2017 OHSTC 15

Date: 2017-08-18

Case No.: 2016-12

Between:

Trans Mountain Pipeline ULC, Appellant

Indexed as: Trans Mountain Pipeline ULC

Matter: Appeal under subsection 146(1) of the Canada Labour Code of a direction issued by an Official Delegated by the Minister of Labour.

Decision: The direction is rescinded.

Decision rendered by: Mr Michael Wiwchar, Appeals Officer

Language of decision: English

For the appellant: Ms Jennifer Miller Q.C., Bennett Jones LLP

Mr Simon R. Foxcroft, Bennett Jones LLP

Ms Marie Buchinski, Bennett Jones LLP

Citation: 2017 OHSTC 15

Reasons

[1] These reasons concern an appeal brought under subsection 146(1) of the Canada Labour Code (the Code) of a direction issued on March 10, 2016, by Mr Ken Fortin, an Official Delegated by the Minister of Labour (the Ministerial Delegate), and an Engineer, with the National Energy Board (NEB or “the Board”) of Canada, Integrity Management division. On April 6, 2016, Trans Mountain Pipeline ULC (Trans Mountain) filed an appeal with the Occupational Health and Safety Tribunal Canada (the Tribunal).

Background

[2] On May 25, 2015, the Ministerial Delegate visited the work place operated by Trans Mountain, located at 8099 Shellmont Street, Burnaby, BC, the said work place being sometimes known as the Burnaby Terminal. The Burnaby Terminal is located in British Columbia and forms part of the Trans Mountain Pipeline System. This facility is regulated pursuant to the National Energy Board Act (NEBA) and the regulations thereunder as well as the Code and its regulations, in regards to its employees’ work place health and safety.

[3] The Burnaby Terminal has been in operation since the 1950’s and is the terminus of the Trans Mountain Pipeline System. It receives products for temporary storage and distribution to local terminals, a refinery and the Westridge Marine Terminal. The Burnaby Terminal presently consists of two rows of a total of thirteen primary storage tanks that are constructed on terraces notched into the mountainside.

[4] On that day, the Ministerial Delegate was conducting a routine facility integrity inspection in his role as a National Energy Board of Canada Engineer and Lead Auditor. This inspection was performed in the presence of five Trans Mountain representatives. The focus of the inspection, as it relates to the direction at issue, involved the facility integrity program of the storage tanks that contain crude oils ranging from light to heavy on the premises as stated. Specifically, during the inspection, the Ministerial Delegate noticed some secondary containment reconstruction that was underway stemming from an equipment failure at Tank 82 at the Burnaby Terminal on May 6, 2009, that resulted in a release of oil into the tank’s secondary containment area that surrounds the tank.

[5] The secondary containment for storage tanks at issue generally consists of a reinforced, Polyflex lined, earthen berm. Each liner is fused to the base of the primary storage tank and any exposed product line piping within the secondary containment area for each storage tank. Portions of the liners, including a portion of the liner spanning the base of the secondary containments, are covered with a noncombustible material.

[6] Each of the secondary containments of the storage tanks is equipped with a surface drainage system that generally consists of a gravity fed polyvinyl chloride (PVC) piping network that conveys surface water collected from within the secondary containment into a sump. Each sump is equipped with oil detection sensors and automated shutoff valves in order to prevent any oil from exiting the secondary containments. The valves are normally in the closed position. Each sump drains via PVC piping to an oil water separator and then to the tertiary containment located at the southeast corner of the Burnaby Terminal. Additionally, there is an under liner ground water drainage system consisting of a gravity fed PVC piping network, which discharges groundwater directly to the tertiary containment.

[7] Consequently, the Ministerial Delegate indicated that further follow up would be required with respect to the permeability of the containment under the liner to confirm compliance with the requirements of the Canada Occupational Health and Safety Regulations (the COHSR) and the National Fire Code of Canada (NFCC). Information was exchanged in June 2015 between the NEB and Trans Mountain regarding this issue. The position of Trans Mountain on the matter was that the NFCC does not apply to the secondary containment of their storage tanks.

[8] Following the May 2009 incident, the NEB issued orders to investigate the incident and due to the impact on the environment and potential public and worker safety, to restrict the service of Tank 82 and to provide sufficient evidence and analysis to demonstrate the integrity of Tank 82’s secondary containment. Trans Mountain submitted a supplemental investigation report dated March 22, 2010. The NEB requested Trans Mountain to specify the applicable regulations, standards and codes to which the secondary containment for Tank 82 was built and the NFCC was not among the standards and codes specified in the NEB information request. Trans Mountain confirmed the secondary containment of Tank 82 was built in accordance with the standards of the National Energy Board Onshore Pipeline Regulations (OPR), the Canadian Standards Association (CSA) Z183-M86 (which is now CSA Z662 - Oil and Gas Pipeline Systems), and the National Fire Protection Association (NFPA) - 30, Flammable and Combustible Liquids Code (NFPA 30).

[9] On April 20, 2010, Trans Mountain provided the NEB with a copy of the drawings and its technical specifications for the proposed secondary containment reconstruction of Tank 82. They specified the exact type of liner to be used and showed that the liner would only be partially covered by noncombustible material. During a subsequent meeting with Trans Mountain, the NEB took no issue with Trans Mountain’s plans for the secondary containment reconstruction. Then, on May 20, 2010, the NEB issued a letter to Trans Mountain lifting the restriction on the use of Tank 82 subject to completion of the reconstruction.

[10] In another request, on September 23, 2010, the NEB requested more information and Trans Mountain replied that the applicable standard for the secondary containments of the tanks, including Tank 82, was NFPA 30, as required by subsection 4.15.1.4 of CSA Z662. The NEB did not take issue, respond or ask any further questions about the proposed secondary containments by Trans Mountain. Furthermore, on June 3, 2011, the NEB confirmed that it considered, with the information submitted in relation to the incident, that Trans Mountain and its parent company, Kinder Morgan Canada, had fulfilled the requirements of the orders. With this NEB decision, Trans Mountain commenced work to upgrade all of the tanks over a six-year period.

[11] On June 5, 2015, the NEB sent an information request to Trans Mountain asking confirmation that the secondary containment reconstruction met the requirements of clause 4.15.1.4 of the CSA Z662, paragraph 10.49(i) of the COHSR, and article 4.3.7.2 of the NFCC. Trans Mountain responded on June 19, 2015, stating that the secondary containment reconstruction met the design requirements of CSA Z662 and NFPA 30. Trans Mountain also stated that the exposed liners of the secondary containments of the storage tanks did not meet the requirements of article 4.3.7.2 of the NFCC, but that they were not required to meet the NFCC requirements. Trans Mountain submitted that paragraph 10.49(i) of the COHSR requires a “storage tank” to conform to article 4.3.7.2 of the NFCC. As a secondary containment is not a “storage tank”, the requirements of paragraph 10.49(i) of the COHSR do not apply to secondary containments of storage tanks at the Burnaby Terminal. Trans Mountain therefore submitted that is was not required by the terms of the COHSR to meet the requirements of article 4.3.7.2 of the NFCC, with respect to the secondary containments of the storage tanks.

[12] On June 23, 2015, the NEB wrote to Trans Mountain stating their view that article 4.3.7.2 of the NFCC, does apply to NEB regulated facilities that also fall under the Code and its regulations’ jurisdiction.

[13] Trans Mountain responded on July 9, 2015, maintaining its position that the secondary containments of all the tanks at the Burnaby Terminal are compliant with the OPR, which refer to CSA Z662 and which in turn refers to NFPA 30, and confirmed its view that the NFCC does not apply to the secondary containments at the Burnaby Terminal since it did not fall under to scope of the Code. In its response, Trans Mountain acknowledged the purpose of the Code and the COHSR in relation to worker health and safety, but emphasized the existing functionality of the secondary containment structures beneath the liners stating that the secondary containments of storage tanks would continue to perform their intended function of spill containment even if the liner were to be compromised due to fire.

[14] Subsequently, the following direction was issued by the Ministerial Delegate to Trans Mountain on March 10, 2016:

In the matter of the Canada Labour Code Part II - Occupational Health And Safety

Direction to the employer under subsection 145(1)

On 25 May 2015, the undersigned official delegated by the Minister of Labour conducted an inspection in the work place operated by Trans Mountain Pipeline ULC (TPMU), being an employer subject to the Canada Labour Code, Part II, at 8099 Shellmont Street, Burnaby, BC, the said work place being sometimes known as the Burnaby Terminal.

The said delegated official is of the opinion that the following provisions of the Canada Labour Code, Part II, are being contravened:

Paragraph 125.1(b) of the Canada Labour Code, Part II, paragraph 10.49(i) of the Canada Occupational Health and Safety Regulations and clause 4.3.7.2(2)(b) of the 1995 National Fire Code of Canada (NFCC).

At the Burnaby Terminal, there are nine storage tanks, identified as Tank # 71, 72, 73, 81, 82, 84, 87, 88 and 90, where the secondary containments have been reconstructed since 2009, using polyuria [sic] liners to provide a permeability of not more that 1x10-6 cm/s to the liquids contained in the storage tanks. These polyuria [sic] liners are combustible, and are not covered with a noncombustible material to prevent the liners from failing, if exposed to fire as required by clause 4.3.7.2(2)(b) of the NFCC.

You are hereby directed, pursuant to paragraph 145(1)(b) of the Canada Labour Code, Part II, to submit a corrective action plan, no later than 11 April, 2016, to ensure that the contraventions do not continue or reoccur.

Issued at Calgary, Alberta, this 10th day of March 2016.

[signature]
Ken Fortin
Delegated Labour Program Official
ID No.: ON3792

To: Ms. Megan Sartore, Regulatory Compliance Lead
Kinder Morgan Canada Inc.
2700-300 5th Avenue SW,
Calgary AB

[15] Trans Mountain responded that it is not in contravention of the Code, the COHSR or the NFCC, as alleged in the direction and that the Ministerial Delegate erred in issuing the direction to Trans Mountain. An appeal was filed with the Tribunal on April 6, 2016, pursuant to subsection 146(1) of the Code, under the following grounds:

a) Paragraph 125.1(b) of the Code and paragraph 10.49(i) of the COHSR are not being contravened because paragraph 10.49(i) of the COHSR only applies to “storage tanks” and does not apply to secondary containment. The reconstruction of the secondary containment at the Burnaby Terminal is not therefore governed by the requirement of subsection 4.3.7 of the NFCC but by the provisions of the CSA Z183-M86 (now CSA Z662, Oil and Gas Pipeline Systems) pursuant to the NEBA and the OPR.

b) The NEB previously determined that the secondary containment reconstruction of tanks # 71, 72, 73, 81, 82, 84, 87, 88 and 90 met the current code requirements for tank terminal facilities and that the applicable fire code was the NFPA 30. Trans Mountain relied on such determination of the NEB.

c) In the alternative to a), if paragraph 10.49(i) of the COHSR is to be read as requiring the secondary containments of the storage tanks at the Burnaby Terminal to meet the standards in subsection 4.3.7 of the NFCC relating to secondary containment, then the secondary containment of the storage tanks at the Burnaby Terminal comply with paragraph 4.3.7.2(1)(b) of the NFCC thereby rendering paragraph 4.3.7.2(2)(b) inapplicable, or in the further alternative the equivalents provisions, found at subsection 1.1.2 of the NFCC are met, thereby demonstrating compliance with paragraph 4.3.7.2(1)(b) of the NFCC.

