Landmark recognition of human rights and environmental impacts as grounds for a recommendation against the grant of a mining lease
Waratah Coal Pty Ltd v Youth Verdict Ltd & Ors (No 6) [2022] QLC 21
Summary
Waratah Coal Pty Ltd v Youth Verdict Ltd & Ors (No 6) [2022] QLC 21 (25 November 2022) involved the Land Court of Queensland making recommendations to the [Queensland] Minister for Resources (Minister) and the Chief Executive of the Department of Environment and Science (Chief Executive) on Waratah Coal Pty Ltd's (Waratah) applications for a mining lease and environmental authority to mine thermal coal in the Galilee Basin.
In the words of Kingham P, this case was "not about whether any new coal mines should be approved". Rather, it was about whether the proposed coal mine "should be approved on its merits". Ultimately, the Land Court of Queensland recommended that both the mining lease and environmental authority applications be refused by the Minister and the Chief Executive respectively.
Kingham P's reasons for recommending the refusal of both the mining lease and environmental authority are discussed in this note.
Facts
Waratah Coal Pty Ltd (Waratah) applied for a mining lease and an environmental authority to develop a thermal coal mine in the Galilee Basin to export thermal coal for the purpose of electricity production (the Proposed Project). Waratah could not proceed with the development of the mine without the approval of both the mining lease and environmental authority.
The Proposed Project encompassed both open cut and underground thermal coal mining on several properties in Central Queensland. All but one of the properties were already largely cleared for grazing purposes. The remining property, Glen Innes, is a protected area under the Nature Conservation Act 1992 (Qld) known as the Bimblebox Nature Refuge (Bimblebox). Bimblebox was established as a refuge by a group of private citizens committed to conservation who "pooled their limited personal savings and secured Commonwealth government funding to purchase the property as part of the national estate". Funding for the property was conditional on it "being declared a refuge under Queensland law" (at [14]) – which it was. Both the Commonwealth and Queensland governments assessed the property as worthy of protection because of its "ecological values" (at [14]). Waratah proposed to underground mine two-thirds of the Bimblebox refuge, which would likely cause "subsidence across the surface of the land above the mine" (at [18]) and lead to ecological and, possibly, "irreversible damage" (at [19]). By law, a nature refuge of this sort can be mined.
Waratah's application for the mining lease and environmental authority lead to Youth Verdict Ltd (YV) and the Bimblebox Alliance Inc (BA), amongst others, objecting to Waratah's mining lease and applications on a number of grounds. At the time of hearing, there were a total of 31 objections. These objections included that the projected greenhouse gas emissions from the Proposed Project would "unjustifiably limit the enjoyment of several human rights" (at [1293]).
In 2020, Waratah applied to strike-out objections raised by YV, BA and others on grounds that the Land Court of Queensland did not have the jurisdiction to consider the objections raised in Waratah Coal Pty Ltd v Youth Verdict & Ors [2020] QLC 33 (7 August 2020) (Waratah Coal Pty Ltd v Youth Verdict & Ors [2020]). Waratah's application was ultimately dismissed on the basis that Kingham P was satisfied "the Court [Land Court of Queensland] had the jurisdiction to entertain the objections … because it [was] required to comply with the substantive and procedural limbs of s 58(1) Human Rights Act 2019 (Qld)" (Waratah Coal Pty Ltd v Youth Verdict & Ors [2020] at [86]).
Following the dismissal in Waratah Coal Pty Ltd v Youth Verdict & Ors [2020], in 2022 the matter came before the Land Court of Queensland again to be substantively determined. The fundamental question was whether the Waratah's mining lease and environmental authority should be granted by the Minister and Chief Executive after a consideration of how the Proposed Project "stacks up economically, environmentally and socially" (at [691]).
Decision
It is not the function of the Land Court of Queensland to make the final decision on the applications for the mining lease and environmental authority – this is reserved for the Minister and the Chief Executive. Rather, it is the role of the Land Court of Queensland to provide recommendations facilitated through an "open and transparent process" (at [3]).
The Mineral Resources Act 1989 (Qld) and the Environmental Protection Act 1994 (Qld) prescribe the matters that must be considered and balanced by the Land Court of Queensland when making recommendations. Additionally, the Human Rights Act 2019 (Qld) (HRA) places an onus on the Court to properly consider human rights and ensure any recommendations made are not incompatible with such rights.
