January 2024 Updates to the Climate Case Charts

Each month, Arnold & Porter and the Sabin Center for Climate Change Law collect and summarize developments in climate-related litigation, which we also add to our U.S. and non-U.S. climate litigation charts. If you know of any cases we have missed, please email us at [email protected].

HERE ARE THE ADDITIONS TO THE CLIMATE CASE CHART FOR UPDATE #178:

State Court Allowed Delaware’s Common Law Claims to Proceed Against Fossil Fuel Defendants but Limited Scope of Claims; Consumer Protection Act Claims Dismissed as Untimely

In the State of Delaware’s case alleging that fossil fuel industry defendants concealed the climate change risks of their products, leading to climate change harms to the State, the Delaware Superior Court granted in part and denied in part the 14 motions to dismiss filed by the defendants. The court first held that the Clean Air Act preempted Delaware’s state common law claims that sought “damages for injuries resulting from out-of-state or global greenhouse emissions and interstate pollution” but not claims and damages originating from air pollution sources in Delaware. The court further found that Delaware stated claims for public nuisance and trespass only “for land the State owns directly, but not for land the State holds in public trust.” The court acknowledged that “damages caused by air pollution limited to State-owned property may be difficult to isolate and measure” but deferred that issue to a later stage of the case. The court also allowed the State to proceed with its claim that the defendants failed to warn of the climate change dangers of their products. The court found that the question of whether there was no duty to warn because the dangers were open and obvious was not appropriate for resolution at this stage. The court also concluded that the case did not present a nonjusticiable political question and found the State alleged sufficient connections to Delaware activities to demonstrate specific personal jurisdiction over individual defendants who contested personal jurisdiction. The court declined to resolve the issues of whether D.C. and California anti-SLAPP (Strategic Litigation Against Public Participation) laws applied only to D.C. and California speech and whether the First Amendment protected statements made by American Petroleum Institute. The court dismissed claims alleging greenwashing and other misrepresentations against certain individual defendants because the State did not “specifically identify alleged misrepresentations for each individual defendant” but granted Delaware leave to amend the misrepresentation claims with particularity. The court dismissed claims under the Delaware Consumer Fraud Act as barred by the statute of limitations, finding that the defendants provided unrefuted evidence that the public had knowledge of or access to information about the defendants’ alleged “campaign of deception” decades before the five-year statute of limitations period expired. The court also dismissed the French energy company TotalEnergies SE for failure to serve with process. State v. BP America Inc., No. N20C-09-097 MMJ CCLD (Del. Super. Ct. Jan. 9, 2023)

Oregon Federal Court Said Youth Plaintiffs Could Proceed with Due Process and Public Trust Claims in Climate Suit

The federal district court for the District of Oregon denied in part the federal government’s motion to dismiss youth plaintiffs’ amended complaint asserting that federal defendants violated the plaintiffs’ constitutional rights to a stable climate system. The plaintiffs filed their second amended complaint after the Ninth Circuit Court of Appeals ruled that they did not have standing because courts could not redress the plaintiffs’ alleged injuries. The district court first reconsidered its June 2023 determination that the Ninth Circuit’s mandate did not foreclose allowing the plaintiffs an opportunity to amend their complaint; the district court again concluded that allowing the plaintiffs to amend did not contravene the rule of mandate. Regarding the plaintiffs’ standing, the district court first adopted the Ninth Circuit’s determination that the plaintiffs established an injury in fact arising from climate change impacts that was fairly traceable to defendants. Regarding redressability, the district court noted that the plaintiffs had “scaled back” their request for injunctive relief by removing a request for a directive requiring the defendants to “prepare a remedial plan” and instead seeking to restrain the defendants “from carrying out policies, practices, and affirmative actions that render the national energy system unconstitutional in a manner that harms [p]laintiffs.” The court found that such relief was substantially likely to redress the plaintiffs’ harm but that even this narrower request for injunctive relief “still treads on ground over which [the] Ninth Circuit cautioned the Court not to step” because the relief was sought “against a host of governmental defendants” and “would be more expansive than any case of which the Court is aware.” The court concluded, however, that the plaintiffs’ requested declaratory relief—i.e., a declaration that “the national energy system” violates the Constitution and public trust doctrine—“may be enough to bring about relief by changed conduct” and that the defendants failed to show that such relief was outside the court’s authority. The court also found that “the political question doctrine does not impede plaintiffs’ claims.” Regarding the defendants’ motion to dismiss the plaintiffs’ due process claim for failure to state a claim, the district court found “that the right to a climate system that can sustain human life is fundamental to a free and ordered society” and that the allegations that governmental action was damaging the climate system in a way that would result in harm to humans stated a claim for a due process violation. The district court also found that the plaintiffs stated a “danger creation” due process claim with their allegations that the defendants failed to adequately regulate the carbon dioxide emissions of third parties. The court also incorporated its earlier analysis concluding that plaintiffs alleged violations of the public trust doctrine in connection with the territorial sea. The court also rejected the defendants’ argument that the plaintiffs were required to bring their claims under the Administrative Procedure Act. The district court dismissed, however, the plaintiffs’ equal protection claim, finding it to be foreclosed by precedent holding that age is not a suspect class. The court also held that the plaintiffs’ claim under the Ninth Amendment was not viable. The court denied the defendants’ requests to certify for interlocutory appellate review this decision and its earlier decision allowing the plaintiffs to amend their complaint. The court also denied the defendants’ motion to stay the litigation and granted the plaintiffs’ motion to set a pretrial conference. Juliana v. United States, No. 6:15-cv-01517 (D. Or. Dec. 29, 2023)

 

DECISIONS AND SETTLEMENTS

Supreme Court Declined to Consider Jurisdiction Question in Minnesota’s Case Against Fossil Fuel Defendants

The U.S. Supreme Court denied fossil fuel industry defendants’ petition for writ of certiorari seeking review of the Eighth Circuit Court of Appeals affirmance of an order remanding to state court the State of Minnesota’s lawsuit seeking to hold the defendants liable for climate change harms. Justice Kavanaugh would have granted the petition. American Petroleum Institute v. Minnesota, No. 23-168 (U.S. Jan. 8, 2024)

Ninth Circuit Denied Rehearing of Decision that Federal Law Preempted Berkeley’s Ban on Gas Infrastructure in New Buildings

The Ninth Circuit Court of Appeals denied a petition for rehearing en banc of its ruling that the federal Energy Policy and Conservation Act expressly preempts the City of Berkeley’s 2019 ordinance prohibiting installation of natural gas piping in newly constructed buildings. The Ninth Circuit also amended its opinion, including to state that its ruling “has nothing to say about a State or local government regulation of a utility’s distribution of natural gas to premises where covered products might be used.” Eight judges joined in a written dissent from the denial of rehearing en banc, and an additional three judges agreed with the dissent. Judge Friedland, who authored the dissent, wrote that she felt compelled to dissent “to urge any future court that interprets the Energy Policy and Conservation Act not to repeat the panel opinion’s mistakes.” The dissent characterized the panel opinion as “entirely misinterpreting a narrow preemption provision about appliance standards” by attributing “colloquial meanings” to key statutory terms “instead of the technical meanings required by established canons of statutory interpretation.” The dissent stated: “Climate change is one of the most pressing problems facing society today, and we should not stifle local government attempts at solutions based on a clear misinterpretation of an inapplicable statute.” California Restaurant Association v. City of Berkeley, No. 21-16278 (9th Cir. Jan. 2, 2024)

