.

13. Supra, note 7.

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