Environmental Liability Of Directors—Lingering Uncertainty

Directors and their corporations may be at a loss to understand what they must do to minimize their risk of environmental liability in light of the recent Ontario Ministry of Environment order and settlement agreement concerning Northstar Canada.

The Northstar settlement agreement

The seminal Bata Industries case¹ in 1992 set benchmarks to measure the standard of care a director of a corporation should demonstrate in exercising the director's role. A "minimum due diligence profile" was established in assessing a defence of due diligence. The guidelines developed in this and subsequent cases were the foundation that we believed should serve to delineate the content of the liability of directors. Has all of that been thrown overboard as a result of the Northstar case? Likely not, but the Environmental Review Tribunal's (ERT) approval of the $4.75-million settlement agreement between 10 former directors and officers and the Ministry of the Environment (MOE) in Norths