Shell Directors Climate Risk Law Suit (Litigation)

The NGO ClientEarth (a shareholder in Shell) has today (9th February 2023) filed a world-first lawsuit against the Board of Directors of Shell plc for failing to manage the material and foreseeable risks posed to the company by climate change.

The lawsuit alleges Shell’s 11 directors have breached their legal duties under the UK Companies Act by failing to adopt and implement an energy transition strategy that aligns with the Paris Agreement.

ClientEarth’s claim is filed in the High Court of England and Wales and is supported by a group of institutional investors collectively holding more than 12 million shares in the company, and more than half a trillion US dollars (£450 billion) in total assets under management (AUM).

In May 2021, a Dutch court ordered a net 45% reduction in group-wide emissions by the end of the 2020s. Shell has appealed the judgement, ClientEarth also alleges that the Board’s failure to fully comply with the Dutch Court’s judgment is an additional breach of its legal duties.

ClientEarth is represented by London litigation firm Pallas Partners, and is asking the High Court for an Order which requires the Shell Board to adopt a strategy to manage climate risk in line with its duties under the Companies Act, and in compliance with the Dutch Court judgment. The High Court will decide whether to grant ClientEarth permission to bring the claim.

The ClientEarth press release is here. It also has a link to FAQs.

CJEU ruling on breastfeeding mothers risk assessment (EU)

On 19th October the Court of Justice of the European Union (CJEU) ruled on a REQUEST for a preliminary ruling under European Union treaty law made by the Tribunal Superior de Justicia de Galicia (High Court of Justice of Galicia, Spain).

This REQUEST asked for clarification on the matter of the employer’s risk assessment of breast feeding mothers in the workplace.

The court found :

(1) The European Equal Opportunites & Equal Treatment Directive 2006/54/EC must be interpreted as applying to a situation (such as that at issue in the main Spanish court proceedings), in which a breastfeeding worker challenges, before a court or other competent authority of the Member State concerned, the risk assessment of her work – in so far as she claims that the assessment was not conducted in accordance with Europan Directive 92/85/EEC of 19 October 1992 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding.

(2) On a proper construction of European Directive 2006/54 (in a situation such as that at issue in the Spanish court proceedings), it is for the worker in question to provide evidence capable of suggesting that the risk assessment of her work had not been conducted in accordance with the requirements of Article 4(1) of Directive 92/85 and from which it can therefore be presumed that there was direct discrimination on grounds of sex within the meaning of Directive 2006/54 (in the case). It would then be for the defendant to prove that that risk assessment had been conducted in accordance with the requirements of that provision (risk assessment of breast feeding mothers) and that there had, therefore, been no breach of the principle of non-discrimination.

The CJEU judgment is here. 

The UK HSE guidance is as yet unchanged. The UK HSE guidance states a specific risk assessment is not required when an employer is notified a worker is a new or expectant mother. This guidance is here.

NB: ACAS is finalising new guidance on preventing pregnancy and maternity discrimination at work. UPDATE : this guidance is here.

The Cardinal Environment EHS Legislation UK websystems contain Law, ACOPs, HSGs and some other health and safety relevant guidance. They do not contain ACAS documents, please refer to legal specialists in Employment Law for further guidance.

Air Quality NOx: UK Supreme Court Decision

On 29th April, the UK Supreme Court handed down its judgement in the ClientEarth v DEFRA (UK Government) case. I posted about this case December last.

These proceedings arose out of the admitted and continuing failure by the UK since 2010 to secure compliance in certain zones with the limits for nitrogen dioxide levels set out by European law, under Directive 2008/50/EC. The Supreme Court in its judgement of 1st May 2013 had declared the UK to be in breach of article 13 (NOx limit values) and had referred certain questions concerning articles 13, 22 and 23 of the Directive to the Court of Justice of the European Union (CJEU). The CJEU had answered those questions in a judgement dated 14 November 2014 (Case C-404/13). At the same time, the European Court had ruled the UK Government must have a plan to achieve the air quality limits ‘as soon as possible’. My post about this is also in the December archive.

In its judgement of 29th April 2015, the UK Supreme Court unanimously orders that the government must submit new air quality plans to the European Commission no later than 31 December 2015. 

Link to Supreme Court Decision press summary.

Link to Supreme Court Decision.

In 2011 the UK Government said a number of areas, including London, would be unable to comply by 2015 (the deadline in the EU Directive) and instead EU law allowed it to ‘comply as soon as possible’. Indeed, air quality plans would continue the breach at least until 2030. This approach is now struck down by the Supreme Court.

