Exide Technologies Ltd v The Attorney-General

JurisdictionNew Zealand
CourtHigh Court
JudgeMiller J
Judgment Date16 Sep 2011
Neutral Citation[2011] NZHC 1127
Docket NumberCIV-2011-485-1549

[2011] NZHC 1127

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-1549

Under the Judicature Amendment Act 1972

BETWEEN
Exide Technologies Limited
Plaintiff
and
The Attorney-General
Defendant
counsel:

M Chen and S D Barker for Plaintiff

V Casey and C Owen for Defendant

Application for judicial review of the Ministry of Economic Development's decision to grant export permits for the disposal and recycling of used lead-acid batteries under cl11 Imports and Exports (Restrictions) Prohibition Order (No 2) 2004 (when waste may be exported) — plaintiff was the only domestic recycler of such batteries — whether Ministry was bound to reduce transboundary movement of waste under the Basel and Waigani Conventions — whether court could intervene on matters of policy — whether natural justice required the plaintiff to be heard on every export application.

The issues were: whether MED policy breached art4 Basel Convention (general obligations); whether permits had been granted on an incorrect basis under cl11(2)(b)(i) of the Order (NZ lacked the necessary facilities); what was required of MED under cl11(2)(c) of the Order (waste can be disposed of in an environmentally sound and efficient manner in the importing State); whether the court could intervene on matters of policy; and whether natural justice required Exide to be heard on every export application.

Held: The Order did not prohibit export whenever NZ was capable of recycling ULAB's. Clause 11 of the Order authorised export for recycling purposes where the waste could be disposed of in an environmentally friendly manner. The Basel Convention did not prohibit transboundary movements, rather such movements were to be reduced. It did not compel parties to develop domestic facilities — It merely required that they take appropriate measures to ensure the availability of such facilities.

MED's construction of the Order was available notwithstanding that it made no attempt to reduce transboundary movements by encouraging domestic recycling of ULABs and its policy was not unlawful. MED did not fail to take account of the objects of the Basel convention in exercising the discretion to grant the permits. It was open to MED to prefer the objective of increasing domestic ULAB recoveries and their eventual recycling, notwithstanding it encouraged transboundary movements. Its decision was a matter of “rhigh policy” (Attorney-General v Unitec Institute of Technology) in which the court should be slow to intervene.

MED did not take into account an irrelevant consideration by relying on economic efficiency when formulating and reviewing its policy. There was no evidence MED had relied upon the absence of facilities in NZ or inefficiencies in Exide's plant or that the competent authority in the importing state had been misled.

MED had not placed an unlawful fetter on its discretion by elevating consistency of policy as an important consideration so that it was unwilling to revisit its policy. The policy was under review by the Minister for the Environment and MED had determined that in the interests of certainty it should pursue its current policy. The central question of whether the policy ought to be changed was addressed in briefing papers and MEDs recommendation accepted.

Exide could not show that MED had failed to adequately inform itself before granting export permits. MED was entitled to assume that the overseas regulatory authorities would enforce existing local standards. There was no requirement that plants in importing states met specific international standards.

The granting of the five export permits could not be impeached for procedural unfairness. Natural justice did not require that Exide be entitled to be heard on every application since they all raised the same general issue, and beyond that Exide had no special interest that the law ought to recognize. This was not a case of a decision that deprived someone of an existing permit that they might otherwise expect to have renewed. It could be assumed that having regard to its unique interest in the matter, Exide was entitled to be heard on MEDs policy of encouraging the domestic collections market at the expense of recycling. Exide had been heard on MED's policy and there had been extensive dialogue. Its claims were weighed against the merits of the policy.

Application for judicial review dismissed.

JUDGMENT OF Miller J

Table of Contents

Introduction

[1]

A brief narrative

[7]

The pleadings

[15]

What regulatory framework governs MED's decisions?

