The gas giant Santos was hoping to make the judges of the Australian Federal Court see sense. The company had already failed to impress Federal Court Justice Mordecai Bromberg in his September decision, which found that the National Offshore Petroleum Safety and Environmental Management Authority should never have approved the Barossa Gas Project off the Tiwi Islands.
The project envisages drilling at a site 140 kilometres from the Tiwi Islands. NOPSEMA’s primary role — and one discharged with less than due diligence on this score — is to regulate offshore petroleum activities in Australian waters and assess environmental plans under the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009 (Cth).
Drilling had already commenced in July, taking place in waters between 204 and 376 metres deep, some 33 kilometres from the Oceanic Shoals Australian Marine Park. In terms of the value, the natural gas project is predicted to be worth $US3.6 billion and produce up to 600 jobs.
The central contention in the case is one of consultation, a process seemingly problematic for Australia’s resource sector behemoths. Dennis Tipakalippa, a Manupi elder, insisted that he and fellow elders were not consulted over the environmental plan developed by the company. They also feared that the project could cause environmental damage to the sea country and sea resources. Legal action seeking to stop the Barossa Gas Project was taken.
Santos, for its part, argued that they had appropriately consulted the Tiwi Land Council and the Northern Land Council, the representative Native Title body. NOPSEMA, in hasty fashion, assumed such actions sufficient for it to approve the Environment Plan.
Justice Bromberg begged to differ, accepting the argument that Santos had not identified relevant persons to consult as required under the Regulations. As the statutory regime states, a ‘relevant person’ is one ‘whose functions, interests or activities may be affected by the activities to be carried out under the environment plan.’ By not looking more closely at this point, NOPSEMA missed information essential in performing its assessment, notably on the relevance of the sea country material. There was even a suggestion that the body had misunderstood its own task in the matter.
'The decision against Santos reiterates a simple but important point: rules on consultation and consideration need to be followed when it comes to gas developments and agreements made in the resource sector. The interests and concerns of First Nations peoples are indispensable in this regard.'
On appeal to the Full Court of the Federal Court, the company trained the legal emphasis on the connection of the Munupi to the sea country. While they appreciated that this connection was ‘genuine and real’, it could only be likened to a personal interest, not more. Yet again, old norms and disputes of connection to land and country, seen from various vantage points, played out.
Justices Debrah Mortimer and Michael Lee refused to accept such a narrow reading. ‘We would not, as Santos urged, confine ‘interests’ to ‘legal interests’ and reject the proposition that the connection of traditional owners with sea country cannot be an interest for the purposes of [the] regulation’. To support that contention, the justices cited the judgment of Justice Brennan in Kioa v West: ‘There are interests beyond legal rights that the legislature is presumed to intend to protect by the principles of natural justice.’
The justices accepted the proposition that Santos’ proposed drilling activity could ‘have a potentially significant adverse effect on the maritime resources closer to the Tiwi Islands, which were a fundamental part of the traditional culture and customs of the Tiwi Islanders.’ It followed that Tipakalippa’s interests and those of the Munupi clan in the environment that may be affected (EMBA) and the marine resources closer to the Tiwi Islands were ‘immediate and direct.’ Such interests, ‘which arise from traditional cultural connection with the sea, without any proprietary overlay, are acknowledged in federal legislation’.
Santos has shown similar form in its previous corporate dealings. In 2021, the ACCR commenced proceedings in the Federal Court alleging that the company had breached the Corporations Act 2001 (Cth) and the Australian Consumer Law in engaging in misleading or deceptive conduct over its ‘clean energy’ claims and Net Zero plan announced in its 2020 Annual Report.
The legal action is the first of its kind to challenge the veracity of a company’s net zero emissions project, questioning the claims on carbon capture and storage (CCS) and the role of blue hydrogen in the energy transition. The Barossa Gas Project is deemed essential to such claims.
Energy analysts with little time for the finer points of due process and consultation have filled press outlets with pessimism in the face of the ruling. The Australian Financial Review expressed concerns that such projects as Woodside Energy’s $16.5 billion Scarborough project in West Australia ‘could also face requirements for broader consultation before approvals are finalised.’
Credit Suisse energy analyst Saul Kavonic warns that, ‘The decision may result in environment plan (EP) approvals taking longer to be put together and get approval for Scarborough, although Woodside should have more time available to do so without it delaying the overall project.’
The decision against Santos reiterates a simple but important point: rules on consultation and consideration need to be followed when it comes to gas developments and agreements made in the resource sector. The interests and concerns of First Nations peoples are indispensable in this regard. The concern now is how far lobby groups in that sector will seek to convince the Commonwealth that lower thresholds for approval are more desirable to avert a supply crisis.
Dr. Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He currently lectures at RMIT University.
Main image: Plaintiff Dennis Tipakalippa (Environmental defenders office)