A Framework for Ontario's Environmental Leaders Program (Formerly Known as Cooperative Agreements) July 2004 (jrYfr^riO Ministry of the Environment V"^i ^WI ,v^ , Environmental Innovations Branch 8 Table of Contents 1.0 Introduction 3 2.0 Requirements And Commitments 5 2.1 Entry Requirements 5 2.1.1 Demonstrated Record of Environmental Compliance 5 2.1.2 Environmental Management System 5 2.1.3 Emission Summary and Dispersion Modelling Report 6 2.1.4 Ontario Regulation 127/01 - Table Seven 6 2.1.5 Provincial Priority Reduction Plans 7 2.2 Ongoing Commitments 8 2.2.1 Communication and Outreach 8 2.3 Monitoring, Reporting and Verification 8 2.3.1 Monitoring and Reporting 9 2.3.2 Verification 9 3.0 Incentives 10 3.1 Technical Assistance 10 3.2 Enhanced Comprehensive Certificate ofApproval 10 3.3 Technology Approval Incentives 1 3.4 Guaranteed Approval Turn Around Time 1 3.5 Single Window Access to the Ministry 1 3.6 Internet Recognition 1 3.7 Public Acknowledgement 1 3.8 Industry-Government Round Tables 1 3.9 Phase Two Development 12 3.10 Greater Regulatory Certainty 12 4.0 Administration 12 4.1 Term 12 4.2 Amendments 13 4.3 Consequences 13 4.4 Management Committee 14 4.4.1 Management Committee Role 14 4.5 Appeals 14 4.6 Program Procedures and Processes 14 Schedule 1- Environmental Management Systems 16 A Framework For Ontario's Environmental Leader's Program Page 2 of 1 INTRODUCTION 1.0 In the spring of 2000, the Government of Ontario, through the Secretary of Cabinet, commissioned the Executive Resource Group (ERG) to prepare an independent review of best practices with respect to how otherjurisdictions meet environmental challenges. The report positions Ontario within the context ofthese best practices, and makes recommendations to the government for establishing Ontario as a leading environmental jurisdiction. In January 2001, the ERG delivered the Managing the Environment report, and the Government has embraced the vision contained in the report as the direction for environmental management in Ontario. The report presents a number of strategic shifts that form an essential backdrop against which management decisions should be made. These strategic shifts include: • a strategic approach to managing the environment, building on the strengths of traditional regulation and the command and control model, and integrating with a it broader, more comprehensive approach; • the formation of a government-wide vision and goals for environmental management with implementation shared across Ministries; • emphasis on strategies to promote continuous improvement in environmental outcomes and accountability; • development of a place-based approach to environmental management; • implementation of a more comprehensive and flexible set of regulatory and non- regulatory compliance tools and incentives; and • an approach to environmental management based on shared responsibility with the regulated community, non-governmental organisations (NGOs), the scientific community and the public. The report also contains a series of recommendations for establishing Ontario as a leading environmental jurisdiction. One recommendation is for Ontario to implement an integrated approach to environmental compliance assurance, with one component being the development of Ontario's Environmental Leaders Program (formerly known as Cooperative Agreements). Ontario's Environmental Leaders Program (OEL) is intended to result in an improved environment, with a long-term view to establishing new norms of environmental protection. This concept is being tested through the use of government-industry Leadership Agreements. Under these Agreements the government provides incentives to environmental leaders that commit to meeting beyond compliance environmental A Framework For Ontario's Environmental Leader's Program Page 3 of 18 targets. The purpose of the program is to test the delivery of such an instrument and to document its success in motivating continuous improvement. The framework includes the following elements, as recommended by the Managing the Environment report and the New Directions Group: • transparency through public involvement and public reporting; • clear accountability, with specific performance-based targets; • clear monitoring and reporting requirements; • third-party verification of performance; and • continuous improvement, through the use of incentives and consequences. This approach is a fundamentally new direction for the Ministry that will further the province's move towards environmental management based on shared responsibility with the regulated community, NGOs, the public, and the scientific, academic, and technical communities. Leadership Agreements, entered into under OEL, are one of the many tools that will be available to motivate both the government and regulated entities to continuously improve the way the environment is managed, ultimately leading to an improved natural environment for current and future generations. This document includes the following sections: Section Two: Requirements and Commitments • Details the conditions of entry and the commitments that participants must make and meet in order to remain in the program. It indicates the monitoring, reporting and verification requirements, as well as the Ministry's responsibilities in the implementation and delivery of Leadership Agreements. Section Three: Incentives • Describes the suite of incentives that are available under a Leadership Agreement. Section Four: Administration • Details the various administrative supports, Agreement terms, and the consequences and appeals processes. A Framework For Ontario's Environmental Leader's Program Page 4 of 18 REQUIREMENTS AND COMMITMENTS 2.0 This section outlines the entry requirements, ongoing commitments of industry participants and the monitoring, reporting and verification requirements. 2.1 Entry Requirements 2.1.1 Demonstrated Record of Environmental Compliance For the purpose of the program, compliance refers primarily to direct environmental impacts. Entry into Ontario's Environmental Leaders Program (OEL) is at the discretion of the Ministry. In evaluating compliance, the Ministry will be guided by the following: • Each Facility will disclose environmental charges, convictions, outstanding fines, Ministry-issued control documents, and litigation involving environmental matters at the Facility during the previous five years. • In the event that any of the foregoing exists, there must be a Ministry approved plan in place to address the issue(s) as may be appropriate, and the Facility must be in compliance with all control documents. • The most senior official at the Facility will sign a Statement of Sustained Compliance. • The Ministry will conduct an internal compliance check based on information existing within the Ministry at the time of application, including interviews with district staff, information on Ministry databases, and other research the Ministry considers appropriate. Strict non-compliance with all environmental laws, regulations and policies will not be the only basis for decisions regarding either denial of entry to, or removal from, OEL . The Ministry will consider all facts, including the existence of approved plans to address non-compliance. However, a deliberate or direct event that has adversely impacted the environment or human health is a significant non-compliance matter that is considered contrary to the purpose and intent ofthe program. 