Royal Forest and Bird Protection Society of New Zealand Incorporated v Buller Coal Ltd

• Jurisdiction: New Zealand
• Judge: Whata J
• Judgment Date: 24 August 2012
• Neutral Citation: [2012] NZHC 2156
• Docket Number: CIV 2012-409-000972
• Court: High Court
• Date: 24 August 2012

Between

Royal Forest and Bird Protection Society of New Zealand Incorporated

Appellant

and

Buller Coal Limited

First Respondent

and

Solid Energy New Zealand Limited

Second Respondent

And Between

West Coast Ent Incorporated

Appellant

and

Buller Coal Limited

First Respondent

and

Solid Energy New Zealand Limited

Second Respondent

[2012] NZHC 2156

CIV 2012-409-000972

IN THE HIGH COURT OF NEW ZEALAND

CHRISTCHURCH REGISTRY

Appeal against the making of a declaration by the Environment Court that greenhouse gas emissions were not a relevant consideration under s104 Resource Management Act 1991 (consideration of applications — actual and potential effects on the environment) when deciding whether to issue a resource consent — the Court said that the Resource Management (Energy and Climate Change) Amendment Act 2004 removed regulation of climate change from local authority control — respondents operated coal mines — whether the Amendment Act removed the jurisdiction of consent authorities to consider the effects on climate change of the discharge of greenhouse gas emissions from the end use of coal.

Counsel:

T Bennion and P D Anderson for Royal Forest and Bird Protection Society

D M Salmon for West Coast ENT Inc

J E Hodder and B G Williams for Buller Coal Limited

M R Christensen and S Hutchings for Solid Energy Limited

J M van der Wal for Buller District Council and West Coast Regional Council

JUDGMENT OF Whata J

1 Buller Coal Limited (“BCL”) and Solid Energy New Zealand Limited (“Solid Energy”) mine coal. The Royal Forest and Bird Protection Society 1 and West Coast ENT Incorporated (“West Coast ENT”) are advocates for the environment. They oppose coal mining proposals by Solid Energy and BCL because the coal produced when burnt will omit more than 20 Mt of CO ₂ in total. CO ₂ is a greenhouse gas. Declarations were sought in the Environment Court as to whether the effect of the combustion of this coal on climate change is a relevant consideration under s 104(1)(a) of the Resource Management Act 1991 (“RMA”). That section states:

104 Consideration of applications

(1) When considering an application for a resource consent and any submissions received, the consent authority must, subject to Part 2, have regard to–

(a) any actual and potential effects on the environment of allowing the activity; …

2 The Environment Court said, in short, that it was not a relevant consideration, because the Resource Management (Energy and Climate Change) Amendment Act 2004 removed regulation of climate change from local authority control. 2 The key issue before me is whether the Environment Court was correct.

The issues

3 The appellants identified the following questions of law to be resolved:

Whether or not, when considering Buller Coal Limited's applications for consents for coal mining activities at the Escarpment Mine including applications for land use, the decision maker must:

• a) under section 104(1), consider the contribution that the subsequent discharges into air from the combustion of the coal will have towards climate change; and

• b) under section 7(i) have particular regard to the effects of climate change, including the contribution that the subsequent discharges into air from the combustion of the coal will have towards the effects of climate change.

4 BCL and Solid Energy seek confirmation of the following declaration: 3

In considering BCL's applications for consents for coal mining activities at the Escarpment Mine including applications for land use and Solid Energy's applications for consents for coal mining activities at the Mt William North mining area including applications for land use, but neither including any applications to discharge contaminants to air from the combustion of coal to be mined, the decision maker cannot have regard to the effects on climate change of discharges into the air of greenhouse gases arising from the subsequent combustion of the coal extracted in reliance on those consents, either where:

• (a) any discharge of greenhouse gases associated with the end use of the coal occurs outside New Zealand territorial boundaries; or

• (b) any discharge of greenhouse gases associated with the end use of coal occurs in New Zealand.

5 Taken together, the ultimate issue in the case is whether the Resource Management (Energy and Climate Change) Amendment Act 2004 (“the Amendment Act 2004”) removed the jurisdiction of consent authorities to consider the effects on climate change of the discharge of greenhouse gas emissions from the end use of coal.

