Climate litigation: How corporations fight green policies

DW (English)

An investor protection regime is said to be stalling climate action and instead paying polluters. The lawsuits hold governments to ransom over green policies, but some states are fighting back.

Transcript

00:00Let me present to you the valley of Roșia Montana.

00:05This is where you can see what we saved.

00:08This is a UNESCO protected area of Romania's Transylvania.

00:12It would be a lunis landscape.

00:14It would be an industrial mining site.

00:17The Romanian government has beaten a multinational corporation from trying to mine these mountains

00:22for gold using a potentially deadly chemical.

00:26It would have been another deserted area, another apocalyptic landscape.

00:31In this era of conservation and climate change, how are foreign investors trying to sue governments

00:36over their climate policies?

00:44And how are communities fighting back?

00:47To find out, we visit two countries on opposite sides of the world in this episode of Transforming

00:52Business.

00:56We begin in the La Guajira region of northern Colombia.

01:00It's home to the El Cerrojón open pit coal mine, one of the largest in the world.

01:05For many years, the mine has been surrounded in controversy over accusations by indigenous

01:10people of human and environmental abuses.

01:13These include air, water and noise pollution.

01:16It's owned by Glencore, a Swiss multinational mining company.

01:20This coal is exported globally, including to Europe and the USA.

01:25Carbon dioxide from coal accounts for about 40 percent of greenhouse gas emissions from

01:31fossil fuels.

01:35Underground in this region, there are coal reserves, economically important to Glencore.

01:48These farmers say they were forcibly moved from here by Colombian police.

01:53They point out to this water source, the Bruno River, which flows through Cerrojón's mining

01:59concession.

02:00It's a vein of water in a region hit by years of extreme drought and a lifeline for

02:06locals.

02:07But it's in jeopardy.

02:22The mine gulps down over 33 million litres of water per day.

02:28After community pressure in 2017, the Colombian Constitutional Court moved to protect the

02:34Bruno River and indigenous communities who rely on it.

02:38It did this after Glencore partially changed the course of the river to extract more coal.

02:44Glencore responded to the Constitutional Court decision by kicking off legal proceedings

02:49to sue Colombia for an undisclosed amount of money.

02:54In response, Glencore says it supports rigorous social and environmental practices and it

03:21has other claims against the Colombian state.

03:43Colombia's environment minister, after this interview with us, refused to answer questions

03:47on the matter, citing potential legal issues.

03:51In a statement to us, Glencore said,

03:53Our preference is to resolve issues of dispute through constructive engagement with host

03:58governments.

03:59Where an amicable settlement cannot be achieved, we may initiate a claim via a legal route

04:05that utilizes arbitration processes.

04:10When asked about how much it's seeking in compensation, its answer, no comment.

04:18This is how Glencore is trying to sue the Colombian government.

04:23ISDS stands for Investor State Dispute Settlements.

04:27It's a legal framework that allows foreign investors to sue governments in which they've

04:31invested money or assets if they believe their interests have been adversely affected.

04:36The rationale for ISDS in the first place is that it promotes foreign investment because

04:44are being encouraged to invest in a jurisdiction where often there are rule of law concerns

04:49or where the local laws are insufficient to provide real protection to investors.

04:56Investors derive these economic rights from international investment agreements signed

05:01by states over the last 50 years.

05:04In the case of Glencore versus Colombia, it's using the Colombia-Switzerland bilateral investment

05:09treaty.

05:12As the planet continues to heat up because of the burning of fossil fuels, policymakers

05:17are upping their game to curb emissions and protect the environment.

05:21This is leading to a trimming back of fossil fuels.

05:26According to a report from the International Institute for Sustainable Development, the

05:31fossil fuel industry is the most litigious in the ISDS system.

05:35The second most is the mining sector.

05:38ISDS has been really heavily weaponized and manipulated by corporations who are holding

05:44on to their profits and activities in complete disregard of the broader issues.

05:50ISDS cases are usually quite secretive and operate outside of domestic courts in arbitration.

05:57The investor appoints an arbitrator, the state appoints an arbitrator, and both can agree

06:02on a third, independent arbitrator, who usually acts as president or chair of proceedings.

