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Sunrise Propane - Was self-regulation at fault?

Tuesday, August 19th 2008 8:59:05am

This is an article from a series of monthly columns by Environmental Law Specialist Dianne Saxe, one of the top 25 environmental lawyers in the world.  These articles are available for publishing at no charge, provided Dr. Saxe is cited as the author.  She can be contacted at (416) 962 5882 or admin@envirolaw.com. For more information, visit http://envirolaw.com.


Sunrise Propane: Was self-regulation at fault?


In the wee hours of  Sunday, August 10, the Sunrise Propane Industrial Gases facility exploded next to a Toronto residential area. Two people died, the 401 highway was closed, power and gas were cut off, some buildings were damaged and 12,000 residents were hurriedly evacuated. Most residents were soon allowed back, but some were kept away for days, mainly because of concerns about asbestos fibers and debris. The Ministry of the Environment ordered Sunrise to clean up the area, but they did not move swiftly enough to satisfy the public; a week later, city staff took over the job.

As usual following a disaster, much media attention is focused on whether government regulators were at fault. In this case, most media attention has focused on two issues: whether the Technical Standards and Safety Authority (TSSA) can be trusted, and whether municipalities can and should do more to keep propane facilities away from residential areas. Although most residents will obtain compensation from their home insurers, both the city of Toronto and the TSSA are already facing class-action lawsuits.  One group of residents  and law firms   has filed a $300 million class action  lawsuit against Sunrise, the City, the Province and the TSSA for  the usual claims: negligence, nuisance, trespass, strict liability and liability under three statutes, including the Environmental Protection Act.  Other class actions are reportedly pending.   Because of the lawsuits, TSSA declined an invitation to attend a public meeting in the area.  

In fact, Canadian regulators generally do a much better job preventing disasters than they do on low-level chronic problems, such as air and water pollution, poor productivity and urban sprawl. However, the public is suspicious of the TSSA because it is a self-regulatory body that the Mike Harris Conservatives spun out of the Ontario government as part of their "Common Sense Revolution". For the previous decades, propane facilities, gas stations, amusement devices, boilers, and many other risky businesses had been directly regulated by government ministries. But to the Harris Tories, this was a waste, and the government branches were replaced by a standalone agency funded by the industries it regulates. As a private agency, the TSSA was supposed to cut the public payroll and the size of the civil service, while providing the same level of protection to the public. Did it?

There is no doubt that the TSSA cut the public payroll: civil service staff that used to be paid out of taxes are now paid out of industry levies. In some ways, the TSSA may be able to operate more cheaply, because it is exempt from government rules about procurement, employment, and access to information. But, until now, there has been no evidence as to whether the TSSA is any more or less effective in protecting public safety than the government departments it replaced. It sometimes happens that self regulatory bodies favour their members over the public interest, but this is by no means automatic.

The TSSA faced much criticism following the fire, because it did not have an accurate list of the propane facilities it regulates, and failed to shut the Sunrise facility down after observing some minor noncompliances. To date, however, we have no evidence that the old government departments would have done a better job. Governments regularly have out of date lists, and would not be allowed by the courts to shut down regulated facilities for minor problems. Nor do we know, at present, that the deficiencies noted by TSSA inspectors had anything to do with the actual blast. On the contrary, the TSSA deserves some credit because they had regularly inspected the Sunrise facility  and did impose a consequence (more frequent inspections) for the deficiencies that it found; lots of facilities regulated by government receive few, if any, inspections, and no consequences for deficiencies.

Did self-regulation have anything to do with the occurrence of this week's explosion? The Walkerton Inquiry proved that some of the privatizations by the Common Sense Revolution were rushed, poorly thought through, and did put the public at risk. The plaintiffs in the proposed class actions will likely try to prove that the creation of the TSSA did the same. But, so far, there's no reason to believe it.

A better question is, where should propane and other risky facilities be located? To fight climate change, which endangers us all, we should encourage vehicles and other energy users to convert from petroleum to propane and natural gas. That means that propane facilities  (like natural gas)  must be in convenient locations, where they will inevitably be close to businesses, homes or both.  

If  propane facilities must be close, can they be safer? Ontario already has stricter rules on setbacks and safety than the national Propane Code, but there is always room for  improvement.