For the first time, the Queensland Land Court has recommended the refusal of approvals for a mining project on the basis of unacceptable climate change impacts and incompatibility with human rights. In this note, we consider the Court's approach in Waratah Coal Pty Ltd v Youth Verdict & Ors [2022] QLC 21 to climate change and human rights.

What does this mean for industry?

Importantly, the Court made it clear that the case:

• is about thermal coal only (see for example paragraph [26]); and
• "…is not about whether any new coal mines should be approved. It is about whether this coal mine should be approved on its merits" (paragraph [1]).

It is now clear that scope 3 emissions are relevant when assessing both mining lease (ML) and environmental authority (EA) applications. This position is locked in for all future mining projects in Queensland and is supported by the State's latest environmental impact statement terms of reference, which were published earlier this year. It reflects a continuing national trend in this space, including in recent decisions of the NSW Planning Commission.

Unlike earlier Land Court decisions, the 'substitution' argument (i.e. that the mine would not result in a net contribution to global warming as the coal would displace lower quality output from other mines) was not made out on the evidence in this case. Parties to similar hearings in all jurisdictions will take learnings from this decision, in which the judge made specific comments about the evidence needed to make or contest the substitution argument. The test for future hearings will be whether the evidence can be established.

The Court examined the mine's forecast contribution to the global carbon budget for scenarios consistent with the goals of the Paris Agreement. The Court was persuaded that the mine would risk unacceptable climate change impacts in Queensland, resulting in unjustifiable limits on the human rights, particularly the cultural rights of First Nations peoples, the rights of children and the rights to property, privacy and home. While not binding on other jurisdictions, the decision marks another step in the continuum of recent decisions that have found that an individual project's contribution to climate change can amount to an unacceptable impact on human rights. It may inform arguments made in other causes of action involving the nexus between climate change and human rights, such as those examined in the decision of the Full Federal Court in Minister for the Environment v Sharma [2022] FCAFC 35 in relation to decisions made by the Commonwealth.

Journey to the Land Court

The project is a proposed 40Mtpa thermal coal mine in the Galilee Basin in Central Queensland. The Land Court's decision is the culmination of almost 15 years of project assessment. Waratah Coal applied for an ML and EA for the project in 2011, and lodged an environmental impact statement that year. The ML and EA applications were not publicly notified until 2019.

A number of persons objected to the applications, and after 25 days in hearing, on 25 November 2022, the Land Court handed down its recommendations.

In a first for objections hearings, evidence from First Nations peoples was given on country and in accordance with cultural protocols.

The active objectors in the hearing also included activist group Youth Verdict and the Bimblebox Alliance, a coalition of local landholders tasked with the conservation of the Bimblebox Nature Refuge (Bimblebox). Bimblebox would be subject to underground mining as part of the project.

Key developments in scope 3 considerations

The 2015 Paris Agreement set a long-term global average temperature goal of well below 2oC above the pre-industrial level by 2100, and to pursue efforts to limit warming to 1.5oC. It also introduced the concept of Nationally Determined Contributions (NDCs), self-determinative commitments to reduce emissions (excluding scope 3 emissions to avoid double-counting).

A key issue in dispute was the relevance of and weight to be given to the impacts of the project's scope 3 emissions. The parties accepted the precedent set in earlier Land Court decisions that scope 3 emissions could be considered in deciding to grant a ML. However, Waratah argued that scope 3 emissions should not be given much weight because doing so would subvert national and international policy frameworks for the management and reporting of scope 3 emissions, including under the Paris Agreement. The Court disagreed.

The Court noted its administrative function and that the Court must make its decision with regard to the policy framework applying to the ultimate decision maker. In this way, the Court gave substantial weight to the Queensland government's commitment to Paris Agreement-aligned targets, including the long-term temperature goal.

For the first time, the Court also found that it had jurisdiction to consider scope 3 emissions in making a decision on the EA application. Previously, the Court has limited these considerations to only those activities authorised by the EA, which do not include third party combustion of the coal. The Court found that the grant of an EA to mine coal could not be logically separated from the purpose of that product, which in this case was to produce electricity.

While stressing that this was only one factor in its decision, the Court used Paris Agreement-aligned carbon budgets to understand the consequences of project emissions, which were estimated to be 1.58Gt of CO2. It found that this was a material contribution to the remaining carbon budget, which could limit the options for achieving Paris Agreement targets and result in unacceptable impacts to Queensland people and property.

Substitution argument

In arguing that scope 3 emissions should not be determinative in deciding the ML and EA applications, Waratah relied on the 'substitution' argument — "…that the combustion emissions related to this mine (and the climate change consequences of them) do not matter. The same or a worse outcome will happen if the applications are refused. The same or a better outcomes will happen if they are approved" (at [954]). This argument asserts that the project coal would displace other lower quality and higher emissions coal.

While the Court did not dispute the relevance of the substitution argument, it did not accept that the argument was made out on the evidence. The Court accepted "there is the possibility of substitution, even in a falling market, but there is insufficient evidence to allow me to make a finding…" (at [996]). On the basis of the market evidence given on the demand for thermal coal, the Court found that while the project might displace some coal in the market, that coal was likely to be of a similar quality.

Human rights assessment

The Land Court, in exercising its administrative function under the Mineral Resources Act 1989 (Qld) and Environmental Protection Act 1994 (Qld), is a public entity under section 9 of the HRA. In making its recommendation, the Court was required to give proper consideration to relevant human rights and whether granting the applications would be incompatible with those rights.

The Court found that the mine's climate change impacts would result in unjustifiable limits on the right to life, the cultural rights of First Nations peoples, the rights of children and the rights to property, privacy and home. It found that the direct impacts on Bimblebox would result in unjustifiable limits on the rights to property, privacy and home of the Bimblebox owners.

In deciding that the limits were unjustified, the Court undertook the 'proportionality test' by considering the criteria in section 13(2) of the HRA. The common key conclusions of this exercise for the climate change limits are set out below.

What is the nature of the right?

The Court examined the scope of each right. Notably, this is the first time the right to life has been judicially considered in Queensland.

What is the purpose of the limitation?

Economic and social benefits (including profits, royalties and regional employment) and contribution to energy security in Southeast Asia. These purposes are consistent with a free and democratic society.

What is the relationship between the limitation and the purpose?

A close relationship.

Can the purpose be achieved by less restrictive and reasonably available means?

Yes. There are readily available lower emissions technologies that can provide energy security to Southeast Asia. Alternatives to the economic and social purposes were not debated.

What is the importance of the purpose of the limitation and of preserving the right?

These must be considered together. While the economic benefits are considerable, they are uncertain in a declining thermal coal market and do not fully account for impacts on Bimblebox or climate change. Private financial interest needs to be balanced against public interest.

On the balance, what is more important: the purpose of the limitation or preserving the right?

Taking into account the nature and extent of the limitation, preservation of each of the rights is to be preferred over the benefits of the mine.

In relation to the rights of the Bimblebox owners, the Court acknowledged that the impact of mining on these private rights would typically be justified through the imposition of operating conditions that limit impacts, as well as through compensation payments. However, the unique factors in this case tipped the balance in favour of protecting the rights. Those factors included that, on the evidence, the mine was unlikely to be compliant with proposed operating conditions, and the particular nature of Bimblebox meant that ordinary compensation would not be sufficient.