As Australia braces for another year of compounding climate disasters, climate litigation cases will also ramp up in 2023, global law firm Clyde & Co has predicted.
Australia already has one of the highest numbers of climate cases globally, second only to the US in the number of lawsuits filed. As of January 2023, the Grantham Research Institute on Climate Change and the Environment holds a database of 128 climate litigation cases for Australia. The country is a “hotbed of climate litigation”, highlights law correspondent Christopher Niesche.
Holding polluters to account with climate litigation
The mining, processing and burning of fossil fuels is the leading driver of climate breakdown and disasters. This is the cause of Australia’s increasingly extreme droughts, bushfires and floods. Therefore, climate litigation efforts often focus on the plans and operations of coal, oil and gas companies, as well as other large industrial polluters.
However, state and federal governments also expose themselves to litigation where their actions and policies fall short. In September 2022, lawyers worldwide issued a stark warning that governments must deliver stronger targets and actions – based on scientific evidence – or face accountability in courts.
While Australia’s federal government strengthened its emissions reduction pledge in 2022, it remains inadequate to meet the goals of the Paris Agreement and keep global heating below 1.5°C. Moreover, ministers continue to approve fossil fuel developments labelled as “carbon bombs” and expansions that would be a disaster for the climate. Meanwhile, some of the country’s biggest polluters have published net zero plans that are misleading and deceptive. Climate litigation can be a powerful tool to force much-needed change.
Climate litigation in Australia: Breaking ground and more to come
Australia has seen several landmark decisions across the climate litigation landscape in the last year. Going into 2023, state governments and large corporations should expect to be held to account on climate-related pledges, say Clyde & Co. The law firm predicts that litigation cases will arise in four areas in particular.
The Australian Securities and Investments Commission issued its first greenwashing fine to Tlou Energy in October 2022. The commission has since issued three infringement notices regarding alleged greenwashing to investment manager Vanguard Investments Australia Ltd.
Also, last year, the Australasian Centre for Corporate Responsibility (ACCR) began proceedings against fossil fuel giant Santos, alleging that it made false and misleading claims about producing clean energy. The lawsuit alleges that the company’s statements about gas being “clean” and that its pathway to net zero by 2040 are deceptive. “Santos has perfected the art of greenwashing, and shareholders continue to be misled by Santos’ clean energy claims”, said Dan Gocher, Director of Climate and Environment at ACCR, commenting on the court proceeding. The Australian Competition and Consumer Commission is also taking steps to tackle greenwashing.
In 2023, we will continue to see a rise in litigation raised by shareholders and activists in relation to company greenwashing and environmental, social, and governance commitments, says Clyde & Co. This is an increasingly high-risk area for directors and officers regarding failure to disclose or meet disclosure obligations.
The second area is challenges to corporate governance by shareholder actions for failure to consider and address climate risk. The focus will be on litigation towards regulation and accountability of corporations rather than monetary compensation, says the law firm.
For example, experts warn that Woodside Energy is failing to disclose its climate risk and is falling short of transparency standards. These are required for investors and shareholders to make informed investment decisions regarding its Scarborough-Pluto Development. “Shareholders and investors should be aware that Woodside’s public statements on climate change, including the company’s emissions reduction targets, are not credible and fall far short of what is required under the Paris Agreement”, the Australia Institute warns. “The company has failed to adequately disclose the climate change and carbon risks associated with its highly carbon intensive existing operation, or its even more polluting growth projects including the Scarborough to Pluto development.”
Duty of care
The third area is challenges to approval validity for fossil fuel projects and developments. For example, in September 2022, the federal court agreed with Tiwi Traditional Owners that Australia’s offshore regulator should not have approved Santos’ drilling permit for its Barossa gas project. The company’s failure to consult with the Munupi Clan invalidated its drilling permit. Another example is Adani’s Carmichael coal mine in Central Queensland. In November, Queensland’s Land Court rejected a bid by Clive Palmer’s Waratah Coal to develop Australia’s largest thermal coal mine in the Galilee Basin due to the human rights and climate impacts of the proposal.
Going forward, projects that require government approval and corporations may face legal challenges regarding alleged negative climatic impacts. Furthermore, projects may only receive approval if they aim to meet climate obligations. However, pending future cases, they may still be liable for negligence regarding the duty of care when it comes to adequately addressing climate risks.
The fourth area is human rights. In September 2022, the UN Human Rights Committee found that Australia had violated the human rights of Torres Strait Islanders because the country had failed to protect them from the impact of climate change, for example, by upgrading seawalls and reducing greenhouse gas emissions. This is the first known damages award against a state on the basis that climate change equates to a breach of basic rights.
Australia’s failures “violated their rights to enjoy their culture and be free from arbitrary interferences with their private life, family and home”, the UN found. The landmark decision made legal history and now obliges the government to take action to ensure the safe existence of the Torres Strait Islands and communities. Furthermore, it sets a precedent for the rights of Indigenous Peoples facing climate impacts around the world.
Seven years to halve emissions
The world needs to almost halve emissions by 2030. However, global emissions are still rising, and new fossil fuel projects continue to get the green light. While governments, companies, investors and industry continue to drag their feet on adequate climate action, communities, activists and legal groups will continue to join forces to use litigation to drive positive change.