The country goes to the polls on Thursday May 7 to elect a new government.

Some reaction from existing politicians and campaigners is set out in the Air Quality News article here.

EHS in International Trade Agreements

Law suits to find actionable EHS rights in international trade law may be looking to:

– The North American Free Trade Agreement (NFTA).

Lone Pine Resources Inc v the Government of Canada is an example.

This claim uses NAFTA Chapter 11 to sue Canada for losses alleged to arise for Lone Pine due to “Quebec’s arbitrary, capricious, and illegal revocation” of the company’s “valuable right to mine for oil and gas under the St. Lawrence River.” Chapter 11 of NAFTA allows private companies to sue governments (party to the agreement) when laws (later enacted) hurt their expected profits (investor protection).

– The Transatlantic Trade and Investment Partnership (TTIP).

TTIP is not yet agreed, the status of negotiations from the EU perspective is here.

These actions may be additional to those brought to the International Centre for Settlement of Investment Disputes (ICSID) under the World Bank ICSID Convention – information about the work of the ICSID is here.

Agreement on Nevada Anaconda Tort Case (US)

Residents local to the old Anaconda copper mine in Nevada had filed a class action lawsuit after the federal USEPA investigation determined that uranium, a by-product of the mine, was leaking into groundwater, resulting in “dangerous levels of uranium or arsenic or both” in 79% of wells north of the mine. A US Labour Department review in 2008 also revealed that the clean-up schedule had not been enforced.

The Defendents (the mining company) had moved (in court) to dismiss seven of the ten claims, but the Court had upheld the Residents claim founded in Rylands v Fletcher strict liability. Here is the Court ruling dated 30th August 2011.

Per the ABC news article – Fueled by demand after World War II, Anaconda produced 1.7 billion pounds of copper from 1952-78 at the mine in the Mason Valley, an irrigated agricultural oasis in the area’s otherwise largely barren high desert. The EPA determined over the years that uranium was produced as a byproduct of processing the copper and that radioactive waste was initially dumped into dirt-bottomed ponds that — unlike modern lined ponds — leaked into the groundwater.

BP and Atlantic Richfield, which bought Anaconda Copper Co. in 1978, provided bottled water for free to any residents who want it for several years. But they say uranium naturally occurs in the region’s soil and there is no proof that a half-century of processing metals is responsible for the contamination. Local residents started seeking outside legal help after a new wave of EPA testing first reported by the AP in November 2009 found that 79 percent of the wells tested north of mine had dangerous levels of uranium or arsenic or both that made the water unsafe to drink. One and a half miles away had uranium levels more than 10 times the legal drinking water standard. At the mine itself, wells tested as high as 100 times the standard.

Though health effects of specific levels are not well understood, the EPA says long-term exposure to high levels of uranium in drinking water may cause cancer and damage kidneys.

Per the ABC news article – The companies agree to pay $7 million in property damages and $900,000 to a medical monitoring fund. The final damages will depend on the cost of extending city water supplies to about 200 residents, estimated between $6.5 million and $12.5 million.

Fracking Litigation (US New York)

Useful New York Times (NYT) update on New York municipal litigation and rules already enacted is found here.

Per the NYT: Fracking has been the subject of five years of evaluation by state officials, including a continuing, and some say strategically delayed, “health impact analysis” by the New York State Health Department — a process whose pace has been criticized by both supporters and opponents of fracking. In August 2011, Dryden, New York, passed a municipal zoning ordinance effectively forbidding hydraulic fracturing. The ordinance prompted a lawsuit now being mulled by New York State’s highest court, the Court of Appeals, whose ruling could settle the long-simmering issue of whether the state’s municipalities can ban the drilling process.

Per the NYT: “It’s going to decide the future of the oil and gas industry in the state of New York,” said Thomas West, a lawyer for Norse Energy Corporation USA, which has sought to have the ban overturned and will file legal briefs on the appeal on Monday.

Flora and Fauna Guarantee Act 1988 (Victoria, Australia)

Here is information on Victoria’s Flora and Fauna Guarantee Act (FFG), which is the key piece of State (Victoria, Australia) legislation for the conservation of threatened species and communities and for the management of potentially threatening processes. Under the Flora and Fauna Guarantee Act, species listed as threatened must have action statements written about them “as soon as possible”. These statements assess the status of threatened species and help prepare action plans to ensure they do not become extinct. There is a backlog of many threatened species that do not yet have action statements, and this is the subject of concern.

