Infrastructure-mining-commodities-coal-mining

Landmark climate change decision

Sharma decision has significant implications for developments and activities with climate change impacts

Authors:

  

Global Publication June 2021

An extremely significant decision in the context of climate change litigation was handed down by Bromberg J in the Federal Court (Court) on 27 May 2021 in Sharma by her litigation representative Sister Marie Brigid Arthur v Minister for the Environment (Sharma).1

Background

The factual context of this case is that the Australian Minister for the Environment (Minister) is currently considering whether to provide approval pursuant to sections 130 and 133 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) for Vickery Coal Pty Ltd to substantially extend its coal mine near Gunnedah in New South Wales (Vickery Project).

By their litigation representative, eight Australian children filed an application with the Court, on their own behalf and representing other children ordinarily resident in Australia, seeking:

  • a declaration that the Minister owes them a common law duty of care, recognised by the law of negligence, to exercise her power under sections 130 and 133 of the EPBC Act in a manner that does not cause them harm arising from the climate impact of the Vickery Project; and
  • an injunction to restrain an apprehended breach of that duty by the Minister.

Evidence and findings

In considering whether a duty of care was owed, the applicants presented unchallenged scientific evidence to the Court that:

  • if the Vickery Project was approved, then over the 25-year life of the project, an additional 33 million tonnes of coal would be extracted from the coal mine and this would lead to an additional 100 million tonnes of carbon dioxide being emitted into the Earth’s atmosphere when burned;
  • human emissions of carbon dioxide in the atmosphere are largely responsible for the warming of the Earth’s surface temperature;
  • the Earth’s average surface temperature is increasing, and will likely continue to increase, with the best future stabilised global average surface temperature that can realistically be contemplated being 2°C above the pre-industrial level; and
  • sustained surface temperature increases will cause Australia to experience more drought, sea level rises and extremes of heat, rainfall and fire-related weather.

Bromberg J accepted, based on the evidence provided by the applicants, that there was a real, significant and foreseeable risk of harm for Australian children arising from a continued increase in global surface temperatures, to which the Vickery Project would contribute if it proceeded, including:

  • around one million of today’s Australian children are expected to suffer a least one heat stress episode serious enough to require acute care in a hospital due to climate change;
  • many thousands will suffer premature death from heat stress or bushfire smoke;
  • if global average surface temperatures reach 3°C above pre-industrial levels, extremely harsh living and working conditions will be faced by rural communities and many locations in Australia will be very difficult to inhabit;
  • in a 4°C surface temperature increase above pre-industrial levels scenario, much of Australia’s inland areas will become uninhabitable for humans, with many agricultural zones largely unviable and life in cities and towns extremely challenging through water shortages and extreme weather events; and
  • substantial economic loss and property damage will be experienced.

The vulnerability of Australia’s children to the risk of these distinct and measurable ‘severe harms’ was a key factor in recognising the existence of a duty of care. Indeed, Bromberg J accepted expert evidence that a ‘business as usual trajectory will result in a fundamentally altered world, with the lives of today’s children profoundly affected by climate change.’2

In addition to their vulnerability, a persuasive factor was the innocence of Australia’s children, with Bromberg J noting that:

They bear no responsibility for the unparalleled predicament which they now face. That innocence is also deserving of recognition and weight in a consideration of the relationship between the children and the government they look to for protection.3

With reference to previous High Court authority, Bromberg J noted that the law of negligence, and recognition of novel duties of care, must evolve to meet ‘contemporary social conditions and community standards’.4 Climate change is, in particular, a matter that reflects the concerns of the vast majority of all Australians.

Bromberg J also rejected the Minister’s contention that the recognition of a duty of care would impermissibly cut across the EPBC Act statutory framework, effectively ‘foreclosing’ the exercise of the Minister’s broad discretion to approve a project by elevating the avoidance of harm to Australian children through climate impacts to a ‘mandatory and paramount consideration’ and dictating a particular outcome (in this case refusal of the Vickery Project). The Minister argued that this would make recognition of the duty of care ‘incoherent’ and contrary to public policy.