D.C. Circuit Said District of Columbia’s Climate Case Against Fossil Fuel Companies Did Not Belong in Federal Court

Citing the “time honored well-pleaded complaint rule,” the D.C. Circuit Court of Appeals affirmed the remand to D.C. Superior Court of the District of Columbia’s lawsuit asserting that fossil fuel industry defendants violated the D.C. Consumer Protection Procedures Act by materially misrepresenting their products’ climate change effects. The D.C. Circuit first found that the “artful pleading” exception to the well-pleaded complaint rule did not apply, rejecting the defendants’ argument that D.C.’s claims necessarily arose under the federal common law of interstate air pollution. The D.C. Circuit also found that the Grable exception to the well-pleaded complaint rule—which provides for federal jurisdiction when a claim necessarily raises a substantial and actually disputed federal issue that is capable of resolution in a federal court without disrupting the federal-state balance—did not apply because no federal issue was necessarily raised. The court rejected the defendants’ contention a federal issue was necessarily raised because the consumer protection claim would contravene federal law affirmatively promoting fossil fuel use. The D.C. Circuit also held that removal was not authorized under the federal officer removal statute because D.C.’s lawsuit was not “for or relating to” actions taken by the defendants “under color of federal office,” whether those actions were production of aviation fuel and other essential military products, compliance with orders of the Petroleum Administration for Defense, or ongoing commercial relationships between the defendants and the federal government. In addition, the D.C. Circuit found that there was not jurisdiction under the Outer Continental Shelf Lands Act because D.C.’s misrepresentation claims did not “aris[e] out of” or “in connection with” the defendants’ operations on the Outer Continental Shelf. District of Columbia v. Exxon Mobil Corp., No. 22-7163 (D.C. Cir. Dec. 19, 2023)

Certiorari Denied in Unsuccessful Challenge to EPA’s Decision Not to Reconsider 2009 Endangerment Finding for Greenhouse Gas Emissions

The U.S. Supreme Court denied a petition for writ of certiorari seeking review of the D.C. Circuit’s dismissal of petitions for review that challenged the U.S. Environmental Protection Agency’s (EPA) denial in April 2022 of petitions requesting that the agency reconsider its 2009 finding under the Clean Air Act that the greenhouse gas emissions from motor vehicles contribute to climate change and thus endanger public health and welfare. The D.C. Circuit found that the petitioners lacked standing to challenge the denial of the petitions. Concerned Household Electricity Consumers Council v. EPA, No. 23-418 (U.S. Dec. 11, 2023)

Conservation Law Foundation and Exxon Settled Adaptation Lawsuit After Exxon Notified Court of Decision to Close Massachusetts Oil Terminal

On December 5, 2023, Conservation Law Foundation (CLF) announced that it had settled its lawsuit asserting that ExxonMobil Corporation (Exxon) violated the Clean Water Act and the Resource Conservation and Recovery Act by failing to prepare its oil terminal in Everett, Massachusetts for the impacts of climate change. CLF reported that just before pretrial discovery was scheduled to start, Exxon notified the court of its decision to permanently close the facility. CLF said the settlement included “an enforceable prohibition on the property ever being used for polluting bulk fossil fuel storage.” Conservation Law Foundation Inc. v. ExxonMobil Corp., No. 1:16-cv-11950 (D. Mass Dec. 5, 2023)

Oregon Court Invalidated State’s Climate Protection Program Due to Agency’s Failure to Comply with “Heightened” Disclosure Requirements

The Oregon Court of Appeals invalidated the Oregon Environmental Quality Commission’s (EQC’s) rules establishing the Climate Protection Program, which created a “cap and reduce” program for distribution of fossil fuels and required certain stationary sources to limit industrial process emissions. The court found that EQC did not comply—or even substantially comply—with “heightened” disclosure requirements for notices of proposed rulemakings that apply to sources subject to Title V operating permits under the federal Clean Air Act. The court found that EQC failed to provide in the notice of proposed rulemaking the required written explanation of any alternatives considered and the reasons those alternatives were not pursued. Northwest Natural Gas Co. v. Environmental Quality Commission, No. 666 (Or. Ct. App. Dec. 20, 2023)

Maryland Appellate Court Revived Greenwashing Complaint Against Gas Utility

The Maryland Court of Appeals ruled that the Maryland Public Service Commission erred when it dismissed a complaint alleging that marketing statements made by Washington Gas Light Company (a natural gas utility) on its customer bills were deceptive and misleading in violation of the Public Utilities Article and Maryland regulations. The complaint alleged that the bills included at least three allegedly misleading statements, including a statement that natural gas is “clean energy,” which the complaint alleged falsely implied that natural gas did not have significant greenhouse gas emissions and was also misleading regarding other emissions attributes. The appellate court held the Commission could only dismiss the complaint on the ground that it failed to state a claim on which relief could be granted. The Commission, however, had dismissed the complaint on the ground that a complaint against one utility was “an inappropriate forum to address the broader issues raised by natural gas and its role in greenhouse gas emissions.” Because this was not a proper ground for dismissal and dismissal resulted in prejudice to the complainant, the court ordered that the Commission’s orders be vacated. The appellate court also held that dismissal of claims against an affiliate of the utility was premature. One judge dissented, finding that the claims were “largely moot” because the statements had been removed from customer bills and the Commission should not be compelled to adopt “broad policy pronouncements regarding natural gas and climate change premised solely on a request that fines be levied against a single utility.” In re Maryland Office of People’s Counsel, No. 2033 (Md. App. Ct. Dec. 20, 2023)

New York Court Said Municipalities Had Standing to Challenge Exclusion from List of “Disadvantaged Communities” that Receive Funding Priority Under Climate Law

A New York Supreme Court denied a motion to dismiss a lawsuit brought by a town and village to challenge their exclusion from the list of “disadvantaged communities” (DACs) designated by the Climate Justice Working Group pursuant to the Climate Leadership and Community Protection Act (CLCPA). The CLCPA requires that at least 35% of the benefits of investment in clean energy, energy efficiency, and other programs go to DACs, with a goal of 40%. The court agreed with the petitioners that inclusion on the DAC list “creates a benefit for certain communities to the detriment of communities … that are excluded.” The court therefore concluded that the petitioners had alleged a harm-in-fact sufficient for standing. The court also agreed with the petitioners that denying standing would “create an impenetrable barrier” to review of the issue of the issue raised by the petitioners: “the consequences of the race-based determinations inherent in the DAC criteria.” Town of Palm Tree v. Climate Justice Working Group of the New York State Department of Environmental Conservation, No. 907000-23 (N.Y. Sup. Ct. Dec. 26, 2023)

 

NEW CASES, MOTIONS, AND OTHER FILINGS

California Youth Plaintiffs Asserted Constitutional Claims Against EPA for Affirmatively Allowing Climate Pollution