[16] On the same filing date for this appeal, that is, April 6, 2016, Trans Mountain made two preliminary requests. First, it applied for a stay of the direction. On May 4, 2016, I heard Trans Mountain’s submissions in support of its application for a stay of the direction during a teleconference. On May 17, 2016, following the receipt of additional written submissions on May 8, 2016, I granted the application for a stay of the direction and indicated that the reasons in support of this order would be included in my final decision. These reasons are set out at paragraphs 21-37 below.

[17] Second, Trans Mountain requested that I exercise my power, under section 146.2 of the Code, to order that the present appeal (as well as the application for a stay) be heard in camera and that all documents filed be sealed and not disclosed publicly or, in the alternative, that the proceedings be subject to a publication ban, until I render my final decision on the merits in this matter.

[18] On May 2, 2016, I held a teleconference during which I advised the appellant that after having heard oral submissions made on its behalf and carefully reviewed the follow-up written materials, I had decided to deny both requests, since the applicant’s concerns, that is, an alleged risk of reputational harm or undue public alarm, are private interests and do not outweigh the public interest in an open process. I also advised that full reasons for this interlocutory decision would be included in my final decision. These reasons are set out at paragraphs 38-48 below.

[19] The appeal was heard on August 30 and 31, 2016, in Calgary, Alberta, and at its conclusion I requested that Trans Mountain address the four following specific questions in its written submissions:

a) Article 4.3.1.1 of the NFCC speaks generally to “storage tanks”. Does this compromise the position of Trans Mountain that paragraph 10.49(i) of the COHSR applies only to “storage tanks” and does not apply to “secondary containment”?

b) In order to assist with my consideration of the “Equivalents” provisions of the NFCC, review the relevant aspects of the CSA Z662 and NFPA 30 applicable to the secondary containment at the Burnaby Terminal.

c) In deciding whether to issue the direction, should the Ministerial Delegate have considered other parts of the NFCC, including Part 1, and in particular, article 1.1.2.3 speaking to allowed alternatives or was he only obliged to consider section 4.3?

d) If it is the position of Trans Mountain that the Ministerial Delegate should have considered parts of the NFCC other than Part 4, how does Trans Mountain reconcile such position with the fact that paragraph 10.49(i) of COHSR speaks only to the application of certain provisions of Part 4 of the NFCC?

Issues

[20] I have to determine the following issue in this appeal: whether the direction issued by the Ministerial Delegate under subsection 145(1) is well founded? Before turning to the merits of the appeal, I will provide the reasons in support of my decisions on the two preliminary issues raised by Trans Mountain, namely, its application for a stay of the direction and its request for certain confidentiality orders.

Reasons for Granting the Application for a Stay of the Direction

[21] The authority of an appeals officer to grant a stay is derived from subsection 146(2) of the Code, which reads as follows:

Unless otherwise ordered by an appeals officer on application by the employer, employee or trade union, an appeal of a direction does not operate as a stay of the direction.

[22] In exercising their discretion under subsection 146(2), appeals officers apply the following three-part test.

1) The applicant must satisfy the appeals officer that there is a serious question to be tried as opposed to a frivolous or vexatious claim.

2) The applicant must demonstrate that he, she or it would suffer significant harm if the direction is not stayed.

3) The applicant must demonstrate that should a stay be granted, measures will be put in place to protect the health and safety of employees or any person granted access to the work place.

Is the question to be tried serious as opposed to frivolous or vexatious?

[23] The appellant (and applicant for the purpose of the stay application) submits that the questions to be tried involve the correct interpretation and application of paragraph 125.1(b) of the Code and paragraph 10.49(i) of the COHSR and, more generally, the scope of an employer’s obligations under the COHSR. It argues that these determinations will have significant implications and that the correct interpretation and application of the Code and the COHSR have previously been found to constitute significant issues to be tried that are not frivolous or vexatious.

[24] I agree with the applicant’s characterization of the issues to be addressed in this appeal and find that these are definitely serious questions. I therefore conclude that the applicant has satisfied the first element of the test.

Would the applicant suffer significant harm if the direction is not stayed?

[25] The applicant notes that the direction requires Trans Mountain to submit a corrective action plan no later than April 11, 2016, to ensure that the alleged contraventions do not continue or reoccur. It submits that the short time frame set for compliance with the direction is not a sufficient time period within which to prepare the corrective action plan. In order to comply with the direction and file the corrective action plan, Trans Mountain requires substantial time and resources to undertake a comprehensive review of possible solutions that could address the requirement of the direction. Such a review will require various field tests, computer modeling and engineering assessments involving multiple third parties in order to determine an engineering and design solution to address the requirements of the direction, while also ensuring compliance with other applicable Code requirements. Given the unique mountainous topography, underlying soil conditions and existing civil infrastructure with respect to the Burnaby Terminal, additional engineering hazard assessments and controls must also be developed in order to develop timelines for implementation of a proposed solution and to ensure that any proposed changes to the current design and construction of the secondary containments at the Burnaby Terminal are implemented in a manner that will ensure the safety of the environment, the public and the workforce. According to the applicant, a response without adequate time may result in unqualified decisions, which could in turn introduce risks or solutions that produce insufficient results.

[26] The applicant estimates that undertaking the comprehensive review described above will take approximately seven (7) months and expenditures of approximately $160,000, with two Trans Mountain staff required to support and manage the review and development of the corrective action plan. Trans Mountain has expended approximately $22 million to date to reconstruct the secondary containments at the Burnaby Terminal pursuant to the approval of the NEB .The feasibility of redesigning and reconstructing the secondary containments would need to be assessed, and even if determined to be feasible, the redesign and reconstruction would be difficult, and would require the expenditure of significant additional costs over several years, dependent on the final design. The applicant emphasized that such a reconstruction may render work already undertaken, and approved by the NEB, worthless.

[27] In this respect, the applicant submits that if the stay is not granted, and in the event that its appeal was to be granted by the appeals officer, it will have been required to incur significant costs and impacts to its operations, as detailed above, in order to prepare the required assessments, all of which would be irrelevant to the continued operations of the Burnaby Terminal. In addition, the applicant maintains that the reconstruction of the facilities at the Burnaby Terminal, including the design and configuration of the secondary containments, was conducted pursuant to an approval issued by the NEB. As such, requiring immediate compliance with the direction would be inconsistent with the approval already issued by the Board, which is the regulatory body authorized to review the design and construction of such facilities pursuant to its enabling statute and regulations thereunder. For example, the applicant notes that the OPR administered by the NEB already require that pipeline facilities be constructed in a manner that ensures “the safety and security of the public and the company’s employees” (SOR/99-294, section 6).

[28] Therefore, in the applicant’s view, if a stay is not granted, it will suffer significant harm in the form of the confusion that the direction creates in terms of the applicable regulatory framework for terminal facilities and the duplication of required measures to ensure the health and safety of its employees, especially in circumstances where it has already incurred significant costs to improve and upgrade the secondary containments at the Burnaby Terminal with the full knowledge and approval of the NEB. In this context, the applicant submits that the need for and the preparation of any corrective action plan which will force it to incur significant additional and, potentially, unnecessary costs should be determined only after the parties have had an opportunity to make full submissions and a decision is rendered on the merits.

[29] In my opinion, the arguments put forward by the applicant convincingly demonstrate that Trans Mountain would suffer significant harm if the stay were not granted. Apart from the fact that it appears to be impossible to comply with the direction in the short term, due to the major engineering work that would be required, the cost of such an undertaking would be considerable.

[30] While cost alone would not justify the stay of a direction, as appeals officers have ruled repeatedly when dealing with applications for a stay, the whole set of factors invoked by the applicant to substantiate the harm that it would suffer if a stay is not granted, i.e. the major expenditures in time and resources to be incurred in developing a corrective action plan, the complexity and scope of the work involved in view of the nature and properties of the Burnaby Terminal, the fact that third parties would have to be involved, the legal complexities relating to the fact that Trans Mountain has, to date, conducted its operations and begun to upgrade the secondary containment facilities at the terminal pursuant to designs and plans approved by the NEB, and the confusion as to the applicable standards for secondary containments that the direction appears to create persuade me that the harm that Trans Mountain would suffer if the application for a stay were rejected would be very significant.

[31] Undeniably, it would be highly prejudicial and inequitable to immediately require the applicant to comply with different standards than the ones it has legitimate reasons to believe are applicable, pending a determination on the merits of the case. In particular, significant weight must be given to the fact that the applicant relied on previous determinations of the NEB in developing and initiating a secondary containment reconstruction project that is still on-going and has already required the investment of important resources. In my view, in these circumstances, the issue of the correctness of the direction should be resolved before the applicant is forced to alter its current reconstruction operations in order to comply with it.

[32] In summary, I find that the numerous obstacles to the timely implementation of the direction are serious, are being invoked in good faith, and go beyond mere inconvenience for Trans Mountain; they are also likely to cause it substantial harm if the direction were not stayed, in the event that it ended up being rescinded once the inquiry into the merits of the case is completed.

[33] Accordingly, I conclude that the second criterion for obtaining a stay of the direction is met.

What measures would be put in place to protect the health and safety of employees or any person granted access to the work place should the stay be granted?

[34] The applicant submits that it currently has in place numerous measures to protect the health and safety of employees or any person granted access to the work place. In particular, the NEB has already determined that the construction of the secondary containments at the Burnaby Terminal was conducted pursuant to an approval issued by the Board and in a manner that complies with the OPR which, as already mentioned, specifically require that a company regulated by the NEB design, construct and operate its facilities in a manner that ensures the safety and security of the public and the company’s employees.

