The UK Government's adherence to the Paris Agreement, and the role of the Courts in supervising any such adherence, came under scrutiny recently in the English High Court in FoE v UKEF.
FoE challenged the decision of UKEF to provide up to £1.15 billion of financial support to a liquified natural gas project ("LNG") in Mozambique (the "Project"). UKEF was not alone in providing support for the Project. Other lenders included export credit agencies from South Africa, Japan, Italy, Thailand, and the United States.
Broadly summarised, FoE contended that:
- UKEF had erred in law or fact when determining that the decision to fund the project was compatible with the UK's commitments under the Paris Agreement; and/or
- in determining that funding the Project was compatible with the provisions of the Paris Agreement, UKEF failed to consider key factors.
Although the two presiding judges, Lord Justice Stuart-Smith= and Mrs Justice Thornton, were broadly aligned in respect of the relevant legal principles to have regard to, they reached markedly different conclusions as to the application of the law to the facts of the case: Stuart-Smith LJ found that UKEF had complied with its legal duties in approving the funding of the Project, while Thornton J considered that UKEF had failed fully to quantify the level of greenhouse gas emissions arising from the project and, therefore, UKEF had acted irrationally. The divergence of views as between Stuart-Smith LJ and Thornton J has resulted in permission being granted for FoE to appeal to the Court of Appeal.
The role of the Paris Agreement in judicial review
Addressing the proper interpretation of the Paris Agreement, Stuart-Smith LJ pointed to the principle of dualism when considering the interpretation of international legal obligations, noting that international law and domestic law are "regarded as separate legal systems, operating on different planes". Therefore as a starting point, Stuart-Smith LJ considered that, when international law crossed over into the domestic plane, it would be appropriate to identify where the international obligations sit on a spectrum ranging from "the aspirational and high-level political end" to the "rigidly prescriptive".
Stuart-Smith LJ considered that the Paris Agreement tended toward the high-level political end of the spectrum, and any interpretation of that agreement therefore required a flexible approach, adopting the test of "reasonable tenability". For this reason, Stuart-Smith LJ considered that there was no need to arrive at an exclusive interpretation of the language, but rather the Court only needed to be satisfied that the UKEF's interpretation was tenable. Thornton J shared this view in her separate judgment.
Accordingly, Stuart-Smith LJ considered it appropriate to afford UKEF a wide margin of discretion, in light of the lack of prescriptive obligations contained in the Paris Agreement, the fact that different elements of the Paris Agreement appeared to be in tension if not in "frank opposition" with one another (in particular the elements regarding the eradication of poverty), the absence of established jurisprudence on the correct interpretation of the Paris Agreement and its provisions, as well as the fact that the Court is "not authorised to decide questions so as to bind the near 200 sovereign parties to the Paris Agreement."
The scope of the UKEF inquiry
As with Sharma, Stuart-Smith LJ also considered the decision to be highly political (with a high degree of policy judgement) and, therefore, that a relatively low intensity of judicial review should be applied by the Court. Both Stuart-Smith LJ and Thornton J considered that it was not the Court's role to adjudicate on the merits of a public policy decision, and judicial review should not be viewed as "politics by another means". Rather, the Court's role was to consider the lawfulness of the relevant decision.
Stuart-Smith LJ found that UKEF had acted in accordance with its "Tameside duty", namely its duty as a public body to carry out a sufficient inquiry prior to making its decision. The decision in question, Stuart-Smith LJ emphasised, was not to decide whether the Project should go ahead at all, but rather whether it should provide export finance to a project that would go ahead in any event. However, while both Stuart-Smith LJ and Thornton J agreed that the Court must only be satisfied that UKEF held a "tenable view" regarding the interpretation of the Paris Agreement, Thornton J considered UKEF additionally needed to demonstrate that it had considered the impact of Scope 3 emissions and, therefore, that "funding the project is consistent with a pathway towards limiting global warming to well below 2C and pursuing efforts to 1.5C." (See the text box below for an explanation on Scope 3 emissions.) In the opinion of Thornton J, UKEF had an obligation to quantify (and thereby consider) the Scope 3 emissions that would arise from the project and, in failing to do so, had failed to discharge its duty of inquiry and had acted irrationally.