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Court File No.: 12023/01

ONTARIO SUPERIOR COURT OF

JUSTICE

BETWEEN:

WILFRED ROBERT PEARSON

Plaintiff

-and-

INCO LIMITED,

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO,

THE CORPORATION OF THE CITY OF PORT COLBORNE,

THE REGIONAL MUNICIPALITY OF NIAGARA,THE DISTRICT SCHOOL BOARD OF NIAGARA, and

THE NIAGARA CATHOLIC DISTRICT SCHOOL BOARD

Defendants

Proceeding under the Class Proceedings Act, 1992

FACTUM OF THE RESPONDING PARTY,HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO

(Certification Motion)

TABLE OF CONTENTS

PART I - OVERVIEW ....................................................................................................................4

PART II - THE FACTS ...................................................................................................................7

A. THIS PROCEEDING....................................................................................................7The Plaintiff .............................................................................................................7The Plaintiff=s Claims.............................................................................................9

The Proposed Class................................................................................................11Alleged Damages ...................................................................................................12

B. OVERVIEW OF HISTORIC INVOLVEMENT OF THE MOE IN PORTCOLBORNE..........................................................................................................13

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B-1 HISTORIC INVOLVEMENT OF MOEIN RELATION TO ALLEGATIONS OFNEGLIGENCE ......................................................................................................15

Studies of refinery impacts - 45(g).........................................................................15Warnings - 45(c)(d)................................................................................................18Inspections and abatement at the Refinery - 45(a) & (e) .......................................20

Issuance of Approvals - 45(b)................................................................................24Complaints - 45(f)..................................................................................................28Enforcement of the EPA - 45(h) ............................................................................29

Conclusion on negligence ......................................................................................32B-2 HISTORIC INVOLVEMENT OF MOEIN RELATION TO ALLEGATIONS OF

NEGLIGENT MISSTATEMENT .........................................................................32

The reports in question...........................................................................................32The alleged distribution .........................................................................................32The actual distribution ...........................................................................................33

The alleged misrepresentations..............................................................................36The actual representations......................................................................................37

C. CURRENT ACTIVITIES OF THE REGULATORS AND INCO...........................39(1) The Community Based Risk Assessment.....................................................40(2) Additional Studies Being Conducted by Inco ................................................44

(3) Public Liaison Committee..............................................................................45(4) Studies Undertaken by Public Regulators ......................................................49

1997 Human Health Risk Assessment.......................................................49

2000 Human Health Risk Assessment.......................................................51March 2001 Human Health Risk Assessment ...........................................51In-Depth Soil Investigation of Rodney Street Community........................52

March 2001 Human Health Risk Assessment ...........................................53October 2001 Human Health Risk Assessment ........................................56

March 2002 Human Health Risk Assessment ...........................................57Other Studies by Public Regulators ...........................................................58

(5) The Director=s Orders....................................................................................58

Regulatory Context for a Director=s Order ...............................................58

March 2001 Draft Order ............................................................................59October 2001 Draft Order..........................................................................61

March 2002 Final Order.............................................................................61Effect of the March 2002 Final Order........................................................61

(6) Statutory Appeals from a Director=s Order ...................................................64

D. CONCLUSIONS.........................................................................................................65

(1) Individual issues vastly outweigh common issues. ........................................65(2) Class Action is Not the Preferred Alternative To Current Activitiesof the

Regulators and Inco, Combined withIndividual Lawsuits if Necessary ....66

E. RESPONSE TO PLAINTIFF=S FACTS....................................................................69

PART III - THE LAW AND ARGUMENT ..................................................................................73

Requirements for Certification ..........................................................................................73S.5(A) REASONABLE CAUSE OF ACTION .............................................................74

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S.5(B) IDENTIFIABLE CLASS....................................................................................76(1) No Rational Relationship ...............................................................................77

(2) Class is Overly Broad.....................................................................................78S.5(C) COMMON ISSUES ...........................................................................................79

(1) Conflict Among Class Members ....................................................................80

(2) Alleged Common Issues Are Overbroad (Are In Fact Individual Issues)andAre Not a Substantial Ingredient of Each Class Members Claim..............83(i) Alleged Common Issues As Against the Crown............................84

(ii) Inspections .....................................................................................85(iii) Certificates of Approval.................................................................88(iv) Duty of Care with respect to Negligence .......................................89

(v) Introduction to Negligent Misrepresentation .................................95(vi) Duty of Care for Negligent Misrepresention..................................97(vii) Conclusion on Duty of Care...........................................................99

(viii) Standard of Care and Breach of Duty ............................................99(ix) Was the Representation Untrue, Inaccurate or Misleading..........101

(x) Reasonable Reliance ....................................................................102(xi) Detrimental Reliance ...................................................................104(xii) Causation......................................................................................107

(xiii) Damages.......................................................................................108(xiv) Punitive Damages ........................................................................108(xiv) General Common Issues ..............................................................110

(xv) Common Issues for Inco ..............................................................111(xvi) Conclusion on Common Issues....................................................111

S.5(D) PREFERABLE PROCEDURE........................................................................111

S.5(E) CLASS REPRESENTATIVE ..........................................................................116(1) Adequately Representation...........................................................................116

(2) Litigation Plan ..............................................................................................118(3) Conflict of Interest........................................................................................119

PART IV - ORDER REQUESTED.............................................................................................119

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PART I - OVERVIEW

1. In this motion, the plaintiff is seeking to have this action certified as a class proceedingagainst the defendants, Inco Ltd., Her Majesty the Queen in Right of Ontario (AHMQ@), The

Corporation of the City of Port Colborne, the Regional Municipality of Niagara, the District

School Board of Niagara and the Niagara Catholic District School Board.

2. The claims against the defendants relate to the alleged contamination of the PortColborne community through the operation of a refinery by Inco Ltd. (the ARefinery@). It has

been specifically alleged against HMQ that the Ministry of the Environment (AMOE@) was

negligent in failing to properly regulate the operation of the Refinery over the last several

decades. It is further alleged that, in various reports, the MOE misrepresented the extent of the

contamination and the potential threat to the health of the residents of Port Colborne. The

Statement of Claim asserts that the members of the proposed class, which consists of

approximately 20,000 residents and former residents of Port Colborne, have suffered a number of

injuries as a result of this negligence ranging from itchy skin to an increased risk of cancer.

3. It is the fundamental position of the Crown on this motion that in light of the vast numberof individual issues in this action as compared to the few common issues, the existence of a

community-wide remediation program initiated by Inco and regulated by government which will

fully remediate Port Colborne soils to scientifically approved standards, and the exemplary

behaviour of the defendants in attempting to address the concerns of citizens of Port Colborne, a

class proceeding is not the preferable alternative.

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4. As noted by Inco in its factum, the enormous number of individual inquiries which wouldbe required simply to assess individual risk, causation and damages with respect to each class

member would be of such substantial significance to proof of the claim of each class member, as

compared to the few and relatively trivial common issues, that certification of this action would

create an unmanageable and unworkable process, leaving thousands of claimants to their own

devices and resources to prosecute individual claims. Added to this, the Crown=s evidence is

that even the assessment ofliability in the case of the public regulators such as the MOE

(determination of duty of care to any given class member, standard of care, breach and

detrimental reliance) will of necessity be so highly individualized, as to significantly increase the

scope and complexity of the individual hearings required, rendering the Aclass proceeding@ of

little or no value. Far from servingjudicial economy, a class proceeding would create a

nightmare of judicial diseconomy.

5. Further, the fact that there is:1. no evidence of any health impacts in Port Colborne due to the Refinery;2. no credible evidence of any property value impacts;3. an ongoing Amade in Port Colborne@ community-wide, scientifically consensual,

government supervised remediation program - the Community Based Risk

Assessment - funded voluntarily by Inco and conducted pursuant to MOE

guidelines and legislation which, together with MOE administrative orders and

expert input from the other parties, promises to eliminate any residual risk of such

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health or property value impacts;

4. a serious risk that certification could undermine that remediation program,underscores that a class action is not required for access to justice or for behaviour

modification.

