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Focus: Alpha Coal Mine clears further hurdle as climate change challenge is dismissed

5 October 2016

In brief: Last week, the Queensland Court of Appeal upheld the decision of the Queensland Environment Minister to grant an environmental approval for the proposed Alpha Coal Mine in Queensland. In doing so, the court dismissed the challenge of an environmental interest group based on greenhouse gas emissions from the downstream transportation and burning of coal to be mined at Alpha. Partner Ben Zillmann (view CV), Senior Associate Giselle Kilvert and Associate David Thorpe consider the Court of Appeal's decision and its impact on the future legal challenges to resources projects in Queensland.

 
 

How does it affect you?

  • This decision further clarifies the relevance of greenhouse gas emissions from the transportation and burning of coal offsite (known as 'scope 3 emissions') to the assessment of mining lease (ML) and environmental authority (EA) applications in Queensland.
  • The Court of Appeal has now settled that scope 3 emissions are not relevant to most aspects of the Land Court's assessment of whether a ML should be granted under the Mineral Resources Act 1989 (Qld) (the MR Act). To the extent that scope 3 emissions are relevant to the Land Court's assessment of ML and EA applications for mining activities, the Court of Appeal has confirmed the validity of a Land Court determination that the public right or interest will not be prejudiced by the grant of project approvals where it was found, as a matter of fact, that greenhouse gas emissions would not decrease if approvals for the mine were refused (because downstream coal users, such as a power station, will still burn the same amount of coal – just obtained from another source). Accordingly, factual evidence in future objection proceedings will be critical to the outcome of any climate change objections.
  • Proponents of large-scale resources projects should ensure that they factor in the prospect of protracted legal challenges to their project schedule, as this latest decision comes more than three years after the initial Land Court objection proceedings were commenced. 

Background

As reported previously in our Client Update: Supreme Court win for Alpha Mine bolsters future mining applications, this case concerned Hancock Coal's proposed Alpha Coal Mine in the Galilee Basin.

Hancock's applications for a ML and EA for the mine were the subject of Land Court objection proceedings in 2014. Objections in those proceedings related, among other things, to the climate change impacts of the project.

Following the objections hearing, the Land Court made alternative recommendations to the Queensland Ministers for Environment and Mining in respect of Hancock's applications, including that the EA application be granted subject to conditions unrelated to greenhouse gas emissions. In response to the Land Court's recommendations, the Queensland Environment Minister issued an EA for the Alpha Mine project.

One of the original objectors, Coast and Country Association of Queensland Inc (CCAQ), sought judicial review of both the Land Court's recommendations and the Minister's subsequent decision to issue the EA on various grounds, including in relation to climate change. CCAQ's judicial review application was unsuccessful. The recommendations of the Land Court and the decision of the Minister were upheld by the Supreme Court in September last year.

CCAQ then launched an appeal of the Supreme Court's decision. The Court of Appeal's latest decision is the outcome of that challenge.

Grounds of challenge

The grounds of appeal raised by CCAQ centred upon the contention that environmentally harmful emissions would result from the transportation and burning of coal after it was mined by Hancock under the authority of the ML and EA being sought.

CCAQ argued that scope 3 emissions should be taken into account in the assessment of the ML and EA applications pursuant to various provisions of the MR Act and the EP Act, including those that required the Land Court to consider:

  • whether there will be any adverse environmental impact caused by [the proposed mining] operations and, if so, the extent thereof (s269(4)(j), MR Act);
  • whether the public right and interest will be prejudiced by the ML grant (s265(4)(k), MR Act);
  • any good reason has been shown for a refusal to grant the ML (s265(4)(l), MR Act); and
  • the 'standard criteria', which include 'the principles of ecologically sustainable development as set out in the National Strategy for Ecologically Sustainable Development'; 'any applicable environmental impact study, assessment or report'; and 'the public interest' (s223(c), EP Act).

CCAQ argued that the Supreme Court erred in construing the MR Act and the EP Act in a manner that allowed the Land Court, when considering whether or not to recommend the grant of the ML and EA, to give zero weight to the environmental harm and adverse impacts caused by scope 3 emissions produced in transporting and burning any coal proposed to be mined. 

In deciding the matter:

  • each of the judges of the Court of Appeal (being President McMurdo and Justices Fraser and Morrison) upheld the Land Court's interpretation of s269(4)(j), namely that it is outside the Land Court's jurisdiction to consider the impacts of activities beyond those carried on under the authority of the proposed ML, such as the impact of scope 3 emissions, on the basis that those impacts are not 'caused by' the relevant 'operations';
  • Justices Fraser and Morrison did not decide whether s269(4)(k) or (l) of the MR Act or s223(c) of the EP Act permitted or required consideration of scope 3 emissions1, but held that, in any event, if scope 3 emissions were relevant under those provisions, that would not affect the result of the appeal because the Land Court took scope 3 emissions into account in a way which is not amendable to statutory review on either view of the legislation. President McMurdo held that, contrary to the Land Court's interpretation of s223(c), the Land Court, in considering objections to an EA for mining activities, must consider scope 3 emissions. Her Honour accepted, however, that her construction of s223 has no effect on the result of the appeal as the Land Court, in determining the objections, made findings of fact that the proposed mining would not detrimentally affected global greenhouse gas emissions. (The Land Court had determined that a refusal to grant the ML and associated EA would have no impact on global greenhouse gas emissions, as the end users of coal to be mined from Alpha would simply obtain coal from another source, meaning there would be no difference in the amount of coal burned and emissions released). Those factual findings are not amendable to statutory review.

What does it mean?

This decision is the latest in a long line of legal challenges, brought on climate change grounds, in respect of large-scale coal projects in Queensland, including the Wandoan Coal Project2 and, most recently, Adani's Carmichael coal mine3 (as reported in our Client Update: Climate change challenge against Adani's Carmichael Coal Mine dismissed).

This decision expands jurisprudence on the operation of key legislative provisions for project approvals in that State, and offers some comfort to project proponents. The State's highest court has now confirmed that the climate change impacts of scope 3 emissions are not relevant to many aspects of the Land Court's assessment of ML and EA applications. To the extent that scope 3 emissions are relevant to the Land Court's assessment, each of the deciding members of the Court of Appeal emphasised the importance of factual evidence as to the relative climate change impacts if a project does not proceed. Proponents of large-scale resources projects should take this into account in responding to objections associated with such emissions.

The decision also underlines that legal challenges of this kind are confined to questions of law, not the merits of earlier decisions. Accordingly, the Court of Appeal will not 'step into the shoes' of the Land Court or a Minister in determining an appeal from an application for judicial review.

Next steps

CCAQ have 28 days to make an application for leave to appeal to the High Court of Australia.

Allens will continue to monitor and report on any significant developments with respect to this matter.

Footnotes
  1. The Court of Appeal noted the Land Court's view that scope 3 emissions are relevant to its assessment of a ML under s269(4)(k) of the MR Act, but did not specifically uphold or overturn that conclusion.
  2. Xstrata Coal Queensland Pty Ltd & Ors v. Friends of the Earth – Brisbane Co-Op Ltd & Ors, and Department of Environment and Resource Management [2012] QLC 013.
  3. Australian Conservation Foundation Incorporated v Minister for the Environment [2016] FCA 1042.

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