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Polluters must be prepared to pay for damage they cause, the Supreme Court of Canada said in a 9-0 ruling Thursday.

The court rejected arguments from Imperial Oil Ltd. that the Quebec government was caught in a conflict of interest when it ordered the company to clean up a large amount of polluted soil.

"There was no conflict of interest such as would warrant judicial intervention - let alone any abuse or misuse of power," Mr. Justice Louis LeBel wrote for the majority.

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The case stems from a 1998 order from the Quebec Ministry of the Environment to Imperial Oil to clean up oil and grease contamination from decades-old storage tanks that had leaked deep into the soil on which 20 homes have been built in a subdivision near the city of Levis.

"This decision is one of the great environmental law victories in Canadian history," Sierra Legal Defence Fund managing lawyer Jerry DeMarco said following the decision.

"Kudos to the Supreme Court of Canada for again recognizing the importance of environmental protection in safeguarding the well-being of Canadians. There are tens of thousands of contaminated sites in Canada - from the Sydney tar ponds, to Levis, Quebec, Hamilton, Calgary, and so on. Toxic messes have been left behind by polluters and now polluters must pay for the environmental harm they have caused."

Company lawyers had claimed the ministry order was illegal on account of several lawsuits it faces from homeowners over botched attempts to clean up the problem.

The lawsuits accuse the ministry of inadequately supervising the previous cleanup operations.

The company maintained that any moves the province made since the lawsuits were launched could be seen as motivated by their desire to reduce the province's civil liability - a clear conflict of interest.

The Supreme Court disagreed.

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"The only interests the Minister was representing were the public interest in protecting the environment and the interest of the State, which is responsible for preserving the environment," Judge LeBel said.

"In the circumstances of this case, it was difficult to separate those interests," he said. "In exercising his discretion, the Minister could properly consider a solution that would save some public money."

Environmentalists have been on tenterhooks ever since a Quebec Superior Court judge ruled in favour of Imperial Oil's arguments in 2000. The Quebec Court of Appeal later reversed that ruling, setting up an appeal to the Supreme Court.

The Ontario Ministry of the Attorney-General sided with environmentalists during oral arguments, warning that polluters could skip away from thousands of contaminated sites across the country unless the Supreme Court put a stop to Imperial's challenge.

An adverse ruling would prevent governments from issuing cleanup orders and "be disastrous for environmental regulation across Canada," Ontario said.

Lawyers for the province also warned that heightened public awareness of environmental issues is likely to multiply the number of lawsuits authorities face in future.

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According to Friends of the Earth, another environmental group, about 30,000 sites in Canada are contaminated. It maintained polluters could have effectively abandoned them had the Supreme Court ruling gone the other way.

The contaminated land in Levis was sold by Imperial Oil in 1979. About 10,000 cubic metres of contaminated soil from the Quebec site were removed soon afterward, and approximately 20 homes were built on the site.

In 1995, worried homeowners asked the ministry to order Imperial Oil to deal with continuing pollution problems. After three years of investigation, the ministry issued the contentious order.

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