Fonterra is not going to go bust. Parliament would not let that happen.
In Wellington this week, Parliament weighed whether to extinguish a climate lawsuit before it could reach judgment — a question that cuts to the heart of who bears responsibility when the atmosphere warms and coastlines shift. The bill, fast-tracked with unusual speed, would retroactively halt activist Mike Smith's case against six major emitters including Fonterra and Z Energy, shielding them from judicial scrutiny over their greenhouse gas contributions. Legal experts warn that in rushing to protect business certainty, the government may be quietly closing the door on any future claim for climate harm in New Zealand — a precedent with consequences far longer than any single court case.
- Companies facing the lawsuit warn of a $22 billion GDP collapse if forced to halt emissions, framing the case as an existential threat to the New Zealand economy.
- Legal scholars and climate lawyers counter that these projections are theatrical exaggerations, designed to frighten Parliament into acting before a court can weigh the actual evidence.
- The bill was introduced just two days before new regulatory scrutiny laws took effect, a timing critics say was engineered to avoid the very oversight mechanisms meant to catch bad legislation.
- Lawyers for Climate Action call it a disproportionate intervention that doesn't just stop one lawsuit — it strips all New Zealanders of any legal avenue to seek redress for climate-related harm.
- A previously undisclosed briefing sent by Fonterra and Z Energy directly to the prime minister's office, requesting exactly this kind of law change, has cast a shadow of corporate influence over the entire process.
- The committee now sits at a crossroads: let the courts do their work and respond legislatively to the outcome, or grant major emitters a permanent shield before any judgment is ever rendered.
A select committee this week heard two competing visions of catastrophe — one from the companies facing a climate lawsuit, the other from the lawyers opposing the bill designed to stop it. At stake is whether Parliament should amend the Climate Change Response Act to prevent companies from being sued over greenhouse gas emissions, retroactively halting activist Mike Smith's case against Fonterra, Z Energy, and four other major emitters before it reaches the High Court.
Fonterra and Z Energy told MPs the lawsuit posed an existential threat. Jointly commissioning an economic impact assessment, the defendants projected a $22 billion GDP drop by 2032 if forced to halt emissions entirely. Fonterra's Simon Tucker warned the company would need to immediately cease operations under such an order — a scenario he presented as the logical endpoint of Smith's case.
Legal experts were unconvinced. Auckland University associate law professor Vernon Rive, who had been consulted during the bill's drafting, called the disaster projections "frankly hyperbolic and implausible," telling MPs that Fonterra was not going to collapse and that Parliament would never allow it. The real substance of Smith's case, he argued, was about corporate responsibility and disclosure — not financial ruin — and that the courts should be allowed to develop that question before Parliament intervened.
The bill's speed drew its own criticism. Introduced on June 29, just two days before new elements of the Regulatory Standards Act came into force, it avoided an additional layer of legislative scrutiny — a timing Rive described as convenient. Jenny Cooper, president of Lawyers for Climate Action, called it "bad law, based on bad policy," the product of a deeply flawed process.
Cooper raised a concern that extended well beyond Smith's case. The bill's sweeping language, she argued, would effectively bar anyone from seeking damages for harm where climate change played a contributing role — and New Zealand currently has no other legal framework to fill that gap. Rather than building one, the bill simply declares that major emitters bear no accountability and that those harmed have nowhere to turn.
The hearing also surfaced an uncomfortable backstory: weeks earlier, RNZ had revealed that Fonterra and Z Energy had sent an undisclosed briefing to the prime minister's office requesting a law change closely resembling what was now before Parliament. Tucker acknowledged at the hearing that a staff member's decision to send the document to a personal email address was inappropriate. The government, which had received official advice against intervening in the case, proceeded regardless.
What the committee must now decide is whether the courts should be trusted to weigh these questions — or whether Parliament should foreclose that possibility entirely, leaving climate harm without a legal home in New Zealand law.
A select committee heard competing visions of catastrophe this week—one painted by the companies facing a lawsuit, the other by the lawyers opposing the bill designed to stop it. The question before Parliament is whether to amend the Climate Change Response Act to prevent companies from being sued over damage caused by their greenhouse gas emissions. The bill would apply retroactively, halting activist Mike Smith's legal case against Fonterra, Z Energy, and four other major emitters before it reaches the High Court next year.
Fonterra and Z Energy, the two most prominent defendants, told MPs on Tuesday that the lawsuit posed an existential threat. In their submission, Fonterra argued that if the court granted Smith's requests—a declaration that the companies are contributing to climate change, plus orders to either lower emissions to net-zero by 2050 or cease operations entirely—the consequences would be ruinous. Fonterra's group director of global external affairs Simon Tucker said the company would need to "immediately cease operations" if forced to stop all emissions. To support this claim, Fonterra, Z Energy, and Genesis jointly commissioned an economic impact assessment estimating that GDP would drop by $22 billion by 2032 if the six defendants were forced to halt emissions completely.
