Mike Smith v Fonterra has developed into one of Aotearoa New Zealand’s most consequential climate-law disputes. What began in 2019 as a civil action by Māori climate activist and iwi leader Mike Smith against some of the country’s largest greenhouse-gas emitters has become a much broader constitutional argument about climate accountability, tikanga Māori, Parliament’s powers, the role of the courts, corporate influence and New Zealand’s international obligations.
At its heart is a relatively simple but legally difficult question:
Can a major company complying with New Zealand’s statutory climate regime nevertheless be held responsible under ordinary common law for its contribution to climate-change harm?
In 2024, the Supreme Court unanimously decided Smith should at least be allowed to take that question to trial. The Government is now seeking to change the law so that the courts cannot ultimately answer it in Smith’s favour.
Who is Mike Smith and what is he arguing?
Mike Smith is a Māori climate activist and iwi leader who brought proceedings in 2019 against major New Zealand companies associated with greenhouse-gas emissions.
The defendants have included Fonterra, Genesis Energy, Z Energy, New Zealand Steel, Dairy Holdings and BT Mining, with Channel Infrastructure, formerly New Zealand Refining Company, also part of the original proceedings.
Smith’s case advances three causes of action:
- Public nuisance
- Negligence
- A proposed new tort concerning climate system damage
Broadly, Smith argues that the companies’ emissions, or activities contributing to emissions, are helping cause climate change and consequent harm.
But his case has another important dimension.
Smith’s claim is grounded partly in his relationship as tangata whenua with whenua and other taonga affected by climate change. That introduces tikanga Māori, whakapapa and kaitiakitanga into questions traditionally examined through common-law tort principles.
The case therefore has implications extending beyond corporate emissions.
It asks how New Zealand’s common law responds when climate harm intersects with tikanga and Māori relationships with the natural world.
The case was nearly killed before reaching trial
The companies attempted to have Smith’s claims struck out before a substantive trial.
The High Court in 2020 struck out his public-nuisance and negligence claims but allowed the proposed new climate tort to continue.
The litigation then went to the Court of Appeal, which in 2021 effectively brought the entire action to an end.
Smith appealed.
That produced the pivotal moment in February 2024.
The Supreme Court unanimously allowed his appeal and reinstated his claim.
Importantly, the Supreme Court did not rule that Smith had proved Fonterra or the other defendants liable for climate change.
It decided the case should not be killed at the preliminary strike-out stage.
The distinction matters.
Smith won the right to have the arguments heard, not the underlying climate case.
The substantive High Court trial is scheduled to begin in April 2027.
Why the Supreme Court decision was so important
The companies argued, among other things, that climate change is fundamentally unsuitable for resolution through tort law.
There are obvious difficulties.
Climate change is global.
Billions of individuals and organisations produce emissions.
No single New Zealand company causes climate change by itself.
Establishing causation between one defendant’s emissions and particular damage therefore presents difficult questions for traditional tort law.
But the Supreme Court was unwilling to conclude at such an early stage that those difficulties made Smith’s case legally impossible.
That is what made the decision significant internationally.
Rather than deciding that traditional common-law concepts could never respond to climate change, the Supreme Court allowed the law to be tested against a new form of harm.
The Government’s own explanatory material for its subsequent legislation acknowledges another crucial part of the Supreme Court’s reasoning: there was no basis at that stage for concluding Parliament had already displaced tort law in the field of climate change.
That finding leads directly to the political battle happening now.
The Government steps in
Instead of waiting for the High Court to conduct the 2027 trial, the coalition Government decided to change the law.
Justice Minister Paul Goldsmith announced legislation preventing courts from imposing certain forms of tort liability for climate damage caused by greenhouse-gas emissions.
The Climate Change Response (Tort Liability) Amendment Bill was introduced on June 28, 2026 and passed its first reading two days later. It was subsequently referred to Parliament’s Justice Committee.
The Bill explicitly responds to Smith v Fonterra.
Its purpose is to amend the Climate Change Response Act 2002 so that no person, including the Crown, can be found liable in tort for emissions-related climate-change effects.
That means the legislation isn’t merely prospective.
Its intended effect reaches the existing Smith litigation.
If enacted in its proposed form, legal analysis indicates the change would effectively prevent the April 2027 trial from producing the type of tort liability Smith is seeking.
Why the Government says it is necessary
The Government’s argument centres on who should make climate policy.
Its position is that climate change involves enormous economic, social and distributional decisions affecting virtually every part of the economy.
