Will the Radon Mitigation Industry Grow and Why?

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1 Will the Radon Mitigation Industry Grow and Why? Dr. Don Pinchin May 2014 Engineering Environmental and Health & Safety Solutions

2 Will the Radon Mitigation Industry Grow: Examples from Several Parallel Environmental or Health and Safety Issues Asbestos in Buildings and Construction Contaminated Sites and Site Cleanup Lead Based Paint (LBP) in Buildings

3 Why Does an Environmental or Health and Safety Industry Grow? Health Risk in a known group of workers Health Risk to the general population Risk to the environment Regulatory pressure (Labour or Environment) Financial Risk to employers, owners, insurers, banks Legal Risk to employers or owners Public Awareness/Pressure on governments, school boards, employers Public Hysteria (unfounded concern)

4 How did These Factors Impact Asbestos in Buildings and Construction - Hazards of asbestos (Canada and the US) Serious often fatal illnesses related to inhalation Long latent period (between exposure and disease) Originally recognized as an occupational hazard in the mining and manufacture of asbestos products Later recognized as a hazard during installation, renovation and maintenance of buildings Concern over the possible health impact on school children (mainly) or other building occupants (largely unfounded but a concern to some occupants)

5 How did These Factors Impact Asbestos in Buildings and Construction (cont d) Regulatory Action United States US Occupational Safety and Health Administration (OSHA) published initial regulations in 1970s Did not address Asbestos in Buildings so US Environmental Protection Agency engaged in the late 70s and 80s related to schools and buildings. Produced guidance documents in the early 70s and stringent regulations (heavily influenced by an emerging abatement industry) in 1986

6 How did These Factors Impact Asbestos in Buildings and Construction (cont d) Legal and Financial Concerns United States US class action laws and legal contingency payments led to thousands of court cases over injured workers and the bankruptcy of many firms Suits lodged over asbestos in buildings resulted in huge class action settlements and insurance claims. Some of this money went to abate asbestos Financial impact on US business and US and UK insurers was significant Purchasers and lenders also became wary of any investment in buildings which contained asbestos

7 Result of These Driving Forces in the US Estimated growth of revenue for asbestos abatement (excluding reconstruction, etc.) Virtually no abatement industry Abatement value $600 million 1987 Abatement value $1.6 billion Post 1987 Abatement volume increases but much more tied to the general renovation and demolition economy. Companies involved were initially small insulators and renovators adding on a product line. Later consolidation and involvement of major construction firms. Consulting and laboratory services were also very strong influencers of regulation and public concerns. Initial entrants to the industry made very large profits

8 How Did These Factors Affect Canada? Initial concerns came from the US (very late 70s) Parental pressure on school boards (80s) and some provincial legislatures First Occupational asbestos regulation 1980 Ontario Royal Commission led to asbestos in building regulations or guidelines in all provinces. These regulations became more stringent over time Insulation and interior renovation firms dominated industry. Consulting and laboratory impact was less significant than in the US Construction unions and larger contractors were very late on board and did not have much impact except in BC where they have pushed the WCB policies and enforcement

9 Result of These Driving Forces in Canada Estimated growth of revenue for asbestos abatement (excluding reconstruction, etc.) Virtually no abatement industry Abatement value $67.5 million 1987 Abatement value $90 million Post 1987 Abatement volume greatly increases as more provinces pass or enforce regulations and guidelines. Also strongly tied to the general renovation and demolition economy. The Canadian approach to asbestos abatement has been much more measured and tied to building alteration than much of the work in the US. Much of the work now is addressing harder (non-friable) asbestos which poses far less risk to workers but which has been caught up in the general and regulatory concern and regulations dealing with soft or fluffy (friable) asbestos

10 Where Did These Forces Impact the Building Sector in Canada? 1. Schools (initially Ontario, then all other provinces) 2. Other public sector buildings (initially, although now they often lag the private sector) 3. Buildings with strong union environments 4. Large building portfolio owners (Class A buildings, malls) 5. Building renovation and demolition (now the largest driver of abatement by far) Where has there been very little impact? 1. Private residences (except BC). There are different (and often unaware) contractors and workers, little union pressure, no deep pockets to pay for abatement and (except for BC) there is no significant government enforcement. Our experience is that homeowners often will not pay for health and safety in their own home.

11 Summary of Driving Forces - Asbestos US Health Risk (workers) Regulatory pressure Legal Risk Financial Risk Public Awareness Some Public Hysteria Strong Lobbying by the service industry Canada Health Risk (workers) Regulatory pressure Financial Risk (lower) Public Awareness Initial Public Hysteria

12 Contaminated Sites and Cleanup What is a contaminated site? Former industrial urban manufacturing or transportation sites, frequently port land with significant value if clean Resource extraction site or northern military site. Usually the responsibility of the federal government Very commonly numerous smaller sites such as gas stations, machine and auto shops, dry cleaners. These are often operating and owned sites (owned gasoline stations) but may be sites abandoned by bankruptcy to the municipalities The risks from these sites are very rarely related to the health effects on workers (except in some land redevelopment or a very few former industrial sites (Sydney tar ponds)) Most concern centres on the environmental risk. This includes contamination of other properties, aquifers, rivers or lakes. Particular concern for the north and First Nations