Eighteen youth plaintiffs from California filed a declaratory judgment action in the federal district court for the Central District of California asserting constitutional claims against the U.S. Environmental Protection Agency (EPA) and EPA Administrator Michael Regan for allegedly harming and discriminating against the plaintiffs by affirmative allowing “dangerous levels of climate pollution.” The plaintiffs alleged that the U.S. exercises control over air above its territory and the pollution that enters that air and that Congress delegated authority to EPA to control various pollution sources but not “to allow pollution from the sources it regulates at levels that discriminate against and injure[] Children.” The complaint alleged that the federal government has known for decades that carbon dioxide pollution would impact the climate and has also long known that climate change would disproportionately harm children and future generations. The plaintiffs contended that despite recognizing the disproportionate harms to children, EPA “actively discriminated against Children by systematically allowing climate pollution for decades at levels that harm Plaintiffs’ health and welfare, by disregarding best available science on climate pollution and Earth’s Energy Imbalance, and by discounting the lives of children in its regulatory analyses.” The complaint asserted equal protection claims on behalf of children as sui generis and as a protected class, substantive due process claims based on violation of the plaintiffs’ fundamental rights to life and to a life-sustaining climate system, and a claim that EPA’s conduct exceeds its delegated authority under Article I of the Constitution and that EPA failed to faithfully execute the law under Article II. Genesis B. v. EPA, No. 2:23-cv-10345 (C.D. Cal., filed Dec. 10, 2023)

Washington Tribes’ Lawsuits Seek Abatement Fund and Damages for Fossil Fuel Companies’ Alleged “Climate Deception Campaign”

Two Tribes—the Makah Indian Tribe and the Shoalwater Bay Indian Tribe—filed separate lawsuits in Washington Superior Court alleging that fossil fuel companies misled consumers and the public about the dangers of climate change. The complaints alleged that this “successful climate deception campaign” inflated and sustained the market for fossil fuels, leading to increased greenhouse gas emissions and “devastating” climate change impacts to the Tribes and their reservations. The Tribes asserted claims under Washington’s public nuisance statute and the Washington Product Liability Act. The Tribes requested that the court order the companies to abate the nuisance, including through the establishment of abatement funds for the Tribes to use to remediate and adapt their reservation lands, natural resources, and infrastructure. The Tribes also requested compensatory damages, pre- and post-judgment interest, and attorneys’ fees and costs. Makah Indian Tribe v. Exxon Mobil Corp., No. 23-2-25216-1 (Wash. Super. Ct., filed Dec. 20, 2023); Shoalwater Bay Indian Tribe v. Exxon Mobil Corp., No. 23-2-25215-2 (Wash. Super. Ct., filed Dec. 20, 2023)

Petitioners Challenged EPA Rule Restricting Certain HFC Uses

Petitions for review were filed in the D.C. Circuit Court of Appeals challenging EPA’s final rule restricting use of certain hydrofluorocarbons (HFCs) with high global warming potentials in certain sectors and subsectors pursuant to the American Innovation and Manufacturing Act of 2020. The rule restricts HFCs in approximately 40 subsectors in the refrigeration, air conditioning, heat pump, foam, and aerosol sectors. The rule also establishes process and information requirements for the public to submit petitions requesting that EPA initiate rulemakings to restrict HFCs in certain sectors and subsectors. Semiconductor Equipment & Materials International v. EPA, No. 23-1344 (D.C. Cir., filed Dec. 22, 2023); Chemours Co. FC v. EPA, No. 23-1345 (D.C. Cir., filed Dec. 26, 2023)

States Challenged Federal Rule Requiring Carbon Dioxide Emissions Targets for Highway System

Twenty-one states filed a lawsuit in the federal district court for the Western District of Kentucky challenging the Federal Highway Administration and U.S. Department of Transportation final rule, “National Performance Management Measures; Assessing Performance of the National Highway System, Greenhouse Gas Emissions Measure.” The rule requires states to “establish declining targets for reducing CO₂ emissions generated by on-road mobile sources” and to submit biennial progress reports. The states asserted that the defendants did not have statutory authority to mandate that states set targets for reducing on-road carbon dioxide emissions, that the rule violates the major questions doctrine, that the rule is arbitrary and capricious in violation of the Administrative Procedure Act, and that the rule violates the Spending Clause. Kentucky v. Federal Highway Administration, No. 5:23-cv-00162 (W.D. Ky., filed Dec. 21, 2023)

 

HERE ARE RECENT ADDITIONS TO THE GLOBAL CLIMATE LITIGATION CHART

Panama: Supreme Court Upholds Importance of Constitutional Values in Protecting Environmental Concerns Regarding Mining Concessions

On November 27, 2023, the Supreme Court of Panama declared Article 1 of Law No. 406, enacted on October 20, 2023, as unconstitutional. This article had approved a Mining Concession Contract between the State and MINERA PANAMÁ, S.A. (1997 Contract), granting exclusive rights for mineral exploration. The original 1997 Contract was previously declared unconstitutional in 2017, leading to negotiations for a new concession contract, executed on December 22, 2021. Mr. Juan Ramón Sevillano Callejas challenged Article 1, alleging violations of constitutional articles related to public procurement, protection of collective interests, and public interest. The Supreme Court deliberated on the conflict between social and environmental concerns and private investment interests, ultimately prioritizing the protection of acquired rights and the State’s duty to ensure a healthy environment.

The Court highlighted the constitutional duty of the State to guarantee a pollution-free environment, referencing international agreements such as the Escazú Agreement and the Protocol of San Salvador. It emphasized the clash between fundamental rights and private investments, stressing that private interests should not override constitutional values. The Court further reinforced the guidance of the Inter-American Commission on Human Rights, which calls on States to reexamine policies that affect the climate in a way that is transparent and participatory. The Court noted inconsistencies in Law No. 406, citing the lack of specified environmental management instruments, contrary to UN Guiding Principles on Business and Human Rights. It emphasized that companies share responsibility for protecting human rights and must not bypass their duties by relying solely on the State. Additionally, the Court highlighted the violation of children’s rights due to the environmental impact, aligning with international principles such as the Committee on the Rights of the Child General Comment 26 on Child Rights and the environment, with a focus on climate change. Callejas v. Law No 406 (unconstitutionality of mining concession) (Supreme Court of Panama, Panama)

DECISIONS & SETTLEMENTS

Mexico: Supreme Court Upholds Oaxaca’s Plastic Bag Ban, Prioritizing Environmental Right

In 2019, Oaxaca’s state legislature amended their state’s Solid Waste Prevention and Management Law. Among the amendments, the legislature prohibited businesses from distributing non-recycled plastic bags. On July 31, 2019, a plastic bag manufacturer filed a lawsuit arguing that this prohibition, among other amendments, was an unconstitutional limitation of the right to carry out business. On August 2, 2019, the Third District Judge in the State of Oaxaca dismissed the case after considering that the plaintiff had no standing to argue the unconstitutionality of the amendments since it had failed to prove convincingly that it was dedicated to manufacturing plastic bags. The plaintiff appealed this decision on September 7, 2020. On appeal, the Second Circuit Court on Civil and Administrative Matters of the Thirteenth Circuit reversed the District Judge’s decision. The Circuit Court concluded that the plaintiff had successfully demonstrated its standing. The Circuit Court also forwarded the case to the Supreme Court of Justice, noting that the decision implicated an interpretation of the right to a healthy environment enshrined in the Mexican constitution and there was no binding precedent on the matter.

On October 25, 2023, the First Chamber of the Supreme Court rendered a decision. The Court ruled that the ban on the distribution of non-recycled plastic bags did not infringe upon the fundamental right to carry out business. Through a proportionality analysis, the Supreme Court considered that 1) the policy aimed to protect a constitutionally valid objective: the right to a healthy environment; 2) that it was adequate to pursue this objective; 3) that there were no alternative measures that could equally protect the right to a healthy environment while encroaching less on the right to carry out business; and 4) that the degree of satisfaction of the right to a healthy environment outweighed the degree to which the right to carry-out business was encroached upon. As such, there was no violation of the right to carry out business.

