Regulatory Standards

In designing a policy regime aimed at mitigating climate change, governments can choose to use mandatory regulatory standards in addition to or instead of efforts to encourage the voluntary adoption of desirable land-use patterns. In addition to enforcement, how the regulatory standard is designed will influence whether or not the public chooses to comply with it. It is therefore important to consider regulatory design if the goal of minimizing agriculture's impact on climate change is to be realised.

In Canada, the legislature has an almost unrestricted right to design environmental standards as it sees fit provided that the laws do not violated the Canadian Constitution and Charter of Rights and Freedom by being arbitrary, overly vague, or outside their constitutional authority. Canada may also choose to limit this authority by participating in international agreements like those governing international trade.

Currently, there are numerous environmental regulatory offences of general application in Canada that have an impact on farmers. In addition, there are certain regulatory offences that are specifically targeted at agriculture. Generally, all of these offences take one of the following forms:

• specifically mandated or prohibited conduct;

• prescribed limits.

Either a strict liability standard or an absolute liability standard is used to determine when someone will be held accountable in law for the commission of a regulatory, environmental offence. In addition, many jurisdictions have taken legislative action to respond to the particular susceptibility of agricultural operations to nuisance actions. They have passed laws that prohibit nuisance claims where a farmer employed "normally acceptable agricultural practices" thereby creating a new standard only applicable to agriculture.

Each of these regulatory standards is discussed below. Strict liability, absolute liability, and the defence of due diligence will be discussed first. This will be followed by an analysis of how the form of the offence as well as the standard used to determine liability can inform the debate on the appropriate standards to be used in GHG mitigation in agriculture. The chapter will then discuss the unique 'normally acceptable agricultural practices' standard.

Strict liability, absolute liability and the defence of due diligence

The discussion of the use of the standard of strict liability in the common law outlined that strict liability offences are actionable per se without proof of intention or wrongful conduct. The same is true of absolute liability offences, however, an important distinction must be made between the standards of strict and absolute liability. Strict liability offences are subject to various defences. That is, one can escape liability if they have an acceptable defence to the action. The defences vary according to the offence and include acts of God, necessity, self-defence, and in some instances, due diligence. Absolute liability offences do not permit these defences.

The distinction between absolute and strict liability offences was not made in the above section for two reasons. First, there are no true, absolute liability environmental offences in the common law. And second, common law strict liability offences are rarely subject to a due diligence defence. This last factor is a key distinction between the regulatory and common law strict liability standards.

Due diligence emerges as a defence to a strict liability offence once it has been established that the defendant committed the offence in question. The defendant will be liable unless she can establish that she used due diligence. Essentially, the onus shifts to the defendant to establish that she used reasonable care in the circumstances. An analysis of due diligence may include a consideration of the following factors (Fuller and Buckingham, 1999):

• acceptable standards in the industry and whether they were followed;

• the nature and gravity of the environmental harm;

• the foreseeability of the harm, including atypical sensitivity;

• available alternative solutions;

• legislative and regulatory compliance;

• character of the neighbourhood;

• the efforts made to address the problem and matters beyond control;

• the expected skill level of the defendant;

• preventative practices;

• any action taken by officials.

These factors are reminiscent of those considered under the common law reasonableness standard.

The due diligence defence is often incorporated into environmental legislation. It serves the dual purposes of reducing the burden of proof a plaintiff must meet, while accommodating those offenders whose actions were reasonable in the circumstances. Its usefulness in the context of GHG mitigation in agriculture will largely depend on the form the offence takes.

Specifically mandated or prohibited conduct

It is common for environmental legislation to require or prohibit specific conduct. Often prohibitions and mandated conduct are used in conjunction to achieve the overall goal of the legislation. For instance, Saskatchewan's 'Environmental Management and Protection Act, 2002' provides that:

Subject to subsections (2) to (4), without holding a valid permit that authorizes the person to do so, no person shall: cause or allow the discharge of any substance that may cause or is causing an adverse effect to the quality of any water.

Furthermore, the EMPA holds that in the event of an accidental discharge, the person responsible is required to report the discharge to the appropriate government authority. With the inclusion of definitions for what is considered pollution and what constitutes a discharge, EMPA provides relatively clear notice of what conduct is expected of the public - do not discharge a pollutant without a permit and if you do, report it. Therefore, the only issue that remains is whether non-compliance with either of these sections is an absolute or strict liability offence.

In designing a regulatory standard aimed at climate change mitigation, strict liability will always be the preferred standard from a farmer's perspective because it provides an opportunity to for the farmer defend non-compliance. On the other hand, if legislatures are serious about mitigating GHGs it may be undesirable to excuse non-compliance under any circumstances. An absolute liability offence may be justified where the standard of conduct expected of producers is unambiguous. If absolute liability is rejected in these circumstances, the burden to establish due diligence should be set quite high so as not to undermine the standard's effectiveness.

As will become clear as the other forms of offences are discussed, GHG mitigation schemes that specifically mandate or prohibit conduct may be in the best position to balance the goal of reducing the risk to producers of non-compliance with the goal of mitigating GHGs. One of the principal reasons for this is the fact that producers will have an incentive to innovate as traditional land management practices become unacceptable through a prohibition. Such a prohibition is not unlikely with respect to summer fallowing on the Canadian prairie.

