Finance

 

Responsible Agency:	Accounting Services - Finance
Issued:	Jan 2008
Last Updated:	Oct 2012

This policy sets out the process for confirming and quantifying the extent of contamination, estimating remediation costs and reporting information to the Accounting Services Division, Department of Finance, related to contaminated sites that are the responsibility of the Government of the Northwest Territories (GNWT), and which qualify as Environmental Liabilities under Financial Administration Manual (FAM) Policy 3201 – Environmental Costs and Liabilities.

The legal obligations regarding contaminated or potentially contaminated sites that are the responsibility of the GNWT on Commissioner’s Land are contained in the Northwest Territories Environmental Protection Act and its associated Regulations and Guidelines.

Section 2.2 of the Environmental Protection Act gives the Minister of Environment and Natural Resources (ENR) the authority to develop, coordinate, and administer Guidelines. The Environmental Protection Division of ENR determines the required level of remediation using the remediation criteria contained under the Environmental Protection Act in the Guidelines for Contaminated Site Remediation. The Environmental Protection Division also reviews remediation plans and monitors the progress of cleanup projects.

The federal government has environmental jurisdiction over surface and groundwater within the Northwest Territories.

See Financial Administration Manual Policy 3201 – Appendix A.

When site contamination is suspected, the provisions and requirements under the Environmental Protection Act shall be followed to confirm the extent of contamination, develop an approved remediation plan, implement the plan, and ensure that any liability associated with the contamination is recorded.

4.1	Reporting of Contamination When site contamination is known or suspected, departments shall contact ENR to report the situation. All departments shall follow the Directives provided by ENR regarding emergency cleanup measures. In addition, Indian and Northern Affairs Canada must be consulted in cases where contaminated surface or groundwater is encountered.
4.2	Phase I Environmental Site Assessment An initial assessment, called a Phase I Environmental Site Assessment (ESA), is completed to determine the likelihood of site contamination and to identify environmental receptors (soil, water, air, etc.) that have been, or could be impacted, by the contamination. The Phase I ESA must be done in a timely manner. A Phase I ESA must be completed by a qualified environmental consulting firm. A report must be produced for the responsible department that provides information on the environmental status of the site with recommendations for action or additional studies. A copy of the Phase I report shall be forwarded to ENR if a problem is identified. A summary of study findings and recommendations shall also be provided to the department currently responsible for the management of the Environmental Liability Fund. For sites where it is obvious on visual inspection that contamination exists (e.g. large hydrocarbon stains or pooling; fuel or waste barrels which are leaking onto the ground; etc), then it is permissible to forego a Phase I ESA and proceed directly to a Phase II ESA.
4.3	Phase II Environmental Site Assessment If the results of the Phase I ESA indicate that site contamination is likely, a Phase II ESA must be undertaken to provide preliminary information on the nature and extent of site contamination. This assessment identifies surface soil types, as well as the likely pathways to human and ecological receptors of contamination. In cases where site contamination is not serious, the Phase II ESA information can be used to estimate remediation costs. But, only if the responsible department applies in writing to ENR stating that sufficient information is available to begin remediation. ENR must approve the plan. A Qualified Person1 shall provide or verify remediation cost estimates. 1The definitions section of the Department of Environment and Natural Resources’ Guidelines for Contaminated Site Remediation defines a Qualified Person as “A person who has an appropriate level of knowledge and experience in all aspects of contaminated site investigation, remediation and management.
4.4	Phase III Environmental Site Assessment When site contamination is extensive or when conditions are present that warrant additional study in order to develop a remediation plan, a Phase III ESA shall be completed. The Phase III ESA will target and identify the boundaries of previously identified contamination. This ESA will also define, in greater detail, contaminant pathways, vulnerable human and ecological receptors, the location and characteristics of groundwater and the nature and quantity of contaminated soils and materials.
4.5	Remediation Work Remediation work must be based on a remedial plan that has been approved by ENR. Upon completion of remediation work, ENR must be provided with a final report for review. This report will detail work completed to satisfy applicable remediation regulations and standards. If ENR agrees that the site meets applicable cleanup standards, a Letter of Completion will be provided to the site owner. Not all contaminated sites require immediate action. It may be appropriate to manage the risk, or to simply monitor the site. These approaches do not relieve the owner departments of the responsibility to have their plan approved by ENR.
4.6	In preparation for annual Appropriations to the central Environmental Liability Fund, each department shall complete an inventory of sites containing the components listed in Appendix B. Additional features to be considered when deciding to include a site are included within FAM Policy 3201.

