Authority Agrees to Stewardship Ontario Assignment of its Primary Service Provider for the Blue Box Program to Resource Recovery Alliance

Published on: Oct 19, 2021 Go back to the Latest News Archive

The Resource Productivity and Recovery Authority (the Authority) has agreed with Stewardship Ontario’s (SO) proposal to assign, with conditions, its master service agreement (MSA) with its primary service provider Canadian Stewardship Services Alliance (CSSA) to Resource Recovery Alliance (RRA), a producer responsibility organization (PRO) under the new Blue Box Regulation established by GFL Environmental Inc. as part of its proposed acquisition of CSSA.

SO’s decision and the Authority’s agreement comes following a three-month review process undertaken to ensure that the Authority and SO have taken appropriate steps to comply with the requirements set out in the following statutory instruments: The Minister of the Environment, Conservation and Parks’ August 15, 2019 direction to wind up the Blue Box Program; the Blue Box Transition and Stewardship Ontario Windup Plan approved by the Authority on December 16, 2020; and the conditions set by the Authority on approval of that plan.

A core objective of these instruments is to protect the confidentiality of commercially sensitive steward data CSSA holds on behalf of SO and to address any real, perceived, or apparent conflicts of interest arising from CSSA’s relationship with SO and any role it might play as a PRO under the Blue Box Regulation. In light of the requirements set out in these documents, it was incumbent on the Authority and SO to take steps to ensure that appropriate measures are in place, and that CSSA is complying with these measures to ensure data security and address any conflicts of interest.

The steps outlined below reflect the Authority’s and SO’s assessment of the actions necessary to comply with the Minister’s directions and the Blue Box Program Transition Plan. None of the actions taken should be interpreted as an indication of the Authority’s or SO’s views on the transaction itself. CSSA has been cooperative throughout the review.

Following GFL’s July 6, 2021 announcement of its planned acquisition of CSSA and the formation of RRA, SO immediately undertook the following due diligence steps:

  1. Retained an external business advisory firm with cybersecurity expertise to undertake a diagnostic assessment of CSSA’s processes and controls to maintain the confidentiality of SO steward data.
  2. Required interim measures to be adopted to strengthen CSSA’s procedures for maintaining data confidentiality and provisions to mitigate conflicts of interest.

The diagnostic assessment concluded that CSSA is currently abiding by all processes and controls required by SO, as outlined in its current service agreement, the Blue Box Transition Plan, and the additional interim measures imposed by SO, including CSSA’s organizational structure, identity and access management protocols, code of conduct, and data security processes.

As part of its acceptance of SO’s proposal to assign its MSA with CSSA to RRA, the Authority is requiring SO to ensure any agreement with RRA further protect the confidentiality of steward data, mitigate conflicts of interest, and otherwise support a fair and competitive marketplace for PRO services under the new Blue Box Regulation through requirements including, but not limited to:

  1. Further limitations on CSSA and/or RRA staff providing services to SO from being involved in certain work related to CSSA and/or RRA being a PRO in Ontario.
  2. SO’s right to undertake at any time a compliance audit and revise or implement new process controls as required.

The Authority is the regulator established by the Government of Ontario to enforce the requirements of the province’s producer responsibility regulatory regime outlined in the Resource Recovery and Circular Economy Act, 2016 and its associated regulations, and to oversee the transition of Ontario’s legacy waste diversion programs to the new regulatory framework as outlined in the Waste Diversion Transition Act, 2016. In this role, the Authority is responsible for monitoring SO’s implementation of the Blue Box Program Plan and Blue Box Transition Plan.