Corporate courts versus the climate - Global Justice Now
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corporate courts versus the climate
© Jiri Rezac / Greenpeace
Fossil fuel companies
are using secretive
tribunals written into
trade deals to sue
governments for more
than $18 billion
over climate policy.
These big polluters
should be paying
to fix the climate
crisis they caused,
but instead they
want a payout.
2
© REUTERS / Alamy Stock Photo
Energy Charter treaty
Fossil fuel companies are
using tribunals set up outside
of national legal systems
specifically for corporations
to use – effectively they
are ‘corporate courts’. It’s
a system written into trade
and investment deals which
allows foreign corporations
to sue governments for vast
amounts. Formally, it is known
as investor-state dispute
settlement or ISDS.
The Energy Charter Treaty
is a giant corporate court
deal which many of the fossil
fuel companies are using
to sue. The UK government
is also trying to include
corporate courts in several
new trade deals.
Right: Members of the European
Parliament protest against ISDS
3
© Jiri Rezac / Greenpeace
Tar sands oil
The owners of the Keystone XL
pipeline, Canadian company
TC Energy, are suing the
US after President Biden
cancelled the pipeline on
climate change grounds.
They are demanding an
astronomical $15 billion.
Keystone XL was intended to
carry tar sands oil from Alberta
in Canada to the US. It would
have increased the market for
tar sands oil and encouraged
more extraction. We know
we need to leave all types of
fossil fuel in the ground to have
any chance of stemming the
climate crisis, and tar sands
are particularly devastating.
Right: Tar sands oil operations in Alberta
4
© Jiri Rezac / Greenpeace
Tar sands are a sludgy
mix of sand, clay, water
and sticky, thick oil. The
oil extraction produces
more climate gases than
conventional oil, and a
large proportion of the
extraction is done by
strip mining the surface.
It leaves behind toxic
waste and pollution.
5
© Onfokus
The Canadian tar sands are in
northern Alberta, underneath
an area of boreal forest which
is seven times the size of Wales.
Production took off in the
last two decades and whole
swathes of land are now
covered with mines, increasing
emissions and destroying forest.
The mines have also displaced
First Nations communities and
polluted their air and water.
6
© Greenpeace / Colin O’Conner
The Keystone XL pipeline was proposed in 2008.
Its route would have crossed further Indigenous
lands, water sources and environmentally
sensitive regions, with risks of leaks which have
happened with other pipelines in the region.
© Michael Kodas
Above: Jean L’Hommecourt outside of her cabin near Fort
McKay First Nation’s village. She used to gather berries or
hunt moose nearby with her mother. Now she’s surrounded
by tar sands mines.
Right: Clear cutting of forest to make way for tar sands mines.
7
Joe Brusky CC: BY-NC-2.0
Resistance to the pipeline built with protests, rallies
and blockades. Eventually this people power turned
things around and in 2015 Obama rejected the
permit for the pipeline. The pipeline owners started
threatening a corporate court case, but when
Trump was elected, he reinstated the pipeline.
On Biden’s first day in office in
2021, he cancelled it again, saying
it was incompatible with the
‘climate imperative’. The owners
promptly launched an ISDS case.
8
© Catstyecam
Coal phase out
In 2015, the year of the Paris climate
summit, the Netherlands seemed to
be heading in the wrong direction.
Despite the lofty goals of the global
summit, the Dutch government had
just allowed energy company RWE to
open a new coal-fired power station.
The following year, a further new
coal-fired plant was opened by
another company, Uniper.
It seemed to sum up all the frustrations
of climate campaigning over recent
decades. The need for action to
tackle the climate emergency had
never been clearer, but governments
were dragging their feet and the fossil
fuel industry was taking advantage.
Climate activist group Urgenda had
resorted to taking the government
to court over its failure to set more
ambitious carbon emission targets,
winning an initial ruling.
Right: Uniper’s new coal power station,
Maasvlakte 3, in Rotterdam
9
But the pressure from
climate activists did not
let up. There were many
demonstrations and
protests in the Netherlands
in those years, and the
Urgenda court ruling
was confirmed by the
supreme court in 2019.
