Endings and Fairness: The Clean Energy Act 2011 (Cth) and Queensland Nickel

Originally published at Opinions on High, the Melbourne Law School High Court blog.

Australia’s first national laws to put a price on carbon were effective to their end; reportedly leading to reductions in Australia’s combined greenhouse gas emissions. In their absence it has been reported that increases in emissions have resumed. While our new Prime Minister grapples with how to rein in these emissions, the High Court last year confirmed that the carbon price laws were lawful, and through the prism of the Constitution fair, to their end. The history books will show, however, that politicians failed to make the case for a carbon price law, but they devised and crafted a successful, if complex though geographically unfair, legal policy. Over the past few days the protagonist in the High Court case, Queensland Nickel, with the business faltering, has brought claims of fairness into the political discourse around this business’ carbon intensive operations.

The Constitution and no interstate discrimination

In Queensland Nickel Pty Ltd v Commonwealth [2015] HCA 12, notable also as Nettle J’s first judgment, the High Court dismissed a claim by Queensland Nickel that regulations supporting the principal Act, the Clean Energy Act 2011 (Cth), were unconstitutional based on their geographic effect. Arguments relying on s 99 of the Constitution, the non-discrimination provision, that the regulations inadvertently and indirectly discriminated against the Queensland-based refinery business wholly owned by Clive Palmer MP, the federal parliamentary member for Fairfax, were rejected.

The High Court concluded that the additional financial liability imposed on Queensland Nickel relative to other refineries in Western Australia that triggered the case was not a cause of a difference or discrimination on the grounds of physical or jurisdictional geography but a result of past decisions made by Queensland Nickel on purely financial grounds. The effect of the laws as experienced by Queensland Nickel relative to its Western Australian competitors may have had an increased financial burden on Mr Palmer’s company, which has not been attributed to the company’s financial woes, but that burden was not attributable to the law; rather business decisions made by the company in its infancy.

In the High Court case, Nettle J adopted the plurality view in the Fortescue Metals case, and found that the particular parts of the carbon price regulation that set out liabilities for nickel refineries ‘did not discriminate between States. In terms, it applied equally to eligible persons carrying on the production of nickel regardless of the State of production’ (at [56]). Although Nettle J acknowledged a difference in practical effect of the laws for Queensland Nickel, he considered that ‘in this case it does not appear that any of the differences between the plaintiff’s and the Western Australian nickel producers’ inputs, production processes or outputs were due to differences between Queensland and Western Australia in natural, business or other circumstances’ (at [58]).

Instead, Nettle J focussed on past decisions about mining processes as giving rise to the different effect of the laws. The mining process adopted by Queensland Nickel was found to have been the reason for the greater financial burden under the laws. Although Nettle J conceded that the mining process decision ‘was informed by geographic considerations’ (at [61]), the decisions were ultimately based on delivering to each firm the greatest possible financial windfall at the time the decisions were made in the historical technological settings.

This conclusion, which eschews considerations of the geography of place, effect, and time in preference for considerations of financial autonomy offers an appropriate and consistent ending for the Clean Energy Act 2011, because financial interests trumped geographic interests and fairness throughout its invention, implementation and repeal.

The carbon price laws and unfairness

In the lead up to the last federal election Clive Palmer claimed to have advice that the carbon price legislation was unconstitutional, drawing in the then federal opposition leader, Tony Abbott, and then Queensland Liberal National leader Campbell Newman in support of his case. One of the frames developed to oppose the carbon laws was fairness and justice. This particularly included fairness to Australia internationally and fairness for businesses in Australia, especially those smaller businesses facing higher electricity costs, and fairness to families facing higher electricity costs (not all caused by the carbon price laws). At that time, in 2013, however, opposition to the laws was not widespread or strong, with most people ambivalent towards them (as distinct from the deeply felt opposition to the then Prime Minister’s popularly understood broken promise not to introduce a carbon tax). Moreover, opposition to the carbon price laws diminished further in the year following the election of the Tony Abbott led government and in the lead up to their repeal.

There could have been a more sophisticated level of opposition to the laws, not triggered by the financial costs created by the laws (as that was their very deliberate intention), but based on geographic fairness. By geography I mean the distribution between places and jurisdictions and across space, time and scale of social, environmental, political and economic advantages and burdens, whether deliberate or consequential.

