The Territorial Court of Yukon has added a $30,000 penalty to the millions of dollars it will cost North 60 Petro to clean up the mess it inherited on its Yukon River property.

In a joint submission made Friday afternoon, Crown prosecutor Noel Sinclair and North 60 lawyer Bill McNaughton recommended Judge Michael Cozens fine the company $2,000 for failing to submit a remediation report to Environment Canada, and order a $28,000 contribution to the federal Environmental Damages Fund "for the purpose of promoting the conservation and protection of fish and fish habitat.”

The fuel supply company has run its main operation out of a riverside lot at 146 Industrial Rd. in Whitehorse since 1995.

Before that, the property was occupied over the years by the CANOL petroleum refinery, various Whitehorse and Yukon Railway facilities, a metal mining concentrate transfer station, and an Imperial Oil bulk fuel storage and distribution facility.

It was one or a combination of those past residents which contaminated the property with oil and gas, McNaughton told the court, but it is now North 60's responsibility to clean it up.

"This is a complex site with a lot of historical (contaminant) material in it,” McNaughton said. "Not material that my client put in it, but inherited.”

The contamination first came to light in May 1997, when Environment Canada inspectors noticed a "rusty coloured, oily stain along the west bank of the Yukon River, adjacent to the property,” according to a statement of facts read out in court Friday.

Samples of the shoreline soils showed oil and gas seeping out of the ground and threatening the river.

The following year, the Yukon government deemed the property a contaminated site under the Environment Act and the long process of fixing the problem began.

Early remediation efforts by North 60 included infrastructure upgrades, and the installation of a hydrocarbon containment system which consists of a number of wells designed to collect and extract the oil and gas from the soil before it reached the river.

But the system did not run year-round, and as Sinclair indicated in court last week, officials at the federal and territorial Environment departments suspected it was not sufficient.

However, it wasn't until nearly a decade after the contamination was first spotted that Environment Canada, the Yukon government and North 60's environmental consultants met to discuss the situation in September 2006.

North 60 drew up a new assessment and remediation schedule, but Environment Canada was not satisfied that things were moving fast enough, and officials deemed the well system "inoperable”.

The department ordered North 60 to "take all reasonable measures to stop the movement of non-aqueous phase and dissolved petroleum hydrocarbons from their property into the Yukon River within 12 months,” to identify and report any petroleum leaks on the property, and to submit a final report.

On Dec. 7, 2007, Environment Canada received a letter from North 60 which updated officials on the situation, but "did not address or satisfy” all aspects of the December 2006 order.

In the following months, North 60 reported 86,000 square metres of soil on the property is "impacted” by hydrocarbons, and there is evidence of hydrocarbon discharge along a 200-metre stretch of the Yukon River.

There is no estimate of how much hydrocarbon has seeped into the river over the years.

Although updated reports were filed over the next year, and a number of meetings were held between Environment officials and North of 60 representatives, in April 2009, the government decided to lay charges of failing to comply with the 2006 order as a way to urge the process along.

North 60 pleaded guilty and negotiated the agreed-upon penalty of $30,000.

Lawyers for both sides noted the penalty is small compared to the cost of the "multimillion dollar” remediation project North 60 is undertaking.

"The main concern is we get the land cleaned up and prevent further contamination of the river,” Sinclair concluded.

In handing down the $30,000 sentence, Cozens gave the company credit for being "proactive and said, "if this was a case where North 60 had sat on their hands and not worked as diligently ... the fine would be greater.”

A new remediation plan is currently awaiting regulatory approval from the Yukon Water Board, Fisheries and Oceans Canada, Transport Canada and the Yukon Department of Environment.