Case: Waratah Coal Pty Ltd v Youth Verdict Ltd & Ors (No 6) [2022] QLC 21

In the recent decision of Waratah Coal Pty Ltd v Youth Verdict Ltd & Ors (No 6) [2022] QLC 21, President Kingham of the Land Court of Queensland (Land Court) recommended refusal of applications by Waratah Coal Pty Ltd (Waratah) for a mining lease and an environmental authority in relation to a proposed thermal coal mine in the Galilee Basin (the Project). The Project entailed both open cut and underground thermal coal mining, with the coal to be exported to Southeast Asian markets for use in energy production. These proceedings arose after various parties objected to the granting of both applications.

The decision analyses various factors that can inform the Court’s assessment as to whether approving such applications is in the “public interest”. These factors included the material contribution to climate change that would be caused by the scope 3 emissions produced from the downstream combustion of coal mined from the Project, the impact of the proposed mining operations on Bimblebox Nature Refuge (Bimblebox), located above the proposed underground mine area, and the impact upon human rights if the Project were to proceed.

Notably, President Kingham stated that the same conclusion would have been reached, regardless of whether the human rights impacts had been sufficiently made out, given the loss of Bimblebox and the climate change implications from the scope 3 emissions arising from combustion of the coal mined throughout the Project.

Key takeaways in Waratah Coal v Youth Verdict & Ors

  • The human rights of individuals and neighbouring landowners, and the impact that a proposed project may have on those persons, is a relevant consideration when determining applications for mining projects at least in Australian jurisdictions which have enacted human rights legislation.
  • Projects which may have a significant impact on climate change need to be considered in light of the emission reduction targets that Australia has committed to.
  • The Court took into account scope 3 emissions that would arise from the Project and considered this a relevant factor in determining whether or not the Project should be approved.

Human rights

Queensland is one of three Australian jurisdictions (as well as Victoria and the Australian Capital Territory) that has enacted human rights legislation – the Human Rights Act 2019 (Qld) (Queensland HRA). This was an important factor in the Court reaching its decision.

In relation to broader individual rights, the Court found that the Project would interfere with the right to life of people in Queensland, the cultural rights of First Nations People, the rights of children, the right to property, the right to privacy and home, and the right to enjoy human rights without discrimination. The Court found that 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 [to Waratah and the local community] and the supply of thermal coal to Southeast Asia.” Significant weight was placed on expert evidence from climate change experts regarding the urgency of reducing emissions, the various impacts of climate change and the importance of meeting the targets set by the Paris Agreement. President Kingham also noted the adverse effects of climate change experienced by First Nations people and the negative impact it was having on their right to enjoy, maintain and develop their culture. Further, the rights of children were deemed to be paramount and the Court considered that intergenerational climate change risks were therefore a relevant consideration.

In relation to the rights of neighbouring landowners, the Court found that the Project would interfere with the right to property and the right to privacy and home. President Kingham considered that the applications should not proceed due to the unjustifiable limitation on rights arising from the likely nuisance and environmental damage of the proposed mine on nearby properties, including noise, dust and subsidence impacts. The Court held the Project would unjustifiably limit these rights, however emphasised the fact that the factors leading to such a conclusion were specific to the case at hand. These factors included the unlikelihood that the mine would comply with operating conditions set by the regulator intended to minimise nuisance impacts and the fact that the impact on nearby landowners’ rights could not be adequately compensated for.

It is therefore unclear whether courts may find that the impact of another project on neighbouring landowners is too great to allow the project to progress in circumstances where the mine would likely meet the operating conditions set by the environmental regulator and/or the landowners can be adequately compensated for any nuisance caused.

Whilst international jurisprudence played a significant part in informing President Kingham’s analysis in relation to human rights, President Kingham added a “strong caveat” that using international jurisprudence to interpret and apply domestic human rights legislation must be approached with caution.

