New Zealand Moves to Ban Tort Liability for Greenhouse Gas Emissions and Climate Damage

New Zealand’s government has announced that it plans to amend the country’s signature climate law to prohibit liability arising from climate change damages, a controversial move that critics say would shield polluters from climate lawsuits and undermine the rule of law. It comes amidst recent legislative action from Republican lawmakers in the U.S. to similarly restrict liability for climate-related harms. 

According to a May 12 announcement, the New Zealand government intends to update the nation’s Climate Change Response Act to preclude liability in climate tort claims for harms from flooding, wildfires, storm damage, drought and sea level rise caused by greenhouse gas emissions. The amendment would block both current and future lawsuits—including a landmark climate case filed against a handful of major polluters that is slated to go to trial next year. 

New Zealand Justice Minister Paul Goldsmith specifically referenced that case, called Smith v. Fonterra, as grounds for the government taking action to restrict liability. He said the lawsuit was “creating uncertainty in business confidence and investment” and that the legislative change is needed to protect businesses and deliver certainty around their legal obligations. 

“The Government is acting now to provide legal clarity and certainty and to remove the possible development of a new regime that contradicts the framework Parliament has already enacted to respond to climate change,” Goldsmith said in a statement. “Our government is committed to fixing the basics, and certainty of law is essential for businesses to operate, attracting overseas investment, and stimulating economic growth.”

Climate advocates sharply criticized the move. 

“This is a shocking abuse of executive power,” Greenpeace Aotearoa spokesperson Gen Toop said. “The courts exist to hold powerful interests to account and protect the public interest. Ministers should not be rewriting the law to shut down cases they don’t like.”

Lawyers for Climate Action, a New Zealand-based organization that uses legal pathways to advance climate action, said the move “raises fundamental issues for both the environment and the constitutional role of the courts, and puts the interests of big emitters over those of impacted communities.”

A liability shield had been proposed in a bill before Parliament over a year ago, according to the organization, but it did not go anywhere. The current proposal, by contrast, is expected to move quickly, though an actual bill has not yet been introduced. But once a bill is released, observers say, it is more likely than not to pass. 

“We don’t have certainty that it would pass, but it seems probable,” Laura MacKay, acting executive director of Lawyers for Climate Action, told Inside Climate News. She said it was “not entirely clear what prompted it now, aside from the fact that there is an election upcoming.” 

New Zealanders will go to the polls in November in an election that could result in the current coalition government, the country’s most conservative in decades, losing its majority. 

Lawyers for Climate Action said the liability shield proposal is now being “rushed through as a government priority before the election,” and that it is a direct response to the Smith v. Fonterra litigation. 

That case—a civil claim brought by climate campaigner and Māori leader Mike Smith against a handful of the country’s largest agricultural and energy companies—is moving forward following a 2024 ruling from the New Zealand Supreme Court deciding that it could proceed to trial. The case aims to hold the companies accountable, under tort law claims, for the climate change consequences of their greenhouse gas emissions, which scientists have long concluded are the primary cause of global warming. The trial is scheduled to start in April 2027. 

It would be blocked if the government’s proposal is enacted. 

Sam Bookman, a climate law expert and lecturer at Melbourne Law School who is admitted to the bar in New Zealand, told Inside Climate News that Smith’s case is the most procedurally advanced climate tort case of its kind in the world. “New Zealand’s Supreme Court unanimously held that the plaintiff had a tenable case,” he said, and following that ruling, “there was no judicial process left which could have derailed this case. So it’s deeply cynical for the defendants to run to the legislature to interfere with a trial process that had already started.”

Bookman said that while the defendants in the case had not publicly said they were looking for a legislative avenue to evade a trial, “clearly they were aggressively lobbying for this.” 

A spokesperson for Genesis Energy, one of the defendants in the case, said that the company views New Zealand’s Climate Change Response Act, not litigation, as the “primary mechanism for addressing climate change.” The 2002 Act provides a framework for the country to implement climate policies, including an emissions trading scheme, that allow for it to meet its international climate change obligations for reducing greenhouse gas emissions.  