Ultimately, Kingham P recommended that both the mining lease and environmental authority applications be refused by the Minister and Chief Executive. An overview of Kingham P's reasons for the recommendation are outlined below.
Climate Change
Climate change was a key issue in these proceedings (at [22]). In dispute was whether the Court could consider the emissions from the combustion of the coal in making its recommendations (at [24]). Waratah submitted the Court had no jurisdiction to consider greenhouse gas (GHG) emissions when making recommendations – they argued this responsibility should be left to the countries where the coal is proposed to be exported and used for electricity generation. Kingham P rejected this submission. The Court held that a consideration of the likely GHG emissions was necessary in applying the principals of "ecologically sustainable development" (at [25]) (in particular, for the environmental authority application) and considering whether each application was in the "public interest" (for both the mining lease and environmental application). Kingham P stated that "granting permission to mine the coal cannot be logically separated from the coal being used to generate electricity" (at [25]), "wherever the coal is burnt the emissions will contribute to environmental harm" (at [26]).
The Court considered the uncertainties of predicting future global GHG emissions, climate change and the potential impact of the Proposed Project. Kingham P recognised that whilst there were in fact many uncertainties, what was certain was the relationship between "increases in the atmospheric concentration of GHGs and increases in temperature" (at [29]), with reference to the Paris Agreement Goals. The parties agreed that the Proposed Project would result in approximately 1.58t of CO2 being emitted between 2029 and 2051. The Court held this was a "material contribution" to GHG emissions. Despite this, Waratah argued that approving the mine would make no difference to total emissions, because the Proposed Project "would displace other lower quality coal with high greenhouse gas emissions" (at [32], [783]). Kingham P rejected this submission. While it was accepted that this mine would not be the sole difference between an acceptable and unacceptable level of climate change, its contribution to that difference would negatively impact efforts to prevent an unacceptable level of climate change.
Kingham P found that the evidence suggested that, if the Proposed Project was to be approved, Bimblebox would likely be lost and the ecological values of Bimblebox seriously and possibly irreversibly damaged. While Bimblebox's ecology was not unique, its ecological condition was very high and the ecosystem the refuge preserved was underrepresented in the surrounding area cleared for grazing. Waratah presented no credible plan that could offset such a loss and Kingham P questioned whether such preventative measures could even be developed and implemented. This significant and real likelihood of damage had to be weighed against the purpose and benefit of the Proposed Project - to mine and export thermal coal for combustion to produce electricity. Waratah's intended market was Southeast Asia to meet a growing demand for electricity. Waratah assessed the economic benefits to Queensland and Southeast Asia at $2.5 billion, in addition to social benefits regionally.
Ultimately, after consideration of both the economic and social benefits of the Proposed Project, Kingham P found that the climate impacts of a new viable coal mine and subsequent combustion of that coal risks "unacceptable climate change impacts to Queensland people and property" (at [36]).
"Perfect Substitution" Defence
Waratah, despite the conclusion reached by Kingham P above, attempted to rely on the "Perfect Substitution" defence (also known as the "Drug Dealers" defence). The "Perfect Substitution" proposition is an argument that has been developed through a series of cases in the Land Court. Waratah's argument was that the combustion emissions and GHGs related to the Proposed Project "do not matter" (at [954]) – "the same or worse outcome will happen if the applications are refused" and "the same or a better outcome will happen if they are approved". Essentially, Waratah contended that if their proposed mine did not supply the coal, then another mine would – hence, harmful emissions will continue regardless of the Land Court's recommendations.
Whilst the Court did "accept the possibility of substitution", it was held that there was "insufficient evidence" to make a determinative finding on the facts (at [996]). The defence was dismissed.
Human rights
The Court — as a public authority acting in an administrative capacity — was required under the HRA to act compatibly with human rights and give proper consideration to relevant human rights in making its decision.. Kingham P accordingly considered whether protected human rights would be limited by the Proposed Project and, if so, whether those limitations were justified.
Under the HRA, an act or decision can limit a human right if the limit is "no more than is justified in a free and democratic society, based on human dignity, equality and freedom" (at [42]). Waratah asserted that the Proposed Project would not limit any human rights because the relationship between approving the mine and climate change was "too remote, indirect, and not specifically attributable to this particular mine" (at [41]). This submission was rejected on the grounds that "the importance of preserving right[s], given the nature and extent of the limitation[s], weighs more heavily in the balance than the economic benefits of the mine and the benefit of contributing to energy security" (at [45]).
