Exide Technologies Ltd v The Attorney-General
Jurisdiction | New Zealand |
Judge | Miller J |
Judgment Date | 16 September 2011 |
Neutral Citation | [2011] NZHC 1127 |
Docket Number | CIV-2011-485-1549 |
Court | High Court |
Date | 16 September 2011 |
Under the Judicature Amendment Act 1972
[2011] NZHC 1127
CIV-2011-485-1549
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
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.
M Chen and S D Barker for Plaintiff
V Casey and C Owen for Defendant
JUDGMENT OF Miller J
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] |
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.
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.
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.
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.
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.
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.
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.
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.
The Basel Convention entered into force on 5 May 1992, and New Zealand ratified it in 1994. Obligations under that Convention to control transboundary waste movements were initially incorporated into the Customs Export Prohibition Order 1996. 2 The Waigani Convention entered into force in 2001, although New Zealand is said to have ratified it in 2000.
Since 2004 obligations under both Conventions have been incorporated in the Import and Exports (Restrictions) Prohibition Order (No 2) 2004, which I will call the 2004 Order. Under the Order decisions about export permits are assigned to the Minister of Commerce. It is common ground that the Minister has delegated his powers, ultimately to officials within MED. For my purposes it suffices to call the decisionmaker ‘MED’ without identifying the particular official who granted any given permit.
Permits are granted for a maximum term of one year. Since January 2008 MED has granted 24 permits, 20 for export to the Republic of Korea and four to the Philippines. Five of those permits are current. They together allow export of 17,000 tonnes per annum. MED is also considering two renewals and two new applications, which would together allow export of an additional 17,800 tonnes.
Between 1996 and 2009 Exide imported about 12,000 tonnes per annum of Australian ULABs for recycling. MED approved such imports on the ground that the ULABs could be handled here in an environmentally sound manner. But in 2009 Australia prohibited ULAB exports. They ceased in October 2010. Since then Exide has depended on the New Zealand domestic market. (It also acquires a small quantity from Pacific Island States.)
Since 2005 Exide has tried to persuade MED to change its policy toward ULAB exports. Those efforts took on greater urgency when Australia signalled its intention to ban exports. MED supported Exide in its attempts to retain Australian imports into New Zealand, but it has consistently refused to restrict exports from this country.
From 1 July 2011 the 2004 Order has been administered in the Ministry for the Environment, which is developing its own policy about ULAB exports, and the Environmental Protection Authority has been substituted for MED as the decision-maker. 3 Exide insists that it cannot await the new policy. When pressed, Ms Chen pointed to the four current applications, which MED must process under transitional provisions, and evidence that MED is urging the Ministry for the Environment to adopt MED's policy. The relief sought, if granted, would leave the Ministry for the Environment with no option but to adopt a materially different policy.
The statement of claim seeks a declaration that decisions to permit ULAB exports since 1 January 2008 were illegal, and an order setting aside current permits under which ULABs have not already been exported. It has now emerged that ULABs have been exported under four of the five current permits. No express application was made for leave to amend the claim, but Ms Chen did urge me to set aside all current permits. She acknowledged that such course would require that the proceeding be adjourned so the permit holders, who have not been sued or served, might be heard on relief.
Several grounds for review are pleaded. First, it is said that the permits already issued are unlawful, and those that are pending would be unlawful, because ULABs can be disposed in an environmentally sound and efficient manner in New Zealand. However, Ms Chen acknowledged in argument that ULAB exports are not...
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