Environmental Protection Alternative Measures Agreement
BETWEEN
THE ATTORNEY GENERAL OF CANADA
AND
JOHNSON CONTROLS LTD., a company incorporated under the laws of the Province of Ontario, having its head office at 7400 Birchmount Rd., Markham, Ontario.
WHEREAS Johnson Controls Ltd. has been charged for an alleged violation under the Canadian Environmental Protection Act, 1999 (called CEPA, 1999 in this agreement);
WHEREAS the prosecution of the offence is not barred at law and in the opinion of the Attorney General of Canada sufficient evidence to proceed with the prosecution of the offence exists;
WHEREAS the Attorney General of Canada is satisfied that Environmental Protection Alternative Measures (Measures) would not be inconsistent with the purposes of the Act in this case;
WHEREAS Johnson Controls Ltd. having been advised of the right to be represented by counsel accepts responsibility for the act or omission that forms the basis of the alleged offence and fully and freely consents to participate in the Measures;
WHEREAS the Attorney General of Canada has consulted with the Minister of the Environment, and has considered the surrounding circumstances, the nature of the alleged offence, and all other factors to be considered as prescribed by CEPA, 1999;
WHEREAS the Attorney General of Canada and Johnson Controls Ltd. agree that an Environmental Protection Alternative Measures Agreement is the most appropriate means of resolving all matters pertaining to this case;
WHEREAS effective January 1, 2001, Johnson Controls LP became the successor to the business previously carried on by Johnson Controls Ltd.;
WHEREAS Johnson Controls Ltd. no longer carries on any active business and accordingly, Johnson Controls LP has agreed to perform the measures on behalf of Johnson Controls Ltd. hereunder;
THEREFORE, the Attorney General of Canada and Johnson Controls Ltd. enter into an Environmental Protection Alternative Measures Agreement with the following provisions:
PURPOSE
The express purpose of this Agreement is to further the goals and objectives of CEPA, 1999 and its regulations.
FACTS
Johnson Controls Ltd. has been charged with:
Count 1:
Between the 18th day of March, 2001 and the 10th day of June, 2001, at or near the Town of Stettler in the Province of Alberta, did unlawfully store PCB material, to wit: lamp ballasts, contrary to section 5 of the Storage of PCB Materials Regulations, thereby committing an offence contrary to section 272(1) of the Canadian Environmental Protection Act, 1999.
Count 2:
Between the 18th day of March, 2001 and the 6th day of April, 2001, at or near the Town of Stettler in the Province of Alberta, did unlawfully deposit into a landfill equipment containing PCB's, to wit: lamp ballasts, contrary to section 6 of the Chlorobiphenyls Regulations, thereby committing an offence contrary to section 272(1) of the Canadian Environmental Protection Act, 1999.
Count 3:
Between the 3rd day of June and the 9th day of June, 2001, did fail to report to an enforcement officer a potential release of a toxic substance listed on Schedule I of the Canadian Environmental Protection Act, contrary to Section 95 of the Canadian Environmental Protection Act, 1999.
Charges were laid in Calgary, Alberta on February 6, 2002.
Johnson Controls Ltd. has been advised and understands that the following act forms the basis of the offence that it is alleged to have committed:
In May, 2000, Johnson Controls Ltd., under contract to Alberta Infrastructure, a provincial government department, agreed to do a lighting retrofit project at Provincial buildings in central Alberta. Johnson Controls subcontracted the physical portion of the work to a Nisku company named Tech Power. Under this project, old light ballasts were removed from the buildings in Stettler by Tech Power under the direction of Johnson Controls Ltd. and pursuant to its contract. Between the 18th day of March, 2001 and the 6th day of June, 2001 Tech Power took the ballasts removed from the Stettler Provincial Building to the Regional Landfill site operated by the Town of Stettler and left them there for disposal.
Johnson Controls did not fulfill their obligations with respect to the Storage of PCB Materials Regulations when, through its contractor Tech Power, it allowed ballasts to be stored at a site that did not meet the requirements of the Regulations, namely the Stettler Landfill. The light ballasts containing PCBs were placed in two drums, which the landfill site operators initially kept outside and later moved to the inside of a building. The lids to the drums were only placed on and were not sealed. The detailed requirements of the Regulations that were not met during the storage include:
- the site was not a room or building or other structure or enclosed by a woven wire fence;
- the entrance to the site was not locked or guarded;
- a register was not maintained of persons who enter the site or who are authorized to enter the site;
- the PCB equipment was not stored in steel drums or containers of sufficient durability and strength, on skids or pallets on a durable sealed floor with curbing or sides that would contain any released liquid or when stored outdoors was not covered;
- there was no fire protection plan that employees were familiar with. The local fire department did not have a copy of any plan;
- there were no absorbent materials for clean-up near the storage site;
- labeling was not affixed to containers containing PCB equipment;
- labeling was not affixed to entrances to PCB storage sites;
- records were not maintained on PCB equipment and containers within a storage site.