6. It is further the position of the Crown that this action should not be certified as a classproceeding because:

1. The statement of claim does not disclose a reasonable cause of action against theCrown for Afailure to enforce@;2. There is no identifiable class because:

(1) the class definition criteria bear no rational relationship to the commonissues; and,

(2) the class is overly broad;3. There are no common issues sufficient to warrant certification because:

(1) of conflicting interests among class members;(2) alleged common issues are overbroad (and in fact devolve into individual

issues);

(3) alleged common issues are not a substantial ingredient of each classmember=s claim;

(4) specifically with regard to allegations of Crown negligence, each of theproposed common issues (inspections, approvals, duty of care, standard ofcare, breach) will require substantial individualized inquiries for proof attrial;

(5) specifically with regard to allegations of Crown negligentmisrepresentation, the proposed common issue (negligentmisrepresentation) devolves into each of the elements of this tort. In turn,each element, except standard of care, will required substantialindividualized inquiries for proof at trial;

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(6) causation is an individual issue;(7)

damages is an individual issue;

(8) the proposed common issue ofpunitive damages is an individual issue;(9) the proposed general common issues applicable to all defendants are either

going to be addressed or have already been addressed in the CBRA

process and Director=s Order.

4. A class proceeding is not the preferable procedure for the resolution of thecommon issues (for reasons outlined above); and

5. The class representative test is not met because:(1) the representative plaintiff cannot be expected to fairly and adequately

represent the interest of the class;

(2) the litigation plan is inadequate;(3) the representative plaintiff has a conflict with other class members.

PART II - THE FACTS

7. The Crown repeats and adopts the facts as set out in Inco=s factum.1 In addition, the

1 The adoption of Inco=s facts is based on all the sworn evidence currently

available before the court on this certification motion and is without prejudice to the Crown

subsequently taking, in this or other proceedings, a different position on matters of fact orscientific opinion as more evidence and further and better scientific opinion becomes available.As well, the Crown does not accept as uncontroverted, any allegation of fact or scientific opinion

by Inco which challenges the findings of an MOE report.

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Crown submits as follows.

A. THIS PROCEEDING

The Plaintiff

8. The plaintiff, Wilfred Robert Pearson, is 70 years old and he lives at 97 Rodney Street inPort Colborne with his wife Catherine. His home is approximately one block from the Refinery.

Catherine is currently on long-term disability, but the cause of her disability is unknown. Mr.

and Mrs. Pearson raised four sons, all of whom reside in Port Colborne, and they have 12

grandchildren.

Cross-Examination of Wilfred Robert Person, January 17, 2002 (APearson Cross-

Examination@), pages 12, 13, 42 and 47

Affidavit of Wilfred Robert Pearson sworn January 17, 2002 (APearson Affidavit@), pages 2

and 5

9. The plaintiff and his wife purchased their home in 1980 after the house was repossessedfrom the previous owners by the bank. The Pearsons paid $17,000 for the house.

Pearson Cross -Examination, pages 12 and 13

Pearson Affidavit

10. The plaintiff served with the Canadian Armed Forces until 1973 when he returned tocivilian life as a truck driver. As a truck driver, he did long-haul trucking and carried loads of

gyprock and wafer board. He also worked at Gore Metals. This work required the plaintiff to

enter the Inco plant in order to transport lugger boxes from the plant to the premises of Gore

Metal. The plaintiff does not know what was in these lugger boxes.

Pearson Cross-Examination, pages 40 and 41; Pearson Affidavit, page 2

11. Since moving to Port Colborne, the plaintiff claims that he has suffered from the

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following:

-dry itchy patches of skin on his arms, legs and head;

-fits of coughing;-itchy eyes and a sore throat;-insomnia which has been treated with medication;

-loss of sexual function;-two major heart attacks with the result that a triple bypass was performed and theplaintiff has been on daily heart medications;

-high blood pressure which has been treated with medication;-depression;

-severe headaches; and-growths on his prostate gland.

Pearson Affidavit, pages 6 and 7

12. There is no evidence that any of the plaintiff=s medical problems have been caused bypollution from the Refinery.

13. In fact, the only published health studies which have ever been conducted of the PortColborne area to date, the ones done by the federal government in 1981 and by the Ministry and

Region of Niagara Public Health Department in 1997 and 2000 (which included reviews of

community epidemiological data) concluded that no health effects had occurred or were

predicted.

AIn conclusion, based on a multi-media assessment of potential risks, no adverse health

effects are anticipated to result from exposure to nickel, copper or cobalt, in soils in thePort Colborne area. Furthermore, the review of population health data did not indicateany adverse health effects which may have resulted from environmental exposures.@

1997 Assesssment of Potential Health Risk, Crown=s Record, Volume II, Tab 2B, p.ii

14. Moreover, the only toxicological risk assessments which have ever been conducted of thePort Colborne area to date, the ones done by the Ministry in 2001 and 2002 (detailed below),

have specifically excluded Mr. Pearson=s property as one of the properties requiring clean up by

Inco for health purposes. According to these internationally peer reviewed, state of the art, risk

assessments, the levels of nickel contamination on the plaintiff=s property are far too low to have

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any toxicological impact, even from long-term exposure.

The Plaintiff=s Claims

15. In this action, the plaintiff is alleging that the MOE has been negligent in various ways. Inparticular, the plaintiff alleges that:

Since beginning its operational activities at the Refinery, the MOE has:

(a) failed to properly inspect, monitor and investigate the Refinery;

(b) failed to properly issue or ensure compliance with Certificates of Approval issuedin relation to the Refinery;

(c) failed to warn Class Members of known hazardous emissions, defects and otherfailures at the Refinery;

(d) specifically failed to warn Class Members that they were, and still are beingexposed to high doses of the known carcinogen nickel oxide;

(e) failed to obtain, in a timely fashion or at all, adequate information or advice in

order to rectify known defects and failures at the Refinery;

(f) failed to respond to complaints made by Class Members about the Refinery, its

emission of contaminants and other activities;

(g) failed to conduct or to cause to be conducted, accurate and complete studies of the

impacts of the Refinery, in a timely fashion or at all; and

(h) failed to apply or enforce theEnvironmental Protection Act, R.S.O. 1990, c. E.19.

Fresh as Amended Statement of Claim (AStatement of Claim@), Plaintiff=s Record, Vol. II,

Tab 1A, paragraph 45

16. Each of these allegations of negligence will be examined in greater detail below, with aview to determining what will be required, as a matter of process, for the plaintiff to prove each.

17. In addition to these claims in negligence, the plaintiff has alleged that the MOE has

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misrepresented to the members of the proposed class through numerous scientific publications

that emissions from the refinery have never posed any risk to human health and that class

members were being exposed to nickel or other non-carcinogenic substances and not the

carcinogen nickel oxide.

Statementof Claim, paras. 46, 47 and 48.

18. The plaintiff alleges that these reports and letters were distributed by the MOE toproposed class members. Alternatively, it is pleaded that the alleged misrepresentations in them

were disseminated to proposed class members by the media and through public meetings. As a

result, it is alleged that AGiven the extremely widespread distribution of these

misrepresentations, it is clear that they were heard or read at some point by all Class Members

including Pearson@.

19. These allegations of negligent misrepresentation will also be examined in greater detailbelow, with a view to determining what will be required, as a matter of process, for the plaintiff to

prove them.

The Proposed Class

20. The definition of the proposed class is correctly set out in paragraph 9 of the Plaintiff=sfactum. The plaintiff estimates that there are 20,000 or more members of the proposed class, a

figure which the Crown accepts.

Affidavit of Dave McLaughlin sworn March 28, 2002 (AMcLaughlin Affidavit@), Crown=s

Record, Tab , para. 80(a)

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21. The plaintiff=s affiant Wolfgang Kaufmann suggests that the class may be further dividedinto sub-classes, based upon levels of contamination, namely: the Eastside Community Area

(also known as the Rodney Street community), the Table A Area, the Table F Area and Farm

Claimants.

