Carmichael Coal Mine: A Case Study

LEAD

Law

Environment and

Development

Journal

VOLUME

17/1

A CASE STUDY OF THE CARMICHAEL COAL MINE FROM THE PERSPECTIVES OF

CLIMATE CHANGE LITIGATION AND SOCIO-ECONOMIC FACTORS

Sandra Cassotta, Vladimir Pacheco Cueva & Malayna Raftopoulos

ARTICLE

LEAD Journal (Law, Environment and Development Journal)

is a peer-reviewed academic publication based in New Delhi and London and jointly managed by the

Law, Environment and Development Centre of SOAS University of London

and the International Environmental Law Research Centre (IELRC).

LEAD is published at www.lead-journal.org

[email protected]

ISSN 1746-5893

This document can be cited as

Sandra Cassotta, Vladimir Pacheco Cueva & Malayna Raftopoulos, ‘A Case

Study of the Carmichael Coal Mine from the Perspectives of Climate

Change Litigation and Socio-Economic Factors’,

17/1 Law, Environment and Development Journal (2021), p. 55,

available at http://www.lead-journal.org/content/a1704.pdf

Sandra Cassotta, Associate Professor in International, Environmental and Energy Law, Department of Law,

Aalborg University, E-mail: sac@law.aau.dk.

Vladimir Pacheco Cueva, Associate Professor, School of Cultural and Society, Aarhus University.

Malayna Raftopoulos, Associate Professor in Development Studies and International Relations/Latin American

Studies, Department of Politics and Society.

Published under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Unported License

ARTICLE

A CASE STUDY OF THE CARMICHAEL COAL MINE

FROM THE PERSPECTIVES OF CLIMATE CHANGE

LITIGATION AND SOCIO-ECONOMIC FACTORS

Sandra Cassotta, Vladimir Pacheco Cueva & Malayna Raftopoulos

TABLE OF CONTENTS

1. Introduction 57

2. The Background of the Carmichael Coal Mine Project 57

2.1 The Regulatory Framework for Mining in Queensland 59

2.2 Climate Change Science and Australian Responsibility to

Climate Change 60

2.3 Legal Elements of the Approval Process in Climate Change Litigation:

Advancements and Regressions 62

2.3.1 Causation 63

2.3.2 Cumulative Emissions 63

2.3.3 Precautionary Principle 64

2.3.4 Market Substitution Agreement 64

2.3.5 Public Interest 66

3. Climate Change Litigation Linked with an Economic, Social, Public

Participation and Stakeholders approach 66

4 Economic factors to take into account in the case of Carmichael Coal Mine 67

4.1 Mining Royalties 67

4.2 Tax 68

4.3 Employment 69

4.4 Public Debt 70

5 Conclusion 71

INTRODUCTION

In 2010, Adani Mining Pty Ltd (Adani) proposed the

development of what would become one of

Australia’s most controversial mining projects. Known

as the ‘Carmichael Coal Mine’ (sometimes referred in

the Australian media as the ‘Adani Mine’ or ‘Adani

project’), the project has a predicted lifetime of 60 years

and estimated life cycle production of 2.3 billion tonnes

of thermal coal. Due to its enormous scale, and despite

its potential economic and social effects (including fiscal

income), the project has met fierce opposition because

of its potential environmental and social impacts. It is

estimated that the burning of coal from the mine will

generate 4.6 billion tonnes of greenhouse emissions.

These emissions are over 0.5 per cent of the remaining

carbon budget which has been set to limit global

temperature rises to 2ºC above pre-industrial levels.

As such, the Carmichael Coal Mine project, which was

initially projected to become one of the largest coal

mines in the world, has found itself the object of an

increasing amount of climate change litigation in

Australia’s courts. By, 2020, the reputation of the Adani

Group was so compromised that the company decided

to change its name to ‘Bravus Group’ after mistakenly

thinking that Bravus meant ‘brave’ or ‘courageous’ in

classical Latin.

In reality, as explained by an article in

The Guardian ‘Bravus’ means ‘crooked’ or ‘deformed’,

‘mercenary’ or ‘assassin’ in that language.

By using the Carmichael Coal Mine as a case study, the

purpose of this paper is to explore and analyse climate

change litigation in a systemic legal and socio-

economical approach. It will focus on the current

challenges and potentials of the Australian legal

framework and the jurisprudence of climate change

litigation. The aim is to advance toward a more

conscious global approach to designing regulations

that can consider and balance direct economic benefits

for the local economy, and global environmental

concerns and global common vision about how to

manage mining developments and energy challenges.

The research question seeks to identify in the

Carmichael Coal Mine case what are the legal elements

of regression and advancement in climate change

litigation that enable economic and social contributions

against climate change impacts.

When examining this particular mining project, the

authors will consider global concerns highlighted, for

example, by the Paris Agreement and the International

Panel of Climate Change (IPCC) concerning

greenhouse emissions or by the United Nations

Development Programme’s (UNDP) Agenda 2030

relating to access to reliable source of energy for the

population. This approach is to provide substantive

guidance, especially in relation to how the local

regulators and policy makers should proceed if they

are to succeed in managing and regulating these projects

when faced with climate change litigation. In that sense,

climate change litigation can serve as a catalysing factor

to facilitate the transition from fossil fuel to renewable

energy. However, as will be explained later, at present

Queensland is not ready to balance climate change

damages with short-term monetary returns.

THE BACKGROUND OF THE CAR-

MICHAEL COAL MINE PROJECT

Australia is one of the most vulnerable continents to

the impacts of climate change and is at the same time

the location of the largest coal developments, thus

making it the scene of numerous juridical reviews

concerning coal mining projects and climate change

Law, Environment and Development Journal

1 Joint Report to the Land Court of Queensland on ‘Climate

Change – Emissions’, Adani Mining Pty (Adani) v. Land

Services of Coast and Country Inc. & Ors. by Chris

Taylor 1-16.

2 M Philpott, ‘Adani Mining Changes Name to Bravus After

10 Years in Australia’, ABC News (5 November 2020)

<https://www.abc.net.au/news/2020-11-05/adani-

changes-name-to-barvus-mining-and-resources/

12851592>.

3 Naaman Zou, ‘Crooked Not Courageous: Adani Renames

Australian Group Bravus Mistaking it for ‘Brave’ The

Guardian (5 November 2020) <https://

www.theguardian.com/business/2020/nov/05/

crooked-not-courageous-adani-renames-australian-group-

bravus-mistaking-it-for-brave>.

litigation. The Carmichael Coal Mine, located in

Queensland, is only one example of climate change

litigation processes in Queensland. Queensland

jurisdictions, by means of merit review and judicial

review, had to face numerous obstacles against coal

mining project proposals in order to evaluate the

approaches taken by tribunals and courts to the

environmental assessment of coal projects.

The Carmichael Coal Mine is one of those difficult

cases with massive environmental, climate and

Indigenous rights implications, making it especially

valuable for analysis. In particular, the focus is on all

the legal elements of the approval process, how social

actors contest them and how these are linked to

economic and social considerations.

Although none of the challenges presented in this

article have succeeded in stopping the Carmichael Coal

Mine project, the authors are able to identify some

elements of advancement and regression in the climate

change litigation’s process. These elements allow for

new legal paths to blocking future project approvals in

the mining sector if such projects pose threats to the

environment and/or aggravate climate change.

In 2010, the Adani Group proposed the Carmichael

Coal Mine project in Queensland’s Galilee Basin. It

involves a Greenfield open-cut coalmine, an

underground coal mine, associated mine processing

facilities and a 388 Km railway, linking the mine with

the coal port at Abbott Point, near the town of

Bowen.

4,5

The process of approval of the project was an

exhausting experience from 2010 to the Queensland

Coordinator-General’s recommendation to approve

the project in early 2014, after numerous approval

processes and court proceedings.

