Terminology
Environmental Site Assessment
Environmental Site Assessment (ESA) is undertaken in a systematic, phased process, as defined by the Canadian Council of Ministers of the Environment (CCME) and in compliance with the guidelines published by the Canadian Standards Association (CSA) with well defined objectives.
A Phase I ESA is a study to determine if there is potential for material adverse environmental risks on the subject site. If such a risk is identified, a Phase II ESA is recommended.
A Phase II ESA is conducted following a Phase I ESA to confirm the presence or absence of material adverse environmental impacts in excess of applicable regulatory criteria, if there is reason to do so.
A Phase III ESA quantifies the horizontal and vertical extent of the adverse environmental impacts confirmed to be present in the Phase II ESA and acquires sufficient data for the preparation of a volume estimate and an environmental site remediation plan.
Phase I Environmental Site Assessment
The Phase I ESA, conducted according to CCME guidelines and CSA standard Z768-01, is customarily required by lenders and others to determine whether there is a likelihood that contamination may be present on the subject site.
A Phase I ESA is a non-intrusive investigation which investigates site historical data obtained from multiple sources and assesses the current environmental situation of the subject site by way of a comprehensive physical site inspection. The training, experience and maturity of the assessor are essential to accurately determine the level of environmental risk. D&G Enviro-Group professionals who conduct Phase I ESAs come from diversified backgrounds and cumulatively possess in excess of 100 years of relevant industrial experience.
The Phase I ESA process includes four key requirements:
A review of all reasonably available information and documentation relative to regulatory records, municipal directories, fire insurance records, topographic maps, aerial photographs, planning documents, title search information, surficial and bedrock geological mapping and relevant data from libraries and other sources.
A site visit conducted with someone familiar with the subject site to identify and assess physical site characteristics, infrastructure such as buildings, structures and underground utilities, hazardous materials, above ground and underground storage and distribution equipment, odours, staining and other physical evidence of past or current site contamination. The site visit also identifies potential issues associated with adjacent properties as well as potential environmental receptors.
Interviews with individuals familiar with the subject site who may have previously undocumented knowledge of past and present operations and site activities to identify situations or events which may have adversely impacted soil or groundwater.
Preparation of a report with supporting documentation such as photographs and records of communications. The report will conclude whether there is, or is not, a potential risk of material adverse environmental impact. In the absence of potential impact, no further action would be warranted. If potential impact is identified, the recommendation to undertake a Phase II ESA is usually made.
Phase II Environmental Site Assessment
The Phase II ESA, conducted according to CCME guidelines and CSA standard Z769-00, customarily involves intrusive testing of soil, surface water or groundwater to confirm the presence or absence of adverse environmental impacts. The key to an accurate and effective Phase II ESA investigation is the collection of a sufficient number of representative samples from potential impacted areas of the subject site and the preparation of defensible conclusions by experienced professionals.
A Phase II ESA identifies site-specific contaminants, obtains representative samples and submits these samples to an accredited laboratory for detailed chemical analysis. The analytical results are compared to the applicable regulatory criteria. The essential components of a Phase II ESA are as follows:
Undertaken if a Phase I ESA identifies the potential presence of contaminated soil or groundwater on a property.
The Phase II ESA investigates surface and sub-surface impact and provides a characterization of site conditions to determine if further assessment or remedial work is required.
The investigation may include the collection of soil, surface water, sediment and groundwater samples. Geophysical surveys and soil vapor surveys may also be used to identify buried infrastructure or contaminant plumes. The investigation may include a hazardous materials survey of buildings or structures.
Representative samples are obtained from test pits, boreholes, manual excavations or monitoring wells. The number, location and specification of sample points are determined from the Phase I ESA findings and by site conditions, in consultation with the client and the property owner.
Prior to any subsurface investigation, the location of underground utilities and services is investigated and confirmed.
Suspected or anticipated contaminants are identified, sampled and analyzed. The laboratory results are compared to applicable regulatory criteria. If the Phase II ESA identifies adverse environmental impacts in excess of the applicable regulatory guidelines, additional assessment, such as Phase III ESA or remediation may be required.
Phase III Environmental Site Assessment
The primary objective of a Phase III ESA is to quantify the depth and lateral extent of contamination on the subject site by additional intrusive testing. The Phase III ESA usually allows a determination of impacted soil volume and an estimation of anticipated remediation cost.
The key components of a Phase III ESA are:
Detailed delineation of identified contaminants in soil, sediment or groundwater. Test pits, boreholes and monitoring wells are generally used to obtain representative samples for laboratory analysis.
Calculation of the volume of impacted soil or the extent of a plume of contaminated groundwater.
Determination of contaminant migration pathways in soil and groundwater and the preparation of "fate and transport" and "risk assessment" models. These are intended to determine the length of time required to reach a receptor and the ultimate concentration when the contaminated plume reaches the receptor.
Development of realistic remedial options, including a schedule and estimated costs.