Affidavit of Wolfgang Kaufmann sworn January 16, 2002 (AKaufmann Affidavit@), Plaintiff=s

Record, Tab , paras. 45-6

22. However, the Table A and Table F classifications, which refer to tables in the MOE=sGuidelines for Use at Contaminated Sites, have been misapplied by Kaufmann to suggest there

has been varying levels of damage to different areas of Port Colborne depending upon whether

they exceed the values in either table, despite express MOE advice to the contrary. The generic

values in Tables A and F of the Guidelines point to a need for further site-specific investigation.

One cannot assume that their exceedence denotes an adverse effect.

Affidavit of Dave McLaughlin, sworn March 28, 2002, para.80(k)

Alleged Damages

23. The plaintiff is claiming damages for loss of use and enjoyment of property and loss of valueof property. The plaintiff is also claiming damages for, inter alia, irritation and inflamation of the

skin, eyes, nasal passages and lungs, coughing, choking, inability to breathe, burning sensations,

nausea, vomiting, headaches, dizziness, loss of consciousness, loss of appetite, pain, suffering, and

increased risk of cancer and lung disease. Finally, the plaintiff is also seeking damages for loss of

income, impairment of earning ability, future care costs, medical costs, loss of amenities and

enjoyment of life, anxiety, nervous shock, mental distress, emotional upset and out of pocket

expenses.

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Statement of Claim, paras. 24 and 25.

24. If the latest, internationally peer reviewed, toxicological risk assessment done by the MOEfor the Rodney Street community is correct, only twenty-five (25) of properties in that community

will require any clean up whatsoever from a health perspective. Given the Rodney Street community

is thought to have the most heavily contaminated properties in all Port Colborne based on current

contour mapping (a fact which can only be confirmed by individual, property-by-property, sampling),

it appears unlikely there will be any others. Nevertheless, the Director of the MOE has already

ordered Inco to confirm whether any other properties outside of the Rodney Street community

require cleanup.

Affidavit of James Johannes (Jim) Smith, sworn March 28, 2002 (AJames Smith Affidavit@), Crown=s

Record, Tab , paras. 47, 48, and 49

25. Of the twenty-five properties, five have already been remediated by Inco. The only thingwhich currently stands in the way of the remediation of the remaining twenty properties has been the

campaign of opposition mounted by plaintiff=s counsel.

Affidavit of Kal Haniff sworn March 28, 2002 (AHaniff Affidavit@), Crown=s Record, Tab , para. 33

B. OVERVIEW OF HISTORIC INVOLVEMENT

OF TH E MOE IN PORT COLBORNE

26. It is submitted that, in considering whether the allegations made by the plaintiff in hisStatement of Claim in connection with the MOE are suitable for adjudication in the process of a

class action, the Court will need to consider the factual background to those issues and

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allegations. Only in this way will the Court be able to determine the nature of the factual and

legal issues facing any trial court which is charged with adjudicating this action as a class

proceeding.

27. Immediately below, in section B-1, is a review of the facts relating to the historicinvolvement of the MOE in Port Colborne in relation to each allegation ofnegligence. These

facts are taken from the uncontradicted evidence of Dave McLaughlin, a phytotoxicology

scientist with the Phytotoxicology Section of the MOE. McLaughlin testified that he

participated in the majority of the MOE=s investigations of farm and residential properties in

Port Colborne from the mid-1970's onwards. Another important source of the evidence is the

cross-examination of the plaintiff=s witness, Allen Baldwin, a former MOE employee who began

his career with the MOE as an abatement officer in the District Office of the MOE reponsible for

inspecting the Refinery.

28. The gravamen of the evidence of both witnesses was thatallMOE activities as alleged inthe Statement of Claim - studies of Refinery impacts, warnings, inspections and abatement at the

Refinery, issuance of approvals, response to complaints, and enforcement of the EPA - were of

necessity highly individualizedactivities. Although there can be no doubt general standards for

abatement existed, the application of those standards involved an assessment of what was

required to eliminate actual adverse effects or the risk of adverse effects to given individuals - the

people who actually complained about being impacted.

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29. Following section B-1 is a further section, B-2, which reviews some of the key evidencein connection with the allegations of Crown negligent misrepresentation. The evidence

establishes that there was no blanket distribution of MOE reports, different reports were

distributed in different way, and there exists no credible evidence that any class members read

them or how many heard about them, let alone relied on them. As a result, many issues relevant

to the tort (especially revolving around reliance) will necessitate a highly individualized inquiry

with respect to each class member.

B-1 HISTORIC INVOLVEMENT OF MOE

IN RELATION TO ALLEGATIONS OF NEGLIGENCE

30. The allegations of negligence against the Crown cover a lengthy period of time - from1959 to present - or Asince beginning its [the Crown=s] operational activities at the Refinery@, to

use the words of the Statement of Claim. Those allegations of negligence fall into the following

categories:

1. Failure to studyRefinery impacts accurately, completely or fast enough - para.45(g);

2. Failure to warn Class members about hazardous emissions from the Refinery -para. 45(c), (d);

3. Failure to properly inspector abate problems with the Refinery - para. 45 (a), (e);4. Failure to properly issue approvals for the Refinery - para. 45(b);5. Failure to respond to complaints of Class members - para. 45(f);6. Failure to enforce the EPA - para. 45(h).

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Statement of Claim, para. 45

Studies of refinery impacts - 45(g)

31. Although the MOE did many studies over the years, until 1997, when the first MOEHuman Heath Risk Assessment (AHHRA@) was conducted, these studies were all directed to

observable ecological impacts (i.e., to plants, soil, surface water, ground water).

McLaughlin Affidavit, para. 9

32. The MOE either responded to individual complaints made by particular Class members,or it conducted annual surveys or special investigations.


Cross-examination of Dave McLaughlin, April 18, 2002 (AMcLaughlin Cross-Examination@)

Q. 22-25, 35-45

33. In terms of general surveys, the Phytotoxicology Section sampled at the same generalsites from year to year to track changes in environmental conditions over time. Vegetation

surveys documented plant injury and determined changes in air pollution levels from year to year,

and soil investigations determined whether soil contaminant levels were increasing or decreasing

over time.


34. These surveysfound different levels of contamination at different properties. Studiesconducted by the Phytotoxicology Sectionfound plant impacts at some properties but not others.

The observed plant injury was very site specific and depended on the species of vegetation, the

degree of soil contamination, and the physical and chemical characteristics of the soil.

McLaughlin Affidavit, para. 11.

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35. Where plant impacts (i.e. adverse effects) were found, the owner of the particularproperty was advised of this fact and was provided with a copy of the Phytotoxicology Section

report.


36. Whether any given study was inaccurate or incomplete, as alleged in paragraph 45(g) theStatement of Claim, is a question which is specific to individual properties.


37. The MOE also did surveys and special investigations. The surveys were similarlyrestricted to areas that the MOE believed were impacted (based on the presence of vegetation

injury and the known northeasterly pattern of the Inco plume). The special investigations were

conducted when some sort of environmental contamination was discovered which required more

thorough inquiry and testing.

McLaughlin Cross-Examination, Q. 38.

38. In McLaughlin=s view, should the plaintiff takes the position that the MOE=s studieswere not broad enough geographically and that the MOE should have inspected other properties

for which no complaint had been registered, the plaintiff will have to prove that the owners of

those other properties had, in fact, experienced unreported plant or health impacts or that they

had levels of contamination sufficient to cause actual plant or health impacts. The plaintiff will

also have to show that these properties were so situated geographically, having regard to historic

activities of Inco, wind directions and their usage by the property owners, that it would have been

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reasonable for the MOE to conclude that these properties might have levels of contamination

sufficient to cause plant or health impacts such as would warrant further or expanded study.

McLaughlin Affidavit, paras. 15 and 16

39. In McLaughlin=s opinion, which is uncontradicted on the evidence, only after anindividualized examination of the property, the types and use of both the property and its

vegetation, and the actual levels of contamination on each property would the plaintiff be able to

argue that the MOE=s failure to conduct broader studies resulted in incomplete studies.


Warnings - 45(c)(d)

40. Whether the MOE should have warned any given member of the Class aboutcontamination would also depend upon an individual examination of:

(1) whether the MOE inspected their property;(2) whether the MOE found an adverse effect;(3) whether the MOE failed to warn the Class member about the adverse

effect.


