Audit of Environmental and Contaminated Sites Management (South of 60) - Follow-up Report Status Update as of September 30, 2014

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Action Plan Implementation Status Update Report to the Audit Committee - As of September 30, 2014

LED

Audit of Environmental and Contaminated Sites Management (South of 60)
Approval Date: 06-22-2012
   Project Recommendations       Action Plan    Expected
   Completion Date   
   Program  Response   
1. The Audit and Evaluation Sector recommends the Assistant Deputy Minister, Lands and Economic Development should establish a more rigorous and comprehensive governance and accountability framework that supports an integrated approach to environmental strategy, planning, budgeting, communication, performance measurement, and reporting. The framework should include a horizontal environmental oversight committee at the DG level to regularly review and discussing environmental objectives and performance – Sub-working groups should be established to address key issues – as well as a defined position on the roles, responsibilities/ accountabilities for the clean-up of uncapped oil and gas wells on reserves. In December 2011, the AANDC Executive Operations Committee approved a proposal to develop a departmental Environmental Management System (EMS). Development and implementation of the EMS will improve governance and accountability by modernizing the department's environmental policy framework. It will integrate environmental strategy, planning, reporting, budgeting, communication and performance into the department's Expenditure Management System (RPP, DPR) and Management, Resources and Results Structure (MRRS). October 2014

Status: Request to Close

Update/Rationale:
As of 30/09/2014:

In the proposed action plan, LED had originally contemplated: creating a new departmental DG -level committee as part of an Environmental Management System; conducting a gap analysis; modernizing and integrating policies into existing departmental systems; and, developing training.

As the scope and departmental implications of the Canadian Environment Assessment Act, 2012 (CEAA 2012) were clarified, efforts focussed on the Department's response to the implementation of this legislation. Due to the pace of implementation, LED opted to use existing senior management tables within the Department rather than create a new DG-level committee. Four presentations were made at the ADM Operations Committee (June 2012 - October 2013) to update progress, obtain direction and seek approval on the development of the Environmental Review Process. The Sector has since continued to use existing senior management tables to regularly discuss key environmental issues, including a joint presentation with the Northern Affairs Organization on contaminated sites (June 2014) and an initial LED Sector presentation on waste management on reserve (November 2014) at the ADM Operations Committee. The Sector will continue to raise key environmental issues at this forum as part of its ongoing business. The Sector also broadened the scope of a monthly National Director's Forum with regional directors, and this forum has been used to raise and seek direction on the Environmental Review Process, waste management and other environmental issues.

A review of the environmental aspects of the Department and a gap analysis was undertaken. Findings from this work highlighted the need for a waste management strategy as a priority.

Following senior management approval of the new Environmental Review Process, work has been underway to modernize and integrate environmental policies and processes with the Department. Collaboration with Treaties and Aboriginal Government, Regional Operations, Resolution and Individual Affairs Sectors and within LED have supported the integration of the new Environmental Review Process within the Duty to Consult, Indian Monies, Ministerial Loan Guarantees, Infrastructure, economic development transfer payments, and land policies on leases, permits and additions to reserve. Further engagement with other Sectors is planned to continue to modernize and integrate environmental policies as part of ongoing business. Additionally, the Contaminated Sites On Reserve program now undertakes an integrated approach with Regional Operations and Other Federal Departments, to seek opportunities to align efforts with other federal activities in communities on reserve, to leverage the mobilization of equipment and realize other cost reductions.

Training requirements have been analyzed and tools have been developed and approved at Operations Committee and implemented to assist departmental staff and First Nations understand the Environmental Review Process changes. Training sessions on the Environmental Review Process have been provided to environment officers and program officers. Further training on other environmental activities will be developed as part of ongoing business.

With respect to the clean-up of uncapped oil and gas wells on reserve in Ontario, LED has proposed to undertake a historical review of the location of uncapped oil and gas wells on reserve, develop a risk management strategy, enter wells that were contaminated sites into the data base, and make recommendations on funding levels. The historical review was completed and an initial list of wells based on existing sources was compiled.LED and IOGC have developed a strategy for Ontario (the one region south of 60 where a gap was noted) and are jointly implementing a risk management approach which focuses funding and efforts to begin addressing wells, instead of pursuing a costly comprehensive inventory. Any wells that represent a contaminated site would be addressed through the Contaminated Sites On Reserve program and entered into the contaminated sites data base.

Finally, IOGC recently presented costing options to AANDC to support a risk management approach in Ontario to address several hazardous wells which AANDC subsequently funded and which the Region is providing funding to and working with the First Nation to re-cap and remediate. LED and IOGC will continue to work together to address the issue as part of their ongoing business.

AES:  Recommend to close.

