January 28, 2015 / 11:44 PM / in 3 years

UPDATE 1-NAFTA panel halts probe of Canadian oil sands oversight

(Adds comments from Suncor, government and quote from complainant)

By Mike De Souza

OTTAWA, Jan 28 (Reuters) - A North American Free Trade Agreement (NAFTA) panel has halted a probe of Canada's oversight of oil sands tailings ponds following a unanimous vote by its three member countries, officials said on Wednesday.

The vote came even after staff at the panel, the Commission for Environmental Cooperation, had recommended proceeding with a formal investigation in response to complaints in April 2010 from three Canadians and two environmental groups.

The complainants argued that Canada was failing to enforce environmental laws related to alleged leaks from industry tailings ponds into water in northern Alberta.

The Canadian government's environment department said on Wednesday that it enforces its legislation related to tailings ponds through "proactive and reactive inspections and investigations."

The NAFTA commission initially agreed to investigate the allegations in December 2013, offering Canada the chance to respond.

Canada argued that the probe would interfere with ongoing provincial court proceedings initiated by a former Alberta environmental enforcement officer, who requested a review of tailings waste ponds operated by Suncor Energy Inc.

Both the officer, Tony Boschmann, and the company said that case had been dismissed.

"Suncor was not a party to those proceedings, but understand(s) the matter was heard and ultimately dismissed by the courts," said Suncor spokesman Michael Lawrence.

The U.S. government also told the panel that Canada had provided enough information to lead the panel to "conclude that there could be a pending criminal proceeding" related to the subject of the complaint.

Suncor said it was not aware of any such investigation.

The panel, set up under the North American Agreement on Environmental Cooperation to review complaints raised by citizens and groups about the enforcement of environmental laws, rejected Canada's arguments in July 2014, stating the provincial case was no longer active.

However, with the vote that was held on Tuesday, the three countries shut down the investigation.

Canada's Environmental Defence, one of the two groups that filed the original complaint, said it would consider refiling with the panel if the three countries acknowledge that the court proceedings have ended.

"They (Canadian officials) just blocked an investigation, so they need to get out of the way and let this (NAFTA panel) investigation happen," said Dale Marshall, the national program manager for Environmental Defence. (Editing by Jeffrey Hodgson and Andre Grenon)

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