41. It cannot be said that the MOE owed a duty to warn all Class members about theexistence of pollution in the soil or air, regardless of any individualized assessment of

contamination levels on each property or the likelihood of the pollution causing an adverse

effect. That is because theEnvironmental Protection Actonly permits the MOE to act to prevent

or alleviate Aadverse effects@. Emissions themselves do not constitute an Aadverse effect@

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under the EPA. It is only an Aadverse effect@ when sufficient nickel has accumulated in the soil

to result in the potential to injure the natural environment or human health. An Aadverse effect@

requires a finding by the MOE that the use of property has been impacted or that there is the

potential for injury to the natural environment or human health.

McLaughlin Affidavit, paras. 19, 20 and 21

42. In McLaughlin=s opinion, it cannot be the case that the MOE is under a duty to warncitizens of any level of pollution, whether or not it is causing an Aadverse effect@. Otherwise, the

MOE would have to warn virtually every Ontarian of the many potential contaminants being

inhaled and ingested daily, since virtually everyone in Ontario is subjected to pollution levels of

some kind or another. This is particularly true for those living in urban areas or in communities

with past or present industrial activities.


43. The fact of the matter is that years of MOE study have shown that soil nickel levels inPort Colborne are only capable of having an impact upon sensitive crops and trees when they

reach a particular level. Government studies of ecological impacts in Port Colborne as early as

1960, and MOE studies in Port Colborne through the 1970s and 1980s all support a Ano

observable effect level@, or NOEL, of about 2000 ppm nickel in soil and a Alowest observable

effect level@, or LOEL, of about 3000 ppm. Even if these soil nickel levels were present, an

adverse effect on vegetation would only occur if the sensitive plant species were being grown on

the property.


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44. On the human health side, there has been no confirmation of health impacts from soilnickel exposure.


45. Therefore, to determine whether the MOE ought to have warned any Class member aboutpotential plant or health impacts, one must necessarily determine (among a host of other

individual issues) whether the soil contamination level on the property of the Class member

exceeded the relevant thresholds from year to year for the entire time the Class member resided

on the property.


46. Whether in fact the MOE warned each Class member who needed to be warned ofpotentialplantimpacts is, therefore, an individual issue which will require examining the actual

level of contamination and the possibility of plant impacts on each property.


47. Whether in fact the MOE ought to have warned each Class member who needed to bewarned of potential health impacts is also an individual issue for the same reason - at a

minimum, it will require an examination of the actual level of contamination and possibility of

health impacts on each property.


Inspections and abatement at the Refinery - 45(a) & (e)

48. Starting in or about 1970, the District Officer of the MOE told Allen Baldwin, an

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abatement officer in the MOE District Office, to conduct inspections of the Refinery on a regular

basis. According to Baldwin, those inspections occurred at times once per week or even more

frequently when detailed investigations were taking place. As a result, since 1970, hundreds of

inspections of the Refinery have been performed by the MOE. Although Baldwin=s affidavit

stated the he was directly responsible Afor overseeing the operation of the Inco Refinery@, an

allegation which has been repeated in the plaintiff=s factum, on cross-examination he admitted

he only meant he had done inspections of the Refinery.

Affidavit of Allen Baldwin, sworn January 14, 2002 (ABaldwin Affidavit@), Plaintiff=s Record,Tab , para. 6

Cross-examination of Allen Baldwin, April 24, 2002 (ABaldwin Cross-Examination@), Q. 125-129

49. In connection with those inspections, the District Office of the MOE encouraged Inco toabate both its air emissions and water emissions, either by voluntary or regulatory means such as

control orders.

Baldwin Cross-Examination, Q. 11 and 16

50. Although historic surface water emissions do not appear to form the basis for any claim inthis action, it is clear that in about 1975, after some discussion between the MOE and Inco, Inco

made application to the MOE to install a water treatment facility, and the MOE approved the

facility. The facility proved very effective.

Baldwin Cross-Examination, Q. 15-18

51. On the air side, abatement involved consideration of what was coming out of Inco=sstacks, and also fugitive emissions (accidental dust or gaseous emissions not controlled through

any stack). The MOE did inspections. Both Inco and the MOE monitored the emissions. There

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was stack testing. There was also high volume monitoring of ambient air emissions off-site of

the Refinery. The MOE had one high volume sampler near the plant and Inco had one or two. In

addition, the Phytotoxicology Section of the MOE did sphagnum moss testing in just some

selected areas of Port Colborne, to the east and north-east of the Refinery. It also had some

vegetation test plots upwind and downwind of the Refinery.

Baldwin Cross-Examination, Q. 19-28 and Q. 29-33

52. By 1980, when Baldwin wrote his abatement report which appears as Exhibit AD@ to hisaffidavit, due to abatement steps undertaken by Inco, air particulate levels from the Refinery were

abated to acceptable levels. Also, nickel content of the ambient air had been reduced to below

the MOE=s established objective of 2.0 micrograms per cubic metre.


Baldwin Affidavit,Exhibit AD@, Plaintiff=s Record, p. 265

53. This success in reducing the particulate and nickel levels in Inco=s air emissions toacceptable levels was due in part to the Ministry=s abatement activities. For example, in 1979

Inco proposed a Aprogram approval@ and the MOE proposed a draft control order concerning

Inco=s air emissions. Inco implemented the requirements of the draft control order voluntarily,

so there was no need to issue the order. Although Inco did the work voluntarily, the MOE was

there and Apu-shing@ Inco to do it.


54. As well, beginning in the early 1970s the MOE had an air regulation which establishedmaximum concentrations for contaminants at a Apoint of impingement@ away from the stack of

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any facility. This was the primary regulation governing air pollution in Ontario. In the view of

the plaintiff=s own witness, Allen Baldwin, an MOE abatement officer who was directly familiar

with the Refinery=s operations for a period of more than 25 years, Inco met the requirements of

the regulation.

Baldwin Cross-Examination, Q. 64-77, 94

55. Baldwin admitted on cross-examination that the aforenoted Refinery inspections andabatement were not being done Ato protect the property and health of members of the proposed

class@, as alleged in his affidavit, and as incorrectly repeated at paragraph 88 of the plaintiff=s

factum. That is true because the proposed class did not exist at the time. Rather, they were done

with the public in mind. In particular, his concern as an MOE abatement officer would be

members of the public who had expressed concern or complaint about being affected by

Inco.


56. Thus, Baldwin=s evidence on cross-examination supports McLaughlin=s evidence tothe effect that,from a process perspective, for the court to determine whether the MOE=s

inspections and abatement activities in relation to the Refinery were adequate, will require a

property-by-property and person-by-person determination of which, if any, class members were

inadequately protected and in fact impacted by those inspection and abatement activities.


57. Moreover, as a study done by Inco=s consultant Jacques Whitford Environmental Ltd.(AJWEL@) indicates, 97% of all the nickel emitted by Inco over the operating lifetime of the

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refinery was emitted prior to 1960. In other words, virtually all of the nickel currently in the soil

in Port Colborne had been deposited by 1960. This fact was known to the MOE since the early

1980's, according to the 1980 report prepared by Allen Baldwin. Therefore, MOE inspections

and abatement of the Refinery operations were concerned with the remaining 3% of total nickel

being emitted to the air.

McLaughlin Affidavit, paras. 29 and 30Baldwin Affidavit, Exhibit D, Plaintiff=s Record, p. 261

58.

This means that had the MOE completely abated Inco=

s emissions (i.e., shut down Inco)

in 1970, when the MOE was first created as a ministry, it would have made no measurable

difference in the soil nickel levels currently known to exist in Port Colborne.


59. Thus,from a process perspective, for the plaintiff to establish at trial that the ongoingnickel emissions from Inco from 1960 onward (the remaining 3%) were so severe in their impact

as to warrant more stringent inspection and abatement actions by MOE during the 1970's-90's

than actually were conducted, the plaintiff will have to show that those 3% air emissions were

causing not just occasional vegetation impacts to a few specific properties (which on the

evidence were in fact being investigated by the MOE and compensated by Inco), but were also

causing unreported and unobserved plant and/or health impacts at each property within the

proposed Class or upon each proposed Class member from year to year during this lengthy time

period.


