Climate Litigation II – Judgment from the Borgarting Court of Appeal
Briefly on the judgment
On Friday the 14th of November, the Borgarting Court of Appeal delivered its judgment and ruling in the lawsuit brought by Greenpeace and Nature and Youth against the State, represented by the Ministry of Energy, concerning inadequate impact assessment in connection with the approvals granted for the plan for development and operationof three petroleum fields in the North Sea.
As in the District Court, the question was whether the decisions approving the PDOs (plans for development and operation) for the three fields/areas Breidablikk, Tyrving and Yggdrasil are valid. An important difference since the District Court’s judgment was that the State had carried out new assessments of the PDO approvals after receiving supplementary information from the operators, including what the State claimed was a sufficient impact assessment of combustion emissions from the fields. The question before the Court of Appeal was whether the Ministry’s decision not to reverse the original PDO decisions was valid.
The Court of Appeal found that both the supplementary assessments and the Ministry’s evaluations were inadequate, and that there were therefore procedural errors. The assessments did not address the total scope 3 emissions from the Norwegian continental shelf, they did not compare the scope 3 emissions with the remaining carbon budgets, and no sufficient assessment of global effects had been carried out. The Ministry’s assessment of the environmental impacts was also inadequate. The Court emphasized that it was unclear whether the assessments were based on gross emissions, that no consideration had been given to the cumulative scope 3 emissions from Norwegian petroleum activities, and that the Ministry had not fulfilled its duty to make an overall, overarching assessment of relevant considerations. The Court of Appeal found that there was a chance that the procedural errors could have influenced the decision. On this basis, the Court of Appeal declared the Ministry’s decisions not to reverse the PDO approvals for the three fields invalid.
The Court of Appeal’s assessment is in part based on the EFTA Court’s advisory opinion on the interpretation of the Environmental Impact Assessment Directive (EIA) (E-18/24). The EFTA Court held that scope 3 emissions must also be subject to an impact assessment, even though this deviates from the understanding that has so far been applied in the EU. After the ECtHR delivered its judgment in late October in the first climate case (Case of Greenpeace Nordic and Others v. Norway, 34068/21), there remains little doubt that combustion emissions must be included in the assessment under Norwegian law, EEA law and the ECHR, and that this requirement must be fulfilled at the latest at the time of PDO approval.
Consequences of the invalidity
Although the environmental organisations succeeded on the substantive claim, the Court of Appeal did not grant their request for an interim injunction to suspend the effect of the PDO approvals. The Court agreed that the development of and production from the fields in question would represent “significant harm” and thus satisfy the statutory requirement for a basis for security, but that suspension would conflict with considerations of proportionality. Considerable weight was placed on the fact that the invalidity is based on a procedural error in the form of inadequate assessment and evaluation, and not on a material error, and that the main rule for procedural errors is that the case must then be reconsidered. The Court of Appeal also referred to the need for predictability in the exercise of public authority, including considerations relating to employment, local communities and confidence in Norway as a supplier of oil and gas.
The Court of Appeal did however issue a ruling ordering the State to reassess the applications for PDO approval so that new decisions can be made within six months, or within two months after a final judgment on the validity of the decisions. The judgment also provides guidance on what is required of the assessments in a new round of consideration.
The relationship to EEA law
With respect to the relationship to EEA law and the obligation to eliminate breaches of EEA rules, there has been considerable discussion as to whether the Norwegian administration may rely on the principles set out in Section 41 of the Public Administration Act, the so-called doctrine of impact on the decision (nw: “Innvirkningslæren”). In its advisory opinion, the EFTA Court stated that if “the EEA States have failed to carry out the environmental impact assessment of a project required under the EIA Directive, they are accordingly obliged to eliminate the unlawful consequences of that omission, for example by revoking or suspending the development consent.” This position appears to imply that invalidity should follow even without the application of any impact doctrine. The Court of Appeal, however, assumed that the error could in any event have had an impact, and that the decisions should therefore be declared invalid also under the Norwegian doctrine of impact on the decision.The issue of conformity therefore did not arise directly in this judgement.
It remains uncertain whether the State will appeal the judgment and rulings to the Supreme Court, though an appeal appears likely.
