On 15 March 2022 the Full Court of the Federal Court of Australia handed down its eagerly anticipated appeal judgment in the Sharma case. Allsop CJ, Beach and Wheelahan JJ separately found that the Commonwealth Environment Minister is not under a duty to take reasonable care, in exercising her powers under ss 130 and 133 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act), to avoid causing personal injury or death to Australian children arising from emissions of carbon dioxide into the Earth’s atmosphere. As such, the Court upheld the Minister’s appeal against the decision of Bromberg J as previously discussed here. Whilst it is possible that an application for special leave may be made to the High Court, for now this decision has immediate tangible impacts on the resources sector with one less bar to seeking approval for major projects.
Background and primary judgment
Vickery Coal Pty Ltd, a subsidiary of Whitehaven Coal Pty Ltd, holds development consent for a coal mine in northern NSW near Gunnedah. No mining has commenced under the approval. In February 2016, Whitehaven (later replaced by Vickery as proponent) applied to the Minister under the EPBC Act to expand the existing approved project for coal mining. The mine extension would increase total coal extraction from 135 to 168 Mt which, when combusted, would produce an additional 100 Mt of carbon dioxide.
The applicants sought a declaration that a duty of care to take reasonable care to avoid causing personal injury or death to Australian children arising from carbon emissions was owed by the Minister in the exercise of her powers under the EPBC Act. The applicants also sought an injunction restraining an apprehended breach of that duty by the Minister in deciding to approve the Vickery Coal Extension Project. At first instance, Bromberg J answered in the affirmative—the first judgment of its kind in the world—recognising a novel duty in the tort of negligence for the foreseeable harm of climate change. His Honour did not however grant an injunction. The consequence was that the Minister owed a duty to take reasonable care not to cause the children plaintiffs’ personal injury (from climatic hazards brought about by increased temperatures due to climate change) when exercising her power under Sections 130 and 133 of the EPBC Act to approve or not approve the Extension Project. In spite of the declaration of a duty of care in these terms, the Minister ultimately granted EPBC Act approval for the Vickery’s extension project on 15 September 2021.
Appeal
On appeal, each judge held that the duty did not arise under the EPBC Act, though for different reasons.
While Allsop CJ observed that all of the factual findings of the primary judge were open to be made on the uncontested evidence put before his Honour at first instance, and those findings were not challenged on appeal, his Honour held (at [15]) that the duty:
“throws up for consideration at the point of assessing breach the question of the proper policy response to climate change and considerations unsuitable for resolution by the Judicial branch of government. In particular, … whether, and if so, how so-called Scope 3 emissions from the combustion of the coal that is to be exported should be or should have been taken into account in making a decision about whether to approve the extension of a coal mine … A duty that calls up such questions should not be imposed: It is one of core, indeed high, policy-making for the Executive and Parliament …”
His Honour also considered that the duty if enlivened would be inconsistent with the text, purpose and context of the EPBC Act. It was incoherent with the obligations of the Minister under the EPBC Act and the context of environmental legislation in Australia more broadly because the EPBC Act concerns the protection of species, community and water resources, not the safety of human life. There is nothing in the EPBC Act which requires the Minister to consider greenhouse gas emissions, global warming or climate change. Finally, paired with the first two reasons, the lack of control over the harm and lack of proportionality and indeterminacy of liability given the tiny contribution of this particular project to all damage of heatwaves and bushfires and harm suffered by children in Australia, culminated in a finding that the duty should not be imposed.
Beach J identified two factors as to why the duty should not be imposed. His Honour found that there was not the ‘sufficient closeness and directness’ between the Minister’s powers under the EPBC Act and the likely risk of harm towards the class of persons, being children under 18 years old in Australia. Beach J also held the view that the duty should not be upheld because of concerns around the imposition of indeterminate liability.
Wheelahan J nominated three reasons as to why the duty should not be upheld. Firstly, the EPBC Act does not create a relationship between the Minister that would support the recognition of this novel duty of care towards the children, noting that the protection of people against the harms of climate change was not a specific role that the Commonwealth Parliament conferred under the EPBC Act. The second reason was also one of incoherence between the duty itself and ability for the Minister to discharge her statutory functions. Finally, his Honour was not convinced that in the current state of causation in the law of negligence, reasonable foreseeability was made out in this case.
What now?
Final orders to implement the effects of the judgment are yet to be made, however for resources companies and proponents of emissions-intensive projects it is clear that when seeking approval under the EPBC Act, this duty of care is no longer a consideration to be grappled with. This may change if the representative class are successful on appeal to the High Court of Australia (following an application for special leave to appeal), noting the comment of Beach J at [754] that “it is for the High Court not us to engineer new seed varieties for sustainable duties of care”. Nevertheless, as it stands the novel duty is no longer and going forward plaintiff actions to create novel duties will undoubtedly be more difficult to argue with issues of causation and incoherence being a prominent feature of the success of this case on appeal.
It is unlikely that the EPBC Act will be amended in the near future to introduce an additional greenhouse gas or climate “trigger”, this proposal having been raised in submissions to the recent Samuel Review of the EPBC Act and not recommended. Instead the assessment of greenhouse gas emissions and their minimisation to the greatest extent practicable, by reference to relevant State and national policies, remains the realm of State or Territory consent authorities in granting or refusing planning approval for proposed developments.