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Issuance of Approvals - 45(b)

60. The plaintiff=s contention with respect to this issue appears to be that the air approvalsissued by the MOE to Inco from the 1970s onward either should not have been granted, or did

not contain sufficiently stringent conditions to prevent the impacts to plants and health which

occurred as a result of air emissions.

Statement of Claim, para. 45 (b)

61. This raises precisely the same questions as the preceding heading dealing withAInspections and abatement at the Refinery@. At the end of the day,from a process perspective,

for the plaintiff to prove his contention that the air approvals should not have been issued (i.e.,

Inco should have been closed down completely) or should only have been issued with more

stringent conditions sufficient to prevent Aadverse effects@, it will be necessary for the court to

examine the actual level of air pollution and possibility of plant and health impacts at each

property and upon each Class member from year to year during this lengthy time period.


62. McLaughlin=s evidence on this point is again confirmed by the evidence provided byAllen Baldwin on his cross-examination. According to Baldwin, the MOE did issue air approvals

to Inco under what is now section 9 of theEnvironmental Protection Act. The MOE=s practice

was to issue one approval for each stack or for each piece of abatement technology that was put in

to abate pollution from a source of emission. This included approvals for stacks, scrubbers,

baghouses, cyclones and other abatement equipment, as well as approvals for modifications to

those systems.

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63. According to Baldwin, Inco:1. Obtained any approvals it required;2. Did not install anything without an approval which was required;3. Did not fail to install anything which had been approved; and,4. Did not violate any conditions of approval that had been issued, of which he was

aware.


64. Although, in part, the above goes to the merits of the plaintiff=s claim concerning MOEnegligence in the issuing and enforcing of approvals (and indeed appears to refute any suggestion

of negligence completely), the true importance of this evidence to the certification motion is that

it underscores that the above Acommon issues@ are likely to be non-issues or trivial at best. It

further underscores that the only way the plaintiff will be able to prove negligence in connection

with the MOE=s issuance of approvals is through an individualizedinquiry into whether Inco=s

approved discharges were in fact having a person-by-person and property-by-property adverse

effect on class members despite meeting all approval requirements.

65. In terms of current approvals, the uncontradicted evidence of Paul Nieweglowski, thecurrent District Manager responsible for remediation efforts in Port Colborne, is that Inco

currently holds the following approvals under MOE legislation:

1. A certificate of approval for a non-hazardous industrial waste site on its property;

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2. A certificate of approval for surface water discharges;3. Permits to take water for a purge well system to contain groundwater

contamination to the site; and,

4. Numerous certificates of approval for air emissions.As well, Inco has filed a comprehensive AClosure Plan@ with the Ministry of Northern

Development and Mines, in apparent compliance with theMining Actand regulations thereunder.

Per Nieweglowski, based on the MOE=s information to date, Inco=s facility is being operated in

accordance with the certificates of approval. Also, containment of the off-site groundwater

contamination is occurring through the purge well system.

Cross-Examination of Paul Nieweglowski, May 3, 2002 (ANieweglowski Cross-Examination@) Q.

81, 89, 137-138, 139 (Answers to Undertakings)Closure Plan, Plaintiff=s Record, Volume III, TabT, especially at p.182-3

66. Thus, the same point made about historic allegations in relation to approvals, applies tothe current situation with Inco

=

s approvals. Although Nieweglowski=

s evidence of Inco=

s

compliance goes, in part, to the merits, it relevance at this time is that it underscores the

likelihood that any Acommon issues@ concerning Inco=s current approvals are likely to be non-

existent or trivial, and any real question of current off-site impacts, eg. causing subsidence to

homes, will have to be proven by an individualizedexamination of each class members property

and property history, as more fully noted by Inco in its factum.

67. Finally, and perhaps most important, Baldwin confirmed that, as with inspections andabatement generally, the certificates of approval issued by the MOE were not issued Ato protect

the property and health of class members@, as his affidavit alleges, and the plaintiff wrongly repeats

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at paragraph 90 of his factum, but rather to meet the requirements of the Act, the regulation, and

the concerns about adverse effects on specific property owners.

Baldwin Cross-Examination, Q. 156

68. This confirms, that as a matter of process, if the plaintiff=s own witness is correct as towhy approvals were issued, the only way to test whether the approvals were efficacious (as

Baldwin believes they were) will be to examine each approval to determine whether, on a

property-by-property and person-by-person basis, it ultimately succeeded in meeting the

requirement of the Act and regulations and the objective of MOE abatement personnel of

avoiding adverse effects on specific property owners.

Complaints - 45(f)

69. According to Baldwin=s affidavit, in 1972 it became HMQ=s operational practice toinvestigate complaints about the Refinery made by residents of Port Colborne. On cross-

examination, he clarified that these complaints came from specific homes or select homes from

within the plume area downwind of Inco - to the east of the plant. The MOE did not receive

complaints from every resident in Port Colborne.


70.

When the MOE received a complaint, it was investigated. So, when the MOE was

investigating those complaints, or when it was doing inspections of the Refinery with a view to

achieving some kind of abatement, those investigations and those inspections were directed at

helping the specific people who were being affected by Inco.

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Baldwin Cross-Examination, Q. 147, 139

71. Baldwin=s evidence on this point is again consistent with the evidence of McLaughlin.According to McLaughlin, whenever any member of the public complained about an actual

impact to vegetation on their property, the MOE investigated and determined whether an impact

had occurred and whether Inco was the cause. As a result, all actual impacts significant enough

to warrant a public complaint were investigated.


72. McLaughlin participated in the majority of complaints investigations conducted by theMOE from the mid-1970's onward. Significantly, these complaints numbered only in the dozens,

not the hundreds.

McLaughlin Cross-Examination, Q. 22-25

73. As a result, as a matter of process, the adjudication of whether the MOE failed to respondto complaints of class members, as alleged in the Statement of Claim, is an individual issue. It

will require the examination of evidence as to whether any given Class member actually

complained to the MOE and whether the MOE responded. Equallyproperty-specific is the

questions of whether, having responded, the MOE=s response was adequate in the

circumstances. This will require a review of the data available with respect to a particular

property at a particular point in time.


Enforcement of the EPA - 45(h)

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74. It is unclear which, of a broad range of possible MOE activities, the plaintiff is referringto when he alleges that the MOE failed to Aapply or enforce@ the EPA. The EPA can be applied

or enforced in a myriad of ways, most of which are entirely discretionary on the part of the

Minister, Director, or Provincial Officer.


75. For example, the Minister has the discretion to issue Astop orders@ in certaincircumstances, effectively closing an industry entirely. The Director has the discretion to issue

approvals (dealt with above) or a wide variety of control orders or clean up orders, depending

upon the particular circumstances. An MOE Provincial Officer has the discretion to lay charges

under the EPA leading to the prosecution of a company for an environmental offence.


76. Assuming the court will review the alleged failure to exercise an enforcement discretion[it is argued under the Law, below, that no reasonable cause of action exists for this claim], the

assessment of whether this alleged failure constitutes negligence on the MOE=s part will again

involve, as a matter of process, consideration of a wide variety ofindividual issues.


77. For example, whether or not MOE officials were justified in Afailing@ to exercise thesediscretions will require a consideration of the Aadverse effects@, if any, which existed from year

to year, at each property, and for each person within the proposed Class. All the discretions

require, as a precondition to their being exercised, that the MOE official has reasonable and

probable grounds for believing that an Aadverse effect@ has occurred or has the potential to

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occur.

Thus, if a given Class member=s property was not suffering plant impacts or a Class member

was not suffering health impacts as a result of Inco=s operations, MOE officials could not be

faulted for failing to take steps to protect that individual.


78. As a result, to assess whether an alleged Afailure to apply or enforce@ the EPA amountedto negligence with respect to any given resident will require the same sort of detailed, property-

by-property and person-by-person analysis of contamination and causation as has been

undertaken by the MOE with respect to the Rodney Street community in its March 2002 HHRA

and March 2002 Order and as is currently being conducted by Inco under the CBRA process.

The complicating difference is that the negligence analysis will be required to examine not

current conditions, which are verifiable, but rather historic property and health conditions, for

which there may or may not be records or information available.


