BUSI401 CHAPTER 9

Question 1

SOURCE SITES

Answer 1

Source sites are the sites on which contamination is, or has been, generated.

Question 2

NON SOURCE SITES

Answer 2

Non-source ​ sites are sites onto which contamination, generated from a source site, has migrated.

Question 3

ADJACENT SITE

Answer 3

An adjacent site is not contaminated, but shares a common property line with a source site.

Question 4

PROXIMATE SITES

Answer 4

Proximate sites are not contaminated and not adjacent to a source site, but are in close proximity to the source site.

Question 5

Polychlorinated Biphenyls

Answer 5

PCBs, or polychlorinated biphenyls, are composed of hydrogen, carbon, and chlorine and are commonly used in electrical equipment. Dumping of the material is a common cause of site contamination. Only inconclusive evidence suggests that PCBs cause cancer, but when heated, they can break down in to carcinogens. Remediation is usually removal and replacement.

Question 6

**NOTES ONLY

Asbestos is a naturally occurring family of fibrous silicate materials that have a tendency to break into dispersible dust, that is, become friable. The level of risk is directly related to the level of airborne fibres, so friability is significant only when the material is exposed to the environment in an uncontained form. If inhaled, this dust accumulates in the lungs where it can cause significant health problems such as asbestosis, a fibrositic condition, and mesothelioma, a rare form of cancer that can lead to fatal lung cancer.**

Answer 6

**NOTES ONLY

Asbestos is a naturally occurring family of fibrous silicate materials that have a tendency to break into dispersible dust, that is, become friable. The level of risk is directly related to the level of airborne fibres, so friability is significant only when the material is exposed to the environment in an uncontained form. If inhaled, this dust accumulates in the lungs where it can cause significant health problems such as asbestosis, a fibrositic condition, and mesothelioma, a rare form of cancer that can lead to fatal lung cancer.**

Question 7

**NOTE ONLY

The substances grouped into the asbestos family have significantly different characteristics and risks. About 95% of the asbestos-in-place is chrysotile, a white mineral with curly fibres that tend not to be taken up in the lungs. Crocidolite, or blue asbestos, has long, thin and straight fibres that penetrate narrow lung passages. This uncommon form is associated with most adverse health effects of asbestos.’**

Answer 7

**NOTE ONLY

The substances grouped into the asbestos family have significantly different characteristics and risks. About 95% of the asbestos-in-place is chrysotile, a white mineral with curly fibres that tend not to be taken up in the lungs. Crocidolite, or blue asbestos, has long, thin and straight fibres that penetrate narrow lung passages. This uncommon form is associated with most adverse health effects of asbestos.’**

Question 8

NOTE ONLY

Removal of asbestos from a building can actually increase the risk. Unless all safeguards are taken, removing asbestos from a building —which disturbs the asbestos and disperses its fibres into the air — can actually increase the risk of asbestos-related disease, rather than reduce the risk as intended. However, in order to attract a purchaser to a property with an asbestos-containing building, removal of asbestos may be needed — in some, but not all, instances a price reduction of an amount sufficient to pay for removal may be acceptable.

Answer 8

NOTE ONLY

Removal of asbestos from a building can actually increase the risk. Unless all safeguards are taken, removing asbestos from a building —which disturbs the asbestos and disperses its fibres into the air — can actually increase the risk of asbestos-related disease, rather than reduce the risk as intended. However, in order to attract a purchaser to a property with an asbestos-containing building, removal of asbestos may be needed — in some, but not all, instances a price reduction of an amount sufficient to pay for removal may be acceptable.

Question 9

Three factors are critical to the effect that a hazardous substance has on value . . .

Answer 9

Three factors are critical to the effect that a hazardous substance has on value:

• Quantity: how much, and in what concentration
• Toxicity: the dosage that must be ingested to have a lethal effect
• Persistence: how long the substance stays. Some substances can persist after visible evidence is gone. Studies have shown that the visible presence of a substance can be more important than technical persistence in low quantities.

Question 10

List 4 federal statutes governing enviromental law in Canada

Answer 10

Federal Statutes include the following:

• Canadian Environmental Protection Act
• Canadian Water Act
• Fisheries Act
• Transportation of Dangerous Goods Act
• Department of Environment Act

Question 11

CONTROL MECHANISMS

Answer 11

Control mechanisms can be categorized by their primacy: the tank holding radioactive water is a primary control mechanism, while the berm surrounding the tank is a secondary control mechanism.

Question 12

TRUE OR FALSE? Both common law principles and statutory obligations apply to situations of environmental damage.

Answer 12

TRUE

Both common law principles and statutory obligations apply to situations of environmental damage.

Question 13

Persons who may find themselves faced with environmental liability problems

Answer 13

Current landlords or tenants

Previous landlords or tenants

Employees, agents, officers, or directors of a business

Real estate agents, property managers, environmental consultants

Governments and their Agencies and Ministries may be liable under statute or on the basis of providing incorrect advice or infor­mation to the public.

Any person who is aware that certain types of pollution are occurring or are likely to occur must make reasonable efforts to prevent or assist in preventing the pollution and to report it to the appropriate authority.

Question 14

Environmental Stigma

Answer 14

An adverse effect on property value produced by the market’s perception of increased environmental risk due to contamination.

An impairment of marketability and/or loss in value caused by environmental contamination and measured as the difference in market value before and after the contaminating event or events other than those conditions capable of being cured by remediation of the property.

Question 15

Liability Allocation Factors

Answer 15

Key factors used to determine liability of contaminated properties.

