A one-week bill with constitutional weight
In early July 2026, Parliament passed the first reading of the Climate Change Response (Tort Liability) Amendment Bill under urgency. It would retrospectively extinguish iwi activist Mike Smith’s lawsuit against New Zealand’s six biggest greenhouse gas emitters, a case the Supreme Court had already agreed to hear, and bar all future climate tort claims.
The process alone should make business leaders uneasy. Public submissions closed after barely a week, with oral hearings compressed into a single day of five- and ten-minute slots. For legislation that retroactively strips rights already before the country’s highest court, that is an extraordinary truncation of scrutiny.
The backstory is murkier still. RNZ revealed that Fonterra and Z Energy, two of the six defendants, had handed the prime minister’s office a previously undisclosed briefing asking for a law change essentially identical to the one now before the House. That looks less like principled policy and more like a legislative favour.
The certainty argument
Justice Minister Paul Goldsmith frames the bill as protecting investment. “Ultimately, if there is a legal uncertainty, there is less investment over time, and that affects us all by making our country less competitive,” he told Parliament. His argument is that the Emissions Trading Scheme already sets climate policy, and courts should stay out of it.
The emitters pushed harder. An economic assessment commissioned by Fonterra, Z Energy and Genesis and analysed by AUT economist Dr Niven Winchester found that forcing the six defendants to immediately cease all emissions would cut GDP by $21.9 billion over 2028-2032, rising to a modelled $112 billion applied across the wider economy.
Those numbers rest on a scenario no court anywhere has ever ordered: an immediate, total shutdown of emissions. Auckland University associate law professor Vernon Rive called the claims “frankly hyperbolic and implausible.” Lawyers for Climate Action president Jenny Cooper KC described the bill as “a disproportionate, knee-jerk reaction to a single legal case that had not even been decided.”
Where the real bill lands
Here is the part exporters should read twice. The trade risk the bill creates may dwarf the litigation risk it removes.
Dr Jane Kelsey, Professor Emeritus of Law at the University of Auckland, and Fernando Hernandez, head of trade and investment policy at Dutch group Both ENDS and a member of EU Domestic Advisory Groups, argue that the law change invites Europe to test whether the climate commitments in the EU-NZ Free Trade Agreement actually bite. Their warning is blunt: “A serious failure to meet climate obligations can ultimately lead to the suspension of trade concessions.”
A complaint that New Zealand had breached its FTA obligations would land with the European Commission. An adverse finding would hit precisely the exporters the bill claims to protect: dairy, meat, horticulture and forestry, all of which depend on preferential tariff access to the EU. Dr Oliver Hailes of the London School of Economics separately warned the select committee that retroactively removing plaintiffs’ rights could expose New Zealand to challenges in international proceedings.
An international look that does not add up
The timing sharpens the contradiction. Only days after flagging the law change, New Zealand voted with 140 other countries at the UN to endorse the International Court of Justice’s advisory opinion on climate. The ICJ found that states may be responsible if they fail to regulate emissions from private entities within their jurisdiction. Wellington is now proposing to legislate exactly that immunity.
It does not sit in isolation. In January 2026 the government removed planned on-farm emissions pricing from its second emissions reduction plan, and the Climate Change Commission has flagged a large ETS unit surplus suggesting the carbon price is not doing its job. To trade partners and ESG-focused buyers, the pattern reads as a country steadily dismantling its climate accountability.
Forbes has already noted the move is being watched as a possible precedent internationally. That cuts both ways. New Zealand branding itself as the jurisdiction that legislates away climate liability is a signal offshore buyers and investors will absorb long before any Commission ruling.
The government wanted to remove uncertainty. It may have swapped a speculative domestic lawsuit for a concrete question about market access to New Zealand’s second-largest trading bloc. Exporters, not emitters, are the ones who will find out the answer.
Sources
- It’s not climate lawsuits that will cost NZ exporters billions; it’s the shortsighted bet to ban them – Newsroom (2026-07-16)
- Bill banning climate tort cases like Mike Smith’s passes first reading – RNZ (2026-07-02)
- Emitters’ claims that court case would shut them down are ‘hyperbolic’ – RNZ (2026-07-14)
- Missing climate briefing note: Z Energy boss speaks out – 1News (2026-07-14)
- Climate litigation’s economic impact would be worse than Covid, MPs told – Newsroom (2026-07-14)
- Climate law tests NZ’s international commitments – University of Auckland (2026-07-07)
- NZ wants to end climate lawsuits. How does that sit with its international commitments? – The Conversation (2026-07-17)
- New Zealand Moves To Ban Climate Change Litigation – Forbes (2026-07-08)
- New Zealand’s second emissions reduction plan 2026-30: January 2026 amendment addendum – Ministry for the Environment (2026-01-29)
- Advice on NZ ETS unit limits and price control settings for 2027-2031 – Climate Change Commission (2026)