Importantly, when addressing the adequacy of the policy to protect the right to a healthy environment, the Court noted among the effects of plastic pollution that plastic production can directly influence climate change through GHG emissions generation and indirectly since it could hamper our oceans’ capacity to sequester carbon emissions when plastic residue is littered in the ocean by affecting food sources of cyanobacteria and turbidity levels hospitable for phytoplankton. Ruling on Constitutionality of banning the distribution of non-recycled plastic bags in Oaxaca (Supreme Court, Mexico).

Romania: Cluj Court of Appeal Notes that It Is Compulsory to Initiate the Transboundary Procedure in the Case of Activities with a Significant Impact on the Environment

The plaintiff has filed an application for judicial review of the environmental endorsement issued by the Hunedoara Environmental Protection Agency for Europe’s second-largest mining project, the Rovina Valley Mining Project, developed by the Canadian company Euro Sun Mining. At the same time, the plaintiff applied for an interim injunction to suspend the effects of the Environmental Endorsement No. 7/2022 issued by the Hunedoara Environmental Protection Agency until the main action was decided. The Court of First Instance dismissed the application. The plaintiff appealed the judgment, and the Cluj Court of Appeal granted the appeal, reversing the lower court’s decision. Judge Iarina Prelipceanu noted, among other things, that point 14 of the Annex to the Espoo Convention makes it compulsory to initiate the transboundary procedure in the case of activities with a significant impact on the environment, such as large quarries, mines, on-site mining and processing of metal ores or coal. The defendants (Samax Romania and the Environmental Protection Agency of Hunedoara) appealed against the judgment. The appeal for annulment was heard by another bench of the Cluj Court of Appeal, which upheld the ruling of the first panel of the Cluj Court of Appeal.

The decision held that the European Court of Human Rights has ruled that an appeal for annulment must not constitute a disguised “appeal” seeking a retrial of the case because otherwise it would prejudice the presumption of validity which irrevocable judgments must enjoy and the principle of legal certainty, and as such the rule of law. The judgment under appeal sets out at length the grounds on which the Court of First Instance’s reasoning was invalidated on the basis of the provisions of Article 18 of the Government Emergency Ordinance 195/2005 and in relation to the fulfillment of the condition of imminent harm, considering that there is apparently a serious impact of the administrative act on water quality, the health of the population as a result of the way the project is operated and, subsequently, the way waste is stored and disposed of, the impact on climate change as a result of greenhouse gases, carbon and the deforestation of a large area of forest. Declic v Hunedoara Environmental Protection Agency and Samax Romania (Cluj Court of Appeal, Romania)

Romania: Climate Impacts of Any Major Plans Are to Be Procedurally and Factually Considered

On November 25, 2022, the plaintiff DECLIC challenged Environmental Endorsement No. 7/2022 (EE No. 7/2022) for the Rovina mining project in Hunedoara County before the Cluj Administrative Court. The grounds for the challenge included the absence of required assessments, failure to conduct cross-border public consultations, violation of environmental legislation, and lack of accreditation for experts who prepared the environmental report.

The plaintiff argued that the issuance of EE No. 7/2022 lacked proper assessments, such as a transboundary impact assessment, an appropriate assessment under the Habitats Directive, and a long-term assessment of the project’s impact on surface and groundwater. Additionally, they asserted a failure to conduct cross-border public consultation and the completion of procedures in violation of environmental legislation. The plaintiff provided evidence, including a technical report and a study on corporate net-zero pledges.

On October 30, 2023, the Court of First Instance granted the plaintiff’s application, citing concerns about the project’s significant environmental impact on another state, specifically Hungary. The decision acknowledged the global dimension of environmental issues. The decision is not final, as both the first and second defendants appealed. The plaintiff also plans to appeal, seeking additional reasons for upholding the decision. The court rejected objections raised by the defendants regarding the co-plaintiffs’ standing, emphasizing the implications for the right to life and a healthy environment. Despite the successful challenge, the Court of First Instance dismissed the co-plaintiffs’ application on the merits, expressing concerns about the enforceability of the judgment without specific measures and coherent plans. The plaintiffs appealed the decision and submitted a memorandum to the Romanian Supreme Court, seeking an advisory opinion from the European Court of Human Rights on various points related to the court’s decision and procedural rights violations. Declic v Euro Sun Mining (through its subsidiary Samax Romania) et al. (Cluj Administrative Court, Romania)

India: Court Considers Sustainable Development but Dismisses Stay Application Against Road Widening

In an effort to impede the proposed cutting down of 2,057 trees in Dehradun to widen the road, the petitioner filed a writ petition in the public interest. The petitioner claims that the respondents were determined to take down fully grown trees rather than remove encroachments, stalls, electric poles, transformers, tankers and vehicle parking that is not planned, hawkers and squatters, and the encroachment of walking spaces. Additionally, the petitioner requested that the respondents provide guidelines for any road widening project that would require the subsequent felling of trees.

The petitioner’s stay application was dismissed by the Court, enabling the State to press forward with the road widening project. Nonetheless, the State was directed to abide by the conditions and directions set forth by the Court. The Court took into consideration the significance of sustainable development and striking a balance between development and environmental needs. Although it recognized the effects of tree-cutting, it concluded that the amount of forest cover in the area did not put the species of birds and insects at risk. The Court additionally noted that the road’s development and widening were urgently needed owing to the heavy traffic and would have possible advantages in terms of improved traffic flow and lower carbon emissions. Ashish Kumar Garg v. State of Uttarakhand (India)

Italy: Continuing the Dieselgate Controversy, Volkswagen Held Liable for Misleading Statements

In 2016, an Italian NGO (Altroconsumo), representing over 63,000 individuals who had bought Volkswagen, Audi, Seat, and Skoda vehicles in the relevant period, started a class action against Volkswagen Aktiengesellschaft and Volkswagen Group Italia S.p.A (VWAG and VWGI, together Volkswagen) before the Court of Venice, seeking a declaration that they engaged in unfair commercial practices against Italian consumers. The case is the Italian spin-off of the so-called “Dieselgate” scandal, which began in 2015 when the U.S. Environmental Protection Agency notified the German carmaker of an alleged emissions standard violation. It was later discovered that, between 2009 and 2015, Volkswagen had employed a particular piece of software (the so-called defeat device) that allowed some vehicles with diesel engines to pass emissions standards tests that they would otherwise have failed. The Italian class action followed the decision of the Italian Competition Authority (ICA), which held Volkswagen liable for unfair commercial practices under articles 20, 21, and 23 of the Italian Consumers Code and issued a fine of €5 million (see Italian Competition Authority v. Volkswagen Aktiengesellschaft and Volkswagen Group Italia S.p.A, which is still ongoing).

Altroconsumo claimed that Volkswagen (i) falsely stated the level of the polluting emissions of Volkswagen-branded EA 189 diesel vehicles (by installing the defeat device to falsify the result of the emissions tests) and (ii) engaged in advertising campaigns presenting its vehicles as having specific green features to protect the environment by reducing CO2 emissions: such “green claims” were false and deceptive, and constituted a misleading commercial practice prohibited by the Unfair Commercial Practice Directive no. 2005/29/CE (implemented in Italy by Legislative Decree no. 145/2007). Altroconsumo therefore argued that Italian consumers’ right to freedom of contract was breached and that they had suffered direct financial loss, equal to the decrease in value of the vehicle(s) they bought because it did not possess the promised green qualities.

