BY MATT FLORO AND JASPER BROWN

On 8 February 2019, Chief Judge Preston of the NSW Land and Environment Court (LEC) handed down his landmark decision in Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7 (GRL v Minister), dismissing an appeal against refusal of consent to the proposed Rocky Hill Coal Project (Project) in the Gloucester Valley on the mid-north coast of NSW.

Preston CJ dismissed the appeal because the proposed greenfield coal mine would be:

  1. in the “wrong place” because of the Project’s unacceptable planning, amenity, visual and social impacts; and
  2. at the “wrong time” because of the Project’s unacceptable cumulative contribution to global climate change.

In commenting on the decision, law firms and the media have emphasised Preston CJ’s reasoning on climate change. Indeed, his Honour’s landmark decision is the first time in Australia (and perhaps the world) where a Court has refused consent to a coal mine because of its impacts on climate change. It is also the first time an Australian court has accepted the urgent need to stay within the global carbon budget in the context of a proposed coal mine.

Nonetheless, GRL v Minister should not be misinterpreted as a radical judgment, but rather viewed as a ground-breaking, yet orthodox, development in environmental law. Preston CJ’s reasoning on the “wrong place” and “wrong time” factors is situated carefully within the context of NSW environmental and planning legislation that mandates consideration of the public interest, the principles of ecologically sustainable development (ESD), and impacts on climate change.

GRL v Minister can be considered the next logical step in environmental, planning and climate change jurisprudence. Preston CJ’s reasoning builds on previous NSW case law and international jurisprudence, while accepting the latest expert evidence on planning, amenity, visual, social, economic, climate change and coal demand issues. Indeed, it is his Honour’s review of the latest expert evidence that allows him to dismiss common “defences” to fossil fuel development impacts on climate change, such as the “market substitution” defence.

Background

On 18 December 2012, Gloucester Resources Limited (GRL) submitted a State significant development application for the Project to the then Department of Planning and Infrastructure (now the Department of Planning and Environment) (Department).

On 11 August 2016, GRL lodged an amended development application for the Project. The amended development application proposed an open-cut coal mine that would produce 21 million tonnes of run-of-mine coking coal over a period of 16 years.

On 18 October 2017, the Department recommended that the Planning Assessment Commission (PAC) refuse consent to the Project.

On 14 December 2017, the PAC, as the Minister’s delegate, refused consent to the Project, citing contravention of zoning objectives, significant visual impact and the Project not being in the public interest. Five days later, GRL filed a merits appeal in the LEC under section 97 (now section 8.7) of the Environmental Planning and Assessment Act 1979 (EP&A Act).

In April 2018, Groundswell Gloucester Inc (GG Inc.), a not-for-profit Gloucester community group, successfully applied to join the merits appeal based on the Project’s unacceptable social impacts and impact on greenhouse gases (GHG).

Preston CJ’s findings

Planning

The Minister’s principal contention for why the Project should be refused was that it was incompatible with other land uses in the Project’s vicinity, in contravention of clause 12(a) of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP).

Preston CJ found that, due to its visual, social and amenity impacts, the Project would have a significant impact on the likely preferred uses in the vicinity and was incompatible with the existing, approved, or likely preferred uses.  Further, GRL’s proposed measures would not avoid or minimise this incompatibility.

Visual

The Minister’s other main contention was that the Project’s residual visual impact would be significant.

Preston CJ accepted expert evidence that the landscape within the Project’s visual catchment was of high visual quality and had high landscape values, and that the land uses in the vicinity had high sensitivity to the changes proposed by the Project. His Honour drew attention to the proposed large amenity barriers and the “even more massive” permanent overburden emplacements, which would “look out of place in the existing landscape”.  His Honour also acknowledged the landscape’s cultural significance to Aboriginal people.

Social and amenity

GG Inc., with whom the Minister agreed, contended that the Project would have a significant social impact on the Gloucester community, contrary to the public interest and the principles of ESD.

Preston CJ determined the Project’s social impacts using the Department’s 2017 Social Impact Assessment Guideline (Guideline), a policy document intended to provide direction on assessing the social impacts of State significant resource projects.

In considering the Guideline, Preston CJ found, among other things:

  1. the “moderate positive social impact of the mine on local employment and the local economy may, however, be countered by negative social impacts”;
  2. a “large majority of the community oppose the Project”;
  3. the Project would “severely impact on people’s sense of place”, resulting in an “extreme” social risk rating;
  4. GRL had failed to assess the social impacts of the Project on Aboriginal people;
  5. the potential impacts on health, wellbeing and amenity warranted “extreme” social risk ratings;
  6. “most of the articulated fears and aspirations of people who oppose the Project are reasonable and have justification in the evidence”;
  7. the Project would result in distributive inequity, as the benefits of the Project would accrue to the current generation but the disbenefits of the Project would burden current and future generations; and
  8. the negative social impacts would not be able to mitigated or managed.

His Honour also found that although the noise and dust impacts would comply with the relevant non-discretionary development standards in clause 12AB of the Mining SEPP, this did not preclude consideration of the social impacts of noise and dust.

His Honour determined that although the Project’s refusal was justified on planning, visual and social impacts “alone”, the impacts on climate change added “a further reason for refusal”.

Climate change

GG Inc. contended that the Project should be refused because the Project’s GHG emissions would adversely impact upon measures to limit global climate change, contrary to the public interest and the principles of ESD.

Emeritus Professor Will Steffen, GG Inc.’s climate change expert, adduced evidence on the carbon budget, which is the most robust way to determine the rate of emissions reductions required to meet the goals of the Paris Agreement. The carbon budget limits the cumulative amount of total additional CO2 emissions that can be allowed consistent with the 1.5º to 2º C global temperature rise target.

