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Climate Change Litigation: The Australian Government Gets Sued

“It’s time the government told the public about the impact climate change will have on our future and the economy.” (Katta O’Donnell, The Guardian, Jul 24, 2020).

While coronavirus ravages life, dominates policy and clouds debate, that other pressing issue of addressing climate change has moved into a more modest gear. That has not prevented some bubbling activity from taking place on the matter of litigation. While climate change law suits remain in their swaddling clothes, some shape is discernible. In countries where fossil fuels remain sovereign, legal actions have focused on restricting or preventing the approval of projects and holding companies accountable on environmental risks associated with their activities.

Short of the bare fisted force of legal action, people’s tribunals, community bodies and petitions have tended to urge change in the field, drawing attention to the predations of climate change policies. In December 2005, for instance, Sheila Watt-Cloutier filed a petition on behalf of the Inuit with the Inter-American Commission on Human Rights claiming that US climate change policy had breached their human rights. As she stated at the time, “A declaration from the commission may not be enforceable, but it has great moral value… Protecting human rights is ground occupied by both reasonable governments and civil society.”

In April 2019, the Australian legal firm Corrs, with unintended punning, predicted a “third wave” of climate change litigation. “In that wave, investors will seek to recover their losses from directors, auditors and advisers who have not confronted climate change risks.” Communities affected by the vicissitudes of climate change would also “litigate to try to force action by government and the largest emitters, and to seek damages from those they think might be held responsible for contribution, inaction, and obfuscation.”

In December 2019, a galvanic jolt passed through the field of ecological justice with a ruling by the Netherlands’ highest court in Urgenda Foundation v. Netherlands. The Dutch Supreme Court upheld the decision of the appellate court affirming the original decision that the government cut its greenhouse gas emissions by at least 25% by the end of 2020 (compared to 1990 levels). While the Dutch State did not disagree with the threat posed by climate change, their argument rested on the primacy of political decision making: it was up to political representatives to decide on the levels of reduction.

In their judgment approving judicial scrutiny of such governmental actions, the justices noted that inadequate action in addressing climate change posed a “risk of irreversible changes to the worldwide ecosystems and liveability our planet” with a “serious risk that the current generation of citizens will be confronted with loss of life and/or a disruption to family life… that the State has a duty to protect against.” The European Convention of Human Rights reaffirmed the State’s obligation “to protect the life and the right to private and family life of its residents”.

The ruling gave Michelle Bachelet, the UN High Commissioner for Human Rights, enough to suggest that “a clear path forward for concerned individuals in Europe – and around the world – to undertake climate litigation in order to protect human rights” had been made. “The potentially devastating effects of unchecked sea rise, heat waves, uncontrollable forest fires, hurricanes and other growing emergencies must spur us all to demand courage and decisiveness by Governments everywhere in responding to these threats.”

As of January 2020, the number of climate change cases filed was recorded at 1,444. A climate change litigation update furnished by Norton Rose Fulbright noted in February this year that suits had “been filed in 33 countries, in addition to cases brought in regional or international courts and commissions. The vast majority of these cases continue to be commenced in the United States (US), followed by Australia, United Kingdom, European Union, New Zealand, Canada and Spain.”

On July 22, university student Katta O’Donnell filed a civil action in the Australian Federal Court that may find itself in the same league as Urgenda, albeit with a somewhat more corporate flavour. She wished, in her words, to put the government “on trial for misconduct.” The action makes the dangers of climate change, and a state’s obligation to inform investors of those dangers, a central theme. “At all material times,” the action observes, “there has existed a significant likelihood that the climate is changing, and will continue to change, as the result of anthropogenic influences.” To that end, “Australia is materially exposed and susceptible” to the risks posed by climate change.

