Law Times

Law times • OctOber 20, 2008 F Cops: Harper's secret agenda or Prime Minister Stephen Harper, no election is com- plete without a few good old- fashioned justice issues. Some are off limits. He learned his lesson in the past messing around with abor- tion rights and trying to make gay marriage a partisan issue. And, several years back the Su- The preme Court taught him a lesson he never forgot (or forgave) about unlimited election time advertising by lobby groups. In this past election Conserva- tive candidates took the usual cheap shots at our judicial system. But it was nothing that isn't already on the record in the House of Commons. One justice issue, however, Hill By Richard Cleroux way of dealing with bad kids than tossing them in jail with hardened criminals. Quebec has the low- est youth crime rate in the coun- try. People come from around the world to study it. played a significant role in this past election. That was violent youth crime, the sort of stuff that fright- ens old people who watch too many American cop shows and Toronto boomers who get all worked up reading about 'Jane and Finch.' (In other parts of Canada they think it's the name of a rock duo.) Harper knows this, and knows scared people vote big time. So, he went around the country this elec- tion scaring people about a rising crime rate, even though statistics show it has been dropping steadily for several years. He dug up 20-year-old stats and used them for comparison to prove his case. Crime experts tried to prove him wrong. But what do they know? They live in ''ivory towers'' (even don't tell you is that getting tough with criminal kids appeals to vot- ers elsewhere, particularly in places where there have been a few recent horrendous crimes. Winnipeg is one of those places. What the political observers Recently a local youth was decapi- tated on a Greyhound bus by a fellow passenger and parts of his body eaten. An Aboriginal boy was shot dead by cops. Later, a man was Tasered to death. Put it all together and you too will soon shout out, 'Put those nasty kids in jail' or whatever Harp- er suggests will solve the problem. For 10 years now, Harper has been systematically courting cops with policies, parties, and praise. It has paid off. About a dozen cops and ex-cops ran as Conservative candidates this year. though ivory has not been legal as construction material for a number of years in Canada). Conservative MPs pitched in with their 10 percenters to help pump up Harper's crime scare. In politics, that's called 'credibilizing the incred- ible' and it really wins votes. Ten percenters are pamphlets that MPs produce several times a year and mail out free of charge to one-tenth of their constituents. They are supposed to be in- formative newsletters about what is happening in Ottawa, but Harper Conservatives learned long ago to make them dovetail nicely into the party platform, all paid for, of course, by taxpayers. Justice Minister Rob Nicholson cranked out 10 percenters which showed photos of young men wear- ing hoods over their heads who ap- pear to be about to commit a crime in a back alley. It wasn't clear from the fuzzy photos he used whether they were whites or blacks. But in any case, they were really mean- looking. Scary? You bet! that the Liberals are the party of lawyers and the New Democrats the party of schoolteachers. And the Conservatives? Well, the party nobody else wanted. Now Harper Conservatives are the cops' party — certainly not the judges' party. Poster girl this year for Harper's They used to joke in Ottawa COMMENT PAGE 7 Directors beware: potential environmental liability lurks BY JOHN BUHLMAN & DERRY MILLAR For Law Times A new Cop Squad is Shelly Glover, a Winnipeg patrol sergeant and 16- year veteran of the force who is also their official spokesperson. She's a Republican dream can- didate: married, mother of five, a soccer coach for 14 years. She comes with a Sarah Palin hairdo and Sonja Smits good looks, plus a law enforcement degree from the University of Winnipeg. And she's bilingual to boot. Can't beat that. Glover ran in St. Boniface on a law and order platform. Harper showed up to help out at a private meeting with cops, parents, teachers, and community leaders. No media questions allowed, only photograph- ers to take nice photos of Harper. The campaign was over before The material was clearly iden- tified as coming from Nicholson. His name was on it. This added a certain measure of seriousness to the crime message. Ten percenters from other Con- servatives arrived in the Convent Glen neighbourhood of the Ottawa- Orleans riding, by coincidence just two days before Harper showed up to release his crime policy. Unfortunately their distribu- tion door-to-door came during the election campaign, which is illegal. The Conservatives said Canada Post must have been late delivering them. Harper's plan to jail 14-year- olds bombed in Quebec because that province has a more humane it started. Luckless Liberal MP Raymond Simard never knew what hit him. Last Tuesday night Glover an- nounced: ''Damn! It feels good.'' She publicly thanked all the cops who worked on her campaign. Who knew? We thought they all went bowling after work. Glover dedicated her victory. volving General Chemical Canada Ltd. is a powerful reminder of the potential li- abilities faced by corporate directors for environmental cleanups in the province. General Chemical Can- ada closed its 86-year-old Amherstburg plant in Janu- ary 2005. The company left behind several envi- ronmental orders is- sued by the Ministry of the Environment, with cleanup costs estimated as high as $64 million. The main issue was the cleanup of a soda ash settling basin that received and treated liquid and solid waste by-prod- ucts, and covered 176 acres of the 450-acre site. With the Canadian com- pany soon to be insolvent, the ministry did not want taxpayers footing the bill for the cleanup. Therefore, in addition to issuing cleanup orders to the Canadian com- pany, the ministry named the U.S. parent company on all three orders, as