79. A further complicating difference, as noted by Inco in its factum, is that a Amere@toxicological risk assessment or epidemiological study, no matter how exhaustive, will not

suffice to establish causation and damages in a negligence lawsuit. The uncontradicted evidence

of the plaintiff=s own risk assessor (supported by Inco=s experts) is that the first of these, a risk

assessment, is Ano longer theoretically applicable to estimating an individual=s risk because

there are no data relating to any individual=s behaviour, food consumption patters, etc.

throughout his/her life@. Concerning the second of these, an epidemiological study, employing

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epidemiological results Ato make a causal determination for an individual plaintiff is beyond the

limits of epidemiology@. An individualizedmedical examination and diagnosis will be required

for each class member to establish causation and effect.

Inco=s Factum, paras. 48 and 103

Conclusion on negligence

80. In summary, regardless of the allegation of negligence considered, it is submitted that asa matter of process for the plaintiff to establish at trial that there existed on the part of the Crown

during the relevant time period a duty of care, standard of care and breach of that standard, will

require a detailed individualizedexamination of the circumstances of each Class member,

specific as to person, property and time period.

B-2 HISTORIC INVOLVEMENT OF MOE

IN RELATION TO ALLEGATIONS OF NEGLIGENT MISSTATEMENT

The reports in question

81. All the allegations of negligent misrepresentation made by the plaintiff against the Crownare based upon thirteen specific MOE reports and letters referenced in paragraphs 33 and 39 of

the plaintiff=s Fresh as Amended Reply to Demand for Particulars of Her Majesty the Queen in

Right of Ontario (AReply to Crown@). The actual reports and letters may be found atExhibits D

to P of the Affidavit of Lynne McArdle, sworn October 18, 2001, in support of the Crown=s

motion for further and better particulars.

Reply to Crown, paras. 33 and 39

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The alleged distribution

82. The plaintiff alleges that these reports and letters were distributed by the MOE toproposed Class members. Alternatively, it is pleaded that alleged misrepresentations in them

were disseminated to proposed Class members by the media and through public meetings. As a

result, it is alleged that AGiven the extremely widespread distribution of these

misrepresentations, it is clear that they were heard or read at some point by all Class Members

including Pearson@.

Reply to Crown, paras. 24-30

The actual distribution

83. Dave McLaughlin conducted a review of each of these documents (which were producedby his office of the MOE), and made inquiries of the MOE staff responsible for distributing the

documents and speaking to the media about them. Based upon those reviews and inquiries, he

was able to make detailed observations about how each report was distributed. Those

observations are appended to this factum as Schedule C.

84. They make it clear that although most of these reports were officially published by theMOE, their distribution was not always the same. For almost all of the reports, a limited number

of copies were made (eg. 50-100). Some were web-posted only. Only one of the reports, the

letter of July 16, 2001, was circulated to all of the households in Port Colborne. The remaining

documents were certainly not distributed to Aall proposed Class members@, as defined in the

Claim. Only one of the reports (the March 2001 HHRA) and the three letters were circulated to

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all the households in the Rodney Street community (some 300 homes). The 2000 Health Study

was not publicly circulated at all, and was only posted on the MOE=s web page in the summer of

2000. Most of the reports were technical reports and, as a result, they were not bulk printed and

were not distributed to the public, but rather were made publicly available through the local

library (one copy) and the internet. It is unknown how many proposed Class members were

aware of the library and internet copies and how many actually read them. Copies of some

reports which were bulk printed and sent to the MOE=s Public Information Centre in Toronto

would have been available upon request by any member of the public. However, there are no

records of how many people requested copies.

McLaughlin Affidavit, paras. 46, 47

85. The 1997 and 2000 Health Studies (Exhibits D and G) generated minimal mediacoverage. As well, all other reports published prior to the spring of 2000 (Exhibits E, F, and H)

received minimal media coverage and few, if any, interviews were given by the MOE in respect

to them.


86. However, commencing in the spring of 2000, with the establishment of the Public LiaisonCommittee (APLC@) under the CBRA process, and the holding of regular monthly PLC

meetings, the media started to follow environmental issues in Port Colborne much more

carefully. The PLC had its own independent expert, Beak International, reviewing and critiquing

the MOE reports. As a result, all of the MOE reports published subsequent to the summer of

2000 received a much higher level of media scrutiny, much of it critical of the MOE=s

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conclusions and findings.


87. This is reflected in the sort of media coverage received by the March 2001 HHRA. Thiswas the first comprehensive human health risk assessment conducted by the MOE after the

discovery in the fall of 2000 of higher than expected levels of total nickel on some properties in

the Rodney Street community. As a result of this discovery, and further as a result of the

commencement of this action in March 2001 and media publicity actively sought by plaintiff=s

counsel, the March 2001 HHRA received considerable media attention in the local media, most

of it highly critical.


88. By March 2001, and continuing throughout the months that followed, the residents ofPort Colborne were broadly aware of this legal action and were exposed to numerous media

reports distributed by plaintiff=s counsel expressing intense criticism of the March 2001 HHRA

and its conclusions.


89. It is submitted that given the different publication dates, different distribution, anddifferent media coverage of the various MOE reports over time, as a matter of process the court

at trial will not be able to assume that all or even most residents of the proposed class either read

the reports or heard media reports about them. This is clearly an individual issue which can only

be determined by an examination of each class member.

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90. There is no credible evidence that all or even most residents either read the MOE reports,heard media reports about them or attended public meetings at which they were discussed.

Although the Kaufmann affidavit alleges that Ait would be reasonable to conclude that because

of the ... extremely widespread nature of these representation that the entire Class has been

exposed@, on cross-examination Kaufmann admitted that he had only spoken to 20 to 30 class

members. Moreover, the cross-examination of the plaintiff revealed, as a case in point, that he

had not read any of the reports.

Kaufmann Affidavit, para. 20Cross-examination of Wolfgang Kaufmann, April 24, 2002 (AKaufmann

Cross-Examination@), Q. 66-72

Pearson Cross-examination, Q. 103-104

91. Moreover, given the highly critical nature of press coverage of the MOE reports since thesummer of 2000, it remains very much an open question the extent to which residents of Port

Colborne would have accepted the conclusions and findings of the MOE reports at face value.

Again, this is an individual issue which can only be resolved through the examination of every

Class member.


92. Further, as the discussion below reveals, it is submitted that even assuming all or mostclass members read the MOE reports or heard media reports about them, given that the actual

representations in the reports are not, on their face, as has been alleged in the Statement of Claim,

it remains a highly individual issue as to how each Class member who read or was aware of the

reports interpreted them.

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The alleged misrepresentations

93. The plaintiff alleges that these reports and letters contained two false statements. Thefirst was that Aemissions from the Refinery have not posed any immediate risk, or any risk to

human health@. This is allegedly false because, it is pleaded, AClass members have been exposed

to the risk of harm and to actual harm@ as pleaded elsewhere in the Claim and Reply.

Reply to Crown, paras. 24 and 31

94. The second was that Aone of the substances that Class Members were being exposed toand are still being exposed to is nickel, and not the known human carcinogen nickel oxide@.

This is allegedly false because, it is pleaded, AClass members have not been exposed to nickel,

but instead have been primarily exposed to the known human carcinogen nickel oxide@.

Reply to Crown, para. 24 and 31

95. The reports in question do not contain the two statements referred to above.[Furthermore, the first statement, even if it were contained in the reports, is a true statement.]


96. The plaintiff=s witness, Kaufmann, was specifically challenged to point out the second ofthe alleged misrepresentations in any of the reports. He conceded Athey may not make a positive

statement@ and indicated he would have to Adouble-check@. But when asked to Adouble-

check@, he refused. Kaufmann also admitted that he had not actually read each of the reports.

He had only Alooked at them@. AI can=t say I have read them all from cover to cover@. Thus, it

was shown that his evidence on the content of the MOE reports, like his evidence on who within

the class had actually read them, had no credible foundation.

