It’s perplexing that Australian policymakers would roll out the red carpet for those who oppose the resources sector — the very industry that drives and powers national prosperity.

Why kneecap your own champions that fund your successful industry?

The single most egregious example of this economic self-harm is so-called “lawfare”; the gaming of the legal system to stop Australian resource projects in their tracks and bleed successful Australian companies dry. We know this well in North America.

Much like Alberta in my native Canada, Australia has a resource-rich western state that is politically and demographically outnumbered, but over-performs when it comes to economic figures.

The resources sector in WA delivered $254 billion in sales in 2022-23, supporting 126,000 full-time jobs (that’s two Optus Stadiums), and generating over $12.7 billion in royalties to help pay for the schools, hospitals, and critical infrastructure West Australians rely on.

Class action lawfare — driven by cashed-up foreign litigation funders — is a clear and present danger to WA’s economy, and to many across the anglosphere.

Four of WA’s five biggest private sector employers — which have at least 70,000 West Australians on their payrolls — are currently facing class actions or class action investigations.

This includes resource giants BHP and Rio Tinto, as well as Perth-headquartered Wesfarmers, and Woolworths. Some of these may have merit, but many others are ill-intended efforts to weaponise Australia’s court system.

And as Australia’s class action industry continues to grow, there’s more pain on the horizon for the resources sector.

After arriving in Australia earlier this year, British class action firm Pogust Goodhead, backed by a billion-dollar loan from American hedge fund Gramercy, pledged to file as many as 10 class actions against Australian companies over the next 18 months.

CEO Thomas Goodhead has identified projects involving BHP, Rio Tinto, and Glencore as potential targets for lawsuits.

Already — just 12 months after the billion-dollar loan was announced — Pogust Goodhead has spent the lion’s share, going after BHP in the English High Court.

Pogust Goodhead’s aggressive pursuit of BHP in Britain over the collapse of Brazil’s Mariana Dam in 2015 — which could see the class action firm and its hedge fund backers make billions in profit — goes on, even after BHP and its partners sealed a $45 billion agreement with Brazilian authorities this week to directly compensate affected communities.

For class-action cowboys, WA, and particularly the Pilbara looms as a target-rich environment.

The same has sprung up in the United States, where opportunistic lawyers, backed by wealthy investors, target the most successful companies in economically powerful industries because they know they have the means to pay up in the form of a settlement.

Then there’s green lawfare pushed by environmental activist organisations, which also actively threatens the livelihoods of WA consumers and workers.

A recent report from the Menzies Research Centre found Australia has become the climate lawsuit capital of the world, giving the Americans a run for their money.

What’s more sinister, if one examines the cases, is that these groups hold up projects based on bureaucratic technicalities, rather than significant breaches that would be cause for concern.

They hold back the economy on ideological grounds, not on serious breaches of environmental or cultural heritage rules.

Recent examples include the Australian Conservation Foundation’s pursuit of Woodside over its Scarborough gas project, and the Environmental Defenders’ Office botched action against Santos over its Barossa gas project. Both ultimately failed but stymied the projects for years.

With that in mind, how do policymakers stop green activists gaming the system and foreign hedge funds gambling on lawsuits against Australian companies that provide value to consumers?

The short answer is it’s not easy. But bipartisan action in the US Congress shows the way, and it all starts with transparency and disclosure.

Republicans and Democrats have come together to introduce the Litigation Transparency Act, which would force disclosure of financing provided by third parties.

They’ve also put forward the Protecting our Courts from Foreign Manipulation Act which would block foreign sovereign wealth funds from funding class actions in American courts.

Policymakers in Australia should heed the same call and do right by Australian consumers, workers, and citizens.

Originally published here