The Carmichael Coal

Mine case involved numerous objections in climate

change litigation and on a number of different

grounds, including impacts on the Doongmanbulla

Spring Threatened Ecological Community, threatened

species like the Black-throated Finch, and the mine’s

contribution to climate change. In addition, the

economic feasibility of the project was among the

objects of litigation. Climate change arguments of

the Carmichael Coal Mine case (as in other cases

considered by the Australian jurisprudence) build on

scientific expertise related to climate change impacts

and on joint expert reports, such the report of Dr

Meinshausen’s carbon budget model.

According to

this joint expert report, the carbon budget available

after 2015 has been depleted to 850 billion tonnes of

carbon dioxide, with exploitation of all known coal

reserves having the potential to contribute 4,000 to

7,000 billion tonnes of carbon dioxide.

The ‘Green Gas Protocol’, is an international

accounting for GHGs

which categories GHGs

emission into three categories: Scope 1 emission that

are direct greenhouse gas emission from a project; Scope

2 emissions that are indirect greenhouse gas emission

from the generation of purchased electricity; and Scope

3 emissions that are all other indirect greenhouse gas

emissions resulting from a company’s activities. This

expert group reported that over its lifetime, the

proposed Carmichael Coal Mine project will account

for 0.53-0.56 per cent of the global carbon budget.

The expert report also calculated GHGs emissions on

a cumulative emission basis, including Scope 3

emissions, and concluded that the potential of

emissions from the Carmichael Coal Mine project will

be the highest of the world.

This report was accepted by Queensland Land Court,

and thus determined an important advancement in

the capacity of the Courts to take science into

consideration in the legal reasoning by recognizing the

concept of ‘cumulative emissions’.

This is the

4 N McNamara and W Crane ‘Public Participation and the

Adani Syndrome’ (2018) 35(3) Environmental and

Planning Law Journal Volume 327.

5 Another proposal exists for a 189 Km railway line if the

line connection goes to Goonyella Railway line, rather

than going directly to Abbot Point terminal.

6 McNamara and Crane (n 4) 328.

7 Chris Taylor and Malte Meinshausen, Joint Report to the

Land Court of Queensland on ‘Climate Change

Emissions’ – Adani Mining Pty Ltd (Adani) v Land

Services of Coast and Country Inc. and Ors (2014) 8.

8 The Greenhouse Protocol is a widely used Protocol in

international accounting for green gas emissions. For

more details on the Protocol and Scope 3, see <https:/

/www.ghgprotocol.org>.

9 Adani Mining Pty Ltd v Land Services of Coast and

Country Inc. [2015] QLC 48, [429]. The concept of

cumulative emissions will be further analysed in section

2.4.2.

Carmichael Coal Mine: A Case Study

‘cumulative capacity’ and ‘long terms effects’ of GHGs

emissions and their capacity to cause environmental

harm, as defined in the Australian legislation in

particular the Mineral Resource Act (MRA)

and the

Environmental Protection Act (EPA).

The Carmichael Coal Mine case has gone through

numerous judicial reviews of government decision-

making since 2010 until now. Courts examined the

lawfulness rather that reconsidering the substance or

merits of the decision. The case is selected because it is

very significant in terms of the development of the

jurisprudence in climate change litigation as it allows

the identification of relevant factors when making

mining project approval decisions.

2.1 The Regulatory Framework

for Mining in Queensland

Australian law deals with climate change impacts to

the environment in a fragmented manner. There is no

specific legislation. In order to fill this gap, climate

change litigation in the mining sector has engaged in a

range of specific legal frameworks mostly focusing on

elements of environmental impact assessment under

environmental protection, planning legislation and

approvals of licenses of coalmines within the statutory

context. Since Australia is a federation of states and

territories, these elements are pertinent to the state

level, with federal legislation engaging only in matters

of national environmental significance, such as threats

to Commonwealth-listed threatened species. This

section will focus on the statutory context of this

federation, specifically the legal framework where the

process of approval of a mining project in this

jurisdiction takes place, including how matters of

climate change that arise in the assessment of the

mining approval processes can be covered.

Environmental assessment, planning legislation and

approval of licenses for coalmines in Queensland,

applicable to the Carmichael Coal Mine case, involve

four main statutory instruments necessary for a

resource title or a mining tenure and an environmental

authority:

1) The Mineral Resource Act 1989 (Qld) (MRA);

2) The Environmental Protection Act 1994 (Qld)

(EPA) that provides an environmental

authority to be requested;

3) The State Development and Public Works

Organization Act 1971 (Qld) (SDPWOA) for

large scale projects;

4) The Environmental Protection and

Biodiversity Conservation Act 1999 (Cth)

(EPBC Act), which implies a scheme of

adaptive management.

The MRA has a mineral exploitation focus and does

not tackle environmental protection. The MRA has

objectives such as encouraging and facilitating mining

projects, ensuring a financial return to the State and

developing an administrative framework that

accommodates mining projects. In contrast, the EPA

is focused on environmental protection.

The SDWPA facilitates and assesses large mine project

proposals, which means that under this act, mining

projects will undergo an assessment process that

includes the production and public notification of an

Environmental Impact Assessment (EIS).

The EPBC implies a scheme of adaptive management,

which is a technique of natural resource management

that demands participatory objective settings, ongoing

monitoring, and iterative decision-making. It is best

suited to projects with high uncertainty about an

ecosystem and when the impact of decisions may be

irreversible.

This act presents an advancement in terms of

effectiveness of environmental protection because

adaptive management hitherto has been applied in

Law, Environment and Development Journal

10 Mineral Resource Act 1989, Queensland.

11 Environmental Protection Act 1994, Queensland.

12 Most major projects will in practice also be declared as

‘coordinated projects’ under the SDPWOA and a

proponent is able to apply for such a declaration, which

if made will entail for the Coordinator-General the dual

roles of facilitating and assessing the large mine project

proposals.

Australian decisions only in circumstances where the

strategy was already prescribed though approval

conditions and EIA, rather than where the court itself

determined that it was appropriate, which proves that

there is a willingness in the judiciary to engage in an

analysis of adaptive managements programmes.

Adaptive management is also strongly coupled with

environmental law in the application of the

Precautionary principle, which states: ‘where there are

threats of serious or irreversible damage, lack of full

scientific certainty shall not be used as a reason for

postponing costs-effective measures to prevent

environmental degradation’.

However, both under EPBC and the EPA there is no

specific mention of GHGs emission. The MRA

focuses on mineral exploitation rather than protecting

the environment and the Coordinator-General

conditions under the SDPWO are inconsistent with

the possibility to take climate change impacts

considerations into courts, especially with regard to

the possibility to demonstrate the causality link or

causation, which is the link existing between an

individual mining project and the impact on climate

change.

The lack of specific reference to GHGs

emissions under the EPCB and EPA means that

consideration to climate change in an environmental

context involves the adaptation of principles only

concerned with direct local impacts in their decision-

making rather than about the multi-various causes

and in particular, global consequence of climate change.

The gaps present in the statutory framework of the

process of approval of a mining project including

climate change components are not the only hurdles

in climate change litigation in Australia. The big

elephant in the room is in the decision-making process

for challenging major mining projects in Queensland

that is rather unusual if compared to other

jurisdictions.

Under the EPA, the Land Court must consider

different factors, which gives more weight to

environmental protection considerations.

contrast, under the MRA, the Land Court must also

take into account and is also supposed to consider

other elements and be able to weigh economic and

social considerations against environmental protection

goal achievements.

What is unusual in the Queensland system is that the

Land Court determination is not binding on

government and the effect is only a mere

‘recommendation’. This means that the Court may

recommend approval or refusal of a project with or

without additional conditions imposed.

2.2 Climate Change Science and

Australian Responsibility to

Climate Change

Climate change has proven to be an intractable problem

for the past twenty years, despite numerous meetings

in the global United Nations Framework Convention

on Climate Change (UNFCCC).