The remainder of this short piece tries to record those geographic bases for opposition to Australia’s recent political and legal responses to the issue of carbon emission reductions, which, unlike Mr Palmer’s claims, did not rise to prominence in law or the media. With Mr Palmer’s recent attempt to deploy a discourse of fairness in the context of the financial predicament of Queensland Nickel it is a timely to record these fairness bases.

Geographer Lesley Head has demonstrated that those Australians with lowest incomes experienced the greatest burden of reducing emissions from electricity use under the carbon price legislation. In contrast, the rich simply paid more to run their air conditioners and wine fridges. Indeed, any consideration of the distribution of effect of climate policies and laws across the spectrum of advantage in Australia is typically not prioritised. The recent history of Australian climate policy has examples of ignorance of their geographic fairness, and the discourse of ‘climate justice’ is rarely highlighted in this country while claims about financial business injustices are.

Moreover, the way the carbon price laws were comprised and then administered demonstrated a lack of concern for geographic fairness in place of economic purity and attention to dominant financial interests. For instance, the laws were ultimately not accompanied by regulations that mandated improvements on those coal-fired generators that disproportionately affect carbon exposed communities. Rather the laws did include exemptions to protect trade-exposed business. Moreover, the promise to close down the least efficient power generators in order to achieve significant additional reductions, and indirectly improve the environmental health of the host communities, came to nothing. The long-advocated greenhouse trigger for environmental assessments in the federal Environment Protection and Biodiversity Act 1999 (Cth), which would have protected more communities from future pollution, was dismissed again — this time as being incompatible with the market approach of the carbon price regime.

The repeal of the laws, however, has entrenched localised pollution (an exception is in Anglesea where the generator supplying the local aluminum smelter has been decommissioned on financial grounds). Large coal fired generators are now not required to reduce their emissions at all. The Australian domestic approach to emissions reductions now also reflects its international agenda of using offsets in place of reductions: a policy approach I have previously questioned as being geographically unfair.

While the High Court’s approach to the issue of the geographic effect of the carbon laws was cursory, that should not leave us to think that the recent and current approaches to carbon emissions reduction laws and policies passed the geographic ‘fairness’ test. Rather, these laws created and have embedded geographic discrimination of a type that s 99 of the Constitution is unable to redress.

Queensland Nickel’s financial struggles and retorts to fairness

As for Mr Palmer’s claim that the Queensland government should have guaranteed Queensland Nickel’s immediate financial security on the basis of fairness, that’s far more difficult to unpack. As Antony Green alludes to it seems that Mr Palmer was attempting to use ‘fairness’ as a slogan in the same way the present government has for its current reform agenda: an agenda focused on matters economic and overlooking the geographic unfairness of climate change law and policy. Lost also in the framing of the debate by Mr Palmer, but identified by the Queensland opposition, is the fairness of the State potentially being called upon to rehabilitate the refinery site lest the local community continue to bear environmental harms without any economic advantages from the operation of the refinery.

From environmental citizenship to heritage citizenship? The Victorian Ombudsman, the Brookland Greens gas leak and the Windsor Hotel redevelopment

This an abridged version of a paper I delivered at The University of Melbourne, Australian Institute of Art History “International Conference to explore approaches to the preservation of urban built heritage, with a focus on Melbourne” in October 2014.

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The Victorian Environment Protection Authority’s embrace of the notion and principles of ‘environmental citizenship’ points towards a principled attempt to begin the process for redistributing power and reprioritising community concerns in environmental laws in the state. Lightly grounded in scholarship, particularly the work of Dobson, Victoria’s Environmental Citizenship Strategy positions the community as having a role in environmental regulation and asserts that the authority’s function is to enforce environmental standards and be responsive to community concerns about environmental harms. The enthusiasm for a novel form of citizenship-based policy development, notwithstanding that the policy is part of the broader State government Environmental Partnerships program, has not, however, migrated to heritage laws. There is no policy support for an idea of ‘heritage citizenship’, for instance. I argue that there should be; that we need to reflect on the purpose and function of heritage laws with concepts of citizenship in mind.

My paper relies on two place-based controversies connected by time, by government mishandling, and – most significantly for the paper – by the critique of the Victorian Ombudsman. The environmental citizenship concept can be traced to the Ombudsman’s report into the Brookland Greens Estate gas leak saga in Cranbourne, while the other Ombudsman report – about the redevelopment of the heritage-protected Windsor Hotel has led us to nowhere in particular. This is despite the nature and topic of the Ombudsman’s critiques being comparable. The paper distills the similarities in the Ombudsman’s critique and offers some preliminary thoughts about what a notion of ‘heritage citizenship’ would mean in our existing legal landscape.