Distinction between Waratah and Sharma

The Court distinguished this case from Minister for Environment v Sharma (2022) 400 ALR 203 (Sharma). Whilst in Sharma Bromberg J at first instance found a real risk of harm to the represented children from climate hazards, and consequentially held that the Minister for the Environment had a duty to take reasonable care to avoid injury resulting from those risk, this was overturned by the full Federal Court, which found that no such duty was owed. President Kingham noted that the Waratah Coal proceedings were administrative proceedings that concerned “whether the State, as the owner of the resource, should authorise Waratah to mine and sell the coal for combustion.” Conversely, Sharma was a civil court proceeding “about [the defendant’s] responsibility for harm attributable to combustion emissions”. There was also a clear difference in that, as noted above, the Queensland HRA provided a legal basis for claims on human rights grounds, whereas at the Commonwealth level no such basis exists (see our analysis of the Sharma case in No 'Duty of Care' but risks of climate litigation continue to grow - insights from the Sharma decision and Climate litigation around the world and potential risks for corporate Australia).

Projects to be considered in light of emission reduction targets

Climate change is a global issue and requires global collaborative action in order to mitigate its effects. The Court emphasised the importance of considering State, national and global impacts of a proposed project, noting that “in making a recommendation, the Court should consider whether approving the mine would make it harder to achieve the goal to which Australia and Queensland is committed”, and going further to consider whether the proposed project would undermine the carbon budgets developed to meet the Paris Agreement targets. 

There is a growing recognition among the judiciary that global, and indeed national, carbon budgets need to be considered when determining cases related to climate change, which view is reflected in President Kingham’s judgment.

Scope 3 emissions

The Court was called upon to consider the relevance of scope 3 emissions when deciding whether or not to recommend the approval of applications pertaining to a proposed mining project. There have been a number of previous cases that have considered whether scope 3 emissions from developments are relevant considerations for decision makers and whether proponents should include environmental assessment of those emissions in applications. In this instance, the Court found that granting permission to Waratah to extract coal under the Project could not logically be separated from its inevitable combustion, “that being the whole point of the exercise”.  Therefore, the scope 3 emissions that would be produced were a relevant consideration in determining whether or not the applications should be approved.

Given the general terms in which these views are expressed, this reinforces the position that scope 3 emissions are likely to be a relevant factor when considering applications pertaining to proposed mining projects. In particular, if the scope 3 emissions are sufficiently certain (e.g. if the extraction of minerals will certainly lead to mineral processing emissions by third parties), then this judgment suggests that such emissions may be a valid consideration in the determination of whether or not a mining proposal should be approved in the first place.

Impact upon current proceedings

As a result of the Land Court being a state-based, lower level court, it is uncertain the extent to which this decision will have a significant impact on other climate litigation proceedings that are on foot in Australia. It will be a matter for the Minister to consider the Land Court’s findings and ultimately make a decision about the application at hand. There is also a right to appeal decisions at first instance in the Land Court to the Queensland Land Court of Appeal, which in turn is subject to appeal to the Queensland Supreme Court (Court of Appeal), and it is anticipated that Waratah will pursue all available options to challenge these findings.

The impact of President Kingham’s findings on current and future climate litigation proceedings will also depend on the nature of those proceedings. This decision is potentially relevant to proceedings involving judicial review of administrative decisions relating to project approvals. For example, elements of the decision in respect of scope 3 emissions may support the plaintiffs in Australian Conservation Foundation Inc v Woodside Energy Ltd & Anor VID345/2022. In those proceedings, the plaintiff is contending that Woodside’s Scarborough gas project should be subject to approval under the Environment Protection and Biodiversity Act 1999 (Cth) due to the impact that the project’s scope 3 emissions will have on the Great Barrier Reef. In other cases, it may be arguable that an administrative decision-maker ignored a relevant consideration if that decision-maker does not consider scope 3 emissions when determining whether to approve or recommend the approval of a project. Conversely, the impact on climate litigation proceedings that do not involve judicial review of such decisions (such as Pabai Pabai and Guy Paul Kabai v Commonwealth VID622/2021) is unclear, as President Kingham drew a clear distinction between administrative decisions and cases like Sharma, which concern liability for tortious action.

Co-authored by Tom Penglis