13 What Are the Driving Forces to Clean up or Control Contaminated Sites? Regulatory Pressure Guidelines published in the early to mid 80s for drinking water and soil contamination limits in many provinces Canadian standards generally followed the US. The ASTM standard for Phase I studies preceded the CSA standard In Ontario the Interim Guidelines for Hydrocarbons were published in the early 90s and have been finalized in the late 90s and updated in 2004 and Most provinces followed a similar timeline with provincial standards or relied on the Canadian Council of Ministers of Environment (CCME) standards published in the mid 90s The CCME standards still apply to all federal lands and some provinces still apply some of these standards. Allowable levels of contamination have become more stringent as the science and analytical ability has improved. Significant fines possible (primarily provincially enforced)

14 What Are the Driving Forces to Clean up or Control Contaminated Sites? Public and First Nations pressure significant for resource extraction and northern sites Financial (the key driver) Lenders and purchasers do not want to become liable for clean up costs which may exceed the value of the property. Properties are either discounted or cleaned up before sale (often does not apply to single family residential sales). Municipal governments lose a significant tax base on these properties and they may be a visible blight on urban development Many urban sites (such as former gas stations) have a significant sale value for redevelopment (retail, food services, etc.) Legal and financial risk usually due to risk of contamination of adjoining properties or aquifers. Possible significant adverse public reaction to the parent firm.

15 Summary of Driving Forces Contaminated Sites Regulations (Federal and Provincial) First Nations and northern concerns Rare legal Risk from environmental regulations Financial Risk to Owners and Lenders Financial opportunity for municipalities Public pressure not a major driver

16 Lead Based Paint (LBP) Abatement Drivers The Closest Model to Radon Health Risk Workers Well known and serious risks due to inhalation and ingestion in miners and manufacturers of lead products (such as leaded gasoline, paints, and plumbing). Impacts can show up as acute illnesses or death or chronic long term impacts (reproductive, other organs) Health Risk General public Impact on fetal and childhood growth and mental development has been documented (primarily in the US) for over 50 years Lead exposure routes mainly due to urban dust and soil (primarily from leaded gas or manufacturing), lead in drinking water from plumbing and ingestion of lead based paint.

17 LBP Abatement Drivers (cont d) Regulatory Pressure United States Canada and the US both moved to reduce new lead going into the environment from gasoline, paint and plumbing fixtures starting in the 1970s (the US led Canada on these issues) Lead Abatement Regulations established in OSHA (worker protection), EPA (standards of work, training and disposal) and Housing and Urban Development (residential actions). Abatement regulations generally date from the early 90s Renovation contractors require training for <1980s housing Also state and municipal regulations regarding lead also exist. Many require LBP disclosure for all housing sales Regulatory Pressure - Canada Canadian LBP Abatement regulations related to buildings are almost non-existent. There are some testing and notification requirements and some guideline documents but no widespread enforcement (with the exception of BC)

18 LBP Abatement Drivers (cont d) Legal and Financial Pressures United States There are extreme legal/financial penalties Law suits against LBP manufacturers - awards in the billions. Lawsuits against housing agencies (public and private) are common and frequently result in mandatory abatement. Disclosure of LBP even in residential sales is common or regulated Frequent fines and orders to abate (usually multiple housing stock) Legal and Financial Pressures Canada There are virtually no legal or financial drivers to force owners or occupants of buildings to disclose or abate lead The only effective requirement is the need to provide contractors with a designated (hazardous) substance survey prior to disturbance of LBP and site-specific orders

19 LBP Abatement Drivers (cont d) Public Awareness United States The actions of the regulators, public agencies (public awareness campaigns by HUD), class action lawyers and courts resulted in a high level of public awareness of the hazards of LBP There is a knowledge that LBP in inner city/low cost housing (which is much more common in the major cities) can have very negative effects on the occupants of these buildings Public Awareness - Canada CMHC has produced some guidance documents dealing with the correct procedures to renovate homes with LBP but this is not widely known to homeowners. This program does not seem to be effective and has not been updated for many years. The industrial/commercial contractors are more aware of LBP and take precautions (bridges, water towers) but there is very little concern or action being taken by single or multi-family residential owners.

20 The Drivers and the Result for LBP In the US there is a large and thriving LBP abatement industry In Canada there is very little LBP abatement and virtually none in the residential sector. Only recently have we seen orders for LBP abatement except in BC where the enforcement is more active. US Health Risk (workers) Health risk (public) Regulatory pressure Financial risk Legal risk Public awareness Canada Health Risk (workers) Health Risk (public)

21 Where Are Radon Drivers in Canada? Health Risk (workers underground and water) Yes Health Risk (public - homes and workplaces) Yes Union and Public Health Awareness Yes School Sector Awareness Variable Public Awareness Low Financial Risk to home builders Possible* Regulatory Pressure (except Quebec) No** Financial Risk to employers No Financial Risk to owners/lenders No Legal Risk No * Tarion Warrantee may impact this ** Testing of Schools in Quebec may have an impact

22 Where will Radon Testing and Mitigation Start? Quebec schools due to ongoing testing (some mitigation has already started) School boards outside Quebec where there is an active parent, parent organization or teacher s union Other public sector property owners union influence? Owners with a strong health and safety policy and a desire to satisfy worker or tenant concerns Possibly specific areas of the country where radon is currently known to be an issue Single family residential (but these will be the exception and not the rule until awareness grows)

23 Where will Radon Testing and Abatement Start? Quebec schools due to ongoing testing (when the results are available) School boards outside Quebec where there is an active parent, parent organization or teacher s union Other public sector property owners Owners with a strong health and safety policy and a desire to satisfy worker concerns Possibly specific areas of the country where radon is currently known to be an issue Single family residential (but these will be the exception and not the rule until awareness grows)

24 Questions? Don Pinchin Pinchin Environmental Ltd PINCHIN ext:

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