The law doesn’t say companies must implement ISO 14001 or any other Environmental Management System (EMS). But if environmental violations occur, a company’s liability and sentence will be determined in part on whether the company can show that it made all reasonable efforts to ensure compliance. In Canada, this concept is known as “due diligence” and we’ll use that term in this article to refer to the principle. The legal impact of the EMS is its impact on the company’s effort to prove due diligence.

1. Having an EMS Is Evidence of Due Diligence

To qualify for ISO 14001 certification, an EMS must have at least all of the components required of a “proper system” under due diligence and more besides that. Thus, all things being equal, a company charged with an environmental offense has a better chance of proving due diligence if it has implemented an ISO-certified EMS.

Moreover, courts sometimes use the standards of ISO and other non-governmental associations as a measuring stick of “reasonable steps” under due diligence. There has been at least one case in Canada where a company used compliance with a voluntary standard to prove due diligence. The case which took place in Alberta involved a metals worker who was killed after his clothes became ensnared in the metal roller of a conveyor. The roller was guarded on one side only—the side away from the worker. But the worker crawled under the conveyor and became ensnared on the other side on something called a return belt idler.

Section 52(1)(a) of the Alberta OHS Act requires employers to install “effective safeguards” on machines but doesn’t define the term. Nor do the regulations. But since the guard conformed to (Section 6.6.2(a)) of the American Society of Mechanical Engineers (ASME) machine guarding standard, the court ruled that the company had used due diligence to prevent a machine guard violation [R. v. Maple Leaf Metal Industries Ltd., [2000] A.B.P.C. 95].

Although Maple Leaf is a safety case, courts in Canada have also signaled their acceptance of ISO 14001 as a standard of due diligence for environmental compliance. For example, courts in Alberta have on at least two occasions ordered companies convicted of pollution offences to achieve ISO 14001 certification as part of a “creative sentence” [See, R. v. Prospec Chemicals Ltd., [1996] A.J. No. 174 , and R. v. Calgary (City), [2000] A.J. No. 1112].

2. Having an EMS Doesn’t Necessarily Prove Due Diligence

An EMS is not a guarantee of due diligence. A company can still fall short of due diligence standards even if it’s implemented an ISO-certified EMS. Putting a system into place, no matter how many bells and whistles it contains, doesn’t end the obligation to comply. You must also proactively check the system, make sure it’s working and make corrections and improvements along the way. If you don’t, you can be liable for resulting violations.

3. Having an EMS Can Lead to Reduced Penalties

Even if it doesn’t prevent you from being held liable for an environmental offense, having an EMS may result in a less harsh penalty. When deciding on an appropriate sentence for an environmental offence, judges look at what are called “aggravating” and “mitigating” factors. Adoption of an EMS may be considered a “mitigating” factor calling for a lighter penalty. The fact that the company has an EMS in place suggests that it took its environmental obligations seriously and made an earnest effort to comply with them.

4. Not Having an EMS Doesn’t Prove Lack of Due Diligence

You don’t need to have an EMS to prove due diligence. In other words, the ISO EMS represents a gold standard, not a minimum. Courts understand that not every company is in the position to adopt one. The important thing is making sure that you can demonstrate that the measures you do adopt are reasonable for a company in your circumstances in light of its resources and the degree of risk involved.

Conclusion

There are other motivations for adopting an EMS other than the fact that it’s required by law. One of the most compelling of these motives is to improve financial performance. But does having an EMS really improve a company’s bottom line? We will answer this question next week.

* * * * *
IN A NUTSHELL

1. The law doesn’t require you to adopt an EMS
2. Having an EMS helps prove but doesn’t conclusively demonstrate due diligence
3. Having an EMS can help reduce penalties for violations you do commit
4. You can prove due diligence without an EMS

Story Tools:  Email This Post  Print This Post Top