Environmental

Enbridge Kalamazoo Oil Spill: State Consent Order

How are major oil spill claims handled in the US? For a fascinating glimpse across the border, Enbridge-consent-judgment is a copy of the multimillion dollar consent order between the State of Michigan and Enbridge over the billion dollar, three-million-litre oil spill into wetlands and the Kalamazoo River in 2010. The State and Enbridge agreed to the order to finalize the obligations as between themselves; the class-action by affected private property owners was settled late last year. Enbridge also paid a $3,699,200 fine to the Pipeline and Hazardous Materials Safety Administration for breaches of several laws involving pipeline management, procedural manuals for operations and maintenance, public awareness, accident reporting and qualifications among others. In addition, the  federal Department of Justice and EPA are still negotiating with Enbridge over penalties and injunctive relief for its violations of the federal Clean Water Act.

In the State consent order, Enbridge agreed to a long list of further obligations, substantial cash payments to the State and other terms, all on top of what it has spent to clean up the spill. The consent order obligations include:

·   An ongoing residual oil monitoring and maintenance program;

·   Continuing remediation of the remaining contamination;

·   A $30 million wetland restoration and monitoring program, including providing the State with not less than 300 acres of restored, created, or banked wetland;

·   A channel and shoreline monitoring program;

·   Reimbursing the state for all past and future legal and oversight costs, which had already exceeded $10.4 million;

·   River enhancement projects, including removal of a dam and improved recreational river access in five locations;

·   A $2.5 million endowment for the permanent maintenance of these river enhancement projects, to be managed by a private consulting firm;

·   $5 million paid to the State as compensation for damage to the banks, bottomlands, and flow of Talmadge Creek and the Kalamazoo River;

·   Stipulated financial penalties, agreed in advance, for any future breach of this Order;

·   Guaranteeing access to the remediation site for state regulators;

·   Using sampling and analytical methods approved in advance by the state;

·   Providing emergency response should any further contamination occur during the monitoring/cleanup;

·   Keeping records for at least 10 years;

·   Identifying individuals responsible for Enbridge’s compliance with the order;

·   Agreeing to indemnify the State for any future claims, secured by $1 million in insurance; and

·   Mutual covenants not to sue each other.

In Canada, it would be surprising for the settlement details of a major claim to be so easily accessible to the public.

    By Dianne Saxe, Ontario Environmental Lawyer

Reprinted with permission from the Environmental Law and Litigation Blog.

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