The Ombudsman’s report into the Brookland Greens Estate gas leak concluded that the Victorian Environment Protection Authority particularly had mishandled regulatory oversight and made poor administrative decisions about the estate development and regulatory control over the adjacent landfill from where the gas emanated. Specifically, the authority:

  • had poorly enforced the laws it was charged to administer. It prioritised relationships with organisations it was supposed to regulate instead of prioritising the welfare of the people it was supposed to protect.
  • did not compel compliance with the law. It did not adequately respond to improved standards and environmental knowledge and failed to escalate enforcement when there was a clear need to do so.
  • lost sight of its overarching environmental protection objectives.
  • had consolidated decision making within a bureaucratic elite, making the organization unresponsive and rendering itself functionally hamstrung.
  • did not take a formal or influential role in court proceedings when it had the opportunity to do so and the knowledge to influence.

The Victorian Ombudsman, 16 months after its inquiry into the Brookland Greens Estate was directed to inquire into the events that led to the planning and heritage approval of the highly contested Hotel Windsor redevelopment. The Victorian government approved the redevelopment through the Minister for Planning in his role as responsible authority: a role he had because of the proposed size of the redevelopment. His decision was supported by an advisory committee recommendation. The project had the support of the City of Melbourne. Heritage Victoria also promptly granted a heritage permit under the Heritage Act.

The focus of the Ombudsman’s report was a plan hatched within the Minister for Planning’s office to generate community opposition to the project upon the release of the advisory committee recommendation report. This was intended to curate a political imperative to reject the project, but the plan was inadvertently disclosed and the rejection of the redevelopment became a political impossibility (and potentially a legal minefield). From the Ombudsman’s report it can be deduced that:

  • an appointee to the advisory panel was implicated in conflict, having previously worked on the site with a member of the development team, bringing into focus the small and interconnected community working on the Windsor Hotel.
  • key decisions, recommendations and strategies were devised by Ministerial staffers with insufficient oversight, accountability, expertise and management.
  • the community was seen as something to use for political purposes rather than as contributing meaningfully to decisions about heritage.
  • the Department of Planning, through its then Secretary, asserted that decisions made under the Heritage Act can be reached by a decision-maker giving equal weight to impacts on heritage of development and to the impacts of economic use of a heritage place arising from non-development. This dispelled any idea that the administration of the Heritage Act ought to achieve its main statutory goal: ‘to provide for the protection and conservation of places and objects of cultural heritage significance and the registration of such places and objects’.

Across both Ombudsman reports there were findings or suggestions about inappropriate administrative conduct, power resting in an exclusive elite, a failure to prioritise community concerns and expectations. and a sidelining of the community in decision-making. Still, the inquiry into the Windsor Hotel has not led to a policy response comparable to the Environmental Citizenship Strategy, which was triggered by the report of the Ombudsman and others prepared for and by the Environment Protection Authority about the Brookland Greens Estate.

However, there is a breadth of scholarship on urban citizenship and justice that could – or may still – provide a starting point for reconsidering legal and policy frameworks and encounters with heritage and planning laws. A notion of ‘heritage citizenship’ could be extracted from this scholarship. Selectively and notably, Fainstein has argued that a just city is one that is one that is diverse, democratic, and equitable; where the community and its collective “quality of life”, rather than politics, is the central figure. Her work draws upon justice theories and philosophy as well as social geographers, prime among them Harvey, whose work articulates a right of city dwellers to urban identity, citizenship and belonging; a right not to be dispossessed. Of particular relevance to heritage, Szerszynski has argued that urban citizenry includes the right to be and of the visual and a responsibility to the visual. Smith and Mcquarrie argue that urban citizenship is not only about belonging within the city, but also belonging within the law of the city, where ‘belonging’ is different from simply ‘being heard’ in law. Finally, legal scholar, Merryman has argued that the basis for heritage conservation is the public interest. So the public should be central in decisions about heritage.

