21 October, 2015
In an important win for the resources industry, the Queensland Supreme Court has endorsed an approach for assessing coal mining approvals which effectively gives no weight to greenhouse gas emissions from the burning of coal. The Court also confirmed that the granting of an environmental authority can be made conditional on the later granting of water licences.
It further found that the Land Court of Queensland has a discretion to make alternative, potentially conflicting, recommendations about mining leases and environmental authorities. The decision shifts the ground in the ongoing fight between environmental activists and miners about expanding coal mines.
The Supreme Court of Queensland has ruled in favour of a mine proponent when considering the role of the Land Court in the applications process for new mining leases and environmental authorities (Coast and Country Association of Queensland Inc. v Paul Anthony Smith, Member of the Land Court of Queensland & Ors [2015] QSC 260 (4 September 2015)).
Douglas J considered that the Land Court had significant discretion in framing its recommendations following such hearings – allowing recommendations in the alternative, and recommendations which permit the further consideration of potential issues about groundwater through later water licence application processes.
Douglas J endorsed the approach of the Land Court to global greenhouse gas emissions. This allows the Land Court to give consideration to the issue, but to conclude that a new thermal coal mine in Queensland would not ultimately change overall global emissions. The Land Court could therefore, as it has done to date, ultimately give the issue no weight when recommending the approval of a new coal mine.
A short history of the treatment of global warming issues in Queensland
The decision comes after a series of decisions about climate issues arising out of approvals for coal mines in Queensland.
In 2006 the Federal Court dealt with a challenge to coal mine approvals for the Sonoma and Isaac Plains Mines under the Environmental Protection Biodiversity Conservation Act 1999 (EPBC Act) over climate change.
The position taken by the decision maker was that the burning of coal from one of the proposed coal mines might arguably cause an impact on a protected matter under that legislation (the Great Barrier Reef and certain wetlands), but he rated that likelihood as insignificant. The judge doubted the extent to which the burning of coal, its contribution to overall emissions, in turn its part in global warming, and that impact on protected matters had the necessary connection required by the legislation to the mining of the coal from those specific mines.
The Land and Resources Tribunal of Queensland considered climate change arguments in 2007. The Member made a factual finding that it had not been demonstrated that the coal from the mine would impact on global warming or climate change. The recommendation was successfully appealed on grounds which did not directly challenge this finding.
A different approach was taken in 2012 by the Land Court of Queensland in Xstrata Coal Queensland Pty Ltd v Friends of the Earth – Brisbane Co-Op Ltd3 Interpreting the requirements for State approvals for the Wandoan Mine, President MacDonald as part of assessing public interest accepted that global coal markets were demand driven. If coal was not supplied from a Queensland mine for burning outside Australia, it would be sourced from somewhere else in the world. There would be no net effect on overall greenhouse gas emissions. Coal would be burned, either way.
The path to the ruling by the Supreme Court
The Mineral Resources Act 1989 (Qld) and the Environmental Protection Act 1994 (Qld) both provide for the Land Court of Queensland to hear, in an adversarial setting, objections to applications for mining leases and environmental authorities. The Land Court considers a number of statutory criteria. A recommendation about the applications is made by the Land Court to the respective Ministers charged with making the ultimate decisions on the applications. The relevant Ministers then consider the recommendation (among other material), and make a final decision.
Hancock Coal Pty Ltd has gone through such a process for its proposed Alpha Mine in the Galilee Basin. The objections before the Land Court raised a range of issues, but most notably questions about the impacts of the project on groundwater and on global greenhouse gas emissions from the burning of the coal from the mine.
Member Smith of the Land Court made his recommendation on 8 April 2014 (Hancock Coal Pty Ltd v Kelly & Ors (No. 4) [2014] QLC 12).
In relation to both the mining lease and the environmental authority he alternatively recommended:
- they be rejected and refused respectively; or
- they be granted on conditions, including most relevantly a condition that the mining lease and the environmental authority be subject to Hancock Coal obtaining water licences under the Water Act 2000 (Qld).
