Australia: Re "Xstrata Coal Queensland Pty Ltd & Ors" [2007] QLRT 33

In this case, QCC sought to force Xstrata Coal to avoid, reduce or offset an estimated 140 million tones of carbon dioxide which would be emitted into the atmosphere over the next 15 years from the expansion of Newlands coal mine in Queensland.

According to Chris McGrath, Barrister for QCC, the case was significant in a number of respects:

1. This was the first case within the body of climate change litigation to allow expert evidence to be called regarding the impact of global warming.
2. Previous case law merely discussed whether greenhouse gas emissions from mining, transport and use of coal should be considered. QCC took this a step further by arguing that not only must greenhouse gas emissions be a relevant consideration in deciding whether to grant the mine extension, but that conditions must be imposed to avoid, reduce or offset these emissions.

The QCC lodged the following objections to the Newlands coal mine expansion:

1. The mine will cause adverse environmental impacts unless conditions are imposed to avoid, reduce or offset the emissions of greenhouse gases that are likely to result from the mining, transport and use of the coal from the mine (emphasis added).
2. The mine will prejudice the public right and interest unless similar conditions are imposed.
3. There are good reasons to refuse to grant the mining lease or to impose conditions, namely, to avoid, reduce or offset the emissions of greenhouse gases that the mining, transport and use of coal from the mine will cause.
4. The mine is not consistent with the principles of ecologically sustainable development because of the emission of greenhouse gases.

To support its objections, the QCC argued that each of these factors would be contravened unless conditions were imposed upon Xstrata to avoid, reduce or offset the emissions of greenhouse gases that are likely to result from the mining, transport and use of the coal from the mine. The implications of this are far reaching as it would not only require a relevant consideration of greenhouse gas emissions but would impose considerable obligations upon a coal miner to account for its own emissions and take measures to reduce them.

The QCC originally sought an order to require Xstrata to avoid, reduce or offset all emissions associated with mining the coal, plus all emissions associated with 'downstream' transport and use by customers. Perhaps realising the difficulty in justifying such an extreme measure, QCC later sought an amended order requiring only 10% of emissions associated with transport and use of coal to be accounted for.

Xstrata opposed the application to amend on the basis that the entire case was predicated on the original particulars of QCC, and until better evidence regarding the costs of avoiding, reducing or offsetting emissions becomes available, 10% will remain an arbitrary figure. It appears that the objection to the application for leave was largely a strategic move on the part of Xstrata, as QCC would have greater difficulty justifying the original conditions stated in the further and better particulars. This in effect would force QCC to argue a more extreme position.

President Koppenol refused the application to amend on the ground that Xstrata would be prejudiced by such a dramatic change, having based its submissions on QCC's original objections.

Xstrata called a number of witnesses in support of its application for a mine extension. Colin White, manager of the sustainable development division of Xstrata Coal, was asked about the amount of coal produced by the mine and the emissions that may arise during the course of operating the mine. Dr Turatti, an environmental scientist, asserted that the expansion will not increase the overall capacity of the mine as it essentially replaces the area currently being mined. The final witness, Mr Stamford, expressed his opinions regarding offset schemes. That is, offsets (such as planting vegetation) represent merely a short to medium term solution to reducing greenhouse gases. Coal companies are instead investing in significant measures to create 'clean coal energy', viewed as a more long-term solution.

The QCC led evidence in an attempt to show a causal link between human activities and climate change. A number of witnesses in particular relied on the Stern Review on the Economics of Climate Change, which recently received significant media coverage. The witnesses largely focused on the social, economic and environmental impacts of greenhouse gas emissions. Jon Norling, the director of Urban Economics in Brisbane, presented an economic analysis of emissions from the proposed extension, with much reference to the Stern Report. Ben Keogh of Australian Carbon Traders wrote a report on offset schemes and opportunities. The final witness, Emeritus Professor Ian Lowe, had written a general report on global warming from a scientific perspective. He was cross-examined by counsel for the Environmental Protection Agency (third party in the proceedings) and it was put to the witness that emissions from the mine alone would have a minimal effect on climate change, which is expressed as a global problem. The witness responded by arguing that global warming and climate change are cumulative problems, and a solution must begin at the individual level; that is, every emitter must do his or her part.