“Our view is that it is the role of government, not the courts, to develop policy and legislation needed to transition Aotearoa New Zealand to a lower‑carbon economy,” the spokesperson said. “Consistency of direction is important to underpin the long-term investment decisions necessary to support a successful transition to net zero 2050.” 

The company did not respond to the question of whether it or related trade associations have lobbied the government to intervene in the ongoing court case. Inside Climate News raised the same question about lobbying to several other defendants, including Fonterra and Dairy Holdings, and did not receive a response. A spokesperson for Z Energy said that the company “welcomes the government’s decision to progress legislation reinforcing the Climate Change Response Act as the primary mechanism for addressing climate change.” 

In a new article published in The Conversation, legal experts Bjørn-Oliver Magsig and Graeme Austin, both with Victoria University of Wellington, argue that courts play an important role in democratic societies grappling with complex challenges, including climate change. “Courts do things governments cannot,” they write. “They cannot be lobbied. They decide on evidence and law. They name specific actors and test their conduct against legal standards.”

Magsig and Austin note that the liability shield proposal follows other climate-action rollbacks that the current right-wing government has made, such as reversing a ban on offshore oil exploration and weakening a methane reduction target. “Against that backdrop, preventing climate-focused tort claims is not an outlier. We argue it is the next layer of a deliberate dismantling of a system of climate accountability,” they wrote.

Magsig and Austin were among more than 100 academic and civil society leaders from New Zealand and around the world who signed onto a new open letter addressed to Goldsmith and several other high-ranking government officials, including Prime Minister Christopher Luxon, urging them to reconsider their decision to restrict liability for climate damage. The letter, spearheaded by Lawyers for Climate Action, argues that the decision is “contrary to New Zealand’s climate objectives, blocks the development of the common law in New Zealand, and risks undermining the rule of law and the separation of powers.”

MacKay said the government’s move is also contrary to the International Court of Justice’s climate change advisory opinion, which clarified that countries have a legal duty to mitigate climate damage including by reining in polluting industries. 

Right-wing governments in both New Zealand and the United States, however, are instead rolling back climate regulations and moving to shield polluters from accountability for climate harms. 

“There is a serious question to be asked around why governments are feeling obliged to protect these companies,” MacKay said. 

In the U.S., some states have already enacted legislation that bars liability for climate change impacts and greenhouse gas emissions. Utah was the first state to pass a liability shield bill into law in March, and since then Tennessee, Oklahoma and Iowa have followed suit. 

At the federal level, Rep. Harriet Hageman, R-Wyo., and Sen. Ted Cruz, R-Texas,  introduced a bill in April called the “Stop Climate Shakedowns Act” that would grant sweeping legal immunity to the fossil fuel industry and block climate lawsuits and related polluter pays legislation. 

“There is a serious question to be asked around why governments are feeling obliged to protect these companies.”

— Laura MacKay, Lawyers for Climate Action

It is unclear if the federal immunity bill will gain traction. Some Democrats in Congress are starting to speak in opposition to it, and Republicans likely have only a narrow window left to act on any of their legislative priorities before the midterm elections in November. 

The American Petroleum Institute, which has actively lobbied Congress on “draft legislation related to state efforts to impose liability on the oil and gas industry,” has stated publicly that stopping “extreme climate liability policy” is among its top priorities this year. The Big Oil lobby and some of its members are named defendants in multiple climate accountability lawsuits that are winding their way through the courts, including several that are inching toward trial. 

“Big Oil knows that time is running out before these cases go to trial and their preferred politicians are potentially no longer in power,” Iyla Shornstein, political director at the Center for Climate Integrity, told Inside Climate News. “That’s why the fossil fuel industry is pushing so hard on every front right now to shield themselves from accountability.”