Should our courts intervene to restrict polluting companies? Lawyers argue that when a defendant’s conduct has the potential to harm the world, it's time for a new tort. David Williams reports
On one side a Māori leader, alleging in court seven big companies are contributing to the loss of his whenua and harm to the taonga of his whānau.
On the other, polluting companies saying they’re operating within the law, and to accept such claims would require judicial contortions akin to those seen in the film The Matrix.
David versus Goliath, you might say. Or, perhaps, Kupe steering his waka hourua on a legal journey to safety.
Central to this battle is climate change, and a growing body of scientific evidence humanity faces dangerous levels of warming.
The amended statement of claim lists one danger as: “An unacceptable and escalating risk of social and economic collapse and mass loss of human life.”
An existential threat, then, in an emerging area of law, which has reached the highest court in the land. There are big question marks, not least over the role of the courts when it comes to something as diffuse and multi-causal as greenhouse gas emissions.
As Victoria University law professor Geoff McLay has said, the biggest question for the courts is: “What’re you here for, if you’re not here for the biggest crisis of our time?”
“When a defendant’s conduct has the potential to literally harm the world, then perhaps it is time to recognise that circumstances now exist where these countervailing concerns do not serve us well.” – article, Journal of Environmental Law
A paper published in the Journal of Environmental Law in January last year, by Maria Hook, Ceri Warnock, Barry Allan and Mihiata Pirini, suggests the time might be ripe to introduce a duty to protect the environment in New Zealand tort law, “opening up the possibility of successfully suing corporations for harm to the climate”.
Mike Smith (Ngāpuhi, Ngāti Kahu), is suing seven of the country’s largest polluters and fossil fuel producers, claiming harm from their activities as part-owner of land at Mahinepua, near Kaeo, in Northland.
The defendants are dairy giant Fonterra, energy company Genesis, farmer Dairy Holdings, New Zealand Steel, petrol retailer Z Energy, Channel Infrastructure, which operated the Marsden Point oil refinery, and BT Mining, which owns and operates the country’s largest coal mine, Stockton.
The companies have moved to strike out his claim, the subject of a Supreme Court hearing earlier this month. We’ve delved into the written legal submissions to get a flavour of the arguments.
First, the legal stuff. Through his pro bono team, headed by Davey Salmon QC, Smith’s claims are for public nuisance, negligence, and/or a new “cause of action”, or novel tort, for a breach of duty.
The High Court threw out the first two pleadings, but left the door ajar to the third. The Court of Appeal shut that door.
“Private litigation against a small subset of emitters, requiring them to comply with requirements that are more stringent than those imposed by statute, will not be effective to address climate change at a national level, let alone globally,” the Appeal Court’s decision, from October last year, said.
Developing a “parallel common law regulatory regime” would be “ineffective and inefficient, and likely to be socially unjust”.
In the simplest terms, Smith, the climate change spokesman for the Iwi Chairs’ Forum, told the Supreme Court these profit-making companies are knowingly causing harm and externalising their costs, trampling on a public right to a safe and habitable climate system.
Often, the harms fall on the most vulnerable – such as indigenous people, and inhabitants of coastal or low-lying areas.
Smith can’t protect himself from their negligence, he argues. It’s the companies themselves that control their emissions, or the fuel they supply.
Stop the emissions, or reduce them in line with the latest international scientific research, and the harm caused to Smith will be materially reduced.
Where the lower courts have gone wrong, he suggests, is they’ve concocted a complex response to a complex problem, conjuring up a fantasy world with a seemingly limitless potential appellants and defendants.
Rather, the legal questions should be, is there harm to Smith, and, if so, can the court intervene to stop it?
Liability isn’t constrained because other people are harmed, the synopsis argues, or because other companies, not named in the claim, create harm.
Why pick on this subset of companies? Smith argues New Zealand’s a small place in which just 15 companies are responsible for 77 percent of the country’s emissions.
It’s conceivable fewer than 100 companies are liable for “substantial” emissions, but the court could fashion a threshold for who’s in and who’s out if the case goes to trial.
“It is precisely because the court are the non-elected, non-political guardians of the rule of law that they are suited to address Mr Smith’s claim.”
Smith has little faith in politicians.
