Climate Litigation in Australia Remains Active

Australia continues to be a highly active jurisdiction for climate-related lawsuits. Since our last update in August 2023, we have seen a steady stream of suits commenced against corporations and government bodies in relation to climate issues, with a continued focus on energy and resource companies. There has been an increase in proceedings commenced by traditional owners and advocacy groups, and a continued stream of regulatory action. As detailed below, it remains the case that plaintiffs are experiencing mixed success in prosecuting their claims and obtaining their desired remedies. 

This article briefly surveys the current state of Australian climate change litigation, focusing on cases that are high-profile, or have significant precedential value. It also compares trends seen in Australia with those being observed in the United States, Europe, and the United Kingdom, and offers some observations on likely future developments in Australia.

Cases Determined by Australian Courts or Settled

The cases recently determined by Australian courts, or settled out of court, fall into three categories:

• Investor or activist led (including funded) claims designed not to extract compensation, but to obtain declaratory and injunctive relief in an effort to change corporate, government, and boardroom behavior;
• Regulatory prosecution of claims relating to the accuracy of reporting of environmental credentials and/or plans to achieve emissions targets; and
• Challenges to government authorizations to energy and resources projects, alleging unacceptable climate change, Aboriginal cultural heritage, and human rights impacts.

Two key cases in the final category were both commenced and determined in the last six months.

First, in Cooper v National Offshore Petroleum Safety and Environmental Management Authority ("NOPSEMA") (Federal Court of Australia, Proceeding No. VID647/2023), the Court ruled that NOPSEMA did not have power to approve an environmental plan related to seismic surveying works at Woodside Energy's Scarborough Gas project on the condition that Woodside undertook further consultation with interested traditional owner groups, and set aside the approval. The proceeding was commenced by a member of the traditional owner group with cultural responsibility for the Burrup Peninsula, the coastal waters of which the seismic survey was proposed to take place. Similar to Tipakalippa v NOPSEMA, the applicant claimed that insufficient consultation had taken place (to which NOPSEMA's reasons for decision in relation to the approval made specific reference) and that the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009 (Cth) did not permit a condition requiring consultation taking place after a grant of an approval, but rather required consultation to have taken place prior to an environmental plan being submitted for approval. In the wake of the decision, Woodside called for "urgent" reforms to Australia's offshore approvals process, citing the threat of delay and increased cost to its $16.5 billion Scarborough Gas project in Western Australia. NOPSEMA went on to approve a further application by Woodside in relation to the seismic survey, as well as an application for drilling works at the project. 

Second, in Munkara v Santos NA Barossa Pty Ltd (Federal Court of Australia, Proceeding No. VID907/2023), the applicant, a Tiwi Island traditional owner sought to restrain the construction of a subsea pipeline at Santos' Barossa Gas Project on the basis that Santos' approval to undertake the work did not take into account risks to cultural heritage in the proposed location of the pipeline. The applicant alleged that the construction of the pipeline would disturb areas of significance to ancestral beings of Tiwi culture ("intangible cultural heritage"), and that there was also a risk of physical disturbance to artefacts of archaeological significance relating to human occupation on the land before sea levels rose ("tangible cultural heritage"). The applicant relied on a briefing paper and the judgment in Tipakalippa as a "new" and evolving understanding of the nature of Indigenous connection to the seabed, requiring Santos to revise its plan for the works. The Court granted an injunction preventing Santos commencing the works, which Santos alleged would cause it to incur costs exceeding $1 million per day. The applicant was not required to proffer an undertaking as to damages to protect Santos from the financial consequences of the injunction.

On an expedited trial, the Court ultimately found that the applicant could not demonstrate a significant new environmental impact or risk, because: (i) the evidence of the intangible cultural heritage was not consistent among traditional owners and was marred by a lack of integrity in the cultural mapping exercise underpinning it; (ii) the evidence of the tangible cultural heritage did no more than identify a negligible chance that there may be objects of archaeological value; and (iii) it was not shown that any of the risks related to matters coming into existence since the approval of the plan, and so they were not "new" risks. The application was dismissed with costs. Significantly, the case highlights the risk to corporates of direct action by interested persons seeking to enforce environmental regulations, and the substantial costs which can arise, and which may not be recovered, when major projects are delayed by litigation.

O'Donnell v Commonwealth of Australia (Federal Court of Australia, Proceeding No. VID482/2020), a novel case in the first category (investor and activist led claims), settled in October 2023. The case concerned allegations by the applicant, representing a class of holders of exchange traded Australian Government Bonds, that the Commonwealth engaged in misleading or deceptive conduct in relation to financial services (namely the bonds), by failing to disclose the risks associated with climate change on the investment performance of the bonds. The applicant sought declarations that the Commonwealth failed to disclose the risks and an injunction restraining the promotion of the bonds until those risks were disclosed. The settlement was approved by the Court, which noted that there were "real, but until more recently, underacknowledged risks that climate change poses to Australia's financial position." While no compensation was sought or agreed to by way of the settlement, the Commonwealth agreed to publish a statement, in which it acknowledged that "Climate change is a systemic risk that presents significant risks and opportunities for Australia's economy, regions, industries, and communities. Achieving Australia's emissions reduction commitments and realizing the opportunities that accompany the transition will require significant investment by governments and the private sector" and that "[t]he economic and climatic changes brought about by climate change will have fiscal impacts."

