An official complaint alleges
Dutch climate group Both ENDS is lodging the first complaint of its kind with the European Commission. If the complaint is upheld, the most extreme consequence could be NZ losing access to the European market.
The SMC asked experts to comment.
Professor Alexander Gillespie, Te Piringa Faculty of Law, University of Waikato, comments:
“Although free trade agreements are not novel, pushing specific international environmental components to the front of them as a core – and binding – goal within them, is new. This type of approach is commendable if the goal is to use trade policy to support, not undermine, shared environmental goals. The EU are at the forefront of this type of thinking, and their agreement with NZ is an exemplar.
“NZ has made clear promises to the Europeans, which will now be held up to the light.
“There is a five step process, which is quite drawn out – with the first major costs being in negative publicity for NZ – well before government to government consultations, evaluation by independent experts and then a possible sanction (if NZ is found to be in breach) as a last resort.
“This is a test case, which will generate considerable attention – as it is not just about climate change, but how free trade and environmental sustainability have been woven together.
“It is an open question whether NZ is currently in breach of its obligations with regards to the promises we made to effectively implement the Paris Agreement. Although our broad goals remain in place, the architecture around them (from stopping the Smith case, weakening targets, and reversing earlier exploration goals) is collapsing – and we may be found in breach of our second commitment in this area of non-regression.
“The debate about how NZ will respond will be coloured by larger political debates at the moment around whether NZ should remain in the Paris Agreement or not – while highlighting, if we leave, we risk undermining complimentary free trade agreements.”
Conflict of interest statement: “No conflicts of interest.”
Professor Barry Barton, Faculty of Law, University of Waikato, comments:
“This complaint is calling for the kind of EU action that has been foreseen for some time. No doubt the European Commission will deliberate carefully both on the political and diplomatic dimensions as well as the legal ones. What could be particularly important is the commitment in Article 19.6(2), that each Party shall effectively implement commitments with regard to nationally determined contributions (NDC), as well as to the UNFCCC and Paris agreement as a whole. The government this year and late last year ruled out offshore mitigation to meet our NDC, and played down our NDC commitment, saying that best endeavours was acceptable.
“Ministers have been quick to blame the previous government for making what they call an extravagant NDC commitment, but it’s questionable whether we would have got either the EU or UK FTAs without it, and without confirming it in the FTA. Both the EU and UK were determined to see genuine progress in climate action. And they continue to be determined.”
Conflict of interest statement: “No conflicts of interest.”
Professor of Political Science Bronwyn Hayward, University of Canterbury, comments:
“News that the New Zealand Government is the subject of a complaint to the European Commission for effectively acting unfairly by not following climate regulations imposed on all European trade partners is a very serious land-mark case which will be watched very closely by our trade partners and by other countries around the world.
“Until now the New Zealand government has been able to have it both ways, appearing to take action on an international stage over climate by making speeches about supporting the Paris climate agreement but significantly rolling back climate policy action at home.
“This is a high stakes case. It could trigger a backlash of nationalism from the minority parties who want to leave the Paris climate agreement, but our trade agreements depend on New Zealand sticking to our word and taking fair actions including fair practices on climate which we expect our partners to do too – playing by fair rules is something New Zealanders pride ourselves on. This case effectively calls out the New Zealand government for cheating on climate regulations.
“While the complaint notes the roll back of virtually all our climate legislation, the most serious trigger appears to have been the extraordinary rushed action the government took to protect New Zealand’s largest emitters from liability for climate harm – the tort liability law.
“That law, passed under urgency, not only blocked Mike Smith from taking Fonterra and other large emitters to court, it has been applied retrospectively and can apply to future cases.
“The drafting of that law was also impacted by a lobbying scandal when it was revealed Fonterra and another defendant had drafted their own text for the law but these copies were not recorded by government – the lobbying scandal and the broad reach of the climate actions in protecting emitters has tainted New Zealand’s reputation as an honest broker.
“The government has prided itself on being able to negotiate trade deals but in this moment we have been called out internationally for not playing by fair trade rules around climate – the stakes could not be higher for us as a nation, and I am deeply concerned that our government has put our country’s reputation and trade at risk.”
Conflict of interest statement: “No conflict of interest. Bronwyn Hayward is a Professor of Political Science and International relations at UC and works with climate policy serving numerous roles on the IPCC.”
Professor Elizabeth Macpherson, Professor of Law and Rutherford Discovery Fellow, University of Canterbury, comments:
“We are off-track for meeting our local and global climate goals. As the coalition government has progressively undone environmental protections across land, water, biodiversity, oceans, and climate laws, it has simultaneously taken action to prevent people taking legal complaints to local courts and tribunals. Legislation preventing tort claims being brought to the courts is one example. Changes to the Marine and Coastal Area (Takutai Moana) Act, which effectively overturned multiple High Court determinations of customary marine title, is another. Most recently, the legislation replacing the RMA reduces the opportunities for people concerned about environmental planning and consenting issues to appeal to the courts.