well as a number of individual of- ficers and directors who sat on the boards of one or both companies. Three of these individuals are lawyers at a major law firm. case before the On- tario Environmental Review Tribunal in- THE MANAGEMENT OR CONTROL TEST: The Ontario Environmen- tal Protection Act permits a Ministry of the Environment director to issue cleanup or preventative measures orders to persons who have or had "management or control" of an undertaking or property. The orders are being ap- pealed by the parent com- pany and the named officers and directors. The parent company claims that: • Its sole interest in Gener- al Chemical Canada was as a shareholder; and provide outside legal advice from time to time, their role was nominal and they did not exercise any direct management or control over operations. FEW PRECEDENTS FOR DIRECTOR LIABILITY: While similar orders have been made by the Ministry of the Environment in the past, they have rarely in- volved large and complex corporate structures, and those that did were resolved in some manner. A very similar case oc- curred in the 1990s involv- Speaker's ing Uniroyal Chemical Ltd.*, which had operated a manu- facturing plant in Elmira, Ontario, since 1942. The plant produced rub- ber chemicals, specialty chemicals, and agricultural products, and in years past, wastes had been disposed of on the plant site. In-ground lagoons had been used for waste water treatment. These historic practices of waste disposal and waste water treatment had contributed to soil, surface water, and groundwater contamination. A cleanup order was is- sued. Like General Chemi- cal, Uniroyal was a Canadian subsidiary of a larger U.S. company, but there was no insolvency issue complicating matters. Still, the ministry named the U.S. parent com- panies as well as an individual officer and director in the cleanup order. The case was settled, with a cost-sharing arrangement between the the company put in place. In the end, the Canadian company was able to pay its share of the cleanup costs, and the issue of individual officer and director liability became moot. ministry and • This shareholder interest, even when coupled with the financial, adminis- trative, and director sup- port that it provided to the subsidiary, does not constitute the type of op- erating management and control contemplated by the EPA; ''This is for victims across the country who have never gotten jus- tice across this country.'' Who knew this was such a nasty, unfair place to live? Glover says she's going to Ottawa to change the crime laws. Maybe Harper could have uni- forms made for his cop-MPs. LT Richard Cleroux is a freelance re- porter and columnist on Parliament Hill. His e-mail address is richard cleroux@rogers.com. • The business and manu- facturing operations of General Chemical Cana- da were undertaken sole- ly by employees of the Canadian company. The individual officers and PROTECT YOUR INTERESTS: With the Uniroyal case result- ing in a settlement, and the General Chemical Canada case yet to be heard, the ex- tent to which company direc- tors may be personally liable for environmental cleanup costs remains unclear. But two facts remain Corner take to help ensure you are protected from potential personal liabilities under Ontario's EPA: 1. Be cautious in accepting nominal board appoint- ments. Canadian cor- porate statutes require a percentage of directors to be Canadian residents. As a result, lawyers, exec- utives, and other profes- sionals often agree to act as directors of Canadian subsidiaries of foreign- based companies to sat- isfy residency require- ments, but never intend to play an active role in directing the busi- ness or gain a full pic- ture of the issues that may be involved. While this can be a mutually beneficial arrangement for both par- ties, before accepting such an appointment, it is critical that you undertake proper due diligence to ensure you have a clear understanding of any potential personal li- ability that could arise from your involvement with the company, both today and in the future. 2. Get protection in place. If you do accept a board ap- pointment, make sure you have liability protection in place that will cover you in the event you are named in a cleanup order. An indemnity agreement with the parent company is one form of pro- tection, but you will want to ensure the financial health of the company is sound, as an insolvent parent may offer little protection. Insurance is another potential solu- tion, but with many cleanup costs measured in the tens of millions, you will want to ensure that coverage limits are high enough to properly protect you. LT * John Buhlman and Derry Millar represented Uniroyal Chemical Ltd. in the case re- ferred to in this article. directors claim that they took the board positions solely to satisfy the requirements under Canadian corporate law for res- ident directors. While they had to execute corporate resolutions www.lawtimesnews.com certain: 1. The Ministry of the En- vironment has the power under the EPA and other statutes to name officers and directors personally on cleanup orders; 2. The ministry will not hesi- tate to use this power in situations where the public interest warrants it. With this in mind, there are a couple of steps you can John Buhlman is a WeirFoulds partner and practises in the ar- eas of environmental law, civil litigation, and administrative law, and has appeared as coun- sel on matters in all levels of the courts in Ontario and before several administrative tribu- nals, including the Environ- mental Review Tribunal. His e-mail address is jbuhlman@ weirfoulds.com. Derry Millar is a WeirFoulds partner and practises as a civil litigator and administrative law advocate, with experience in matters concerning avia- tion, commercial law, estates, environmental law, insurance, products liability, and real es- tate. He is also Treasurer of the Law Society of Upper Canada. His e-mail address is dmillar@ weirfoulds.com.

• Cover
• Women In Law
• A Criminal Mind
• Focus On Business/Competition Law