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Kaufmann Cross-Examination, Q. 120-137, Q. 117

The actual representations

97. The allegation that all of the documents referred to above contain the first statement,Aemissions from the Refinery have notposed any immediate risk, or any risk to human health@,

is wrong. As the evidence of the MOE expert who reviewed each report in detail establishes, the

actual statements were differently worded, were more qualified, and changed over time. It goes

without saying that the MOE maintains they were true.

McLaughlin Affidavit, para. 55-58

98. The allegation that any of the documents contain the second statement, that Aone of thesubstances that Class Members were being exposed to and are still being exposed to is nickel,

and not the known human carcinogen nickel oxide@, is also false. No document contains such a

statement. In fact, far from denying the presence of nickel oxide, beginning with the March 2001

HHRA, MOE reports make it very clear that, in the MOE=s view (based on the evidence then

available to the MOE) most of the nickel in the soil in Port Colborne is nickel oxide. Moreover,

according to McLaughlin, there is no basis to conclude from reading the earlier reports that the

MOE had ruled out the presence of nickel oxide. The most one can reasonably conclude from

reading them is that the writers did not think that the species of nickel was particularly relevant to

the report=s findings.

McLaughlin Affidavit, paras. 59, 61 and 63

99. Even assuming, for the sake of argument, that the earlier reports contained such astatement (which they do not) there is no evidence of any detrimental reliance within the class, as

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a result. Despite the release of the Acorrective@ March 2001 HHRA (which states the

contamination in the soil is nickel oxide) and despite repeatedly misleading and alarmist news

releases by plaintiff=s counsel concerning the (carcinogenic) health impacts of nickel oxide on

the people of Port Colborne, there is no evidence of a mass exodus of residents from Port

Colborne or mass change in behaviour of residents.


100. It is submitted that without an individualized inquiry into the circumstances of eachproposed Class member, one cannot come to any factual conclusions concerning:

1. whether any individual actually read or heard about each of the above reports andletters;

2. how, in the face of what is said and is not said in the reports, any individualinterpreted what they read or heard;

3. whether any individual heard media coverage of the reports;4. how, in the face of media coverage which was highly critical of the reports and,any individual responded to what they read or heard, or if they relied upon what

they read and heard at all;

5. whether any individual attended public meetings at which the reports werediscussed;

6. how, in the face of criticisms by the PLC consultant and plaintiff=s counsel, anyindividual responded to what they heard or if they relied upon what they heard atall; and,

7. whether they would have responded differently had different information beenincluded in those reports.

McLaughlin Affidavit, para. 74 [for points a, b, d, and g; c, e and f are purely submissions]

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C. CURRENT ACTIVITIES OF TH E REGULATO RS AND INCO

101. Well prior to the commencement of this action, extensive environmental and healthinvestigations by the public regulators had been conducted. Also, environmental remediation

activities initiated by Inco and the public regulators were well underway and are currently works

in process. These processes are designed to address all community concerns in relation to

environmental contamination.

102. As described more fully below, these processes include: (1) the Community Based RiskAssessment process undertaken by Inco, (2) the Public Liaison Committee, (3) numerous health

and other studies, including Human Health Risk Assessments undertaken by the public

regulators, MOE and Region of Niagara Public Health Department (ARNPHD@), (4) draft and

final cleanup Orders issued by the Director, and (5) appeal processes to the Environmental

Review Tribunal under the EPA. These various processes are being undertaken pursuant to the

requirements of theEnvironmental Protection Act, theEnvironmental Bill of Rights, the MOE=s

1996 Guidelines for Use at Contaminated Sites, and extensive intergovernmental and

international expert peer review programs.

103. It is submitted that a class action is not a preferable procedure to these processes, taken asa whole, for addressing all significant environmental concerns in Port Colborne and all damages

allegedly sustained as a result of Inco=s historic operations of the Refinery.

(1) The Community Based Risk Assessment

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104. In 1996, the City of Port Colborne approached both the MOE and Inco for advice as tohow to deal with the numerous properties in the city containing elevated levels of nickel, copper

and cobalt.

Haniff Affidavit, para. 3

105. Also in 1996, the MOE published the AGuidelines for Use at Contaminated Sites inOntario@ to help owners of contaminated propertyclean up the soil so that the property could be

redeveloped for alternative land uses. The Guidelines describe three approaches for cleaning up

contaminated soil: 1) background, 2) generic and 3) site specific risk assessment (SSRA).


106. The background approach involves the use of soil guidelines to restore the site to naturalbackground conditions. Table F of the decommissioning guidelines outlines background

concentrations using Ontario Typical Range values.


107. The generic approach involves the use of soil guidelines that have been developed toprotect human health and the natural environment (Tables A-D of the Guidelines). The generic-

effects based guidelines are set to protect the most sensitive of plants, soil and aquatic organisms

and human health anywhere in Ontario, while eliminating the need for MOE review and

approval.


108. The site specific risk assessment (SSRA) approach does not use a list of established soil

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guidelines. Instead, the property owner obtains the services of a qualified consultant to develop

risk-based soil guidelines that are specific to and can only be used to remediate a specific

contaminated property. Because it is specific to one site, it is called a site specific risk

assessment. Generally speaking, property owners who clean up their contaminated soil using the

background or the generic effects-based soil guidelines do not require Ministry approval.

However, if an SSRA approach is used, the property owner must submit the SSRA approach to a

third party independent reviewer and then the proposal must be submitted to the MOE for

approval.


109. In the case of Port Colborne, the SSRA approach would have been a protracted processgiven the number of properties with elevated levels of nickel, copper and cobalt. As a practical

matter, individual site specific risk assessments in the affected areas could take decades to

complete, obtain MOE approval and then implement. Accordingly, in considering possible

alternatives, discussions among the City, the MOE and Inco in 1998 and 1999 led to the proposal

by Inco of a Community Based Risk Assessment (CBRA) approach, a voluntary community-

wide risk assessment which considers site specific scientific data pertinent to the Port Colborne

area.

Haniff Affidavit, 8, 9 and 10

110. The CBRA was endorsed by the City of Port Colborne through council resolution inMarch 2000 and the PLC approved the Scope of Works for the CBRA on November 30, 2000.

The City Council then adopted the scope of works by resolution on December 18, 2000. On

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January 12, 2001, the MOE sent the PLC a letter formally endorsing the CBRA Scope of Works.


111. Inco is undertaking the CBRA using the MOE=s Guidelines as a template. Under theCBRA approach,Inco has agreed to remediate properties according to the findings of the CBRA

and the development of specific procedures as part of the CBRA. As set out in Technical Scope

of Work for the CBRA process, Inco has publicly committed to the following:

As the proponent of the CBRA process, Inco is committed to developing a scientifically

sound, risk based and practical solution which protects human health and theenvironment, to resolve the issue of contamination as a result of Inco=s operations.


ATechnical Scope of Work - Community Based Risk Assessment for Port Colborne, November

30, 2000@, in Affidavit of Joseph Grignano, sworn January 17, 2002, (AGrignano Affidavit@),

Exhibit AO@, Plaintiff=s Record, p. 8

112. In May 2000, Inco retained Jacques Whitford Environment Limited (AJWEL@) todevelop the specific aspects of the CBRA in consultation with the City and the MOE. The public

is also involved in the process through a Public Liaison Committee (APLC@) appointed by the

City Council [see APublic Liaison Committee@, below]. Inco is funding the costs of the CBRA

process. Inco has also agreed to fund the cost of a separate socio-economic study [which has

come to be called the Aproperty valuation study@] to be carried out at the same time as the

CBRA.

Haniff Affidavit, paras. 11 and 12

113. Once the CBRA model is developed, based on the results of ongoing sampling andanalysis, the remediation phase will begin. Suitable remediation, if and where called for, will

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depend on individual property characteristics. It might consist of, for example, the addition of

substances to existing soil to stabilize soil conditions, the use of certain vegetation that naturally

absorb nickel from soil, or the removal of soil. Prior to the initiation of this lawsuit, it was hoped

that the development of the CBRA might be completed in 2002, with remediation, if and where

called for, to begin thereafter.


114. Although there have been some delays in the CBRA process, these are normal, necessaryand appropriate in a process such as this, which requires consultation and scientific debate. The

PLC=s independent consultant, Beak, has demanded significant additional work from Inco=s

expert. This show that the process is working very well, resulting in a superior product that

better protects the interests of the community.

