The Crown bring charges against any of the directors and officers

  Consolidated Silver Inc. (CSI) owns and operates a silver mine in Northern Ontario. As part of the operation for the silver mine, there is a tailings pond, which contains water from the mining operations. The water, which contains high levels of arsenic, lead and cadium, is highly toxic to fish and wildlife. In 2015, there was an incident where some of the mine tailings water were accidentally released into a nearby stream, causing considerable harm to the stream ecosystem. CSI was convicted with an environmental offence at that time and paid a fine of $150,000.00. Since that incident CSI has taken steps to become an environmental leader in the silver mining industry. In 2016, it put in place an environmental management system that seeks to identify environmental risks within the mining operation and improve environmental performance. Among the measures put in place, CSI has a system whereby the tailings pond is closely monitored to ensure its integrity. Employees are given special training in environmental matters, including knowledge of toxic substances. In 2018, CSI was recognized by the Canadian Mining Association for environmental leadership. Environmental matters at the mine site are the responsibility of Jason Chu, who is the Manager of Environmental Operations. Jason is responsible for all the day-to-day environmental management operations. Jason reports to Phoebe Okowa, the Vice-president - operations. Phoebe is responsible for all the mine operations and is on site most days. She receives reports weekly from Jason. Claude Lesage is the President of CSI. Claude played a strong role in moving CSI towards improved environmental performance, and is made aware of any serious environmental concerns at the mine. Claude works out of CSI’s Head Office in downtown Toronto. He visits the mine site several times a year. In the late fall of 2021, there was a high, but not unforeseeable, amount of rainfall within a two-week period causing a sudden rise in the level of the tailings pond. In those circumstances, a channel is used to divert excess water to a secondary pond. The channel had been identified as a potential environmental risk, as it no longer meets industry standards for engineered channels of this sort. Upgrading would require the expenditure of millions of dollars to ensure that the channel meets modern standards. Phoebe had decided not to upgrade the channel until 2022 due to COVID19-related labour shortages and budget restrictions. Claude Lesage was not consulted on this decision, but had created a corporate policy that dedicated significant funds for environmental matters. Instead, the channel was visually inspected regularly. There were no policies in place concerning the timing of inspections, but rather the inspections occurred when Jason had available personnel. Jason had received prior training on conducting inspections of tailings ponds and channels. The channel was last inspected on October 22, 2021, at which time it was reported that the channel was in good condition. On November 5, 2021, Jason, after discussing the matter with Phoebe, decided to divert tailings water from the main tailings pond to the relief pond via the channel. An inspection of the channel was not made immediately prior to the diversion. The high rainfall had collapsed part of the channel, resulting in a release of toxic water into the natural environment causing significant environmental harm. The problem was discovered almost immediately due to monitoring of flow volumes and the diversion was immediately stopped. However, it was estimated that approximately 200 cubic metres (200,000 litres) of toxic material was released into the environment. On December 1, 2010, after an inspection of the site, CSI was charged with releasing a contaminant into the natural environment contrary to s.14 of the Environmental Protection Act: 14. (1) Subject to subsection (2) but despite any other provision of this Act or the regulations, a person shall not discharge a contaminant or cause or permit the discharge of a contaminant into the natural environment, if the discharge causes or may cause an adverse effect. Section 14 is a strict liability offence. A subsequent investigation by CSI determined these additional facts about the incident: 1. The specific cause of the collapse of the channel was that a tree had fallen across the channel, which caused a build-up of other debris (mostly from the storm), which in turn resulted in a blockage of the channel and the eventual breach. 2. There was no outward indication that the tree in question was likely to fall. 3. Twenty other mines in Ontario use a similar discharge channel system. Only five mines have upgraded their channels to meet the new standards. 4. The decision taken by Okowa to postpone the channel upgrade was the result of a decision to spend the environmental budget on a process upgrading technology that would save CSI future operating costs. You are a lawyer for the Provincial Crown and you have been asked to review the charge and prepare a legal memorandum addressing the following questions: 1. Should the Crown bring charges against any of the directors and officers (Lesage or Okowa) of CSI. Please note section 194 of the Act: 194 (1) Every director or officer of a corporation has a duty to take all reasonable care to prevent the corporation from, (a) discharging or causing or permitting the discharge of a contaminant, in contravention of, (i) this Act or the regulations, or (ii) an environmental compliance approval, certificate of property use, renewable energy approval, licence or permit under this Act; 2. Can CSI or any other potential defendant identified above successfully mount a due diligence defence in these circumstances.