Volkswagen denied Altroconsumo’s allegations and raised a series of preliminary objections which were all rejected. The Court of first instance upheld Altroconsumo’s claims and found that the defendants were responsible for using misleading, and at times false, “green claims” in their marketing and advertising activities. The Court awarded damages, amounting to €3,000 for each member of the class action in financial damage, plus €300 in moral damage (over €200 million in total), plus legal expenses. According to the Court of first instance, Volkswagen’s conduct potentially misled consumers, and such potential effect was enough to draw a causal link between Volkswagen’s behavior and the damage suffered by the consumers, as it was presumed—in the absence of evidence to the contrary—that consumers were influenced in their commercial choices by Volkswagen’s “green claims.” To reach its conclusions, the Court of first instance relied on reasoning expressed by the Italian Supreme Court in prospectus liability cases where a similar presumption applies.

Volkswagen appealed the decision issued by the Court of first instance before the Court of Appeal of Venice. With a decision published on November 16, 2023, the Court confirmed the existence of unfair and deceptive business practices perpetrated by Volkswagen, although it partially upheld Volkswagen’s appeal in relation to the pecuniary damages. In particular, the Court did not deem proven the pecuniary damage, already liquidated by the Court in €3,000 for each consumer, considering the free corrective actions offered by the manufacturer.

On the other end, the Court of Appeal confirmed the amount of non-pecuniary damages for €300 for each of the 63,136 consumers who opted into the class action. The decision is not final and binding yet, as the parties have six months starting from the publication to appeal it before the Supreme Court. Altroconsumo v. Volkswagen Aktiengesellschaft and Volkswagen Group Italia S.p.A (Court of Venice, Italy)

Germany: Court Orders Compliance with the Annual Emission Targets for the Building and Transportation Sectors for the Years 2024 to 2030

Friends of the Earth Germany submitted a claim with the Higher Administrative Court Berlin-Brandenburg, for its missing emission targets for the building and transport sector. The organization argues that the sectors exceed the annual CO2 emissions considered permissible under law and are therefore required to draft an emergency program, detailing the speedy reduction of their respective emissions, and to secure the adherence to targets between the years of 2023 to 2030.

On November 30, 2023, the Higher Administrative Court Berlin-Brandenburg ruled that the federal government must adopt an immediate action program (Sofortprogramm) under Section 8 of the Climate Protection Act (CCA). The program is intended to ensure compliance with the annual emission targets for the building and transportation sectors for the years 2024 to 2030. At the level of the admissibility of the lawsuit, the court confirmed that environmental associations can sue for the enactment of an immediate action program under the CCA. Such a right to sue for implementing the CCA is not explicitly provided for in German procedural law. On the merits, the court found that the federal government is obliged to decide on an immediate program by exceeding permissible GHG emissions in the building and transport sectors, thereby confirming that the provisions on immediate programs in the CCA are binding, enforceable law. DUH and BUND v. Germany (Higher Administrative Court Berlin-Brandenburg, Germany)

Japan: Appeal Filed Against Judgment to Allow Construction of Coal Plant

On May 27, 2019, 45 Japanese citizens filed suit to block the construction of a new coal-fired power plant. The plaintiffs filed a legal challenge against the Japanese Minister of Economy, Trade and Industry, seeking cancellation of the Notice of Confirmation of the environmental impact assessment (EIA) for the construction of two new coal-fired generating units—totaling 1,300 MW—at the Yokosuka power plant. The Plaintiffs allege that JERA, the plant operator, improperly exploited a streamlined assessment process for replacements or upgrades that the Japanese Government created after the Fukushima Daiichi nuclear accident.

On January 27, 2023, the Tokyo District Court delivered a judgment that dealt with the request to cancel the Notice of Confirmation issued by the Minister of Economy, Trade and Industry, who confirmed the EIA of JERA under Article 46 (17) (ii) of the Electricity Business Act. Firstly, the judgment discussed if the Notice of Confirmation was considered a disposition against which an administrative complaint could be made. On this point, the Court determined that the Notice of Confirmation was considered a disposition within the meaning of Article 3(2) of the Administrative Case Litigation Act since the issuance of the Notice was an essential requirement for starting the operation of a power plant and granted legal status to JERA. Secondly, the judgment discussed if the Plaintiffs had standing and to what extent claims could be made. The Court stated that those persons who lived close to the coal-fired power plant and were likely to directly suffer significant damage from air pollution had legal interests to request the cancellation of the Notice of Confirmation. On the other hand, the Court stated that the damage from climate change could not be considered an individual interest to be protected by law. Thus, the Court recognized the standing of the Plaintiffs who lived within 20 km of the coal-fired power plant related to air pollution but did not recognize the standing and claims related to climate change and CO2 emissions. Lastly, the judgment discussed if the Notice of Confirmation was legal. The Court stated that the consideration of the alternative fuels was not obligatory and the use of the simplified procedure of the assessment was rational when the nature of the power plant (in this case, replacement) fell under the scope of the rationalized guidelines. Therefore, the use of the simplified procedure in accordance with the rationalized guidelines was not against the Power Plant Assessment Ordinance, and there were no procedural defects in the assessment of the impact of air pollution. Moreover, the Court stated that there were no reasons to predict that the level of the environmental impact would increase by the construction. The Court concluded that the Notice of Confirmation was legal as its content was adequate, and there was no deviation nor abuse of power by the Minister.

On the same day, the Citizens’ Committee released a statement saying that the judgment was unjust, for the Court rejected the standing of the plaintiffs in relation to climate change and determined that the evaluation of PM 2.5 and consideration of the use of alternative fuels were not necessary. On February 9, 2023, the citizens submitted a statement of appeal, and the following arguments were made in the appeal procedure:

Firstly, the citizens claim that the judgment of the District Court did not recognize the danger of climate change as fact, although the significant damage caused by climate change such as an increase in the number of extremely hot days and also an increase in the precipitation have been observed in their residential area. They particularly emphasized the destruction of marine ecosystems due to the impact of climate change and the fact that fishermen are being deprived of their means of livelihood.

Secondly, the citizens contest their lack of standing with regard to GHG emissions. The citizens argue that their health and living environment are exposed to risks, and their interests to not suffer damage from GHG emissions should not be absorbed into public interests which do not assign standing but should be recognized as individual concrete interests.

Thirdly, the citizens argue that the lack of consideration of the use of alternative fuels is a serious procedural flaw in the Notice of Confirmation. They also contest the District Court’s recognition of governmental discretion in issuing the alleged notice.

Fourthly, the citizens argue that there have been procedural flaws during the EIA, including the lack of consideration of carbon dioxide emissions at the planning phase. They also contend that the conducted assessment ignores the perspective of environmental conservation through transparency of the decision-making process and effective public participation, which is a fundamental requirement of EIA, and that the assessment did not examine the consistency with the Paris Agreement. Finally, the citizens argue that the use of the simplified EIA procedure is illegal since the present plan does not meet the criteria, such as the reduction of environmental impact as a result of the replacement of the power plants. Yokosuka Climate Case (Tokyo District Court, Japan)

Italy: Volkswagen Sued for Misleading Statements on Environmental Claims

In 2015, the Italian Competition Authority (ICA) started an investigation against Volkswagen Group Italia S.p.A. and Volkswagen Aktiengesellschaft (VWGI and VWAG, together Volkswagen) for alleged unfair commercial practices and breach of the Italian Consumers Code. The investigation of Volkswagen was triggered by consumer associations’ allegations of false declarations made by Volkswagen when marketing its EA 189 diesel vehicles in relation to (i) the level of polluting emissions of such vehicles (Volkswagen was accused of having installed the so-called defeat device to falsify the result of the emission tests) and to (ii) their specific green features. In 2016, the ICA’s investigation ended: the ICA found Volkswagen liable for unfair commercial practices and for breach of articles 20, 21, and 23 of the Italian Consumers Code, as Volkswagen failed to describe the positive environmental impacts of their EA 189 diesel vehicles in a clear, truthful, accurate, and unambiguous way. Because of such a breach, the ICA issued a fine of €5 million. In 2016, Volkswagen appealed the decision issued by the ICA before the Regional Administrative Court of Lazio, seeking the annulment of the €5 million fine.