In his reasons Member Smith expressed concerns about the evidence before him about the impacts on groundwater.
In relation to the greenhouse gas arguments, he found that the burning of the coal was not something required to be considered by the Court as part of the statutory criterion relating to "environmental impact", but did fall to be considered under the legislation through the public interest criteria. In the event he was wrong in relation to that, he was satisfied that world coal markets are demand driven, such that, if the coal from the Alpha Mine was not burned, coal from another mine would be used in its place. In effect there would be no change to overall world emissions as a result of the Alpha Mine. The issue was therefore not given any weight in making the recommendation.
Coast and Country Association of Queensland Inc. (CCAQ), an objector in the Land Court, sought judicial review of that recommendation in May 2014.
Before the hearing of that application, the Minister for Environment and Heritage Protection made a decision to issue the environmental authority. The grant was conditional on obtaining a water licence, one of the alternatives recommended by the Land Court. In October 2014 CCAQ also sought judicial review of that decision on substantially the same grounds as its challenge to the Land Court recommendation.
An indication from the Minister for Natural Resources and Mines about the conditions he would impose on the mining lease was also challenged. Ultimately the Supreme Court did not have to make a decision about that representation.
Arguments and outcomes
1. An initial concern with the recommendation of Member Smith was its “either/or” nature. Did the legislation permit the Land Court to offer a range of possible options to the Ministers?
Douglas J in the Supreme Court held that the ability of the Land Court to make recommendations should not be read narrowly. A recommendation could be made in the form adopted by Member Smith.
2. CCAQ further contended that the Land Court was required to find that there was a “net benefit”, weighing up the benefits to the mine against the impact on the environment and all the statutory criteria, before it could make a positive recommendation.
Douglas J rejected this contention, noting that there was no additional test required by the legislation.
3. A recommended condition requiring Hancock Coal to obtain a water licence was also attacked as lacking finality. It was said the Land Court effectively deferred consideration of a central issue about whether the environmental authority should be issued.
That argument was rejected.
4. The Supreme Court was also asked to consider whether the approach taken by the Land Court on greenhouse gas emissions was correct.
It confirmed the approach and reasoning of the Land Court. As a matter of statutory construction, issues of climate change arise under the public interest criteria, not under the criterion directed to the environmental impact. The latter criterion focuses more narrowly on the activities of the miner in the operation of its mine.
Whilst ultimately in each case it is a question for the Land Court to be satisfied on the evidence, it was also open for it to conclude that the worldwide demand for coal is such that there would be no net change to global emissions as a result of a new mine in Queensland.
The Ministers were also held to be able to grant the environmental authority (and though it has not yet been granted, also the mining lease) on the condition that the water licence application process is also followed.
The way the Court dealt with this final issue represents a sensible balancing of the requirement to follow separate approvals processes which consider the same issue, in this case the impact on groundwater.
The challenge to the decisions of the Land Court, the Minister for the Environment and Heritage and the Minister for Natural Resources and Mines therefore failed. CCAQ was also ordered to pay costs
Where to next in the fight over coal?
The decision shifts the ground in the ongoing fight between environmental activists and miners about expanding coal mines.
To date it has been common for environmental activists to object to the development of new mines on grounds of global climate change, despite earlier rulings on the point by the Land Court of Queensland. The Land Court has so far adopted a consistent approach to those objections. The Supreme Court has now confirmed that approach which leaves little room for this ongoing debate.
The Supreme Court's endorsement of conditional recommendations and approvals is also a welcome confirmation of an approach to the overlapping approvals processes required for mining activity. In particular, the potential for some water related issues to be considered in greater detail under the water licence regime reduces the level of duplication within the approvals processes.
For further information, please contact:
Gavin Scott, Partner, Ashurst
gavin.scott@ashurst.com
