Environmental Weekly News Round Up - 17 November 2023

Welcome to our latest weekly Environment Law News Update, where we bring you developments, insights, and analysis in the world of environmental law. In this edition, I would like to acknowledge and thank the following contributors for their valuable input: Jill Crawford, Stefano D'Ambrosio-Nunez, Elizabeth Mutter, Ben Holland, Anastasia Panich and Chloe Moran.

Breaking New Ground: Scotland’s Ambitious Bill Against Ecocide

Scotland is on the verge of pioneering a ground-breaking environmental protection measure through a bill that seeks to criminalise ecocide.

The bill spearheaded by Labour MSP Monica Lennon aims to introduce severe punishments, including jail terms of up to 20 years for acts causing significant environmental harm such as major oil spills and deforestation.  Monica Lennon emphasised the bill’s necessity, noting Scotland’s status as a significantly depleted country and views the potential 20-year maximum sentence as a justified response to severe ecological damage.

The proposed bill defines ecocide as “unlawful or wanton acts” leading to widespread environmental destruction. It sets a minimum sentence of 10 years, focusing on deterring and penalising major polluters, especially those responsible for catastrophic incidents due to negligence.  The legislation also aims to bolster existing environmental laws by providing a more overarching deterrent against environmental crimes.

The proposal has entered consultation phase, which concludes in February 2024, after which it will need the support of at least 18 MSPs to proceed.  This initiative aligns with Scotland’s commitment to environmental issues, highlighted by First Minister Humza Yousaf’s upcoming attendance at COP28 climate summit in Dubai.

Internationally the concept of ecocide is gaining some traction with 13 countries already recognising it in some form.  Advocacy groups like Stop Ecocide International, endorsed by public figures such as Greta Thunberg, Pope Francis and Sir Paul McCartney are pushing for its inclusion in international law. However, critics point out limitations in the existing international legal framework to address environmental crimes.  The International Criminal Court (ICC) for instance only addresses environmental harms related to war crimes and is seen as too limited in scope to deal with ecocide as it does not cover peacetime environmental damages.  Moreover, the ICC’s jurisdiction is limited to ‘natural persons’ raising the question of how to assign responsibility for ecocide in the context of corporate actions. 

From a UK perspective, supporters argue that introducing ecocide law in the UK would create a strong legal tool to prevent large-scale environmental destruction by holding corporations and individuals accountable for severe environmental damage and would complement existing environmental legislation.

However, proving culpability and intent in cases of environmental damage can be challenging including the establishment of indirect and long-term environmental impacts.   Other significant challenges include: (i) deciding whether to target corporations as entities or hold individual executives to account, (ii) the requirement of significant resources to ensure effective enforcement of ecocide laws, (iii) specialist legal expertise, (iv) investigative capacity, and (v) in some cases invariably the need for international cooperation. There is also a need to balance environmental protection with economic and social considerations.

In summary, given the above factors predicting the bill’s success is challenging as it depends on the complex interplay of political, legal, public and international elements.   The consultation response will be crucial.  However, the proposal does represent a bold and progressive step in relation to environmental protection and underscores a serious response to the climate crisis.  Scotland’s initiative could serve as a model for the UK government and other countries as well (if successful) and may well indicate a broader shift in government priorities for environmental protection.

Corporate Accountability in the Climate Crisis: Court of Appeal Refuse to Hear Client Earth’s Case Against Shell

The Court of Appeal has refused to hear Client Earth’s case aiming to hold directors personally liable for mis-managing climate risks.  Client Earth state that this was the first derivative action worldwide to seek to hold directors personally liable for climate risk management.  

The High Court had dismissed the case earlier without considering the merits of the claim, a decision which Client Earth had appealed to the Court of Appeal.

The Court of Appeal’s refusal to hear the claim was based on procedural grounds including Client Earth’s small shareholder status and a general reluctance to interfere in directors’ decision-making.  The Court did not engage with the substance of Client Earth’s evidence or their argument about directors’ mismanagement of climate risks.

Paul Benson a senior lawyer at Client Earth expressed deep disappointment with the decision viewing it as missed opportunity to address the climate crisis and clarify directors’ legal responsibility in light of significant risks to companies and shareholder value.   Despite the High Court’s initial ruling it had affirmed that corporate directors have a duty to manage climate risk.

Client Earth acting as a shareholder brought the lawsuit alleging Shell’s directors breached legal duties under the Companies Act by not adopting a transition strategy aligned with the Paris Agreement.  The lawsuit was supported by institutional investors holding over 12 million shares in Shell, representing over half a trillion dollars in assets.

Client Earth alleged that Shell had failed to adopt and implement an ‘Energy Transition Strategy’ that aligns with the Paris Agreement.