Under the Kyoto

Carmichael Coal Mine: A Case Study

13 C Slattery, ‘Canary in the Coal Mine: Why the Approval

Conditions for the Carmichael Mine Reveal the Need

to Amend the EPBC Act to Incorporate Adaptive

Management Principles’ (2016) 33 Environmental and

Planning Law Journal, 428.

14 SHCAG Pty Ltd v Minister for Planning and

Infrastructure (2013) NSWLEC 1031, 86.

15 The concept of ‘causation’ or ‘causality link’ will be

further analysed in section 2.4.1.

16 It is unusual compared to other jurisdictions whereby

a final decision is first made whether to approve a

mine, with this decision then able to be appealed or

judicially reviewed, rather than the court making a

recommendation to a final decision-maker. J Bell-James

and S Ryan, ‘Climate Change Litigation in Queensland:

A Case Study in Incrementalism’ (2016) 33(6)

Environmental and Planning Law Journal 581.

17 Under the EPA, the Land Court considers a number of

factors, including: Principles from the

Intergovernmental Agreement on the Environment,

including the Precautionary principle, intergenerational

equity, and conservation of biological diversity and

ecological integrity; any relevant environmental impact

assessment impact study, assessment report; the character,

resilience and values of the receiving environment; all

submissions made by the applicant and submitters; the

financial implications as they would relate to the type

of activity or industry carried out, or proposed to be

carried out, under the instrument and the public interest.

See the Environmental Protection Act 1994, 1994 (Qld)

s 191, 191 (g).

18 Mineral Resource Act 1989 (Qld) s 269 (4).

19 UN Framework Convention on Climate Change, New

York, 9 May 1992, 1771 UNTS 107.

2018, the IPCC released a report that warned of severe

and catastrophic consequences if urgent action is not

taken to limit temperature rises to 1.5ºC.

Without

any doubt ‘urgent action’ includes the elimination or

significant reduction of coal combustion.

However, in response to climate change agreements,

in Australia, the Morrison Coalition Government

announced that its focus remained on ensuring energy

prices remain low and only two days before the May

2019 Australian Federal election was called, he gave

final approval to what is one of the largest coal mines

of the world, the Adani Carmichael Coal Mine.

The current scientific understanding of climate change,

quantification of emissions as proposed from the

Carmichael Coal Mine project, and the contribution

of those emissions to climate change has been

prepared and documented in a joint expert report on

greenhouse gas and climate change issues for the Land

Court of Queensland hearing of objections to granting

the mining lease (ML) and environmental authority

(EA) applications for the mine and rail components

of the project. Even with a reduced timeframe scale,

Carmichael Coal Mine project is one of the largest

coalmines in the world and presents a serious impact

on the global temperature rising to 2ºC above pre-

industrial levels.

The crucial question is how the tribunals and courts

deal with this evidence when deliberating on legal issues

and if the way they deal with scientific evidence actually

facilitates the transition away from fossil fuels. From

an analysis of the jurisprudence of other cases, such

Protocol,

the parties are required to account for

GHGs emission and industrialized nations are

committed to emissions reduction targets.

Progress has been made with the signature of the Paris

Agreement

to which the parties, including Australia,

a signatory party, agreed to limit global warming to

below 2ºC, and now with a new aspirational goal of

1.5ºC. However, at the event, Australia defended its

rights to adjusting its targets even though these are

currently not ambitious enough to stay under the 1.5ºC

or 2ºC limit.

There is undeniable consensus and scientific evidence

that climate change represents a serious, global threat

and it is extremely likely that human influence has been

the dominant factor, as found by the

Intergovernmental Panel on Climate Change (IPCC).

Negative impacts have already been observed to water

quality, ecosystems shifts, crop yields and an increase

in climate related extreme events, such as heat waves,

droughts, floods, cyclones and wildfires.

In October

Law, Environment and Development Journal

20 Kyoto Protocol to the United Nations Framework

Convention on Climate Change, Kyoto, 11 December

1997, 2303 UNTS 162.

21 Paris Agreement, Paris, 12 December 2015, in Report

of the Conference of the Parties on its Twenty-First

Session, UN Doc FCCC/CP/2015/10/Add.1.

22 Jillian Button and Hamish McAvaney ‘The Big Picture:

Australia’s Commitments under the Paris Agreement’

Allens Insight (Melbourne, 26 May 2020) < https://

www.allens.com.au/insights-news/insights/2020/05/

climate-change-guide/the-big-picture-australias-

commitments-under-the-paris-agreement/>.23

Intergovernmental Panel on Climate Change (IPCC),

‘Summary for Policymakers’ in TF Stocker and others

(eds), IPCC, Climate Change 2013: The Physical Science

Basis. Contribution of Working Group 1 to the Fifth

Assessment Report of the Intergovernmental Panel

on Climate Change (CUP 2013) 17.

23 Intergovernmental Panel on Climate Change (IPCC),

‘Summary for Policymakers’ in TF Stocker and others

(eds), IPCC, Climate Change 2013: The Physical Science

Basis. Contribution of Working Group 1 to the Fifth

Assessment Report of the Intergovernmental Panel

on Climate Change (CUP 2013) 17.

24 Intergovernmental Panel on Climate Change (IPCC),

‘Summary for Policymakers’, IPCC, Climate Change

2014: Impacts, Adaptation, and Vulnerability, Part A:

Global and Sectoral Aspects, Contribution of Working

Group II to the Fifth Assessment Report of the

Intergovernmental Panel on Climate Change (CUP

2014).

25 Intergovernmental Panel on Climate Change (IPCC),

Global Warming of 1.5ºC. An IPCC Special Report on

the Impacts of Global Warming of 1.5 above pre-

industrialized Levels and related Global Greenhouse

Gas Emission Pathways, in the Context of Strengthening

the Global Response to the Threat of Climate Change,

Sustainable Development and Efforts to Eradicated

Poverty (World Meteorological Organization 2018).

26 The ‘Coalition’ is made up of two of Australia’s main

conservative parties: The National Party and the Liberal

Party. The Coalition’s historic contender in the Australian

political scene is the Labour Party.

27 V McGinnes and M Raff ‘Coal and Climate Change: A

Study of Contemporary Climate Litigation in Australia’

(2020) 37(1) Environmental and Planning Law Journal

91.

the 2012 Wandoan Mine Case

and the 2014 Hancock

Coal Case,

various objectors question both

threatening climate change predictions and optimistic

predictions of economic benefits. The Carmichael Coal

Mine case is one of these.

It is important to observe

that climate arguments build upon the jurisprudence

from reports produced by experts on climate change

impacts, who produced the joint expert report

mentioned above, which in turn relies on

Meinshausen’s carbon budget model.

Calculated on a cumulative basis, which would include

Scope 3 emissions, potential emissions of the

Carmichael Coal Mine are among the highest in the

world. The expert report underlines that these

cumulative emissions will matter for the long-term.

The argument was accepted by the Land Court in 2015

when deliberating on the Adani Mining Pty Ltd v Land

Services of Coast and Country Inc. (2015), QLC 48

(429), which represents a significant step of progression

in climate change litigation as the Land Services Court

and Supreme Court of Coast and Country Inc. (LSCC)

They argued that the cumulative emissions from the

mine should be considered and that these cumulative

emissions will have a global effect on the environment.

This effect will cause environmental damage within

the definition of the EPA and could pave the way for

future Australian responsibility for climate change.

2.3 Legal Elements of the

Approval Process in Climate

Change Litigation: Advancements

and Regressions

Climate change litigation plays a fundamental role in

cases where governments are weak in taking action

against climate change impacts. In the last decade, in

Queensland there has been a significant amount of

public interest litigation opposing government

approvals for new mining activities, albeit not

successful, in stopping the activity.