2.1.2 Environmental Management System Facilities participating in OEL must have an environmental management system (EMS) in place. The EMS must include all Ministry-identified elements as outlined in Schedule One: EMS. A Framework For Ontario's Environmental Leader's Program Page 5 of 18 8 An environmental management system is that aspect of an organisation's overall management structure that addresses the immediate and long-term environmental impact of its products, services and processes on the environment. An EMS provides a Facility with an organisational framework that increases its ability to identify and mitigate environmental impacts arising from its activities. Environmental management system elements add rigour to the Facility's measurement and reporting mechanisms. 2.1.3 Emission Summary and Dispersion Modelling Report Each Facility must submit a completed Emission Summary and Dispersion Modelling (ESDM) report that reflects current emission rates to the Ministry. Facilities must prepare this report using procedures set out in Ontario Regulation 346 and the guidance document entitled, Procedure for Preparing Emission Summary and Dispersion Modelling Report (MOE, 1998). Regulation 346 includes point of impingement limits that are intended to protect communities against local adverse impacts from stationary industrial/ commercial sources. Compliance verification with Ontario Regulation 346 typically includes a Ministry review of the ESDM report submitted by each industrial/commercial Facility. Thus, ESDM reports provide the Ministry and the Facility with compliance information and may inform the target-setting process. If the ESDM report identifies a previously unknown situation of non-compliance, the Facility must immediately develop and implement a Ministry-approved plan that will bring the Facility into compliance. Failure to develop and implement such a plan will result in denial ofthe request to enter into a Leadership Agreement with the Ministry. 2.1.4 Ontario Regulation 127/01 - Table Seven Ontario Regulation 127/01, Airborne Contaminant Discharge Monitoring and Reporting, requires industrial and commercial sources to report on emissions of a wide variety of compounds when they are emitted above prescribed thresholds. In addition, each Facility must keep on site record keeping information required by Table Seven of the Step by Step Guideline that accompanies the regulation (the Guideline as defined in Regulation 127/01). Table Seven sets out some of the detailed data used to calculate air emission. This information will provide evidence that emissions have been calculated accurately, and will allow the Ministry to verify that emission reductions were not achieved through, for example, changes in production levels (which is not credited under this initiative). A Framework For Ontario's Environmental Leader's Program Page 6 of 1 2.1.5 Provincial Priority Reduction Plans Facilities must submit a Provincial Priority Reduction Plan (PPRP) to the Ministry with the application. The PPRP must contain issue-specific goals and beyond compliance environmental objectives including the following: • the targeted substances, baseline emissions, reduction targets and measures of success; • site-specific and local issues; • industry objectives; • strategies and actions including the steps the Facility will take in order to achieve the emissions reduction targets, including capital investment and process changes; and • the timetable for implementation. Facilities' choice of emissions reductions targets must reflect both the Ministry's priorities and the significant environmental impacts and aspects as identified within a Facility's EMS. Facilities may choose from a long list of targets developed by the Ministry. Alternatively, participating Facilities may choose to develop their targets by engaging in a consultative risk management process with the Ministry. The PPRP should also contain information including, but not limited to: • alternative implementation options considered; • previous commitments and achievements related to priority substance reduction and continuous improvement; • enhancement of environmental management systems; • training programs; • staffing and organisation considerations; and, • data or information gathering programs and projects. Since Leadership Agreements focus on new environmental improvements that take participants beyond compliance, Facilities may not rely on actions that represent compliance with existing legal requirements under municipal, provincial or federal jurisdiction. Previous emissions reductions will not be considered for commitments under Leadership Agreements. Facilities will not receive credit for reductions achieved through outsourcing production, closing production lines or by replacing one substance A Framework For Ontario's Environmental Leader's Program Page 7 of 18 with another that causes or is capable of causing pollution in similar or greater levels of toxicity. 2.2 Ongoing Commitments Facilities entering into a Leadership Agreement must make commitments in several areas, as follows: the meeting of explicit, measurable emission reduction targets set out in the PPRPs (see above); stakeholder communications requirements; and monitoring and reporting requirements. 2.2.1 Communication and Outreach The Ministry considers that environmental protection and innovative solutions can be significantly advanced through stakeholder communication and involvement. As such, the Ministry is interested in working with environmental leaders who wish to be transparent and open with their stakeholders regarding their environmental management. Communication and outreach should include all interested parties, including governments, the community and other stakeholders. Outreach will vary across facilities depending on their size, setting and type of operation, however, it must be proactive and include opportunities for two-way communication with those interested in the activities of the Facility. Communication and outreach must include the following features: • community consultation; • an open and accessible public response system; and • a system that informs the community of important issues related to the Facility's environmental management. 2.3 Monitoring, Reporting and Verification Credible monitoring and reporting of environmental performance is key to ensuring transparency, monitoring Facility progress and evaluating the impact of the program on beyond compliance performance of regulated entities. A Framework For Ontario's Environmental Leader's Program Page 8 of 18