5 February 2018 (OTTAWA) — Greenpeace Canada has been granted Intervenor status in the upcoming Supreme Court of Canada case, Orphan Well Association, et al. v. Grant Thornton Limited, et al. Our factum will be publicly available here.
Thousands of abandoned (orphaned) oil wells are littered across Alberta’s landscape, threatening to contaminate water and soil or leak dangerous gases that endanger families in nearby homes. The social costs of dealing with these liabilities could total $8 billion.
The outcome of this case will answer the question: who is responsible for the clean-up of an oil company’s operations when that company goes bankrupt? At a higher level, the case will clarify how provincial environmental legislation can be squared with federal bankruptcy laws.
QUOTES:
“There can be no meaningful environmental protection in this country if the provinces do not have the space to regulate. All over Canada, the provinces regulate industry by way of the “polluter pays” principle: if you pollute, you clean it up. But if the Supreme Court of Canada upholds the Court of Appeal’s decision, those clean-up obligations can be swept aside in favour of big banks and secured creditors whenever a polluting company declares bankruptcy. That creates a moral hazard that will undermine effective environmental regulation from coast to coast to coast,” said Nader Hasan, a constitutional law expert and legal counsel for Greenpeace Canada. Hasan represented the Inuit hamlet of Clyde River last year in their landmark Supreme Court victory against oil exploration in the Arctic waters near their community.
“Banks are asking the courts to find a conflict between provincial and federal law where none exists. Greenpeace is arguing that bankruptcy law should not be interpreted in a way that voids the “polluter pays” principle and leaves taxpayers and the environment holding the bag for clean-up costs. It is vital that Canada establish the right balance between federal bankruptcy and provincial environmental law as we transition to a low-carbon world, because fossil fuel companies that refuse to adapt will be at increased risk of bankruptcy as the world stops buying what they are selling,” said Keith Stewart, Senior Energy Strategist at Greenpeace Canada.
BACKGROUND:
This legal case began in 2015 when oil company, Redwater Energy Corporation, went bankrupt. Financial services firm, Grant Thornton, became its receiver and trustee. Grant Thornton sought to abandon Redwater’s oil wells (which were expensive to clean-up or remediate), while keeping other valuable assets to pay Redwater’s creditors. The Alberta Energy Regulator argued that this was not permissible and the company was responsible for using valuable assets to remediate the wells, against which the company argued that it was within their right under the Bankruptcy and Insolvency Act to settle debts to creditors first.
While Albertan courts in the Redwater case have determined that payment to creditors supersedes insolvent companies’ clean-up obligations under provincial environmental law, the Supreme Court agreed to re-examine the decision this February. ATB Financial (a co-respondent) is supporting the lower court decision, while the Canadian Bankers' Association is an Intervenor. Since the Redwater decision in Alberta, more than 1,800 hundred wells representing $100 million-plus in liabilities have been abandoned.
For more information, visit the case file on the Supreme Court of Canada’s website.
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Contact:
Jesse Firempong, Communications Officer, Greenpeace Canada, 778-996-6549, 
Nader Hasan, Stockwoods Barristers, (416) 593-1668, 