Such risks loom large for the investor – in this case, the investor who seeks to trade in government bonds, a market in Australia worth A$700 billion. Such considerations “can have a serious material impact on a decision by an investor to invest in Sovereign bonds and on the value of Sovereign bonds.” In lending money to the government, investors were entitled to be appraised of these risks, being “material to [their] decision to trade in exchange-Australian government bonds (e-AGBs).” In “failing to disclose climate change risks to investors,” claim O’Donnell’s lawyers, “the Commonwealth of Australia is accused of breaching its duty of disclosure and misleading and deceiving investors.” The requisite standard of care and diligence was therefore not met. “The standard is equivalent to the legal standard imposed on company directors in Australia.”

The current Australian government, overly friendly to the fossil fuel sector, filled with barely closeted climate change denialists, will find O’Donnell’s action troubling. The voter turned demanding investor is a truly threatening prospect.

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17 comments

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  1. Matters Not

    Re:

    … voter turned demanding investor is a truly threatening prospect

    Really? Are Ministers personally threatened by legal action? Are they personally liable for any damages awarded by an appropriate Court? Or is it the case that the government of the day will pick up any damages awarded against Minister(s) (provided of course they were acting in an official capacity)?

    Is it not the case that personal responsibility for bad decisions simply evaporates (given the caveat mentioned above)?

    Should Dutton, for example, be held in any way (personally) accountable for the decision to pay millions to a faraway country for services never delivered? Should he be held responsible for that lack of demand? Etc, etc.

    Should all this ‘freedom’ granted to Ministers be not accompanied by some responsibility? Or has it become an example of Licence?

  2. Phil

    This is more readable:

    Indeed. So what does it matter who pays the bill? The Government or the Company. I would have thought fining a company and costs for a disaster caused through negligence, would have an effect on their future business model.

  3. Michael Taylor

    Phil, there is a way to make sense of the first document:

    Sit yourself down with a bottle of Drambuie and keep reading until it makes sense. 😜

  4. Michael Taylor

    I would have thought fining a company and costs for a disaster caused through negligence, would have an effect on their future business model.

    Hence this is, in my humble opinion, a potentially groundbreaking case.

  5. Matters Not

    Certainly a legal minefield but it’s perhaps more important in terms of political point scoring. Then there’s defamation. Joh, for example, wanted it all ways and at all times. Initially, (as I recall), he succeeded in having the State fund his personally launched defamation proceedings against whoever – which was agreed to – with Joh taking the damages awarded. A classic case of heads I win – tails you lose.

    Nevertheless, it was soon realised that this was a potential growth industry that could rapidly get out of hand – with all and sundry trying their luck. And why not. No downside. No personal expense involved. Might even just jag a favorable decision. So have a go. Thus a (responsible) decision was made, that a Minister launching a defamation action would bear all the risk. So while a favorable decision might bring a financial reward – an unfavorable one might mean significant costs. Ministers suddenly developed tougher skins. But lawyers were somewhat disappointed.

  6. Phil

    ‘ Phil, there is a way to make sense of the first document:’

    Jesus mate how long do you think I have to live?

    I can’t see the problem, did they not just have a win against ‘ Robo Debt ‘

    Didn’t Dutch citizens just have a win against their government over global warming?

    Of course what makes all this worse is, governments know full well what global warming is doing and choose to do nothing.

  7. Michael Taylor

    MN, whenever I see Joh’s and your name together I can’t help but have a chuckle over his “separation of powers” mumbo jumbo.

    A classic for the ages.

    I’ll search for it online and paste here for all to enjoy.

  8. Michael Taylor

    Unfortunately I cannot find it. I have it in one of my university readers, but which one? And how long will it take to find it? And would I be able to obtain permission from Carol to destroy the spare room as I turn it upside down looking for my readers? 😳

  9. Matters Not

    Guess politicians are just slow learners. Campbell Newman had/has trouble with the concept as well.

    Many chided Premier Campbell Newman last week when he appeared to devalue the separation of powers, suggesting it was “more an American thing”. … More than 250 years ago, French political philosopher Montesquieu wrote his epic Spirit of the Laws, and its liberal challenge to political tyranny everywhere later fuelled the American and French revolutions.

