Climate litigation review 2023: disputes heat up with no cool change ahead

Australia continues to be a key forum for climate change disputes – including new and significant proceedings commenced, and progress on several large, ongoing matters. Activists, nongovernment organisations and regulators are instituting proceedings in increasing numbers, relying on new and novel legal causes of action.

Last year saw regulators, including the Australian Securities and Investments Commission (ASIC), take a more prominent role in climate change disputes by commencing civil proceedings against several superannuation and investment funds in relation to alleged ‘greenwashing’. We predict ongoing heightened activity by regulators as formal complaints are made, and for greenwashing allegations to remain prominent.

Rossiter v ANZ: discovery application over bank’s internal risk management documents – ongoing
On 9 November 2023, proceedings were filed in the federal court by ANZ shareholder, Catherine Rossiter. Rossiter seeks discovery over documents under section 247A of the Corporations Act 2001 relating to ANZ’s internal risk management framework for the purpose of determining whether the bank’s governance systems adequately deal with climate change and biodiversity risks.

Munkara v Santos: assessment of Indigenous cultural heritage in environmental plan for fossil fuel project – dismissed
On 30 October 2023, Simon Munkara, a member of the Jikilaruwu clan and a Tiwi Island traditional owner, applied for an urgent injunction to prevent Santos from beginning works on its Barossa gas project export pipeline. Munkara argued that Santos failed to properly assess submerged cultural heritage along the underwater route of the export pipeline in its environmental plan. The injunction was granted on 2 November 2023 but was discharged on 15 January 2024, with Justice Charlesworth dismissing Munkara’s claim.

AP4CA v EnergyAustralia: misleading or deceptive conduct – ongoing
In August 2023, Australian Parents for Climate Action (AP4CA) filed proceedings against EnergyAustralia, alleging that the way in which it marketed its “carbon neutral” product line amounted to misleading or deceptive conduct.

ASIC v Active Super: civil penalty proceedings (greenwashing) – ongoing
In August 2023, ASIC filed civil penalty proceedings in the federal court against Active Super, alleging that it engaged in misleading conduct and made misrepresentations to the market regarding its ethical and responsible investment principles.

Cooper v NOPESMA: consultation of traditional owners in seismic blasting project – plaintiff successful
In August 2023, Mardudhunera traditional custodian, Raelene Cooper, instituted proceedings in the federal court against the National Offshore Petroleum Safety and Environmental Management Authority (NOPESMA), seeking judicial review of its decision to approve seismic blasting in the Scarborough offshore gas project in Western Australia.

The court set aside the seismic blasting plan on the basis that traditional owners were not sufficiently consulted. This case follows the federal court’s 2022 judgment in Tipakalippa v NOPSEMA, which found that consultation with Tiwi Islands traditional owners in relation to an environment plan concerning the Barossa gas field was insufficient.

Jubilee Australia Research Centre v EFA: disclosure requirements under Environment Protection and Biodiversity Conservation Act 1999 – ongoing
Jubilee, a human rights organisation, filed a claim in July 2023 against Export Finance Australia (EFA) and the Northern Australia Infrastructure Facility, alleging that the Commonwealth statutory corporations failed to disclose the true effect of their activities, which include fossil fuel subsidies, on the environment in contravention of the EPBC Act.

ASIC v Vanguard: civil penalty proceedings (greenwashing) – plaintiff successful
In July 2023, ASIC instituted civil penalty proceedings against Vanguard Investments, alleging that it made false and misleading statements by offering an “ethically conscious” index fund without conducting appropriate environmental, social and governance screening and research. The fund was marketed to investors seeking securities with an ethically conscious screen to exclude bond issuers with significant business activities in certain industries, including fossil fuels.

Judgment was rendered by the federal court on 28 March 2024, the court finding that Vanguard contravened the ASIC Act numerous times by making false or misleading representations. An additional hearing is set for August 2024, where the court will consider what penalties it will impose on Vanguard. This is ASIC’s first successful greenwashing civil penalty action.

ASIC v Mercer: civil penalty proceedings (greenwashing) – ongoing, settlement pending
In February 2023, ASIC commenced its first civil penalty proceedings in relation to alleged greenwashing conduct, against Mercer Superannuation. ASIC alleges Mercer made misleading statements about the sustainability of one of its superannuation products, including that it excluded investments in companies involved in carbon-intensive fuels, alcohol and gambling. The court reserved judgment on whether it will approve an A$11.3 million (US$7.5 million) settlement offer made in December.

Gomeroi People v Santos: impact of fossil fuel project on traditional owners – appeal allowed
In January 2023, the Gomeroi people of New South Wales lodged an appeal in the federal court against a decision of the National Native Title Tribunal. The Gomeroi people submitted that Santos’s Narrabri gas project would contribute to climate change and have grave consequences for their culture, land and waters. The tribunal held – among other things – that the Gomeroi people had failed to justify their assertions.

The Gomeroi people lodged an appeal over this decision before the full court of the federal court, which was heard in August 2023. The court delivered judgment on 6 March 2024, allowing the appeal on the basis that the effects of climate change are capable of falling within the Native Title Act 1993 assessment criteria that must be considered by the tribunal.

O’Donnell v Commonwealth: misleading or deceptive conduct – settled
In July 2020, Kathleen O’Donnell commenced a class action against the Australian government alleging that the government engaged in misleading or deceptive conduct by not disclosing the risks of climate change to sovereign bond investors.

The class action was settled in August 2023, with the settlement receiving approval by Justice Murphy of the federal court on 11 October 2023. Under the terms of settlement, the Australian government agreed to publish a statement on the Department of Treasury’s website acknowledging that climate change is a systemic risk that may affect the value of government bonds.

Pabai Pabai v Commonwealth: duty of care to protect Torres Strait Islanders from climate change harms – ongoing
Gudamalulgal First Nations leaders from the Torres Strait Islands argue that the Commonwealth government owes Torres Strait Islanders a duty of care to take reasonable steps to protect them from harms caused by climate change arising out of the terms of the Torres Strait Treaty, and that the Commonwealth breached this duty of care.

The federal court held on-country hearings in June 2023 and scientific experts gave evidence in November 2023. Further hearings are set to commence on 29 April 2024. The outcome of these proceedings will test whether Australian courts will recognise a climate change duty of care.

ACCR v Santos: misleading or deceptive conduct (greenwashing) – ongoing
The Australian Centre for Corporate Responsibility (ACCR) alleges that Santos engaged in greenwashing in relation to representations as to its net zero plan and claims that natural gas is “clean fuel”. This is the first case globally to challenge the veracity of a company’s net zero targets as being “misleading” rather than “inadequate”. A 15-day hearing is set in September 2024.

ACF v Woodside Energy: whether fossil fuel project required to gain approval under EPBC Act – ongoing
These proceedings were commenced by the Australian Conservation Foundation (ACF) in 2022 and relate to Woodside’s proposed Scarborough gas project. The ACF claims that the emissions from the Scarborough project would cause an adverse impact on the Great Barrier Reef and therefore requires approval under the EPBC Act. A hearing is set to commence on 2 September 2024.

ASIC issued several infringement notices during the course of 2023 in relation to greenwashing activities, having brought its first enforcement action in 2022. In the nine months to March 2023, ASIC issued 11 infringement notices and reached 23 corrective disclosure outcomes – most in relation to managed funds. Activist groups, nongovernment organisations and other bodies also continue to complain to ASIC, the Australian Competition and Consumer Commission, other regulators and to corporations directly in relation to claims of greenwashing and ‘bluewashing’.