Canada: Federal Court Revokes Darlington Nuclear Preparation Licence Based On "Gaps" In Environmental Assessment

In a rare (and over 200-page) decision, the Federal Court of Canada revoked the Licence given to Ontario Power Generation (OPG) to construct new nuclear generation units at the existing Darlington nuclear facility, and ordered that the environmental assessment (EA) under the Canadian Environmental Assessment Act be returned to the appropriate panel for further consideration including addressing certain "gaps" in the analysis undertaken in the EA.

Introduction

On May 14, 2014, the Federal Court released its decision in Greenpeace Canada v. Attorney General of Canada, 2014 FC 463. The case, brought by environmental non-governmental organizations, challenged OPG's proposal to construct up to four new nuclear reactors as part of the federal Darlington New Nuclear Power Plant Project (the Project). The decision considered two judicial review applications:

  • A challenge to the adequacy of the federal EA of the Project under the Canadian Environmental Assessment Act, SC 1992, c 37 (CEAA 1992);1 and
  • A challenge to the Project's Site Preparation Licence (Licence) based on the failure to comply with the requirements of CEAA 1992 and the Nuclear Safety and Control Act (NSCA).

Brief Facts

In June 2006, OPG sought approval for the construction of a new nuclear power generation facility at the existing Darlington nuclear site in Clarington, Ontario. The Project, which included the construction, operation, decommissioning and abandonment of nuclear reactors and the management of the associated conventional and radioactive waste, triggered an EA under the CEAA 1992 and Law List Regulations. The Project was the first proposed nuclear new build in Canada in over a generation, the first since CEAA 1992 was enacted, and the first to potentially use enriched uranium fuel.

The EA of the Project was referred to a three-member joint review panel (the Panel), with a mandate that included: (a) performing an EA of the Project based on an Environmental Impact Statement (EIS) prepared by OPG; and (b) reviewing OPG's application for the Licence. The EA process engaged the public, the CNSC, and other government agencies and departments, including public hearings and written submissions.

Since OPG had not yet committed to a particular reactor design for the Project, the EIS examined – and the Panel considered – multiple possible reactor designs using the "plant parameter envelope" (PPE) approach,2 which involves examining reactor design and site parameters in a way that strives to consider the greatest potential adverse impact to the environment.

On August 25, 2011, the Panel issued its report (the Report), concluding that the Project is not likely to cause significant adverse environmental effects, provided that the Panel's recommendations and OPG's commitments are fulfilled. The Report stated that, if the Project is to go forward, the selected reactor technology "must be demonstrated to conform to the [PPE approach] and regulatory requirements, and must be consistent with the assumptions, conclusions and recommendations" of the EA. If the reactor technology selected "is fundamentally different than those assessed" by the Panel, the Report stated that the EA "does not apply and a new environmental assessment must be conducted." Moving the Project forward, on August 17, 2012, the CNSC issued the ten-year Licence to OPG.

Decision

Environmental Assessment

The applicants challenged the EA on a number of grounds. Their overall position was that, in conducting the EA, the Panel failed to comply with the mandatory requirements of CEAA 1992 and the Panel's own Terms of Reference.

Specifically, the applicants argued that CEAA 1992 required the Panel to take a precautionary and restrictive approach to environmental assessments, characterizing CEAA 1992 as the federal "look before you leap" law and characterizing the EA conducted by the Panel as the opposite, as a "leap before you look" approach.

In particular, the applicants took issue with the Panel's adoption of the PPE approach, arguing that the approach does not allow for a meaningful analysis and, as a result, invalidates the EA. The applicants contended that, by using the PPE approach, the Panel did not review a "project" within the meaning of the CEAA 1992, because the specific nature of the physical work to be undertaken was not identified. The applicants argued that it was not possible to conduct an EA that met the requirements of CEAA 1992 – and that meaningfully assesses the environmental effects – when the reactor technology had not been chosen and other key Project components, such as the site design layout, the cooling system option, the used nuclear fuel storage option, and the radioactive waste management option, all remained unspecified.