Question 16

3 MAIN PHASES OF AN ESA

Answer 16

There are three main phases of ESAs.

First and foremost, it is simply necessary to determine if there is a possibility that environmental contamination exists at a site by commissioning the preparation of a Phase I ESA.

Once the client is satisfied that the presence of contamination is possible, a Phase II ESA should be requested.

Finally, if the presence of contamination at the site is confirmed, a Phase III ESA must be prepared to ascertain the severity and to propose a suitable plan of action and/or prevention.

Question 17

Records Review

Answer 17

To collect data on past activities on the site that could be interpreted as contributing to existing contamination.

The first activity in a Phase I ESA.

Question 18

Phase II ESA

Answer 18

Confirms the existence or absence of environmental contamination.

Intended to further reduce or eliminate uncertainty where the potential contamination of a property has been identified.

Question 19

Phase III ESA

Answer 19

Describes the extent of contamination and possible remediation alternatives as well as
the cost to remediate.

Question 20

ESA THREE PHASES

Answer 20

The process of performing an environmental site assessment/investigation can involve three phases:

• Phase I: Determines if there is a reasonable basis to suspect the presence or absence of an environmental risk.

• Phase II: Confirms the presence or absence of a suspected environ¬mental risk.

• Phase III: Determines the extent of a known environmental risk and develops an appropriate plan of action to reduce the risk to an acceptable level.

Question 21

TRUE OR FALSE?
Phase I ESA does not involve the investigative procedures of sampling, analyzing, and measuring

Answer 21

ANSWER

TRUE

Question 22

NOTE ONLY

Although ESAs are not a legal requirement throughout Canada, the Canadian Standards Association (CSA) standard has become accepted in Canada as typical due diligence for property transactions. Phase I ESAs are guided by the Canadian Standards Association Standard Z768 (1994)
— CAN/CSA-768-01

Answer 22

NOTE ONLY

Although ESAs are not a legal requirement throughout Canada, the Canadian Standards Association (CSA) standard has become accepted in Canada as typical due diligence for property transactions. Phase I ESAs are guided by the Canadian Standards Association Standard Z768 (1994)
— CAN/CSA-768-01

Question 23

Levels of Assessment
Factors to be considered

Answer 23

Types of activities that have occurred on the property and neigh­bouring properties

Framework of legislation and published guidelines that apply to the property

Materials used on the property

Types of processes and operations on the property

Amount of information available concerning environmental compli­ance on the property

Client’s need for additional information

Question 24

Uses of Phase I ESAs

Answer 24

Financial

Baseline Studies

Regulatory

Site Remedial Measures or Redevelopment

Question 25

RISK OF DEVELOPING ASBESTOS RELATED DISEASE

Answer 25

The risk of developing an asbestos-related disease is directly related to exposure to airborne fibres. For example, there is little risk in a building where the asbestos is contained and does not become airborne, or where the fibres become airborne but never reach an area where people could be exposed to them.

Question 26

TRUE OR FALSE?
Removal of asbestos from a building can actually increase the risk.

Answer 26

ANSWER: TRUE

Question 27

RADON GAS

Answer 27

Radon gas is a naturally occurring radioactive element. Radioactive elements give off ionizing radiation and can lead to mutated DNA and cells, with cancer as one possible outcome. According to Health Canada, on average, 10 percent of lung cancers are attributable to radon exposure worldwide and in 2006, an estimated 1,900 lung cancer deaths in Canada were due to radon exposure. Radon is the second leading cause of lung cancer, after smoking.’

Question 28

Define Isolation

Answer 28

Separating the risk from the transportation mechanisms present, from the environment in general, and from human beings.

Question 29

Define Encapsulation

Answer 29

A complete enclosure of a waste in another material in such as way as to isolate it from external effects such as those of water or of air; e.g., casting toxic waste into something like concrete which is insoluble and thus inaccessible to water and other substances that might bring out the hazardous material.

Question 30

COSTS DUE TO CONTAMINATION?

Answer 30

Costs that can arise from the presence of a hazardous substance fall into several categories:

Cost to Cure a contamination problem is often the major concern.

Liability could accrue to the owner for damages to the public, adjacent landowners, and subsequent purchasers, even if the property is a non-source site. Recovery of costs from the owner of the source-site may not always be possible!’

Inability to Finance can diminish the market value of contaminated property. Since contamination can impair loan security, lenders are reluctant to finance contaminated property. Financing may be available from more expensive secondary sources, or the purchaser may need to rely on equity.

Disruption. Contamination and ensuing remediation activities could temporarily or permanently disrupt all or part of the normal use of a property.

Increase in Operating Costs. For example, operation of remediation equipment might increase utility costs, changes may be required for ventilation, or costs may increase for landscaping and exterior maintenance.

Reduction in Net Operating Income. Contamination may preclude certain uses with alternative uses resulting in lower rent. Net rental income might decline due to higher vacancy rates or increased tenant turnover leading to higher leasing commissions, legal fees, and rent inducements.

Question 31

NOTE

Both common law principles and statutory obligations apply to situations of environmental damage. A person may be found liable for environmental contamination without even realizing it — ignorance is no defence. It is important to understand what constitutes liability. It is every­one’s responsibility to keep the environment safe and healthy, not just the parties directly involved with the contamination.

Answer 31

NOTE

Both common law principles and statutory obligations apply to situations of environmental damage. A person may be found liable for environmental contamination without even realizing it — ignorance is no defence. It is important to understand what constitutes liability. It is every­one’s responsibility to keep the environment safe and healthy, not just the parties directly involved with the contamination.