Our Successes · Energy & Climate

The Xstrata climate change case: seeking accountability for emissions

04 May, 2012

EDO Qld represented Queensland Conservation who sought to have climate change impacts taken into account in the assessment of a giant coal mine. This case was the first step in an ongoing effort to compel governments to account for climate change impacts when assessing carbon-polluting developments.

The Great Barrier Reef, for example, will suffer more frequent bleaching events over the next few decades as ocean temperatures rise. But coal mines continue to be approved despite their contribution to global warming. In February 2012 there were more than 40 coal mines under application in Queensland alone.

In 2007, represented by EDO Qld, Queensland Conservation (QCC), the state’s peak environment body, sought to have climate change impacts taken into account in the assessment of a giant coal mine. The case was technically lost when the Queensland Government introduced special legislation to shield the mine owners from further legal challenge after QCC won an appeal against an initial adverse judgement. However, it counts as a success story in demonstrating the legal legitimacy of the issue and as the first step in an ongoing effort to compel governments to account for climate change impacts when they assess carbon-polluting development.

In 2005, Xstrata Coal Queensland Pty Ltd applied under the Mineral Resources Act 1989 and the Environmental Protection Act 1994 to expand the lease for its Newlands coal mine in central Queensland west of Mackay. The company proposed to extract 28.5 megatonnes of coal over 15 years. The mining, transport and use of this coal would emit an estimated 84 Mt of carbon dioxide equivalent, the majority when used for electricity or steel production. The resulting average annual emissions are equivalent to about 1% of Australia’s direct annual greenhouse gas emissions (based on 2004 levels).(However, they wouldn’t be counted towards Australia’s total if the coal is exported overseas, as most of it would be.)

QCC objected to the lease expansion, contending that the emissions would contribute significantly to climate change and have adverse impacts on the environment unless the company was required to avoid, offset or reduce the emissions resulting from mining, transport and use of the coal. QCC’s objections were heard in Queensland’s Land and Resources Tribunal before President Greg Koppenol in early 2007. The case was presented by barristers Stephen Keim SC and Chris McGrath, with evidence from six expert witnesses including some of Australia’s top scientists on climate change.

QCC applied initially for 100 per cent of the emissions to be avoided, offset or reduced but prior to the hearing sought for this to be amended to 100 per cent of emissions from the mining project and 10 per cent of emissions from the transport and use of the coal. At this level of offsets, the mine would be viable and return large profits. QCC’s object was not to stop the coalmine but to have reasonable conditions imposed to mitigate its emissions. The Tribunal, however, refused to allow this amendment.

QCC’s expert witnesses presented evidence that greenhouse gas emissions cause climate change and will result in great environmental harm. For example, Professor Ove Hoegh-Guldberg provided evidence that by 2050 ‘even under the best case scenario, losses of at least 50% of the Great Barrier Reef’s living coral cover are likely to occur’ and that coral-dominated reefs will become rare.

Experts also presented evidence about the level of emissions that would result from the mine and the cost of offsets, demonstrating that the proposed condition of full offset of mining emissions and partial offset of transport and use emissions would not jeopardise the economic viability of the mine. (See export reports here, here, here, and here)

In February 2007, Mr Koppenol delivered his judgement and recommended that the lease and environmental authority for the mine extension be granted without the conditions sought by QCC. He considered them unwarranted because, he concluded, the mine would have ‘no demonstrated impact’ on climate change and the conditions could ‘drive wealth and jobs overseas and … cause serious adverse economic and social impacts’. On the evidence for global warming, Mr Koppenol said:

"QCC submitted that I should have regard to ESD principles 'to mitigate the serious environmental degradation caused by global warming.' The difficulty with that submission is that…it is based upon an assumption concerning the cause and effect of global warming. In the present case, I am not satisfied that that assumption (relevantly, a demonstrated causal link between this mine’s GHG emissions and any discernable harmlet alone any 'serious environmental degradation'caused by global warming and climate change) has been shown by QCC to be valid."

In coming to this conclusion, Mr Koppenol relied on a notorious paper entitled ‘The Stern Review: A Dual Critique’ that disputes climate change science but which is widely criticised by climate scientists for numerous errors. (The Stern Review: A Dual Critique, Vol 7 No 4, World Economics Journal, October-December 2006, pages 165-232 ) This paper had not been presented in evidence or considered during the hearing. Mr Koppenol informed the parties a few days after the hearing that the paper had come to his attention and he invited written submissions on it. At no time during the hearing had there been any dispute that anthropogenic greenhouse gas emissions contribute to climate change and are a serious threat to the environment. E xpert witnesses for Xstrata accepted the science of global warming.

QCC decided to appeal what it described as an ‘extraordinary’ decision that rejected the overwhelming scientific evidence of climate change without hearing any expert evidence (a decision hailed by climate change denialists). The three judges of Queensland’s Court of Appeal unanimously upheld the appeal, finding that QCC had been denied natural justice when the Tribunal failed to accord QCC ‘a fair opportunity to test or refute the critique by other information or submissions.’

The Court also found that QCC should have been permitted to amend its proposed condition on the amount of offsets imposed on the mine. The Court ordered a rehearing of the case in the Land Court (the Land and Resources Tribunal having been recently subsumed into the Land Court).

However, the very same day QCC won its appeal, the Queensland Government denied them the right to a retrial by announcing its intention to pass special legislation to validate the mining lease and environmental authority. The government was willing to bypass due process in order to protect the mine, with the Mining Minister explaining in Parliament (17 October 2007) that Xstrata’s mining operation had proceeded despite QCC’s pending appeal and that Xstrata’s investment now needed protecting:

… it is likely the Supreme Court would declare the two grants invalid if an application was made to it. This means that the future of the new mining operations at Suttor Creek mining lease and the future of everyone employed there is literally hanging by a thread.

In passing this legislation, Queensland’s Parliament over-rode the community’s legal right to uphold the principles of ecologically sustainable development and prevent harm to the environment. But the government made clear its priority, stating in a media release on the day of appeal judgement: "The coal industry is central to the Queensland economy and we will not allow a technicality to threaten its development and jobs."