At the end of that year in
response to this pressure,
a law was passed by
the Dutch parliament
to phase out the use of
coal altogether, requiring
the shutdown of coal
power stations.
Photo: Climate activists hold a
protest during the Rotterdam
Harbour Festival, September 2019
10 © Romy Arroyo Fernandez/NurPhoto via Getty ImagesNow both Uniper and RWE are
© SOPA Images Limited / Alamy Stock Photo
suing the Dutch government in
the hope of getting a massive
payout. These companies profited
first from the government’s
inaction and the government is
actually offering compensation.
But they’re trying their luck to see
if they can profit more through
corporate court cases. RWE
wants €1.4bn and Uniper €900m.
This is holding climate action to
ransom.
The implications of these cases
are wider and more dangerous
than just the cost for the public
purse in the Netherlands.
Corporate court cases can often
be secretive and hard to find out
about, but Uniper and RWE have
been public and vocal in their
threats. So much so that it would
seem the target is not just the
Netherlands, but to send a warning
to any other country that might be
considering passing similar laws. Global climate strike, Utrecht, September 2021
11© Money Sharma/AFP via Getty Images
Governments in Germany,
Denmark and New Zealand
have already admitted restricting
their climate policies because of
the dangers of being sued in
corporate courts. And the risks
are especially high for developing
countries, for whom the amounts
at stake are a far higher
proportion of their budgets.
Fridays for Future youth climate strike, This affects our future.
New Delhi, India, September 2019
12Tanenhaus CC: BY-2.0
Open cast mining
Cerrejón is an open cast coal
mine in Colombia – the largest
in Latin America. Much of its
coal is exported to Europe.
It has been controversial for
decades. Over 30 communities
have been displaced to make
way for the mine, and people
living nearby have suffered
health problems, environmental
damage, and violence and
intimidation for raising concerns.
In 2017 local communities
won a case in the Colombian
supreme court against the
diversion of a river to expand
the mine. The mine owners,
including Anglo-American, are
now turning to corporate courts
to challenge that decision.
13Colonial origins
How did we end up with such forerunners of ExxonMobil,
Wikimedia CC:BY-SA-3.0
an unjust system as corporate Total, Rio Tinto and more,
courts? If it seems designed to got together. They drafted
favour the interests of fossil fuel the prototype for ISDS
firms and big business, that’s agreements, specifically
because it was. in order to protect oil and
other big business interests.
Back in the 1950s and 1960s,
a group of businessmen were So the corporate court
worried about the policies of system was created to
newly independent countries. protect fossil fuel companies
These former colonies were from the threat posed by the
talking about now being able anti-colonial struggle. It is no
to control their own resources. surprise that it is the system
A group led by Hermann Abs, a fossil fuel companies turn to
banker, and Hartley Shawcross, now to protect themselves
a lawyer at that point working against the struggle for
for Royal Dutch Shell, and climate justice.
including others from the
Hermann Abs
14© Jess Hurd
take action
The risk to climate action
from corporate courts is only
going to grow. We know
industry insiders themselves
expect that more ambitious
climate policy will drive
an increase in cases. The
amounts at stake could be
over $9 trillion – that’s more
than ten per cent of the
global economy.
We need to get rid of
corporate courts. And we
know that we can. Across
the world, countries such
as South Africa, India,
New Zealand, Bolivia,
Tanzania and the US
are rejecting corporate
courts. The UK needs to
step up and join them.
15© Romy Arroyo Fernandez/NurPhoto via Getty Images Global Justice Now works as part of a global movement to challenge the powerful and create a more just and equal world. Our local activists campaign around the country for a global economy where people come before profit. Find out more and get involved in the campaign on corporate courts: globaljustice.org.uk/trade Global Justice Now, 66 Offley Road, London SW9 0LS +44 20 7820 4900 • offleyroad@globaljustice.org.uk • globaljustice.org.uk @GlobalJusticeUK Global Justice Now @globaljusticenow Published 2022. Printed on 100% post-consumer waste recycled paper. Cover images : © Michael Kodas; © Onfokus. Design and layout: causeffectdesign.co.uk
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