On 15 July 2025, Justice Wigney of the Federal Court gave judgment in Pabai v the Commonwealth of Australia (No. 2) [2025] FCA 796 (“Pabai”).
Key Takeaway
Government decisions concerning climate change policy are matters of “high or core government policy” and are not subject to the common law duties of care in Australia.
However, emission reduction targets and climate transition plans which lack a proper, scientific basis may be vulnerable to criticism and challenge.
Background
This case was brought by Mr Pabai Pabai and Mr Guy Paul Kabai on behalf of their communities in the Torres Strait Islands claiming that the Commonwealth of Australia (Commonwealth) has acted negligently in its response to climate change.
The Applicants are from Boigu and Saibai which are small low-lying islands close to the coast of Papua New Guinea. The Applicants have witnessed the impacts of climate change on their island communities, particularly in the degradation of land and marine environments causing damage to sacred and ancestral places and resulting in a loss of the ability to practise sacred traditions (Ailan Kastom).
The Applicants primary case in negligence alleged that by virtue of the special protective relationship between the Commonwealth and Torres Strait Islanders the Commonwealth had a duty to set appropriate greenhouse gas emission reduction targets based on the best available science and implement measures to reduce emissions. The Commonwealth failed to do so in setting its 2015, 2020, 2021 and 2022 greenhouse gas emissions targets and breached its duty to the Torres Strait Islander peoples causing the loss and damage suffered by the Applicants.
The Applicants alternative case was that the Commonwealth had a duty to provide adequate funding for infrastructure, in particular seawalls, which would assist Torres Strait Islanders to adapt to the impacts of climate change. The Commonwealth failed to take steps to lead and complete planned seawall projects causing the loss and damage suffered by the Applicants.
The Applicants sought orders requiring the Commonwealth to take steps to prevent harm to their communities caused by greenhouse gas emissions, including by reducing greenhouse gas emissions at the rates recommended by the best available science.
The Court’s findings
This case was dismissed on all grounds, confirming that in Australia, government decisions concerning “high or core government policy”, like climate change policy, are not subject to the common law duties of care.
In considering the salient features to establish whether a novel duty of care existed, Justice Wigney found that the relationship between the Commonwealth and Torres Strait Islanders is more than just the governing and governed, Torres Strait Islanders are in a position of vulnerability and reliance on the Commonwealth and that the possibility of harm was reasonably foreseeable. However, since the Commonwealth cannot control the risk of harm caused by global human impacts on climate change to Torres Strait Islanders, a special protective relationship could not be established.
His Honour agreed with the Applicants that the Commonwealth failed to actively engage with and in some cases gave no consideration to the best available science when setting its national greenhouse gas emissions reduction targets prior to 2022.
In considering the potential breach of the standard of care required, if a duty had been owed, his Honour found that the Commonwealth had acted carelessly in setting targets which might materially contribute to the harm suffered by Torres Strait Islanders and that harm is not far-fetched or fanciful. However, his Honour found that it was reasonable for the Commonwealth to give consideration to other economic and social factors when setting emissions reduction targets.
On the alternative case, the Court found that there was no duty binding the Commonwealth to provide adequate funding for infrastructure (seawalls). Significantly, the Court found that such a duty of care would require the Court to pass judgment on the roles and responsibilities of three tiers of government in respect of adaptation measures and their budget related decisions.
Despite no duty of care being established, his Honour considered whether Ailan Kastom is right which can be compensable under the law of negligence. His Honour found that observance of customs or traditions was not a right currently capable of protection by law.
Important considerations for reporting entities
Justice Wigney found that many of the factual claims underpinning the applicants case surrounding the Commonwealth’s response to climate change were correct. This includes the following:
the Commonwealth failed to actively engage with and in some cases gave no consideration to the best available science when setting its national greenhouse gas emissions reduction targets prior to 2022;
every country must take drastic steps to reduce greenhouse gas emissions to keep global temperatures below 2 degrees above pre-industrial levels in accordance with best available science; and
climate change has, and will continue to have, devastating impacts on Torres Strait Islanders, particularly in relation to their ability to practise sacred traditions and customs (Ailan Kastom).
Despite this, the law in Australia currently provides no redress for communities to claim damages or relief in respect of harm suffered as a result of government decisions involving policy. The case affirmed that the Commonwealth is free to develop policy without the potential to be sued.
It is noteworthy that Justice Wigney accepted without requiring proof, that modern tenets of climate science and its impacts is no longer in serious doubt. This is important to consider for climate reporting entities as it indicates that whilst negligence is not the best avenue for litigants looking for cause of action against policy decisions of Governments and entities in Australia, claims surrounding the credibility and validity of targets and transition plans are potential avenues for litigation.
As part of mandatory climate reporting, reporting entities must report on their climate risks and opportunities, any climate transition plans in place and any greenhouse gas emissions reduction targets set. The Pabai decision is a reminder that emissions reduction targets and climate transition plans which lack a proper, scientific basis may be vulnerable to criticism and challenge. Accordingly, there are serious risks with unsubstantiated targets and transition plans that are not founded in the best available science on climate change.
Recent International Decision
On 23 July 2025 , the International Court of Justice (ICJ) unanimously decided that countries are legally obligated under internal law to protect the climate and prevent harm caused by climate change. Key findings of the ICJ included:
Binding obligations are imposed on countries in the UN Framework Convention on Climate Change and the Paris Agreement;
Customary obligations are imposed on countries to protect the environment, including that states have a duty to prevent significant harm by acting with due diligence;
1.5 degrees is the binding target for limiting global average temperature increase under the Paris Agreement;
Fossil fuel production and consumption may constitute wrongful acts;
States are required to take steps to avoid climate harm, including by regulating private fossil fuel companies; and
Emissions are attributable to individual states, enabling any state to prosecute another state for breaches of its obligations under international law.
While the ICJ’s opinion is not binding, this decision aligns with many of the arguments posed by the applicants in the Pabai case and may provide an avenue for appeal. It will be interesting to watch the evolution of climate litigation in Australia and globally, as the Courts consider the extent of these international obligations and the legal recourse available.
If you have any queries about mandatory climate reporting requirements, greenwashing and broader disclosure risks around your greenhouse gas emissions targets and transition plans, please contact Emma Peters, Hayden Fox, Alexandra Kenny or Bronte Fox, from our ESG team.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.