While the Court conceded that there was uncertainty around the precise extent of the mine's impact, there was no uncertainty about the nature of climate change impacts or their cause. There was no dispute that the combustion of the coal would contribute to the concentration of atmospheric carbon dioxide, to climate change, and the harm that would result. While acknowledging that the mine alone would not commit the world to an unacceptable level of climate change, it would likely make a material contribution to it. In fact, it was agreed between parties that the Proposed Project was projected to produce 1.58t of CO2 being emitted between 2029 and 2051.
After Kingham P had found that the Proposed Project would make a material contribution to climate change, her Honour then considered whether this material contribution would amount to a limit against the protected rights under the HRA. Six rights were found to be limited, these were:
the right to life of people in Queensland (s 16);
the rights of First Nations people (s 28);
the rights of children (s 26(2));
the right to property of people in Queensland (s 24(2));
the right to privacy and home (s 25(a)); and
the right of certain groups to enjoy human rights without discrimination (s 15(2)).
Each right was considered individually by the Court. Kingham P had particular regard to the impacts of climate change on the rights of Aboriginal and Torres Strait Islander peoples and their children, accepting that climate change impacts will include the loss of home, loss of culture and health impacts caused by climate change and displacement (see, for instance, [624]-[633], [1542]-[1568], [1589]-[1603], [1618]-[1622], [1631]-[1633], [1645]-[1648] and [1655]-[1657]).
Moreover, the right to life of people in Queensland was given particular scrutiny given that this right had not been judicially considered in Queensland (at [1455]) nor had the "relationship between the right and threats posed by climate change" been considered by ay court in Australia (at [1455]). The right to life for people in Queensland (s 16 of the HRA) is derived from article 6(1) of the International Covenant on Civil and Political Rights and confers a positive obligation to take steps to ensure the right is protected as well an obligation to refrain from conduct that causes "arbitrary deprivation of life" (at [1454]). YV and BA submitted that a decision to approve the mining lease and environmental authority applications would lead to "life-threatening … climate change impacts" (at [1454]). Kingham P ultimately concluded that in fact "approving the [Proposed] Project would contribute to foreseeable and preventable life-terminating harm" (at [1512]).
The importance of preserving each of the identified rights, given the nature and extent of the limitation of those rights caused by climate change, weighed more heavily in the balance than the economic benefits of the Proposed Project (at [45]).
Her Honour found that:
What is reasonably necessary involves a value judgment about the relative costs and benefits. Mining thermal coal for combustion is not the only way in which the State can generate an economic benefit and meet the needs of electricity consumers, wherever they may be ... Approving the Project is necessary for Waratah to secure its financial benefit, but that individual interest must be weighed against the public interest in limiting the extent to which climate change threatens the lives of people in Queensland (at [1485]).
The Project’s material contribution to the life-threatening conditions of climate change (and associated economic and social costs) is not proportionate to the economic benefit and the supply of thermal coal to Southeast Asia. Assessing the economic benefits and environmental and social costs consistently, the limit is unreasonable in the sense of being disproportionate because it extends beyond what is reasonably necessary to achieve the purpose of the Project (at [1486]).
…
The evidence presents a clear and pressing threat to the right to life that is now experienced by people in Queensland and will only be exacerbated by increasing emissions, to which the Project would make a material contribution … (at [1505]).
Commentary
The Waratah decision provides insight into the Land Court's interpretation and application of the HRA when making recommendations on proposed projects that have significant environmental and human rights concerns, whilst also having potentially significant economic benefits.
Notable elements of the decision include the Court's consideration of the burning of coal produced by a mine when assessing whether a proponent should be granted permission to mine, and a recognition of the threat to life created by climate change.
Significantly, the Court recognised the value judgment involved in assessing whether a limitation of a human right is reasonably necessary. In circumstances where there were said to be other means of a State generating economic benefits and meeting the needs of electricity consumers, the Court found that approving a thermal coal mine and the material contribution it would make to the life-threatening conditions of climate change would not be proportionate to any purported economic benefit.
The decision further details a shift in the Court's attitude and interpretation of the "perfect substitution" defence. Citing a US Court of Appeals case which the described the perfect substitution assumption as "irrational" (at [794]), this decision demonstrates that "perfect substitution" is not "self-evident" (at [793]) and requires sufficient evidence to be relied upon.
The Department of Environment and Science refused the environmental authority on 3 April, 2023. See here.
The full decision can be read here.