This section analyses the legal elements determining

causes of approval or rejection of the Carmichael Coal

Mine case. It investigates if those legal elements were

based on climate change argumentation and if those

elements can be discerned as signs of regression or

advancement in climate change litigation. Climate

change litigation can demonstrate that there are

weaknesses not only in the laws but also in the legal

reasoning and legal interpretation made by the judges.

Both the jurisprudence and the law can be key factors

in pushing the mining sector to improve its

performance and to increase awareness and

responsibility from polluters.

From an analysis of selected relevant case law of the

Carmichael Coal Mine case,

it is possible to unfold

the legal elements of the approval process and how

those elements have been contested by court’s

reasoning. In particular, five elements were decisive in

climate change litigation of the Carmichael Coal Mine

case:

1) Causation;

2) Cumulative emissions;

3) Precautionary principle;

4) Market Substitution Agreement

(MSA) and

5) Public interest.

The next sections will focus on each of these five legal

elements in detail.

Carmichael Coal Mine: A Case Study

28 Xstrata Coal Queensland Pty Lrd v Friends of the Earth

– Brisbane Co-Op Ltd (also referred as the ‘Wandoan

Mine Case’), [2012] QLC 13, [600].

29 Hancock Coal Pty Ltd v Kelly (No 4) (also referred as

‘Alpha Coal Case’), [2014] QLC 12.

30 The economic impact of the Carmichael Coal Mine

case will be considered in section 4.

31 Key case law in Queensland Courts concerning climate

change litigation of the Coal Mine case examined in

the following sections are: Adani Mining Pty v Land

Services of Coast and Country Inc. & Ors. [2015] QLC

48 (15 December 2015); Land Services of Coast and

Country Inc. v Chief Executive, Department of

Environment and Heritage Protection & Anor [2016]

QSC 272; in the Federal Courts: Australian Conservation

Foundation Incorporated v Minister for the

Environment and Energy [2017] FCAFC 134 (25 August

2017); as well as native title litigation: Burragubba v

State of Queensland [2017] FCAFC 133 (25 August 2017);

Burragubba v State of Queensland [2016] FCA 984 (19

August 2016); Adani Mining Pty Ltd and Another V

Adrian Burraguba, Patrick Malone and Irene White on

behalf of the Wangan and Jagalingou People [2015]

NNTTA 16 (08 April 2015).

2.3.1 Causation

The concept of ‘causation’ or ‘causality link’ refers to

the link established between an individual mining

project and its impact on the climate. Although the

effect of thermal coal as a major source of GHGs

emission has been proven and assessed in solid,

scientific studies and scientific papers, including the

previously mentioned Meinshausen 2009 paper,

proving causation has been the eternal conundrum in

courts, representing a sign of regression for a long

time in climate change litigation in the Australian courts

proceedings in the sense that the legal reasoning of

the courts has systematically denied such a causality

link.

In the Carmichael Coal Mine case during the

jurisdictional review process, where landholders,

environmentalist and indigenous groups were

challenging the grant of the mining leases, the causality

link was not accepted.

The Queensland Land Court’s

recommendation in the December 2015 case found

that coal would come from elsewhere in the event of

refusal.

Similarly, the Federal Court of Australia, in its

judgement of the 25 August 2017 of the Judicial

Review of the Australian Conservation Foundation

Incorporated v Minister for the Environment and

Energy [2017] FCAFC 134, did not consider causation

on the ground that there is no such direct consequence

between emissions and proposed actions,

and even

if the actions were not taken, pollution would be

caused by ‘someone else’.

However, the case does represent a considerable sign

of advancement in law and also an important shift in

the Australian jurisprudence because in reality, it could

be advocated that ‘half a victory’ with regards to

causation was achieved anyway. It was the first time

Law, Environment and Development Journal

that climate change science was taken into consideration

in courts and even if causation was not accepted, what

was accepted was the existence of cumulative emissions

from the mine to be considered

global effect on the

environment and cause environmental damage within

the definition of the EPA. The concept of ‘cumulative

emissions’ will be analysed in the next section.

2.3.2 Cumulative Emissions

A significant advancement occurred in the Carmichael

Coal Mine case due to the procedural shift by the Land

Court to use joint expert reports and accept the existence

of cumulative emissions and not merely annual

emissions, which means that the effect of those

emissions caused by coal would matter for long-term

climate change. Cumulative Scope 1 and 2 emissions

were even described in the Carmichael Coal Mine case

as not negligible. The decision did not attribute

responsibility for the impacts of Scope 3 emissions to

the proponent but the Court accepted the existence of

cumulative emissions and therefore de facto an

equivocal link between GHGs emissions and climate

change and that a single project can be considered as

significant in a global context in a physical cause and

effect sense.

However, the strong hurdle in the legal thinking of

courts is that even though the defence does not deny

a climate change contribution, the legal thinking is

based on the argument that ‘if mining is not conducted

with the project then someone else will do it’, in what

is defined as ‘market substitution agreement’ defence.

The second argument for the defence was that mining

would determine significant economic benefits and

jobs.

The Courts’ reasoning is based on a finding

that if, in fact, global emissions are not increased, there

is no impact that constitutes or causes environmental

harm. The future will tell.

32 See (n 10) section 2.

33 Adani Mining Pty Ltd v Land Services of Coast and

Country Inc. [2015] QLC 48.

34 Australian Conservation Foundation Incorporated v

Minister for the Environment and Energy [2017] FCAFC

134.

35 ibid paragraph 48.

36 Adani Mining Pty Ltd (n 9) [429].

37 ibid.

38 The Adani’s EIS had estimated that the mine would

generate over 10,000 jobs. It was revealed at a trial thought

expert modelling that this figure was in fact more likely

to be 1,206 jobs in Queensland, as part of a total 1,464

jobs in Australia.

2.3.3 Precautionary Principle

During the referrals, the Land Court conducts a hearing

with applicants in proportion to the number of parties

objecting, for example to a mining lease. When doing

so, Land Court takes into consideration the EPA that

considers a number of principles of environmental

law, amongst which the Precautionary principle.

order to prevent serious or irreversible environmental

damage, lack of full scientific certainty should not be

used as a reason for postponing measures to prevent

environmental degradation.

In the Adani Carmichael Coal Mine Case in

Queensland, the Federal Court decision in the

Australian Conservation Foundation Inc. v Minister

for the Environment (ACF)

rejected the argument

of the applicant that the Minister failed to take into

account the Precautionary principle. The court

explained that the application of the principle requires

two conditions precedent: a) a threat of serious or

irreversible environmental damage; and b) scientific

uncertainty as to the environmental damage. The legal

court reasoning is that if there is not a threat of

scientific or irreversible damage, the precautionary

principle is not triggered.

The rejection of taking the Precautionary principle as a

legal argument to stop the mining lease in the Adani

Carmichael Coal Mine Case above into consideration

may be due to the way this principle is applied in

Australia. When applying the precautionary principle

in the Australian context, one must be mindful to

frame their consideration in scientific uncertainty rather

than uncertainty generally. If the court reasoning

considers that if there is, in fact, incontrovertible

evidence that a mine will open overseas directly in

response to the rejection of a mine in Australia and

this mine will produce coal at an identical rate and over

identical timeframes, then there is an argument that

there is no threat of serious and irreversible damage

caused by allowing the Australian mine to proceed.

There is an evident sign of regression in the way the

court interprets the climate change component, as it is

not possible to predict the future of the coal market

for the duration of the mining lease, which in turn

means that it cannot be proven on the balance of

probabilities that the impacts of a mine will be cancelled

out by a theoretical alternative mine.

If the court reasons in ‘scientific terms’

and what is

assessed is the amount of GHGs emissions that will

certainly enter into the atmosphere, then a logical

conclusion is to simply accept that there is indeed a

threat of serious and irreversible damage and the lack

of certainty as to the state of the coal market should

not be used as a reason to postpone measures to

prevent environmental harm.