[35] Moreover, the applicant submits that prior to the issuance of the direction, it already implemented significant measures to protect the health and safety of employees or any person granted access to the Burnaby Terminal. These include the following:

  • Access controls and personal protective equipment: Access to the secondary containments is restricted and any personnel accessing a tank bay is required to wear appropriate personal protective equipment including fire retardant clothing and combustible gas monitoring equipment.
  • Existing state-of-the-art fire suppression system: The applicant referred to specific details of the extensive fire suppression system in place at the Burnaby Terminal, including (i) comprehensive written fire safety instructions and pre-plans in place at the Terminal that identify available firefighting and suppression resources, the location of such resources at the facility, and how they can be employed; and (ii) a recently upgraded fire extinguishing system featuring a 3000 gallon per minute (gpm) diesel fire pump, a foam proportioning system, and a trailer mounted 3000 gpm foam cannon. Upgrades were also made to the hydrant system so that it can now deploy foam concentrate to all hydrants in the terminal from the fire pump. Trans Mountain stores approximately 10,000 gallons of foam concentrate at the Terminal, which can produce approximately 333,000 gallons of foam solution.
  • Measures to address the health risks should petroleum product leak within a secondary containment: The applicant submits that it is well-equipped to alleviate the two primary health risks posed by an eventual incident of this nature, namely the inhalation of potentially toxic vapours by responders and the ignition of the released products or product vapours. In this regard, the quick application of a vapour suppression foam product would serve to suppress the product vapours and de-energize any potential ignition source. In addition, all responders are required to wear a self-contained breathing apparatus (SCBA) at all times to preclude inhalation of potentially toxic vapours. In the unlikely event that foamed product contained in a secondary containment would ignite, the primary strategy would be to protect the integrity of the exposed storage tank shell above the fire (to keep the tank intact, so it continues to function as primary containment for the remaining product) with the use of cooling foam, and to extinguish the fire within the secondary containment using a foam cannon as well as wheeled dry chemical units, if necessary.
  • Integrity of the secondary containment structures: The applicant submits that a fire in the secondary containment resulting in combustion of the exposed portions of the liner would not cause the secondary containment structures to fail. The berms of the secondary containment structure are comprised of compacted layered lifts of dense soil and earthen materials, which satisfy stringent construction and geotechnical design requirements. Considering the width of the berms, the nature of the material they are comprised of and their particular general geometric and civil design, it is submitted that it is extremely unlikely that any amount of hydrocarbon vapour would penetrate through the berm wall. Turning to potential groundwater contamination, the applicant submits that should product permeate into the earthen berm, the groundwater drainage from the secondary containment is directed through an oil/water separator and along a controlled drainage path to a tertiary containment levee at the southwest comer of the Terminal.

[36] After having carefully examined this question, I am satisfied that the third criterion is met. I consider that the above noted measures will suffice to protect the employees’ health and safety (and that of any person granted access to the workplace) pending resolution of this appeal. Certainly, I note that the direction calls for the preparation of a corrective action plan, not the implementation of any immediate action relating to worker safety. In addition, the Ministerial Delegate appeared to agree with the granting of an extension for compliance with the direction up to at least November 2016, without requiring or suggesting that any different or modified safety procedures be implemented at the Burnaby Terminal. In my opinion, in such a unique situation and the very specific circumstances of this case, it is not necessary that I require that additional measures be put in place to protect the health and safety of employees or any person granted access to the work place.

[37] For the preceding reasons, on May 17, 2016, I granted the application for a stay of the direction until such time as a final decision is rendered.

Request for In Camera Hearing, Sealing Order or Publication Ban

[38] On April 26th, 2016, I held a teleconference to address this preliminary issue. I advised the appellant that appeal proceedings under section 146 of the Code are quasi-judicial proceedings and are presumptively open to the public. There is therefore an onus on the party seeking a publication ban or a confidentiality order, of establishing that the requested relief is necessary.

[30] With these considerations in mind, I asked the appellant to provide submissions for its request which counsel for the appellant provided in writing on April 27th, 2016.

[40] The appellant relies on what is commonly referred to as the two-part Dagenais/Mentuck test which it describes as follows:

a) First, is the order necessary to prevent a serious risk to an important interest, because reasonably alternative measures will not prevent the risk?

b) Second, do the beneficial effects of the order, including the effects on the right of litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which in this context includes the public interest in open and accessible court proceedings? (Dagenais v Canadian Broadcasting Corporation, [1994] 3 SCR 835 and R v Mentuck, [2001] 3 SCR 442.)

[41] The appellant submits that this test is satisfied for reasons which may be summarized as follows:

  • given the nature of the direction issued and the grounds for appeal, there is a significant, and very real potential for Trans Mountain to suffer material reputational damage, and the potential for undue public alarm, should the details of the direction, of the pending stay, and of the pending appeal be publically disseminated before the appeals officer has had the opportunity to carefully consider the matter and render his decision;
  • there is public anger towards the appellant’s operations in the proximate geographic area, which is intensified by the fact that it is currently in the midst of an application before the National Energy Board for its pipeline expansion project;
  • there are no alternative measures available as any publication or news coverage, once released, cannot be effectively retracted or redacted, and could impair the integrity of the appeal process. This is particularly relevant to these proceedings given the amount of internet publication and social media activity; and
  • the beneficial effects of an order would outweigh the deleterious effects, since the appellant seeks only temporary privacy until such time as the appeal has been heard and a full decision has been rendered.

[42] As indicated by appeals officer Pierre Hamel in Maritime Employers Association v. Longshoremen’s Union, CUPE, Local 375, 2016 OHSTC 14, proceedings before an appeals officer of the Tribunal are in the public domain, as is the Tribunal record. Nonetheless, the appeals officer can issue a sealing or confidentiality order and, in so doing, make an exception to this principle in cases where it is deemed appropriate that certain information not be disclosed:

[6] … The test applicable in this matter is the one established by the Supreme Court and known as the Dagenais/Mentuck test. The applicable principles are set out notably in Toronto Star Newspapers Ltd. v. Ontario, 2005 SCC 41 (CanLII):

[26] The Dagenais test was reaffirmed but somewhat reformulated in Mentuck, where the Crown sought a ban on publication of the names and identities of undercover officers and on the investigative techniques they had used. The Court held in that case that discretionary action to limit freedom of expression in relation to judicial proceedings encompasses a broad variety of interests and that a publication ban should only be ordered when:

(a) such an order is necessary in order to prevent a serious risk to the proper administration of justice because reasonably alternative measures will not prevent the risk; and

(b) the salutary effects of the publication ban outweigh the deleterious effects on the rights and interests of the parties and the public, including the effects on the right to free expression, the right of the accused to a fair and public trial, and the efficacy of the administration of justice. [para. 32]

[7] This principle was reaffirmed more recently in Canadian Broadcasting Corp. v. The Queen, 2011 SCC 3 (CanLII), and applies to any restriction that could be imposed by a tribunal to the open court principle applying to judicial or quasi-judicial proceedings, including confidentiality orders regarding exhibits tendered in evidence. Confidentiality orders are therefore not automatic, even when the parties agree to them, and reasons must be given with reference to the above test.

[8] In adapting this test to administrative appeals under the Code, I must determine whether the appropriateness of treating certain information as confidential outweighs the open court principle and the rule regarding the public nature of the Tribunal record.

(underlining added)

[43] In that case, Appeals Officer Hamel ordered that certain exhibits be sealed as confidential as they contained sensitive personal information about individuals who did not attend the hearing, did not take part in the appeal process and they were unable to make submissions on these allegations.

[44] In the present case, however, the appellant’s submissions can be said to essentially relate to reputational damage and private commercial interest. In Sierra Club of Canada v. Canada (Minister of Finance), [2002] 2 S.C.R. 522, the Supreme Court of Canada examined the concept of “important commercial interest” in the context of a request for a confidentiality order under sections 151 of the Federal Court Rules and ruled that the interest to be protected by a confidentiality order must be one in which the public in general has an interest or stake. This interest cannot merely be specific to the party requesting the order:

[55] In addition, the phrase “important commercial interest” is in need of some clarification. In order to qualify as an “important commercial interest”, the interest in question cannot merely be specific to the party requesting the order; the interest must be one which can be expressed in terms of a public interest in confidentiality. For example, a private company could not argue simply that the existence of a particular contract should not be made public because to do so would cause the company to lose business, thus harming its commercial interests. However, if, as in this case, exposure of information would cause a breach of a confidentiality agreement, then the commercial interest affected can be characterized more broadly as the general commercial interest of preserving confidential information. Simply put, if there is no general principle at stake, there can be no “important commercial interest” for the purposes of this test. Or, in the words of Binnie J. in F.N. (Re), [2000] 1 S.C.R. 880, 2000 SCC 35 (CanLII), at para. 10, the open court rule onlappeals officery yields “where the public interest in confidentiality outweighs the public interest in openness” (emphasis added).

(underlining added)

[45] In Foster-Jacques v. Jacques, 2011 NSSC 290, the Supreme Court of Nova Scotia ruled that personal embarrassment is not, in itself, a reason to issue a sealing order or a publication ban:

[15] Personal embarrassment or a general expectation that personal, health or financial privacy will be maintained when accessing the courts is not, in itself, a reason to issue a sealing order or publication ban. (John Doe v. Smith 2001 ABQB 277 (CanLII))

[46] Similarly, in C.W. v. L.G.M., 2004 BCSC 1499, the Supreme Court of British Columbia found that the mere private to avoid embarrassment is not sufficient:

[25] I think the following principles can be distilled from the cases I have referred to:

[…]

4. The mere private interest of a litigant to avoid embarrassment is not sufficient to displace the public interest in an open court process.

[47] Applying the decisions above to the present case, I find that the appellant’s concerns, that is, an alleged risk of reputational damage or undue public alarm, are private interests that do not outweigh the public interest in an open process. Moreover, I am not convinced that the potential discussion of the direction and of this appeal process in the news media or, for that matter, the knowledge of the situation that gave rise to this appeal by the general public pose a serious threat to the proper administration of justice.

[48] The appellant has thus failed to discharge its onus to demonstrate that there are unique circumstances that would warrant a shift from the basic presumption that the proceedings should be open to the public. I am therefore denying both requests in this regard.

Merits of the appeal

Testimony of the Ministerial Delegate

[49] I called the Ministerial Delegate as a witness. Below is a summary of his testimony.

Mr Fortin has his Masters in Engineering and been employed with the NEB as an engineer, lead auditor and safety program manager for the past 10 years. His role is to conduct audits and reviews under the NEBA and regulations. He performed an integrity inspection at the work place in question and he wrote a report.

The Labour Program, Employment and Social Development Canada, trained him in regards to the enforcement of the Code and its regulations and he received his designation as a delegated official two years ago. His only occupational health and safety education and training were obtained through the Labour Program basic training that is provided to all their health and safety officers. In regards to fire protection and prevention the only education and training that he received was from a company in the field of foam fire protection and extinguishing systems and he has no education or training in the area of loss control.

Mr Fortin does not follow any particular scheme when conducting his integrity inspection as it relates to his NEB duties and his Code functions. He performs his walk about and notes health and safety contraventions when he observes them. I inquired about how he enforces the NFCC and its provisions.

