Laura MacKay from Lawyers for Climate Change. (Photo supplied)
The government’s attempt to shut down Mike Smith’s case against large emitters of greenhouse gases is progressing swiftly through parliament.
The Climate Change Response (Tort Liability) Amendment Bill is now before the Justice Select Committee, and the period for public submissions closes tomorrow morning, after being open for just 10 days.
If passed, the bill would stop civil tort claims against greenhouse gas emitters for climate-related harm. Torts are part of the common law, meaning they are developed over time by the courts to address wrongful actions.
A successful tort claim in this context could have allowed a person or community that has suffered harm or damage from climate change, for example, from flooding and erosion, to hold emitters accountable.
But the government wants to close off that option, as well as put an end to Mike Smith’s ongoing case against Fonterra and others.
Here, Laura MacKay from Lawyers for Climate Action, lays out the background to the proposed bill, the issues it raises, and how to make a submission.
Mike Smith’s claim is against six New Zealand corporate defendants — Fonterra, Genesis Energy, Dairy Holdings, New Zealand Steel, Z Energy and BT Mining.
The Supreme Court says it is “beyond question” that these defendants are either very substantial emitters of greenhouse gases or very substantial suppliers of fossil fuels — together they make up a third of New Zealanders’ emissions.
Smith’s case against these companies puts forward two arguments, which are both based in tort law.
Public nuisance and novel climate tort
Public nuisance is a tort that’s been recognised by the courts for centuries. In short, it is an act or omission that substantially, materially and unreasonably interferes with public rights.
Traditionally, public nuisances have been recognised in cases such as factories which emit smells or noise and cause harm to the community around them, or in the obstruction of highways or rivers.
Using the same principles, Mr Smith argues that the tort of public nuisance can also be applied to greenhouse gas emissions. He says that emissions from the defendants have been part of ongoing, dangerous, human-caused interference with the climate — and that this interferes with a range of rights, including the right to public health, public safety, public comfort, public convenience, public peace, and a safe and habitable climate system.
Mr Smith says these companies know their activities have contributed to climate change, yet despite that knowledge, they’ve continued to emit greenhouse gases.
He is also proposing a novel climate tort. A key principle of the common law legal system is that where there is a wrong, the law should provide a remedy. Therefore, the courts can develop new torts to adapt to changing social circumstances. Mr Smith argues that a new tort should be recognised which involves a duty to cease materially contributing to damage to the climate system.
Finally, he argues that tikanga Māori should inform how the common law develops in relation to these causes of action, a point which was accepted by the Supreme Court.
Mr Smith is not seeking a payment through damages. Instead, he primarily wants the emitters to be required to reduce their emissions, eventually achieving zero net emissions by 2050.
What’s happened in the case so far?
In 2020, the companies applied to strike out the claim before trial, arguing it was legally untenable. A strike-out application asks a court to end a case at the outset, without hearing the evidence, on the basis that the claim could not possibly succeed. The High Court struck out the claims in public nuisance and negligence, but refused to strike out the proposed new climate tort.
The Court of Appeal struck out the claim entirely, reasoning that climate change “simply cannot be appropriately or adequately addressed by common law tort claims” and instead called for “a sophisticated regulatory response at a national level supported by international co-ordination”.
But in a unanimous judgment issued in February 2024, the Supreme Court overturned the Court of Appeal decision and reinstated all of Mr Smith’s claims.
This does not mean that the Supreme Court decided that Mr Smith’s case would succeed — only that it deserved to be tested at a full substantive trial with evidence presented. A full substantive trial is scheduled for April 2027.
The Climate Change Response (Tort Liability) Amendment Bill
So what does the government’s new bill propose?
It would amend the Climate Change Response Act 2002 (CCRA), which is New Zealand’s climate framework law, by inserting a new part that bars all tort claims against greenhouse gas emitters.
In short, the bill proposes to protect emitters from accountability for damage caused by their emissions.
The bill lists examples of the types of damage that will be barred, including:
- climate change-related risks or threats to the continuation of a safe and habitable climate system;
- endangering or impairing the life, safety, health, property, or comfort of the public;
- interfering with, or obstructing, the public in the exercise or enjoyment of public rights; and
- harm, impairment, or loss, or a conception (including, without limitation, a tikanga Māori conception) of harm, impairment, or loss, that is neither physical nor economic.
This includes situations where emissions cause damage to property (such as homes, farms, roads, and other infrastructure) or are causing “threats to the continuation of a safe and habitable climate system” or “endangering or impairing the life, safety, health, property or comfort of the public”.
The bill also has a broad definition of which emitters are protected. It includes corporations, ministers of the Crown and all government departments, and foreign-owned entities.
In substance, this means that the bill protects all emitters — including foreign-owned and foreign-controlled entities — at the expense of New Zealand tax and ratepayers, property owners, businesses, farms, iwi and local communities, who will be left with no ability to seek compensation or otherwise hold those responsible for climate-related harm and damage accountable.
The bill expressly states that the prohibition applies to Smith v Fonterra, so Mike Smith’s case could not proceed to the full trial scheduled for April 2027.
What is the justification for this bill?
The government has advanced two primary justifications for this bill.