Professor Steffen stated that there were 215 Gt C (billion tonnes of carbon, emitted as CO2) left before the carbon budget was exhausted. At the present rate of emissions (~10 Gt C per year), that would mean that the carbon budget would be exhausted in 21-22 years. Accordingly, Professor Steffen opined that fossil fuel combustion must be phased out quickly and no new fossil fuel development (including the Project) was consistent with the carbon budget approach.

Conversely, GRL argued that coal from the Project should be allowed to be exploited for four main reasons.

First, GRL submitted that the carbon budget would not necessarily be exceeded because reductions in emissions or increases in the removal of GHGs by sinks could “net out” the GHG impact of the Project.  Preston CJ rejected this argument, stating there was no evidence of any specific action to “net out” the Project’s emissions.

Second, GRL submitted that refusing approval to individual coal mines such as the Project would not achieve least cost abatement. Preston CJ rejected this argument, stating that if a consent authority determined that a development was unacceptable because of impacts on climate change:

it would not be rational to nevertheless approve the development because greater emissions reductions could be achieved from other sources at lower cost by other persons or bodies.

Third, GRL submitted that the Project’s GHG emissions would occur regardless of whether the Project was approved. Coking coal would be sourced elsewhere because of its limited substitutes, resulting in at least the same amount of emissions (“market substitution” or “drug dealers’ defence”). Further, coal mining would move to countries with less stringent climate change policies, leading to an increase in emissions (“carbon leakage”).

Preston CJ rejected these arguments, finding that there was no certainty or evidence that market substitution would occur as countries were increasingly acting to combat climate change. His Honour added:

The potential for a hypothetical but uncertain alternative development to cause the same unacceptable environmental impact is not a reason to approve a definite development that will certainly cause the unacceptable environmental impacts.

Fourth, GRL submitted that the Project’s GHG emissions were justifiable because the Project was a coking, not thermal, coal mine.  Preston CJ found that GRL overstated this argument. His Honour found that the “current and likely future demand for coking coal can be met … by other coking coal mines, both existing and approved, in Australia.”

There was no evidence that “carbon leakage” would occur.

After dealing with GRL’s arguments, Preston CJ considered that the Project’s Scope 3 emissions were relevant to be considered because they were part of GRL’s own Environmental Impact Statement. Importantly, consideration of Scope 3 emissions was required by clause 14(2) of the Mining SEPP and clause 4.15(1)(b) of the EP&A Act, and was consistent with existing case law.

Drawing on the science in Professor Steffen’s carbon budget approach, Preston CJ found that the “direct and indirect GHG emissions of the [Project] will contribute cumulatively to the global total GHG emissions”. In other words, there was a “causal link” between the Project’s cumulative GHG emissions and global climate change.

Consistent with the Dutch Urgenda case, his Honour stated that it “matters not that this aggregate of the Project’s GHG emissions may represent a small fraction of the global total of GHG emissions.”

His Honour stated that to address the global problem of climate change, what was needed was “multiple local actions to mitigate emissions by sources and remove GHGs by sinks.”

Nonetheless, his Honour acknowledged there is “no proscription on approval of new sources of GHG emissions, such as new coal mines”. His Honour declined to adopt a “policy decision” of no new fossil fuel development.

Instead, Preston CJ determined that the better approach to evaluating a fossil fuel development was to consider the impact of the development on climate change, as well as other impacts, in “absolute” or “relative” terms:

1. In absolute terms, a fossil fuel development may lead to

a sufficiently large source of GHG emissions that refusal of the development could be seen to make a meaningful contribution to remaining within the carbon budget and achieving the long term temperature goal;

2. In relative terms,

[o]ther things being equal, it would be rational to refuse fossil fuel developments with greater environmental, social and economic impacts than fossil fuel developments with lesser environmental, social and economic impacts.

Accordingly, his Honour held that the Project demonstrated “poor environmental and social performance in relative terms”. Although the Project was not one of Australia’s largest coal mines, it had unacceptable planning, visual and social impacts, which alone justified refusal. In the Court’s weighing of relative impacts, the Project’s impacts on climate change added a further rationale for rejection, particularly considering the urgent need to stay within the carbon budget to abide by global temperature limits. These negative impacts were not outweighed by the purported economic benefits, which his Honour found were “significantly overstated”.

Conclusion

GRL v Minister is a landmark decision, but it is far from radical. It is persuasive authority, but it is not binding. It is founded on NSW environmental and planning legislation and is consistent with established NSW case law and international jurisprudence. It is, in some respects, a conventional planning decision. Nonetheless, its acceptance of up-to-date expert evidence on a kaleidoscope of issues, notably climate change, makes it a decision for the twenty-first century – and environmental law’s next logical step.

Could there be a step backwards?

On 5 March 2019, GRL filed a notice of intention to appeal the decision to the NSW Court of Appeal.  GRL now has until 8 May 2019 to file a notice of appeal.

The environment now waits in relative silence.

Matt Floro is the EDO NSW Solicitor with carriage of the case on behalf of Groundswell Gloucester.  Jasper Brown is a volunteer researcher at EDO NSW and part of the legal team behind the case.

Suggested citation: Matt Floro and Jasper Brown, ‘Wrong place, wrong time: The next logical step in environmental, planning and climate change jurisprudence’ on AUSPUBLAW (27 March 2019) <https://auspublaw.org/2019/03/wrong-place,-wrong-time/>