    … central principle – that those who make the laws should be separate from those who administer the laws, who should also be separate from those who judge us if we break those laws – still forms the cornerstone of any society hoping to call itself democratic.

    https://www.couriermail.com.au/news/opinion/opinion-separationofpowers-debate-is-not-unique-to-queensland/news-story/a2821f2083da83fda3ddf47b914b1f7e

    MT John Avery wrote a fair bit at that time – so I would include his name in any Google.

  10. Michael Taylor

    Thank you, MN. Will do so shortly.

  11. Michael Taylor

    I do believe this is the one:

    theaustralian.com.au/commentary/call-crimestoppers-we-have-a-parliament-of-dobbers/news-story/f1288e713c38bad76b578e768443f8d3

    Though I think this is an edited version. I seem to remember being a bit more hilarious than this.

  12. Jack Cade

    Mention if Joh just reminds us that that era didn’t end. The same kind of people infest the federal coalition, with the same morals and ethics and the same electorate. That they fixed the Joh
    trial jury and got away with it shows that Qld learned nothing.

  13. Andrew J. Smith

    Related has already been occurring in the US and Australia i.e. the IPA/LNP follows in legislating protections for corporate entities against class action.

    ‘Minnesota sues Exxon, Koch and API for being ‘deceptive’ on climate change. WASHINGTON (Reuters) – The state of Minnesota on Wednesday filed a lawsuit against the American Petroleum Institute, Exxon Mobil Corp and Koch Industries for what it called a decades-long campaign to deceive the public about climate change.’

    https://www.reuters.com/article/us-usa-climatechange-oil/minnesota-sues-exxon-koch-and-api-for-being-deceptive-on-climate-change-idUSKBN23V2XY

    Then the LNP moves into action on behalf of their corporate sponsors, with broad sweeping legislation not restricted to climate change, in the following example Covid-19 impacts:

    ‘Frydenberg moves to shield boards from class action lawsuits….. The changes are designed to make it harder for shareholders to sue companies if the information they provide about their prospects is proven incorrect as the coronavirus pandemic makes financial forecasting difficult….’

    https://www.smh.com.au/politics/federal/frydenberg-moves-to-thwart-shareholder-class-action-lawsuits-with-disclosure-rule-change-20200525-p54waa.html

    Supposedly different reasons but the same effect, informed by radical right libertarian roots demanding ‘freedom and liberty’ for corporate entities to do what they want and obstruct any efforts by stakeholders or civil society to hold power to account.

  14. wam

    She bases her case:
    “At all material times there has existed a significant likelihood that the climate is changing, and will
    continue to change, as the result of anthropogenic influences (Climate Change).”

    There may be a case that 23 year old kathleen bought the bonds in the full knowledge of existing conditions and with the express purpose of profiteering from that knowledge??
    As for joh (how did the old kiwi get into the conversation??) remember horvath??
    We got our home TV in 74 from QLD by microwave. It showed us the dregs of politics that was to come to us via the CLP but we were still euphoric from gough giving us our little group of elected assembly..
    Oh the memories of joh, flo and pumpkin scones, obese ministers like hinzw and petitepolice commissioner lewis what a giggle we had till satellites cut our supply.
    ps
    michael,
    I took my darling newly married and a bridesmaid to a dance in adelaide called the ‘sophisticats or something the girls wanted a dubonnet in those days a pony. 5 oz glass cost a couple of bob. The barmaid reached out for the ‘drambui and gave me two butcher glasses charged me 4 bob and I had a most pleasant night.

  15. David Evans

    Wonder what Australias’ greatest ever loud mouthed, foul mouthed scientist, philosopher, and all-round dickhead would think of this? Get rid of that black mailing coal puppet clown and there would be some hope for the country, ’til then ????????????????

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