In the Adani Carmichael Coal Mine Case, the Federal

Court decision, in the Land Services of Coast and

Country Inc. v Chief Executive, Department of

Environment and Heritage Protection & Anor [2016]

QSC 272 rejected the precautionary principle and the

application of the ‘standard criteria’ because the

possible economic benefits that the project would be

able to provide were deemed more important.

Hence,

it could be assessed that that in this judgement,

economic considerations and ‘scientific reasons’ were

determinant to rejecting the applicant’s contention.

2.3.4 Market Substitution Agreement

The Market Substitution Agreement (MSA) is the

dilemma of Queensland climate change litigation.

Queensland’s courts have systematically accepted the

Carmichael Coal Mine: A Case Study

39 Environmental Protection Act (EPA), 1994 (Qld) s 191

(g).

40 N De Sadeleer, ‘Environmental Principles: From Political

Slogans to Legal Rules’ (Oxford University Press 2002)

221.

41 Australian Conservation Foundation Inc. v Minister for

the Environment (2016) 251 FCR 308.

42 ibid [184].

43 J Bell James and B Collins, ‘If We Don’t Mine Coal,

Someone Else Will: Debunking the Market Substitution

Assumption in Queensland Climate Change Litigation’

(2020) 37(2) Environmental and Planning Law Journal,

183.

44 Or referring to ‘scientific uncertainty’ rather than

‘uncertainty generally’ as previously mentioned in this

section.

45 Adani Mining Pty Ltd (n 9) [625]: ‘Although there will be

environmental damage caused by the mine, I consider

that the adverse consequences are outweighed by the

benefits that will flow from the development of the

mine’.

MSA as an argument to dismiss climate change impacts

because of mining leases. The argument was also

defined as ‘no net impact’ or as the ‘drug dealer’s

defence’ by Readefern.

The argument sustaining the

MSA is essentially that there will be no net increase for

GHGs in the atmosphere because of any one project

because if the market demand for coal is not met by

the proposed mine, then it will be extracted somewhere

else.

The MSA has been used for example in the

Adani Mining Pty v Land Services of Coast and

Country Inc.

by the Land Court as a legal element in

rejecting the negative impact of coal and no increase of

GHGs emissions in mine where approved.

Even if there has been a sign of progression in the

climate change litigation with regards to the fact that

single projects are significant in a global context and

the cumulative effect has been accepted,

the major

obstacle has remained the MSA. The MSA is not a

concept unique to Queensland but a concept that argues

that a rejection of a particular mining project in a given

location will make no difference to global GHGs and

climate change because other coal mining projects will

result in equal emissions and will be developed anyway

somewhere else.

This is merely an assumption that is ‘market-driven’.

However, MSA is wrong on several grounds as it is

contrary to basic economic principles and even if a

court cannot accept that the MSA is wrong, it should

accept that is it uncertain.

Also the unethical

component could be considered because even though

MSA has been defined as the ‘drug dealer’s defence’,

which compares mining activity to a criminal activity, it

would not be acceptable that a criminal would find the

way to avoid responsibility completely by arguing that

should the activity be removed from the market,

another criminal would do it.

In that sense, a sign of advancement in climate change

litigation would be to ‘neutralise’ the MSA by instilling

in the legal reasoning of the courts the use of the

Precautionary principle as a counter argument,

specifically on insisting on the uncertainty of the MSA

and basing the legal reasoning on ‘standard criteria’.

In that sense, when making an objection decision

regarding an environmental authority, the Land Court

must consider a number of factors, amongst which

the standard criteria that are mentioned in the EPA

and include the Precautionary principle as set out by

the IGAE and mentioned in the previous section.

However, there is still the hurdle that when applied in

the Australian context, the Precautionary principle is

based on scientific uncertainty understood in a ‘narrow

vision’ and not scientific uncertainty in general or in a

broader and holistic perspective.

The notion of scientific uncertainty should be

rethought because scientific uncertainty means a scale

of values, rather than one specific one relating to climate

change impact. Scientific uncertainty in ‘general means’

means that we are not sure in terms of economic

benefits for example or we are not sure about the

results of scientific proofs ‘in general’ not only related

to climate change science but also in terms of economy,

sociology, health, etc. and the interactions of these

impacts amongst each other. Nowadays it is

impossible to consider climate science physical impacts

in an isolated way but rather it is the ‘cascading effects’

between the physical world, chemical world, biological

world and human societies in general that have to be

considered by observing the multiple intersections

existing between physical changes, ecosystem,

economy, sociology in the human system. This is the

broad, scientific concept of general uncertainty that

should be considered in line with the contemporary

scientific findings assessed from the IPCC and other

relevant institutions and not the old narrow ‘mediaeval’

scientific uncertainty that the Australian courts only

consider at present in climate change litigation.

For that reason, the MSA can be neutralised by arguing

that it is not in line with basic economic principles and

economic provisions. In case of threats of serious

and irreversible damage, the lack of certainty as to the

state of future coal markets should not be used as an

element of the legal reasoning to postpone measures

to prevent environmental damage.

Law, Environment and Development Journal

46 The Guardian, ‘Is it Un-Australian to Be Driving on with

Fossil Fuel Expansion Plans? 14 April 2014. See also,

McGinnes and Raff, ‘Coal and Climate Change: A Study

of Contemporary Climate litigation in Australia’, (2020)

37 Environmental Planning Law Journal 1.

47 ibid.

48 Adani Mining Pty Ltd (n 9) [452].

49 See previous section 2.3.2 on ‘Cumulative emissions’.

50 James and Collins, ‘If we Don’t Mine Coal, Someone

Else “Will”: Debunking the “Market Substitution

Assumption” in Queensland Climate Change Litigation’

(2020) 37 Environmental and Planning Law Journal 167.

However, as it will be demonstrated in section 4, the

estimation was overstated and the existence of certain

economic voids in different sectors was later established

and proved.

In the Carmichael Coal Mine case, it was the balance

between public interest and economic and social factors

that was important to strike and even though climate

or environmental impacts had been ascertained, it was

the relevance of economic benefits that was decisive in

the approval of this mining project.

In the case Adani Mining Pty v Land Services of Coast

and Country Inc. of 2015

the Land Court of

Queensland acknowledged that the economic benefits

were overestimated. However, this was not enough

for the Court to warrant a refusal of the project because

of the prevalence of the MSA in the case in point.

This is clearly a sign of regression in climate change

litigation and contradicts the science that emissions

would have an impact because of the cumulative effect.

The refusal to take established science into

consideration and let the MSA prevail can also be

considered as a climate injustice issue because of the

global impact that these emissions could have in the

rest of the world, especially in developing countries

nearby. In addition, climate injustice is tangible with

the refusal or systematic undermining behaviour of

courts allowing climate-scepticism to prevail over science

and law and destroying the credibility of climate

scientists and their arguments in the process of

litigation.

The participation of stakeholders in this process has

been identified as a strong sign of advancement in the

process of approval in mining projects. In the

Carmichael Coal Mine case, the relevance of

stakeholders’ participation reveals the need to

incorporate adaptive management principles linked to

public participation. This suggests considering

stakeholders as a tool of success in climate change

litigation processes in connection to mining lease court

cases.

Stakeholders are an important factor that can

2.3.5 Public Interest

In Adani Mining Pty Ltd v Land Services of Coast

and Country Inc. (Adani)

public interest was taken

into consideration and has represented an element of

advancement in terms of climate change litigation since

the Land Court has accepted that climate change

considerations form a part of the ‘public interest’ under

Queensland law. However, the legal element of public

interest was not sufficiently strong to win against the

MSA arguing that GHGs emissions would be emitted

anyway from other projects and sources. Even though

Scope 3 emissions were found to be important to

consider under the public interest concept, there is still

progress to be made in the court reasoning in weighing

ethical and economic considerations against public

interest. At a federal level, it is clear that litigation

concerning the Carmichael Coal Mine case has

demonstrated the weak relevance of this concept. The

case was undermined by the strong economic and social

interests and has become politicised by other factors

rather than environmental and human protection goal

achievements, probably also by the lesser relevance

accorded to this concept in Australian law.

