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Second Prime Contractor Case in Alberta Concludes
This article was recently published in the McLennan Ross OHS news and was authored by David Myrol. Mr. Myrol is a leading authority in the field of Occupational Health & Safety law in Alberta, and was the first full time OHS Prosecutor for the Province of Alberta.
Dave Myrol is now in private practice with the firm McLennan Ross and is the Chair of their OHS Practice Group. He may be reached at 780 482 9290 or dmyrol@mross.com
The trial portion of an important OHS case finally ended in August of this year. The case was a disappointment for many hoping to gain some insight into the extent of prime contractor obligations in Alberta. However, such was not to be the case as the prime contractor entered a guilty plea to a narrow and unusual set of facts on a little used section of the OHS Act. Therefore, the opportunity for judicial analysis was lost, and we remain without much direction from the courts on this important issue. Nevertheless, the case is important for its sentencing component and message from the court.
In this case the court expressly rejected the crown recommendation for a higher fine to be imposed on the prime contractor. In sentencing the prime contractor, the court resisted the temptation to impose a sentence based only upon the consequences of the accident. Instead, the court looked towards the actions of the prime contractor, and the connection between the error of the prime contractor and the death of the worker. The court acknowledged that the causal connection here was tenuous at best and therefore imposed a much lower fine than what was recommended by the crown. The reassuring message is that violators will be sentenced on their actions and not just on the injury sustained.
The accident in question involved an oil well owned by Arc Resources Ltd. that had ceased producing because of a blockage in the well thought to be created from wax build-up over the years. Arc sought to remove the wax build-up with heated crude oil and contracted with a number of companies to help remove the wax and bring the well back into production. Trican Well Service Ltd. was contracted to provide a Coil Tubing Unit and operators for the Unit. Arc supplied the crude oil that was to be circulated down the well using the Coil Tubing Unit. "Crude oil" is a controlled product and triggers legal obligations with respect to the training of workers and the availability of a material safety data sheet ("MSDS") which identifies the known hazards of the controlled product.
On the day of the accident the main operator of the Coil Tubing Unit conducted a safety meeting, and warned everyone at the meeting to stay away from the "pressure side" of the Coil Tubing Unit while it was operating. The coil tubing from the Unit was then inserted into the well and hot crude oil was circulated through the coil tubing and into the well. The process did not remove the wax blockage and the coil tubing was removed from the well. The operators of the Coil Tubing Unit then attempted to purge the excess oil remaining in the coil tubing by blowing air through the tubing.
Unfortunately this created a mixture of oil and air that was ignited by a spark likely generated from static electricity within the hosing of the Coil Tubing Unit. An explosion resulted on the "pressure side" of the Coil Tubing Unit where the main operator was located. No one else was harmed in the explosion.
In January of 2004, Arc plead guilty to s. 24.1(c) of the OHS Act. The Crown alleged that Arc had failed to ensure there was a complete review of the contents of the MSDS "regarding all of the special precautions to take when using or handling" the controlled product. The Crown also alleged that Arc failed to fully update the flashpoint range for the crude oil. Subsequent testing of the crude oil used in the accident revealed a different flashpoint than the one recorded on the MSDS.
However, the Crown conceded that the inaccuracy was not the cause of the explosion and that the explosion would likely have happened even with an accurate flashpoint recording on the MSDS. The Crown also conceded at the sentencing of Arc that there was no direct cause between the breach of s. 24.1(c) of the OHS Act and the death of the worker. Nor did the Crown allege any form of gross negligence on the part of Arc. The Crown recommended a fine between $75,000 to $100,000. Counsel for Arc recommended a fine between $20,000 to $25,000. The Court rejected both recommendations and imposed a fine of $30,000 plus a $4,500 victim fine surcharge. In mitigation the Court noted that: (1) the connection between the breach of s. 24.1(c) and the death of the worker was tenuous at best; (2) a timely guilty plea had been entered; (3) there was no previous record; (4) Arc had taken steps to address its failings; and (5) Arc had committed to making a $50,000 contribution to STARS Air Ambulance. (It is important to note that the Court did not credit Arc with a dollar for dollar value on the charitable donation noting that it was only "an element of mitigation").
The facts of this case are most unusual. The essence of the wrong committed by the prime contractor seems to have been a failure to provide an MSDS and instruct workers about the hazards of a controlled product. There can be no doubt that accurate information and training about the hazards associated with controlled products is crucial in preventing workplace accidents. The MSDS has a very important role to play in the workplace and that importance should not be diminished. However, in this case the controlled product was "crude oil" with commonly understood hazards. The entire industry is based upon this product. In terms of prevention, can it seriously be suggested for a moment that the main operator from Trican did not appreciate the explosive nature of crude oil? If he were handed the MSDS on the morning of the accident, would he even look at it? Strange facts indeed, but such is sometimes the nature of a guilty plea.
In this case the employer Trican was also charged as a result of the accident. Trican challenged the case in court and lost, and in August of 2004, received a fine of $120,000 plus an 18,000 victim fine surcharge. The story may not be over for Trican as they have time to appeal. Whether they do or not remains to be seen. However, one should not assume from this isolated example that prime contractors will be treated more leniently by the courts than employers. With only two prime contractor cases in Alberta, it is too early to make that assumption.
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