In the course of his inspection he does not inform or involve the work place health and safety committee as it relates to that part of his integrity inspections. His focus during this inspection in this matter focused on tanks and the facilities outside the buildings occupied by employees and personnel. He did not review any of tanks plans and specification prior to or during his inspection.

I asked him to describe the circumstances and the nature of the hazard to the requirement stated in his direction that would pose a health and safety hazard to employees. He testified that the hazard is that oil product could catch fire in the event of a tank leak and oil product spilling into the secondary containment area. This could then expose workers to toxic vapours from the toluene, xylene, hydrogen sulphide all flammable products of the oil product that was stored in the tank. However, he did not know what products were in the storage tank at the time of his inspection. He did not inspect or review the fire protection and preventions procedure and equipment related to the purported hazard. He stated that he was not concerned that the combustible liner would propagate flame or create an exposure hazard to other tanks. His opinion was that the secondary containment was adequate to contain the fuel that is leaked.

I asked the Ministerial Delegate if he made any inquires with the employer concerning the identification and assessment of the hazard he described pursuant to Part XIX - Hazard Prevention Program of the COHSR, and he did not. He further qualified that the possible hazard to employees created by oil product catching on fire once it has leaked into the secondary containment area would occur to those employees that were responding to extinguish and control the fire.

I also asked the Ministerial Delegate other questions to clarify his findings as described in his report and supporting documents and with respect to his interpretation of the NFCC as is pertained to his intervention.

I asked the Ministerial Delegate if he was familiar with the “Equivalents” provisions in subsection 1.1.2 of the NFCC and he answered in the negative. I made him read the subsection then asked him if would consider himself to be “the authority having jurisdiction” as it relates to accepting an alternative to the requirements of sentence A1.1.2.3(1) of the NFCC. The Ministerial Delegate answered that based on his reading of the subsection he could be considered “the authority having jurisdiction”. I asked him if the fire protection and life safety requirements in the CSA Z662, NFPA 30 and ASTM D5084 codes and standards to which the secondary containments were designed and constructed could be considered equivalents to the requirements of paragraph 4.3.7.2(2)(b); his response was that in his opinion he could consider them.

In cross-examination the Ministerial Delegate was asked if was a Canadian Registered Safety Professional (CRSP) and his answer was negative and he does not have any legal training in statutory interpretation. He was asked if he had conducted a previous inspection at this location and his answer was affirmative. He acknowledged that the term used in his direction “polyuria” was an incorrect description of the liners and the correct term is “polyurea”.

Testimony of the expert witness

[50] I accepted Mr Robert Fewchuk, P. Eng., Chemical Engineer and Regional Manager, GHD Limited (GHD), as an expert witness. I qualified Mr Fewchuk to provide opinion evidence in the field of engineering related to emergency spill response, emergency spill management, emergency spill planning and emergency spill preparedness, and with respect to the compliance of the secondary containment structures with the requirements of the NFCC. This expert witness gave evidence in the area of testing methods that are used by his company, GHD, to conduct seepage modeling, which allowed, among other things, Mr Fewchuk and his company to evaluate the permeability of the secondary containments of the storage tanks to the fluids containment in the storage tanks.

[51] The results of the testing conducted and the results that it reached with respect to tanks 83 and 87 were presented to me in a report titled “Seepage Assessment - Secondary Containment - Burnaby Terminal” (the Report) dated August 15, 2016. At the conclusion of the hearing, I granted the appellant an extension for the subsequent filing of an addendum to the Report by Mr Fewchuk and GHD titled “Supplemental Seepage Assessment - Secondary Containment - Burnaby Terminal” dated September 30, 2016. This addendum was filed with the Tribunal on the same date. This part of the Report provides test results and Mr Fewchuk’s and GHD’s conclusions for tanks 71, 72, 73, 74, 81, 82, 84, 85, 86, 88 and 90.

Appellant’s submissions

[52] In presenting its case, the appellant tendered evidence from two witnesses: Mr Huddleston, Senior Director Technical Services and Engineering, Kinder Morgan Canada Inc., and Mr Robert Fewchuk, an engineer with GHD, a third party professional services company. As already mentioned, I qualified Mr Fewchuk as an expert witness and his testimony is covered above.

[53] At the onset of his testimony, Mr Huddleston gave an account of the historical infrastructure upgrades made to the Burnaby Terminal which included the secondary containment structures of the tanks stipulated in the Ministerial Delegate’s direction.

[54] Mr Huddleston testified that he attended meetings with NEB to review technical specifications and drawings in detail relating to the secondary containment reconstruction. During those meetings, the NEB took no issue with Trans Mountain’s plans. Trans Mountain completed the project in compliance with the detailed drawings and technical specifications previously submitted to the NEB on April 20, 2010, in reliance on the plans detailed in this letter. He testified that the NEB did not raise any concerns regarding any of the bi-annual tracking tables submitted to it, or with respect to the upgrade work described therein and that, to date, Trans Mountain has completed upgrades to the secondary containments of nine of the tanks at an estimated cost of $22 million. If the direction is upheld an additional $10 - 20 million would be required to be spent by Trans Mountain to comply with the requirements of paragraph 4.7.3.2.(2)(b) of the NFCC, a conservative estimate as stated by Mr Huddleston in his testimony.

[55] Mr Huddleston testified that the exposed liners of the secondary containments of the storage tank facilities would have been observed during a 2013 physical integrity inspection of the Burnaby Terminal. The Ministerial Delegate and Mr Tyler Caines, both representatives of the NEB, attended that inspection. No concerns were raised during, or after, the inspection regarding the exposed portions of the liners or regarding the type of liner. Mr Huddleston testified that during this inspection, the Ministerial Delegate would have physically walked on and viewed the uncovered portions of the liner on the secondary containment Tank 82.

[56] It is Mr Huddleston’s evidence that, prior to May 2015, the NEB expressed no concerns that would have suggested that the secondary containment reconstruction was required to meet the requirements of the NFCC, expressed no concerns with respect to the type of liners installed on the secondary containment of storage tanks, and expressed no concerns with respect to the fact that the liners were only partially covered with noncombustible material.

[57] Mr Huddleston also testified that a liner might be used on secondary containment for reasons other than to meet the permeability requirements of the NFCC; other reasons include vegetation management and environmental protection of the underlying secondary containment structure.

[58] The appellant submits that the fundamental issue in this appeal is whether article 4.3.7.2 of the NFCC applies to the secondary containment of the storage tanks. The NEB’s prior determinations regarding codes and regulations applicable to this issue together with the legislative scheme and a reading of the legislative text in ordinary meaning (harmoniously with the scheme and objects of the Act and the intention of the legislature) lead to the conclusion that article 4.3.7.2 of the NFCC does not apply to the secondary containments of storage tanks. That is the threshold that I should determine, and I should answer in the negative and rescind the direction.

[59] In the alternative, it is submitted that should I find that article 4.3.7.2 of the NFCC applies in this matter, independent expert evidence confirmed that each of the secondary containments of the storage tanks meets the requirements of article 4.3.7.2 of the NFCC and therefore, I should rescind the direction.

[60] In its submissions the appellant addressed the issues first by pointing to the threshold question of whether article 4.3.7.2 of the NFCC, applies to the secondary containments of storage tanks.

[61] In the event I were to find that article 4.3.7.2 of the NFCC applies to the secondary containments of the storage tanks, then in the alternative, the appellant provides submissions regarding the requirements of article 4.3.7.2 of the NFCC, and the evidence submitted by Trans Mountain that confirms compliance with it.

[62] It is the appellant’s position that article 4.3.7.2 of the NFCC has no application to the secondary containments of the tanks at Burnaby Terminal. That position is supported by the ordinary meaning of the applicable legislation and codes, and second by the NEB’s prior confirmation in its decision letter that construction to the standards set out in the OPR, CSA Z662 and NFPA 30 met code requirements. The appellant provided their detailed analysis and statutory interpretation of the Code, the Regulations and the NFCC as it pertains to storage tanks.

[63] In response to my question a) in paragraph 19, the appellant submits that article 4.3.7.2 of the NFCC which states that section 4.3 applies to storage tanks for flammable liquids and combustible liquids does not compromise the position of the appellant. The words of paragraph 10.49(i) of the COHSR are clear that paragraph 10.49(i) applies only to storage tanks and only requires storage tanks to conform to section 4.3 of the NFCC. In this regard, the wording of paragraph 10.49(i) of the COHSR is clear and unambiguous. It requires that storage tanks conform to section 4.3 of the NFCC. “Secondary containments” are not specified in paragraph 10.49(i) of the COHSR, and there is therefore no obligation for secondary containments to also conform to section 4.3 of the NFCC pursuant to paragraph 10.49(i) of the COHSR.

[64] In response to my question b) in paragraph 19, that is to review the relevant aspects of the CSA Z662 and NFPA 30 applicable to the secondary containment at the Burnaby Terminal, in order to assist me with my consideration of the “Equivalents” provisions of the NFCC, the appellant provided a comprehensive evaluation and review of those provisions in relation to the matter at bar.

[65] The appellant further submits that it provided a significant amount of information to the NEB regarding the construction of the secondary containment for Tank 82. In particular, it clearly specified in several communications with the NEB that the secondary containment of Tank 82 is constructed in conformity to the standards prescribed by the OPR, CSA Z662 and NFPA 30. As well, it provided the NEB bid drawings and detailed technical specifications which were prepared to meet the requirements of the current code requirements, namely the OPR, CSA Z662 and NFPA 30. In addition to specifying the standards according to which the secondary containment reconstruction was being constructed, the technical specifications detailed the specific type of liner (Earthwise 232 minimum thickness 50 mil) that would be used and clearly showed that the liner would only be partially covered by noncombustible material (gravel); such liner would not be considered noncombustible.

[66] From Mr Huddleston’s testimony, the appellant submits that Trans Mountain considered the NEB decision letter to be an approval of the secondary containment reconstruction for Tank 82, and an approval for Trans Mountain to proceed with the same upgrades to the secondary containments of the remaining tanks. The evidence demonstrates that the decision letter constitutes a decision of the NEB. The letter meets all of the usual indicia of a “decision” by an administrative body.

[67] If the direction is upheld, it is submitted that the effect of the direction and the opinion of the Ministerial Delegate therein regarding the need for the secondary containments of the storage tanks to comply with sentence 4.3.7.2(2) of the NFCC would be contrary to the determination made by the NEB in its decision letter.