The Victorian Government has now settled with EEG.

Environment East Gippsland (EEG) is a small volunteer-run group that acts in this area. It commenced a legal action against the Victorian government over its failure to prepare “action statements” for four species listed as threatened – the glossy black cockatoo, the long-nosed potoroo, the large brown tree frog and the eastern she oak skink. Here is the EEG web posting about these species. Each of the four species cited in the Environment East Gippsland case has been without an action statement for at least 10 years, with the glossy black cockatoo first listed as threatened in 1995.

As part of the settlement, the government has agreed to finalise action statements by 30 June, 2014. The assessment of the cockatoo will be completed by the end of this year, with the potoroo the next to be analysed. The government also agreed to create an “over-arching plan” for the other species without an action statement by 20 December this year, although this was not part of the main settlement.

Here is The Guardian press article about this, which gives the details about the settlement.

Windfarms (UK)

Judicial Review is upheld in relation to a decision of the Scottish Ministers dated 4 April 2012 to grant consent for the construction and operation of a 103 turbine Viking Wind Farm in Central Mainland, Shetland.

This lengthy Opinion is the first time a petition for Judicial Review of a decision to grant planning permission for a wind farm development has been successful.

The Opinion (ruling) identifies that the decision by the Scottish Government Ministers to grant planning permission was unlawful:
(a) the Scottish Ministers had failed to follow the EU Wild Birds Directive (as respects a rare bird, the whimbrel),
(b) the applicant (for planning permission) did not have a licence to generate electricity.

Here is a short guide to Judicial Review in Scotland.

Here is the Shetland Times news article on the ruling.

Deepwater Horizon (2010 Gulf of Mexico Oil Spill Settlement) (US)

Per RT.com news article – BP will stop paying some damage claims under the 2010 Gulf of Mexico oil spill settlement, after an appeals court agreed that the oil giant may be covering ‘fictitious’ payments to businesses. On Wednesday, a split 2-1 jury of the 5th US Circuit Court of Appeals in New Orleans said the administrator of the payoff program was approving millions of dollars of payment based on what BP called a flawed interpretation of the settlement deal reached last year. It ordered US District Judge Carl Barbier, who in March had approved administrator Patrick Juneau’s damage evaluation methods, to reconsider his decision and make sure that the claims covered are legitimate. The judge was also told to bar payment of certain claims until the review is over. The appeals judges however upheld another Barvier ruling, which in April dismissed BP’s lawsuit against Juneau.

Here and Here are the 5th Circuit Court of Appeals Opinions (rulings) issued 2nd October (Wednesday).

Here is the company’s press release on the Fifth Circuit Court of Appeals rulings.

Deepwater Horizon Oil Spill (US)

(Reuters) – (The Guardian)

BP returns to court to try to hold down fines that could hit $18 billion in a new phase of the Gulf of Mexico trial that will rule on how much oil it spilled in 2010. Starting today in New Orleans, this second of three trial phases, could – in the worst outcome – land the company with a bill five times greater than the $3.5 billion it has set aside for fines.

The outcome hinges on what the court decides about whether BP made every effort to cap the well, and what it decides about the dispute over how much oil escaped into the Gulf. The trial is being heard by US district judge Carl Barbier.

The first phase, which wound up in April, was to apportion blame for the events leading up to the fatal blowout of the well among BP and its partners, Transocean Ltd and Halliburton Co. The blowout killed 11 men and polluted large areas of ocean and beach and damaged wildlife and industry in five Gulf states.

Today, the government, joined now by BP’s former partners on the well, will argue that the company deliberately underestimated the size of the spill, and wasted time trying to plug the well with debris, when the flow was too strong. BP in pre-trial motions argues that the federal government reviewed and approved of its various plans to cap the well at every juncture, and that other oil companies also agreed with its strategy.

The US federal Clean Water Act (CWA) levies civil and criminal penalties on parties that violate its oil discharge prohibitions. Under the Clean Water Act, BP could be fined $1,100 for each barrel of oil that escaped into the Gulf, rising to $4,300 a barrel if the company is found to be guilty of gross negligence.

Even once those fines are set under the Clean Water Act, BP could still be hit with high bills for environmental restoration to the Gulf.

The Resources and Ecosystem Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act (known as the “RESTORE Act”) was developed to direct a portion of the Clean Water Act civil penalties from the Deepwater Horizon incident to Gulf restoration. President Obama signed the RESTORE Act into law on July 6, 2012. See here for the Environmental Law Institute (ELI) webpage on the RESTORE Act.