Case Note: Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7

The Rocky Hill case has been heralded as a landmark decision for the recognition of climate change in relation to environmental approvals and decision-making. In this case note, EDOWA solicitors Ruby Hamilton and Sarah Flynne examine the key aspects of the case and what it could mean for WA.

A summary version of the case note is below, and you can  download the full note here.

We note that the proponent has lodged a notice of intention to appeal against the decision.

1. BACKGROUND

On 8 February 2019, the New South Wales Land and Environment Court (NSWLEC) handed down a decision relating to an application for consent to develop a coal mine in the Gloucester Valley, a rural-residential area. The proposal included open-cut pits and vegetation clearing with planned recovery of 21 million tonnes of metallurgical coal (used for producing steel, distinct from thermal coal which is burned to generate electricity). The Planning Assessment Commission (delegated by the Minister for Planning) refused the application for consent and the proponent, Gloucester Resources Ltd, appealed this decision.

The NSWLEC decision, by Chief Judge Preston, dismissed the mine proponent’s appeal, confirming the decision to refuse consent. Preston CJ summarised the reasons for this decision as follows:

The mine will have significant adverse impacts on the visual amenity and rural and scenic character of the valley, significant adverse social impacts on the community and particular demographic groups in the area, and significant impacts on the existing, approved and likely preferred uses of land in the vicinity of the mine.

The construction and operation of the mine, and the transportation and combustion of the coal from the mine, will result in the emission of greenhouse gases, which will contribute to climate change.

These are direct and indirect impacts of the mine. The costs of this open cut coal mine, exploiting the coal resource at this location in a scenic valley close to town, exceed the benefits of the mine, which are primarily economic and social. Development consent should be refused.

(see [8], line breaks and emphasis added)

The proceedings

This case was a merits review proceeding in which the NSWLEC “stands in the shoes” of the original decision-maker in relation to the application, and re-makes that decision. Its decision stands as though it was made by the Minister or the Minister’s delegate, rather than as a Court ruling on legal validity or interpretation.

2. THE DECISION

Preston CJ undertook a comprehensive review of the positive and negative impacts of the mine, using a cost-benefit analysis to determine that the approval should be refused. In considering the direct and indirect impacts of the mine, Preston CJ generally found that the social and economic benefits would be short-term and minor, and would be outweighed by potentially major long-term adverse social, environmental and economic impacts. The “distributive inequity” of the benefits primarily accruing to the proponent and the costs impacting on the community was a key finding in the decision.

In concluding the decision, Preston CJ held that:

an open cut coal mine in this part of the Gloucester valley would be in the wrong place at the wrong time. Wrong place because an open cut coal mine in this scenic and cultural landscape, proximate to many people’s homes and farms, will cause significant planning, amenity, visual and social impacts. Wrong time because the GHG emissions of the coal mine and its coal product will increase global total concentrations of GHGs at a time when what is now urgently needed, in order to meet generally agreed climate targets, is a rapid and deep decrease in GHG emissions. These dire consequences should be avoided.

(see [699])

Climate change findings

One of the key impacts considered in the case was greenhouse gas (GHG) emissions and climate change. Preston CJ confirmed that the principles of ecologically sustainable development (ESD) require consideration of climate change impacts and made the following key findings in relation to climate change:

  • increased GHG concentrations in the atmosphere have already affected, and will continue to affect, the climate system;
  • a rapid and deep decrease in GHG emissions is urgently needed in order to meet generally agreed climate targets;
  • approval of the project, which will increase GHG emissions, is likely to run counter to actions that are required to achieve rapid reductions in GHG emissions necessary for net zero emissions and limiting temperature rise to 1.5-2ºC;
  • Scope 3 and downstream GHG emissions are relevant considerations in the determination and assessment of proposals;
  • the mine’s direct and indirect GHG emissions will contribute cumulatively to global GHGe and climate impacts;
  • mitigation and offset actions must be specific and certain to justify approval of projects with GHG emissions; and
  • assumptions of market substitution and carbon leakage are unproven.

Preston CJ emphasised that each proposal must be assessed on its merits and this assessment must involve consideration of GHG emissions and climate impacts.

3. SIGNIFICANCE OF DECISION FOR WESTERN AUSTRALIA

While this decision of the NSWLEC is encouraging in terms of official recognition and application of climate change science, it is important to bear in mind the nature of the decision and its status in relation to WA’s legislative and regulatory framework.

