Appeal No. 99-164

Date of Decision - February 12, 2001

 

IN THE MATTER OF Sections 84, 85 and 87 of the Environmental Protection and Enhancement Act, S.A. 1992, c.E-13.3;

-and-

IN THE MATTER OF an appeal filed Mr. Brian Bildson with respect to Amending Approval 11929-01-01 issued to Smoky River Coal Ltd. by the Director, Northern East Slopes Region, Alberta Environment.

Cite as: Bildson v. Director, Northern East Slopes Region, Alberta Environment, re: Smoky River Coal Ltd.

 

TABLE OF CONTENTS

I. BACKGROUND 1
A. Procedural Background 1
B. Receivership/Bankruptcy 2
II. ANALYSIS 5
III. DECISION 6

I. BACKGROUND

[1] On November 15, 1999, the Board received a Notice of Appeal from Mr. Brian Bildson (the "Appellant"). The appeal was in relation to a decision by Mr. Rick Ostertag, Approvals Manager, Northern East Slopes Region, Alberta Environment (the "Director"), granting Amending Approval 11929-01-01 (the "Approval") to Smoky River Coal Ltd. (the "Approval Holder"). The Approval, effective October 15, 1999, authorizes the "opening up, operation and reclamation of the Smoky River Coal Mine and construction, operation and reclamation of the Coal Processing Plant, including the No. 12 Mine South B2 Pit Extension."

[2] In his Notice of Appeal, the Appellant raises concerns about the effects on wildlife habitat, water quality, and personal and professional use of the Caw Ridge area. He requested the "suspension of approvals subject to a public hearing and proper evaluation of cumulative effects of industries in the immediate area."

A. Procedural Background

[3] On November 15, 1999, the Board acknowledged receipt of the Notice of Appeal filed by the Appellant and wrote to both the Approval Holder and the Director informing them of the appeal. A request was made by the Board to the Director to provide all records relating to this appeal ("the Record").

[4] On November 15, 1999, the Board also wrote to the Natural Resources Conservation Board (the "NRCB") and the Alberta Energy and Utilities Board (the "AEUB") asking if the matters contained within the Notice of Appeal had been the subject of a review or hearing under their respective jurisdictions. On November 19, 1999, the Board received a letter from the NRCB advising the matter had not been the subject of a review or hearing. On December 7, 1999, the AEUB responded by indicating that Notices of Objection had been received in relation to two applications for licences made by the Approval Holder to the AEUB to accommodate an extension of the surface mine pit and to accommodate a technical modification to the dump. The AEUB "… did not consider any of the parties expressing an interest in the project to be directly and adversely affected by the development and thus approving the applications without a hearing…" Following the issuance of the licences, three applications for a hearing pursuant to section 43 of the Energy Resources Conservation Act, S.A. 1980, c.E-11 (the "ERCA"). On November 25, 1999, the AEUB denied the requests for a section 43 hearing but indicated that it was prepared to hold an inquiry pursuant to section 22 of the ERCA concerning coal development in the Caw Ridge area.

[5] On December 7, 1999, the Board wrote to the Appellant requesting further information how he was directly affected by the Director's decision to issue the Approval, clarification of the environmental concerns and whether or not he had an opportunity to participate in a AEUB hearing. On December 7, 1999, the Board also wrote to the Director and Approval Holder asking if they wished to participate in a mediation meeting and if, in their opinion, were there any other persons who may have an interest in this matter. On December 21, 1999, the Appellant responded to the Board's letter.

[6] On December 9, 1999, the Director wrote to the Board indicating that mediation would be advantageous in light of the information received from the AEUB and their intent to hold an inquiry. In letters dated December 15, 1999 and January 10, 2000, both the Appellant and Approval Holder agreed to mediation respectively. The Approval Holder advised that they are "… involved in a corporate sale process…" and requested that the mediation be delayed.

[7] On January 4, 2000, the Board received a Notice from the AEUB indicating that a pre-inquiry meeting was being convened on January 26, 2000, to develop terms of reference for a hearing concerning coal mine development in the Caw Ridge area. In response, the Board wrote to the Appellant on January 12, 2000, proposing that the appeal would be held in abeyance pending the outcome of the AEUB process. Mr. Bildson advised via e-mail that he was in agreement with the Board's proposal.

B. Receivership/Bankruptcy

[8] On July 19, 2000, the Director advised the Board that the Approval Holder had been petitioned into receivership. The Director provided the Board with a copy of an order of the Court, in the matter of Montreal Trust Company of Canada Ltd. v. Smoky River Coal Limited et al. (Action No. 0001-05474, Court of Queen's Bench, Judicial Centre of Calgary) dated July 10, 2000. In his letter of July 19, 2000, the Director advised:

"You will note that the Order has the effect of disclaiming the mineral leases and provides for the disclaiming of the surface leases held by Smoky River Coal Ltd. from the Crown. The current approval is not being terminated in order to permit and require the receiver to perform environmental protection activities present on the site.

Given the receivership of Smoky River Coal Ltd. and the disclaiming of the leases, any future coal operations at this location will require a new approval under the Environmental Protection and Enhancement Act.

Given the foregoing, the Director submits that it may be appropriate for this appeal in respect of the approval given to Smoky River Coal Ltd. to be terminated."

[9] The Board wrote to the parties on July 20, 2000, requesting comments in response to the Director's request. The Appellant replied on August 1, 2000 indicating ongoing concerns regarding the state of the reclamation bond and the impact on the B-2 site.

