Is the legal industry complicit in climate change? How Sharma has turned the heat up on lawyers’ responsibilities – By Brynn O’Brien

Is the legal industry complicit in climate change? How Sharma has turned the heat up on lawyers’ responsibilities

BRYNN O’BRIEN, EXECUTIVE DIRECTOR, AUSTRALASIAN CENTRE FOR CORPORATE RESPONSIBILITY

Australia is getting hotter. The continued buildup of carbon dioxide, methane and other greenhouse gases in the Earth’s atmosphere, due to human activities, primarily the extraction and burning of fossil fuels for energy, is driving global temperatures up.

In April this year, carbon dioxide reached a critical record: at a concentration of 420 parts per million, we are halfway to a doubling of pre-industrial levels. The International Energy Agency told us in May this year that exploring for new fossil fuels in 2021 is fundamentally incompatible with a safe climate.

From 8 July 2021, it is the law of the land in Australia that the Minister for the Environment:

“has a duty to take reasonable care, in the exercise of her powers …to avoid causing personal injury or death to persons who were under 18 years of age and ordinarily resident in Australia at the time of the commencement of this proceeding arising from emissions of carbon dioxide into the Earth’s atmosphere.” (Sharma v Minister for the Environment [2021] FCA 774, per Bromberg J)

The Sharma decision is indeed groundbreaking, but to anyone paying attention it cannot be a surprise. It comes as the harms of climate change become increasingly obvious, and more easily attributed to corporate emissions, and follows years of legal opinions on the theme of corporate and directors’ responsibilities for companies’ climate impacts. A 2019 opinion warned of the risk of litigation, which in the authors’ view was “increasing, probably exponentially, with time”. It is fair to say that this particular risk is now material for Australia’s corporate greenhouse polluters, in ways that may continue to take form.

To put it another way, given the way Sharma illuminates the Minister’s duty, it is reasonable to entertain the prospect that there are other classes of persons and other classes of decision-makers to whom a similar relationship, and by extension duty, can be constructed.

For example, does the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), Australia’s independent regulator for all offshore oil and gas operations, owe such a duty, and to whom? If NOPSEMA decision-makers fail to take into account and appropriately weigh the harm their licence-granting activities may have on children and future generations, have they acted unlawfully?

Sharma will loom large in the practices of Australian lawyers advising companies that extract (or facilitate the extraction of) coal, oil and gas, for the immediate future. The decision has implications for project, asset and company valuation, and corresponding impacts on corporate disclosure obligations and directors’ duties.

While the Minister has signalled her intention to appeal the decision to the Full Federal Court, companies will be reckoning with what is at stake for their businesses, and their lawyers will be advising them on how to deal with the precarity of planned fossil fuel projects. On one view, the common law, through the court, has seen fit to intervene to restore sense when the national political rhetoric and debate has become too removed from the reality of the science and its frightening predictions. The legal profession must now wrestle with the question of whether it has a duty, albeit a philosophical one, to follow the court’s lead.

It is also time to grapple with some of the assumptions underpinning commercial legal practice. Commercial lawyers have, to a large extent, advanced the side of polluting industries. The Sharma case was run by a small firm, Equity Generation Lawyers. The Minister was represented by the Australian Government Solicitor, while the solicitors on the record for Vickery Coal, a subsidiary of ASX-listed Whitehaven, were Ashurst.

This dynamic is familiar in public interest litigation in Australia, especially where corporate interests are involved. A small firm, community legal centre or NGO represents David, and a top tier player represents Goliath. But in 2021, this power dynamic is increasingly anachronistic.

The fossil fuels industry is often compared to the tobacco industry, and lawyers who protected the industry, despite the known harms of the product, have rightly been judged on their conduct. But this analogy has little relevance to the issue of climate change. Lawyers for the tobacco industry could avoid smoking cigarettes. They could represent an industry doing harm and not experience that harm themselves.

To put it simply, the commercial legal industry has never been required to respond to systemic risk of the kind posed by climate change. None of us, not even big firm commercial lawyers, can escape its harms.

Climate change, as I often remind myself, means everything changes. But for the arid regions of Australia, a lot of what it means is heat.

The last time I was in South Australia, it was 48C. We crossed into South Australia on a day when the fire danger in the Flinders Ranges was described as “catastrophic”.

We wandered around towns where more than a handful of shops displayed signs saying they were “closed due to heat”. Heat is familiar to South Australians. But apparently not that kind of heat, and not for such an extended period of time.