Under the existing planning and heritage law regime, however, the experience that many in the community have, including those opposing the Windsor Hotel redevelopment, is that they are kept on the periphery. Planning and heritage laws restructured around a concept of heritage citizenship would, however, bring community into the framework more explicitly. Community rights and interests and their position in the city as dwellers and responsibility bearers should mean that heritage laws are primarily and unashamedly about heritage protection for them; rather than their interests merely being a factor to balance against proprietary and capital interests. Heritage citizenship would see also a dispersal of power within the administrative system for heritage protection, with less dependence on a professionalised and hierarchical bureaucracy, power reallocated away from the Minister, and a more purposeful role for all of us urban citizens.

Clearing the Air: Australia, environmental justice and ‘toxic’ pollution

Here is a speech I gave at a public seminar hosted by Environmental Justice Australia on 8 July 2014 on the topic of air pollution and environmental injustice.

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The focus of this evening’s seminar is the recently published ‘Clearing the Air’ report into air pollution by our hosts, Environmental Justice Australia.

However, I want to start my presentation by taking you back a couple of years to the report that saw this organisation shift its attention, and ultimately its name, towards concerns of environmental justice.

In that report, the final report of the Environmental Justice Project (pdf), the Environment Defenders Office (‘EDO’) – as it then was – explained an absence within Australia of a narrative – or movement – for environmental justice and a policy gap in the promotion of environmental justice principles throughout the country.

For those of you unfamiliar with the concept of environmental justice it is a term with an evolving definition: it is defined differently depending on context and perspective. What links the definitions, however, are two concerns about fairness.

First, fairness in terms of where environmental harms are situated. In this respect the concept is understood as having distributional or geographic aspects.

Second, a concern about fairness in decisions about projects or policies that are perceived as having environmentally harmful effects – wherever those effects may be located. So in this respect the concept is also understood as having procedural or political aspects.

When understood at its most basic level within these two terms, I am sure you will agree that for many decades these concerns about fairness have been evident in Australia. I am confident that each of you could recall a case, a project, a decision, a pollution event that either gave rise to concerns about distributional unfairness or procedural or political unfairness.

Some readers of the EDO’s Environmental Justice Project Final Report, however, suggested that the concept of environmental justice is novel to Australia: that the EDO’s work was the first time that environmental justice had been brought into view in Australia. That is not accurate. A review of the footnotes of the EDO report makes plain that there has existed and been recorded for a period of time in Australia events and literature on environmental justice.

In fact, the experience of air pollution in Australia allows you to trace environmental justice concerns for decades. The graphic locating geography hot spots of air pollution in the Environmental Justice Australia report, (pdf, see page 16), offers you an opportunity to reflect on how long those spots have been presenting distributional, unfair health problems to those communities. They have not just appeared over the past two years.

The principal messages in my presentation today, drawn from my research and also what I learned in putting together and recently teaching the subject Toxics, Waste and Contamination Law is that environmental justice concerns have played a part in our pollution laws over the past 40 years.

It is only now are we as a community of scholars and of individuals beginning to frame our laws as being directed to achieve environmental justice. The report we are discussing tonight is part of this movement; part of the trend.

I want to offer two potential reasons for this interest in environmental justice: not simply the concepts but also the words, the discourse, the phrase, the term.

First, we are seeing demands that human health impacts be a priority when governments respond to incidents and reports of degraded environments and, associated with that, a second potential reason (and this is somewhat preliminary and speculative) is the displacement, in the view of non-government entities, of sustainability as the predominant policy goal of environmental laws.

To reach these conclusions, however, it has been necessarily for me to take what is becoming an unconventional route to understanding what environmental justice means.

The conventional route is to see environmental justice as having emerged from the environmental racism movement in the USA, exemplified by the incident in the late 1970s and early 1980s in Warren County where abandoned chemical wastes were relocated in the face of African America led opposition to a tip created in the least wealthy and least white county in North Carolina.

A less specific, less limiting and arguably more global and less instantaneous, alternative starting point for the emergence of environmental justice is in the anti-toxics movement.

Political scientist John Dryzek traces the discourse of environmental justice to this movement and social scientists Buell and Szasz also separately reached this view.

For them ‘toxic’ was and is a word of political power and an expression and encapsulation of human health concerns. Szasz writes of toxic as ‘icon’, a rallying point. Buell writes of the ‘global rhetoric’ of toxicity predating the 1970s. Dryzek notes the difficulty in disproving toxicity: hence it has symbolic and political power.