CLIMATE CHANGE LITIGATION

LINKED WITH AN ECONOMIC,

SOCIAL, PUBLIC PARTICIPATION

AND STAKEHOLDERS APPROACH

Climate change litigation has served to shed light on

the connection with environmental law to both

economic and social benefits, which is essential to

understand economic consequences. This linkage has

proven useful to understand the economic benefits

of the mining projects. In the Carmichael Coal Mine

case, the promise of economic profits was heavily

stated:

the estimation of the number of future jobs

the mine would have generated was over 10,000 jobs.

Carmichael Coal Mine: A Case Study

51 Adani Mining Pty Ltd v Land Services of Coast and

Country Inc. [2015] QLC 48.

52 The economic and social approach of the Carmichael

case is examined in section 5.

53 Adani Mining Pty Ltd (n 9) [575], [586].

54 ibid.

55 C Slattery ‘Canary in the coal mine: why the approval

conditions for the Carmichael Mine reveal the need

to amend the EPBC Act to incorporate adaptive

management strategies’ (2016) Environmental and

Planning Law Journal 33.

Law, Environment and Development Journal

influence climate change litigation as limited

opportunities for stakeholders’ involvement challenges

the legitimacy of the approval conditions and

undermines the transparency in the environmental

decision-making processes.

ECONOMIC FACTORS TO TAKE

INTO ACCOUNT IN THE CASE OF

CARMICHAEL COAL MINE

In 2013, an Australian government approved

independent scientific body completed a report for a

number of Queensland Government agencies in

relation to the Carmichael mine’s supplementary EIS.

Amongst the various questions posed to the

Independent Expert Scientific Committee on Coal

Seam Gas and Large Coal Mining Development

(IESC), the agencies wanted to know what ‘additional

measures and commitments [are] required to monitor,

mitigate and manage impacts resulting from changes

to surface or groundwater resources?’ Amongst other

things, the authors of the report recommended:

A Mine Void Management Plan, (…)

would be expected to be developed

prior to completion of mining in the

first pit (…). In the Final Void

Management Plan, the proponent

should demonstrate that impacts to

water resources are mitigated and

managed in perpetuity.

This piece of advice is in line with the best practice

notion that successful mine closure results in few or

no negative legacies.

However, Currell et al. point

out that the IESC recommendation, as sage as it may

be is not binding and companies are ‘not required to

resolve all technical and scientific issues identified in

the committee’s advice’.

Furthermore, they argue

that in Australian mine approval processes, it is

common to omit remediation/mitigation strategies

‘if the proposed mine has a more serious impact than

is currently modelled’. What is concerning about this

warning is that in repeated instances Australian

government regulators, make no attempt at preventing

adverse outcomes in the mining sector and this

behaviour pervades thinking not just in relation to

environmental issues but also those of a financial and

economic nature.

It is for this reason that a number of economists and

journalists interested in this project have drawn

similarities between the physical voids that will need

to be created to extract the resource and the ‘economic

voids’ that are likely to appear once production starts.

These commentators have identified four different

types of economic voids: mining royalties, tax,

employment and public debt. Below, each one will be

examined in detail.

4.1 Mining Royalties

Queensland’s Mineral Resources Act (1989) and Mineral

Resources Regulation (2013) stipulate that coal mining

be subject to royalty payments based on a sliding scale

of from 7 per cent to 15 per cent depending on the

market value of a tonne of coal.

Even though this

requirement may seem simple, it was the Office of the

State Revenue’s Royalty Ruling MRA001.2, (issued in

56 IESC, Advice to Decision Maker on Coal Mining Project

– IESC 2013-034. Carmichael Coal Mine and Rail Project

– EPBC 2010/5736. Independent Expert Scientific

Committee on Coal Seam Gas and Large Coal Mining

Development (Canberra, 2013) <www.iesc.environ-

ment.gov.au/projectadvice/advice-decision-maker-

coal-mining-project-iesc-2013-034>.

57 P H Whitebread-Abrutat, A D Kendle and N J Coppin,

‘Lessons for the Mining Industry from Non-mining

Landscape Restoration Experiences’ in M Tibbet, A B

Fourie and C Digby (eds), Proceedings Eight

International Conference on Mine Closure (Australian

Centre for Geomechanics 2013) 625-40.

58 Currell, M.J., Werner, A.D., McGrath, C., Webb, J.A.,

Berkman, M. ‘Problems with the application of

hydrogeological science to regulation of Australian

mining projects: Carmichael Mine and Doongmabulla

Springs’, Journal of Hydrology, (2017) 681.

59 The rate calculation depends on the average price per

tonne of coal sold, disposed of or used in a given

period by a particular mining operation. See Royalty

Ruling MRA001.2 Determination of coal royalty.

Carmichael Coal Mine: A Case Study

2019) that finally clarified a number of issues related

to calculating the appropriate value of coal at the

relevant taxing point and the ability to claim deductions

for particular ‘allowable’ expenses. Before then, these

issues were resolved on an ad hoc basis. However,

given the enormity of Adani’s initial proposal,

corporate tax advisors, such as PWC and civil society

organisations, raised, as early as 2013, the need to clarify

coal royalty rules, thus opening up the path for what is

now MRA001.2.

Legal clarifications aside, the issue of royalty revenues

arising from Carmichael’s operation needs further

examination. In 2018, one of Adani’s public

statements said, ‘The Carmichael project will pay

billions of dollars in royalties’.

This is not likely to

occur, given that the market value of thermal coal

(Carmichael’s primary product) is expected to remain

at around its current international value of USD $8

per tonne (where the 7 per cent royalty rate applies).

Carmichael’s export target of 27 million tonne per

annum (mtpa) is likely to yield AUD $125m annually,

a significant figure when compared to 2018’s coal

industry contributions of AUD $538m but much

lower than the one Adani claims because, at that market

value, it will take 8 years before it reaches the 1 billion

mark.

One can argue that however much the company

inflates its royalty payments, it will still make some

payments, thus debunking the economic void claim.

However, in mid-May 2015, an Australia Broadcasting

Corporation

investigation found that the after some

high level political debate in the state’s cabinet, the

Queensland Government announced a seven-year

royalty deferral for Adani valued at AUD $320

million.

This together with the three years it will take to construct

the mine means that the State will not receive royalties

for a total of 10 years from the start of the project,

which represents a significant loss of revenue for the

public.

4.2 Tax

Non-renewable resources contribute approximately 10

per cent of Australia’s GDP

and yet the country’s

taxation regime at the federal level does not include

taxes specifically designed for profits derived from the

mining sector.

The taxes that currently apply to mining operations

are the same that apply to other sectors: corporate

60 Judy Sullivan and James O’Reilly, ‘State Taxes Uncertainty

in Royalty Regimes and Disputes Process – The Need

for Legislative Reform’ PwC Energy and Mining Tax

Update (Edition 1, December 2013) 4 <https://

www.pwc.com.au/tax/assets/mining-energy-tax-

update-dec13.pdf>.

61 Adani Australia, Did You Know Adani’s Carmichael

Mine will Generate Billions of Dollars for the

Government? (2018) < https://www.youtube.com/

watch?v=8S5cqxGONz4 >.

62 T Buckley and S Nicholas, ‘Conflating Queensland’s

Coking and Thermal Coal Industries’ Institute for

Energy Economics and Financial Analysis (Cleveland

OH, May 31, 2019) <https://ieefa.org/conflating-

queenslands-coking-and-thermal-coal-industries_june-

2019/>.