His withering assessment is the legislative process is “inapt” to respond, thanks to a three-year electoral term and “features of human psychology” when faced with problems overwhelming and “invisible”.
“Parliament, and the executive, have failed to act to avoid harm to Mr Smith. Mr Smith pleads as fact that they will continue to fail to act as needed.”
Part of that, it’s alleged, is active lobbying by defendant companies against emission-reduction policies, which has meant “an effective regulatory response has not developed in New Zealand”. This “may never happen”, the synopsis says, a situation possibly fostered by a change to a National-led Government.
Under the Paris Agreement, the goal is to limit global warming to 2C, but preferably to 1.5C, compared to pre-industrial levels.
But this country’s “logically flawed” and “inadequate” carbon budgets won’t achieve the 1.5C limit, he says, especially as they rely on offshore credits rather than reducing emissions.
“It is precisely because the court are the non-elected, non-political guardians of the rule of law that they are suited to address Mr Smith’s claim.”
Policy should be left to policymakers, sure. But Smith says judges should judge by allowing the case to proceed to trial, where evidence can be called.
Meanwhile, Te Hunga Rōia Māori o Aotearoa (The Māori Law Society), which was granted leave to intervene in the appeal, says tikanga Maori – a system of law that includes obligations to others, and the natural world – is relevant to the development of common law.
Lawyers for Climate Action NZ, another intervener, launched a judicial review against the Climate Change Commission’s emission budgets, arguing they were inadequate.
“In the absence of effective government action to date, courts internationally are increasingly being asked to play an important role,” their legal submissions state.
Climate change has much in common with pollution nuisance cases, the group says, and there’s even an arguable case for negligence. There are difficulties applying tort law, but they’re not insurmountable, it’s argued.
“Concern about the suitability of the remedy is not a reason to strike out the claims.”
Beyond legal arguments, it’s worth repeating three staccato sentences explaining the need for the law to respond to climate change, according to Lawyers for Climate Action.
“Climate change is the greatest challenge facing humanity. It is already causing and will continue to cause immense harm. Left unchecked, it poses an existential threat to humanity.”
Smith says the factual foundations for his claims are reports by the Intergovernmental Panel on Climate Change. A few scientific points bear repeating.
Atmospheric concentrations of key greenhouse gas emissions are unprecedented in at least 800,000 years, and about half of anthropogenic carbon emissions between 1750 and 2011 occurred in the past 40 years.
Carbon emissions from burning fossil fuels and industrial processes contributed about 78 percent of total greenhouse gas emissions between 1970 and 2010.
One hundred individual entities are responsible for the majority of global emissions. None of the New Zealand companies named in the Smith case are on that list.
The Chapman Tripp-led legal team representing Fonterra, Genesis, Dairy Holdings, NZ Steel, and Z Energy throws Smith’s words back at him, from a submission for the Iwi Chairs’ Forum on the Government’s emissions reduction plan.
In it, Smith said climate change will affect all New Zealanders – “we need to be a team of 5 million on this”. The right question isn’t who to blame, but how we respond to climate change, the companies’ submissions say.
“We all need to act and that action needs to be coordinated, effective and enduring.
“The courts should not accept Mr Smith’s invitation to end-run the political component of this challenge. It is through democratic political mechanisms that competing interests are balanced, international relations are settled, and domestic action is legitimately determined.”
Smith’s claim is “too abstracted to meaningfully determine fault”, the companies state. Rather than being based on a genuine relationship between harmer and harmed, “it seeks judicial regulation on the basis that the [Climate Change Response Act] does not go far enough or fast enough”.
Generalised references to tikanga “beg, rather than solve”, the same question as the rest of the claim: Why do these respondents owe an enforceable duty to this appellant?
The call to arms by Smith, using beguiling rhetoric, invites the court “to stretch, bend and invent tort law”, the synopsis of legal submissions states. However, allowing the case to proceed won’t prevent the pleaded harm to Smith.
“Instead, it would only create new and serious problems – institutionally, constitutionally and for the integrity of tort law itself.”
Contrary to Smith’s claims, his case isn’t orthodox; the remedies “contrived”. Rather, they’re an invitation to re-allocate constitutional power, which should “attract the utmost judicial caution”.
“For this claim, the concepts and structures of legal responsibility are a veneer applied in order to ask the courts, rather than Parliament and the Government, to direct New Zealand’s climate change policy.”