Development and implementation of the EMS will follow a phased approach beginning in fiscal year 2012-2013:

  • Phase 1 "Planning/Environmental Review" – Develop EMS engagement framework and DG-level steering committee terms of reference; define environmental aspects; conduct gap analysis; and outline scope of EMS.
March 2013
  • Phase 2 "Policy Modernization and Systems Integration" – Modernize existing policies, procedures and tools; integrate environmental consideration into existing departmental systems.
March 2014
  • Phase 3 "Implementation and Operation" – Develop training, communication and awareness materials and deliver to all staff with environment management responsibilities.
October 2014

The Department (LED and IOGC) plans to take the following steps as part of developing a strategy to address roles, responsibilities/accountabilities and budget source and level funding for the clean-up of uncapped oil and gas wells on-reserve:

1. Undertake a historical review, location and determine the ownership of uncapped oil and gas wells on-reserve

March 2013
2. Develop a Risk Management Strategy to deal with any identified abandoned wells and/or third party owned wells March 2013
3. Enter abandoned and third party owned wells that have impacts on human health and safety into the Integrated Environmental Management System (IEMS) contaminated sites data base, for monitoring purposes. March 2014
4. Determine required funding levels and sources for future environmental management and make recommendations to Senior Management on plan of action.

A revised action plan, with milestones leading up to the planned implementation date of March 2013, will be presented to Audit Committee once it has been reviewed and agreed on by LED and IOGC.
March 2014
2. The Audit and Evaluation Sector recommends the Assistant Deputy Minister, Lands and Economic Development should establish a regulatory gap management strategy that includes a single point of responsibility; policy and associated guidance/procedures, including those for Department owned assets; and identifies the internal resources required to implement the strategy, based on a needs assessment. In developing the strategy, the ADM, LED should work with Environment Canada to identify areas where new regulations may be developed to close gaps. Aboriginal Affairs and Northern Development Canada (AANDC) and Environment Canada (EC) have identified the extent of the regulatory gap on reserve and are in the process of conducting a risk assessment and prioritizing which aspects of the gap to address first. Once the risk assessment and prioritization are complete, AANDC and EC will develop several options to closing the gap and present them to senior management for further direction. October 2012

Status: Completed

Update/Rationale:
As of 30/06/2014:

Consistent with the action plan, AANDC has: completed the assessment and prioritized which aspects of the regulatory gap to address first; presented options on the prioritized gap area to senior management for further direction; and, completed a preliminary assessment of resource requirements to support the identified options.

The risk assessment of environmental regulatory gaps on reserve was completed in consultation with Environment Canada.  The regulatory gap associated with waste management was identified as the top priority, given the associated environmental, human health and financial/legal risks.

Options to address waste management were presented to DGIOC in March 2014.  As a follow-up to direction from this presentation, work was undertaken to develop regulatory options. A commitment to develop strategies and options to improve waste management monitoring and enforcement was one component of the Government of Canada response to the Study of Land Management and Sustainable Economic Development on First Nation Reserve Lands.

Finally, further analysis has been completed to build upon the preliminary assessment of resource requirements undertaken in the Q4 of 2013-14.  All options have now been fully costed.

As the completion of further analysis and implementation of the commitment to improve waste management monitoring extends beyond the original scope of the audit action plan, this initiative will be completed as part of ongoing environmental management business planning and activities.

AES: Implemented. The recommendation will be closed. Closed.

This recommendation will be addressed through the EMS development process and modernization of AANDC's environmental policy framework. October 2013
A preliminary assessment of internal resource requirements will be undertaken when options to close the regulatory gap are presented to senior management. October 2012
3. The Audit and Evaluation Sector recommends the Assistant Deputy Minister, Lands and Economic Development should develop a Contaminated Sites Management Program Liability Estimation Guide/Standard that is consistent with public sector accounting standards and TBS requirements and implement a communications and training strategy to ensure regional environmental officers understand the distinction between cost estimates and liability estimates and have the skills and capacity to correctly calculate these figures. The Lands and Environmental Management Branch will be developing a Contaminated Sites Management Program (CSMP) Liability Estimation Guide/Standard. The CFO sector will provide financial expertise in the development of the guide as required.

The Lands and Environmental Management Branch will be preparing a communications and training strategy to ensure the regional environmental officers understand their roles and responsibilities related to environmental liabilities and have the skills and capacity to correctly calculate environmental site liabilities. The CFO sector will provide assistance with the development of the training as required.
March 2013

Status: Underway

Update/Rationale:
As of 30/09/2014:

The Liability Estimation Guide was completed in March 2013 and provided to CFO for review. However, new Treasury Board liability reporting requirements have since been introduced. LED has contracted an expert to develop a revised Cost Estimation Guide and a revised Guide for the Development of Reporting of Liabilities and Contingent Liabilities. Draft estimation guides have been developed, and regional offices are now testing the guides for completeness and usability of the material. This work is on track for completion of the new guides and training by March 31, 2015.