Site Remediation
Remediation is conducted to render the subject site in compliance with the applicable environmental regulatory criteria
Environmental Site Remediation
Except in certain very specific cases, site remediation, also known as Phase IV, is conducted on a voluntary basis to satisfy purchasers of a property and their lenders. The objective of a site remediation is to remove contaminated soil so that the site will meet applicable regulatory criteria.
Site remediation may be conducted in a variety of ways. Although D&G has extensive experience with all the following remedial technologies, we are neither a vendor nor a promoter of any specific technology. That is what makes D&G an intelligent choice as environmental risk management consultant, since our role is to determine the most appropriate technology to address your particular problem. Some of the technologies we have successfully applied are as follows:
Excavation and off-site disposal or treatment
In-situ thermal extraction
In-situ natural attenuation or enhanced bio-treatment
Ex-situ bio-pile treatment
Soil vapour extraction, soil venting and air sparging
Free-phase petroleum product recovery, transport and off-site disposal or treatment
Containment, encapsulation or immobilization of contaminated soil and groundwater
Recovery, treatment, discharge of impacted groundwater
Risk Assessment
In some cases, a site-specific risk assessment to identify and evaluate exposure pathways and receptors can eliminate the need for costly excavation or other remedial treatment options. This may result in a significant reduction in disruption to the subject property and any on-going or continuing operations, and therefore, significantly decrease overall project costs. We work in conjunction with a licensed toxicologist who is recognized by the regulatory agencies.
Environmental Due Diligence
Experience in environmental due diligence for mergers and acquisitions
Hybrid Phase I Site Assessment and Limited Compliance Audit
We have learned that environmental due diligence projects are usually done on a tight time frame and we have demonstrated experience pulling together, in a timely manner, the essential information in a management format decision tool document. Our basic model centers on what we call a “Hybrid Phase I Site Assessment and Limited Compliance Audit”. In the case of a multi-site acquisition, we mobilize qualified teams to visit each site, in many cases concurrently. We have established strategic alliances with several international environmental consulting firms with worldwide reach. Combined with our local office and fully bilingual professional personnel, we deploy teams rapidly and efficiently throughout North America and overseas.
The teams visit the sites armed with a uniform inspection checklist and report back to our central location by way of teleconference, Skype or Zoom upon completion of the individual inspections. A senior professional moderates the conference calls and extracts salient points from each of the debriefings. The inspection teams subsequently prepare a formal report which follows within an agreed upon time frame.
Based on the debriefings, we develop an “Environmental Due Diligence Summary Table” which captures the important management issues for all sites in a single document. Generally, we outline the following in our summary:
Facility Identification
Use and Description
Permits and Compliance
Contamination Issues
Areas of Concern
Analysis and Comments
Conclusions
Recommendations
Corrective Action Cost Estimate
Environmental Risk Score
This document can then be used as a high-level decision tool to quickly assess the material issues which could adversely affect the transaction or result in material financial liabilities in the future. D&G Enviro-Group adds value in the areas of finance and accounting, having an experienced Chartered Accountant on our senior staff.
D&G has conducted assessments of this nature for acquisitions valued at up to $350 million.
Compliance with Section IV, Chapter IV of the Loi sur la Qualité de l’Environnement
In certain very specific cases, a property may be subject to the provisions of Section IV, Chapter IV of the Loi sur la Qualité de l’Environnement (LQE). This is sometimes erroneously referred to as “Law 72” compliance.
Schedule III of the Règlement sur la Protection et la Réhabilitation des Terrains (RPRT) sets out a list of industrial activities, the permanent cessation of which may trigger certain onerous regulatory obligations for a property owner or tenant. It is very important to ascertain whether such a listed activity has been or continues to be undertaken on your property. The subtleties of this assessment are generally not well understood and many consultants end up recommending unnecessary, costly work. The presence or not of a listed activity is usually determined during the undertaking of a Phase I ESA and must be done with care by seasoned professionals who are familiar with the legislation and the potential impact of an incorrect assessment.
Generally speaking, the cessation of a listed activity prior to March 1, 2003 triggers Section IV, Chapter IV in the event that the current land use changes in the future. If a listed activity ceases after March 1, 2003, the requirements are triggered within six months of the cessation, regardless of whether there is an anticipated change of land use or not.
The important nuance is that the triggering of Section IV, Chapter IV creates a legal obligation for the entity who ceases the listed activity or the property owner who is changing the land use. Site characterization and remediation are then no longer voluntary and the Ministère de l’Environnement et de la Lutte contre les changements climatiques must be involved at every step in the process. The MELCC must approve the characterization report and the remediation plan and must ultimately approve the final remediation report.
Where an “Expert” recognized by the MELCC is required to attest documents in order comply with certain aspects of the regulation, D&G employs an independent, arm’s length professional similar to the use of a financial auditor to verify and attest financial statements, rather than create an obvious conflict of interest by using in-house personnel for this step.
If this situation applies to you and your property, there are techniques and strategies that can be applied prior to cessation of the listed activity or the changing of land use that can mitigate the adverse financial and timing impacts to comply with this legislation.