Justice Minister Paul Goldsmith wants you to believe the government’s amendment to the Climate Change Response Act is about certainty. It bars courts from finding tort liability for climate harm, retroactively halting the Smith v Fonterra case that the Supreme Court had unanimously allowed to proceed. The stated rationale is that climate policy belongs with Parliament, not judges.
That framing is clean and defensible in the abstract. In practice, the government’s own documents demolish it.
The government’s advisers said leave it alone
OIA documents obtained by the NZ Herald reveal that a June 2025 Ministry of Justice briefing recommended no action, calling reform “premature” while proceedings were still underway. A March 2026 draft Cabinet paper acknowledged the statutory bar could have the “longer-term, unintended effect of decreasing certainty in the law” – the exact opposite of the government’s pitch.
Most damning: the Regulatory Impact Statement found no evidence that the ongoing court proceedings had measurably harmed business confidence. It noted “a lack of any business perspective” meant the question had not been adequately tested. The government could not find the problem it claimed to be solving, and did not try particularly hard to look.
As recently as April 2026, the status quo remained the Ministry’s preferred option. Ministers overrode that advice.
What was actually at stake in Smith v Fonterra
The case, brought by iwi leader Mike Smith against Fonterra and six other major emitters including Genesis Energy, was not a damages claim. It was a public interest action seeking to establish whether companies could be held liable for climate harm, with the goal of prompting emissions reductions. The Supreme Court unanimously found Smith had a tenable case. Trial was scheduled for April 2027.
Sam Bookman, a climate law lecturer at Melbourne Law School, called it “the most procedurally advanced climate tort case of its kind in the world” and described it as “deeply cynical for the defendants to run to the legislature to interfere with a trial process that had already started.”
Genesis Energy stated that climate transition policy is “the role of government, not the courts.” That is a reasonable position. But there is a difference between Parliament setting climate policy and Parliament retroactively extinguishing a live Supreme Court proceeding to benefit named defendants.
The rule-of-law problem business leaders should not ignore
The NZ Bar Association has criticised the retrospective application. Over 100 academic and civil society leaders signed an open letter arguing the decision undermines the rule of law. These are not fringe objections.
For directors and investors, the precedent matters more than the specific case. A government that retroactively overrides a Supreme Court ruling to protect specific companies has established that judicial outcomes are negotiable when the defendants are large enough. That is not certainty. It is the opposite.
Professor Alexander Gillespie from the University of Waikato warned the move could have “negative implications globally, as other countries follow suit.” Associate Professor Stephen Young from the University of Otago noted the government is “prioritising commercial certainty over environmental security, even as climate change makes the conditions for commercial enterprise or even continued existence increasingly uncertain.”
Trade agreements add a layer of real exposure
A legal analysis published at EJIL Talk identifies potential inconsistencies with multiple trade agreements. The EU-NZ FTA states a party “shall not weaken or reduce the levels of protection afforded in its environmental law in order to encourage trade or investment.” Similar provisions exist in the UK-NZ, Korea-NZ, and CPTPP agreements.
This is not academic. If trading partners invoke these provisions, companies operating under these FTAs could face exactly the kind of uncertainty the tort bar was supposed to prevent.
Compliance relief is real but the bigger picture is what matters
The tort bar sits alongside the government’s move to raise climate-related disclosure thresholds from $60 million to $1 billion in market capitalisation, saving listed issuers an estimated $15.3 million to $102 million per year in compliance costs. For mid-sized companies, that relief is genuine.
But as the University of Otago analysis in Newsroom frames it: “If litigation is foreclosed, a question arises: who pays? The costs of climate harms will fall on someone.”
New Zealand’s gross emissions in 2024 were 75.8 million tonnes CO2 equivalent, with agriculture at 53% and energy at 38%. The companies targeted in Smith v Fonterra sit at the heart of both sectors. Shielding them from liability does not make the costs disappear. It moves them to taxpayers, ratepayers, and insurers who are already signalling they will not carry the load indefinitely.
Business owners who cheer reduced compliance today should ask a harder question: when a government demonstrates it will rewrite the rules mid-trial for favoured defendants, what happens when you are on the wrong side of the next rewrite?
Sources
- Government changes climate law to prevent lawsuits (2026-05-12)
- Government changes climate law to prevent lawsuits (2026-05-12)
- Officials told Government not to intervene in climate court case (2026-05-13)
- Climate law change is a dangerous trade-off (2026-05-16)
- Govt changes law to halt climate lawsuits – Expert Reaction (2026-05-12)
- Denial of Environmental Justice: Would a Bar on Climate Tort Litigation Be Inconsistent with New Zealand’s International Obligations? (2026-05-12)
- New Zealand Moves to Ban Tort Liability for Greenhouse Gas Emissions and Climate Damage (2026-05-19)
- GHG Inventory 2026 Snapshot – New Zealand’s Greenhouse Gas Inventory (2026-04)