06:22According to Global ISDS Tracker, the number of fossil fuel cases has increased steadily

06:28in the last three decades.

06:31The International Institute for Sustainable Development says fossil fuel cases also have

06:36a nearly five times higher average amount of compensation awarded, in the region of

06:41600 million dollars.

06:43An article published in the journal Science suggests that globally ISDS claims from fossil

06:48fuel investors could amount to over 340 billion dollars.

06:53And there have been multiple reports from a host of international bodies criticizing

06:57the impact of ISDS on green policy.

07:03The former UN Special Rapporteur on Human Rights and the Environment, David Boyd, said

07:08fossil fuel and mining cases act as a deterrent for governments and create regulatory chill.

07:15In 2018, according to a UN report, New Zealand withdrew from cancelling existing offshore

07:32oil permits because of fears of ISDS.

07:36When France was allegedly threatened by an ISDS lawsuit from a Canadian multinational,

07:41Green Group Friends of the Earth says that the country diluted its plans for a fossil

07:46fuel extraction phase-out by 2040.

07:50And in Denmark, it's reported that expensive ISDS claims have meant it's chosen 2050, rather

07:56than an earlier date, for phasing out oil and gas production.

08:02But there have been some interesting developments in at least one ISDS case, and we've travelled

08:07to Romania to hear more.

08:11Let me present to you the valley of Roșia Montana.

08:14This is where you can see what we saved.

08:17This is a UNESCO protected area of Transylvania called Roșia Montana.

08:24It would be an industrial mining site.

08:26It would be of gigantic proportion, just imagine trucks that are 15, 20 tons heavy going around

08:33and just imagine tons of explosives per day.

08:37The Romanian government, driven by local community efforts, has beaten a multinational

08:42corporation in an ISDS case worth 4.4 billion dollars.

08:46The Canadian company Gabriel Resources wanted to excavate these mountains to build one of

08:52the biggest gold mines in Europe.

08:54In this valley, it wanted to build a long reservoir to collect over 200 tons of wastewater

09:00Wastewater laced with cyanide, a deadly chemical used to extract gold from rocks.

09:10It could have looked something like this, acid mine drainage from a local copper mine.

09:15And the town of Roșia Montana would have looked totally different.

09:20It would have been another deserted area, another apocalyptic landscape.

09:27Roșia Montana is a very old gold mining region.

09:31It dates to before the Romans.

09:33You'll find extensive underground Roman mine galleries, about 7 kilometres long.

09:39People are proud of their mining heritage.

09:43During communism, this region was mined by the Romanian government, here in this open

09:48pit gold mine.

09:50Gabriel Resources won mining rights in the region in 1999.

09:55Major national protests because of community mobilisation stalled the project and drew

10:00international attention.

10:03We meet locals who were the backbone of this opposition.

10:07Davian Petrišor.

10:11He tells us how for years he was heartbroken and destroyed morally, living in constant

10:16fear that he would be thrown out of his home.

10:19Now people are more hopeful.

10:22They were able to show to the court that they are a sovereign state and that they can

10:27take decisions on whether they want to approve a project or not, regardless of the corporate

10:32grip and pressure that Gabriel Resources put on them.

10:36Gabriel Resources is now trying to nullify the costs of the case it needs to pay the

10:40Romanian government.

10:42And it's issued notification of a potential second ISDS action.

10:47When we repeatedly asked them for a statement, they never responded.

10:51Nowadays, states realise that they can no longer be held hostages by corporations who

10:57might want to use that mechanism to threaten them if they were to implement climate or

11:02environmental policies.

11:05Back in Colombia, communities continue to take a stand against coal mining in their

11:09region.

11:15Their futures are uncertain, with ISDS cases hanging in the balance.

11:22What the people of Guajiro want is to protect the Arroyo Bruno, to preserve that water source

11:30and that the water is above the coal.

11:34They're looking to Romania as an example of hope, an example of change, in favour of the planet.

11:42What do you think of ISDS cases?

11:44Let us know in the comments below.

11:46And if you liked this episode, please check out the Transforming Business playlist for

11:50videos on topics just like this one.

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