New Zealand Enacts Law Blocking Climate Litigation Against Businesses

New Zealand’s parliament has approved a contentious new law that blocks civil claims for climate-related harm under tort law, effectively ending the country’s most prominent corporate climate lawsuit while drawing sharp criticism from activists and legal experts.

The Climate Change Response (Tort Liability) Amendment Bill passed its final reading in parliament with 67 votes in favor and 53 against, and is expected to take effect within days after receiving formal assent from Governor-General Cindy Kiro. The law prohibits both current and future lawsuits seeking damages for climate loss or harm, with Justice Minister Paul Goldsmith stating it aims to provide businesses with clarity on their climate obligations.

Goldsmith emphasized that the legislation does not alter the government’s duties under the Climate Change Response Act 2002 or alter emissions trading scheme requirements. “Our response to climate change is best managed by the Government at a national level and not through piecemeal litigation in the courts,” he said in a statement. He warned that such lawsuits risk creating a conflicting legal framework inconsistent with Parliament’s established climate policies.

The new law directly targets a landmark climate lawsuit brought by Mike Smith, a Northland iwi leader and activist, against six major New Zealand companies: Fonterra, Dairy Holdings, Genesis Energy, Z Energy, New Zealand Steel, and BT Mining. A seventh defendant, Channel Infrastructure, was removed after closing its Marsden Point oil refinery. Smith’s case argued that these companies contributed to climate harm through public nuisance, negligence, and a novel duty to cease contributing to net greenhouse gas emissions. While no financial compensation was sought, Smith demanded that the companies halt their emissions. A trial had been scheduled for April 2027 after the Supreme Court unanimously allowed the case to proceed.

Smith described the bill’s passage as “deeply concerning,” particularly as it was enacted while the Supreme Court was considering another of his cases—Smith v Attorney-General—which challenges the government’s climate response and its impact on Māori communities. “That timing raises profound questions about the separation of powers and the rule of law,” Smith said. He has since launched a new legal challenge against the amendment itself.

The bill followed intense lobbying by the defendant companies, which in 2024 proposed legal changes in a briefing to the government. Critics, including the national ombudsman, have accused the government of withholding information about meetings related to the bill. Greenpeace Aotearoa called the law a “shocking abuse of executive power,” and the vast majority of submissions to a parliamentary inquiry urged its rejection.

Environmental groups and legal scholars warn that the law could chill climate accountability efforts globally, with Greenpeace International’s Amanda Larsson urging international legal support to defend New Zealanders’ right to hold polluters accountable. International parallels are emerging, including recent U.S. state laws shielding fossil fuel firms from climate liability and proposed measures in Germany, the Netherlands, and Belgium to restrict climate-related legal claims.

Climate law expert Sam Bookman of Melbourne Law School said the bill reflects a broader trend of governments attempting to limit climate litigation, though he doubts such challenges will succeed under New Zealand’s constitutional framework. He noted that the country’s sophisticated legal landscape and growing NGO involvement suggest that climate litigation will continue, particularly if opposition parties gain power in the upcoming November election.

Smith, along with the National Iwi Chairs Forum and Climate Clinic Aotearoa, has filed a complaint with the UN Special Rapporteur on Climate Change and Human Rights over the government’s actions. Bookman advises plaintiffs to adapt legal strategies, acknowledging that even unsuccessful lawsuits can impose significant costs and reputational damage on defendants.

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