The companies agree the country needs a transition to a net zero economy, “and they are an important part of this transition”, but there are “different legitimate policy views” on the best path.
(That’s unlikely to wash with Lawyers for Climate Action, which said greenhouse gas emissions must cease to stop further warming. “Each additional tonne of GHG emissions and fraction of a degree of warming increases the harm.”)
In its submissions, BT Mining says coking coal is essential to steel manufacturing – “no coal, no steel”.
Its view is the courts are being asked to fashion a bespoke injunction, to the effect that overseas steel-makers using its coal, and creating greenhouse gas emissions, must peak by 2025 – “but remain unaffected if the same steel-makers should instead/simply use coal from any other supplier from anywhere else in the world”.
“That such an extraordinary and legally unanchored tort claim as against BT Mining should have been struck out is unsurprising.”
Reversing the Appeal Court’s decision would open the floodgates in New Zealand “to litigation by all against all”.
Channel Infrastructure argues it’s no longer an emitter of any significance, after permanently closing its oil refinery at Marsden Point. “By its estimate, Channel reduced its CO2 emission by 98 percent – or by more than 1 million tonnes per annum – from its 2019 levels.”
A Supreme Court decision on the strike-out claim isn’t expected for months.
Twists and turns
It has been quite a few days for twists in climate change law.
Yesterday, Stuff reported the High Court dismissed a judicial review against Energy Minister Megan Woods over the climate change implications of granting permits for fossil fuel exploration.
Across the Tasman, activist group Australasian Centre for Corporate Responsibility, has expanded its claim against gas giant Santos, for alleged greenwashing.
The initial claim, filed a year ago, centred on emissions targets said to be misleading and falling afoul of Australian consumer law.
Patrick Tydde, a Perth-based partner of Australian law firm GT Law, tells Newsroom the expansion followed the inspection of documents divulged in the discovery process, to include statements made in an investor briefing and climate change report.
From the perspective of Australian courts, climate change is an emerging area of law, Tydde says, and will continue to develop.
He refers to a tort claim, known as the Sharma case, taken by eight teens and a nun against Minister for the Environment, which was successful in the first instance but overturned on appeal.
Part of the reason was court processes were deemed unsuitable to determine matters of public policy, and protection from personal injury from the effects of climate change wasn’t a ministerial responsibility, the judges said.
Similar questions are expected to be raised in an upcoming federal court case urging the Australian government to protect Torres Strait Islanders against the harms of climate change, by setting appropriate emissions reduction targets.
Tydde says via email: “I don’t think it is the reluctance of courts to intervene per se, but more that the legal framework in Australia is such that climate change issues don’t often fit neatly into existing causes of action.
“For example, with respect to negligence, one of the issues in Australia is proving that the specific event/polluter is the cause of the specific damage claimed.
“This is what I see as the impediment to successful claims in tort and is why it is unlikely that we will see cases in Australia similar to what are being brought in the European Union.”
Back in New Zealand, Smith is pinning his hopes on getting to trial, in part by relying on overseas precedents. His legal submissions reference the initial Sharma decision, and the loss on appeal.
“The duty of care framework used in Australia is materially different to that in New Zealand, and it is significant that both decisions followed a trial with evidence.
“The case is different to the present, including because the control and culpability of an administrative decision-maker exercising a public power is distinct from those directly emitting or making/selling emissions-causing products.”
Smith prefers a case against Royal Dutch Shell, in which the Hague District Court ordered the fossil fuel company to reduce its worldwide emissions by 45 percent by 2030.
“The Royal Dutch Shell case is particularly significant because it is very similar to Mr Smith’s claims,” the submissions state. “The Dutch courts accepted very similar arguments to those made by Mr Smith in this proceeding following an evidential hearing.”
The article in last year’s Journal of Environmental Law, which advocated for a new tort to the environment, said New Zealand’s courts will weigh the proximity of the emitter to an individual and various policies when considering imposing a novel duty of care.
Concerns include a duty being owed to absolutely everyone, indeterminate liability, and, as voiced earlier by BT Mining, the opening of the legal floodgates.
The journal article concludes: “When a defendant’s conduct has the potential to literally harm the world, then perhaps it is time to recognise that circumstances now exist where these countervailing concerns do not serve us well.”
