Green energy campaigners in Canada applauded a precedent-settiing 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.
I would argue that corporate bankruptcy generally serves to provide too much protection to companies and management.
In addition to ecological damage, how about allowing the claw back of sky high executive pay, private equity management fees, etc. as a part of bankruptcy proceedings.