Neil Sands
The government is flexing its constitutional muscle to override a Supreme Court decision allowing an environmental activist to sue six large New Zealand businesses over greenhouse gas emissions.
The move signals that the government wants climate policy to be set by Parliament, not the judiciary.
Justice Minister Paul Goldsmith said the case, Smith v Fonterra and others, was creating confusion about the climate obligations businesses must meet, arguing that “certainty of law is essential for businesses to operate, attracting overseas investment and stimulating economic growth”.
“Therefore, the government will amend the Climate Change Response Act 2002 to prevent findings of liability for tort for climate change damage or harm caused by greenhouse gas emissions in both current and future proceedings before the courts,” Goldsmith said in a statement.
However, the Green Party accused the government of protecting corporate polluters, while Lawyers for Climate Action NZ (LCANZ) said the change will impede the court’s ability to hear an on-going case and “cut(s) across the court’s legitimate constitutional role in developing the common law”.
“[It] raises fundamental issues for both the environment and the constitutional role of the courts, and puts the interests of big emitters over those of impacted communities,” LCANZ acting executive director Laura MacKay said.
Greens co-leader Chlöe Swarbrick said the government wanted to stop major greenhouse gas emitters being held accountable.
“They’ve spent two-and-a -half years taking a wrecking ball to climate laws and, at the eleventh hour, they’re now ripping away New Zealanders’ and the courts’ ability to do what this government lacks the spine to do,” she said.
A new tort?
The case was launched in August 2019 by Ngāpuhi and Ngāti Kahu elder Michael Smith, who is a spokesperson on climate change for the Iwi Chairs Forum, a national forum of tribal leaders.
It initially involved seven defendants – dairy giant Fonterra, electricity generator-retailer Genesis Energy, dairy farming company Dairy Holdings, steel-making company New Zealand Steel, fuel retailer Z Energy, fuel importer Channel Infrastructure and coal-mining operator BT Mining.
Channel was dropped from proceedings in May 2024.
The case alleges the companies knowingly emitted greenhouse gases or supplied products that released them when burned, representing individual and collective corporate failure to address the damage caused by climate change.
Smith is seeking declaratory relief and injunctions ordering the defendants to reach net-zero emissions by 2030.
He advanced three tort claims, one of which raised the prospect of a novel tort of “climate system damage” – arguing the defendants are legally obliged to cease materially contributing to damage to the climate system and the adverse effects of climate change.
The High Court ruled in 2020 that this element of the case could proceed but the Court of Appeal struck it out a year later, only for the Supreme Court to reinstate it in 2024 and send back to the High Court for trial.
In its 70-page judgement, the Supreme Court cited several cases involving the interaction between tikanga Māori and the common law, including one from 1866, another from 1910, and the more recent Ellis ruling of 2022.
‘Lawfare’ or legitimate challenge?
The matter was scheduled to go to trial in the High Court in April next year, but Goldsmith said the government was taking action to prevent the prospect of the courts developing a new climate regime under common law that contradicts the framework Parliament has already set up.
“Our response to climate change is best managed by the government at a national level and not through piecemeal litigation in the courts… It is essential to maintain the coherence of the regulatory system and to deliver consistent obligations for greenhouse gas emitters,” he said.
“The courts are not the right place to resolve claims of harm from climate change and tort law is not well-suited to respond to a problem like climate change which involves a range of complex environmental, economic and social factors.”
The move comes after Goldsmith warned last year that the government was willing to legislate “over the top” of court decisions for the sake of legal clarity.
ACT Party agriculture spokesman Mark Cameron said the changes would put an end to “lawfare” by climate activists, affirming that it is Parliament’s role to set climate policy.
““New Zealanders elect governments to make climate policy through Parliament, not judges in courtrooms responding to activist campaigns,” he said. “This bill rightly recognises that any responsibility around emissions rests with central government through nationally consistent mechanisms like the ETS (emissions trading scheme).”
University of Waikato law professor Alexander Gillespie said climate litigation has been used as a tool to challenge inadequate climate action since the 1980s, adding that “[the] use of novel extensions to ensure entities are held accountable for their actions is a long tradition in tort law”.
“The clear problem is that not enough is being done to rectify the problem of climate change, especially in New Zealand, and accountability for what could be legal wrongs is being sidestepped [though the legislative changes],” he said.
“By potentially making a blanket ban in this area, they are avoiding even theoretical findings of wrongdoing – even if liability is not attached. This type of legislative response in New Zealand to circumvent legitimate climate litigation may have negative implications globally, as other countries follow suit, to close down a wide array of cases involved in climate litigation.”
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