Alert

Who does this affect?

Proponents and financiers of major projects and new developments which may have climate change impacts

What do you need to do?

Properly assess greenhouse emissions and audit development approval processes to minimise legal risk from challenges to the project

Authors
Rebecca Dixon  
Senior Associate

Belinda Walker  
Solicitor

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Rebecca Dixon  
Senior Associate
T +61 2 9296 2287

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Sydney
Dominic Bortoluzzi  
David O'Donnell  

Melbourne
Louis Chiam  
Stephen Davis  

Perth
Laurence Iffla  

Brisbane
Matthew Austin  

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Anvil Hill Project Watch Association Inc v Minister for the Environment and Water Resources & Anor [2007] FCA 1480

On 20 September 2007, the Federal Court of Australia dismissed an application for judicial review of a decision made by the Minister for the Environment and Water Resources under the Environment Protection and Biodiversity Conservation Act 1999 ("EPBC Act"). The decision of the Minister related to a project to construct and operate an open-cut coal mine and ancillary facilities in the Hunter Valley, NSW, known as the Anvil Hill Project.

The Minister had decided that the project was not a "controlled action" under the EPBC Act. A consequence of this decision was that no environmental approval at the Commonwealth level would be required to construct and operate the mine. The Anvil Hill Project Watch Association ("the Applicant") sought to challenge the Minister's decision on a number of grounds, including that the Minister had not properly assessed and considered the adverse impact of greenhouse gas emissions arising from the Anvil Hill Project. The application was dismissed by Stone J who held that the Minister had not made any errors of law in deciding that the project was not a controlled action.

What does it mean for you?

Development proposals for major projects will not necessarily be subject to the Commonwealth environmental assessment and approval process under the EPBC Act just because they may produce additional greenhouse gases.

What is the issue?

Projects which involve greenhouse emissions have been under increasing scrutiny by environmental groups and the wider community. The Anvill Hill Project has already been the subject of several high profile legal challenges, including both concluded and pending proceedings in the NSW Land and Environment Court challenging approval processes undertaken by the NSW Minister for Planning. The first such proceedings in the Land and Environment Court resulted in findings that the environmental impact assessment of the proposed mine was inadequate due to the Director General of the Department of Planning's failure to properly assess the impact of greenhouse gas emissions. Greenhouse gas emissions arising directly from the project and its electricity use had been assessed, but the assessment failed to properly detail the indirect impacts of burning the coal that would be extracted from the mine.

This left considerable uncertainty and significant risk for proponents of projects with climate change impacts. Key issues facing such projects included the extent to which an environmental assessment must consider the "downstream" or indirect greenhouse impacts of the project.

Other difficulties which the Courts have been grappling with include the weight to be given to direct and indirect greenhouse emissions once they have been properly assessed. What one project will have a significant impact on global warming when compared to national or global annual carbon emissions? How does the Court take into account the scientific complexity?

In the Anvil Hill context, the uncertainty in this area then moved to the Commonwealth environmental assessment level.

On what grounds was the Minister's decision challenged?

The Applicant challenged the Minister's decision on the following key grounds:

• that the Minister erred in law in finding that the project was not a controlled action under the EPBC Act in that the Minister misconstrued or applied the wrong test under the Act, or failed to take into account a relevant consideration or took into account irrelevant considerations; and
• that the project was in fact a controlled action (and this was a jurisdictional fact which the Court was required to form its own opinion on). This is a key risk for proponents, because a jurisdictional fact would mean that a decision of the Minister is open to review on the merits by the Court.

When determining whether a project is a "controlled action", and hence whether Commonwealth approval is required, the Minister is to consider the likelihood of the project having a significant impact on a matter of national environmental significance. In this case, the Applicant argued that the project would have an adverse impact on the following matters of national environmental significance:

• the Great Barrier Reef;
• the Greater Blue Mountains World Heritage Area;
• the Painted Diuris ( a threatened species of orchard); and
• the White Box - Yellow Box - Blakely's Red Gum Grassy Woodland and Derived Native Grassland (a listed ecological community).

What were the findings?

The Court held that, under the EPBC Act, whether something is a controlled action is a decision the Minister has to come to after weighing up the relevant considerations. It is not a jurisdictional fact.

The Minister accepted that greenhouse gases in the atmosphere are affecting the global climate. However, the Minister had found that the additional greenhouse gases arising from the proposed mine would not be a substantial cause of climate change affecting matters of national environmental significance. The proposed mine would contribute only a relatively small amount to total global emissions (approximately 0.04% of the current annual global greenhouse gas emissions). Accordingly, a link between the additional greenhouse gases arising from the proposed mine and an increase in global atmospheric temperature is not likely to be identifiable at all.

Justice Stone rejected all grounds of appeal and the application was dismissed.