QCC conceded that the conditions sought in the original particulars were not appropriate and argued that it could not present a case based on those figures. The President decided that QCC must argue according to the terms of its original objection. As a result, QCC did not end up presenting submissions.

In its submissions, Xstrata asserted that the mining extension will replace existing operations, thus there will be no additional greenhouse gases emitted by the mine. Further, there is no suggestion on the evidence that capacity will increase in the near future.

Counsel then addressed the question of causation - that is, does there exist a causative link between the gases emitted as a result of the coal mining operations and an increase in global warming. Whilst acknowledging Professor Lowe's argument of 'cumulative effect', one cannot identify a cause and effect in relation to an individual project. The application at hand only deals with one project (that of a single mine extension), thus the underlying purpose of the conditions (ie to assist in reducing the effect of climate change) will not be satisfied. The effect of the conditions will be to impose restrictions upon an individual miner, thus discriminates against that miner. Imposition of these conditions will have little, if any effect on global greenhouse gas emissions. Instead of targeting a specific miner or industry, conditions should apply to all generators of greenhouse gas emissions in order to be effective. The Environmental Protection Act is not concerned with individual social responsibility, therefore should not be called upon to target an individual in order to solve a global problem. For the causation argument to succeed, one must find a link between the emissions of this specific mine and a significant contribution to global warming.

Counsel then alluded to the absurdity in compelling a mining company to account for emissions that occur 'downstream' in the transport and use of the coal. One can only account for emissions at the point of actual emission. Conditions imposed on the mine will not affect the release of gases in the transport of coal via train or ship, and the use of it in other countries. Such factors exist beyond the mine's control and Queensland mines should not suffer the burden of having to account for emissions occurring elsewhere, such as overseas markets.

A better approach to climate change would be to adopt a national approach where conditions imposed would apply in a uniform manner across all emission generators in Australia. This would be more effective than attempting to impose conditions on a single entity in an ad hoc manner.

The Environmental Protection Agency stated it supported Xstrata's submissions.

The Queensland Conservation Council failed in its attempt to stop the Newlands Coal Mine expansion on grounds of greenhouse gas emissions.

In his decision, President Koppenol acknowledged the assertions made in the Stern Review and the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. In addition to this, he also gave weight to criticisms published by Professor Robert Carter and Professor Sir Ian Byatt. Not only did he question the accuracy of a number of reports relied upon by QCC’s witnesses (such as the much-publicised Stern Review), but President Koppenol queried the magnitude of global warming itself, when he noted:

In response to the QCC’s submission that the Tribunal should consider ESD principles "to mitigate the serious environmental degradation caused by global warming", President Koppenol arrived at the following conclusions:

• There exists a lack of causation between the greenhouse gas emissions of the Newlands Coal Mine and any discernible harm or "serious environmental degradation" caused by global warming and climate change.
• The volume of emissions of by the mine, on a global scale, is negligible. Therefore, even complete elimination of emissions from the mine would only have a minimal effect on global warming or climate change.

In addition, President Koppenol decided not to impose any conditions to avoid, reduce or offset greenhouse gas emissions on the basis that the imposition of such conditions would "drive wealth and jobs overseas and to cause serious adverse economic and social impacts".

It was on this basis that the Tribunal did not accept the four main objections presented by the QCC. Therefore, the Tribunal made the following recommendations to the Minister for Mines and Energy:

• This additional surface area application be granted in whole without any of the conditions sought by the objectors.
• The related environmental authority (mining lease) application be granted on the basis of the draft environmental authority for the application, without any of the conditions sought by the objectors.

The QCC has since expressed its disappointment with the decision, but vowed to continue its campaign. QCC coordinator Toby Hutcheon remarked that future applications would probably be for the offset of only 10 percent of greenhouse gas emissions from the mining, transport and use of coal.² He also expressed his disappointment at the tribunal’s decision to refuse QCC’s amendment, requested before the hearing, to reduce the offset figure from 100 percent to 10 percent.

In contrast, the Queensland Resources Council have applauded the decision and acknowledged its status as a "powerful precedent".³ Xstrata Coal also said it was pleased with the decision, with spokesman James Rickards observing the need to "focus on an industry response and … (ensure) that all sites continue to meet environmental standards".⁴

© Hopgood Ganim

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