Affidavit of Paul Nieweglowski, sworn April 18, 2002 (ANieweglowski Affidavit@), paras. 4-6

(2) Additional Studies Being Conducted by Inco

115. The CBRA process does not officially include a Human Health Study or a PropertyValuation Study. The MOE only required Inco to do a human health risk assessment (HHRA)

and ecological risk assessment (ERA) as part of the CBRA process, because that is all that is

required under the MOE=s Guidelines. However, as a direct response to community input, and at

the request of the PLC, in early 2001 Inco voluntarily agreed to conduct these two additional

studies to augment the work being done under the CBRA process. The Property Valuation Study

contract was awarded in December 2001, and the Study is expected to be completed by

December 2002.

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Nieweglowski Affidavit, paras. 10 and 11

116. As note earlier, the Human Health Study for the Rodney Street Community by theRNPHD had to be terminated due to a lack of public participation as a result of a campaign of

opposition mounted by plaintiff=s counsel. Because of this, the Ventana=s Human Health Study

had to incorporate some elements that would have been done by the RNPHD study. Ventana=s

health study is comprised of approximately 19 sub-studies to assess the current health of the

community and determine whether scientifically meaningful relationships exist between any

health issues and exposures to chemicals of concern. The public has had an opportunity to input

in the study development. These studies will commence immediately.

Nieweglowski Affidavit, para. 12-13

117. On the issue of compensation mechanisms which might arise out of any CBRA-relatedstudy, given these studies have yet to be completed, they may well recommend such mechanisms.

Compensation could be administered in a variety of ways. The important point is that until such

time as any health or property value impacts are shown to have occurred as a result of Inco=s

operations, and current evidence suggests otherwise, the question of compensation mechanisms

is premature.

Nieweglowski Affidavit, para. 14

(3) Public Liaison Committee

118. The Public Liaison Committee, or PLC, is an integral part of the CBRA process.Constituted in accordance with Terms of Reference approved by the MOE and Inco and adopted

by City Council resolution, the PLC consists of seven lay persons who, with expert assistance

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from their own independent expert, represent the residents of Port Colborne in every aspect of

the CBRA process.

PLC Terms of Reference, Grignano Affidavit, Volume III, Plaintiff=s Motion Record, Exhibit P,

at 50

119. The purpose and mandate of the PLC, and its meetings, are set out in the Terms ofReference of the PLC. The purpose is:

1. to investigate and provide input to INCO and the Ministry on contamination in thePort Colborne area and on the manner in which the CBRA is conducted;

2. to solicit public input;3. to provide information to the public; and,4. to provide input to Inco and the MOE respecting the scope of work, preparation

and implementation of the CBRA to address soils contamination attributed to Inco

operations.

The mandate of the PLC, and its meetings, is to:

5. receive and review all appropriate information respecting the contamination oflands in Port Colborne;

6. provide input to the Ministry and INCO;7. monitor the progress of the CBRA;8. review the findings and recommendations of the CBRA and provide input to Inco

and the Director;

9. provide input to the Ministry and INCO on methods of implementing therecommendations of the CBRA; and,

10. submit a final report including comments and advice to the Ministry with respectto the PLC and CBRA processes.

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PLC Terms of Reference, at 51

120. Public participation in the PLC process is expressly provided for:1. Obtaining the views of the public when developing PLC input to the Ministry and

INCO;

2. Seeking public input through public forums. At these public forums, Athe publicwill have the opportunity to ask questions of INCO and the MOE related to theCBRA@; and,

3. Permitting public delegations to attend regular meetings of the PLC Ato speak tothe subjects of the agenda for that meeting@.

PLC Terms of Reference, section 7

121. The PLC operates as an open and independent body. It is not controlled by Inco or theMOE. As the PLC terms of reference set out, it is controlled by its own Chair and voting

members. No important decisions of the PLC are made in private. All are made in public.

All PLC meetings have been open and transparent and have had significant public input. Minutes

and reports discussed at the PLC meetings are available at the municipality=s website and copies of

the preceding minutes are, as part of the Agenda of the PLC meetings, endorsed and available at

the following meeting.

Nieweglowski Affidavit, paras. 7, 18, 23 and 29

122. The PLC has formed a technical sub-committee (TSC) chaired by its independent expert,Beak Consulting, which meets regularly with the consultants of other parties to clarify protocols,

sampling results and interpretations. Beak was chosen by the PLC, by public tender, at the outset

of the CBRA process, to provide the PLC with the expertise it required to review studies prepared

by Inco. Although the public is free to attend the TSC meetings, such meetings of experts are a

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common feature of environmental remediation processes and are designed to expedite the

resolution of issues requiring experts.

Nieweglowski Affidavit, paras. 8, 29 and 31

123. In the MOE=s view, the PLC has operated as a very effective two-way window to thecommunity. It may be that certain residents in the community, notably the affiant for the

plaintiff, Ms. Ellen Smith, and certain other residents from the Rodney Street community, are

frustrated because they have not been allowed to take control of a process that is intended to

serve the entire community. Nevertheless, Rodney Street residents have been extremely active,

vocal participants in PLC meetings.

Nieweglowski Affidavit, 20 and 21

124. The MOE=s view of the effectiveness of the PLC process has been supported by theindependent evidence of one of the lay PLC members, Paul Dayboll. Dayboll came forward as

an independent witness after plaintiff=s counsel declined to assist him in filing an affidavit in

these proceedings to respond to the criticisms of the PLC and CBRA processes expressed by the

plaintiff=s affiant, Ellen Smith.

Cross-Examination of Paul Dayboll, April 30, 2002

125. In Dayboll=s view, the PLC and CBRA processes have permitted the community of PortColborne to address its contamination problem on its own terms, and in a way that is completely

preferable to litigation. In Dayboll=s own words:

I've been part of the CBRA process from the outset, from the beginning of the PLC. AndI can't think of another process where the community would have as much input and sayand as much ability to watch over the process as we do here.

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My fear of a process that differs from this is the loss of the community's ability tosomewhat have a say and have control. And one of the things that is interesting in this

process is while we don't have, while we don't have legislative ability or ability to push alaw or, and we've stated that several times saying that we are just a committee of the PLC,we seem to have had an amazing amount of power to make things move along.

Example, when we wanted to do a health study, and that became really evident throughcommunity meetings, that health was the most important thing, people were really

worried about health. In a normal SSRA you wouldn't be allowed to have a healthmonitoring study. You wouldn't be able to go in and take blood and all that kind of stuff;

it wouldn't be part of the process. You would only do a human health risk assessment.

When we became aware of that we were able to go to Inco and say to them listen, a

human health study has to be a part of this thing. And I think because it was thecommunity asking and it wasn't just being mandated to them, they got on board and saidyes, we'll fund it.

We also wanted a socio-economic impact study which we realized was kind of a propertyvaluation study at the end. We were able to ask for that, which was really outside of the

SSRA. And I think that if you had gone through another process, we wouldn't have allthose abilities.

So as a committee we've been surprised, actually, in some ways as to how much we'vebeen able to ask for, push for, and receive in the end. And I think that that is really why I

believe the process is the best process at this moment.

In the end, after we're done the CBRA, we may find that some people or some portions ofour community are going to have to go off and use other processes to get resolution to

their concerns or to the level that they want resolution.

I think for a lot of the community, I think for a lot of the community I believe that theCBRA process needs to be completed now, it needs to be completed without anyhindrance of other processes in, ongoing at the same time. But I believe at the end of the

CBRA of the first phase, phase one of the CBRA, we're going to have information thatwe couldn't have gotten any other way.

And then in phase two we can really look at how we're going to compensate people, howare we going to make the city clean again, how are we going to make the city healthyagain, and how are we going to put people back on its feet. And I think that that has to be

done by the community.

I think for it to be done through any other process would take, would take all of that

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ability out of the people's, of Port Colborne's hand and put it into the hands of one or two

people somewhere else. And that's not what Port Colborne wants. Port Colborne wants

to solve this problem on its own. And we are doing that through the CBRA process. And

at this moment it's the best process on the go at this time. You know, we're really please

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