A regulation that specifically mandates conduct will also promote innovation if it directs an outcome rather than a process. For instance, a regulation could state that producer must employ land management practices that maintain a constant level of organic matter in the soil. A regulation in this form will allow producers to innovate within their own operations and employ practices that best suit their situation.

Zero tolerance

Environmental legislation may outline zero-tolerance of certain substances that are deemed hazardous to the environment in all amounts. EMPA states that "[n]o person shall manufacture, offer for sale, sell, use or consume any product containing a halocarbon that acts as a propellant." Zero-tolerances are closely related to the prohibition of conduct in environmental legislation. The distinction being obvious - zero-tolerance prohibits actual substances in specific forms instead of prohibiting conduct. The use of zero-tolerance presumes that there are means to test for the presence of the prohibited substance.

The use of zero-tolerance may pose an additional risk to producers in a GHG mitigation scheme. Unlike prohibited conduct, the meaning of zero-tolerance may change as the means used to detect the presence of a prohibited substance improve. For example, if a GHG mitigation scheme establishes zero-tolerance for methane emissions from confined livestock operations, producers may be faced with having to satisfy a changing standard, at a considerable expense to their operation, each time the tools of measurements become more precise.

In this circumstance, whether the scheme employs a strict or absolute standard of liability is of great importance. The added uncertainty as to what will attract liability under a scheme that establishes zero-tolerances argues for a strict liability standard. As mentioned above, however, the reduced risk to farmers under a strict liability standard is achieved by sacrificing the environmental objectives the standard is ultimately trying to promote.

It should be noted that the changing standard does create an incentive for continual innovation in order to establish better GHG mitigation practices on the farm. Unfortunately, this incentive is achieved as a result of an increased risk to producers.

Prescribed limits

Environmental legislation also may permit an activity up to a certain prescribed level of acceptance. For example, the 'Canadian Environmental Protection Act' (CEPA) (1999) provides that:

No person shall manufacture for use or sale in Canada or import a cleaning product or water conditioner that contains a prescribed nutrient in a concentration greater than the permissible concentration prescribed for that product.

CEPA provides the maximum acceptable nutrient concentration in its regulations. This leaves no ambiguity as to what is expected of a person in these circumstances because the statute outlines a clear standard of conduct. Therefore, there is no added risk of non-compliance due to a misunderstanding as to the standard that will be used to evaluate conduct.

This form of standard may be attractive in the context of GHG mitigation because it is less restrictive than a straight prohibition of offending conduct. It will allow activities to occur up to an acceptable threshold. This may be desirable if GHG mitigation will require a fundamental shift in land management activities. The threshold can be lowered overtime to allow for the gradual adoption of new activities by producers. It must be noted, however, that once the initial threshold is established there is a risk that the subsequent legislative amendments may not occur.

Prescribed limits may also be a means to target those producers who can have the largest impact on GHG emissions without burdening small players with the costs associated with change. The prescribed limit can be set at a level above what would be expected from small producers.

Unfortunately, the use of prescribed limits does not always produce a clear standard of conduct. EMPA also uses prescribed limits to control activities that may be harmful to the environment. Below is an example of such:

No person shall discharge or allow the discharge of a substance into the environment in an amount, concentration or level or at a rate of release that may cause or is causing an adverse effect unless otherwise expressly authorized to do so.

This section of EMPA leaves a lot of room for interpretation. Although adverse effect is defined elsewhere in EMPA, the inclusion of that definition provides little assistance in outlining the expected standard of conduct. The section is designed in an overly broad and imprecise fashion thereby introducing ambiguities and enhancing the risk of non-compliance as a consequence of a misunderstanding.

Even when the standard is clear, however, the use of prescribed limits may be unattractive. The mere imposition of a prescribed limit alters the focus of compliance to meeting the limit. The overall objective of mitigating GHG in agriculture gets lost. Prescribed limits do not provide an incentive for on-going innovation to develop best practices once the threshold has been met. In addition, establishing the prescribed limit in itself may prove problematic. At some point, this process involves the creation of an arbitrary threshold.

Normally accepted agricultural practices

The normally accepted agricultural practices standard emerged in response to an increase in nuisance actions directed at agricultural operations. It is a unique example of the creation of a new standard designed to protect a specific industry. This standard has been adopted by numerous jurisdictions across North America. For example, the 'Agricultural Operations Act' of Saskatchewan provides:

The owner or operator of an agricultural operation is not liable to any person in nuisance with respect to the carrying on of the agricultural operation, and may not be prevented by injunction or other order of any court from carrying on the agricultural operation on the grounds of nuisance where the owner or operator uses normally accepted agricultural practices with respect to the agricultural operation.

It goes on to define a normally accepted agricultural practice as one that, among other things:

is conducted in a prudent and proper manner that is consistent with accepted customs and standards followed by similar agricultural operations under similar circumstances including the use of innovative technology or advanced management practices in appropriate circumstances.

Therefore, a producer will be immune from liability for any nuisance her operation is causing provided that she is using management practices that are custom in her industry.

This standard has not been employed in any other area besides nuisance. Special preference given to the property rights of one segment of society at the expense of another segment is rarely justified. It is highly unlikely that this standard will be employed in a GHG mitigation scheme and its use in this context should not be encouraged. The protection afforded to operations that employ customary practices preserves the status quo and has the potential to penalize innovation.

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