As we pulled up in Port Pirie, it felt

like we were in the set-up to a formulaic joke: an ex-commercial lawyer and an ex-advertising professional, both turned climate champions, pull into a regional industrial town. They lock themselves out of the car by mistake, as the temperature enters the high forties.

But we were in luck; it was early evening, and there was a cool change on its way. We took shelter in a nearby shopping centre and, as we waited for the RAA representative to arrive, the temperature dropped 10 degrees. I had never thought of 38 as a comfortable temperature, but after 48 it was a relief. Thirty-eight seemed survivable, at least for a bit, whereas 48 did not. We thanked the diligent RAA rep for his help in prising open our little car, waited for the car to air out, and kept going.

Thirty-five degrees, as it turns out, is the temperature at which, from a medical perspective, the human body’s ability to cool itself through sweating becomes markedly less effective. A 2019 report by The Australia Institute, based on data published by the Bureau of Meteorology and the CSIRO, found that, in Adelaide, “the average number of days over 35 could increase by 180% without strong climate policies, from historical averages of 17–19 days per year up to 50–51 days per year by 2090.”

None of us has to reach back far into our memories to have a glimpse of climate harm. Less than a year after my trip to South Australia but before the pandemic took hold, Australia caught fire. The devastation of these fires was felt acutely in South Australia, particularly on Kangaroo Island and in the Adelaide Hills. Ecological experts have told us that koalas are now severely under threat of extinction, and that the Great Barrier Reef is, we are told, very likely in a state of terminal decline. Across the country over the Black Summer people were displaced from their homes. Thirty-five people lost their lives directly in the fires, with at least 400 more deaths from smoke inhalation and other fire-related causes. As if this isn’t terrifying enough, our scientific agencies like the BOM and the CSIRO are telling us that, in 20 years’ time, the summer of 2019-2020 will very likely seem mild.

Although every major bank in the world still lends money to fossil fuel exploration, the long-term work of climate campaigners means that capital for coal, oil and gas exploration is getting harder to attract, and more expensive.

Climate awareness in the legal services industry, however, is nascent. In most Australian jurisdictions, fossil fuels companies are major players in the economy. This means many law firms and many more lawyers are deeply embedded in the fossil fuels problem.

Big firm lawyers know how to cultivate relationships and practices to win work. It would be laughable to suggest that commercial law firms treat the perpetrators and the victims of climate change equally.

Law firms are not taking the victims of climate change out for long lunches. It is unlikely that a First Nations community whose land a multinational oil company intends to frack will get representation from a major firm. Firms’ business development plans do not target communities of colour whose lives are disproportionately impacted by air pollution.

Commercial lawyers, by default, take the side of incumbency, of wealth of atmospheric pollution; in short, of those causing catastrophic climate change.

But lawyers’ principled refusal to facilitate the expansion of the fossil fuels industry would be a crucial step in constraining activities that will harm all of us.

In an interlocutory decision in the Sharma litigation, His Honour Justice Bromberg characterised climate change as “the greatest intergenerational injustice ever inflicted by one generation of humans upon the next.” His assessment of the children-litigants’ predicament was withering:

“It is difficult to characterise in a single phrase the devastation that the plausible evidence presented in this proceeding forecasts for the Children. As Australian adults know their country, Australia will be lost and the World as we know it gone as well. The physical environment will be harsher, far more extreme and devastatingly brutal when angry. As for the human experience – quality of life, opportunities to partake in nature’s treasures, the capacity to grow and prosper – all will be greatly diminished. Lives will be cut short. Trauma will be far more common and good health harder to hold and maintain. None of this will be the fault of nature itself. It will largely be inflicted by the inaction of this generation of adults, in what might fairly be described as the greatest inter-generational injustice ever inflicted by one generation of humans upon the next. (Sharma v Minister for the Environment [2021] FCA 560, per Bromberg J, at 293)

I have argued in the Financial Times that there is a growing cohort of lawyers who are “deeply uncomfortable with the profession’s role in facilitating the expansion of the fossil fuel industry,” and that, in the very near future, “the best and brightest junior lawyers” will reject firms whose activities are incompatible with their safety.

It will not surprise me if a couple of the Sharma litigants, all aged under 18 at the commencement of the proceedings, choose to pursue a legal career. And what major law firm would want to alienate them, and their classmates, as graduates? B August 2021 THE BULLETIN 7