With a decision issued in May 2019, the Regional Administrative Court of Lazio rejected Volkswagen’s appeal confirming the ICA decision and the fine of €5 million. The Administrative Court held that Volkswagen’s green claims were misleading for the fact that, on one hand, Volkswagen emphasized its care for the environment, and, on the other hand, installed in the marketed diesel vehicles a defeat device to falsify the result of the emission tests.

In 2019, Volkswagen appealed the Regional Administrative Court of Lazio’s decision before the Supreme Administrative Court (Consiglio di Stato).

Besides challenging the decision on the merits, Volkswagen raised a procedural objection: in June 2018, before the Regional Administrative Court of Lazio delivered its judgment, the public prosecutor’s office of Brunswick, before which the case had been brought in Germany, imposed a fine of €1 billion on Volkswagen, in accordance with the Act on Regulatory Offences (Ordnungswidrigkeitengesetz). That fine penalized negligent breach of the duty of supervision in the activities of the undertaking, in particular as regards the development of the software for the illegal defeat device and its installation in 10.7 million diesel vehicles marketed worldwide (700,000 of which were sold in Italy). The decision of the German public prosecutor’s office became final on June 13, 2018, since Volkswagen waived its right to challenge it and, moreover, paid the fine prescribed therein. Therefore, Volkswagen (both the German and the Italian entity) argued before the Italian court that they do not need to pay the fine imposed by the Italian Competition Authority because the principle ne bis in idem expressed in Article 50 of the Charter of Fundamental Rights of the European Union applies.

The Supreme Administrative Court referred the issue to the European Court of Justice (ECJ), which on September 14, 2023, rendered its judgment. The ECJ found that, although Article 50 of the Charter of Fundamental Rights of the European Union applies to sanctions of an administrative nature (such as those imposed by the Italian Competition Authority), the local Court needs to verify whether the facts examined in both cases are “identical.” In that respect, the ECJ stated that the relaxation of supervision of the activities of an organization established in Germany, to which the German decision relates, is conduct that is distinct from the marketing in Italy of vehicles fitted with an illegal defeat device for the purposes of Regulation No. 715/2007 and from the dissemination of misleading advertising in that Member State, to which the decision at issue relates.

In addition, the mere fact that an authority of a Member State refers—in a decision finding an infringement of EU law and of the corresponding provisions of the law of that Member State—to a factual element relating to the territory of another Member State is insufficient to support the inference that that factual element gave rise to the proceedings or was found by that authority to be one of the constituent elements of that infringement. Therefore, it will be up to the Italian Supreme Administrative Court to ascertain whether the German authority has actually ruled on the same factual elements the Italian authority is considering. Italian Competition Authority v. Volkswagen Aktiengesellschaft and Volkswagen Group Italia S.p.A (Italian Competition Authority Administrative Courts, Italy)

 

NEW CASES, MOTIONS, AND OTHER FILINGS

Brazil: Public Prosecutor’s Office Seeks to Declare Administrative Improbity and Removal of the Minister of Environment

On July 6, 2020, the Federal Public Prosecutor’s Office (MPF) filed a Civil Action for Administrative Improbity, with a request for precautionary removal from office, against Ricardo Salles, at the time Minister of Environment of Brazil, claiming the practice of intentional acts that violated the constitutional duty to protect the environment. It stated that the former Minister, through actions, omissions, practices, and speeches, promoted the dismantling of environmental policies, favoring unlawful interests in violation of the constitutional principles that guide the Public Administration. The MPF raised a vast set of acts by the former Minister that allegedly contributed to the intentional dismantling of environmental protection, based on four main aspects: (i) regulatory measures; (ii) transparency and participation measures; (iii) budget measures; and (iv) monitoring measures. As for normative dismantling, climate is highlighted regarding the extinction of the Secretariat of Climate Change and Forests. The MPF claimed that such an act would signal that combating climate change was not a priority of the Federal Government and would distance Brazil from its international and national climate commitments. Regarding the budget dismantling, it questioned the reduction of resources allocated to the Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA) and the paralysis of the Amazon Fund due to the extinction of the operational and guiding bodies. The Amazon Fund is dedicated to financing REDD+ actions linked to the reduction of Greenhouse Gas (GHG) emissions, and the MPF mentioned its paralysis as influencing the lack of financing and implementation of the Plan for Prevention and Control of Deforestation in the Legal Amazon (PPCDAm), provided for in the National Policy on Climate Change (PNMC). The increase in deforestation and the Ministry’s lack of action to combat it are associated with the failure to comply with climate commitments and deforestation reduction targets. Given a broad picture of dismantling of the protection of the environment, the MPF requested, as a preliminary injunction, the precautionary removal of Ricardo Salles from the post of Minister of the Environment, with a definitive request that the acts questioned be declared unlawful and as to sentence him to loss of public office. The first instance judge denied the preliminary injunction request.

In its reply, the Federal Government denied the existence of any wrongdoing by the former minister Ricardo Salles. It alleged the principle of separation of powers, affirming the inadmissibility of a lawsuit questioning the choice of the President regarding the appointment of public positions of trust. It emphasized that the acts questioned by the MPF are decisions of administrative merit, within the scope of the competencies of the public manager to direct public policies. Also, they were carried out in accordance with the environmental agenda and in compliance with the laws and the Constitution.

Ricardo Salles presented his defense on October 3, 2023. He claimed there was no act of improbity, stating that the lawsuit was an attempt to force the judiciary to meddle in political choices. With regard to the environmental-climate issue, he alleged that there was no proof or evidence of any supposed predatory intent, or any evidence of Ricardo Salles’s private interests overlapping with public, diffuse, or collective interests. The defense maintains that there has been no regulatory disruption, contrary to the initial allegations. It also argued that there had been no dismantling of transparency and participation bodies since government policies can vary without this immediately meaning administrative impropriety. It also rejected the thesis of the alleged decrease in social representation in councils, with the edition of Decree No. 9,806/2019. Regarding the removal of information with maps of priority areas for biodiversity conservation from the internet, he claimed that the initial complaint was inept, emphasizing that this allegation is based solely on journalistic “news,” which is not confirmed by mere access to the links attached to the case file. As for the alleged interference in the dissemination of data by INPE, he said it had no influence over the agency since it is a research unit subordinate to the Ministry of Science, Technology and Information. With regard to the undue restriction of institutional communication, he argued that the initial complaint was inept due to the lack of supporting evidence and insufficient description of the facts. He also argued that there had been no budgetary disruption, since it is not the responsibility of the Minister of State to draw up or discuss the Budget Law. He emphasized that there had been no dismissals of civil servants with misuse of purpose, and he also denied that there was any risk to civil servants in their field activities or that the defendant’s management had in any way affected this safety. Finally, he concluded by emphasizing that there was no act of improbity due to the absence of a material violation of the law and the absence of malice, requesting, preliminarily, the immediate dismissal of the action, in favor of the retroactivity of the more benign rule—with the new wording of Law 8.429/92, by Law 14.240/21. In the alternative, he argued that the action should be immediately dismissed due to the contestant’s lack of competence to carry out the acts embodied in the decrees and the absence of a causal relationship with the alleged illicit acts, affirming the manifest absence of an act of administrative misconduct. If the previous theses are overcome, alleging that the initial complaint is inept due to the atypical nature of the facts set out in the initial complaint, as well as the lack of individualization and supporting evidence demonstrating the occurrence of the alleged conduct, he requested that the initial complaint be rejected. On the merits, he requested that the complaint be dismissed and that the MPF be condemned for bad faith litigation. Federal Public Prosecutor’s Office v. Ricardo Salles and Federal Union (Federal District Court, Brazil)

