The Dutch Ruling Against Shell Shows That Climate Treaties Have Consequences

The Dutch Ruling Against Shell Shows That Climate Treaties Have Consequences
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Last Wednesday, a Dutch Court ruled that leading British-Dutch oil and gas company Royal Dutch Shell plc, commonly known as “Shell” and headquartered in The Netherlands, is bound to reduce its carbon dioxide emissions by 45 percent from 2019 levels by the end of 2030. In addition, the Court stated that the company is not only responsible for CO2 emissions from its own operations; it also placed “heavy best efforts obligation” on Shell to reduce emissions from its supply chain partners and end users.

The lawsuit had been launched by the Dutch wing of environmental NGO “Friends of the Earth,” called “Milieudefensie,” in 2019. It was supported by six other NGOs and also by 17,200 individual citizens acting as co-claimants.

One of the three acting judges in the case, Larisa Alwin, commented that Shell’s climate efforts “are not concrete and are full of reservations.” The Court ordered Shell to start embarking on its duty to reduce emissions right away. This means that even if the company would win the appeal case it now intends to make, it is legally bound to implement the ruling unless it won on appeal.

Of critical importance, the Court rejected Shell’s argument that the company is not a party to the Paris Climate Agreement, on which the claimants were basing their case, and that this agreement merely binds states. In 2015, another environmental NGO, Urgenda, won a lawsuit against the Dutch state, whereby the government was ordered to reduce emissions by at least 25 percent from 1990 levels by the end of 2020. That case was decided not only on a report by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) and a binding European Union CO2 emission reduction target that had been agreed in 2014 but also on human rights provisions in the European Convention on Human Rights (ECHR). This Treaty, agreed to after World War II and involving Eleanor Roosevelt, is unrelated to the EU Treaties. The Dutch government considered the legal basis of this ruling to be shaky, but its appeal was dismissed by the highest Dutch Court. In response, the Dutch government was forced to phase out coal power four years earlier than planned.

In its ruling against Shell, the Court stated that climate change involves severe risks for Dutch citizens, including higher sea levels, health risks, and air pollution (the judges appear to believe that carbon dioxide is injurious to human health), and therefore that the human rights of Dutch citizens are violated by Shell. In particular, the Court claims that Shell is violating the right to respect for one’s “private and family life,” enshrined in Article 8 of the ECHR. A novelty is that with these kinds of lawsuits, companies are not only made responsible for any damage they may have inflicted in the past but also made responsible for potential damage in the future. At least the Dutch court seems convinced that similar lawsuits are about to follow, as it stated that “other companies will need to reduce their CO2 levels” – implying that other oil producers shouldn’t be allowed to fill the supply gap created by Shell’s compliance with the Court’s decision. 

Two years ago, the Netherlands was rocked by farmers protesting another court ruling that ordered the government to cut nitrogen pollution or risk a ban on up to 18,000 infrastructure and construction projects, including a new airport. This triggered a huge debate on “judicial activism.” Ahead of the March 2021 elections, Dutch prime minister Mark Rutte’s ruling VVD party considered a push to diverge from human rights treaties in cases where these are interpreted “against their original meaning,” while trying to restrict campaigners’ access to the courts. This move triggered a backlash, and the initiative fizzled out. The country’s powerful judiciary seems here to stay. Part of the problem is that the Dutch government signed up to international obligations that judges see as their job to enforce. Unlike national legislation, these are not as easy to overturn when politicians have second thoughts about them. 

What can Shell do now? Apart from appealing and hoping for a more lenient judicial interpretation, not much else except simply to comply. The company had already announced new targets to reduce its emissions earlier this year. According to the Dutch Petroleum Industry Association (VNPI), the obligations imposed on Shell by the Court ruling are “not impossible to achieve,” even if they’re more burdensome than the company’s original targets, at least when it comes to the obligations in the Netherlands. Before the Court ruling, the company’s CEO, Ben van Beurden, rejected setting the absolute reduction targets the Court has now imposed, saying that this can be achieved only by “shrinking the business.” Perhaps the company may decide to leave the Netherlands as a potential legal escape route, something that it already considered doing in 2020, due to taxation concerns.

In any case, Roger Cox, the lawyer for the NGO that won the case, considers this case to be an “example” for further climate litigation worldwide. Around the world, climate cases are being brought before courts. One estimate of the total number of such cases filed in at least 33 countries – mostly the United States, Australia, the UK, the European Union, New Zealand, Canada, and Spain – was approximately 1,444 in January 2020. That’s on top of the cases brought in regional or international courts or commissions. According to law firm Norton Rose Fulbright, “the nature of the claims against corporations has also diversified beyond the unsuccessful tort and public nuisance actions pursued predominately in the US in the 2000s and early 2010s.” The claims now increasingly rely on constitutional and human rights laws.

This should remind democratically elected politicians that signing up to various international agreements with lofty targets comes with consequences. It’s best to think about those consequences before rubber-stamping such agreements – and putting unelected judges in charge.

 

Pieter Cleppe is the editor-in-chief of www.brusselsreport.eu, a new online magazine covering EU politics

@pietercleppe

 



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