Kang et al. v. KSURE and KEXIM

Summary:

On March 23, 2022, one Korean national and three Australian nationals, who are members of the indigenous community in the Tiwi Islands, Northern Territory, brought a claim against the Korea Trade Insurance Corporation, and Korea Export Import Bank, Korean public financial institutions that are functioning as export credit agencies planning to provide financial support to the development project for the Barossa fossil gas reserve off the coast of Northern Territory, Australia, near the Tiwi Islands (“Barossa Gas Project”). The Barossa Gas Project is being developed by SK E&S (Korea), Santos (Australia) and JERA (Japan). SK E&S purchased 37.5% of the stake in the project in June 2012, reached a final investment decision in March 2021, and applied for export credit guarantee to the defendants. The plaintiffs are seeking preliminary injunction against the defendants not to provide any financial support in relation to the Barossa Gas Project.

The plaintiffs argued that the project will cause significant environmental harm due to (i) 15Mt p.a. of CO2 emission throughout the entire life cycle of the fossil gas produced and consumed (ii) environmental harm to the marine ecosystem impacting the endangered sea turtle species and the livelihood of the indigenous communities. Plaintiffs also argued that the project has significant legal risk as (i) the developer companies have not completed the requisite consultation process with the indigenous communities and due to (ii) potential dispute over the control of the gas field with Indonesia as it is located within the Indonesian EEZ. Plaintiffs further argued that the project has significant financial risk as (i) development of new fossil gas wells are incompatible with the climate goals under the Paris Agreement (ii) the demand for fossil gas is expected to fall 55% by 2050 according to the IEA projection of the 2050 Net Zero scenario, and (iii) CCS technologies are not mature enough to guarantee reliable capture and storage of the CO2 emissions, creating serious risk of cost overrun. The claim is based on the environmental rights stipulated under Art. 35 of the Korean Constitution and property rights of the indigenous individuals living in the Tiwi Islands. Plaintiffs also invoked Art. 100 of the National Finance Act, which permits citizens to demand corrective measures against unlawful spending of public funds.

At Issue: Whether Tiwi Islanders were adequately consulted and environmental and climate harms properly assessed for the proposed Barossa pipeline that would run through a habitat protection zone near the Tiwi Islands.