Summary
A climate change advocacy group was unsuccessful in judicial review proceedings challenging the grant of two petroleum exploration permits.
Background
The Crown Minerals Act 1991 (“CMA”) creates a legal regime whereby permits are granted for the exploration, prospecting, and extraction of Crown owned minerals. The purpose of the CMA at the relevant time was to promote exploitation of Crown owned minerals for the benefit of New Zealand.
The Minister of Energy and Resources has the power to grant mineral permits under the CMA. The CMA lists various matters which the Minister must be satisfied of when granting permits, but these considerations are not stated as exhaustive. Additionally, there is a general requirement for all decision-makers under the CMA to consider the principles of the Treaty of Waitangi.
The Climate Change Response Act 2002 (“CCRA”) is the primary legislation governing carbon emissions in New Zealand. Amendments in 2019 introduced a statutory ‘net zero’ target and requirements for the government to set emissions budgets and emissions reduction plans. Section 5ZN allows any public decision-maker to have regard to these matters as they think fit.
In 2021, the Minister proposed to grant permits under the CMA to two firms allowing them to explore for petroleum in specified areas of Taranaki.
Students For Climate Solutions Incorporated(“SCSI”), an incorporated society established to enable students to address climate change concerns, challenged the permit decision in judicial review proceedings.
The High Court dismissed the challenge on all grounds. SCSI appealed to the Court of Appeal.
The case
SCSI argued that the Minister’s decision was unlawful due to failure to consider the climate change implications of the decision, as well as the principles of the Treaty of Waitangi.
Both parties accepted that mandatory considerations were those matters that the governing statute expressly or impliedly required the decision-maker to take into account. It was not open for a court to impose its own view on decision-makers as to what was sensible to consider.
There was also no dispute between the parties that combustion of petroleum was a leading cause of climate change.
Failure to consider climate change implications
The parties agreed there was no express requirement in the CMA to consider climate change.
However, SCSI argued that a requirement to consider climate change was implied by the reference to ‘for the benefit of New Zealand’ in the CMA’s purpose section. They argued that the ‘for the benefit of New Zealand’ wording meant that exploitation of Crown minerals should only occur if it was determined that the exploitation was in New Zealand’s benefit. Assessment of public benefit in this case required the Minister to consider climate change impacts, and this interpretation was supported by the scale of the climate emergency as well as the intent behind s 5ZN of the CCRA.
The court unanimously rejected SCSI’s interpretation of the purpose of the CMA. ‘For the benefit of New Zealand’ did not qualify the CMA’s purpose of promoting mineral exploitation. Rather, it was clear that Parliament regarded promotion of this objective and benefit to New Zealand as one and the same.
This was supported by Parliamentary materials that showed that when the purpose clause was added to the CMA, the main concern was economic development. Environmental concerns were intended to be dealt with in other legislative regimes. Subsequent case law in the High Court had confirmed this interpretation in other contexts.
Accordingly, the proper interpretation of the CMA was that Parliament had not intended a requirement for climate change to be considered.
Failure to consider Treaty of Waitangi principles
SCSI argued that failure to consider climate change implications in this case amounted to a failure to consider Treaty principles, as Maori stood to be disproportionately affected by climate change.
The court unanimously rejected this argument. Proper consideration of the Treaty principles in this context required consulting iwi and hapū around the permit area and assessing impacts of the permit on them. The Minister had considered this. A broad policy assessment weighing economic benefits with climate change impacts was not required as it would be inconsistent with the scheme and purpose of the CMA.
Were climate change implications a permissible consideration?
The High Court had held that not only was climate change not a mandatory consideration under the CMA, it was not a permissible consideration either. The court held that the CMA, as the more specific legislation, overrode the more general permission under s 5ZN of the CCRA for decision-makers to consider climate change matters. The effect of this decision was that any Minister under the CMA who considered these matters substantively would act unlawfully.
The majority of the Court of Appeal declined to reach a concluded view on this issue, holding that it unnecessary to decide the case.
However, in a separate judgment, Mallon J came to the opposite conclusion to the High Court. Climate change matters were a permissible consideration under the CMA – there was no limitation under that Act on what matters a Minister could consider, and there was clear intent that s 5ZN applied generally to all public decision-makers. Additionally, there would be occasions where it would be perverse for a Minister not to consider climate change when granting mineral permits, such as where New Zealand was on track to significantly exceed an emissions budget.
Result
The appeal was dismissed on all grounds.
Amendments to the CMA following the permit decision mean that this decision is of lesser relevance to the interpretation of the CMA specifically.
The broader relevance of the decision relates to its treatment of s 5ZN of the CCRA. Unfortunately, the law is left in an unsatisfactory state. Cooke J’s decision in the High Court is directly in conflict with Mallon J’s comment in the Court of Appeal. Neither decision is binding precedent on future judicial reviews in the High Court. The legal uncertainty leaves room for future litigation about the extent to which public decision-makers can factor climate change concerns into their decision-making.
For more information on this case or related issues please contact Director Brigitte Morten