“This Dutch complaint to the European Commission confirms that we are still subject to international climate and environmental norms, processes, and standards. The New Zealand Government can be held to account for its failure to meet global obligations, under international Treaties and customary international law. As a coastal island nation in the South Pacific, we are both vulnerable to the impacts of climate change and in a position to lead global climate and environmental policy through locally-grown solutions. This is a time-critical opportunity to put New Zealand on the map for the right reasons.”
Conflict of interest statement: Elizabeth is also a barrister and has acted as lawyer and policy adviser for public and private sector and Indigenous peoples on matters related to environmental law and Indigenous rights and interests.
Dr Sebastian Gehricke, Director Climate and Energy Finance Group, Otago University, comments:
“This is something many experts, commentators and stakeholders have been warning about. The current government has certainly significantly rolled back New Zealand Climate Policy and Environmental protections. This should not come as a surprise.
“It is good to see that there are organizations in Europe pushing for the enforcement of this clause in our free trade agreement, which was a first of its kind when signed.
“The current government may not like this complaint, but it has plenty merit.
“Stating to support the Paris agreement and our net zero goals is one thing, but its actual policy choices that deliver real change and those have been heading in the opposite direction.”
Conflict of interest statement: Dr Gehricke has declared he has no conflicts.
Dr Alberto Alvarez-Jimenez, Te Piringa – Faculty of Law, University of Waikato, comments:
“This is the process: the European Commission will assess the mater and will decide if there is evidence that NZ is breaching its commitments under the NZ-EU FTA.
“If the conclusion is affirmative, it may raise the issue with NZ, which depends obviously on the overall context of the bilateral relationship, and on the potential impact that the issue will have on the relationship.
But, if the EU gets serious and is unhappy about NZ’s response, then there is legal dispute. The EU can request formal consultations with NZ in which the EU identifies the international obligations under the FTA that NZ is allegedly breaching.
“The purpose of the consultation is to give, in this case NZ and the EU, the opportunity to settle the dispute. For this to happen, it would necessarily mean some changes in policy direction from NZ on climate change. The consultations cannot last for more than 90 days after the request is made and would be held in Aotearoa.
“But the NZ government is not necessarily the only actor that can be involved during the consultations: the EU-FTA has a “balanced representation from Māori; business and employers’ organisations; trade unions; and independent non-government organisations active on sustainable development, human rights, and economic, social, and environmental matters.” The NZ government, at least on paper, could request the views on the dispute with the EU from this advisory group.
“If the dispute is not settled by negotiations during this time then formal adjudication by an international panel of three members, could eventually follow. However, adjudication is not the automatic consequence of unsuccessful consultations. It would be up to the EU to formally request the composition of the panel and NZ could not oppose this decision.
“The panel will follow due process and decide if NZ’s actions are or not in compliance with its environmental obligations under the EU-NZ FTA.
“If the conclusion is that NZ is not in compliance, then NZ will have to design the measures to comply. If the EU is satisfied, then this is the end. But the EU can still be unhappy, in which case it can request again the original panel to make a determination.”
Conflict of interest statement: “No conflict of interest to declare.”
Associate Professor David Jefferson, Faculty of Law, University of Canterbury, comments:
“The claim against Aotearoa New Zealand for failing to uphold its obligations related to climate change in the NZ-European Union free trade agreement is significant. To date, there have been few other examples of claims being brought against parties for breaching the climate commitments they have undertaken in their trade treaties. A major reason for this is that climate obligations have only recently been introduced into free trade agreements worldwide. In the New Zealand context, the first treaty to contain such commitments is the NZ-UK free trade agreement, which entered into force in 2023. The NZ-EU agreement entered into force one year later, in 2024, and this is the first time that the climate commitments in either agreement are being tested.
“It is notable that several New Zealand organisations and groups and individuals have co-sponsored the Both ENDS complaint, demonstrating domestic support for upholding Aotearoa’s international climate obligations notwithstanding the actions and policies of the current government. Whilst it is unclear what the outcome of the complaint will be, if the European Commission is persuaded by the claim then the procedures of the dispute settlement chapter of the NZ-EU free trade agreement would be triggered. These procedures would first involve consultations between the parties, and if these fail then an independent panel would be established. This panel could order Aotearoa New Zealand to take measures to comply with its obligations. Ultimately, if such measures are ordered and New Zealand does not implement them, Aotearoa could lose its preferential market access to the European Union. This loss would have significant negative consequences for New Zealand businesses.”
Conflict of interest statement: No statement received.