On 8 February 2019 Chief Justice Preston of the Land and Environment Court handed down his judgement in Gloucester Resources Limited v Minister for Planning  NSWLEC 7.
The case involved the refusal of development consent to an open-cut coal mine (Project) at Gloucester in the upper Hunter Valley of NSW on a number of grounds, including the impacts of the mine on climate change and the social impact of mining on the community.
The case illustrates that proponents seeking consent for new major projects, or modifications of existing projects, with ‘material’ greenhouse gas emissions across all industries in NSW should carefully assess climate change impacts, particularly if the proposal is not ‘carbon neutral’.
In December 2012, Gloucester Resources Limited (GRL) lodged a DA for consent to carry out the Project. The DA was subject to a lengthy planning process and GRL lodged an amended DA in August 2016.
Due to objections from Mid Coast Council and the public, the then Planning Assessment Commission (Commission) was asked to determine the DA. On referral to the Commission, the NSW Department of Planning and Environment (DPE) recommended refusal of the DA.
Importantly, the Minister did not previously refer the Project to the Commission for merits review. Rather, the Commission held a ‘public meeting’ and received further submissions on the Project as part of its determination process.
Following this, the Commission refused the DA on various grounds, including incompatibility with applicable land use zones under local planning controls, significant visual impacts, potential risks associated with increased noise and air quality impacts and the Project was not in the public interest.
Following the Commission’s decision, GRL lodged a merits appeal with the Land and Environment Court. Subsequently, Groundswell Gloucester (Groundswell), sought to be joined to the proceedings.
Groundswell is a non-profit community group formed by a group of Gloucester residents concerned with the environmental, social and economic future of the Stroud Gloucester Valley. Groundswell Gloucester strongly opposed development of the Project.
On 23 April 2018, the Land and Environment Court ordered that Groundswell be joined to the proceedings brought by GRL. This enabled Groundswell to lead expert evidence of the mine’s detrimental impact on climate change and on the social fabric of Gloucester.
Climate Change impacts
Groundswell argued that the Project should be refused on the basis that both the direct and indirect greenhouse gas (GHG) emissions from the Project would be inconsistent with Australia’s commitments under the UNFCCC and the Paris Agreement.
Professor Steffan, an earth systems scientist at the Australian National University gave evidence on behalf of Groundswell that in order to meet this global commitment GHGs would need to peak by 2020 and global warming would need to be limited to 2 degrees thereafter. In the Professor’s view, this goal could not be achieved while continuing to develop new fossil fuel projects.
Whilst GRL’s expert, Dr Fisher, did not dispute that climate change was real or that GHGs must be reduced to limit a global temperature rise to 2 degrees, he formed the opinion that the requirement under the Paris Accord did not require an embargo on fossil fuel development. On this basis GRL proposed alternative solutions to meet the required emission reduction targets, which do not require the prevention of coal mining. One such alternative to meet commitments was increasing the rate at which carbon is extracted from the atmosphere through ‘carbon sequestration’ and through the preservation of carbon sinks.
Further, GRL argued that ‘scope 3’ emissions, which are indirect emissions arising from sources not owned or controlled by GRL (such as from a third-party purchaser burning coal), should not be considered when assessing the Project’s impact, because Australia should not be held responsible for emissions caused by the burning of coal in other countries.
The final argument by GRL was that most of the coal produced by the Project would be ‘coking coal’. This is an essential component in the making of steel, with limited alternative uses. GRL argued that this important purpose justifies the approval of the Project despite any adverse climate impacts.
Upon the courts review, Chief Justice Preston accepted that Scope 3 emissions should be considered when assessing the Project’s impact, given they constitute ‘downstream’ emissions pursuant to clause 14(2) of the Mining SEPP. Downstream emissions in this context mean the emissions caused by burning the coal produced by the mine by end users. He also found there to be a casual link between the Project and climate change consequences as all of the Project’s direct and indirect GHG emissions would contribute ‘cumulatively’ to total GHG emissions.
As there was no specific proposal to offset the Project’s impacts by removing GHGs from the atmosphere, the argument regarding carbon sequestration as an alternative measure was rejected.
The argument that coking coal is critical for the production of steel was overstated by GRL, as the demand for coking coal from steel production in Australia could be met by existing and approved mines.
Other negative impacts on existing uses
The primary arguments against approval of the Project centred around clause 12 of the Mining SEPP. This required the consent authority to consider the compatibility of the proposed mine with other land uses in the vicinity.
Accordingly, the judgment carefully weighed the Project’s benefits against significant adverse visual, amenity and social impacts, including significant impacts on existing, approved and likely land uses in the vicinity of the mine. Chief Justice Preston considered various adverse factors, including:
- Visual impacts: high visual contrast with surrounding landscape, intrusive night lighting, changes to the visual character and other factors, contributing to a high visual impact. The Project would be incompatible with the rural character of the land and the residential and rural-residential, agricultural and tourism uses in its vicinity;
- Amenity impacts: noise and dust impacts, contributing to social impacts;
- Social impacts: The Project was likely to have major negative social impacts including impacts on the composition, cohesion and character of the community and local people’s sense of place, adverse impacts to the culture and Country of Aboriginal people, and issues of distributive inequity which would not be adequately addressed by way of the mitigation measures proposed by GRL;
- Public benefits: the alleged public benefits of the Project (suggested by GRL to include an economic benefit to NSW of $224.5 million over the life of the mine) were substantially over-stated and did not outweigh either the public costs of the proposed mine or the public benefits of the existing, approved and likely preferred uses in the vicinity of the Project, if those uses were left unaffected by the Project. Significantly, while the benefits of the Project would be present only for the life of the Project, the negative impacts would endure.
Take home message
The increasing recognition of causative links between fossil fuel developments and climate change mixed with Australia’s increased commitment to international climate accords has led to social and climate change impacts being factored into the decision-making process when deciding to grant development consent for large projects. This is particularly relevant for large fossil fuel dependent developments.
The consent authority now bears a real responsibility to decide whether greenhouse gas emissions of each development are acceptable, and if not, if it is a sufficient reason to refuse consent.
Large developments are now on notice.