Agreed facts

6 The parties agree the following:

• …

• 2. On 26 August 2011, independent Commissioners appointed by the West Coast Regional Council and the Buller District Council granted consents to BCL associated with the construction and operation of an open cast mine on the Denniston Plateau (“the Escarpment Mine”). The consents granted included a land use consent to mine coal and associated land disturbance activities.

• 3. West Coast ENT and Forest and Bird appealed that decision on grounds including that the Commissioners erred in not having regard to the effects of the Escarpment Mine applications on climate change.

• 4. The resource consents, if upheld on appeal, will authorise BCL to remove up to 6.1 million tonnes of coal on the Denniston Plateau over a period of 5–12 years. The coal is intended to be exported to

  customers in India and China for use in the steel manufacturing industry.

• 5. BCL's applications are set out in Schedule A and include applications for land use consents for coal mining and associated activities. BCL was not required to and did not apply for a discharge permit relating to the discharge of greenhouse gases.

• 6. On 12 December 2011, Solid Energy lodged with the West Coast Regional Council and Buller District Council applications for resource consents to carry out mining activities at the Mt William North mining area.

• 7. The resource consents, if granted, will authorise Solid Energy to mine approximately 5 million tonnes of coal in the Mt William North mine over a period of approximately 12 years. This will provide approximately 4.1 million tonnes of marketable coal, all of which will be exported. This coal is intended to be exported to customers in India, China, Japan, Brazil and South Africa for use in the steel manufacturing industry.

• 8. Solid Energy's applications are set out in Schedule B and include an application for land use consent for coal mining and associated activities.

• 9. Solid Energy was not required to and did not apply for any discharge permit relating to the discharge of greenhouse gases.

• 10. Solid Energy's applications to the consent authorities were publicly notified on 10 February 2012. Submissions on the applications close on 19 March 2012.

• 11. BCL, West Coast ENT and Forest and Bird all intend to lodge submissions in relation to the Mt William North applications.

  Climate change

• 12. The appellants to the Escarpment Mine consents consider that both the Escarpment Mine and Mt William North Mine applications raise the issue of whether the effects on climate change of the subsequent combustion of coal mined at the sites are able to be given regard to by decision makers under the RMA.

• 13. The parties are all in agreement that the Court can assume, for the purposes of these proceedings:

  • a. Climate change is a serious global issue.

  • b. The coal mined at the sites will probably result in the subsequent discharge of carbon dioxide from the combustion of that coal.

  • c. Carbon dioxide is a known greenhouse gas.

  The Mt William North and Escarpment Mine

• 14. The parties agree that:

  • a. Mt William North is expected to produce approximately 4.1 million tonnes of marketable coal;

  • b. Of that coal, 100% is expected to be burnt overseas, producing approximately 11.5Mt of CO ₂ in total.

  • c. The Escarpment Mine is expected to produce approximately 4.3 million tonnes of marketable coal;

  • d. Of that coal, 100% is expected to be burnt overseas.

  Treatment of greenhouse gas emissions

• 15. Both Solid Energy (and BCL if the Escarpment Mine is consented) are mandatory participants in the stationary energy sector of the Emissions Trading Scheme (“ETS”) (enacted under the Climate Change Response Act 2002) because they carry out the activity of mining over 2000 tonnes of coal in a year. The ETS requires coal mining participants to monitor and report emissions in New Zealand and to surrender emission units to cover their relevant emissions in New Zealand. This includes a requirement for Solid Energy (and BCL) to surrender emission units for carbon emissions from coal sold to domestic customers (except larger customers who “opt in” to the ETS and take responsibility for their own carbon emissions).

• 16. Coal mining participants are not required to surrender units for carbon dioxide emissions from any coal that is exported. Units must, however, be surrendered for any fugitive emissions of methane released to the atmosphere during mining activities (including for coal that is exported).

Submissions for the appellants

7 The appellants were separately represented by Mr Salmon for West Coast ENT and Messrs Bennion and Anderson for Royal Forest and Bird. Mr Salmon focused on effects considerations within New Zealand. Mr Bennion adopted a supporting role on that topic, while also dealing with extra-territorial discharges. Nevertheless I think it is fair to say that they collectively submit:

• (a) Section 104(1)(a) should be given its plain and ordinary meaning, informed by the purpose of sustainable management with the result that effects on climate change of discharges of greenhouse gases caused by the end use of coal are a mandatory relevant consideration.

• (b) The Amendment Act 2004 circumscribes consideration of the effects of greenhouse emissions in a precise and specific way, amending only the provisions...