On June 4, 2001 the landfill operator told Johnson Controls Ltd. that the deposited light ballasts contained PCBs. Johnson Controls Ltd. failed to notify an Canadian Environmental Protection Act enforcement officer until June 8, 2001. On June 9th, 2001, these ballasts were seized by an Environment Canada enforcement officer as part of an investigation into the alleged deposit of electrical equipment containing PCBs.
A random sampling of 12 of the light ballasts that were seized on June 9, 2001 were delivered to Environment Canada Laboratories in Edmonton where oil was extracted from the ballasts and analyzed for PCBs. The following information contains the amount of oil extracted for analysis from the ballasts and the PCB concentration contained within that oil:
- Sola Fluorescent Ballast - oil extracted 13.1106 grams at 601000 micrograms/gram PCB
- Philips Ballast - oil extracted 3.819 grams at 577000 micrograms/gram PCB
- Philips Ballast - oil extracted 3.7659 grams at 561000 micrograms/gram PCB
- Philips Ballast - oil extracted 3.5608 grams at 577000 micrograms/gram PCB
- Philips Ballast - oil extracted 4.2492 grams at 576000 micrograms/gram PCB
- Philips Ballast - oil extracted 2.8471 grams at 641000 micrograms/gram PCB
- Philips Ballast - oil extracted 4.6624 grams at 561000 micrograms/gram PCB
- Canadian General Electric Ballast - oil extracted 5.398 grams at 558000 micrograms/gram PCB
- Canadian General Electric Ballast - oil extracted 5.3673 grams at 566000 micrograms/gram PCB
- Canadian General Electric Ballast - oil extracted 4.2983 grams at 555000 micrograms/gram PCB
- Canadian General Electric Ballast - oil extracted 4.3634 grams at 554000 micrograms/gram PCB
- Canadian General Electric Ballast - oil extracted 4.173 grams at 562000 micrograms/gram PCB
Electrical equipment contains PCBs under the Storage of PCB Materials Regulations when the concentration is 50 ppm (50 micrograms per gram) or higher. The Chlorobiphenyls Regulations limit the release PCBs to the environment to one gram per day.
On December 6, 2001, the remaining ballasts that were seized on June 9, 2001 were inventoried and identified according to the Environment Canada book entitled "Identification of Lamp Ballasts Containing PCBs". 294 light ballasts were inventoried of which 283 were identified as containing PCBs.
Johnson Controls Ltd. does not deny participation or involvement in the commission of the alleged offence and accepts responsibility for the above act.
MEASURES
Johnson Controls Ltd. represents that since January 1, 2001 a limited partnership carrying on business in Canada under the style and name of Johnson Controls LP has conducted the lighting retrofit business previously carried on by Johnson Controls Ltd. Johnson Controls LP was the entity that performed the contract which Johnson Controls Ltd. had entered into, relating to the incidents described in the Facts above. Johnson Controls Ltd. is a limited partner in Johnson Controls LP and has no active business.
Having regard to the foregoing, Johnson Controls Ltd.(hereafter, "Johnson Controls") undertakes to complete the following measures through Johnson Controls LP (unless otherwise specifically identified).
Johnson Controls undertakes to perform and complete the following measures on behalf of Johnson Controls Ltd. and represents that it has full authority to perform and complete such measures.
Johnson Controls shall create a standard operating procedure and policy for the management of ozone-depleting substances and PCBs applicable to its operations in Canada, as regulated under Canadian Environmental Protection Act, 1999 within 6 months of the signing of this agreement. Johnson Controls will supply a copy to Environment Canada.
This standard operating procedure and policy shall be incorporated into Johnson Controls' Environmental Management System within six months of signing of this agreement.
Johnson Controls shall develop a training program relating to the proper management of polychlorinated biphenyls (PCBs) and the associated environmental regulations and deliver such program to the Alberta contractors currently retained by Johnson Controls LP to perform lighting retrofits. Such training shall be provided at no cost to the contractors.