63 Mark Willacy, ‘Queensland Government Offers Adani

Mining Group a ‘Royalties Holiday’ that could Cost

State $320 million’ ABC News (Brisbane, 18 May 2017)

<www.abc.net.au/news/2017-05-18/queensland-

government-gives-adani-royalties-holiday/8536560>.

64 Queensland Government, ‘Palaszczuk Government

Welcomes Royalties Agreement with Adani’ (Media

Statement, The Queensland Cabinet and Ministerial

Directory, 31 May 2017) <http://statements.qld.gov.au/

Statement/2017/5/31/palaszczuk-government-

welcomes-royalties-agreement-with-adani>.

65 Minerals Council of Australia, ‘Submission to Senate

Economics References Committee Inquiry into

Corporate Tax Avoidance’ (Minerals Council of

Australia, Canberra, 2015) 2.

66 In 2012, the Rudd Labour government introduced the

Minerals Resource Rent Tax (MRRT) to tax profits

derived from iron ore and coal mining at a rate of 30

per cent but the Abbot Coalition government repealed

the tax in 2014. It did not apply to companies making

less than AUD $75m of MRRT mining proûts per year.

Companies making more AUD $75m were entitled to

an ‘extraction allowance’ of 25 per cent therefore the

effective rate was 22.5 per cent. Any MRRT paid was

deductible for income tax purposes. Because mining

companies used various tax minimisation schemes, the

MRRT tax never raised the desired revenue for the

government. In the first six months after its introduction,

it had only raised AUD $126 million against a full year

forecast of AUD $2 billion. See P Guj, ‘Mineral Royalties

and Other Mining Specific Taxes’ (International Mining

for Development Centre 2012). See also <https://

www.news.com.au/finance/business/rio-pays-no-

mining-tax/news-story/a9829f30fb4d9a0df0589-

d85a40ae5d8> and <https://www.sbs.com.au/news/

swan-reveals-mining-tax-revenue>.

Law, Environment and Development Journal

income taxes (top rate of 30 per cent) and various

withholding taxes. Despite the existence of these taxes,

large mining companies are notorious for paying little

or no tax at all in Australia. This is due to the

provisions in the tax code that allow companies to

offset large accumulated losses against past and future

profits, claim expenses such as depreciation, research

and development and debt financing amongst others.

The sector also benefits from tax incentives and

concessions such as the fuel tax. In addition, mining

companies make full use of tax minimisation schemes

involving overseas subsidiaries registered in tax havens

or low tax jurisdictions.

In 2018, the Australian

Taxation Office (ATO) questioned both BHP and Rio

Tinto for selling iron ore to their Singapore subsidiaries

(where the corporate tax is 17 per cent) at one price and

then reselling for a higher price to their final clients.

This practice is known as trade misinvoicing and

multinational companies commonly use it to avoid

capital controls, claim tax incentives and evade or

minimise taxes. Money laundry operations also use

the same technique.

For its part, Adani has promised a contribution of

AUD $22 billion in taxes to government over the life

of the mine.

However, during a 2015 trial in the

Queensland Land Court, company representatives

admitted that the figure is more likely to be AUD

$16.8 billion.

In addition, following the lead of

other large conglomerates in Australia, the company

has set up a corporate structure designed to minimise

tax paid in Australia. Indian and Australian media

investigations have been unable to decipher the

complex corporate web created by Adani but it is clear

that subsidiaries exists in Singapore, Mauritius, the

British Virgin Islands and the Cayman Islands, the

latter three being well established tax havens. These

media reports suggests that the company may end up

paying a fraction of the stated billions in tax, a situation

that, if it occurs, will leave a large void in the

government’s revenue expectations in years to come.

4.3 Employment

Adani’s original 60 mtpa proposed mine

together

with the operation and expansion of the company’s

terminal at Abbot Point Port and construction of the

388 km freight rail line connecting the mine with the

port, would have required a large labour force in a

region in Queensland that depends heavily on natural

resource extraction.

And Adani’s public

announcements early in the project proposal phase

matched high expectations by claiming that the

company would generate ‘10,000 direct and indirect

67 M West, ‘Australia’s Top 40 Tax Dodgers 2020: Fossil

Fuels Dominate Once More’ Michael West Media (21

January 2020) <www.michaelwest.com.au/australias-top-

40-tax-dodgers-2020-fossil-fuels-dominate-once-more/

68 Emma Alberici, ‘Why Many Big Companies Don’t Pay

Corporate Tax’ ABC News (Wednesday 14 February

2018) <www.abc.net.au/news/2018-02-14/why-many-

big-companies-dont-pay-corporate-tax/9443840>.

69 Global Financial Integrity, ‘Trade Misinvoicing’ <https:/

/gfintegrity.org/issue/trade-misinvoicing/>.

70 Leith van Onselen, ‘Adani White Elephant Won’t Even

Pay Australian Tax’, Macrobusiness (3 October 2017)

<www.macrobusiness.com.au/2017/10/adani-white-

elephant-wont-even-pay-australian-tax/>.

71 Michael West, ‘Adani Mining Feels Heat Over $14b

Galilee Basin Coal Mine Gap’ Brisbane Times (28 April

2015) <www.brisbanetimes.com.au/business/adani-

mining-feels-heat-over-14b-galilee-basin-coal-mine-gap-

20150427-1mud1h.html>.

72 Lisa Cox ‘Uncertainty over Massive Queensland Mine

after Election Shock and Concerns Over Indian

Company’ The Sydney Morning Herald (6 February

2015) <www.smh.com.au/business/uncertainty-over-

massive-queensland-mine-after-election-shock-and-

concerns-over-indian-company-20150206-

137mbi.html>.

73 A project of those dimensions would have made

Carmichael, the second largest producer of thermal

coal in the world after Peabody Energy’s North Antelope

Rochelle mine in the USA (107 mtpa)

and dwarfed

Australia’s current largest thermal coal operation, BHP

Billiton’s Mount Arthur Mine (15 mtpa). Josh Robertson,

‘What we Know about Adani’s Carmichael Coal Mine’

ABC News (Friday 26 April 2019) <www.abc.net.au/

news/2019-04-26/what-we-know-about-adanis-

carmichael-coal-mine-project/11049938>.

74 Charis Chang, ‘The Hunt for Adani’s 10,000 Jobs Brings

Up ‘Zero Results’ NEWS.com.au (Sydney, 27 September

2017) <www.news.com.au/finance/business/mining/

the-hunt-for-adanis-10000-jobs-brings-up-zero-results/

news-story/7532705440f71254b658b320d91ed02e>.

Carmichael Coal Mine: A Case Study

jobs’ over the life of the mine.

However, during a

court case in 2015, Adani’s economist, citing the

company’s latest economic assessment said the project

would generate 1,464 direct and indirect jobs in

Australia in the first 30 years from the start of the

mine.

Since then, the proposed rail link has decreased

in length and the revision calls for a 200km rail line

that would make use of an existing line owned by

Aurizon.

In the revised proposal, the mine itself is

expected to produce an estimated 10mtpa of coal based

on an investment of AUD $2 billion for the life of the

mine and not the original AUD $16 billion.

In the absence of any regulation ensuring that

companies keep their employment promises during

the operational stages, the challenge is to rely on

mechanisms that maximise employment for the local

population.

It is also important that during the

proposal phases, companies rely on economic

modelling that does not inflate employment figure.

As it stands, this project has already created a large

void in terms of the employment expectations it

originally raised.

4.4 Public Debt

Australia’s biggest bank, the Commonwealth Bank

was adviser to the project until 2015 when it withdrew.

Since then Adani has had difficulties securing a bank

that would support the project.

The Queensland

Government offered AUD $900m in the form of a

low interest loan but then retracted it in 2017.

The

last possibility for external funding came in the form

of the Northern Australia Infrastructure Facility

(NAIF) that would have made AUD $1b available but

it was also blocked (West, 2017).

