In an unfortunate win for big oil and gas, the Australasian Centre for Corporate Responsibility (ACCR)’s case against Santos in federal court was dismissed this week – but now the oil and gas lobby wants to take it one step further and remove the democratic right of organisations to sue them in court.
The case already had huge barriers to scale, being the first in the world to challenge the credibility of a company’s energy claims and net zero strategy – especially at a federal level.
The ACCR argues that the oil and gas giant breached the Corporations Act 2001 and consumer law with omissions in their 2020 annual report, 2020 investor day briefing and 2021 Climate Change Report.
And before the legal community could analyse why the judge dismissed the case, lobby group Australian Energy Producers stepped in to call for a “crack down” on climate organisations “misusing the court system”.
In a statement, Climate Integrity replied, “It’s irresponsible for industry to attempt to undermine this core function of our democracy.
“Public interest litigation plays a critical role in enhancing accountability and is critical to a healthy, functioning democracy. It is a legitimate role of the courts to hold powers to account, and all people have the right to bring cases.”
Executive director Claire Snyder said it was not up to the fossil fuel industry to “dictate what can and cannot be heard in court.”
“Any attempts by the fossil fuel industry to delegitimise the rights of some sections of the community to access the courts should be viewed as undemocratic, dangerous and ultimately self-interested.
“While there is still much to digest in the ACCR versus Santos decision, it is important to note that both parties in the case agreed that the production and use of natural gas involves the release of greenhouse gases into the atmosphere, which contributes to the harms associated with the impacts of climate change.”
The responses to these claims came fast and furious. Along with the organisation, several law and politics experts and industry players have also put forward their two cents, disagreeing with the gas lobby.
This includes Anthony Whealy, chair of the Centre for Public Integrity and former Supreme Court judge, who said that despite being fallible and often changing opinions upon appeal, the courts are a “litmus test for what is reasonable.”
He angrily claimed, “the gas industry lobby would say that, wouldn’t they? They would brand this court action as dangerous, when in fact challenges like this are the very essence of democracy. This type of litigation should be encouraged, not discouraged.
“This is democracy in action.”
Jacqueline Peel, distinguished professor at Melbourne Law School, and director of the Laureate program on Corporate Climate Accountability, said there should be a balance between allowing corporates to plan their own clean energy transition and the need to hold corporate actors accountable to the promises they make through public and legal debate.
“These questions are complex and consequential, and there is a valid part for public interest groups and litigants to play in testing these questions before the courts.
“Moreover, the widespread nature of this kind of anti-greenwashing public interest litigation – in Australia and across many other jurisdictions – reinforces that these are public policy questions of global interest and relevance as we assess the accountability of different actors – including corporations – for climate action and activities that may give rise to climate harm.”
It was not up to the fossil fuel industry to “dictate what can and cannot be heard in court.”
Joo Cheong Tham, professor of Melbourne Law School and a director at the Centre for Public Integrity, said “holding big business legally accountable for the claims they make is not an abuse of court processes – it is the rule of law at work. Calls for a ‘crackdown’ on climate litigation risks undermining necessary scrutiny of fossil fuel companies.”
Sarah Schwartz, legal director at the Human Rights Law Centre, said public interest advocacy is vital to a “healthy functioning democracy” and prevents governments and companies from “trampling over people and communities.”
“People speaking up for climate action and defending democracy should be able to use public interest litigation to hold powerful fossil fuel companies accountable and protect their communities. We are seriously concerned by the fossil fuel industry’s continued calls to stop people and communities from using the courts to challenge climate destruction.”
Belinda Lowe, director of campaigns and communication at Grata Fund, said, “these are nothing more than narrative tactics designed by fossil fuel companies to delegitimise the right of our communities and public interest groups to hold them accountable to the law and the unequivocal scientific evidence that shows pollution produced by these companies is driving radical climate harm.
“Big bosses of coal and gas must remember that it’s up to a court to decide if a case has merit, not a fossil fuel executive.”
She references the fossil fuel industry taking a page out of the tobacco industry playbooks, trying to “spin its way” out of the health impacts of cigarettes, which were “no match for the scrutiny of the courtroom.”
“Make no mistake, attacks like this from big fossil fuel companies are an attempt to shut down the growing wave of community climate litigation, and it is part of a deliberate, deeply destructive and self-interested strategy that will undermine the role of the courts and Australian liberal democracy.”
Saffron Zomer, executive director at Australian Democracy Network, said, “the right to bring a case before an independent court is a cornerstone of Australian democracy.
“Any suggestion that certain issues — particularly those involving powerful companies — should be off-limits to public scrutiny is an attack on the fundamental right of communities to seek justice and hold the powerful to account. Courts determine merit. That is their role, not the role of the gas industry.”
Case notes
According to an analysis by lawyers Hamilton Locke, the case was filed back in 2021 and wasn’t on trial until 2024. The case is also the world’s first in testing the viability of carbon capture and storage, the environmental impacts of blue hydrogen, and Australia’s first in suing the oil and gas industry for climate greenwash.
In the case, the judge had ruled that clean energy and clean fuel were “not misleading or deceptive” because Santos’ statements conveyed natural gas was “relatively cleaner than coal and diesel”, while still recognising “natural gas is a material contributor to greenhouse gas emissions.
It also found clean and zero emissions hydrogen were “not liable to mislead” because it referred to hydrogen produced from natural gas and carbon capture and storage, which resulted in “no net” emissions.
And the 2030, 2040 targets and net zero roadmap were not misleading or deceptive because the targets were “understood as long-term aspirations” which are subject to assumptions, uncertainties, and contingencies, and retained sufficient “flexibility and adaptability.”
While it’s not a legal victory, writes the lawyers, the case’s significance was that it was a “test case” for climate change, disclosures, commitments and transition plans that many corporations are preparing and publishing. It was already successful in that it has managed to progress to trial and complex judgment and expanded “greenwashing” beyond investment portfolios to energy producers.
The lawyers also added that a lengthy and resource consuming litigation should warn significant emitters to utilise alternative techniques to reduce their carbon footprint and remain vigilant to produce supporting evidence.