[68] The appellant submits that there was no evidence presented by the Ministerial Delegate to suggest that the NEB was not involved in the issuance of the direction. It is proposed that to the contrary, the evidence is that the Ministerial Delegate is an employee of the NEB and is also a Health and Safety Officer who has delegated authority to enforce Part II of the Code and the COHSR. Further evidence of the NEB involvement includes the fact that the inspection reports submitted by the Ministerial Delegate to me as part of his intervention report refer specifically to not only the Code, but also the NEBA. The inspection reports are issued on the NEB letterhead. Furthermore, the evidence confirms that the Ministerial Delegate and other NEB staff communicated directly with Trans Mountain by email on the issue of applicability of the NFCC.

[69] It is submitted by the appellant that if the direction were not rescinded, it would effectively reverse the findings of the NEB made in their decision letter. As such, seeking to retroactively impose standards of the NFCC in light of the findings already made by the NEB in their decision letter would amount to a reversal of the NEB’s determination that Trans Mountain’s design and construction of the secondary containment reconstruction was in accordance with the standards of the NEBA, OPR, CSA Z662 and NFPA 30 met the current code requirements.

[70] Likewise, the appellant submits that while the provisions of the NEBA grant the NEB the authority to reconsider decisions, there is no suggestion that the NEB sought to exercise that authority in the context of the direction. No notice was provided to Trans Mountain that the NEB was proposing to exercise its review powers, which should be used sparingly and with caution. In the circumstances, the well-established principles of administrative law do not favour any such reconsideration. In Trans Mountain’s case, there is no basis for reconsideration of the decision letter; there is no obvious error or newly adduced evidence. In this case, the need for certainty and finality regarding applicable codes are paramount, particularly given that no valid basis for review has been alleged. An administrative body should not reconsider a prior decision where there has been a financial or contractual reliance made on the prior decision. Mr Huddleston testified that a conservative estimated cost to Trans Mountain to completely cover the lined secondary containments of the storage tanks with noncombustible material to comply with the requirements of paragraph 4.3.7.2(2)(b) of the NFCC if the direction was to be upheld would be an additional $10-20 million (Cdn) which is significantly prejudicial to Trans Mountain. The appellant provided case law in support of its arguments.

[71] Secondly, the appellant argues that, in any event, the secondary containments comply with the NFCC.

[72] It is submitted that if I find that paragraph 10.49(i) of the COHSR requires compliance with standards relating to secondary containment under article 4.3.7.2 of the NFCC, then the evidence demonstrates that Trans Mountain is in compliance.

[73] The direction alleges that Trans Mountain is in contravention of paragraph 4.3.7.2(2)(b) of the NFCC, that states:

Where a membrane provides the level of impermeability required in Sentence (1), it shall…when the membrane is combustible, be covered with a noncombustible material of such nature and thickness that the membrane will not fail when the secondary containment is exposed to fire.

[74] The appellant submits that this provision means that if the liner installed at a secondary containment is needed to provide a level of impermeability required in paragraph 4.3.7.2(1)(b), then it needs to comply with sentence 4.3.7.2(2). In other words, if a liner is used in a secondary containment and it is needed in order to attain the impermeability requirements set out in paragraph 4.3.7.2(1)(b), then the liner needs to be “covered with a noncombustible material of such nature and thickness that the membrane will not fail when the secondary containment is exposed to fire.” The mere presence of a membrane or liner on the walls and base of a secondary containment will not trigger the application of sentence 4.3.7.2(2). Sentence 4.3.7.2(2) is only triggered if the liner is required to provide a permeability of not more than 10-6 cm/s. The corollary is that if the liner is not required in order to provide this specific level of impermeability, the NFCC does not require that the liner comply with sentence 4.3.7.2(2). Two arguments are made in this regard: First, that the secondary containments of the storage tanks referenced in the direction comply with the requirements of article 4.3.7.2 of the NFCC, and second, that in the alternative, the secondary containments of the storage tanks satisfy the “Equivalents” provision in the NFCC and therefore comply with the NFCC.

[75] It is submitted by the appellant that the evidence demonstrated that the liners on the secondary containments of the storage tanks are not required in order to meet the impermeability requirements stipulated in paragraph 4.3.7.2(1)(b) of the NFCC. This is because the permeability of the secondary containments without the liner meets these impermeability requirements. Trans Mountain retained the services of GHD to conduct hydraulic field-testing and sampling at the Burnaby Terminal. Mr Fewchuk, the expert witness, gave extensive evidence explaining the testing methods used by GHD to conduct seepage modeling, which amongst other things allowed GHD to evaluate the permeability of the secondary containments of the storage tanks to the fluids contained in the storage tanks. The results of GHD’ s testing and the conclusions that it reached with respect to all the tanks at the Burnaby Terminal were presented in two reports stated in the above paragraph 51.

[76] The appellant points to one of the conclusions reached in the GHD reports that the secondary containment of each of the tanks complies with paragraphs 4.3.7.2(1)(a) and (b) of the NFCC. Sentence 4.3.7.2.(1) of the NFCC states the following:

4.3.7.2

1) Except as provided in Sentence (2), the base and walls of a secondary containment shall be made of noncombustible materials, and shall be designed, constructed and maintained to

a) withstand full hydrostatic head, and

b) provide a permeability of not more than 10-6 cm/s to the flammable liquids or combustible liquids contained in the storage tanks.

[77] In that regard, the appellant submits that in order to meet the requirements of sentence 4.3.7.2(1) of the NFCC, the base and walls of a secondary containment must be made of noncombustible material; they must be designed, constructed and maintained to withstand a full hydrostatic head; and they must be designed, constructed and maintained to provide permeability of not more than 10-6 cm/s to the liquids contained in the storage tanks. The GHD reports confirm that each of the secondary containments for the storage tanks meets each of these three requirements and they also conclude that the utility corridors in the secondary containment berms for each of the storage tanks do not represent a preferential flow path through the containment berms.

[78] The appellant submits that as the requirements of paragraph 4.3.7.2(1)(b) of the NFCC are satisfied without the presence of a liner, paragraph 4.3.7.2(2)(b) of the NFCC is not applicable. Therefore, Trans Mountain requests that on this basis, I rescind the direction.

[79] In the same vein of Trans Mountain’s argument that the secondary containments comply with the NFCC, the appellant submits that NFCC “Equivalents” provision is met.

[80] In the alternative, it is submitted, the evidence demonstrates that even if article 4.3.7.2 of the NFCC applies in the circumstances, the secondary containments of the storage tanks satisfy the requirements of the NFCC pursuant to the provisions relating to alternative solution/Equivalents, thereby demonstrating compliance with the NFCC.

[81] The relevant provision of the NFCC for consideration is article 1.1.2.3, which provides as follows:

1.1.2.3 Alternatives

1) Alternatives to requirements in this Code are permitted if the authority having jurisdiction is satisfied that these alternatives provide a level of fire and life safety that is equivalent to the level of performance required by this Code in conformance with Article 1.1.2.1. (See Appendix A.)

[82] The term “Authority having jurisdiction” is defined for the purpose of the NFCC in section 1.2.1.2(1) as follows:

Authority having jurisdiction means the governmental body responsible for the enforcement of any part of this Code or the official or agency designated by that body to exercise such a function.

[83] The appellant argues that the NEB, the Ministerial Delegate and the appeals officer are each an “authority having jurisdiction” for the purpose of the NFCC. Trans Mountain notes in this regard that the Minister of Labour and Human Resources and Social Development Canada (HRSDC) (now Employment and Social Development Canada) are primarily charged with the enforcement of the Code and the COHSR. This includes enforcement of the provisions of the NFCC that are incorporated by reference into the Code and the COHSR.

[84] A Memorandum of Understanding (MOU) between the NEB and HRSDC provides for a joint administrative arrangement whereby the NEB is responsible for the application and enforcement of Part II of the Code in the Federal oil and gas industry. Employees of the NEB can be appointed as “delegated officials”. These delegated officials are vested with certain authorities to perform activities related to the administration and enforcement of the Code. In the present circumstances, the Ministerial Delegate enforces Part II of the Code and the COHSR and is therefore an authority having jurisdiction as defined for the purpose of the NFCC. It is submitted that the fact that the Ministerial Delegate issued the direction is further evidence that the Ministerial Delegate is an authority having jurisdiction for the purpose of article 1.1.2.3 of the NFCC.

[85] The appellant further submits that the appeals officer hearing the appeal is also an authority having jurisdiction. Designated by the Minister of Labour pursuant to subsection 145.1(1) of the Code, and subject to certain enumerated exceptions, the appeals officer has all the powers, duties and functions of the Minister under Part II of the Code [subsection 145.1(2)]. On an appeal, the appeals officer has broad discretion pursuant to subsection 146.1(1) of the Code to vary, rescind or confirm a decision or direction and to issue a direction. In this regard, the appeals officer is an authority having jurisdiction for the purpose of article 1.1.2.3 of the NFCC.

[86] In response to my questions c) and d) in paragraph 19 above, the appellant submits that the NEB, the appeals officer and the Ministerial Delegate are each an “authority having jurisdiction” as contemplated by the NFCC. It was therefore open to the Ministerial Delegate to accept an arrangement with respect to the secondary containments of the storage tanks at the Burnaby Terminal even if the arrangement was not identical to the requirements set out in article 4.3.7.2 of the NFCC.

[87] In the circumstances of this appeal, and as evidenced by the appellant, it is argued that the secondary containments of the storage tanks provide an equivalent level of fire and life safety. The Ministerial Delegate did not suggest or adduce any evidence to suggest that the secondary containments of the storage tanks do not provide an equivalent level of fire and life safety.

[88] It is submitted that in my capacity as an authority having jurisdiction, an appeals officer also has the jurisdiction to consider the “Equivalents” provision of the NFCC for the purposes of the appeal and determining compliance with the NFCC.

[89] It is also submitted by the appellant that the intent of the “Equivalents” provision is explained in sentence A-1-1.1.2.3(1) of Appendix A of the NFCC (Explanatory Material for the National Fire Code of Canada 1995), which provides inter alia, as follows in relation to article 1.1.2.3 of the NFCC:

The requirement is intended as a means for the authority having jurisdiction to accept an arrangement, such as an existing building or fire protection system, that is not exactly identical to that requirement by the Code, but that is considered to provide an equivalent level of fire and life safety due to its specific qualities.

[90] Furthermore, sentence A-1.1.2.3(1) of the NFCC, states the following:

It is the intent of this Code that an equivalent level of safety be achieved rather than necessarily achieving strict conformance to the NBC. The application of this Code to the upgrading of existing facilities should be based on the judgement of the enforcement authority, who must deal with each case on its merits.

