Payback time for oil patch fraud? Risk of Lawsuits Against Fossil Fuel Companies Getting Harder to Ignore

Attn. Fossil Fuel Companies – the Risk of Climate Lawsuits Is Getting Harder to Ignore by Jessica Clogg & Andrew Gage, December 4, 2015, Slaw Canada’s online legal magazine

In a recent speech to the world’s insurance companies, Mark Carney, the Governor of the Bank of England (and formerly of the Bank of Canada), warned of the risks of lawsuits “by parties who have suffered loss or damage from the effects of climate change [who] seek compensation from those they hold responsible.”

While not presenting such lawsuits as a sure thing, Mr. Carney alluded to multi-billion dollar lawsuits against the Asbestos industry and said that the risks of such litigation “will only increase as the science and evidence of climate change hardens.”

West Coast Environmental Law made a similar case last year when we (with the Canadian Centre for Policy Alternatives) issued a report – Payback Timewarning that lawsuits for climate-related damages might soon be brought against Canadian oil and gas companies. But if the fossil fuel companies were listening carefully, they may have heard other hints that such lawsuits may be coming.

Exhibit A: The decision of the Supreme Court of Canada in Chevron v. Yaiguaje released on September 4, 2015. This case allowed villagers from Ecuador to attempt to collect a $9.5 billion debt from Chevron that the Ecuadorean courts have awarded for pollution in their rainforests. The courts in Ecuador have ruled that Chevron owes $9.5 billion in compensation for oil and gas contamination.

This case is not a climate damages lawsuit – it’s about water and land pollution from extracting the fossil fuels, not atmospheric pollution from burning it. But, it is about a very poor community that stood up to one of the world’s largest fossil fuel companies and shows that even the world’s largest fossil fuel companies may one day need to stand up in court and account for what they have done.

But it’s also the international nature of the Ecuador lawsuit that foreshadows climate litigation. In Payback Time the authors explained that court cases concerning climate damages do not need to be brought in the countries where greenhouse gas emissions occurred, but can be brought in the countries where damages caused by climate change took place. Similarly, the Ecuador lawsuit was brought in Ecuador (after Chevron successfully convinced a U.S. judge that the case could not be brought in the U.S., and promised to abide by the decision of the Ecuadorean courts). And the Supreme Court of Canada affirmed that because Chevron has no assets in Ecuador, the villages can seek to enforce the Ecuadorean Court of Appeal’s US$9.5 billion judgment in Ontario’s courts. The case may one day be an important precedent for climate-impacted communities from (for example) Bangladesh or Tuvalu seeking to enforce a debt in Canadian courts.

The Ecuadorean villagers still have a long legal fight before them – Chevron has been successfully staved off collection of assets in the U.S. by raising allegations of fraud. But without judging the final outcome of that legal fight, the Supreme Court’s decision still gives some idea as to how fossil fuel companies might be sued for climate damages in courts around the world, and those damages orders then enforced in Canada and elsewhere.

Interestingly, our colleagues at the Environmental Law Alliance Worldwide have identified Ecuador as a country with laws that might support a lawsuit against private companies for climate-related harm.

Exhibit B: A human rights complaint filed against 43 fossil fuel companies and 7 cement companies in the Philippines. On September 22, 2015 Greenpeace Southeast Asia, 11 other organizations and 20 individuals filed a human rights complaint against 50 private companies including 6 Canadian oil and gas companies – that are collectively responsible for about 21% of historic greenhouse gas emissions. The complaint alleges that the companies had produced fossil fuels knowing that the resulting pollution would cause climate change and lead directly to violations of the human rights of people in the Philippines. While not requesting damages, the complaint demonstrates another point that we made in Payback Time: each country that suffers climate related impacts have their own laws that can be used to hold fossil fuel companies accountable.

The assertion that these 50 private companies are responsible for 21% of historic greenhouse gas emissions is based on Exhibit C – peer reviewed research conducted by Richard Heede, a researcher with the Climate Accountability Institute. Heede’s work demonstrated that just 90 entities are responsible – through their own emissions and those caused by their products – for roughly 2/3rds of historic greenhouse gas emissions. This ground-breaking research will likely be used in any climate lawsuits brought against fossil fuel companies, as well as in other types of legal proceedings – as the Human Rights Complaint demonstrates.

The Philippines complaint asserts, as we argued in Payback Time, that Filipino agencies have jurisdiction over international companies because the actions of those companies are causing harm in the Philippines.

Exhibit D: The investigation recently launched by New York State Attorney General against Exxon Mobil for climate-related fraud. Investigative journalists at Inside Climate Newsrecently revealed that Exxon Mobil’s own scientists warned the company in about 1980 that climate change “would require major reductions in fossil fuel combustion” in order to avoid “potentially catastrophic events.” Exxon Mobil went on to become one of the leading funders of “climate dis-information” – organizations that existed to cast doubt on the climate science.

Tobacco litigation first gained traction with juries and judges when it became clear that tobacco giants had known about the risks of cigarettes and had supressed the science, funding public misinformation that is similar (and often involved the same people) to climate denial campaigns. Sharon Eubanks, the lawyer who represented the U.S. Department of Justice in tobacco lawsuits, is among many who see links between Exxon’s behaviour and the tricks played by big tobacco.

Thus far fossil fuel companies have been able to reap billions of dollars of profits from their fossil fuel sales, all the while banking on the assumption that taxpayers and victims of climate change will pay the price. With the costs of climate change rising, the possibility that this assumption will be challenged – in court – is getting harder and harder to ignore. [Emphasis added]

[Refer also to:

TRIPLE FRAUD ON HOT ICE? Chevron’s RICO Case Spectacularly Implodes as Corrupt Ex-Judge Admits to Making It Up in Exchange for Chevron Payoff. How much fraud at the AER, Council Canadian Academies, University of Waterloo, Alberta Research Council (now Alberta Innovates), Alberta Environment?

Big Tobacco ordered to put $1B in trust for class-action lawsuit members; Quebec Court of Appeal orders Imperial Tobacco and Rothmans Benson & Hedges to pay $1B in instalments ]

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