Johnson Controls shall deliver the same training to any Johnson Controls LP employee who can reasonably be expected to manage electrical contracts or provide on-site supervision of lighting retrofits.
Johnson Controls shall supply a copy of the training course outline to Environment Canada within three months of the execution of this EPAM agreement for approval by the Regional Director of Environmental Protection. All training will be completed within nine months of such approval. Johnson Controls will provide a list of the employees and contractors who have completed the training during the nine-month period to Environment Canada.
Johnson Controls shall submit for publication by the "Electrical Business Magazine", a Canadian publication for the electrical industry, an article or paid advertising space describing the facts of this case, issues related to PCBs and the essential terms of this agreement, including availability and benefits of EPAMs. This will be completed within three months of the signing of this agreement.
Johnson Controls shall make a voluntary payment of $40,000 payable to the Receiver General of Canada in trust for the Environmental Damages Fund, as administered by the Regional Director General, Environment Canada, Prairie and Northern Region.
Johnson Controls Ltd. acknowledges and agrees that, for the purposes of the Canadian Environmental Protection Act, any act or thing to be done by Johnson Controls LP shall be an act or thing undertaken by Johnson Controls Ltd. for the purpose of complying with the Act and performance of an Environmental Protection Alternative Measures agreement in accordance therewith.
COMPLIANCE SCHEDULE
Johnson Controls agrees that it shall comply with all the measures, terms and conditions of this Agreement before August 24, 2003.
VERIFYING COMPLIANCE WITH THIS AGREEMENT
The Parties agree that the Department of Environment will supervise and monitor compliance with this Agreement.
INSPECTION AND OTHER ENFORCEMENT ACTIVITIES
Nothing in this Agreement bars CEPA, 1999 enforcement officers and analysts from conducting inspections or investigations which they are legally authorized to conduct.
REPORTING
Johnson Controls shall submit progress reports on how it is meeting the terms and conditions specified within this agreement for each ninety (90) day period, beginning November 1, 2002 until the termination of this Agreement. All reports required to be submitted under this Agreement will be delivered to Environment Canada within seven (7) days of the end of a reporting period.
Reports relating to the administration of or compliance with this Agreement will become part of the supervision record as well as part of the compliance history of Johnson Controls Ltd.
Johnson Controls agrees that all progress reports shall be signed by a duly authorized officer.
CONFIDENTIAL INFORMATION
All information contained in and obtained by virtue of this Agreement is subject to the provisions of the Access to Information Act and CEPA, 1999.
Trade secrets, financial, commercial, scientific or technical information that is and is treated as confidential information, information the disclosure of which could reasonably be expected to result in material financial loss or gain or could reasonably be expected to prejudice the competitive position of any person, or information which could reasonably be expected to interfere with contractual or other negotiations of any person, will remain confidential and not be disclosed, except as provided for in the Access to Information Act and CEPA, 1999.
This Agreement shall be filed with the court, as part of the court record of the proceedings to which the public has access, in accordance with the provisions of section 300 of CEPA, 1999.
Notwithstanding the above, reports relating to the administration of or compliance with this Agreement will be accessible to the public in accordance with Section 301 of CEPA, 1999. The final progress report will be made available to the public and to the court in accordance with Sections 300(2) and 301. Interim progress reports will not be made available to the public under Sections 300(2) and 301.
RESERVATION OF RIGHTS
The Attorney General of Canada reserves the right to seek injunctive relief in the event of any violation of the requirements of this Agreement.
PENALTIES
Failure on the part of Johnson Controls Ltd. and its responsible officials to comply with the provisions this Agreement is an offence under section 272 (1) (e) of CEPA, 1999. The Parties acknowledge that CEPA, 1999 provides that if this EPAM is not complied with, Johnson Controls Ltd. and its responsible officials may be prosecuted for failing to comply with the EPAM and for the original offence.
In the event that Johnson Controls Ltd. and/or its responsible officials fail to comply with the stipulations of this Agreement, Johnson Controls Ltd. and/or its responsible officials are liable on conviction to the penalties provided for pursuant to CEPA, 1999.
FORCE MAJEURE
A Force Majeure is an event resulting from circumstances beyond the control of Johnson Controls that causes or may cause a delay in compliance with any provision of this Agreement. If a Force Majeure event occur, Johnson Controls shall notify the Attorney General of Canada in writing as soon as practicable, but in any event within 7 days of when Johnson Controls first knew of the event or should have known of the event by the exercise of due diligence. The notice shall invoke the Force Majeure provisions of this Agreement and describe the anticipated length of time during which Johnson Controls will not be able to comply with this Agreement.
