Gloucester Resources Limited v. Minister for Planning

Summary:

On December 19, 2017, Gloucester Resources Limited sued the Minister of Planning, appealing the denial of the company’s application to construct an open cut coal mine in New South Wales, the Rocky Hill Coal Project, which proposed to produce 21 million tonnes of coal over a period of 16 years. The Land & Environment Court of New South Wales upheld the government’s denial of the application. The court found that the project was not in the public interest after weighing costs and benefits of the project, including the climate change impacts of the mine’s direct and indirect greenhouse gas emissions. Under Section 4.15(1) of the Environmental Planning & Assessment Act (the EPA), the government is to consider the public interest as part of its review of a development application.

The Department of Planning denied the Rocky Hill Coal Project application in December 2017. After Gloucester Resources Limited appealed the decision, a local community action group called Gloucester Groundswell Inc. was joined to the litigation. The Minister and Groundswell argued that the Rocky Hill Project application should be denied due to the:
1) incompatibility of the proposed mine with the existing, approved and likely preferred uses of nearby land;
2) the adverse visual impacts of the mine;
3) the adverse social impacts of the mine;
4) the uncertainty surrounding the economic and public benefits of the mine which were not shown to be greater than the public costs of the mine; and
5) the Rocky Hill Coal Project is not in the public interest because of the matters in (1) to (4) above and “it is contrary to the principles of ecologically sustainable development because the direct and indirect greenhouse gas emissions of the mine will contribute to climate change.”

As part of its consideration of climate change impacts, the court held that both upstream and downstream emissions of the project should be considered by the Planning Department because the EPA and its regulations require consideration of “the principles of ecologically sustainable development” (“ESD”) which can encompass climate change impacts. The court also pointed to the requirements under the EPA to consider “any environmental planning instrument” and cited language in the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) of 2009 and the 2010 Gloucester Local Environmental Plan as including consideration of ESD and the cumulative greenhouse gas emissions associated with a project. The court recognized the link between these emissions and climate change, remaining unpersuaded by petitioner’s arguments related to market substitution, carbon leakage, the theoretical possibility that other projects would offset these emissions, and the inefficiency of this denial as a mechanism for global abatement of emissions.

After weighing the costs and benefits of the project, the court upheld the government’s denial of the application, finding “that the negative impacts of the Project, including the planning impacts on the existing, approved and likely preferred land uses, the visual impacts, the amenity impacts of noise and dust that cause social impacts, other social impacts, and climate change impacts, outweigh the economic and other public benefits of the Project.” While not foreclosing all mining projects, the court ruled that this project was not a “sustainable use” because of the combination of climate change impacts of the project and the high environmental and social costs of locating a coal mine in this particular location.

At Issue: Whether the government could decline a coal mine project application upon consideration of climate change impacts and other factors