First, it argues that New Zealand already has some legislation relevant to greenhouse gas emissions, so any finding of tort liability would “create a parallel and contradictory regime” to that legislation.
There are a few key points as to why this justification does not add up.
First, the existing CCRA doesn’t address the issues Mr Smith wants the courts to address. There is no mechanism within the New Zealand legislative framework that identifies who should be responsible for remedying climate-related harm.
Nor does the present legislative framework require emitters to reduce their emissions. Rather, the New Zealand Emissions Trading Scheme (NZ ETS) “merely facilitates state-introduced market signals via a trading scheme in emissions units.”
Second, the NZ ETS is not driving meaningful reductions in gross emissions. This is for a variety of reasons, including that more than half of New Zealand’s emissions are excluded from the NZ ETS, there is no effective cap on the number of units available under the ETS due to forestry, and some companies are allocated “free” units.
Therefore, any potential finding of tort liability in Smith v Fonterra would not create a parallel regime but would instead fill gaps in the legislative framework. This has been the function of tort law for hundreds of years.
When a wrong occurs, tort law can help address it. If the common law is barred from addressing a wrong, and no legislative alternative exists, the relevance and legitimacy of the law are at risk.
The government also claims that ongoing proceedings are causing business uncertainty. The bill’s objective is therefore to “give businesses and investors legal clarity and confidence” by ensuring companies operating in New Zealand understand their greenhouse gas obligations.
However, as Ministry of Justice officials noted multiple times in their advice to the Minister of Justice, and then repeated in the Regulatory Impact Statement, there is no evidence base for the assumption that the litigation is creating uncertainty due to a lack of consultation with businesses.
Instead, officials advised the government that a statutory prohibition could in and of itself create uncertainty because a future parliament “may simply repeal it”, whereas allowing the court process to continue would “clarify if there are any legal duties under the common law and provide greater long-term certainty”. Because the bill does not propose a statutory alternative to allocate responsibility for climate-related damage, the bill also creates considerable uncertainty for communities, iwi, property owners and others as to who will remedy climate-related damage.
Wider issues with the bill
While parliament is supreme, that power has always been tempered by constitutional principles. The bill breaks basic constitutional principles. Because it reaches back in time to end a case already underway, it undermines the certainty that everyone should be able to rely on the law as it stands — the rule of law.
There is another long-standing constitutional principle, called the “separation of powers”. One aspect of this principle is that parliament does not interfere in cases that the courts are actively hearing. Yet this bill does exactly that, effectively deciding the case in the companies’ favour before the evidence is heard.
It also cuts across Māori rights and the Treaty. The bill blocks the courts from developing the role of tikanga Māori in this area and bars claims based on a tikanga understanding of harm. Māori were not consulted in developing the bill, which is also likely a breach of the Crown’s duty to act in good faith.
It further raises serious questions about New Zealanders’ rights and New Zealand’s international commitments. The bill cuts across rights protected by the New Zealand Bill of Rights Act, including the right to bring civil proceedings against the Crown, and the rights of minorities to enjoy their culture.
In our view, it is also potentially inconsistent with the right to life, as it would bar claims about “threats to the continuation of a safe and habitable climate system” and “endangering or impairing the life, safety, health, property or comfort of the public”.
The bill is also likely inconsistent with New Zealand’s international commitments, including the rights to a fair hearing, an effective remedy, life, and the rights of minorities, including Indigenous culture as set out in the International Covenant on Civil and Political Rights.
There are further issues with corporate lobbying and a lack of transparency. As has been extensively reported, there was previously undisclosed corporate lobbying by Z Energy and Fonterra to the Prime Minister’s Office, which was not disclosed in responses to Official Information Act requests.
There are ongoing investigations into the conduct of staffers in the Prime Minister’s Office. This lack of transparency from the Prime Minister’s Office compounds concerns about the bill’s intent and rationale, and also raises questions about why there is such a short select committee process.
Conclusion
It’s difficult to conceive of a broader framing of the scope of protected conduct, or the scope of immunity conferred, when the proposed bill is read as a whole.
It’s clear that the justifications for the bill don’t have any real basis, and that it would have significant impacts on New Zealand’s constitutional conventions, protected rights, and international obligations.
Why the government is insisting on proceeding with this bill against clear opposition, including advice from its own officials, is a question worth asking.
Lawyers for Climate Action strongly opposes the bill in its entirety. If the bill is to proceed in some form, then a full consultation process should be undertaken, as all New Zealanders are being deprived of a potential legal right.
- The deadline for public submissions on the bill is 9am on Monday, July 13. Anyone can submit to the Justice Select Committee. You can read the full text of the bill here, which includes an explanatory note from the government. Submissions can be made through this portal. Lawyers for Climate Action has also created a submission hub online which includes other submissions, non-legal explainers, and other helpful resources about the Bill.
Laura is the acting executive director of Lawyers for Climate Action. She has worked in environmental and climate law and policy in New Zealand and the European Union and was the recipient of a Fulbright Scholarship. Lawyers for Climate Action uses legal pathways to accelerate climate action, hold governments and polluting companies to account and to ultimately create systemic change.
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