New Zealand’s free trade agreement with the European Union is facing its first formal climate complaint, five weeks out from the general election, and the Government says it has done nothing wrong.
Dutch environmental group Both ENDS lodged the complaint with the European Commission on Wednesday through the Single Entry Point, the mechanism the EU set up in 2020 to let European organisations raise concerns about whether a trading partner is keeping the sustainability promises in a trade deal. The group says it is the first complaint lodged there on environmental and climate grounds.
It argues New Zealand has broken two commitments in the agreement, which came into force on 1 May 2024. One is a “non-regression” clause, Article 19.2(4), which states a “Party shall not weaken or reduce the levels of protection afforded in its environmental or labour law in order to encourage trade or investment.” The other commits both sides to “effectively implement the Paris Agreement.”
The complaint lists a series of Government decisions since the deal took effect, RNZ reported. These include the lower 2050 methane target, keeping agriculture out of carbon pricing, reversing the ban on new offshore oil and gas exploration, the $200 million Gas Security Fund and planned LNG import facility, and the law that stopped climate damage lawsuits against major emitters. That law ended the case brought by climate campaigner Mike Smith against Fonterra and other large companies, which the Supreme Court had allowed to go to trial.
Only EU-based groups can use the Single Entry Point, so New Zealand organisations have signed on as co-sponsors. They include Greenpeace, the Environmental Law Initiative, the Ngāti Pūkenga Iwi ki Tauranga Trust, the health professionals’ climate group OraTaiao, Mike Smith and Emeritus Professor Jane Kelsey.
The stakes are real, even if any penalty is years away. Two-way trade between New Zealand and the EU was worth around $21.5 billion last year. Both ENDS says it wants compliance, not sanctions. Under the process, the Commission first assesses the complaint. If it takes the case up, it can raise the matter with the New Zealand Government and hold formal consultations. If that fails, an independent panel of experts examines the case. Trade benefits could only be suspended as a last resort if a panel found a breach and New Zealand did not put it right. A Commission spokesperson confirmed the complaint had been received and would be reviewed, according to a dpa report.
Fernando Hernandez Espino, head of trade and investment policy at Both ENDS, told RNZ the deal was regarded as the benchmark. “What makes this case very significant is that this is the so-called gold standard,” he said. “There is no other trade agreement with the EU where regressing or rolling back on climate policies has consequences like this one, and in this particular case, it’s about losing the access to the European market.”
Trade Minister Todd McClay rejected the claim outright. “We are compliant with the EU free trade agreement,” he told RNZ. “We have always been clear that we are committed to meeting our environment and climate obligations. However, it is for the New Zealand Parliament and our government to decide how we do this.”
He added, “It is not for overseas countries, organisations or lobby groups to tell New Zealand how to meet its obligations.” McClay also said it was deeply disappointing to see New Zealand organisations join foreign groups against the country, warning “This harms our exporters and the jobs they provide.” He said an earlier approach to the Commission, following a letter from the Greens in June, had been rejected.
Prime Minister Christopher Luxon said he disagreed “completely.” “New Zealand’s fully compliant with our international obligations and our trading obligations,” he said. “We take those agreements very seriously, and we make sure we meet our obligations on that.”
New Zealand First deputy leader Shane Jones went further. He told RNZ the coalition had pushed for development, jobs, investment and growth for the benefit of New Zealanders, and that decisions about climate policy belonged to New Zealand. “They have absolutely no authority, and they are worsening our economic prospects,” he said of the sponsors.
The co-sponsors reject the suggestion they are working against exporters. “It’s more a call for the government to explain its conduct and to take corrective action,” Mike Smith told RNZ. Greenpeace executive director Russel Norman said in the Both ENDS release that his organisation had “met the Prime Minister, Ministers and senior officials many times to warn them they were breaching that chapter.”
Green Party co-leader Chlöe Swarbrick said the Greens were not involved in lodging the complaint, which was laid by a European organisation. “This should be a wakeup call to the minister to do his job, instead of blaming everyone else for the consequences of his actions,” she said.
Academics say the case will be closely watched. University of Waikato law professor Al Gillespie told RNZ “It is an open question whether NZ is currently in breach of its obligations with regards to the promises we made to effectively implement the Paris Agreement.” He said the United Kingdom and members of the CPTPP trade pact would be watching. University of Canterbury political scientist Bronwyn Hayward called it a “very serious landmark case.”
For voters, the complaint lands on a live election question. Gillespie said the wider debate over whether New Zealand should stay in the Paris Agreement would now be coloured by the trade risk, calling it “a very complicated knot to untangle.” If you are still working out where the parties sit on climate, trade and the economy, try our voting tool before 7 November.
The Commission has not given a timeline for its assessment, and Both ENDS says it will publish an update at each stage.
Should the EU have a say in how New Zealand meets its climate promises, or is this a matter for New Zealand voters alone? Tell us what you think in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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