Lac-Mégantic: Where Does the Buck Stop?

photo: wikimedia commons

Canadians trust that their government will take reasonable measures to protect them, their workplaces, communities and their environment. Like the young people partying at the Musi-café in Lac-Mégantic, we are all in a way, oblivious to the risks that governments impose on us. When a catastrophic accident like Lac-Mégantic happens, people’s confidence in the system is shaken.

Was it the result of an improbable sequence of events? An "accident" that occurred in spite of a sound regulatory system and corporations committed to public safety?

Or was Lac-Mégantic the consequence of a flawed regulatory regime, one that allows profit-seeking companies to largely regulate themselves -- exacerbated by the enormous increase in the transportation of oil by rail over the last five years -- with the people of Lac-Mégantic paying the terrible price?

And how far does the chain of responsibility extend beyond the Montreal, Maine and Atlantic railway, to major players in the rail and oil industries, and to government policy-makers?

The backdrop to Lac-Mégantic is the wild-west boom in the production of unconventional oil -- shale oil from North Dakota and bitumen from Alberta.

Close to 275,000 barrels of oil per day are now being transported by rail in Canada, from almost nothing five years ago. The rail industry has met this spectacular surge in demand, for the most part, using tank cars that were not built for carrying hazardous materials.

And yet, Transport Canada’s Transport of Dangerous Goods division has an extremely small budget, $13 million, to cover all modes of transportation. This is about the same as the annual government budget to promote the oil sands over the next two years.

The division has just 35 inspectors, the equivalent of only one inspector for every 4,000 tank carloads of crude oil transported in 2013. This compares with one inspector for every 14 tank carloads in 2009 when the oil-by-rail boom started.

Despite the dramatic rise in oil shipments, the Conservative government cut the Rail Safety budget by 19 per cent from 2010 to 2014, and shaved the Transportation of Dangerous Goods budget over those four years, from $14 million to $13 million. It plans to freeze both budgets until 2015-2016 at least.

The Harper government’s laissez-faire attitude to regulation is reflected in its incessant use of the term "red tape," which implies that regulations are burdens on business rather than a legal mechanism to protect the public interest. Its latest regulatory policy, the Cabinet Directive on Regulatory Management (CDRM), took effect in late 2012.

The CDRM goes beyond previous regulatory policy in several ways. Although assessment of a proposed regulation’s impact is supposed to include a calculation of benefits along with costs -- as well as its impact on the health, safety and the environment, on vulnerable groups, etc., -- impact is in practice determined solely by anticipated costs, most of which are short-term costs to business.

Moreover, given its penchant for control, regulatory proposals will not generally move forward without the nod from the Prime Minister’s Office.

The Transport Minister granted Montreal, Maine and Atlantic (MMA) an exemption from the required two-person crews -- one of only two exemptions granted for a freight railway -- despite objections from the union representing the workers and its troubling safety record -- possibly due in part to pressure to adopt the lower U.S. standard -- which permits one-person crews.

Until Lac-Mégantic, Transport Canada did not heed repeated Transportation Safety Board warnings regarding unsafe tank cars and vague brake rules, allowing these trains be left unlocked and unattended.

For example, Transport Canada has downplayed dangers of the old DOT-111 tank cars -- which compromise almost 80 per cent of the Canadian fleet -- requiring only tank cars built within the last two years, to comply with the higher design standards. However, with an average life span is 40 years, the conversion to the new reinforced cars will take a very long time.

Amendments to the Railway Safety Act more than a decade ago surrendered authority to companies to develop their own safety management systems -- making their own judgments about the balance between cost considerations and the risks to public safety.

Referred to as co-regulation between government and industry, this is in effect, self-regulation -- a major surrender of Transport Canada’s regulatory authority.

Industry lobbyists, in the months leading up to the accident, repeatedly advocated against new safety measures for the transportation of dangerous goods.

Records filed with the Commissioner of Lobbying suggest that, beginning in 2013, the Railway Association of Canada’s lobbying efforts sought "…to assure [regulators] that current regulations for dangerous goods transportation are sufficient." In post-accident filings it removed its claim that current regulations were sufficient.

Though it is still early days in the aftermath of the tragedy, and there are many more questions than answers, the evidence to date points to corporate negligence and regulatory failure as root causes of the accident. And the chain of responsibility extends to the highest levels of corporate management and government policy-making.

The pattern established from past industrial disasters is that, as memory and media coverage recede, governments seek to restore public confidence in their regulatory system by reframing the narrative as one of technological learning -- if we’d only known then what we know now -- and obscure the root causes of the disaster.

However, this may be more difficult now since Lac-Mégantic and the recent spate of oil-related accidents have heightened public awareness of the dangers of huge shipments of crude oil passing through their communities -- whether by pipeline or rail -- making it more difficult for government to change the channel.

It is important to keep the spotlight on the flawed self-regulation approach that lies at the heart of the regulatory failure responsible for Lac-Mégantic. The government needs to take back authority ceded to corporations.

Bruce Campbell is the executive director of the Canadian Centre for Policy Alternatives. His study, "The Lac-Mégantic Disaster: Where Does the Buck Stop?"  is available on the CCPA website.

An abridged version of this piece also appeared on The Toronto Star.

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