However, Bromberg J held that an expectation for a statutory power to be used with care being taken to preserve human life and safety, and avoid killing or injuring persons, can be presumed to have been intended by Parliament in any statutory scheme, absent an express legislative intention to the contrary, and it is natural for this expectation to ‘almost always cut across the exercise or performance of a … broad discretionary power’.5 Bromberg J also noted that the concern for human health and safety as a mandatory consideration required to be taken into account in approval decisions is expressly reflected in various provisions of the EPBC Act itself.6

However, Bromberg J held that a duty of care should not be imposed which required the Minister to take reasonable care to avoid harm to Australian children beyond harm by way of personal injury, thereby precluding the extension of the duty to cover property damage and pure economic loss.7 That was because the scheme of the EPBC Act was said to contain ‘no suggestion that in the broad range of interests that need to be considered by the Minister, the loss of property or economic loss that may be inflicted upon Australian children is to be elevated to a paramount consideration’, and indeed the scheme of the EPBC Act ‘contemplates that interests or rights of this kind may be compromised in order to protect the environment’.8

The duty of care was, accordingly, accepted by Bromberg J to be one owed by the Minister to take reasonable care to avoid causing personal injury to Australian children through climate impacts when deciding, under ss 130 and 133 of the EPBC Act, to approve or not approve the Vickery Project.

Importantly, Bromberg J held that, even though the specific contribution to increased global emissions, and the ultimate further increase in surface temperatures, from approval of the Vickery Project itself ‘may fairly be described as tiny’, that contribution was not ‘so insignificant’ as to deny a real and foreseeable risk of harm to the children.9

Injunction

Nevertheless, Bromberg J declined to order an injunction to restrain the Minister from an ‘apprehended breach’ of the duty of care which was asserted by the applicants. Notably, the request for an injunction assumed not only that the Minister would approve the Vickery Project, as to which there was no evidence, but also that the Minister would necessarily breach the duty by approving the Vickery Project. Bromberg J emphasised that recognition of the duty did not, of itself, dictate that the Vickery Project must be refused to avoid a breach of the duty.10 Bromberg J was ‘not satisfied that a more nuanced response from the Minister, something short of unconditional approval, is necessarily unavailable as a reasonable response to the foreseeable harm to the Australian children’.11

To impose an injunction would, in those circumstances, amount to an unjustified ‘overreach’ by the Court.12

Next steps

Bromberg J has now invited submissions from the parties on the precise terms of a formal declaration from the Court to reflect the recognised duty of care. When made, the declaration will give precision to the scope of the duty, including the extent to which it will be expressed to apply to all Australian children as represented parties (beyond the immediate eight applicants). The declaration will also help to guide the decision, falling short of unconditional approval, that the Minister could reasonably make to avoid a breach of the duty.

Significant implications

The decision in Sharma fundamentally alters the liability landscape in the context of climate change. Potentially, the recognition of the duty, if supported by other courts, could operate to condition the ability of not only governments but also private entities to undertake new developments and projects, including infrastructure and energy projects, and also conceivably any business activity that may lead to an appreciable risk of harm arising from the contribution of that activity to net carbon emissions.

Failure to ensure projects and business activities are ‘climate friendly’ and minimise emissions could lead to liability in negligence. While the trajectory of this form of liability will be very much in a state of development in coming years (and it remains to be seen whether the decision will be appealed by the Minister), the foundation stone has potentially been set firmly in place. At the very least, this decision sounds a warning bell to those who wish to pursue developments or activities that could be said to have climate change impacts.


Footnotes

1

[2021] FCA 560.

2

Sharma, [289]-[315].

3

Sharma, [312].

4

Sharma, [253].

5

Sharma, [398].

6

Sharma, [403].

7

Sharma, [148].

8

Sharma, [416].

9

Sharma, [253].

10

Sharma, [410].

11

Sharma, [501].

12

Sharma, [502].



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