[91] The appellant argues that the scheme of the NFCC and its overall intent is for “an equivalent level of safety [to] be achieved rather than necessarily strict conformance”. In this regard, and in order to carry out the intent of the NFCC including Part 4, the modern principle of statutory interpretation requires provisions to be read in harmony with the scheme and objects of the legislation and the intention of the creators of that legislation. Having regard to the scheme, object and intent of the NFCC, it was incumbent on the Ministerial Delegate to consider Part 1 of the NFCC, including article 1.1.2.3 which speaks to permitted alternatives, in determining whether Trans Mountain was in compliance with the NFCC and in determining whether to issue the direction.

[92] In other words, it is argued that the Ministerial Delegate was not restricted to a consideration of the strict conformance to section 4.3. The point is that paragraph 10.49(i) requires conformance to section 4.3 of the NFCC. Conformance to a provision of the NFCC (such as section 4.3) can be achieved by either strictly complying with the requirements, or by meeting the “Equivalents” provision. The fact that paragraph 10.49(i) of the COHSR does not specifically refer to article 1.1.2.3 of the NFCC cannot change or limit the ways by which conformance to section 4.3 can be achieved. To do so would run afoul of the intended purpose and intent of the NFCC, which is clearly stated to be “an equivalent level of safety” - not strict conformance. The appellant submits that there is simply no basis upon which to exclude the “Equivalents” provision from consideration in this matter.

[93] The appellant presents the NFCC, when considered in its entirety, as clearly intended to provide a flexible approach to compliance through the inclusion of section 1.1.2. It provides the “authority having jurisdiction” with the discretion to permit alternatives where they “provide a level of fire and life safety that is equivalent to the level of performance required by the Code…”. This flexibility promotes the objectives of worker protection found in the Code. To interpret the NFCC, for the purposes of 10.49(i) of the COHSR, in a way that limits or removes the possibility of alternative means of compliance would frustrate the overall legislative scheme and its goal to provide for the protection of workers. Additionally, to adopt a narrow interpretation without consideration of the NFCC in its entirety, could lead to absurd results. The appellant submits for example that:

Section 10.49(a) of the COHSR requires the application of subsection 4.1.5 of the NFCC. Subsection 4.1.5 states that “Portable extinguishers shall be provided and maintained as required elsewhere in this Part and in Part 6.” As discussed, the use of “shall” is imperative and it applies to Part 4 and Part 6 under subsection 4.1.5. Consequently, if the interpreter only considered what was required in Part 4 and ignored Part 6, a safety risk would be created. This would directly oppose the legislative scheme.

[94] As well, the appellant argues that a party could be placed in a situation whereby an authority having jurisdiction properly determines at the time of construction that a structure meets the requirements of the NFCC by virtue of satisfaction of the “Equivalents” provisions having been satisfied, and yet a subsequent investigation pursuant to paragraph 10.49(i) of the COHSR that examines the same structure only having regard to Part 4 of the NFCC could result in a contrary finding that the structure does not comply with the requirements of the NFCC. Absurd consequences include logical contradictions and internal incoherence, such as those that could result if Part 4 of the NFCC is considered in a vacuum and without regard to its purposes and intent. Here, the interpretation that avoids absurdity is the one that requires consideration of NFCC provisions found outside of those explicitly cited in the COHSR, and that achieve the intent and purpose of the NFCC.

[95] The appellant summarizes its argument by stating that ignoring the “Equivalents” provision in determining compliance with paragraph 10.49(i) of the COHSR is inconsistent with the modern principle of statutory interpretation, contradicts the intent of NFCC and the purposes of the COHSR, and may indeed lead to absurd results. Consequently, paragraph 10.49(i) of the COHSR (and its requirement for storage tanks to conform to section 4.3 of the NFCC) requires a consideration not only of the strict requirements set out in section 4.3, but also a consideration of how the NFCC intends compliance with section 4.3 to be achieved. This includes consideration of the “Equivalents” sections found in Part 1 of the NFCC.

[96] The Ministerial Delegate, the appellant submits, testified that he did not consider the “Equivalents” provisions set forth in subsection 1.1.2 of the NFCC, when determining whether Trans Mountain’s secondary containment reconstruction met the requirements of the NFCC or in determining whether to issue the direction. In fact, the Ministerial Delegate testified that he had no familiarity with the “Equivalents” provisions of Part 1 of the NFCC. He also confirmed in response to the appeals officer that he had no knowledge of how the “Equivalents” provisions would impact the requirements set forth in Part 4 of the NFCC, or if he was an “authority having jurisdiction”, as contemplated in the NFCC. The appellant submits that it was incumbent on the Ministerial Delegate to consider the alternative provisions in determining whether the employer was in compliance with the particular NFCC requirement. Had he done so, it was open to him to accept the secondary containment reconstruction as an arrangement or an alternative that provides for an equivalent level of fire and life safety. It cannot be said, with respect, that the Ministerial Delegate exercised his judgement regarding compliance with the NFCC, when, in the circumstances, he admittedly did not contemplate the “Equivalents” provisions and whether the secondary containments of the storage tanks provide for an equivalent level of safety.

[97] The appellant argues that the NFCC allows the authority having jurisdiction to consider whether “an equivalent level of safety due to its specific qualities” has been achieved, in circumstances where it considers that the strict conformance to the NFCC is not achieved. The evidence demonstrated that the Ministerial Delegate failed to undertake such an exercise and instead moved to issue a direction alleging non-compliance with the COHSR and the NFCC without considering the “Equivalents” provisions. The evidence supports a finding that the current design of the secondary containment reconstruction meets the performance requirements of the NFCC, and that therefore, the design, construction and specifications of the secondary containment of the storage tanks are a permitted alternative, as contemplated by article 1.1.2.3 of the NFCC.

[98] It is purported by the appellant that the evidence on this point was uncontroverted and is the only evidence before the appeals officer regarding the construction and the impermeability of the secondary containments of the storage tanks. The evidence of the Ministerial Delegate was that he was unaware of what products the storage tanks actually contained at the time he conducted the inspection leading to the issuance of the direction and that he did not review any of the drawings or secondary containment construction information relating to the Burnaby Terminal that would be on file with the NEB, as part of his consideration of whether to issue the direction. The appellant summarized the evidence of Mr Huddleston and Mr Fewchuk to elaborate on this point.

[99] Furthermore, the appellant submits that it gave detailed evidence, from the testimony of Mr Huddleston, regarding the emergency measures in place at Burnaby Terminal in the event of an incident, including the fire suppression infrastructure on the primary storage tanks which includes fire detection sensors and piping that can deliver foam. It is submitted that while the Ministerial Delegate testified that was aware that there were fire-fighting procedures and personal protection equipment available for workers at the Burnaby Terminal, his evidence was that he had not viewed either.

[100] The evidence of Mr Huddleston, it is submitted by the appellant, is that in the unlikely event of a spill, the primary concern at all times is the safety of the workers at the Burnaby Terminal and the public in proximity to it. His evidence is that the management of a spill into secondary containment coupled with a fire would be no different whether the liner is compromised by fire or not. In his view, the combustion of exposed portions of the liner would not present an escalated risk to the responders or workers at the work place having regard to the procedures in place, their training and the safety equipment that is available to them. In further testimony, he stated that in the unlikely event of a spill into the secondary containment and a fire, a liner that is partially covered with noncombustible material would not expose responders to any additional or differing hazards than a fire in the secondary containment having a liner that is fully covered by noncombustible material. He opined that the primary risk to responders associated with a fire in the secondary containment of a storage tank would be the heat and vapours that are generated, but that the presence or absence of a liner (regardless of any coverage with noncombustible material) would not alter the magnitude of the risk. Preparation and implementation of the corrective action plan that the Ministerial Delegate has directed the employer prepare, would not increase worker safety at the Burnaby Terminal.

[101] It is submitted by the appellant that the evidence on this point was not challenged and was not controverted by the testimony of the Ministerial Delegate. In fact, it is argued, the testimony of the Ministerial Delegate suggested that he was unsure as to the nature of any hazards that the partially covered liners actually posed to workers health and safety at the work place. He did not demonstrate a clear understanding of which workers at the work place might be affected by a release into the secondary containment, nor did he demonstrate an understanding of how employee safety could be compromised if the liners were compromised by fire; in fact, he was unable to verify whether the potential for employee exposure to hazards as a result of a compromised liner was real, based on actual or apprehended knowledge.

[102] The appellant maintains that, from his testimony, the Ministerial Delegate was not concerned about any hazards arising from the actual combustion of an uncovered portion of liner. His testimony appeared somewhat irrelevant to considerations under the COHSR and the NFCC, suggesting instead that the focus of his concern was that if the liner was compromised, this could result in a leak through the secondary containments of the storage tanks, which would result in a spread of the spill. The Ministerial Delegate testified that he did not request Trans Mountain to provide any hazard assessments for the work place, and as such the same were not considered when he issued the direction.

[103] The purpose of Part II of the Code, the appellant submits, is the prevention of accidents and injury to the health of workers occurring in the course of their employment. The requirements of the NFCC are directed to fire and life safety. While Trans Mountain has described in evidence that the secondary containments of the storage tanks will perform the primary purpose of the secondary containment in the unlikely event that the liner is compromised due to fire, none of the Code, the COHSR, or the NFCC were drafted to address the environmental impacts of a potential release event. Such issues are addressed by other legislation directed to environmental protection such as the Canadian Environmental Protection Act, S.C. 1999, c. 33 and the regulations thereunder, and should not be a relevant consideration in deciding whether compliance with the fire and life safety requirements of the COHSR or NFCC are achieved. Further, it is submitted, the evidence demonstrated that produce seepage into the subsoil would not elevate the likelihood of employee accidents or injury.

[104] It is submitted by the appellant that based on the findings of the GHD reports and based on the testimony of Mr Huddleston and Mr Fewchuk, it is evident that the secondary containments of storage tanks will contain released product in the event of a spill even if there is a fire that compromises the uncovered portions of the liner. Having regard to the testing conducted by GHD and the conclusions reached in the GHD reports, it is evident that the secondary containments of the storage tanks constitute an arrangement that should be accepted as providing an equivalent level of fire and life safety due to its specific qualities.

[105] The appellant requests that I make a determination that the secondary containments of the storage tanks constitute an alternative to the requirements of the NFCC, by having an equivalent level of fire and life safety as contemplated in article 4.3.7.2. of the NFCC, and that Trans Mountain has therefore demonstrated compliance with article 4.3.7.2 of the NFCC. On this basis, the appellant requests that I rescind the direction.