In the event that a Force Majeure occurs, Johnson Controls shall bring an application to vary in accordance with Section 303 of CEPA, 1999. The application shall be made to the Attorney General of Canada and a copy of the application shall be sent to the Department of the Environment.
INTENT AND INTERPRETATION OF THE AGREEMENT
This Agreement constitutes the entire Agreement among the Parties. The Parties acknowledge that there are no representations among the Parties other than those expressly set out in this Agreement.
This Agreement supersedes all previous negotiations, arrangements, letters of intent, offers, proposals, representations and information conveyed, whether oral or in writing, among the Parties or their authorized representatives.
SEVERABILITY
The provisions of this Agreement shall be severable should for any reason Johnson
Controls LP and/or Johnson Controls Ltd.be lawfully excused from performing any of the terms of this Agreement for which it/they are responsible. For greater certainty, the remaining provisions of this Agreement shall remain in full force and effect.
TIME OF THE ESSENCE
Time is of the essence in this Agreement.
GOVERNING LAW
This Agreement shall be governed by the laws of Canada including the provisions of CEPA, 1999 and its regulations, and any definitions that apply to this Agreement are those provided for in CEPA, 1999 and its regulations, and those also specified in this Agreement.
WARRANTY
Johnson Controls warrants that the obligations it has undertaken in this Agreement will be performed by persons who are competent, qualified and have the appropriate knowledge and skill.
CERTIFICATION
Johnson Controls Ltd. certify that on the date of the coming into force of this Agreement, Johnson Controls Ltd. are not required to undertake any activity or refrain from the taking of any activity constituting the measures negotiated in this Agreement by any federal, provincial, territorial or municipal law, or court order.
Johnson Controls further certifies that moneys expended on fulfilling the alternative measures does not come from government financial grants.
Johnson Controls Ltd. also certifies that the person whose signature appears below is an officer of the corporation who has been duly authorized to sign this Agreement and bind the corporation.
VARIATION OF AGREEMENT
An Application to vary this Agreement shall be made in accordance with section 303 of CEPA, 1999. The Application shall be made to the Attorney General of Canada and a copy of the Application shall be sent to the Department of the Environment.
TERMINATION OF THIS AGREEMENT
This Agreement shall terminate when the terms and conditions have been fulfilled to the satisfaction of the Attorney General of Canada or otherwise in accordance with the applicable provisions of CEPA, 1999.
ASSIGNMENT
This Agreement shall not be assigned without written consent.
NOTICE
Whenever in this Agreement, it is required or permitted that notice or demand be given or served by any Party to or on the other Parties, such notice or demand will be in writing and will be validly given or sufficiently communicated if forwarded by registered mail, priority post mail or facsimile as follows:
The address for delivery is:
To Johnson Controls Ltd.:
7400 Birchmount Road Markham, Ontario, Canada L3R 5V4
Attn: Steve Sales
Fax: 1 905 474 5433
To the Attorney General of Canada:
Department of Justice Edmonton Regional Office
211 Bank of Montreal Bldg.
10199 - 101 Street Edmonton, Alberta T5J 3Y4
Attention: Wesley W. Smart
Fax: (780) 495-4915
To the Department of the Environment:
Peter Blackall
Regional Director, Environmental Protection
Environment Canada Room 200, 4999 - 98 Avenue
Edmonton, Alberta T6B 2X3
Fax: (780) 495-2451
The Parties may change their respective addresses for delivery by delivering notice of change as herein provided.
WAIVER
No condoning, excusing or overlooking by any of the Parties of any default by the other Parties at any time or times in performing or observing any of the Parties respective covenants will operate as a waiver of or otherwise affect the rights of the Parties in respect of any continuing or subsequent default. No waiver of these rights will be inferred from anything done or omitted by the Parties except by a variation of this Agreement in accordance with Section 303 of CEPA, 1999.
IN WITNESS WHEREOF the Parties have executed this Agreement this 22nd day of August, 2002.
EXECUTED on behalf of the Attorney General of Canada
__________________________________
Wesley W. Smart
Agent for the Attorney General of Canada
SEALED, ATTESTED TO AND DELIVERED on behalf of Johnson Controls Ltd. by Per:
____________________________
Per:
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TOR_LAW\5091019 v2
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