Environmental Due Diligence and Remediation

F.A.Q.s

Why should I be concerned about hazardous materials in my building?

Hazardous materials often pose a health risk to your employees, your customers, and persons using the building. If someone is injured because of the materials in the building you may be liable. In addition, the presence of hazardous materials often affects the leasability and almost always reduces the sale value of a building

As a property owner or manager, when does my facility require an assessment or an audit for the presence of hazardous materials?

Under civil law you have an obligation to be aware of any hazards that are present in the building. Many materials are provincially or Federally regulated. For example in Ontario there is a list of eleven designated substances and the presence of these has to be noted prior to tendering any work or construction or renovations. The contractor must be made aware of those substances. In addition there are specific regulations for asbestos and other hazardous materials which apply (with some variations) in all Canadian provinces and territories. Detailed information on regulations for each of the provinces across Canada is available from our office.

What sort of assessment do I need if I am either contemplating purchasing or selling a property?

Most financial institutions in Canada require a Phase I Environmental Site Assessment (ESA) that complies with CSA Standard Z768-94, the accepted standard in Canada. It involves a review of the history of the property to determine whether there were any past operations at the site which might cause an adverse environmental condition. This is typically done by examining historical aerial photographs, historical fire insurance plans, municipal directories and performing an historical title search to see who has owned the property in the past. In addition to the historical research performed, a site visit is conducted at which time any current operations which could have an environmental impact are also assessed. A Phase I Assessment does not include sample collection or intrusive testing. The sole purpose is to determine if the possibility of environmental contamination has occurred.

If it is determined from the Phase I Assessment that environmental contamination has occurred, what is the next step?

A Phase II Assessment would then take place. This is the point at which intrusive testing is performed. A Phase II Assessment can cover a wide variety of tasks ranging from asbestos sampling to excavating bore holes on the property and installing monitoring wells to check the quality of the soil and groundwater. If there are any conditions found in the Phase II Assessment that warrant remediation a remedial action plan is then developed.

What would a remedial action plan consist of?

Remedial action plans consist of the development of detailed plans and specifications outlining how the remediation will take place. This is followed by tendering of the work to qualified contractors in the remediation area, supervision of the remediation project, and some level of confirmation sampling at the end of the project to ensure that the contaminant is now within the accepted criteria.

What liabilities, other than hazardous materials, should a property manager be aware of?

There are a number of other potential environmental liabilities beyond the building envelope that building managers need to be aware of. These could include chemical or hydrocarbon contamination of soil and groundwater on the property. This contamination might be the result of leaking underground storage tanks or past industrial operations on the site. These operations may have used any number of chemical compounds that can cause not only adverse health effects for persons utilizing the property, but can also present a very real liability in financial terms to the owner of the property.

What are some of the examples of those financial liabilities?

An owner of a property that has leaking underground storage tanks or substantial contamination of the soil and groundwater will find it difficult to obtain financing for the property. They may not be able to renew a mortgage if those conditions are found to be present. So if you are considering either purchasing or selling a property you need to have an assessment performed of the environmental conditions. This is generally a condition of the financing of any property offered by any major financial institution.

What about the possible health effects of these environmental liabilities? How do they manifest themselves?

Most of the provinces in Canada now have criteria that has been developed for limits of chemical contamination in the soil, and these are risk-based criteria. If you are occupying a property where there are conditions which exceed those criteria there could potentially be a health risk to the building occupants. The severity and type of health risk varies a great deal depending on the type of contamination. Many of these compounds are carcinogenic and the risk-based criteria may be bases on a long-term exposure hazard.

What does an environmental consultant do?

The term environmental consultant covers all manner of issues in which man interacts with the natural world. This may involve the impact of industrial development on wildlife, emissions to the air or water, waste and water treatment and waste reduction. Pinchin Environmental specializes in areas related to hazardous materials in buildings and issues related to worker health and safety caused by environmental hazards. Pinchin has trained building consultants who assess hazardous materials in various different types of building components. We prepare risk assessment reports on asbestos, mould, PCBs, lead, and mercury. We also conduct comprehensive building inspections and assessments and determine what is required for safe occupancy, and what is required for government or regulatory compliance. We conduct environmental and health and safety audits. We also assess and measure industrial emissions and design and implement control measures. (with an emphasis on odour control).

Why would an environmental assessment or audit be requested?

Environmental Site Assessments (Phase I & II ESA’s) are often requested by clients when they are considering mortgaging, valuing, or selling property. We work closely with owners or their agents prior to a purchase or a sale and look at the environmental issues to give an estimate the cost of remediation, or the depreciation effect these environmental liabilities might have on the value of the building. As an example, if there is asbestos present on the piping and on the ceilings and the building is valued at one million dollars, there might be $150,000 worth of asbestos abatement required. Some tenants will not occupy asbestos-containing buildings so that is very important information for a potential purchaser. Soil contamination and remediation of value of the building or site.

Environmental Audit (often combined with a Health and Safety audit) looks much more at the current activities in a building or property which may lead to contamination of this site, exposure to workers to hazardous chemicals, or physical agents, or non-compliant with regulations or established due diligence standards. This is a picture of the current activities as opposed to an Environmental Assessment of a property that lacks at the historical or pre-existing activities and contamination.

If remediation is required, what is the procedure?

We prepare specifications related to the required remedial work that can be bid on by qualified contractors. The outline of work and the procedures will change greatly depending on the site conditions. These specifications are often reviewed by the client, by regulatory officials, by insurance companies, and by the company’s Health and Safety committee.

After procedures have been prepared, do you oversee the work to ensure that it is being carried out correctly?

Our project inspectors are at the job sites ensuring that the work is being done in compliance with the procedures prepared, and in compliance with current regulatory requirements and in accordance with the wishes of the client. Depending on the clients’ needs we may be on site fulltime or part time at specific milestones. On some sites, Pinchin is responsible for all aspects of health and safety and compliance (joint with the contractor).