Toxic was proxy – for justice, for fairness, for protection of human health. It remains so. You are also likely seeing it appear more in our environmental language. Alkon et al in recent scholarship in the journal Local Environment argue that we should not always be looking for environmental justice as a term to understand its meaning and force, but to be mindful of proxy terms.

So if you are looking for a narrative of environmental justice in Australia a search for concerns and complaints about toxicity can be a proxy. You are all likely aware of the long standing National Toxics Network. Some of you might be aware of the book Local Heroes edited by Kathleen McPhillips which recounts incidents of toxic pollution and threats around Australia, including at the periphery of Coode Island here in inner Melbourne. These, as well as some of those locations in the pollution hot spots map, are Australia’s early stories of environmental justice. They date for decades.

What is central in the toxics terminology is the human – toxic effects on humans. So having sketched out a path for you to see environmental justice as having resonated through our experience of pollution laws, I now want to turn to emphasise the centrality of human health to those concerns. To show the parallel experience of health and toxicity in our modern environmental laws.

If you look at the origins of the Environment Protection Act 1970 (Vic), you will see a focus on human health concerns within the broader community.

Former federal MP Lindsay Tanner, in his co-authored 1978 book, The Politics of Pollution, pinpoints the proposal for the Carrum sewerage treatment plan with an effluent pipeline into Port Phillip as a trigger for the public to demand a comprehensive pollution control regulatory system in Victoria: a system that would protect the “quality of life” of the public. Tanner’s book also records the election promise of the Bolte government to create the Environment Protection Authority in May 1970 in response to community demands for government intervention to control pollution for their benefit.

While these laws have changed over the past 40 years, particularly in the post-Rio legal sphere, and while governments have repositioned the laws to achieve environmental protection and meet principles of sustainability, recent reports analyzing the conduct of the Environment Protection Authority reiterate that in the community’s view these are laws ought to protect them, their well-being and their health, and that their health has been missing from the agency’s regulatory enforcement activities.

My research has also led me to suspect that if the community ever signed up to the concept of environmental sustainability it has since signed off.

With Annette Jones I reviewed submissions to human rights dialogues, which clearly (and perhaps naturally because of the subject matter) prioritized human well-being, particularly of the most vulnerable in the community, over environmental sustainability and protection concerns. This was so even when governments invited submitters to consider explicitly a right of ‘environmental sustainability’, as the Tasmanian government had proposed. There the Tasmanian people rejected that right in preference to a right to a healthy environment.

The issue of human health as a regulatory priority of pollution laws will be explored in a forthcoming volume of the Michigan Journal of Environmental and Administrative Law. In the introductory essay by Uhlmann, he notes that:

“I would submit that the environmental laws themselves are human-centric … Our environmental laws focus on the need for pollution prevention to protect public health.”

He argues that in contemporary times: “We regulate hazardous waste, … when it has the substantial potential to be harmful to “human health and the environment (in that order).”

Ulhman is not alone in suspecting an internal US change in approach to greenhouse gas emission regulation (with human health as its core) is symbolic as well as pragmatic. In the same volume he notes that Tracy Bach presents research that shows the community is more likely to accept greenhouse gas regulations if climate change is understood as a human health issue. Bach, an environmental pragmatist, argues that we should attempt to secure atmospheric environmental protection through human interest.

Elsewhere in the US, the need for change climate regulatory responses are framed in environmental justice terms in order to persuade regulators to require emissions reductions from power plants rather than letting markets do that work so that communities that host energy infrastructure should see real benefits and changes in the quality of the air that they breathe. President Obama, admittedly with limited alternatives, has responded in a manner that his advisors claim responds to environmental justice and the claims of environmental justice advocates to limit emissions in vulnerable communities.

So, I want to bring you back to environmental justice in Australia. Now, perhaps as a result of the EDO’s two-year old report, we are seeing a clearer and more conscious and deliberate engagement with the concept in Australia. Chakraborty and Green have produced and analysed National Pollutant Inventory data maps with social advantage data showing a clear and strong correlation in Australia between a lack of advantage and presence of potentially harmful pollutants.

Moreover, Felicity Millner (pdf) from Environmental Justice Australia has written about the need to achieve fair access to justice in the environmental law field in Australia. This organization may take on a role as justice advocate, a role that Alkon et al identified as important in driving the environmental justice narrative, and the Clearing the Air report challenges us to confront and come up with a way to respond to an environmental injustice.