These setbacks and financier’s concerns over the long-

term feasibility of coal projects,

decreasing world

coal prices and the company’s human rights record in

India,

means the company has some way to secure

Carmichael’s finances but options are still available. In

the period 2018-19 the Indian state of Gujarat saved

Adani’s troubled 4GW Ultra Mega Power Plant at

Mundra in the Gulf of Kutch by renegotiating its

purchase agreement allowing it to increase its power

tariff by 30 per cent for the next 30 years.

At the

75 This figure originates from consulting firm GHD in a

report commissioned by Adani. Rod Campbell, ‘Fact

Check: Will Adani’s Coal Mine Really Boost

Employment by 10,000 Jobs?’ The Australian Business

Review (Sydney, 31 August 2015)

<www.theaustralian.com.au/business/business-

spectator/fact-check-will-adanis-coal-mine-really-boost-

employment-by-10000-jobs/news-story/

903c1932738b1d1a1763c74e45f4d7c7>.

76 J Fahrer, ‘Carmichael Coal and Rail Project Economic

Assessment Expert Report’ Report to Land Court Of

Queensland (Brisbane 2015).

77 Rod Campbell, ‘Fact Check: Will Adani’s Coal Mine

Really Boost Employment by 10,000 Jobs?’ The

Australian Business Review (Sydney, 31 August 2015)

<www.theaustralian.com.au/business/business-

spectator/fact-check-will-adanis-coal-mine-really-boost-

employment-by-10000-jobs/news-story/

903c1932738b1d1a1763c74e45f4d7c7>.

78 Josh Robertson, ‘What we Know about Adani’s

Carmichael Coal Mine’ ABC News (Friday 26 April

2019) <www.abc.net.au/news/2019-04-26/what-we-

know-about-adanis-carmichael-coal-mine-project/

11049938>. The projected production in the latest

proposal is 40mta.

79 One such mechanism is the Impact Benefit Agreement

(IBA). Currently, local level governments and

indigenous landowners use these agreements in their

dealings with mining companies but federal and state

governments can also use them. So far, the Bravus Group

has not entered into an IBA with any entity.

80 Michael West and Lisa Cox, ‘Adani and Commonwealth

Bank Part Ways, Casting Further Doubt on Carmichael

Coal Project’ The Sydney Morning Herald (Sydney, 5

August 2015) <www.smh.com.au/business/companies/

adani-and-commonwealth-bank-part-ways-casting-

further-doubt-on-carmichael-coal-project-20150805-

gisd1l.html>.

81 M Tahara-Stubbs, ‘Adani Claims Financial Close on

Carmichael Coal Mine’ Project Finance (London, 18

July 2018).

82 Michael West ‘EFIC may Finance Adani Coal Mine’

Michael West Media (23 May 2017) <https://

www.michaelwest.com.au/report-efic-may-finance-

adani-coal-mine/>.

83 As of 2019, over 100 globally significant financial

institutions have divested from thermal coal, including

40 per cent of the top 40 global banks and 20 globally

significant insurers. Tim Buckley, ‘Over 100 Global

Financial Institutions Are Exiting Coal, With More to

Come’ Institute for Energy Economics and Financial

Analysis (Cleveland OH, 27 February 2019) <https://

ieefa.org/wp-content/uploads/2019/02/IEEFA-

Report_100-and-counting_Coal-Exit_Feb-2019.pdf >.

84 Environmental Justice Australia ‘The Adani Group’s

Environmental and Human Rights Record’ The Adani

Brief Update (Environmental Justice 2019).

85 This effectively is a taxpayer-funded subsidy to the

company that consumers will have to pay via increased

electricity tariffs in Gujarat.

Law, Environment and Development Journal

same time, the Government of India awarded the

company a Special Economic Zone tax exemption for

10 years and the State Bank of India provided a US

$1.5 billion loan to the Adani Group. What this means

is that the company has enough political influence to

maintain Indian government support. In Australia,

there is the possibility that the Federal Government

may lend AUD $1b at a discounted 3 per cent annual

rate for 30 years via the Export Finance and Insurance

Corporation to build the railway link between the mine

and the port.

Despite its recent good fortunes in India and the

promise of public money from Australia, the company

remains highly indebted. A 2015 report by Credit

Suisse, placed Adani in a category of Indian corporates

with ‘high exposure to [fluctuating prices of]

commodities’ whose foreign currency debt servicing

‘continues to be of concern’.

In a later report, Credit

Suisse warned that Adani’s listed companies’ debt to

Earnings Before Interest, Taxes, Depreciation and

Amortization (EBITDA) ratios were high in 2017 and

would take years to decrease.

Providing taxpayer’s funds to a company with such

high levels of indebtedness carries an equally high level

of financial risk. The Bravus Group may decide, in

future, to write off incurred losses and abandon the

project altogether leaving a large void of debt that all

Australians would have to pay over the next 30 years

without realising any of the supposed benefits.

Apart from current concerns with the Bravus Group’s

misleading the public in terms of the abovementioned

economic factors, we also need to take into account

86 Tim Buckley ‘The Fix Is In: Adani Hooks India’s Poor

and Australia’s Taxpayers’ Michael West Media (29 May

2019) <www.michaelwest.com.au/the-fix-is-in-adani-

hooks-indias-poor-and-australias-taxpayers>.

87 A Gupta, K Shah and P Kumar, The Adani Group

(India Corporate Health Tracker: Sector Review. Credit

Suisse Equity Research, 16 February 2017) 9 <https://

research-doc.credit-suisse.com/docView?language=-

ENG&format=PDF&s-ourceidemblast&-

document_id=x754328&serialid=zIxSn4xZTOJCZ921-

PyMcyqKWxHK%2Bd2Zxu-0xhtt2oXt0%3D>.

88 According to the report, the EBITDA rates in 2017

were: Adani Power: 8.1, Adani Ports & SEZ: 4.1, Adani

Enterprises: 8.6 and Adani Transmission: 5. See Gupta,

Shah and Kumar, ibid.

Australia’s economic resilience to climate change. This

resilience depends, largely, on government investment

on climate change mitigation and this, in turn, depends

on current government revenues. Therefore, every

dollar that ends up in the above-mentioned ‘void’ is

not just a financial loss but also a lost opportunity to

invest in measures that will strengthen Australia’s

chance to mitigate the worst effects of climatic change.

CONCLUSION

The main findings were ascertaining the current status

in terms of advancement and regression in climate

change litigation, as well as outlining the regulatory

framework for mining projects in Australia. Despite

the initial potentials in terms of job opportunities,

financiers have recognized that investing in coal has a

number of risks that are primarily linked to climate

science, climate policy pressures, competition from

renewable energies producers, the use of public funds,

the evasion or minimization of tax and royalties and

making employment promises. The Australian federal

and state governments should seriously consider

enacting laws and policies that prevent companies from

using tax minimization schemes, both domestic and

off-shore. These laws should also limit the use of

royalty dispensation schemes. Employment levels

should be negotiated by using Impact Benefit

Agreements, involving the impacted indigenous

communities surrounding a mining project and the

state so that job numbers at that level are also

maintained at a certain level. When deliberating on

legal issues relating to mining leases approvals, Courts

and tribunals still do not take into account scientific

evidence, which will have a repercussion on the

transition away from fossil fuel. However, at least,

climate change litigation has been crucial to insist on

weighing the economic and social contributions against

climate impacts. The current Australian regulatory

framework need to shift towards a more just, modern

and ethical system by including scientific findings and

scientific uncertainty in a broader, holistic regulatory

vision or at least more in line with the current

Anthropocene Era that we are living in.

LEAD Journal (Law, Environment and Development Journal) is jointly managed by the

Law, Environment and Development Centre, SOAS University of London

soas.ac.uk/ledc

and the International Environmental Law Research Centre (IELRC)

ielrc.org