AES:  Ongoing

4. The Audit and Evaluation Sector recommends the Assistant Deputy Minister, Lands and Economic Development should develop a requirement within FNITP for a First Nation to submit an environmental mitigation status report at project close-out in order to receive current and future project funding, similar to hold-backs on reports for financial statements. For Contaminated Sites, First Nations report to regions through Data Collection Instruments (DCI) reporting requirements on a quarterly basis or at 6 month intervals and at the end of the fiscal year reporting. The DCI is only a FNITP requirement; the more important deliverable for Contaminated Sites is the report, which comes through on the Funding Amendment as the approved scope of work. However, if DCI's and appropriate documents are not submitted then funding will be held back.

There are currently no DCI's for mitigation reports related to Environmental Assessments. It is up to the department to ensure that an environmental assessment is completed as per the requirements of the Canadian Environmental Assessment Act. The department is also responsible for ensuring mitigation measures are identified within the EA report and ;included in the Terms & Conditions of approvals (e.g. project funding agreements, and land permits). Parliament is currently reviewing Bill C-38 an omnibus bill entitled the "Jobs, Growth and Long-Term Prosperity Act", which was introduced in the House of Commons on April 26, 2012. The Responsible Resource Development initiative under Bill C-38 includes specific legislative changes to the Canadian Environmental Assessment Act. This could change the approach required for assessing environmental impacts of projects and activities on reserve. LED is leading a Task Team to create a new regime to ensure mitigation of environmental impacts will occur.

Monitoring and enforcing the Terms and Conditions of an approval is up to the departmental authority responsible for the approval (e.g. Lands/Aboriginal Business Development Program/IOGC/etc.). Projects often involve one time funding, which will make a FNITP tracking approach difficult. The department is exploring options for managing information in relation to mitigation measures in order to satisfy the reporting requirement identified in the Canadian Environmental Assessment Act 2012 coming into effect. The enforcement of mitigation measures is often difficult due to the limitations within the Indian Act. Serious violations may be subject to environmental legislative penalties found under other federal legislation such as Species at Risk Act (SARA), Canadian Environmental Protection Act (CEPA), and Fisheries Act.

CFO, TPCOE will work with LED to understand recommend the best approach and who should be involved to achieve their objective(s) for this action.
March 2013

Status: Completed- request to close.

Update/Rationale:
As of 30/06/2013:

For Contaminated Sites, First Nations report to regions through Data Collection Instruments (DCI) requirements on a quarterly basis or at 6 months intervals and at the end of the fiscal year. The DCI is only a First Nation and Inuit Transfer Payment (FNITP) requirement; the more important deliverable for Contaminated Sites is the report which comes from the funding amendment based on the approved Scope of Work. However, if DCI's and appropriate documents are not submitted then funding will be held back.

In addition, the department completed an analysis of the impacts of the changes to the Canadian Environmental Assessment Act, 2012 on program areas. In response to these changes the department identified the Integrated Environmental Management System (IEMS) as the preferred option for tracking environmental reviews as required under section 67 of the Canadian Environmental Assessment Act, 2012  and any associated mitigation measures in relation to projects covered by the new Act. The system will identify any mitigation measures that will inform the department's determination on the significance of environmental effects associated with the physical activities. Additionally, Environment Officers are required to incorporate them into the terms and conditions of their authorizations including funding. LED has worked with the Federal Lands Working Group comprised of all federal lands departments to ensure a consistent federal reporting process, CFO on the information and technology management requirements including DCI's and finally, the Corporate Secretary Branch to deal with access to information and privacy matters on the Environmental Management Approach (EMA ) file.

AES: Fully Implemented. The recommendation will be closed. Closed.

5. The Audit and Evaluation Sector recommends the Assistant Deputy Minister, Lands and Economic Development should define a departmental position on the enforcement of lease, permit and other environmental regulatory requirements, identify mechanisms to enforce these requirements, and provide adequate levels of training and staffing to enable the Department to fulfill its enforcement roles and responsibilities. Through the EMS process, the department will scope out its environmental responsibilities with respect to leases, permits and regulatory requirements and will modernize its environmental policy framework accordingly. Further instruction on applying corrective measures to ensure lease and permit provisions are followed may be developed through directives or procedures. An analysis of training requirements associated with the above will be undertaken.