But legal experts who testified to the committee dismissed these projections as theatrical. Vernon Rive, an associate law professor at Auckland University who was consulted by officials while the bill was being drafted, called the disaster scenario "frankly hyperbolic and implausible." He told MPs that "Fonterra is not going to go bust," and that Parliament would not allow it to happen. The real substance of Smith's case, Rive argued, was not about financial damages but about corporate responsibility—a declaration that large companies have a legal duty to address their emissions. He suggested that allowing the case to proceed would provide "robust information and disclosure" about whether major emitters could actually reduce their output, and that Parliament could always respond legislatively once the outcome was known.
The speed and method of the bill's passage drew sharp criticism from the legal community. The government introduced it on June 29, just two days before new elements of the Regulatory Standards Act came into force—a timing that, Rive noted, "conveniently" allowed the bill to dodge an additional layer of scrutiny. Jenny Cooper, president of Lawyers for Climate Action, called it a "disproportionate, knee-jerk reaction" to a single unresolved case. "It is bad law, based on bad policy, and it's the result of a deeply flawed decision-making process," she told the committee.
Cooper raised a broader concern: the bill's retrospective application and sweeping language could have consequences far beyond Smith's case. By preventing claims where climate change is a contributing factor, it would "effectively impose a total restriction on anyone's ability to bring a claim for damages caused by any event where climate change is a contributing factor." She pointed out that there is currently no regulatory regime for compensation or liability over climate damage in New Zealand law. Rather than developing suitable legislation to address this gap, the bill simply declares that major emitters have no accountability and that those suffering from climate harm have no avenue for redress.
The government has justified the intervention by saying Smith's case was creating business uncertainty and risked establishing a "parallel regime" to existing climate change law. Officials had advised against intervening in the court case, but the government proceeded anyway. The bill's introduction also came weeks after RNZ revealed that Fonterra and Z Energy had sent a previously undisclosed briefing document to the prime minister's office requesting a law change similar to what is now proposed. When asked about this at the committee hearing, Tucker acknowledged that a staff member's decision to send the document to a personal email address was "inappropriate and contrary to our internal policies."
The committee's hearing laid bare a fundamental disagreement about what the case actually threatens and what the law should do about it. One side sees an existential economic risk that demands preemptive legislative action. The other sees a company making implausible claims to avoid accountability, and a government rushing to shield corporate interests from judicial scrutiny. The outcome will shape not only whether Smith's case proceeds, but whether New Zealand's courts can ever hold major emitters responsible for climate harm.
Citas Notables
Fonterra is not going to go bust. Parliament would not let that happen.— Vernon Rive, Auckland University associate law professor
It is bad law, based on bad policy, and it's the result of a deeply flawed decision-making process.— Jenny Cooper, president of Lawyers for Climate Action
La Conversación del Hearth Otra perspectiva de la historia
Why would legal experts say the economic impact is hyperbolic when Fonterra commissioned a study showing a $22 billion GDP loss?
Because the study assumes the worst possible outcome—that the court orders the companies to stop all emissions immediately, with no transition period. Rive's point is that Parliament wouldn't actually allow that to happen. The court might order something far less drastic, like a declaration of responsibility without an immediate shutdown.
So the companies are exaggerating the threat to get the law passed?
Not necessarily exaggerating—they genuinely fear losing control of the outcome. But yes, they're presenting the most catastrophic scenario as inevitable, when it's one of several possible outcomes. The legal experts are saying: let the case happen, see what the court actually orders, then Parliament can respond if needed.
Why does the timing of the bill matter so much? It was introduced on June 29—why is that suspicious?
Because it dodged scrutiny under the Regulatory Standards Act, which came into force two days later. If the bill had been introduced after that date, it would have faced additional review requirements. The government timed it to avoid that oversight.
What's the real danger of this law, according to the lawyers?
It's not just about stopping Smith's case. The language is so broad that it could prevent anyone from suing over any climate-related damage in the future. If your house floods and climate change contributed to the flooding, you couldn't sue the major emitters. It creates blanket immunity.
But doesn't New Zealand already have climate law? Why would we need this bill?
That's the paradox. New Zealand has climate targets and regulations, but no system for holding companies liable for climate damage or compensating people harmed by it. Instead of building that system, this bill just says: no liability, no compensation, no accountability.
What happens if Parliament passes this bill?
Smith's case stops immediately. The High Court hearing scheduled for next year never happens. The companies avoid any judicial finding that they're responsible for climate harm. And the precedent is set: major emitters can't be held accountable through the courts.