It’s all in the numbers: UNSUCCESSFUL challenge to coal mine extension approvals on environmental grounds

The decision in Environment Council of Central Queensland Inc v Minister for the Environment and Water [2024] FCAFC 56 is an example of climate change activism in New South Wales mining industry. Two substantial extensions of coal mines in New South Wales, which had been approved by the Minister, were unsuccessfully challenged by the Environment Council of Central Queensland by way of judicial review.

The Minister’s Decisions

The Minister considered and approved the proposals to extend the mines pursuant to the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). In granting the approvals, the Minister determined that the extension of the mines were “controlled actions” (actions which may significantly impact matters of national environmental significance). However, the Minister determined that the controlled actions did not have “relevant impacts” (likely or definitive impacts) upon matters of environmental significance” (MNES), as defined by the Act. Accordingly, the Minister approved the extension of the coal mines (First Decision).

Following the First Decision, the Environment Council of Central Queensland Inc (ECCQ) ECCQ sought to reopen the decision making process by providing the Minister with what it contended was “substantial new information” about the impact, or likely impact, of extending the coal mines. In particular, the new information sought to highlight the resultant greenhouse gas (GHG) emissions which would be produced by the additional combustion of coal if the two mines were extended and the detrimental effect, which the ECCQ argued would be “significant“, of those emissions (ECCQ Information). ECCQ contended the ECCQ Information triggered the Minister’s powers (pursuant to section 78(1) of the EPBC Act) to vary a prior decision or substitute a new decision in its place.

Having considered the ECCQ Information, the Minister determined that the ECCQ Information was, indeed, “new information” as required by the EPBC Act. However, the Minister determined that the mine extensions were not a substantial cause of the stated physical effects of climate change in the relevant area (Second Decision). The Minister therefore decided not to revoke the First Decision and, instead, confirmed the extension approvals.

Judicial Review of the Decisions

The Minister’s Second Decision prompted the ECCQ to seek judicial review of the Decisions.

The Minister argued that she made the Second Decision on a reasoned basis because:

1. the ECCQ Information did not show that the mine extensions would cause any net increase in global GHG emissions and global average temperature. In addition, the Minister formed the view that, if the coal was not supplied by the extended coal mines, it would likely be supplied by another party; and
2. even if it could be demonstrated that the extended mines would cause a net increase in global GHG emissions, any contribution would be too small to determine it “a substantial cause of the physical effect of climate change on the world heritage values of declared World Heritage properties“, as required by the EPBC Act. In coming to this decision, the Minister had calculated that the extension of the coal mines would result in a net increase in global GHG emissions and in global average temperature of 0.00024 degrees Celsius.

By close of argument on appeal, ECCQ maintained four main grounds for review, principally attacking the Minister’s decision-making process and her determination that the mine extensions were not a substantial cause of the stated physical effects of climate change on world heritage values of declared World Heritage properties, a finding which was required in order for the Minister to exercise her power to vary or substitute a new decision.

ECCQ contended that:

1. the Minister had misdirected herself by limiting the statutory concept of substantial to a numerical analysis;
2. the Minister was required “on all the material before her to reason across a very broad spectrum of scenarios in which the proposed action is taken, but failed to do so”;
3. in light of the ECCQ Information, the Minister’s decision was irrational because her reasoning involved scenarios about which probabilistic reasoning was not rationally possible, due to “the sheer volume of complex interconnected variables on a global scale over decades“; and
4. The Minister’s analysis proceeded on the basis that GHG emissions would occur anyway, which was faulty reasoning. The EPBC Act required the Minister to consider the proposed action itself, not what might happen if the proposed action did not occur.

The Western Australia Court of Appeal (Court of Appeal) rejected each of ECCQ’s grounds, determining that the Minister’s numerical analysis and consideration of the proportion of the contribution of GHG emissions and temperature increase on a global scale was a reasonable application of the cause and effect analysis and that it was for the Minister to evaluate the aspects of the information before her that she found most persuasive about any causal link between the extended operation of the mines and indirect adverse consequences on MNES. The Court of Appeal said that ECCQ failed to understand that, in coming to her decision, the Minister had to prepare reasoning which met the standard of “satisfaction“, being conclusions based on more than sheer speculation, or guesswork, even if it involved a predictive exercise. Accordingly, the Minister’s numerical analysis was appropriate.

Regarding the attacks upon the Minister’s analysis that the emissions were still likely to occur via alternative means if the coal mines were not extended, the Court of Appeal pointed out that this was only one of the Minister’s two limbs of analysis, and the second limb determined independently that the GHG emissions which would result from the extended mines were not a substantial cause of of the stated physical effects of climate change on world heritage values of declared World Heritage properties.

Like the earlier judicial review proceedings, ECCQ’s appeal was unsuccessful. The Court of Appeal determined that the Minister had complied with the EPBC Act and dismissed the ECCQ’s appeals, noting that the EPBC Act is ill-suited to the assessment of environmental threats, such as climate change and global warming, and their impact on MNES in Australia.

Commentary

This case is a timely reminder that we are operating in an era of sophisticated climate change activism. “Green litigation” is pursued by a variety of parties, including (but not limited to) public interest groups, charities, local communities and Indigenous Peoples and, as stated in the Global Litigation Report: 2023 Status Review published by the United Nations Environment Programme in July 2023¹, these litigants “are taking a prominent role in bringing these cases and driving climate change governance reform in more and more countries around the world” and “climate change litigation is increasing and broadening in geographical reach“. The risk of climate change litigation in the mining industry is, perhaps, higher than in other fields. Given that green litigation is increasing year on year and that the number of climate change disputes in Australia is particularly high² it is important to be mindful of the environmental impact, and potential risk of “green litigation“, in any project or proposal.

Given the Court of Appeal’s comments on the EPBC Act’s ability to respond to climate change litigation, and Australia’s domestic climate change targets and international obligations, it may be that legislative reform will be necessary in future.

Footnotes

1. A copy of which you can find here.
2. See pages 27-29 of the 2023 Status Review for more information. As at 31 December 2022, the highest number of climate change cases filed outside America (1,522) were pursued in Australia (127), followed by the UK (79) and the EU (62).