Liabilities for mining companies amid evolving climate legislation

The recent decision in Verein KlimaSeniorinnen Schweiz and Others v. Switzerland has set a precedent requiring states party to the European Convention on Human Rights to evaluate the effectiveness of their legislative regimes in protecting vulnerable populations from the effects of climate change. This ruling, while directed at states, will likely lead to new domestic laws and regulations affecting local businesses, including mining companies.

The Verein KlimaSeniorinnen case is part of a broader trend of climate change-related legal challenges targeting both government authorities and private companies involved in mining activities. These cases are based on a combination of domestic legislation and international treaties, highlighting the intertwined nature of environmental, climate change, and human rights issues.

A. Challenges to the Constitutionality of Legislative Provisions

1. Callejas v. Law No 406 (2023): A Panamanian citizen challenged the constitutionality of a law approving a government concession contract with a mining company, arguing it violated constitutional rights, including the right to a pollution-free environment. The Panamanian Supreme Court ruled that fundamental rights take precedence over private investment interests, emphasising the state's duty to guarantee a healthy environment.

   “This ruling highlights the importance of constitutional rights over private investment interests,” said Jan Mellmann, Partner at Watson Farley & Williams. “It highlights the duty of the state to ensure a healthy and pollution-free environment.”

2. Decision C-298/16 (Colombia, 2016): Colombian citizens challenged laws allowing mining in sensitive ecosystems crucial for mitigating climate change. The Constitutional Court ruled that indefinite powers to grant mining concessions were incompatible with the right to a healthy environment, requiring each mining proposal to be considered on its own merits, including potential environmental harm.

   “The decision from Colombia’s Constitutional Court sets a critical precedent,” remarked Lauren Satill, Associate at Watson Farley & Williams. “It ensures that environmental considerations are integral to the granting of mining concessions.”

B. Challenges to Government Decisions

1. Saonu and Morobe Provincial Government v Minister for Environment and Conservation and Others (Papua New Guinea, 2021): The court stayed the issuance of an environmental permit for a special mining lease, citing failure to consider climate change impacts and procedural deficiencies in the Environmental Impact Assessment.

   “The court’s stay on the permit issuance reflects growing judicial recognition of climate change considerations,” said Sarah Ellington, Partner at Watson Farley & Williams. “It underscores the necessity for comprehensive environmental impact assessments.”

2. KEPCO Bylong Australia v Independent Planning Commission and Bylong Valley Protection Alliance (Australia, 2019): KEPCO's application for a coal mine was rejected due to inadequate plans for managing greenhouse gas emissions. The decision was upheld on the grounds that the project's potential adverse impact on climate change was not sufficiently mitigated.

   “This case illustrates the increasing scrutiny on greenhouse gas emissions in mining projects,” noted Sulaiman Hoosen, Associate at Watson Farley & Williams. “Future projects must incorporate robust plans to mitigate such emissions.”

3. Wayúu Indigenous Community v Ministry of Environment (Colombia, pending): The Wayúu Indigenous community seeks to annul an environmental license for a coal mining project, arguing that the government failed to consider climate change impacts when granting the permit.

   “This pending case signifies the expanding role of indigenous communities in climate litigation,” commented Mellmann. “Their arguments highlight the intersection of environmental protection and human rights.”

Environmental Activism and Legal Precedents

Legal actions are increasingly recognising the link between environmental protection and human rights. Cases such as EH v Queensland Police Service (Australia, 2020) and R v Brewer and others (UK, 2022) reflect this trend, with courts considering the motivations behind climate protests and the balance between protest rights and public order.

What Does the Future Hold for Mining Companies?

Mining companies must anticipate stricter regulatory environments due to decisions like Verein KlimaSeniorinnen. The European Court of Human Rights (ECtHR) ruling underscores the need for climate-conscious policies and compliance with international human rights standards. Companies should:

• Focus exploration and production on higher quality ores requiring less energy and water.

• Integrate value chains to improve energy efficiency.

• Co-locate power sources to utilise renewable energy.

• Include incentives in contracts to reduce scope 3 emissions.

  “Mining companies should be proactive in adapting to these new regulations,” advised Ellington. “Implementing robust and realistic transition plans and greenhouse gas reduction targets will be essential.”

The ECtHR decision reinforces that climate change is a human rights issue, increasing pressure on states to align their climate policies with international standards. Mining companies must adapt to this evolving regulatory landscape to remain compliant and competitive.

“This ruling marks a significant shift in how climate change is viewed in relation to human rights,” concluded Hoosen. “Mining companies need to stay ahead of regulatory changes to ensure continued compliance and operational success.”