[106] As a last argument on this issue, the appellant contends that the testing conducted by GHD as summarized in its reports constitutes the types of test or evaluation anticipated by sentence 1.1.2.1(2) of the NFCC and that the use of the worst case scenario developed by GHD and Trans Mountain and utilized as an assumption in the GHD testing and modeling described in Section 2 of the GHD report simulates or exceeds anticipated service conditions within the meaning of sentence 1.1.2.1(3) of the NFCC. Furthermore, the performance of the secondary containments of the storage tanks in relation to past releases of product into the secondary containment constitutes past performance within the meaning of sentence 1.1.2.1(2) of the NFCC. Based on the results of the testing and evaluation, and based on knowledge of original design and past performance, the secondary containments of the storage tanks will provide an equivalent level of life and fire safety as a system having a liner entirely covered by noncombustible material as required by paragraph 4.3.7.2.(2)(b) of the NFCC. Consequently, the secondary containments of storage tanks constitute an alternative to the strict requirements of the NFCC pursuant to article 1.1.2.3 of the NFCC.

[107] The appellant concludes its submissions by stating that it is not in contravention of the Code, the COHSR or the NFCC as alleged by the Ministerial Delegate, who erred in issuing the direction to Trans Mountain, the employer. The following reasons are provided:

a) Paragraph 125.1(b) of the Code and paragraph 10.49(i) of the COHSR are not being contravened because paragraph 10.49(i) of the COHSR only applies to “storage tanks” and does not apply to “secondary containment”.

b) The secondary containments of the storage tanks at the Burnaby Terminal are governed by the provision of the NEBA, OPR, CSA Z662, and NFPA 30.

c) The NEB previously determined that the secondary containment reconstruction met “current code requirements for tank terminal facilities” and that the applicable fire code was NFPA 30.

d) Trans Mountain relied on such previous determinations of the NEB.

e) In the alternative, and in any event, the secondary containments of the storage tanks comply with article 4.3.7.2 of the NFCC.

f) In the further alternative, and in any event, the equivalent provisions, found at subsection 1.1.2 of the NFCC, are met, thereby demonstrating compliance with article 4.3.7.2 of the NFCC.

[108] For these reasons, the appellant submits, Trans Mountain requests that I rescind the direction.

Analysis

[109] The appellant has raised several grounds to dispute the correctness of the direction. In my opinion, it is not necessary to address each argument put forward by the appellant in order to resolve this appeal.

[110] While the appellant claims that the fundamental issue in this appeal is whether paragraph 10.49(i) of the COHSR and the provisions of the NFCC therein referred to apply to secondary containments of storage tanks, I consider that a determination on this issue, which raises complex interpretative questions, may not be necessary to resolve this appeal. Indeed, a ruling on this issue only becomes critical to the appellant’s case should I find that, on the facts of this appeal and contrary to Trans Mountain’s position, the secondary containments of the storage tanks at the Burnaby Terminal do not comply with the requirements of this provision. To the extent that, in fact and based on the evidence before me, such secondary containments actually comply with the construction standards for secondary containments of storage tanks set out in article 4.3.7.2 of the NFCC. Then, I would have to conclude that the Ministerial Delegate erred in finding otherwise and rescind the direction on that basis alone. In other words, the issue of whether paragraph 10.49(i) of the COHSR only applies to storage tanks and not to secondary containments of storage tank may become moot.

[111] Consequently, I will first proceed to examine the appellant’s arguments that the secondary containments in issue are, at any rate, in full compliance with the requirements of 4.3.7.2 of the NFCC. If necessary, should I find that they are not, I will subsequently address the remaining arguments presented by the appellant in support of its position, including its claims on the inapplicability of the provisions specified in the direction.

[112] The direction states that the appellant is in contravention of paragraph 125.1(b) of the Code, paragraph 10.49(i) of the COHSR and paragraph 4.3.7.2(2)(b) of the NFCC. Paragraph 125.1(b) of the Code requires that an employer ensure that all hazardous substances in the work place are stored and handled in the manner prescribed by regulations. In turn, paragraph 10.49(i) of the COHSR provides as follows:

The provisions of Part 4 of the National Fire Code apply as follows:

(i) storage tanks for flammable liquids and combustible liquids shall conform with section 4.3, with the exception of paragraph 4.3.13.1(1)(d), articles 4.3.13.5 and 4.3.15.2 and sentences 4.3.16.1(3) and (4);

[113] Thru concluding that the appellant contravened paragraph 4.3.7.2(2)(b) of the NFCC, the Ministerial Delegate implicitly found that paragraph 10.49(i) of the COHSR incorporates by reference article 4.3.7.2 of the NFCC as an applicable provision and that, therefore, the Code, through the COHSR, requires that an employer controlling a work place comprising aboveground storage tanks comply with this provision of the NFCC. While, on its face, article 4.3.7.2 of the NFCC does not set out requirements for storage tanks but rather addresses secondary containments for storage tanks, it appears that the Ministerial Delegate determined that it nevertheless applied since it is included in Part 4 of the NFCC and is not listed as a provision expressly exempted from application in paragraph 10.49(i) of the COHSR.

[114] At the hearing, the Ministerial Delegate stated that, in his view, storage tanks have multiple components, including secondary containments, which are the areas surrounding a storage tank or a group of storage tanks. Thus, contrary to the appellant’s submissions, he considered that the reference to storage tanks in paragraph 10.49(i) of the COHSR can be interpreted to mean not only storage tanks per se, but also every element necessary for their proper installation and maintenance, including the secondary containments.

[115] As discussed above, for the purposes of determining whether the Ministerial Delegate correctly determined that there was a contravention, I will similarly assume that paragraph 10.49(i) of the COHSR requires that secondary containments of storage tanks conform with article 4.3.7.2 of the NFCC, an article which plainly includes paragraph 4.3.7.2(2)(b), that is, the specific provision found by the Ministerial Delegate to have been breached by Trans Mountain.

[116] The Ministerial Delegate determined that the appellant contravened paragraph 4.3.7.2(2)(b) of the NFCC for the following reasons:

At the Burnaby Terminal, there are nine storage tanks, identified as Tank # 71, 72, 73, 81, 82, 84, 87, 88 and 90, where the secondary containments have been reconstructed since 2009, using polyuria [sic] liners to provide a permeability of not more that 1x10-6 cm/s to the liquids contained in the storage tanks. These polyuria [sic] liners are combustible, and are not covered with a noncombustible material to prevent the liners from failing, if exposed to fire as required by clause 4.3.7.2(2)(b) of the NFCC.

[117] The contravention is the result of the failure by Trans Mountain to ensure that the secondary containments’ liners or membranes that are made up of a combustible material, polyurea or “Polyflex”, are covered with a noncombustible material. The appellant acknowledged that only portions of the liners are covered with a noncombustible material. The evidence provided by its witnesses also established that covering the totality of such membranes with a noncombustible material would not be a simple task or a straightforward operation. Hence, it is beyond dispute that the liners in question are only partially covered with a noncombustible material.

[118] Other than the above accurate finding of fact, the direction, as it is worded, is based on two other findings made by the Ministerial Delegate. The first one is also factual in nature, that is, the liners or membranes of the secondary containments at the Burnaby Terminal use polyurea to provide a permeability of not more that 1x10-6 cm/s to the liquids contained in the storage tanks. The second one is a legal conclusion, namely, that paragraph 4.3.7.2(2)(b) of the NFCC requires these polyurea liners to be covered with a noncombustible material to prevent them from failing in the event of a fire.

[119] However, these two findings are incorrect. Correctly interpreted and applied to the facts of this case, paragraph 4.3.7.2(2)(b) of the NFCC does not require the polyurea liners used on the secondary containments of the storage tanks at the Burnaby Terminal to be covered with a noncombustible material. The reason is that, contrary to the Ministerial Delegate’s conclusion, the liners are not necessary to ensure that the secondary containments at this work place provide a permeability of not more than 1x10-6 cm/s to the liquids contained in the storage tanks as is required by article 4.3.7.2 of the NFCC.

[120] In order to demonstrate the errors in the direction, it is useful to reproduce the text of the relevant parts of article 4.3.7.2 of the NFCC:

4.3.7.2 Construction

1) Except as provided in Sentence (2), the base and walls of a secondary containment shall be made of noncombustible materials, and shall be designed, constructed and maintained to

a) withstand full hydrostatic head, and

b) provide a permeability of not more than 10-6 cm/s to the flammable liquids or combustible liquids contained in the storage tanks.

2) Where a membrane provides the level of impermeability required in Sentence (1), it shall

a) conform to ULC/ORD-C58.9. “Secondary Containments Liners for Underground and Aboveground Flammable and Combustible Liquid Tanks”, and

b) when the membrane is combustible, be covered with a noncombustible material of such nature and thickness that the membrane will not fail when the secondary containment is exposed to fire.

[italics in original, bold added for emphasis]

[121] Read together, Sentence (1) and (2) of article 4.3.7.2 of the NFCC set out requirements to ensure that a secondary containment provide a certain level of impermeability to the flammable or combustible liquids contained in storage tanks and limit the risk that fire exposure will lead to the failure of the secondary containment. On my review, these provisions do not impose a general requirement that a membrane be installed on the base and walls of a secondary containment’s structure nor do they stipulate that, if such a membrane is installed, it shall, in all cases, be made of a noncombustible material or covered with a noncombustible material.

[122] Pursuant to Sentence (2), it is only “[w]here a membrane provides the level impermeability required in Sentence (1)” that the membrane shall be covered with a noncombustible material if it is itself combustible. In other words, the stated requirements for a secondary containment’s membrane, including the one determined by the Ministerial Delegate to have been breached by Trans Mountain, clearly apply only when this condition is met.

[123] What this means is that the required level of impermeability and, therefore, compliance with article 4.3.7.2 of the NFCC, may be attained without the use of any liner or membrane or the use of an uncovered combustible liner. Definitely, the possibility that compliance with article 4.3.7.2 of the NFCC be achieved through the composition of the earthen layers under the liner is even contemplated in the Ministerial Delegate’s inspection report, which states the following (at page 3):

…further follow-up will be required on the permeability of the containment under the liner to confirm compliance with the requirements of COSHR [sic] 10.49(i) and the NFC 4.3.7.2.

[124] Therefore, I agree with the appellant’s interpretation of article 4.3.7.2 of the NFCC according to which the mere presence of a liner or a membrane on the walls and base of a secondary containment will not trigger the application of paragraph 4.3.7.2(2)(b). When examined as a whole and in context, this provision means that, if the liner installed a secondary containment is needed to provide the level of impermeability required in paragraph 4.3.7.2(1)(b) (i.e. a permeability of not more than 10-6 cm/s), then (and only then), the liner shall comply with the requirement of Sentence 4.3.7.2(2).

[125] Strictly speaking, if a liner is used in a secondary containment and is needed in order to attain the impermeability requirements set out in paragraph 4.3.7.2(1)(b) of the NFCC, it must be “covered with a noncombustible material of such nature and thickness that the membrane will not fail when the secondary containment is exposed to fire.” As argued by the appellant, the corollary is that if the installed liner is not necessary in order to provide this specific level of impermeability, the NFCC does not require that the liner comply with paragraph 4.3.7.2(2)(b).

