Whatever happened to ... the Bata Shoe Company.

• Author: Bowal, Peter
• Position: Follow-up on Famous Canadian Cases

This feature profiles a famous Canadian case from the past that holds considerable public and human interest and explains what became of the parties and why it matters today.

[The Bata Shoe company has] a credit in the corporate bank of good citizenship upon which [it is] entitled to draw

R. v. Bata Industries Ltd., Marchant and Weston, (1992) 7 C.E.L.R. (N.S.) 293

Introduction: The New Environmental Regulation of the 1980s

Today, the environment is increasingly coming under regulatory oversight. The first major environmental protection push in the western world began in the early 1980s when sweeping new regulations were ushered in to shift a much greater burden of care and potential liability onto the private sector. Businesses were put on notice that the "polluter pays" principle would be enforced. Stringent assessment; approval, licencing and reporting requirements; and personal liability of officers, directors and other agents of the corporation were created. Now, managers could be fined and imprisoned for the failures of the companies they managed. Various Canadian provinces drafted laws that set out managerial liability, such as this section from the Ontario Water Resources Act, R.S.O. 1990:

Where a corporation commits an offence under this Act, any officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence, and is liable to the punishment provided for the offence whether or not the corporation has been prosecuted or convicted. The enactment of these new environmental statutes stirred the anxieties of the Canadian business community. And few cases could have reinforced these anxieties more than the Ontario court case of R. v. Bata Industries Ltd., Marchant and Weston. The Bata Shoe Company ("Bata") became the test case for this new, strict environmental regulation in Canada.

The Bata Shoe Company

Thomas Bata Sr. founded the Bata Shoe Company in the Czech Republic on August 24, 1894. The founders son, Thomas J. Bata moved corporate headquarters to Toronto in 1964. By the late 1980s, Bata had become the largest manufacturer and retailer of footwear in the world. Its plant was located in the village of Batawa, on the north shore of Lake Ontario. In 1984, the founder's grandson, Thomas George Bata, became the CEO. He also proved to be an effective and popular leader, overseeing international operations, setting up the Bata Shoe Foundation and receiving several honourary doctorates, the Order of Canada and, later, a lifetime achievement "Award for Responsible Capitalism."

However, Bata did not perform well during the first four years of the 1980s, suffering losses which topped $6.4 million in 1984. To solve its problems, Bata hired Keith Weston. He reengineered Bata, controlling almost every financial decision Bata Manufacturing made. In 1985, he became Vice-President and was elected to the Board of Directors. By the time he left in November 1988 for his next executive assignment in Malaysia, Mr. Weston had turned around the Batawa operation, from a loss of $6.9 million to a net gain of $0.9 million.

The Chemical Waste Storage Problem

The Batawa plant's main products were casual shoes and boots made of leather. These products required several hazardous liquid chemicals in the manufacturing process, some of which, like benzene, were carcinogenic. In the 1980s, regulations were enacted to specify correct storage and disposal of chemicals.

The chemical waste storage problem had been identified by Bata employees as early as 1983 and was...