Key Takeaways
- Z Energy handed a briefing note to a former Beehive staffer that suggested a law change to shield fossil‑fuel companies from climate‑related tort claims.
- CEO Lindis Jones says the note merely repeated public positions and that the company “followed the instructions of government.”
- An independent economic report commissioned by Z Energy, Fonterra and Genesis Energy estimates that an immediate court‑ordered cessation of emissions would cut New Zealand’s GDP by $21.9 billion (0.9 %) over five years, with larger sector‑wide impacts reaching $112.6 billion (4.8 %).
- Climate activist Mike Smith’s attempt to introduce internal Z Energy documents into the parliamentary submission process was blocked by the Court of Appeal after a High Court grant.
- The government’s Climate Change Response (Tort Liability) Amendment Bill seeks to prevent such lawsuits, a move Smith characterizes as a “co‑ordinated campaign of secret lobbying” but which Z Energy says reflects standard corporate‑government engagement.
- Legal experts warn that using litigation to drive emissions reductions would be ad hoc, arbitrary, and economically costly, while policy‑led pathways could deliver substantial economic gains.
- Z Energy’s own emissions have risen since 2019 but are trending downward since 2023; the company maintains that a predictable policy framework, not court‑directed mandates, is the best way to achieve net‑zero by 2050.
Background on the briefing note and the landmark climate case
In early 2024 the Supreme Court granted climate activist Mike Smith permission to sue Fonterra, Z Energy and several other major fossil‑fuel emitters for their contribution to climate change. Smith’s claim seeks a court declaration that the defendants are causing climate harm, an order to cut emissions immediately toward net‑zero by 2050, or a suspended injunction that would halt emissions from a court‑set date. As part of the litigation, Z Energy was ordered to disclose documents related to its lobbying efforts. During this process the company handed a briefing note to former Beehive chief policy advisor Matt Burgess. The note, later released by court order, outlined suggestions for changing the law so that companies could not be sued over greenhouse‑gas‑related damages. Smith alleged the exchange reflected a secret, coordinated lobbying effort at the highest levels of power.
Z Energy’s CEO on the note and government instructions
Chief executive Lindis Jones, in an interview with RNZ, acknowledged that the briefing note was indeed seeking a law change but stressed that its contents were nothing new. “What really matters here… is the substance of what was in that note, and there’s nothing in that note that we hadn’t said before publicly or to the court or to the government,” Jones said. He accepted that the perception of handing over a piece of paper to a former government staffer was “deeply unfortunate,” yet maintained the company simply “followed the instructions of government.” Jones added that the note did not contain any surprise revelations and that Z Energy had never before explicitly sought a legislative change, though it had expressed its views on many regulatory matters.
The independent economic impact report
To inform the debate, Z Energy, Fonterra and Genesis Energy commissioned an independent analysis from economist Dr Niven Winchester. The report examined the economic and emissions consequences if the court granted the remedies Smith requested. Under an immediate cessation order applied only to the three defendant companies, Winchester projected a decline in New Zealand’s GDP of $21.9 billion over the five‑year period 2028‑2032 – equivalent to a 0.9 % reduction, with a steep $7.5 billion drop (1.6 %) in 2028 alone. The study also modeled a broader scenario in which cessation orders extended to all participants in the defendants’ sectors, estimating a far larger GDP loss of $112.6 billion (4.8 %) over the same horizon. In both cases emissions would fall below the targets set by the Climate Change Reduction Act, but the report emphasized that the associated economic costs would be substantial, manifesting as reduced investment, consumption and services.
Sector‑specific warnings and broader economic context
Fonterra’s submission highlighted concrete operational risks: an inability to collect milk from farms, rising unemployment and damaged export earnings, illustrating how the economic shock would ripple through the wider economy. Z Energy’s Jones warned that the impact would look like a “dramatic reduction in investment, consumption, services,” affecting households nationwide. He also noted that while the company’s emissions are higher than in 2019, they have been trending downward since 2023, suggesting that a gradual, policy‑guided transition could achieve similar environmental benefits without the abrupt economic disruption posited by the court‑ordered scenario.
