Britain’s Coal Gamble Becomes a Taxpayer Liability -By Fransiscus Nanga Roka

A coal mine that does not open may also be a financial burden on the state. This is what lies at the heart of the investor-state dispute settlement (ISDS) case that Britain is facing in relation to Woodhouse Colliery: the investors are seeking damages from Britain because a court has ruled that the decision to approve the planning application for the project was made in violation of the law. The issue is whether ISDS will require the British government to honor its legal obligations or whether it will force British taxpayers to pay for the costs of bad decisions made by their government.

On September 13, 2024, the High Court of England and Wales struck down Britain’s approval of West Cumbria Mining’s plan to develop an underground coking-coal mine in Whitehaven. The decision was based on downstream emissions and on how the developers argued that the project would result in zero net greenhouse gas (GHG) emissions. The argument is that if the coal being mined is used as a fuel for steelmaking, rather than generating electricity, then there is no environmental harm done.

In August 2025, Singapore based Woodhouse Investment, and West Cumbria Mining (Holdings) initiated the first ever ICSID arbitration in Britain as Respondent. Both proceedings were brought under the 1975 United Kingdom – Singapore Investment Treaty. The estimated amount of compensation being requested from Britain by Woodhouse Investment and West Cumbria Mining (Holdings) is between £150 million and £300 million; this is the estimated liability of Britain for damages to Woodhouse Investment and West Cumbria Mining (Holdings).

Britain must accept responsibility for what has happened. Ministers supported a plan that they knew would fail if it were challenged in court. Businesses have the right to a government that provides competent administration, clear explanations of why decisions are being made and procedural fairness in making those decisions. The environment is no reason to act in an arbitrary manner.

However, administrative errors do not give investors right to profits of a mine that has not even been built. Also, an investor’s treaty does not necessarily ensure that planning permissions granted to investors can withstand the courts when challenged as being illegal. The tribunal must make clear which promises made to investors were legally enforceable commitments and which were based on unresolvable issues regarding regulations, environmental impacts and financing.

The difference is significant, since the Coal Authority refused to issue conditional underground mining licenses for both projects in September 2024. In addition, there are two distinct regulatory processes required to obtain planning approval and permission to extract coal. Damage analyses should assess if each project would have been able to proceed, rather than assume that all of the project’s planned production has been achieved.

The transparency issue is also very real. In January 2026, the Tribunal issued an Order that allows for publishing of both Awards and Decisions with appropriate redactions. However, all hearings remain closed to the public; parties must agree to allow publication of their Written Submissions; and all Supporting Evidence will remain unpublished. Therefore, taxpayers who ultimately pay the costs of these proceedings will have no knowledge of the arguments or evidence used to determine those costs.

This will create a dangerous dynamic, where governments may be hesitant to correct illegal fossil fuel approval, because doing so could lead to costly international treaty litigation. While the possibility should be studied carefully, we should not prejudge the investor’s claim.

Four strategic responses are essential.

First, Britain needs to obtain a consensus on publishing the core arguments and having the hearings in front of the public, but also with limited confidentiality protections. There must be public accountability for a conflict about what the government’s climate responsibilities are to the public.

Secondly, the respondent’s defense will need to be very thorough when testing for jurisdiction, specific guarantees, cause/effect relationship, and valuation. All projected profit levels must take into consideration any unobtained permission(s), financial limitations, market conditions and transition risks. Compensation must be based upon demonstrating treaty violations and not attempting to establish a “certainty” post hoc.

Ministers should support a credible Whitehaven employment program that will have measurable investments and employment opportunities. It would be unfair for communities to receive promises of industrial renewal and not be able to point to specific examples of such renewal other than the filing of lawsuits.

Fourth, both Britain and Singapore need to look over the regulations within their treaties regarding what types of protections exist and what process will be followed if there is a conflict. The review should address how each party can enforce climate action, make decisions transparently and receive money for loss of profits caused by speculation, all while maintaining the integrity of current legal commitments.

Perhaps the most challenging part of this is that the British government cannot say it will approve coal based upon flawed logic, claim to be leading the world on climate change, and then let the British people deal with the consequences of that decision.

Investors should have fair and legal rights. Communities should have the chance to grow economically. Neither of these require taxpayers to pay for what may happen with a coal project.

Fransiscus Nanga Roka

Faculty of Law Unviersity 17 August 1945 Surabaya and Managing Partner Law Firm Victorious Indonesia