A revised action plan, with milestones leading up to the planned implementation date of October 2013, will be presented to Audit Committee once it has been reviewed and approved by the national EMS working group.
October 2013

Status: Completed – Request to Close

Update/Rationale:
As of 31/12/2013:

After the introduction of the Canadian Environment Assessment Act, 2012 (CEAA 2012), AANDC began scoping out implications of CEAA 2012 on the Department.  As a result of these efforts, a New Environmental Review Process has been developed, procedures have been defined and scope of the approach has been determined. Under this new process, a significant proportion of projects involving leases, permits, and regulatory permits are risk assessed and environmentally reviewed factoring in the Species at Risk Act, Canada Environmental Protection Act and the Fisheries Act, and other appropriate federal legislation.

As cited above, the scope of AANDC's approach has been defined, which has informed development of options to support an Environmental Management System and ongoing efforts to review and maintain policies.  For example, environmental clauses have been added or revised to the new draft Additions to Reserve policy, the new Locatee Lease policy, and the new commercial lease precedent.   Other land management instruments requiring environmental conditions will be considered as part of regular business.

Training requirements have been analyzed and a number of tools have been developed, approved at Operations Committee and implemented to assist departmental staff and First Nations to understand the changes.  

When the Action Plan for the Audit of Environmental and Contaminated Sites Management (South of 60) was first presented, the Department had contemplated returning to the Committee with a fast-tracked Action Plan that would see earlier milestones identified leading up to the implementation date of October 2013. As the scope and implications of CEAA 2012 for AANDC were clarified, efforts were diverted to respond to the implementation of this legislation and opportunities to fast track the Environmental Management System did not materialize.  Four presentations were made at ADM Operations Committee (June 2012 – October 2013) to update progress, obtain direction and seek approval on the development of the Environmental Review Process.    

AES: Implemented. The recommendation will be closed. Closed.

6. The Audit and Evaluation Sector recommends the Assistant Deputy Minister, Lands and Economic Development should conduct a needs assessment exercise to determine the environmental management training needs of First Nations (inclusive of FNLMA and non-FNLMA First Nations) and align budget to identified needs. LEMB and Community Opportunities Branch will work jointly to develop a needs assessment strategy for environmental management, monitoring and compliance of FNLM and non-FNLM First Nations under a departmental Environmental Management System in order to align identified budget needs.

Currently, training in relation to environmental management is provided to First Nations participating under the Reserve Land and Environment Management Program. Two environmental courses are provided by the University of Saskatchewan and environmental components in relation to specific land management instruments are included in the technical training delivered by the National Aboriginal Lands Managers Association. Training support provided by external service providers such as the National Aboriginal Lands Managers Association and the University of Saskatchewan will be reviewed and adjusted based on evolving needs of First Nation communities.

As part of the new FNLM funding formula, each First Nation is funded at least $200,000/year plus an additional $75,000/year for two years to develop and manage their land/environment. In addition, FNLM funds the Lands Advisory Board Resource Centre, who, in addition to other responsibilities, is funded to provide capacity training and assistance to FNLM First Nations. This Board is responsible to undertake training and assistance for First Nations in the FNLM Regime. This training includes specialized courses on decision-making, governance and control over reserve lands and resources required under a Land Code. This on-line training is expected to be launched FY 2012-13. 

LEAF's current funding allocation provides a base amount ($25K) and the remaining balance to each region is based on population. It funds projects based on the eligibility criteria such as awareness sessions on environmental regulatory compliance, pollution prevention and environmental management of land and community assets. The new strategic direction of LEAF to align with the development of the EMS will provide the same base amount of funding and as of April 2012, projects will be funded based on incentives that are top priorities in both the OAG and the Environmental Tracker. This re-focus will link LEAF and EMS, and will provide awareness sessions on an on-going basis.
March 2013

Status: No Longer Relevant

Update/Rationale:
As of 30/09/2013:

We are requesting to close this recommendation as it is no longer relevant for a number of reasons.  First, efforts in Quarter 2 have focused on finalizing the scope of the Environmental Management System (EMS), a system to coordinate environmental management within the Department.  Part of this effort has included examining EMS models from other federal departments and identifying best practices.  Findings do not support undertaking external needs assessments, but rather support examining the environmental aspects of the organization itself.  Additionally, success factors from other federal departments suggest a phased approach with a narrowed scope of implementation.  In short, progress on the development of the EMS based on success factors no longer favours a needs assessment.  In fact, efforts to conduct such an assessment may shift attention away from critical areas where EMS implementation should commence within a phased approach. As part of the work in developing the EMS, research and assessment on existing data, provincial legislation and regulations, federal regulations, compliance and monitoring was completed with regions in Quarter 2. Furthermore, a Gap Analysis was conducted, which highlighted the Departmental needs to address all its environmental aspects.  Findings suggest prioritizing efforts on the development of a waste management strategy on reserve.  

AES: The recommendation is no longer relevant and will be closed. Closed.

 
 
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