A group of Australian teenagers has filed a class action against the Commonwealth Minister for the Environment, and is seeking an injunction to prevent the Minister approving a proposed coal mine expansion. The claim alleges that approving the mine would breach the Minister’s common law duty of care to young people.

The case follows the recent landmark proceedings launched by Kathleen O’Donnell, a 23-year old law student, alleging that the Commonwealth and others failed to properly disclose information about climate change risks to prospective investors in government bonds.

Snapshot

Both cases are novel but draw together threads observed across global climate litigation:

  • Climate related claims brought by young people against governments raising the particular impact of climate change on younger and future generations;
  • Allegations of inadequate or misleading disclosure of climate related risks, typically brought against large corporates to date;
  • Increasing attention to the role of governments and required climate disclosure in relation to sovereign debt and government financial offerings; and
  • Potentially, seeking to increase momentum for development and implementation of climate policy or regulation.

A landmark disclosure case

On 22 July 2020, Kathleen O’Donnell, a 23 year-old law student, commenced proceedings in the Federal Court of Australia claiming that the Commonwealth and others failed to disclose to potential investors the risk that climate change poses to exchange-traded Australian Government Bonds (Government Bonds claim).

The claim, which has been brought against the Commonwealth of Australia, the Department of the Treasury and the Chief Executive Officer of the Australian Office of Financial Management (together the Respondents), also alleges that as a result of the apparent disclosure breaches, Commonwealth officials failed to perform their duties to the requisite standard.

We understand that this is the first case in the world to raise the issue of climate change risk disclosures in the context of the sovereign bonds.

Implications

  • The findings of the case will be important in addressing the link between climate change and financial risk, and the scope of disclosure obligations and duties in response to such risk.
  • It adds to a growing trend of claims and other forms of pressure against corporations, banks and financial institutions seeking disclosure about their financial exposure to climate change-related risks.
  • The commencement of the proceedings is a timely reminder for sovereign and private sector issuers of financial products to review internal risk assessment criteria and processes and the nature and extent of disclosures to investors on climate change risks.

Climate class action

The second case is a class action filed by a group of teenagers on behalf of all young people, claiming that the Minister for Environment has a common law duty to protect young people, who are more vulnerable to negative impacts of climate change. (Youth Climate Class Action)

The case focuses on the proposed expansion of the Vickery coal mine, which requires the Minister’s approval under federal environmental laws.

The claim is said to allege that approval of the mine expansion would breach the Minister’s duty of care to the claimants because the expansion would result in processing of more coal (majority metallurgical and some thermal coal at this mine), with resultant greenhouse gas emissions, and that this would exacerbate climate change impacts on young people. The solicitor acting in both cases is the same.

Implications

  • Class actions are complex and generally lengthy proceedings. However, the case may increase the focus on the rationale for approval of emissions-intensive activities.
  • Some of the issues raised by the case are novel, and others reflect themes of litigation brought by young people in climate change claims around the world including the recent human rights claim by young Queenslanders (see our blog post here). Because this case is framed by reference to the common law rather than to a specific regulatory regime, the case may have broad implications.
  • The case also comes at an interesting point in review of federal environmental laws, as legislation proposing to devolve significant decision making power from the Minister to the States is currently before Parliament. The case may therefore have both direct and indirect implications for the interpretation of duties of State decision makers.