[126] One might wonder about the reasons why a membrane would be installed on a secondary containment if it is not an essential component to ensure that the secondary containment achieve its purpose, that is, provide a certain level of impermeability to the to the flammable liquids or combustible liquids contained in the storage tanks in the event of a leak. Then again, during his testimony, Mr Huddleston explained that a liner might be used on a secondary containment for reasons other than to meet the impermeability requirements of a fire code. He stated reasons such as vegetation management and environmental protection of the underlying secondary containment structure.

[127] From his testimony, my understanding is that while the presence of a liner would always facilitate the remedial efforts should there be an incident causing a leak of petroleum products into a secondary containment, it is not absolutely necessary to prevent the escape and spread of the liquids and vapours outside of the secondary containment should there be a fire which, in my opinion, is the object and purpose of article 4.3.7.2 of the NFCC.

[128] Consequently, to the extent that the underlying earthen fill of a secondary containment is made up of noncombustible materials that provide the required level of impermeability such that fire exposure would not lead to the failure of the secondary containment, compliance with article 4.3.7.2 of the NFCC is achieved. Based on this interpretation, there can be no contravention to paragraph 4.3.7.2(2)(b) to the extent that the liners of the secondary containments at the Burnaby Terminal are not required in order to meet the impermeability requirements stated in paragraph 4.3.7.2(1)(b) [emphasis added].

[129] In this regard, the evidence before me is clear and uncontroverted. In particular, Mr Fewchuk’s testimony and his expert reports unequivocally demonstrate that the permeability of the secondary containments at the Burnaby Terminal without the liners meets the level of soil impermeability required in paragraph 4.3.7.2(1)(b) of the NFCC.

[130] At the hearing, Mr Fewchuk gave extensive evidence explaining the testing methods used by his firm (GHD Limited) to conduct seepage modeling which allowed the evaluation of the permeability of the secondary containments to the liquids contained in the storage tanks at the Burnaby Terminal. There is no evidence that the methodology used was flawed or not conducted according to acceptable scientific and engineering principles. In fact, I find that Mr Fewchuk’s evidence was credible and compelling.

[131] Therefore, I accept his evidence and the conclusions that are reached in the seepage assessment conducted by GHD Limited for each of the secondary containment of the storage tanks referred to in the direction. The results of the tests are reported in two reports, the first with respect to tanks 83 and 87, dated August 15, 2016, and the second one, with respect to tanks 71, 72, 73, 74, 81,82, 84, 85, 86, 88 and 90, which was filed on September 30, 2016.

[132] This evidence convincingly establishes the following facts:

  • The base and walls of the secondary containments of the tanks (without the liners) are made up of noncombustible materials. GHD Limited sampled and tested the composition of the structure of the secondary containments and the reports confirm that each is comprised of compact layers of earthen fill comprised predominantly of gravel, sand, silt and clay.
  • If an exposed liner is compromised, the structure of the secondary containments would be able to withstand a full hydrostatic head in the event of a release of all the fluids contained in the primary storage tank even assuming a worst case scenario in which: (1) a large hole would develop on the liner at the base of the tank near the product line, allowing the entire contents of the tank to empty in the secondary containment in a short period of time, and (2) the released product then ignites resulting in a large pool fire. In other words, the secondary containments would not fail structurally in the event of a worst case release scenario.
  • In the event of a crude oil release into the secondary containments where the exposed liner is compromised, the product would not break through the earthen berms but will merely seep into the subsurface over a prolonged period of time, allowing a situation-specific tactical response to prevent harm to workers/employees or the environment.
  • The results of the seepage analyses and modelling performed on site indicate that the wall and base of the secondary containment of all the tanks, even if the liner is compromised, have a permeability of not more than 10-6 cm/s. As a result, it is not the liner that provides the required level of impermeability for the secondary containments at the Burnaby Terminal.

[133] On the basis of this expert evidence, I find that the requirements of paragraphs 4.3.7.2(1)(a) and (b) of the NFCC are met by the secondary containments in issue. Specifically, (1) their core (i.e., their base and walls) are made of noncombustible materials, (2) they are designed, constructed and maintained to withstand full hydrostatic head, and (3) they are designed, constructed and maintained to provide a permeability of not more than10-6 cm/s to the liquids contained in the storage tanks. As these requirements are satisfied, paragraph 4.3.7.2(2)(b) of the NFCC is not applicable and, therefore, cannot be breached. More clearly, this is not a situation where it is a combustible membrane that provides the level of impermeability mandated by the NFCC.

[134] Accordingly, the Ministerial Delegate erred in finding that the secondary containments at issue in this case use “polyuria [sic] liners to provide a permeability of not more that 1x10-6 cm/s to the liquids contained in the storage tanks” and that paragraph 4.3.7.2(2)(b) of the NFCC requires these combustible liners to be covered with a noncombustible material to prevent the liners from failing. I therefore conclude that the direction must be rescinded on this basis alone.

[135] In fairness, I should mention that the Ministerial Delegate did not have access to the reports prepared by GHD Limited and to Mr Fewchuck’s expert evidence at the time of his investigation and it is not clear that he was provided with cogent information concerning the permeability of the structure of the secondary containments by Trans Mountain before the issuance of the direction. Nonetheless, I can use and rely on this relevant evidence, even if it was gathered and became available only a few months after the issuance of the direction, because this appeal is a de novo process.

[136] I also carefully reviewed the provisions of the NFCC relating to alternative solutions/equivalents and the appellant’s submissions in this regard. In my view, the appellant’s interpretation of these provisions is reasonable and their submissions that the secondary containments at the Burnaby Terminal comply with the “Equivalents” provisions of the NFCC are persuasive. Accordingly, on the basis of the arguments set out and evidence summarized at paragraphs 82-111of the appellant’s written submissions which I accept, I find that the design and construction of the secondary containments of the storage tanks at the Burnaby Terminal constitute an alternative solution to the strict requirements of the NFCC having an equivalent level of fire and life safety, as is contemplated in article 1.1.2.3 of the NFCC.

[137] Certainly, I agree with the appellant that the scheme of the NFCC and its overall intent is for “an equivalent level of safety [to] be achieved rather than necessarily achieving strict conformance” (see Appendix A to the NFCC). The intent of the “Equivalents” provisions of the NFCC is clearly explained in Sentence A-1.1.2.3 of Appendix A, which provides explanatory material for the NFCC:

This requirement is intended as a means for an authority having jurisdiction to accept an arrangement, such as an existing building or fire protection system, that is not exactly identical to that required by the Code, but that is considered to provide an equivalent level of fire and life safety due to its specific qualities.

[138] Having regard to the scheme, object and intent of the NFCC, I find that the Ministerial Delegate was an authority having jurisdiction and should have considered Part I of the NFCC (including article 1.1.2.3 which concerns permitted alternative solutions) in determining whether the appellant was in compliance with section 4.3 of the NFCC. At the hearing, the Ministerial Delegate indicated that he had no familiarity with the provisions of Part I and, in consequence, did not consider them.

[139] In summary, paragraph 10.49(i) of the COHSR requires conformance to section 4.3 of the NFCC, but based on the terms of Part I of the NFCC and the above-noted statement of intent, compliance with section 4.3 can be achieved by either strictly conforming with a specific requirement or satisfying article 1.1.2.3 of the NFCC which speaks to permitted alternatives or equivalent solutions. In my opinion, the totality of the evidence before me clearly support a finding that the current design and construction of the secondary containments at the Burnaby Terminal meets the performance and fire safety requirements of the NFCC for these structures.

[140] The key parts of the evidence and testimony in this regard are summarized at paragraph 101 of the appellant’s submission, which I will not reproduce here. Overall, I am satisfied that, as is contemplated by article 1.1.2.3 of the NFCC, the current design and construction of the secondary containments, as well as fire-fighting procedures in place and the equipment available for employees, constitute an arrangement that provides an equivalent level of fire and life safety as that envisaged by paragraph 4.3.7.2(2)(b) of the NFCC.

[141] Furthermore, I cannot ignore that the NEB previously indicated to the appellant that the reconstruction of the secondary containments that is still underway, and conducted in accordance with requirements set out in the OPR and standards such as CSA Z662 and NFPA 30, was in compliance with “current code requirements for tank terminal facilities.” I have no reason to believe that the NFCC sets out more stringent standards than those of CSA Z662 and NFPA 30. In fact, the evidence before me suggests that these are equivalent standards.

[142] Accordingly, I find that, even if paragraph 4.3.7.2(2)(b) of the NFCC applied and had not been strictly complied with by the appellant because of the failure to completely cover the liners in place with a noncombustible material, there would be no basis to issue a contravention direction since the equivalents provisions, found at subsection 1.1.2 of the NFCC are met. Briefly, the appellant has demonstrated compliance with the specific provision that gave rise to the direction in this acceptable alternative way.

[143] Finally, while I do not have to address this issue given the above determinations, I note that the appellant devoted a large portion of its submissions to arguments aimed at demonstrating that paragraph 10.49(i) of the COHSR applied only to storage tanks and not to other related facilities such as secondary containments. I will therefore make brief comments on this issue even if it has become moot in the circumstances of this case.

[144] At first glance, the appellant’s interpretation in this regard is not completely devoid of merit. However, it warrants mentioning that there are certain legal roadblocks to its acceptance. First, paragraph 10.49(i) speaks to compliance with section 4.3 of the NFCC as a whole, save for certain expressly enumerated provisions found in that section. Second, and more fundamentally, one of the articles specifically exempted from application in paragraph 10.49(i) of the COHSR, namely article 4.3.13.5, sets out a requirement for placards identifying the liquids stored and the capacity of storage tanks to be posted in a conspicuous location outside of a room where they are located (if they are inside a building). As such, article 4.3.13.5 does not directly concern storage tanks. It relates to incidental elements necessary for the safe installation of storage tanks.

[145] If, as argued by the appellant, paragraph 10.49(i) of the COHSR applied only to “storage tanks” (literally defined as a vessel for flammable or combustible liquids) and only required that “storage tanks” as defined above conform to section 4.3 of the NFCC, then why would the regulator have deemed it necessary to expressly exclude from application a provision that does not, on its face, impose requirements for storage tanks per se? In my view, the inclusion of this provision in the list of exceptions to the application of section 4.3 in paragraph 10.49(i) of the COHSR casts doubt on the validity of the appellant’s interpretation. In any event, it may be that, in a future case, an appeals officer will have to issue a decisive finding on this interpretative issue. That case is for another day.

Conclusion

[146] For the abovementioned reasons, the appeal is allowed and the direction issued by Ministerial Delegate Fortin, on March 10, 2016, is rescinded.

Michael Wiwchar

Appeals Officer

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