Environmental and Regulatory Compliance Issues for the Natural Resources Sectors during COVID-19

March 25, 2020

Written By Sharon Singh, Radha Curpen, Sarah Gilbert, Brad Gilmour and Gregory Whiteside

Across Canada, companies and regulators are taking unprecedented steps to respond to the COVID-19 pandemic. Efforts to protect the health and safety of the workforce while adapting to the evolving regulatory responses to COVID-19 are placing pressure on the ability of many companies to maintain business continuity. One of the pressures is a company's ability to maintain compliance with regulatory requirements with respect to environmental and health and safety matters.

We outline some of the challenges and related steps that can be taken by companies to protect against liability in relation to regulatory non-compliance during COVID-19, with a focus on the natural resources sectors.

Challenges to Regulatory Compliance during COVID-19

Companies in natural resources sectors typically have numerous and complex regulatory compliance requirements, including obligations under permits and legislation. These requirements will continue in full force and effect during the COVID-19 period, absent any direction otherwise from the regulators. Added challenges for operators in maintaining compliance and achieving other regulatory objectives may include reduced access to experienced personnel and consultants who have responsibilities related to the fulfillment of regulatory requirements.

For example, the legal requirements imposed on companies in the natural resources sectors often include obligations relating to monitoring, sampling, testing, and reporting on various environmental parameters. Some requirements may go further and require detailed environmental field studies and other forms of environmental assessments. Other obligations include maintaining the proper function and integrity of infrastructure and the ability respond appropriately in the event of an emergency. All of these regulatory functions require access to experienced, qualified and healthy personnel

Key challenges could include:

• restrictions on the number of employees or contractors who are permitted to work at a given time and location, regardless of whether that is at a corporate office or a plant site;
• restrictions on accessibility to third-party service providers such as environmental consultants, laboratory services, etc.;
• disruptions to the supply chain (e.g., availability of compliance apparatuses, sampling and testing materials, abatement and emergency response supplies, etc.) and
• the impact of other measures relating to social distancing.

While COVID-19 may create challenges, a company must still be able to demonstrate that it has taken all reasonable steps to achieve compliance in the circumstances. For many companies in the natural resources sectors, this may require the implementation of several risk management measures, including:

• Identify and assess key areas and risks that may be impacted by COVID-19 restrictions.
• Determine whether appropriate steps can be implemented to ensure continued compliance with legal requirements during any COVID-19 restrictions.
• Implement proactive and regular communication with regulators regarding issues faced by the company relating to its legal requirements due to COVID-19 restrictions, and maintain a record of such communications.
• As needed, identify and implement alternative methods to achieve compliance, and update operational plans and procedures to reflect changes at the workplace.
• Ensure appropriate communication, training and qualifications with respect to existing and updated operational plans and procedures.
• Consider whether to request relief from certain compliance requirements from the applicable regulator(s) due to COVID-19 restrictions.
• Maintain detailed records of key actions taken by the company that demonstrate that all reasonable steps were taken to maintain compliance during the COVID-19 time period.

The challenge of complying with certain regulatory requirements during COVID-19 restrictions will not come as a surprise to regulators. While it remains unclear as to how different regulators will respond to these challenges, companies will have to stay on top of these developments and maintain a strategy to comply with legal requirements and demonstrate due diligence with respect to regulatory decisions that are impacted by COVID-19.

Maintain Systems and Communications

While the challenges associated with maintaining compliance with regulatory requirements (and business continuity) will likely increase over the coming weeks and months, companies must continue to plan, respond and adapt to the impacts of COVID-19. (See Bennett Jones update on Community and Stakeholder Considerations - COVID-19)

Governments will be called upon to modify their approach to administering and enforcing certain regulatory requirements during these extraordinary times. This could include extending deadlines for submission of reports or studies, decreasing the number or frequency of sampling and testing, waiving non-essential field testing, or providing guidance on acceptable alternative measures that can be implemented in the face of COVID-19 restrictions. Actions should be taken by regulators to work with the regulated community to ensure the continued implementation of key regulatory programs while continuing to protect the environment, and the health and safety of employees, contractors and the public.

We are here to help as needed and to discuss your plan to respond, adapt and recover from COVID-19 and any issues you may face in complying with your regulatory requirements. In addition, please visit our COVID-19 Resource Centre for other COVID-19-related materials.

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