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An environmental group has lost its legal challenge of regulatory exemptions given to a pair of dams in northern British Columbia.

“It’s bitterly disappointing and a worrying judgment,” Alan Andrews, lawyer for the Sierra Club of B.C., said Wednesday.

Progress Energy built the dams to store water for its natural gas fracking operations in the northern part of the province. Court heard the company inadvertently built the dams too high, which brought into force environmental regulations the dams couldn’t meet.

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The province granted the company an exemption from the rules.

Lawyers for the Sierra Club argued the government wasn’t allowed to grant such exemptions after the fact.

They said environmental assessment legislation would be undermined if proponents could build and operate a project in violation of the rules, then benefit from an exemption.

The court found the company reported the problem as soon as it was discovered. It also ruled Progress had done what it could to consult with local people and to ensure the dams were safe.

As well, the government strictly limited the amount of water Progress could store in the dams and warned the company it could face further sanctions if there were more problems with them.

In a written decision, Justice Catherine Murray found the government’s exemption was reasonable and dismissed Sierra’s suit.

“(Government staff) performed a careful analysis of the concerns raised,” she wrote. “It was reasonable for the executive director (of B.C.’s assessment office) to rely on his team’s research and analysis.”

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Andrews said the ruling sets a bad precedent.

“This decision leaves the door open to companies to flout environmental rules, knowing they can go to the government with their hands up and not face penalties,” he said.

The ruling weakens deterrence, he added.

“This sends a message that you can neglect environmental laws and not face the consequences.”

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