Fortescue Metals Group Limited and Ors v The Commonwealth of Australia

Fortescue Metals Group Limited and others (the applicants) brought proceedings against the Commonwealth of Australia (the respondent) in the High Court of Australia. The dispute concerned the validity of certain provisions of the *Carbon Credits (Carbon Farming Initiative) Act 2011* (Cth) and the *Carbon Credits (Carbon Farming Initiative) Rule 2015* (Cth) (the Rules), which established a framework for the creation and trading of Australian carbon credit units. The applicants sought declarations that these provisions were invalid and that the Commonwealth had acted unlawfully in its dealings with them under this scheme.

The High Court was required to determine whether the impugned provisions of the Act and the Rules constituted an unlawful delegation of legislative power. Specifically, the court had to consider whether the power to make rules concerning the methodology for calculating carbon abatement, and the subsequent approval of projects based on these methodologies, was so broad as to amount to an impermissible transfer of legislative authority from Parliament to the executive. A further issue was whether the Commonwealth had acted in a manner that was procedurally unfair or otherwise unlawful in its administration of the scheme, particularly in relation to the applicants' carbon abatement projects.

French CJ, delivering the judgment of the Court, held that the legislative scheme did not involve an unlawful delegation of legislative power. The Court reasoned that while the Act and Rules provided a framework for the development and approval of methodologies, the ultimate legislative authority remained with Parliament, which had set the broad parameters and objectives of the scheme. The detailed rules were considered to be administrative in nature, designed to give practical effect to the legislative intent, rather than constituting a wholesale transfer of law-making power. The Court also found no evidence of procedural unfairness or unlawful conduct by the Commonwealth in its administration of the scheme.

The High Court therefore dismissed the applicants' claims and made no orders other than that the applicants pay the respondent's costs.