The Environmental Defenders Office (EDO) has today filed urgent proceedings on behalf of the Environment Centre Northern Territory (ECNT), challenging the lawfulness of a Federal Government decision to grant up to $21 million to gas company Imperial Oil and Gas.

The decision by the Commonwealth Minister for Resources and Water was announced earlier this month under the Beetaloo Cooperative Drilling Program, a program set up to provide funding for gas exploration activities in the Northern Territory’s Beetaloo sub-basin.

The legal action – a judicial review in the Federal Court – questions the lawfulness of the Beetaloo Cooperative Drilling Program and the decision of the Minister to grant these funds. The solicitor with carriage of this matter is Anna Gudkov, working with Ruby Hamilton, both under the supervision of Sean Ryan.

Grants under this program are subject to the Public Governance, Performance and Accountability Act 2013 (Cth) which requires that the Minister not approve the expenditure unless he “is satisfied, after making reasonable inquiries, that the expenditure would be a proper use of…money”.

A “proper” use of money is defined by section 8 of the Public Governance, Performance and Accountability Act as one that is “efficient, effective, economical and ethical”. 

The Federal Court proceeding filed by ECNT alleges that before deciding to give Imperial Oil and Gas up to $21 million to support their gas exploration activities, the Minister failed to make reasonable inquiries in respect of the increased risks of climate change if the Beetaloo Basin is exploited for gas development.

In addition, the filing argues the Minister failed to make reasonable inquiries into the economic risks of expenditure on these projects in the context of a world which is moving rapidly away from fossil fuel use.

The proceeding argues that an assessment of these risks is necessary under the Public Governance, Performance and Accountability Act and the Minister made an error of law by not making reasonable inquiries into these risks prior to making a decision on this expenditure.

On behalf of ECNT, EDO has also sought an undertaking from the Minister that he will not execute a grant agreement with Imperial Oil and Gas, and/or transfer public funds to Imperial until the legality of his decision to make the grant is clarified by the Court.

“This case is about whether the proper process has been followed in respect of the Federal Government’s decision to grant $21 million to Imperial Oil and Gas for exploration activities in the Beetaloo sub-basin in the Northern Territory,” said EDO CEO David Morris.

“Our client will argue that before making a decision to grant these funds, the relevant Minister needed to make reasonable inquiries into a range of risks, including climate and economic risks, that may arise from the expenditure.”

“We will argue on behalf of our client that the Federal Government did not make these reasonable inquiries, and thus the Minister’s decision is invalid.”

Co-Director of ECNT, Dr Kirsty Howey stated, “We want to see taxpayers money used wisely and with all the consequences being fully considered. Granting $21 million to a private fossil fuel company should only be done after all care is taken to examine the impacts on climate change, the environment and the community.”

 “The law requires the Minister to be satisfied that the expenditure is a proper use of money having made reasonable inquiries. We say that means inquiries into the risks of a heating climate if the heart of the Northern Territory was opened up to fracking.”    

The Court documents argue that Minister Pitt didn’t make reasonable inquiries about climate change risks, transition risks to a zero carbon economy, and risks associated with failing to meet the targets of the Paris Agreement.

 “It’s not apparent from the available public documents that the Minister made any inquiries about the climate change risks of gas developments in the Beetaloo”, added Dr Howey.