Environmental indemnities must cover all applicable operations
and project lifecycle phases. Otherwise, as highlighted in a recent
decision by the Supreme Court of Canada (SCC), even a carefully
drafted indemnity can be rendered null and of no effect.
In R v Resolute FP Canada Inc., 2019 SCC 60, the
SCC considered the scope of an indemnity held by forest-product
companies Resolute and Weyerhaeuser. Each of these companies had a
previous connection with the Dryden pulp and paper mill in northern
Ontario (Weyerhaeuser had held title to the mill's waste
disposal site from 1998 to 2000, and Resolute's predecessor
(Great Lakes) was a previous owner).
Toxic Mercury Contamination
The Dryden mill operation included a chlor-alkali plant (used to
bleach paper) that released untreated mercury waste into the
English and Wabigoon Rivers in the 1960s. This release caused
extensive harm, including to local residents (such as Grassy
Narrows and Islington First Nations' members