Those decisions, it argues, should therefore be made by elected governments and Parliament through the Climate Change Response Act rather than by judges determining liability between individual litigants.
The Government is particularly concerned that successful tort litigation could create what it describes as a parallel and contradictory regulatory regime alongside New Zealand’s existing climate legislation.
Fonterra makes a similar argument.
The cooperative says climate change requires a nationally coordinated response and that Parliament, rather than individual courts, is best placed to balance emissions reductions against issues such as energy security, supply chains, investment confidence and export competitiveness.
Fonterra has warned that the remedies sought in Smith’s litigation could have severe consequences for the cooperative, farmers and the wider economy.
Those are the defendants’ and Government’s arguments; they have not been established as consequences by the court.
The ETS is at the centre of the dispute
This leads to the Emissions Trading Scheme.
The defendants’ essential position is that Parliament has already created a comprehensive statutory mechanism for managing greenhouse-gas emissions.
Companies operate within that regulatory framework.
From their perspective, allowing a court simultaneously to impose additional obligations through negligence, nuisance or a new climate tort creates two systems governing essentially the same emissions.
The Government has now adopted much of that policy logic.
Its Bill says regulatory policy regarding greenhouse-gas emissions belongs with the Executive and Legislature.
Smith’s case raises the opposite question:
Does complying with environmental regulation necessarily eliminate ordinary civil responsibility for harm?
The Supreme Court did not accept, at the strike-out stage, that the existing statutory climate regime had automatically extinguished common-law tort claims.
That is crucial.
The ETS and common law potentially perform different functions.
The statutory regime manages New Zealand’s overall response to emissions.
Tort law traditionally asks whether one party has caused legally recognisable harm to another and, if so, whether a remedy should follow.
The Government’s Bill would now explicitly close the door that the Supreme Court found existing legislation had not already closed.
This creates a major constitutional argument
The controversy therefore goes beyond climate policy.
Smith had successfully gone to New Zealand’s highest court.
Five Supreme Court judges unanimously decided his claim should return to the High Court.
A trial was scheduled.
Before that trial could occur, the Executive proposed legislation designed specifically in response to the litigation.
Parliament unquestionably possesses broad legislative powers under New Zealand’s constitutional system.
But critics argue the circumstances raise serious rule-of-law and separation-of-powers questions.
The issue is not simply whether Parliament can change tort law.
It plainly can legislate about tort liability.
The more difficult question is whether it should retrospectively alter the legal rules governing an identifiable piece of active litigation after the Supreme Court has ordered that litigation to trial.
That is where Smith’s latest legal battle begins.
Smith turns his attention to the Government
Smith has launched separate High Court proceedings challenging the Government’s decision-making around the legislation.
According to the material supplied, his judicial-review case alleges that the process was unlawful, insufficiently transparent and improperly influenced by lobbying from companies involved in the underlying litigation.
Fonterra openly acknowledges engaging with Government on climate policy and says a document prepared as part of that engagement was disclosed to Smith during discovery.
The existence of corporate engagement with Government is therefore not itself disputed.
The legal and political question is what influence that engagement had, how Cabinet reached its decision, whether relevant processes were properly followed and whether the decision is susceptible to judicial review.
Those allegations should be treated as Smith’s claims unless and until determined by the High Court, rather than established findings of improper conduct.
The international dimension
Smith has also taken the dispute beyond New Zealand.
The supplied material says he has approached United Nations special rapporteurs, arguing the intervention raises human-rights and rule-of-law concerns.
Legal scholars have separately questioned how eliminating climate tort litigation sits alongside New Zealand’s international commitments.
Three international instruments feature prominently in the arguments presented in the source material.
Paris Agreement
New Zealand is committed under the Paris framework to pursue domestic action addressing climate change.
Critics of the Bill argue that protecting emitters from civil climate liability could weaken one potential domestic accountability mechanism.
However, it is important to distinguish that argument from a definitive legal conclusion that passing the Bill would itself breach the Paris Agreement. That proposition remains contested.
ICCPR
Arguments have also been advanced under the International Covenant on Civil and Political Rights, particularly concerning access to an effective remedy and fair judicial processes.
The concern is especially focused on retrospective legislation affecting litigation already underway.
Again, describing the legislation as definitively violating the ICCPR goes further than the supplied material establishes. The stronger formulation is that critics and human-rights advocates argue the intervention raises potential issues under New Zealand’s ICCPR obligations.