Cases Pending Before Australian Courts

As noted in our last update, Pabai & Anor v Commonwealth of Australia (Federal Court of Australia, Proceeding No. NSD622/2021), a case concerning whether the government has a duty of care to protect Torres Strait Islanders from climate-related harm, and Australian Centre for Corporate Responsibility v Santos Limited (Federal Court of Australia, Proceeding No. NSD858/2021), a "greenwashing" case commenced by a shareholder activist organization, remain before the courts.

In December 2023, Greenpeace commenced proceedings against Woodside Energy (Federal Court of Australia, Proceeding No. NSD1520/2023). Greenpeace alleges that Woodside has engaged in misleading or deceptive conduct by claiming to have reduced its emissions from extraction and processing activities, when in reality (it is alleged) it increased its actual omissions and relied on carbon offsets to support its reduction statement. Greenpeace also alleges that Woodside's plan to achieve net zero emissions by 2050 does not take into account the emissions produced when Woodside produced oil and gas burned by end users. Greenpeace is represented by the Environmental Defenders Office, the same solicitors who acted for the applicants in the Cooper and Munkara matters discussed above, as well as the Australian Centre for Corporate Responsibility in the above-mentioned proceeding against Santos. The proceeding is listed for a first directions hearing in February 2024. 

In August 2023, climate advocacy group Australian Parents for Climate Action ("APCA") commenced proceedings against energy and gas retailer EnergyAustralia (Federal Court of Australia, Proceeding No. NSD1520/2023), claiming that EnergyAustralia has made misleading statements about the carbon neutrality of its "Go Neutral" energy products and their impact on the environment. APCA claims that the "Go Neutral" products involve EnergyAustralia purchasing "avoidance" carbon credits which do not negate the emissions from their products and do not result in a net decrease in greenhouse gas emissions. APCA seeks declarations that EnergyAustralia misled its customers, and orders requiring EnergyAustralia to issue a corrective statement and refrain from making similar statements. 

Australia also continues to see proceedings commenced by the Australian Securities and Investments Commission (ASIC) in relation to "greenwashing" allegations, including against superannuation funds and asset managers. An example of this is ASIC v LGSS Pty Ltd as trustee for Local Government Super ("Active Super") (Federal Court of Australia, Proceeding No. NSD847/2023), where ASIC commenced penalty proceedings against Active Super for misleading conduct and misrepresentations relating to claims that it would cease investment in certain sectors that were harmful to the environment and community, including gambling, tobacco, oil tar sands and coal mining, while continuing to expose its members to such investments. Separately, ASIC issued an infringement notice to superannuation fund promoter Future Super in relation to a Facebook post that included a statement that "Naysayers don't join together to move nearly $400 million out of fossil fuels" at a time when the fund had no basis to represent that its $400 million funds under management had previously been invested in fossil fuels, thereby overstating the positive environmental impact of the fund. 

Comparison with International Trends and Looking Ahead

Like the United States, the UK, and Europe, Australia has seen a relatively large number of climate-related filings recently. 

The Australian cases continue to be determined in a cautious and orthodox manner, with courts exercising a significant degree of caution when determining plaintiffs' claims (particularly those that allege novel causes of action). This approach is similar to that of the English courts in much of the climate change-related litigation determined there to date, where courts have expressed that achieving emissions reductions is a matter for government policy and that ordinary legal principles will continue to determine cases. This can be contrasted with the position in other European countries, where judges in some countries have so far been more willing to embrace novel arguments and claims. In the United States, the merits of recent climate change cases have largely not yet been decided, although US courts have recently permitted some novel cases to proceed, including an August 2023 judgment in favor of youth plaintiffs in Montana.  

Unlike the United Kingdom, the costs of pursuing environmental litigation have not been reported as a significant deterring factor in Australia, likely owing to the existence of a sophisticated and well-resourced environmental law office as well as similarly well-equipped interest groups, plaintiff law firms, and litigation funders. The Australian courts' preparedness to grant injunctions to restrain projects pending final determination without requiring plaintiffs to give an undertaking as to damages has also reduced the financial risk to plaintiffs while creating an additional risk to corporates, which cannot always recover project-delay costs, even if they defeat plaintiffs' claims in court.

Looking ahead, the pending Australian greenwashing cases are being closely watched by multiple sectors, and further regulatory enforcement actions and challenges to environmental approvals should be expected (including from regulators who are active in ESG monitoring and investigations, but have yet to bring enforcement actions in the court). In addition, if the Australian Government's proposed legislation concerning climate-related financial disclosure obligations is enacted in the form proposed, this will likely lead, in due course, to further regulatory enforcement action in relation to climate-related statements and disclosures. 

Read the full Climate Report.