In 'Victory for Land and Water,' Canada's Supreme Court Rules Bankrupt Fossil Fuel Companies Must Clean Up Pollution Left Behind

Green energy campaigners in Canada applauded a precedent-setting Supreme Court ruling on Thursday which ordered the bankrupt Alberta-based oil and gas company Redwater Energy to clean up its failed wells instead of leaving the task to the public.

Observing the “polluter pays principle,” the 5-2 ruling overturned two earlier decisions by lower courts which had sided with a federal law stating that insolvent companies could prioritize paying back their creditors over fulfilling their environmental obligations.

“Bankruptcy is not a license to ignore rules,” Chief Justice Richard Wagner wrote in the ruling, which was celebrated as one that would set a new precedent for the entire country.

“The Supreme Court of Canada has prioritized paying clean up costs before creditors when extractive companies go bankrupt. This outcome reinforces the growing understanding that polluters are responsible for their clean up obligations,” said the Pembina Institute, a think tank focused on clean energy and environmental policy.

“Working families across this province, as well as all of Canada, should not have to pay for the financial and environmental liabilities left behind when companies walk away from their obligations,” said Energy Minister Margaret McCuaig-Boyd. “Upholding the polluter-pays principle is good news for Albertans and it’s good news for Canadians.”

“In a world tackling climate change and transitioning away from fossil fuels, oil companies’ environmental liabilities are only going to grow, which is why it is vital that the polluter pays principle remains a core element of our legal framework.” —Keith Stewart, Greenpeace Canada”Today’s decision reaffirms that oil companies cannot simply abandon their environmental liabilities,” said Keith Stewart, Greenpeace Canada’s senior energy strategist. “In a world tackling climate change and transitioning away from fossil fuels, oil companies’ environmental liabilities are only going to grow, which is why it is vital that the polluter pays principle remains a core element of our legal framework.”