Legal expert opinion and alternative economic analyses
Legal scholar Vernon Rive, consulted on the government’s proposed law change, argued that the prospects of obtaining injunctive relief that would create a parallel judicial‑regulatory framework forcing quantified emissions cuts were “very low.” He warned that relying on litigation to manage emissions would be arbitrary and ad hoc, potentially dragging other organisations into costly court battles without guaranteeing faster reductions. Complementary studies paint a different picture of climate action’s economic upside. Deloitte’s 2023 Turning Point report estimated that decisive climate policies could add $64 billion to New Zealand’s GDP by 2050, whereas inadequate action could cost $4.4 billion over the same period. The Sustainable Business Council projected that a productivity‑led economy powered by abundant renewable energy and stable policy settings could raise annual GDP by roughly $22 billion by 2035, far outweighing the short‑term costs modeled in the Winchester report.
Z Energy’s stance on litigation versus policy
Jones reiterated that Z Energy does not view the challenge as a binary choice between economy and environment. “It’s not whether we should transition to a lower carbon economy or not – we absolutely should. It’s how we do it that matters,” he said. He defended the existing legal framework, particularly the Climate Change Reduction Act, as a “very precious” tool for managing emissions reductions. According to Jones, allowing courts to dictate emissions cuts would set a risky precedent, leading to uneven, unpredictable outcomes and exposing many entities to litigation. He argued that the government, possessing the most comprehensive data, is better positioned to make the necessary trade‑offs between economic activity and environmental goals.
Document disclosure delays, the Ombudsman investigation, and Smith’s legal maneuvers
The Ombudsman’s inquiry into how the Prime Minister’s Office handled official information revealed that Z Energy and Fonterra delayed releasing the briefing note to Smith until after the government announced its intention to amend the law. Jones explained the delay stemmed from the confidentiality obligations inherent in ongoing multi‑defendant litigation. He said the company is now releasing all relevant information “at a point in time that really matters,” coinciding with parliamentary consideration of the bill. Smith attempted to introduce internal Z Energy documents into his submission to the Justice Committee, but the High Court’s grant was overturned by the Court of Appeal, which stayed the order, preventing the documents from reaching the select committee. Jones contended the sought‑after material reflected an internal discussion that was “in fact incorrect” and not pertinent to any government dialogue.
The Climate Change Response (Tort Liability) Amendment Bill and parliamentary submissions
On Tuesday, oral submissions were made to the Justice Committee regarding the Climate Change Response (Tort Liability) Amendment Bill. The legislation aims to amend existing climate statutes to bar companies from being sued for damages arising from greenhouse‑gas emissions, effectively halting Smith’s landmark case. Z Energy, as part of its submission, released the contested briefing note and the Winchester economic report, asserting that the disclosed content aligned with its long‑standing public positions. Smith characterized the bill as a governmental attempt to strip citizens of their right to seek justice when powerful corporations damage the climate through pollution. The debate underscores a tension between using the courts as a lever for climate accountability and relying on legislative and policy mechanisms to drive emissions reductions.
Conclusion
The unfolding dispute centers on whether climate‑related liability should be adjudicated through the courts or addressed via predictable, government‑led policy. Z Energy’s leadership maintains that its actions were transparent, lawful, and aligned with official guidance, while warning that court‑mandated emissions cuts would inflict significant economic harm without guaranteeing faster environmental progress. Independent analyses corroborate the economic risks of abrupt legal remedies, yet also highlight the substantial gains possible from well‑designed climate policy. As Parliament weighs the Tort Liability Amendment Bill, the outcome will shape New Zealand’s approach to balancing corporate accountability, economic stability, and its climate‑change mitigation objectives.