24 August Greenwashing is now a global issue August 24, 2022 By ER Law Admin Environment, General Environment, Greenwashing, Ethics 0 Businesses and governments are now realising that being green is no longer nice to have, it’s an integral part of operations. There are also benefits, perceived and real, to both consumers and business customers to being involved in programs that are environmentally friendly or have an ethical or sustainable edge. This has given rise to a new risk - ‘greenwashing’ - that governments around the world are now grappling with. Greenwashing refers to misrepresenting a product, policy or purpose as environmental, ethical or sustainable. It applies not only to companies but also non-profits, investors or anyone seeking to represent themselves in that light. European research has found that up to 30% of multinationals provide incorrect data on emission levels, with the biggest culprits being in the energy and resources sector. While the European Commission has found that 42% of claims by companies were exaggerated, false or deceptive. In Asia, the problem is also widespread. For example, companies may seek to promote “clean coal” where they use carbon capture technology but fail to highlight that the effectiveness of the technology in remediating greenhouse gas emissions is questionable. Similarly, automotive producers in Thailand, Vietnam and Indonesia keen to promote electric vehicles may not mention how much coal is used in the generation of some parts of their vehicles. Much of the international action on greenwashing has focused on investment companies and how they choose to label their funds. For example, German prosecutors recently raided the headquarters of Deutsche Bank in relation to its asset management arm DWS. The United States Securities and Exchange Commission has also brought charges of misrepresentation against BNY Mellon Investment Advisor on the basis of greenwashing. As a result, The Securities and Exchange Commission is proposing that investors need to invest at least 80% of their assets in “clean” or “ESG” assets to use that terminology in a fund’s name. The Australian Securities and Investment Commission (ASIC) is also increasing its focus on greenwashing, releasing Information Sheet 271 recently. This outlines nine guiding questions for organisations to consider when making disclosures to investors. These include guidance on terminology, labelling, methodologies or policies for integrating sustainability considerations, influence over the benchmark index and the use of metrics and sustainability targets. The focus is on misleading statements and disclosure obligations for funds managers, but these could potentially be extrapolated to organisations seeking to promote ESG policies or activities. Steps have been made towards change by the International Sustainability Standards Board that was established at COP26. Two Disclosure Standards for sustainability financial disclosures have been released: ● IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information; and ● IFRS S2 Climate-related Disclosures. Together they seek to require disclosures to include information on governance processes, controls and procedures as well the organisation’s strategy to address climate and sustainability-related risks and opportunities. It is expected that ASIC and other jurisdictions will adopt these recommendations in the future. The Deputy Chair of the Australian Competition and Consumer Commission (ACCC), Delia Rickard, has also indicated that they’re reviewing how other international jurisdictions are dealing with greenwashing. So we can expect to see more action and enforcement in the coming year. While most regulatory changes are happening in western countries, governments in Asia are aware of the issue. In Singapore, the Competition and Consumer Commission has taken gentle steps to invite researchers to bid for grants on sustainability issues including greenwashing. The Public Relations & Communications Association of Southeast Asia has also established a working party to consider setting standards within the industry. While little steps, it indicates that there is increasing focus on greenwashing in Asia and something for all organisations operating in the region to keep an eye on. Related Articles Regulatory action on greenwashing Greenwashing is an enforcement priority for regulators in Australia, including ASIC and ACCC. In the recent case of ASIC v LGSS Pty Ltd [2024] FCA 587 (Active Super case), ASIC was successful against the trustee of Active Super. In this case Active Super was found to have made false or misleading representations that it did not invest in certain sectors or activities. The purpose of these representations was to promote the superannuation fund’s ESG credentials. The court found that Active Super did actually invest in those sectors either directly or indirectly through its investment funds. QUEENSLAND’S MINE REHABILITATION REQUIREMENTS FOR VOIDS: ENSHAM CASE STUDY The State of Queensland reformed its mine rehabilitation legislation, namely the Environmental Protection Act 1994 (Qld) (EP Act), in 2018 through the Mineral and Energy Resources (Financial Provisioning) Act 2018 (Qld) (MERFP Act). A case study of the Ensham open-cut coal mine[i] in central Queensland highlights three issues for the efficacy of this regulatory framework. The first issue concerns an available exclusion of rehabilitation requirements for existing mining voids (the area of excavation created by open cut mining) in flood plains. Under the EP Act, as amended by the MERFP Act, a holder of an environmental authority (EA) may, in its Progressive Rehabilitation and Closure Plan (PRCP) and PRCP Schedule, identify land as a Non-use Management Area (NUMA).[ii] This is land that would not be rehabilitated “to a stable condition” and not have a post-mining land use. This rehabilitation exception as a NUMA is not applicable to mining voids wholly or partly in flood plains – these must be rehabilitated to a “stable condition”,[iii] as defined in the EP Act. This is the “section 126D(3) rehabilitation obligation”.[iv] However, the transitional provisions of the mining rehabilitation reforms differentiate the rehabilitation obligations of pre-existing mines (those existing at the time of the reforms, such as the Ensham Mine) and new site-specific mines.[v] Pre-existing mines with a “land outcome document” that presents an outcome similar to a NUMA can establish criteria for rehabilitation or management of a void in a flood plain that supersede this section 126D(3) rehabilitation obligation.