ICSID: Claimants Claim Expropriation Against Slovenia’s Decision to Conduct an Environmental Impact Assessment

Ascent, a UK energy company, initiated arbitration proceedings against Slovenia, in the aftermath of the Slovenian Environmental Agency’s request to Ascent to undertake an environmental impact assessment (EIA) before proceeding with the development of the Petišovci oil and gas field. According to Ascent, the EIA was not required and never had been previously under Slovenian law. It is alleged that this requirement affected Ascent’s investment since the amount of gas produced by the field was very significantly reduced, resulting in a significant loss of the Investors’ revenues.

Following the Notices of Dispute filed by Ascent on July 23, 2020, and 5 May 2022, on August 15, 2022, Ascent announced the formal submission of the request for arbitration against Slovenia, which included a preliminary damages assessment in excess of €500 million. Ascent argued that “Slovenia’s campaign against the Investor culminated in a complete ban on low-volume hydraulic stimulation, which came into effect on 5 May 5, 2022.” Claimants alleged that Slovenia’s measures have de facto deprived Ascent of its right to produce gas in Slovenia, and hence its rights have been unlawfully expropriated by Slovenia, in breach of the host State’s obligation under international law and both the ECT and the BIT. Ascent v Slovenia (ICSID)

France: TotalEnergies’ Shareholders Sue TotalEnergies for Unlawful Dividends

On July 6, 2023, many TotalEnergies shareholders sued the company for unlawful dividends (article L232-12 of the French commercial code) and insincere accounts. If the dividend is recognized as unlawful, the shareholders must return it, as provided for by article L. 232-17 of the French Commercial Code. The distribution might also engage the liability of directors and auditors if they have been negligent in the performance of their duties and this negligence has caused the unlawful distribution of dividends. As recommended by the French Markets Authority, the risks arising from climate change have to be taken into account in the evaluation of cash flows and the discount rate of the assets. This conclusion is also reached on the basis of International Financial Reporting Standards global accounting standards (IAS 36 – International Accounting Standards –Impairment Tests).

The plaintiffs claim that TotalEnergies has erroneously evaluated the future price of carbon and has not properly accounted for its GHG emissions and that this has led to an overvaluation of its assets. According to the plaintiffs, first, the company does not consider the depreciation of its assets due to the future cost of carbon. Indeed, TotalEnergies uses a carbon price well below the values defined by France Stratégies, which apply to entities under French law engaged in a Net Zero Emission trajectory (as TotalEnergies is). Second, TotalEnergies does not account correctly for its Scope 3 emissions and largely underestimates them. This erroneous calculation has an important impact on assets’ valuation.

Following the rules and accounting standards, TotalEnergies should depreciate many of its assets: therefore, its profits are over-evaluated, and the distribution of dividends made on this valuation is unlawful. The plaintiffs claim that, as provided for by the law, TotalEnergies should void that resolution that distributes dividends and claim the reimbursements of those dividends. Métamorphose vs TotalEnergies (Commercial Court of Nanterre, France)

United Nations Special Rapporteur: Communication to France on Mega-Basin Projects

On May 18, 2023, the UN Special Procedures on the right to food, climate change, environment, freedom of assembly, human rights defenders, and water and sanitation, issued a communication to France expressing their deep concern about the continued development of mega-basin projects in France, including especially for agricultural use. The projects are large water reservoirs that are filled by pumping groundwater. The communication considers that mega-basin projects may lead to violations of the right to environment and right to food due to difficulties for food production in regions that are heavily reliant on irrigation or with limited access to water resources. Such projects may have negative consequences by limiting the livelihoods and productivity of small farmers who are already suffering economic difficulties linked to COVID-19, climate change, and other constraints.

Mega-basin projects would mostly benefit a few large-scale agricultural industries, rather than the vast majority of smaller farmers in France, and encourage monoculture farming that requires both vast amounts of water and chemicals. Such farming practices may also lead to the production of crops for exportation mostly, adding to the overall environmental costs of food production. Faced with climate change and the increased frequency, intensity, and duration of droughts, these types of farming practices and related mega-basin projects would not be sustainable in the long run. The communication points to the “short-term profitability of the mega-basins.” Climate change poses several additional challenges to the sustainability of mega-basin projects from a perspective of human rights, notably: the impact of climate change on overall water needs across France; the fact that storing water behind mega-dams could lead to severe evaporation of water resources; and, under pressure of heat and light the basins may be prone to formation of harmful algae and bacteria. There have been some studies conducted, but these did not detail the effects of climate change on the basis sufficiently.

The UN Special Procedures share the concerns expressed by farmers, peasants, and experts that mega-basins are at odds with sustainable agricultural systems, especially in light of climate change impacts: “living soils capable of filtering water would allow agriculture to face the climate crisis and increasing water scarcity,” and as such mega-basins are an “example of poor adaptation to climate change.” To guarantee the right to food, “funding related to water in agriculture must be massively redirected towards the support and development of practices allowing water to be retained in the soil (e.g. agroecological practices such as plant covers, hedges, permanent meadows, peasant seeds, grassy strips),” conserving water resources and protecting water quality.

The annex to the communication outlines the most important UN Charter-based and UN treaty-based provisions governing the right to food: Article 25 of the Universal Declaration of Human Rights (UDHR) and Article 11 of the International Covenant on Economic Social and Cultural Rights (ICESCR), and further notes the relevance of the UN Framework Principles on Human Rights and Environment (2012) and Human Rights Council resolution 50/9 of 2022, which recognizes that climate change affects the realization of the right to food. The communication asks the government to provide more information “on existing mechanisms to involve French farmers and the organizations they represent in the consultation, mediation, and decision-making process regarding mega-basin projects and ensure that their interests and concerns are taken into account.”

The communication also pays considerable attention to facts and complaints related to the rights of environmental human rights defenders during peaceful protests and manifestations and in terms of criminalization and access to justice for people protesting against the basins.

