Students for Climate Solution’s Appeal - New Development in NZ Climate Litigation
The Court of Appeal has released a judgment in the case of Students for Climate Solutions Inc v Minister of Energy and Resources [2024] NZCA 152. James Every-Palmer KC, co-founder of Lawyers for Climate Action NZ, was lead counsel for Students for Climate Solutions.
The Court of Appeal dismissed the appeal. Although Students for Climate Solutions were ultimately unsuccessful, it is still an important development in NZ climate change litigation. While the panel agreed on the outcome, Mallon J wrote a separate opinion from French and Gilbert JJ about whether the climate change impacts were a permissive relevant consideration.
What this case was about
Students for Climate Solutions are a group of students from the Victoria University of Wellington law school. In 2021, they applied for judicial review of the Minister of Energy and Resources’ decision to grant petroleum exploration permits in Taranaki to Greymouth Turangi Limited and Riverside Energy Limited.
It was undisputed in the proceeding that the burning of fossil fuels is a significant contributor to global climate change. However, the key issue was whether the decision-maker failed to appropriately consider the impacts of petroleum exploration on climate change when making a decision to grant the permits.
On appeal, Students for Climate Solutions argued:
that climate change considerations were a mandatory relevant consideration for the Minister when considering whether to grant the permits; and
that the Minister failed to have proper regard to the principles of the Treaty of Waitangi, by failing to consider the wider climate change implications of fossil fuel extraction on Māori.
Climate Change was not a mandatory relevant consideration - but could the statutory purpose incorporate climate considerations?
The Court of Appeal unanimously rejected the appellant’s argument that climate change was a mandatory relevant consideration. However, there was some disagreement on the scope of the purpose clause of the Crown Minerals Act - “to promote prospecting for, exploration for, and mining of Crown owned minerals for the benefit of New Zealand” (section 1A).
Students for Climate Solutions argued that climate change considerations were so obviously material that s 1A required decision-makers to undertake a balancing exercise to assess whether each proposed exploration was for the benefit of New Zealand, particularly given the climate impacts of fossil fuels, rather than just assume economic benefit.
French and Gilbert JJ upheld the High Court’s interpretation of the purpose clause, which found that it was to increase investment in New Zealand’s petroleum and minerals sectors. The Court noted that when the Government reviewed the Crown Minerals Act in 2018 and 2023, the purpose clause was not amended to align more with the plaintiff’s suggested interpretation. The Court concluded that “the fact Parliament considered the Crown Minerals Act in the specific context of climate change and nevertheless left the wording of that section unchanged also leaves no room for the ambulatory approach to statutory interpretation” proposed by the plaintiffs (at [54]).
Mallon J wrote a separate judgment. While Mallon J agreed that climate change was not a mandatory consideration, Mallon J’s reasons differed slightly from French and Gilbert JJ on the scope of the purpose clause.
Her Honour noted that the purpose of the Crown Minerals Act was not simply to promote investment in extractive industries, but that the words “for the benefit of New Zealand” indicated that “not all such investment will necessarily benefit New Zealand” (at [117]). In fact, “Parliament did not intend promotion of investment ‘for the benefit of New Zealand’ necessarily to be solely about economic benefits” (at [118]). As a result, s 1A allows for other factors to be considered, including environmental and climate-related considerations.
Whether decision-makers under the Crown Minerals Act can take the Climate Change Response Act into account.
In the High Court, Cooke J had found that climate change considerations were irrelevant, and that had the Minister made her decision based on climate considerations, this would have been an irrelevant consideration. Put another way, it would be unlawful for decision-makers to decline petroleum exploration permits on account of concerns about their impact on New Zealand’s climate targets, budgets, and emissions reduction plans.
Gilbert and French JJ noted that both parties disagreed with Cooke J’s findings, but fell short of deciding whether the approach taken by Cooke J was correct, saying that it was unnecessary for the resolution of the appeal.
Mallon J, however, addressed the question directly. Much of Mallon J’s judgment turned on s 5ZN of the Climate Change Response Act, which provides that New Zealand’s 2050 target, emissions budgets, and emissions reduction plans are permissive considerations that decision-makers can take into account when “performing a public function, power, or duty conferred on that person or body under law”.
Her Honour found that “it would not be contrary to the scheme of those Acts if the Minister were to take into account the matters specified in s 5ZN of the Climate Change Response Act” (at [125]). Rather, Mallon J noted that “s 5ZN is broad in its application”, and is part of the relatively recent and wider statutory context in which decisions under the Crown Minerals Act are made. To that end, Mallon J found:
[127] Given the accepted climate emergency, and that the combustion of fossil fuels is the main cause of climate change, it would be odd if the Minister responsible for petroleum exploration was precluded from taking into account these key components of New Zealand’s response to climate change, when Parliament has said in the Climate Change Response Act that those exercising powers may do so. For example, if an emissions budget was on course to be significantly exceeded, it would be odd (and potentially contrary to the benefit of New Zealand) if the Minister was precluded from taking into account any published advice from the Climate Change Commission about this in determining whether to grant a permit in furtherance of the purpose of the Act to promote further exploration or prospecting of petroleum “for the benefit of NZ”.
Mallon J’s judgment is in stark contrast to Cooke J’s reasoning in the High Court. This leaves the issue somewhat unsettled.
Principles of Te Tiriti o Waitangi
The second ground of appeal concerned whether the decision-maker failed to have proper regard to the principles of the Treaty of Waitangi. In particular, the applicants argued that the Minister should have assessed whether exploration should take place at all, because of the disproportionately adverse consequences of climate change on Maori and the Crown’s duty of active protection.
The Court upheld the High Court decision, and found that s 4 did not require the Minister to conduct a “wide ranging inquiry” into the potential impact of climate change and mitigation measures on Maori. The Minister was entitled to focus on the localised issues raised by directly affected iwi.
Key Takeaways
This is an important decision, and one which comes off the back of a High Court decision earlier this week in Major Gas Users’ Group v Commerce Commission [2024] NZHC 959. That decision concerned the risk of stranded assets in an appeal against the Commerce Commission’s determination of depreciation methodology for gas pipeline assets. Like Students for Climate Solutions’ case, it’s another example of a Court considering how climate-related impacts affect statutes and other areas of law that might not explicitly reference or concern climate change.
Students for Climate Solutions was a case about statutory interpretation, and the Court was once again careful to state that it was playing its constitutional role and giving effect to Parliament’s intention, rather than straying into making its own policy judgements (see [38]). The way in which courts strike this balance is an important question we have written about previously in respect of Smith v Fonterra.
Although the Court did not accept Students for Climate Solutions’ arguments, it is also another decision that makes clear that climate science and the seriousness of climate change impacts are beyond dispute. But the judgment does still leave open the question of what the relevance of s 5ZN of the Climate Change Response Act is, and whether climate change impacts are a permissive relevant consideration.
You can read the full judgment here.