To ensure the timely remediation, recording and documentation of items which are quantifiable, the following procedure is recommended:

1. Obtain the complete listing of the department’s Tangible Capital Assets and program activities;
2. Consult with the program staff responsible for Tangible Capital Asset management and maintenance in order to determine potential environmental issues;
3. Consult with the program staff responsible for activities that have the potential to cause environmental damage (i.e. highway construction or fuel storage);
4. Review the government’s current Infrastructure Acquisition Plan for demolitions that may, or may not, be part of site preparation as they may identify contamination issues (all contaminated clean-up costs are considered operational costs);
5. Review the government’s current Infrastructure Acquisition Plan for renovations as these projects may involve contamination issues;
6. Identify those sites where ESA work has been completed and determine if sufficient information is available to:
   • prepare a remediation plan;
   • estimate costs for site remediation;
   • prepare plans for approval by ENR; and
   • commence site remediation.
7. Any other procedure that is deemed appropriate in an individual circumstance.

• Arctic Waters Pollution Prevention Act
• Canadian Environmental Protection Act, 1999
• Department of Indian Affairs and Northern Development Act
• Environmental Protection Act
• Environmental Rights Act
• Federal Legislation
• Financial Administration Act, Sections 4,12, 35 and 36
• Fisheries Act
• Government of the Northwest Territories Legislation
• Guidelines for Contaminated Site Remediation
• Mackenzie Valley Resource Management Act
• Public Sector Accounting Board Handbook, Sections PS 3200 and 3300
• Northwest Territories Waters Act

Failure to comply with policies and directives of the Financial Administration Manual may result in actions under Part X of the Financial Administration Act. The Government of the Northwest Territories may seek legal remedy in the Territorial Courts.

MANAGEMENT OF CONTAMINATED SITES

Initial Discovery and Notification

Initial discovery of site contamination can occur following an event, spill of a hazardous product, or during an investigation that is completed for the sale, refurbishing or demolition of a property.

Section 5.1 of the Environmental Protection Act states that the owner or person in charge, management or control of a contaminant that has been discharged to the environment must:

• report the discharge to the Northwest Territories 24-Hour Spill Report Line
• take all reasonable measures to stop the discharge and repair any damage; and
• make a reasonable effort to notify the affected public.

The Environmental Protection Division (EPD) of the Department of Environment and Natural Resources (ENR) will assess the significance of the reported discovery. If the EPD determines that contamination poses an immediate or future risk to human health or the environment, remedial action must be taken by the responsible party to rectify the situation.

In all cases, the responsible party must inform any affected parties about the contamination event and provide proof of such disclosure to the EPD in accordance with the Environmental Protection Act.

Environmental Site Assessment

An Environmental Site Assessment (ESA) identifies the nature and extent of contaminants. There are three stages of phased investigation, depending on the size and complexity of the contaminated site.

Phase I ESA

The purpose of the Phase I ESA is to identify the existence of contamination at a suspected site. At a minimum, the Phase I ESA must meet or exceed the Canadian Standards Association (CSA) Standard Z768-01 - Phase I Environmental Site Assessment.

The objective of the Phase I ESA is to assemble available historical and current information that may be required to develop a field-testing program. This work typically encompasses three broad aspects:

1. Facility Characteristics. A current and historical description of the site and its facilities is developed, particularly as it relates to the areas of concern like contaminant sources and discharge points. Visual inspections, facility records review and discussion with informed personnel are undertaken. The existence of above and below ground structures is identified (using plans and blueprints, if available). Prior site uses and surrounding land uses are also considered.
2. Contaminant Characteristics. Contaminants that could be present at the site are identified. Their quantities and concentrations are estimated through visual inspections, review of documentation and discussion with informed staff.
3. Physical Site Characteristics. Information is reviewed to develop a better understanding of site geology, hydrology and hydrogeology. The overall aim is to provide a more comprehensive description and understanding of the local site characteristics and to develop a current and historical description of the area.
   
   The sources of information can include:
   • aerial photographs;
   • geology and groundwater reports
   • topographical, geological and other maps;
   • ENR’s Hazardous Materials Spill Database; and
   • previous site investigation reports.