In addition, among other things, the applicants argued that there were a number of "information gaps" in the Report, so significant as to have the effect that the Panel did not consider the environmental effects of the Project as required by CEAA 1992. For instance, the applicants argued that the Panel did not properly consider the potential hazardous substance emissions. Also, the applicants argued that the Panel's conclusion – "radioactive and used fuel waste is not likely to result in significant adverse environmental effects" – had "no factual basis." According to the applicants, the Panel simply recommended "future study and analysis" of the radioactive waste issue, accepting OPG's evidence that "effective and practical mitigation options would be available when required in the future."

However, after undertaking a thorough and lengthy review of various technical aspects of the EA, the Court ultimately disagreed with the applicants' over-arching argument about the inadequacy of the EA and of the PPE approach, deciding that the CEAA 1992 contains no prescriptive method for conducting an assessment such that a specific reactor technology does not need to be chosen and identified to make the EA meaningful, especially in light of the fact that an EA is to take place as early as practicable in the planning stages of the Project.

Nevertheless, the Court went on to rule that the Panel's EA failed to comply with the CEAA 1992 in three areas:

  • inadequacies in the PPE analysis regarding hazardous substance emissions and non-radioactive wastes, such that the Panel took "a short-cut by skipping over the assessment of effects, and proceeding directly to consider mitigation," making it "questionable whether the Panel has considered the Project's effects at all in this regard." Nothing in the Report suggested a "qualitative assessment of the effects of hazardous substance releases";
  • long-term management and disposal of radioactive waste (i.e., spent or used nuclear fuel to be generated by the Project), such that the Panel had provided no analysis of the feasibility of storing and managing used nuclear fuel at Darlington in perpetuity. The issue had "not received adequate consideration" by the Panel; and
  • deferral of the analysis of a severe "common cause" accident involving both the new and existing reactors at the Darlington site.

Importantly, the remedy crafted by the Court did not include quashing the Report. Rather, it returned the matter to the Panel to reconsider and resolve the shortcomings identified by the Court. Until such time as the shortcomings are resolved, the Project is not permitted to proceed, in whole or in part.

Quashing of the Licence

The Court reasoned that since a valid EA is a prerequisite to the Licence, and since the EA was determined not to comply with the CEAA 1992, the Licence is, therefore, invalid. In terms of remedies, this means that: (a) the Licence is quashed; and (b) CNSC (and the Department of Fisheries and Oceans and Transport Canada) may not issue another Licence or other authorization until the Panel has resolved the shortcomings of the Report. This remedy is in line with prior Federal Court jurisprudence.3 The Court rejected the applicants' argument that the Licence failed to comply with the NSCA.

Discussion

Generally speaking, it is uncommon for a judicial review of a panel assessment under CEAA 1992 (given the expertise of such panels, the deference usually accorded, the volume of evidence considered, and the complexity of the EA) to weigh in on how specific issues under consideration were addressed by the panel. The Court was clear on the law: a reviewing court should not act as an "academy of science" or comment on EA principles or approaches; instead, it should focus on whether the Panel had complied with the legislative scheme and relevant jurisprudence. However, the Court in this case took a hands-on approach, finding specific aspects of the EA deficient, and therefore non-compliant with the governing statute.

That said, the Federal Court's decision reaffirms the concept that the Court should not simply quash or "throw out" the entire EA report, or the analysis done by a panel or the decision-makers in an EA. Rather, where a Court perceives gaps or errors in an EA, it should send those issues back to the panel for (re)consideration.

While the Court's decision has no immediate impact — Ontario has already indefinitely postponed the Project — the federal Cabinet "has no jurisdiction to issue any authorizations or to take any other action, which would enable the Project to proceed, in whole or in part," until such time as the Panel has completed its work of reconsideration and determination. This does not mean that the Project cannot proceed; rather, it necessitates additional steps in order to fulfil the existing legislative requirements for the EA. In other words, it is not a road block, but rather a "speed bump" in the regulatory process, which will require additional time, analysis and consideration.

Footnotes

1. CEAA 1992 was replaced by the Canadian Environmental Assessment Act, 2012 (S.C. 2012, c. 19, s. 52) July 6, 2012.

2. Also known as a "bounding approach" or a "bounding scenario."

3. Imperial Oil Resources Ventures Limited v. Canada (Fisheries and Oceans), 2008 FC 598 6.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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