Nature of the decision

The NSWLEC has the jurisdiction to conduct merits review appeals and judicial review proceedings. WA does not have an environmental court or tribunal with similar jurisdiction, with WA courts only having jurisdiction to hear judicial review proceedings concerning legal questions. As this case is a merits review proceeding in which the NSWLEC was sitting as an administrative tribunal, it does not create a binding precedent for courts in WA.

Further, New South Wales’ environmental protection legislative and policy framework under the Environmental Planning and Assessment Act 1979 (NSW) (NSW Act) differs to the regime established in the Environmental Protection Act 1986 (WA) (EP Act). The NSW Act integrates planning and environmental law and expressly requires the public interest to be considered in assessing a proposal’s likely environmental, social and economic impacts. The ESD principles included in the NSW legislation are identical to those listed in WA legislation, except that the WA legislation also includes the principle of waste minimisation. The shared ESD principles include:

  • the precautionary principle;
  • the principles of inter-generational equity;
  • the principle of conservation of biological diversity and ecological integrity; and
  • improved valuation, pricing and incentive mechanisms.

Application to Western Australia

Despite the above, the Court’s consideration of the ESD principles and findings in relation to GHG emissions and climate change impacts is likely to be influential for decision-makers and courts in WA. Preston CJ’s reasoning and findings are particularly applicable to two key decision making processes in WA – environmental impact assessments of significant proposals by the Environmental Protection Authority (EPA), and the Minister for Environment’s role in approving and conditioning those proposals.

Environmental Protection Authority – assessment
In conducting environmental impact assessments in accordance with its objectives to protect the environment and prevent environmental harm in s 15 of the EP Act, the EPA is required to have regard to the ESD principles included as the central objects of the EP Act in s 4A. This case confirms that the principles of ESD require consideration of the impact of a development on climate change. Further, much of the case turned upon an assessment of the “direct and indirect impacts” of the mine proposal – an assessment which is analogous to an EPA environmental impact assessment against ‘key environmental factors’ under s 44(2) of the EP Act. The case highlights the need for such assessment to consider a proposal’s GHG emissions, its contribution to climate change, and impacts on people and the environment on a local and global scale.  Accordingly, this case confirms that the EPA is required to comprehensively consider GHG emissions and climate impacts in assessing and reporting on the environmental impacts of significant proposals under the EP Act.

Minister for Environment – approvals
In WA the Minister for Environment often exercises a similar function to the NSW Minister for Planning in this case. As the decision-maker in environmental approvals, the Minister for Environment may impose conditions on any approval that are directed to the control of environmental harm. This case makes clear that GHG emissions and climate change impacts are relevant considerations in exercising this function, being scientifically established as contributing to environmental harm. A failure by the Minister to consider these impacts may lead to a decision being considered unreasonable.

If administrative decision-makers in WA accept the findings from the case and carry out their roles accordingly, they should ensure that new projects and any potential GHG emissions remain within the carbon budget. As Preston CJ accepted in the case, with carbon budgets already exhausted by existing projects, fossil fuel developments must be phased out and any new projects must demonstrate that they will achieve net zero emissions through avoiding/minimising GHG emissions and, to the extent that they cannot achieve this, identify specific and concrete offsets.

4. EPA GHG GUIDANCE

The EPA’s guidance on GHG emissions released on 7 March 2019 established a separate environmental factor guideline and technical guidance for GHG emissions and confirmed that the EPA is obliged to consider the effect of proposals with the potential to increase WA’s GHG emissions. This guidance was consistent with the findings in Gloucester and required proponents of projects subject to environmental impact assessment under the EP Act to describe:

  • scope 1 and scope 2 GHG emissions per annum and over the life of the proposal;
  • scope 3 emissions, where there is an established link between the proposal’s activity and these emissions and they will be relatively large;
  • proposed measures to avoid emissions through best practice design and benchmarking;
  • proposed continuous improvement measures to reduce emissions over the life of the proposal; and
  • proposed measures to offset all residual (net) direct emissions associated with the proposal that meet the offset integrity principles and are based on clear, enforceable and accountable methods.

This guidance was withdrawn on 14 March 2019 for further consultation.