[10] On August 4, 2000, the Board asked the Director to respond to the Appellant's letter and on August 22, 2000, the Director wrote to the Board indicating:

"The receiver will not be undertaking any further mining activity on the disclaimed lands. The mineral licences will not therefore be operated by the receiver.

Thus, as the receivership of Smoky River Coal Ltd. has reached a point from which it is clear that the coal mine will not be operated by Smoky River Coal Ltd., it appears that there is no utility in maintaining an appeal of this approval.

Should any other company seek to operate any part of the former mine, it will require a new mineral lease, new EUB authorization and a new EPEA approval.

The alternative to the Director's proposal is to hold that appeal in abeyance pending the ultimate resolution of the receivership."

[11] On August 30, 2000, the Board wrote to the parties asking whether the Board should hold the appeal in abeyance pending the final resolution of the Approval Holder's receivership. In a letter dated September 25, 2000, the Appellant agreed to hold the appeal in abeyance "… until the final resolution of Smoky River Coal's affairs." The appeal was placed in abeyance until December 15, 2000.

[12] On November 1, 2000, the Board obtained a copy of a Government of Alberta News Release that indicated that an Enforcement Order was issued to the Approval Holder for failure to produce reclamation plans prior to the discontinuance of its operations. The Order provided "… Alberta Environment with the means to ensure that the monitoring continues and reclamation is carried out."

[13] On November 14, 2000, the Board wrote to the Director regarding the intentions of Alberta Environment (the "Department") regarding the reclamation issues and the status of the Approval. The Director responded on November 21, 2000, by attaching a letter dated November 14, 2000, sent to the Appellant from the Department. In this letter to the Appellant, the Department states they are working with AEUB to address environmental matters at the mine site. The Department goes on to say that "… once we know what activity will be allowed at the minesite we will be in a position to prepare a reclamation plan for the mine site and a strategy for implementing the plan. We are aware of the issues surrounding the Caw Ridge and anticipate that the plan will address the B2 Pit." The November 21, 2000, letter also advised that with respect to the bankruptcy, the Board "… may wish to contact the Trustee directly …"

[14] On January 19, 2001, the Board wrote to the Appellant advising him that counsel for the receiver had indicated that:

"… the Trustee has 'disclaimed' its interests in the surface lease and in the mineral leases, which as a result, to the Board's understanding, have therefore been returned to the Crown. Further, while the approval remains in place, and the Department is carrying out reclamation work in accordance with the approval, Mr. Lee [legal counsel for the Receiver/Trustee] advised that the Trustee does not intend to sell or otherwise transfer the approval."

The Appellant was requested to confirm whether or not he wished to continue with his appeal.

[15] The Appellant responded in a letter dated January 25, 2001, indicating that he is "… not prepared to allow the appeal to lapse until there is clarification on when the reclamation work will be started and completed. A reminder that one of my concerns in my original appeal was approvals being granted to SRCL [the Approval Holder] when they were financially unstable."

II. Analysis

[16] It is clear to the Board, based on the Order of the Court of Queen's Bench, that the mine is now in the hands of the Department and Alberta Resource Development. Specifically, the Court of Queen's Bench ordered that:

1. The Receiver is authorized to disclaim the mineral and surface leases.

2. The Receiver is authorized to consent to the forfeiture of the Letter of Credit posted as security in relation to the reclamation work. The Bank posting the Letter of Credit is instructed to make payment on the Letter of Credit to the Director.

[17] Further, it is the Board's understanding that based on the Order of the Court that the security posted in relation to the reclamation work is now in the Environmental Protection and Enhancement Fund established pursuant to section 28 of the Environmental Protection and Enhancement Act, S.A. 1992, c.E-13.3 (the "Act"). Specifically, the Court of Queen's Bench ordered that:

1. The Director shall cause the payment on the Letter of Credit into the Environmental Protection and Enhancement Fund in accordance with the Act and the Conservation and Reclamation Regulations (A.R. 115/93) thereunder.

[18] It is also the Board's understanding that, pursuant to sections 28 and 30 of the Act (the provisions that deal with the Environmental Protection and Enhancement Fund) and the Conservation and Reclamation Regulation, the money that was realized from the security posted by the Approval Holder, will be used in relation to the reclamation work. Further, it is the Board's understanding, pursuant to section 28 of the Act, that the purposes of the Environmental Protection and Enhancement Fund include carrying out any further reclamation work that the Director considers necessary.

[19] The Board further understands that the Appellant has had discussions with the Director. Specifically, in the letter dated November 14, 2000, the Director advises that work is currently underway to deal with the environmental matters at the mine. Specifically, the Department, in conjunction with the AEUB, will be developing a reclamation plan and a strategy for implementing this plan.

[20] The Board also notes that the Director has issued an Enforcement Order to ensure the reclamation is carried out. As a result, the Board is satisfied that the Director will ensure that the mine is properly reclaimed in accordance with the Act and the purposes of the Environmental Protection and Enhancement Fund.

[21] Finally, the Board notes that Mr. Bildson advises: "A reminder that one of my concerns in my original appeal was approvals being granted to SRCL [the Approval Holder] when they were financial unstable." The Board notes that the financial stability of the Approval Holder prior to the issuance of the Approval does not fall within the purview of the Board.

III. Decision

[22] For the reasons listed above, the Board has determined that the Notice of Appeal is not properly before the Board and in accordance with section 87 of the Act, the Board dismisses the appeal.

[23] In the event the facts change in paragraphs 16 to 21, the Appellant is free to ask the Board for reconsideration of its decision pursuant to section 92.1 of the Act.

Dated on February 12, 2001, at Edmonton, Alberta.

Dr. William A. Tilleman

 

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