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Can the Federal Government Stop Adani's Carmichael Mine?

15 January, 2019

At EDO Qld we often get asked: can the federal government stop Adani’s Carmichael coal mine?  We answer the most common questions below.

Is there a federal legal power to stop Adani’s mine?

Yes.

Adani requires an approval under our federal environmental law, the Environment Protection Biodiversity Conservation Act 1999 (Cth) (EPBC Act) to commence the mine, as it will have a significant impact on matters of national environmental significance (MNES).

Adani was granted EPBC Act approval on 14 October 2015.

Section 145 of the EPBC Act provides that the Minister may revoke an approval if:

(a) the Minister believes that the action will have a significant impact on MNES that was not identified in assessing the action; and

(b)  the approval would not have been granted if information that the Minister has about that impact had been available when the decision to approve the action was made.

There is substantial new information about impact of Adani’s mine on MNES since its approval in 14 October 2015, for example:

  • Dr Veron and EJA have written to the environment minister in respect of the unprecedented consecutive bleaching of the Great Barrier Reef showing an increased sensitivity to greenhouse gas emissions from projects including the Carmichael mine;

  • ACF and EDO have written to the environment minister in respect of new information of the insufficiency of offsets to protect the Black-throated Finch from the impacts of the Carmichael mine.

There is ample information for the Minister to reasonably form the belief that the Carmichael mine will have significant impacts on MNES that were not identified in the assessment process, and that the EPBC Act approval would not have been granted if these impacts were known during the assessment process.

Separate from the existing power to revoke the EPBC Act approval under current law, it is also the sovereign right of parliament to make new laws for the peace, order and good government of Australia.  Federal parliament could pass laws to prevent all thermal coal mines in the Galilee basin, or all new thermal coal mines nationally, if it wished to meet its commitments in the Paris Agreement to pursue efforts to limit global warming to 1.5°C.

Is there any precedent for stopping a project like this?

There are many precedents for stopping significant projects by federal government action, for example:

  1. The federal government ended sand mining on Fraser Island in 1977 by refusing an application for an export licence, this action survived High Court challenge;

  2. The federal government made a commitment in 1983 to stop the damming of the Franklin River in Tasmania by passing new federal laws (the precursor to the EPBC Act), this actions survived High Court challenge;

  3. The federal government created a policy in 1984 of no new Uranium mines by limiting exports to three existing and advanced uranium mine projects.

Would the Australian Government have to pay compensation to Adani?

Both the EPBC Act and the Commonwealth of Australia Constitution provide for compensation to be payable for any ‘acquisition of property’.

The termination of property tenure such as a mining lease has been held to be an ‘acquisition’1 because the rights return to the Crown.2 Cancelling environmental licences, such as bore licences, has been held to not be acquisition of property as they are statutory rights that are ‘inherently susceptible to change or termination’ and whose cancelling does not confer an identifiable advantage on the Commonwealth.3

Accordingly, the exercise of the existing power to revoke an EPBC Act approval would not be considered acquisition of property attracting compensation under the EPBC Act or Constitution.

Would revoking Adani’s approval be a ‘sovereign risk’?

‘Sovereign risk’ is not a legal term or a well-defined concept. In its narrow, historical definition ‘sovereign risk’ is the risk of a country’s government defaulting on its debts. It could also be taken to include the risk of expropriation and nationalisation of private assets.

Prominent economist Saul Eslake has determined that stopping the Adani Carmichael mine on environmental grounds would not pose a ‘sovereign risk’ (as it is understood by institutional investors) as it would not risk Australia’s credit rating or undermine Australia’s capacity to attract foreign investment.4

In its broadest usage, usually by industry lobbyists, 5‘sovereign risk’ is the risk of the parliament using its power to adversely affect the commercial interests of private sector companies. In other words, it is the risk that our elected representative will make laws for the benefit of all Australians to the detriment of the interests of some private companies.  Some would call that democracy.

In any case, the concept has no application to the administrative exercise of executive powers under existing laws to protect the environment, such as the power to revoke approvals under the EPBC Act due to new information of impacts.  This power and possibility was well known at the time Adani sought the EPBC Act approval and, as such, it was a known risk assumed by Adani and any investor.

Would talking about revocation invalidate any revocation decision due to prejudgment or bias?

It is possible for a court to overturn a government decision if a complainant can demonstrate that the decision maker had pre-judged the matter, without affording the complainant the due processes under the law.6

However, in the leading decision of Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 the majority of the High Court decided that:

“Decision-makers, including judicial decision-makers, sometimes approach their task with a tendency of mind, or predisposition, sometimes one that has been publicly expressed, without being accused or suspected of bias. The question is not whether a decision-maker’s mind is blank; it is whether it is open to persuasion. ….

… The state of mind described as bias in the form of prejudgment is one so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented. Natural justice does not require the absence of any predisposition or inclination for or against an argument or conclusion.”

Accordingly, it is possible for a decision maker to indicate a tendency, inclination or predisposition provided they are open to persuasion and follow natural justice.

 

References

1. Newcrest Mining (WA) Limited v Commonwealth [1997] HCA 38.

2. The Commonwealth v WMC Resources Ltd [1998] 194 HCA 8.

3. ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51.

4. http://www.saul-eslake.com/sovereign-risk-proposed-adani-carmichael-coal-mine-queensland/#sthash.LmQJXFis.dpbs

5. Environment and Communications Legislation Committee, Commonwealth of Australia, Environment and Infrastructure Legislation Amendment (Stop Adani) Bill 2017 (2017) 2.32 – 2.40.

6. Administrative Decisions (Judicial Review) Act 1977 (Cth), ss 5(1)(e), 5(2)(e) and 5(2)(f).

Environmental Defenders Office Queensland (EDO Qld) gives a strong legal voice to the environment when needed most.

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