Outline

• Canadian environmental laws amended to criminalise offences and increase level of fines substantially.

• New offences including "depositing" a substance harmful to birds on or in the water.

• Authorities given extensive enforcement powers of search and detention of vessels.

• The effective date of the new law has yet to be fixed by the Government.

TO THE MEMBERS

Canadian new law in respect of environmental protection and criminal sanction

On 19th May, 2005, Canada enacted Bill C-15 to amend the Migratory Birds Convention Act, 1994 and the Canadian Environmental Protection Act, 1999.

The changes brought about by the Bill are extensive, comprising 40 pages of technical amendments to the two existing Acts. The aspects most affecting Members are threefold:

1. A discharge (including an accidental discharge) is a criminal offence

The Bill adds new offences including that of 'depositing' a substance harmful to birds on or in the water. Under the wide definition of the term 'deposit' in the Bill, an accidental discharge can result in criminal charges not only against the person who commits the discharge but also against the master, chief engineer, owner and operator of a vessel - and, if the owner or operator is a corporation, against any director and officer of the corporation who is in a position to direct or influence its policies or activities relating to prohibited conduct and who fails to take all reasonable care to ensure that the vessel and all persons on board the vessel do not cause the discharge.

The law specifically provides that, in a prosecution of such an offence, it is sufficient proof of the offence to establish that a substance was deposited by the vessel. However, the law also provides that a person or vessel shall not be found guilty where they exercised due diligence to prevent the commission of such an offence under the Act.

Other offences introduced by the new law include knowingly making a false record or statement, knowingly giving wrong information, obstructing justice, etc.

2. Increased penalties (including an unprecedented system of minimum fines)

Penalties for contravening any provision of the law are increased as follows:

Every person or vessel that commits an offence is liable

(a) on conviction on indictment, to a fine of not more than $1,000,000 or to imprisonment for a term of not more than three years, or to both; and

(b) on summary conviction, to a fine of not more than $300,000 or to imprisonment for a term of not more than six months, or to both.

However, the new law also creates a minimum fine system as follows:

In the case of an offence for a discharge that is committed by a vessel of 5,000 tonnes deadweight or over:

(a) the fine imposed on conviction on indictment shall not be less than $500,000; and

(b) the fine imposed on summary conviction shall not be less than $100,000.

3. Enforcement power

The law gives extensive powers to enforcement officers to board, search, direct and detain a vessel suspected of committing an offence in the exclusive economic zone of Canada, though such powers may not be exercised in relation to a foreign vessel, or to a foreign national on board a foreign vessel, without the consent of the Attorney General of Canada.

The effective date of the law has yet to be fixed but is expected to be sometime in the fall or early next year.

This is a further example of the current trend to criminalise environmental offences, and appears to be more extreme than any similar legislation so far, including the recent EU Directive on Criminal Sanctions, by reason of the controversial features described in 1 and 2 above. Many industry bodies, including the International Group, raised objections to those aspects of the Bill that criminalise accidental spills, but the Bill was passed without amendments. It remains to be seen whether grounds can be found to challenge the law in the Canadian courts in future.

Further information regarding the date from which the law takes effect will be provided when known. In the meantime, Members are invited to note this current legislative development. The text of the Bill and a legislative summary can be found at the following websites:

http://www.parl.gc.ca/38/1/parlbus/chambus/house/bills/government/C-15/C-15_3/C-15.html

http://www.parl.gc.ca/common/Bills_ls.asp?Parl=38&Ses=1&ls=C15

Yours faithfully

THOMAS MILLER (BERMUDA) LTD.

Dear Sirs