UNDRIP
The United Nations Declaration on the Rights of Indigenous Peoples adds another dimension because Smith’s case engages tikanga, kaitiakitanga and his relationship with whenua and taonga.
Critics argue extinguishing the case before those aspects are fully examined at trial risks sidelining Indigenous legal perspectives and rights.
The precise legal consequences of UNDRIP in New Zealand domestic law, however, are more complicated than treating the declaration as directly equivalent to an enforceable domestic statute.
Tikanga Māori could be one of the case’s most important legacies
Smith v Fonterra matters particularly for Māori law because it sits within the broader development of tikanga as part of New Zealand’s common law.
Smith’s argument isn’t simply that climate change causes generic environmental damage.
His relationship with the environment is framed through whakapapa and responsibilities associated with kaitiakitanga.
That potentially forces the common law to confront questions about harm differently.
If climate change damages whenua, wāhi tapu, customary resources or relationships protected through tikanga, can those impacts be understood adequately using conventional Western concepts of property damage?
Or does New Zealand common law need to recognise harm through a framework informed by tikanga?
A full trial could explore those questions.
Legislation preventing the underlying tort claims may significantly restrict the opportunity for that jurisprudence to develop through this particular case.
Why business is watching closely
For New Zealand’s major emitters, the stakes are substantial.
If Smith ultimately succeeded, the implications could extend well beyond the six defendants.
Other businesses could face claims.
Boards might need to reassess climate-related legal risks.
Insurers, lenders and investors could reconsider exposure.
Climate obligations might effectively emerge from two places — legislation passed by Parliament and common-law principles developed by courts.
That uncertainty is precisely what the Government and Fonterra say they want to avoid.
Fonterra argues the potential consequences could be extremely serious for farmers and the wider economy.
Critics respond that uncertainty is not unusual when common law encounters a new form of harm, and that preventing courts from examining the issue removes a longstanding mechanism through which law develops.
Why environmentalists are watching just as closely
From the climate-litigation perspective, Smith v Fonterra represents something potentially transformative.
The case asks whether climate responsibility exists in addition to regulatory compliance.
That principle matters far beyond New Zealand.
If a company can comply with every statutory emissions requirement but still potentially be held responsible for identifiable climate harm, corporate climate risk changes significantly.
The Supreme Court did not decide that this principle applies.
It decided the argument was sufficiently tenable to deserve a trial.
Some international commentators consequently regard Smith’s litigation as one of the world’s most procedurally advanced climate tort cases.
That makes the Government’s attempt to legislate it away internationally significant as well.
The fundamental clash
Strip away the legal complexity and there are two competing philosophies.
The Government and corporate position is essentially this: climate change is a collective global problem requiring nationally coordinated policy. Parliament must balance emissions reduction against jobs, energy, agriculture, exports and economic consequences. Courts deciding individual tort claims are not institutionally equipped to make those choices.
Smith’s position raises the counterargument: the existence of government regulation should not necessarily deprive people suffering harm of access to ordinary common-law remedies. Courts have always developed tort law as new forms of harm emerge, and regulatory compliance does not automatically answer whether a defendant owes legal responsibilities to others.
The Supreme Court decided the second proposition was at least sufficiently arguable to be heard.
The Government’s legislation is intended to ensure that, whatever a trial might otherwise decide, tort liability will not become another mechanism for regulating greenhouse-gas emissions.
What happens next?
There are effectively now two interconnected battles.
The first is the original Smith v Fonterra litigation, with its substantive High Court trial scheduled for April 2027.
The second is the political and legal battle over the Climate Change Response (Tort Liability) Amendment Bill and Smith’s challenge to the Government’s decision-making.
The Bill has already passed its first reading and entered the select committee process.
If Parliament enacts the statutory bar in the form proposed, the Government intends that neither Smith nor future plaintiffs will be able to establish tort liability for emissions-related climate-change effects.
The irony is striking.
The original litigation began by asking:
Can corporations be held responsible through the courts for contributing to climate change?
Seven years later, the dispute is asking something even bigger:
When the Supreme Court says a citizen deserves to have his case heard, should Parliament change the law specifically to ensure he cannot win it?
That is why Mike Smith v Fonterra is no longer simply a climate case.
It is simultaneously a climate case, a tikanga Māori case, a corporate-accountability case, a parliamentary-sovereignty case and a rule-of-law case.
The ultimate outcome could help define not only who bears responsibility for climate harm in Aotearoa, but who gets to decide what that responsibility is — Parliament or the courts — and whether tikanga Māori gets the opportunity to help shape the answer.