[vi] The MERFP Bill Explanatory Notes for the transitional provisions reveal that this exemption from section 126D(3) “does not retrospectively breach existing rights and provides certainty to industry on the transitional process”.[vii] However, this grandfathering is arguably disconnected from environmental risks of such residual voids, creating two classes of mines based on the timing of a mine’s existence (pre-existing versus new). This Ensham case study provides an example of a pre-existing mine’s use of a “land outcome document” to exempt rehabilitation of residual voids in a flood plain but without clarity around the non-use management status of the area of the residual voids. The second issue discussed in this case study is progressive rehabilitation. The design of a financial assurance system to increase progressive rehabilitation was “a clear objective of the EPA’s work in 2004”, yet the EP Act fell short by failing to clearly outline criteria for certification of final rehabilitation for industry, and a scheme of refunding financial assurances at the termination of mining activity.[viii] These issues remained unaddressed until the 2015 State election when the then Labor Opposition ran on the campaign “[to] investigate the expansion of upfront rehabilitation bonds for resource companies to fully fund long-term rehabilitation activities”.[ix] Thereafter, the Queensland Treasury Corporation published a number of discussion papers advising of the shortcomings of the current financial assurance framework and that, in 2017, there were “220,000 hectares of disturbance, with an estimated rehabilitation cost of $8.7 billion”.[x] Queensland’s 2018 mining regulation amendments concerning progressive rehabilitation were intended to ensure “rigorous” review of NUMA approvals in PRCPs, “through an objective public interest evaluation” for future or newly established mines.[xi] However, the reforms may not effectively address instances in which progressive rehabilitation has been lacking in large, open-cut, mature mines in operation at the time of these legislative changes. As of 2021, approximately 33% of the Ensham Mine’s 4,944.7 ha of scheduled rehabilitation areas had been progressively rehabilitated.[xii] According to Ensham’s PRCP, this level of progressive rehabilitation exceeds that of other open-cut mines in Queensland.[xiii] For established mines, such as Ensham, that are approaching closure and have large voids that have not been substantially progressively rehabilitated across their mine life, the most economical rehabilitation option may be to rehabilitate residual voids to accord with legislated requirements. Under Queensland’s legislation, “rehabilitation” does not necessarily mean these voids will be re-filled. This may be contrary to community understanding of what rehabilitation is. Thirdly, this case study highlights areas in the regulatory framework in which information transparency could be improved – particularly public access to information – which raises issues of accountability, quality of community engagement and, ultimately, social licence on the part of mining companies and government. Information transparency is also relevant to community engagement and expectations for rehabilitation, such as the meaning of “rehabilitation” of residual voids (i.e., refilling to establish a pre-mining state versus the legislated “stable condition” standard). This article is structured as follows. Part 2 presents the legal and operational context of the Ensham Mine. It also describes the operational history of flooding and its relevance to rehabilitation and management of post-mining residual risks, which leads to a discussion of the rehabilitation legal reforms. Part 3 discusses the reform of Queensland’s rehabilitation legislation framework as it concerns residual voids, including the transitional provisions of the EP Act. Part 3 also explores Ensham’s Residual Void Project (RVP) for the development of the rehabilitation criteria for residual voids and considers the community engagement process. Part 4 comments on the transitional regulatory design issues in Queensland’s framework, issues concerning progressive rehabilitation of pre-existing open-cut mines such as Ensham, as well as transparency of information and community consultation. Part 5 concludes and suggests future research. Submission - DISER Consultation Paper December 2020 ‘Enhancing Australia’s decommissioning framework for offshore oil and gas activities’ ARELJ Recent Development- Electricity Infrastructure Investment ACT 2020 (NSW): Key Provisions and Legal Issues for Project Investors to Consider Recent Development: Critical Minerals: Developments Globally and in Australia John Southalan Barrister (WA Bar Association), Mediator (NMAS), Adjunct Professor (UWA & Murdoch) john@southalan.net This note is written in a personal capacity and does not represent the views of any organisation with which the author is associated. This note examines the legal and policy attention being focused on “critical minerals”, and implications for mineral regulation in Australia and particularly Western Australia. The note was written for a 21 February 2024 seminar held by ER Law at the Perth office of Norton Rose Fulbright. The last year has seen great focus on “critical minerals”. There is broad consensus that, to meet the 2050 energy transition for the Paris Agreement, much more critical minerals are required (and that means mined, given that recycling supply cannot meet expected demand [i]). Many governments have adopted incentives to encourage and support the mining and processing of these minerals. And, just in the last few months, significant price volatility has seen some critical mineral operations in Western Australia close, and increasing consideration of government incentives. SHARMA v MINISTER FOR THE ENVIRONMENT More than a year on from the overturning of Sharma v Minister for the Environment by the Full Federal Court, Justice Bromberg’s original judgment continues to occupy the minds of the Australian legal community. Although the current position in Australia is that the Minister owes no duty of care in such cases, the Full Court of the Federal Court of Australia stressed that the expert evidence regarding the threat of climate change and global warming was largely uncontested, perhaps foreshadowing the cornerstone of cases to come. Globally, climate litigation is showing no signs of slowing down. As outlined below, despite numerous defeats in various jurisdictions, climate litigants have secured a small number of hard-won victories, fuelling the pipeline. Showing 0 Comment Comments are closed.