   A site inspection will examine stressed vegetation, key ecological receptors, leachate breakout and signs of contamination discharge. Surrounding land uses will also be considered. Drinking water sources and wells will be noted using published well records correlated to site observations. The proximity of the site to surface water bodies or sensitive habitats (e.g. wetlands) should also be identified.

Phase II ESA

The objective of the Phase II ESA is to confirm the presence of contamination and to characterize substances of concern at the site. The Phase II ESA must meet or exceed the CSA Standard Z769-00 - Phase II Environmental Site Assessment.

Characterization of the contamination (i.e., degree, nature, estimated extent and media affected) and site conditions (i.e., geological, ecological, hydrogeological and hydrological) are necessary to develop a remedial action plan and/or to identify the need for more specific Phase III investigations. It may also be determined that no further action is required or that immediate action is needed. Further study may be necessary to determine risks to public health and safety or the environment. This may take the form of human health and ecological risk assessments using Phase II investigation data.

The Phase II sampling program should include the adoption of sampling procedures, quality assurance/quality control procedures and laboratory analytical protocols. In addition, environmental quality remediation criteria must be selected in accordance with those established by the Guidelines on Contaminated Site Remediation.

Phase III ESA

A Phase III detailed investigation may be necessary if the Phase II ESA results indicate that significant contamination exists that will require remediation. This investigation will address outstanding issues with a view to obtaining enough information to formulate a remedial action plan. The objectives of the Phase III investigation are:

• identify and delineate the boundaries of identified contamination;
• define, in greater detail, site conditions in order to identify all contaminant pathways, particularly with respect to possible risk assessment; and
• provide contaminant characteristics and other information required to develop a remedial action plan, acquire data for specifications and tender documents.

Generally, the Phase III detailed testing program will focus on areas identified in the Phase II program and involves a systematic process of sampling and analysis, evaluation, conclusions and recommendations.

Once the environmental condition of the site has been assessed, the results are compared to applicable remediation criteria (numerical limits) in order to determine whether further investigation or remedial actions are required.

SITE IDENTIFICATION, STATUS AND ESTIMATED COSTS OF REMEDIATION

Financial Reporting and Collections, Government Accounting Division, Financial Management Board Secretariat (FMBS) will provide each Department with a spreadsheet containing the particular Department’s most recent inventory of contaminated sites. Only one site inventory list is to be maintained, however, the list is required to be updated twice each year: first, as part of the annual business planning process for Main Estimates Budgeting purposes; second, to aid in the preparation of the annual Government of the Northwest Territories (GNWT) Public Accounts (deadlines and format for the Public Accounts information are provided in the Year-End Instructions Manual). This site inventory will contain the following components for each known or suspected site:

• Location (community in which the site is located);
• GNWT Department responsible;
• Type of site as defined by primary use (e.g. fuel tank farm, airport, etc.);
• Tangible Capital Assets identifier number, if applicable;
• Description of the site and environmental issues (i.e. nature of the contamination);
• Type of Environmental Site Assessment completed;
• Assessment of the ownership of the site and responsibility for clean-up (e.g. 100% GNWT; 50% GNWT/ 50% Federal, etc.);
• Recommended or planned method of remediation;
• Estimated volume of contamination;
• Estimated cost of remediation;
• Estimated cost of monitoring sites subsequent to quantifying remediation costs.  This would include, for example, monitoring undertaken to determine whether contamination has spread to surrounding areas.  This monitoring should be identified in the Remedial Action Plan (RAP) or ESA report as a required part of the remediation;
• Status and Next Steps (i.e. more Environmental Site Assessments or clean-up to be undertaken), including related dates; identify inter-departmental coordination opportunities to share consulting, travel, equipment costs, etc. for environmental work undertaken in the same community.
• Fiscal year that actual remediation costs were incurred;
• Estimated cost of capital equipment to be purchased where the equipment required is not available on site and leasing would be cost prohibitive;
• Estimated cost and timing of a Phase I Environmental Site Assessment, as applicable;
• Estimated cost and timing of a Phase II Environmental Site Assessment, as applicable, including the consultant’s estimate of the volume and/or area of contamination;
• Estimated cost and timing of a Phase III Environmental Site Assessment, as applicable, including the consultant’s estimate of the volume and/or area of contamination.  The consultant should identify an estimate of the cost of remediation either in the ESA report or in a separate communication; and
• Estimated costs remaining for the clean-up of the site (i.e. the liability).

A site or event, which has the potential to contaminate the environment, is not to be included until such time as the site or event is suspected of having actually caused damage.