On September 15, 2023, France responded to the communication and the various requests for information. In its response, it mostly emphasizes the questions and issues related to the human rights defenders and protests but also outlines in some detail which (legislative) frameworks and principles cover climate adaptation action in the agricultural sector, and how public participation may take place in this respect. The response does not include a substantive reaction on how public participation has occurred in response to the contested basins, or why the basins are pursued as part of France’s “range of solutions” to effectively adapt to climate change as related to “agriculture and biodiversity” or ensure “food sovereignty as a strategic issue for the nation.” Communication to France about the continued development of mega-basin projects (United Nations Special Rapporteurs)

United Nations Special Rapporteur: Communications Concerning Saudi Aramco’s Business Activities in the Fossil Fuel Sector

On June 26-27, 2023, five UN Special Procedures on business and human rights, climate change, environment, toxic wastes, and water and sanitation, jointly issued communications to Saudi Arabia, Japan, France, USA, and the UK, and financial institutions domiciled in these countries (JP Morgan, Citigroup, HSBC, SMBC, Crédit Agricole, Morgan Stanley, BNP Paribas, Goldman Sachs, Mizuho Group, Sumitomo Mitsui Banking Corporation, Société Générale, and EIG Global Energy). The communication is also addressed to, and directly concerns, Saudi Aramco’s business activities in the fossil fuel sector. Saudi Aramco is a State-owned enterprise, with 98.5% owned by the Government of the Kingdom of Saudi Arabia. It holds the exclusive right to explore, drill, prospect, appraise, develop, extract, recover, and produce hydrocarbons, as well as to market and distribute hydrocarbons, petroleum products, and liquid petroleum gas in the Kingdom. According to the communication, Saudi Aramco’s activities and business strategies are not aligned with the Paris Agreement goals, obligations, and commitments, including the ambitions of the Saudi government, and Saudi Aramco’s own responsibilities for human rights protection as a business enterprise under the UN Guiding Principles on Business and Human Rights (UNGPs).

Specifically, despite Saudi Arabia’s net zero targets for 2060, and Saudi Aramco’s own ambition to achieve net zero Scope 1 and 2 GHG emissions by 2050 across its wholly-owned operating assets, the company is maintaining production of crude oil, further exploring for oil and gas reserves; expanding into fossil fuel gas; and misrepresenting information about GHG emissions. Rather than cutting fossil fuel production and emissions “at the rapid rate necessary to meet the 1.5°C climate mitigation goal,” it is expanding its fossil fuel activities based on the argument that it has “low-cost production” compared to other countries.

According to the UN Special Procedures, this approach undermines “the ability of the Kingdom of Saudi Arabia to discharge its duties under international law and commitments in the context of the Paris Agreement,” and further “disregards Saudi Aramco’s own responsibility to reduce production to address its climate change-related human rights impacts,” as much as other companies. In fact, based on “the size, sector, operational context, ownership and structure of Saudi Aramco”—including the fact that it is a State-owned company—and “in the context of the alleged contributions of its business operations to the severity of the human rights impacts of climate change” over time, there is a “heightened expectation” that this company takes its responsibility under international human rights law. Saudi Aramco bears “increased responsibility […] existing over and beyond compliance with applicable laws [...] to act fully in line with international standards and best practices to prevent and mitigate against the human rights impacts of climate change.”

International responsibilities to protect human rights by mitigating GHGs through its own business activities and products follow from the UNGPs (2011), HRC Resolution 48/13 (2021), and UNGA Resolution 76/300 (2022) on the Right to a Clean, Healthy and Sustainable Environment, and the UN Framework Principles on Human Rights and the Environment (2018). Special attention is drawn to the report of the UN Special Rapporteur on Human Rights and the Environment on States’ obligations in relation to climate change (A/74/161), stating that “further exploration for additional fossil fuels” must be prohibited because “not all existing reserves can be burned while still meeting the commitments of the Paris Agreement.” In addition, States must prohibit the most polluting and environmentally destructive fossil fuel activities, including “oil and gas produced from hydraulic fracturing.” All of this follows from the right to a healthy environment, and related human rights, “including the rights to life, health, food, water, housing and culture.”

In relation to “access to information,” Saudi Arabia acts in violation of “international human rights standards that require that businesses should ensure adequate and accurate disclosure and reporting of their climate impacts in an accessible manner.” Saudi Aramco omits important information about Scope 3 emissions from its reporting and advertising, which is “inconsistent with the Greenhouse Gas Protocol and Task Force on Climate-related Financial Disclosures standards.” Inaccurate information on GHG emissions can lead to underestimating the climate change crisis, and in turn, exacerbate negative human rights impact due to climate change. Therefore, all companies “should refrain from supporting and/or engaging in public information campaigns based on inaccurate, misleading, and unfounded assertions that harm the ability of States and the public to make informed decisions pertaining to climate change.”

Finally, the communications note that Saudi Aramco increasingly sought and received private financial support from a range of financial institutions, e.g., through borrowing funds, selling bonds or equities, or getting support for financial transactions, or for investments in its oil and gas infrastructures. Each of these financial activities help finance the harmful activities of Saudi Aramco that “are contributing to climate change-related human rights impacts,” in a manner that is contrary to the human rights responsibilities of these financial institutions.

In August-September 2023, Japan, the UK, and France responded to the communication, as well as Société Générale S.A., Crédit Agricole S.A., BNP Paribas, HSBC, Mizuho Financial Group, and Sumitomo Mitsui Banking Corporation. The companies all outline their respective approaches to human rights under the UN Guiding Principles on Business and Human Rights; OECD Guidelines; as well as the Equator Principles, UN Global Compact, or International Bill of Rights more generally. Communications to Saudi Arabia, Japan, France, USA, and the UK, and 13 financial institutions concerning Saudi Aramco’s business activities in the fossil fuel sector (United Nations Special Rapporteurs)

United Kingdom: Prime Minister’s Net-Zero Claims Challenged

On September 20, 2023, the Prime Minister gave a speech setting out his “new approach to Net Zero.” The accompanying press release stated that due to the “UK’s over-delivery on reducing emissions,” there was “space to take a more pragmatic, proportionate, and realistic approach to reaching net zero.” A number of policy changes were announced. The 2030 ban on the sale of petrol and diesel cars was delayed to 2035. Policies requiring landlords to upgrade the energy efficiency of their properties were dropped. And the ban on new fossil fuel boilers for certain households was delayed.

On December 1, 2023, environmentalist and TV personality Chris Packham announced a public law proceeding challenging these decisions. The grounds of claim are:

• The obligation under Section 13 Climate Change Act 2008 to have proposals and policies to meet carbon budgets is continuing and the proposals and policies must be current. If they are altered, there must always be plans in place to meet the budgets. The secretaries of state breached this obligation.
   
• There was a failure to take into account considerations listed under Section 10 of the Climate Change Act, such as the risk to the delivery of proposals and policies and to the achievement of the carbon budgets and the 2050 net zero target.
   
• There was a failure to consult on the changes, particularly a failure to take into account ongoing consultations about off-grid heating and minimum energy efficiency in rental properties.
   
• The decisions were based on misinformation.
   
• There was a breach of the duty to inform the public of the reasons for the decisions to change the policies.

 

The next stage is for the High Court to decide whether to permit the claim to proceed to trial. R (Packham) v Secretary of State for Energy Security and Net Zero and Secretary of State for Transport (challenge to the ‘new approach to Net Zero’) (High Court of England and Wales, UK)

New Zealand: Energy Company Sued for Misleading and Deceptive Conduct in Its Public Statements Concerning Its Greenhouse Gas Emission Policies

In November 2023, three NGOs—Consumer NZ, the Environmental Law Initiative, and Lawyers for Climate Action NZ Inc—filed a complaint against Z Energy Ltd, the largest petroleum retailer in New Zealand. The complaint is New Zealand’s first “greenwashing” case. The complaint details claims that Z Energy has made, which give the impression that it is taking action to reduce its greenhouse gas emissions. Complainants argue that these statements do not align with Z Energy’s actual policies and actions. Accordingly, they argue that Z Energy has breached section 9 of New Zealand’s Fair Trading Act, which prohibits “misleading and deceptive conduct.” Consumer NZ Inc v Z Energy Ltd (High Court, New Zealand)