[26]

The Imports and Exports (Restrictions) Act I988

[26]

The Imports and Exports (Restrictions) Prohibition Order (No 2) 2004

[28]

The Basel Convention

[39]

Status of Conventions in New Zealand Law

[39]

Background to the Easel Convention

[41]

The terms of the Easel Convention

[43]

Subsidiary declarations and guidelines

[54]

The Basel Ban Amendment

[59]

The Waigani Convention

[61]

MED Policy and Processes

[62]

The issues

[68]

Can MED prefer waste reduction through recycling to domestic recycling and fewer transbonndary movements under the 2004 Order?

[69]

When seeking importing States' consent did MED rely upon lack of environmentally compliant New Zealand facilities, or overseas demand for recycling, and does it matter?

[85]

Are ULABs “required” as a raw material for recycling or recovery in the importing States?

[89]

What does environmentally sound and efficient disposal in the importing State require of MED?

[91]

Does consistency of policy matter too much to MED?

[98]

Did MED rely on material mistakes of fact about Exide when granting export permits?

[103]

What did MED not take into account when granting export permits?

[105]

Must MED seek approval of Waigani Convention Parties through whose exclusive economic zones ULABs travel?

[107]

Does Australia's change of approach matter?

[118]

The first cause of action: substantive challenges

[120]

Illegality and failure to consider object of reducing transboundary movements

[121]

Irrelevant consideration of economic eficiency

[122]

Unlawfulf etter on discretion

[123]

Material errors offact about Exide

[126]

The second cause of action: procedural fairness

[127]

Decision

[132]

Introduction
1

New Zealand generates about 16,000 tonnes of used lead-acid batteries (ULABs) each year. Their export to certain countries for recycling is routinely authorised, provided the ULABs can be disposed of there in an environmentally sound and efficient manner. Permits are granted under delegated authority by the Ministry of Economic Development (MED) as New Zealand's competent authority under the Basel and Waigani Conventions, which are international conventions restricting inter-State or ‘transboundary’ movement of wastes.

2

MED grants export permits because it believes both that transboundary movements are permissible for recycling under the Conventions and that MED maximises ULAB recoveries in New Zealand by allowing exporters to compete freely with New Zealand's last remaining ULAB recycler, Exide Technologies Ltd. Current and pending permits allow the export of more ULABs than New Zealand generates each year.

3

Exide claims that MED's policy contravenes the Conventions, which aim to reduce transboundary waste movements. Indeed, it characterises the policy, not entirely without justification, as one of maximising transboundary movements. If MED is to pursue the objective of reducing transboundary movements at all, Exide maintains, it must take into account, when authorising exports, the need to sustain Exide's plant.

4

Until 2010 Exide relied on imported Australian ULABs, but Australia's competent authority now prohibits exports from that country for recycling, citing Australia's obligations under the Basel Convention. The viability of Exide's plant is said to depend on a change in government policy, for Exide now requires most, and perhaps all, of New Zealand's annual ULAB “arisings”, to use the parties' terminology, if it is to operate the plant efficiently.

5

This application for judicial review is a last-ditch attempt to force such a change of policy upon MED, which is unsympathetic. MED characterises Exide's pleas as a demand for a domestic monopoly. Should the policy not change, Exide's senior witness, John Cowpe, says in his sworn evidence, New Zealand will lose its only recycling facility. At present the plant is eking out its stocks and operating four days per week.

6

Having regard to Exide's position, the proceeding has been brought on at short notice and this judgment has been written in some haste. All of the many points taken by counsel have been considered, but the judgment addresses those that might reasonably be thought dispositive.

A brief narrative
7

ULABs have been recycled at Exide's Petone plant since 1965. The plant also produced batteries, but that ceased in 2006. It is capable of recycling 28,000 tonnes of ULABs per annum. Exide operates under a resource consent granted by the Greater Wellington Regional Council. There is a controversial history of lead-bearing dust emissions from the plant, but the evidence is that since 2006 Exide has invested heavily in compliance, and it says the plant is now very efficient. Discharges to air are now said to be only 10–15 per cent of those permitted under the resource consent.

8

As the Attorney-General acknowledges, New Zealand has assumed substantial obligations affecting transboundary waste movements and designed to protect human health and the environment. They arise under the Basel, Waigani, Stockholm and Rotterdam Conventions. 1 For present purposes only the first two of these matter.

9

The Basel Convention entered into force on 5 May...

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