Irving Oil has been ordered to pay $4 million for offences under the Transportation of Dangerous Goods Act, including failure to comply with safety requirements and inadequate training of staff, after an investigation related to the Lac Mégantic, Que., disaster.
About $400,000 of the penalty is a fine.
Almost $3.6 million will be used to implement research programs on federal safety standards and regulations under the federal act, according to a news release Thursdsay from the Public Prosecution Service of Canada.
Irving Oil pleaded guilty earlier to 34 counts under the Transportation of Dangerous Goods Act.
The charges were related to a joint investigation by Transport Canada and the RCMP after the train derailment in Lac Mégantic on July 6, 2013, that killed 47 people.
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The investigation found that Irving Oil failed to comply with applicable safety requirements by failing to properly classify the crude oil it transported by train, and that the shipping documents on board the trains were "erroneous," the Public Prosecution Service of Canada said in the news release.
The investigation also found that Irving Oil did not adequately train its employees in the transportation of dangerous goods.
The offences occurred between November 2012 and July 2013, when close to 14,000 train cars transported crude oil to Saint John.
In a statement posted to the company's website on Thursday, Irving Oil said it strongly believes in the importance of safety and regulatory compliance "across all of our operations and we take these charges very seriously."
"Irving Oil acknowledges and appreciates the work undertaken by Transport Canada to uphold rigorous standards around the safe transport of goods," the statement goes on to say.
"The company will remain vigilant in all of our operations, upholding our commitment to safety for employees, customers, and communities."
47 people killed in explosions
The derailment in July 2013 set off several massive blasts in Lac Mégantic, a town of about 6,000, and wiped out a large portion of the downtown core.
The crude oil on the train was destined for Irving's refinery in Saint John.
Under the Transportation Safety Board of Canada's regulations, crude oil is classified into three packing groups based on its level of danger. It is the importer's responsibility, in this case Irving Oil, to make sure the packing is correct.
In September 2013, the Transportation Safety Board said a preliminary investigation found the crude oil the train was carrying had been listed as the least dangerous on the scale, or packing group three, when in fact, the oil had the properties of packing group two, which has a lower flash point and can ignite more quickly.
No evidence it caused disaster
Denis Lavoie, the main federal prosecutor on the case, said prosecutors did not believe the misclassification of the crude oil contributed to or caused the railway disaster.
However, in court, he said prosecutors had argued that in other circumstances, it could have an impact.
"But in Lac Mégantic, we don't have any evidence of whether it did or not," he said.
Shipping documents on rail cars must provide the proper packing group in order to inform first responders how to deal with an incident such as a fire or spill, Lavoie said.
Information determines response, handling
"First responders might act differently, depending on the packing group, on how to extinguish a fire, for example," he said.
"That is quite important, since we have railroads that go across villages and towns across the country."
'If this compels those handling the material to pay more attention to the hazard classification and appropriate handling, that's a good thing in the long term.' - Mark Winfield, environmental studies professor
Mark Winfield, a professor of environmental studies at York University, who has researched how governments regulate for public safety, said the classification influences how materials are handled.
"If you know what you're carrying around is likely to explode or catch fire, you're probably likely to handle it differently than if you think it's something inert and innocuous," he said.
"It's more of a question of, if people are aware of what they're handling, they're probably going to behave a bit differently."
Thursday's decision will hopefully get shippers to pay more attention and make sure they classify their materials correctly, he said.
"If this compels those handling the material to pay more attention to the hazard classification and appropriate handling, that's a good thing in the long term," he said.
Transport Minister Marc Garneau said Thursday's outcome closed "another sad chapter in this tragic event."
He said the federal government pursued the charges "because there was a clear infraction with respect to the transportation of dangerous goods."
"We have a responsibility for it. It comes under Transport Canada, and we will always take the necessary measures if anybody fails to respect the requirement with respect to the transportation of dangerous goods," he told reporters Thursday.