Shell had claimed that its ‘Energy Transition Strategy’ which includes a pledge to achieve net zero emissions by 2050 did align with the Paris Agreement but critics have said that the Strategy is lacking short to medium-term targets to cut scope 3 emissions, which constitute over 90% of the company’s overall emissions.  

Client Earth also claimed that Shell’s Board failed to fully comply with the Dutch Court’s judgement ordering a 45% reduction in group-wide emissions by 2030.  This non-compliance was cited as a breach of legal duties.  

Since Client Earth filed its lawsuit, it is reported that Shell has further weakened its transition strategy leading to criticism and divestment from major shareholders.

Client Earth despite the setback says that it remains committed to fighting for accountability from company directors in the face of climate change and emphasises the long-term risks to companies not aligned with climate goals.  

The case certainly emphasises a growing trend in corporate governance where environmental and climate risks are increasingly viewed as critical factors in a company’s long-term success and risk management.

Shell Sues Greenpeace on the Sea Shore

In January, Greenpeace campaigners occupied a floating oil platform north of the Canary Islands, with demands that Shell “stop drilling- start paying”. The activists boarded the White Marlin ship north of the Canary Islands in the Atlantic in January. They remained on board for 13 days until the ship reached Norway. At the time, Shell was granted an injunction to prevent more activists boarding. 

Shell have also responded by suing Greenpeace to “recover the significant costs of responding to Greenpeace’s dangerous actions”. The damages claimed are £1.7m. Shell argue that there were significant legal costs to secure two court injunctions to prevent further boarding, and there were also significant costs for the companies’ who had to deal with extra action at sea (for example by mobilising an extra safety vessel and increasing security). A spokesperson for Shell said that their intent has been misrepresented, and that “this is simply about preventing activities at sea or in port which could endanger people’s lives”.

Shell have offered to reduce its damage claim to £1.14m if the activists agreed not to protest again at any of Shell’s infrastructure. Greenpeace has said it would only do so if Shell complied with a 2021 Dutch court order to cut its emissions by 45% by 2030, which Shell has appealed. 

Greenpeace have described this as “one of the biggest legal threats” in its history and plans to contest the action. The co-executive director has accused Shell of “trying to crush Greenpeace’s ability to campaign, and has sought to silence legitimate demands for climate justice”. 

There have been reported talks between the parties, so it is uncertain if this case will make it to Court. 

Inflation is holding back the Government’s flood protection plans

This week, the National Audit Office published their ‘Resilience to flooding’ report. It shows that despite a doubling in capital funding in England to combat flooding, a quarter of new flood defence projects have been abandoned. Also, the Environment Agency’s target of better protecting 336,000 from flooding by 2027 has been cut to 200,000; a 40% reduction. 

The EA have said inflation is to blame. As well as the above cuts, there is an increased risk for those properties that have already benefited from works to better protect them against flooding due to a £34 million shortfall in the EA’s maintenance funding for 2022-23. 

This year we have seen a named storm beginning with the letter D at the earliest time yet; storm Babet flooded more than 2,000 homes; storm Ciarán flooded more than 1,000 homes; 18 to 20 October was the third wettest three-day period for England and Wales since 1891; and the Met Office predicts more extreme weather events to come, including more intense rainfall, as UK average temperatures increase. 

The EA’s target of bettering protection for 336,000 homes was set in 2020. However, the project underspent by £310 million in the first two years and now an average of £1 billion will need to be spent each year for the government to sit their target of spending £5.7 billion on flood defences by 2027. 

The National Audit Office has warned against hastily accelerating new projects as a consequence of the need to spend more as this may lead to delays or cost overruns. They also criticised the government for having no concrete plans set beyond 2026. Ultimately, they have advised that Defra, the EA and the Treasury must work together to avoid short-term decisions and ensure value for money. 

The full report can be read here. 

Ofwat investigates South East Water over water supply concerns

In Ofwat’s latest performance report, South East Water (SE) was ranked as the worst performer on water supply interruptions in England and Wales despite the fact that it exclusively supplies water (and does not provide any waste disposal services).

David Black, Ofwat’s chief executive stated: “Providing reliable water supplies is at the heart of a water company's responsibilities. Too many customers have been failed too often by SE.”

SE fully intends to cooperate with Ofwat and has said they acknowledge Ofwat’s decision and that “Resilience forms a major focus for SE both now, and as a significant part of our PR24 business plan which has been submitted to Ofwat”.

Unfortunately, this comes right off the back of the Drinking Water Inspectorate (DWI) informing SE in October that it was considering taking enforcement action against it. The reason for this being to secure improvements to SE’s supply system. 

Ofwat has reported SE was “lagging behind” in its latest performance report. This includes “poor” performance in categories such as customer satisfaction, leakage, per capita consumption reduction, and mains repairs. They have demanded SE publish a service commitment plan to address its issues.

It should also be noted, however, that SE was ranked as having “satisfactory” performance on priority services and drinking water quality.

UK-US Partnership on nuclear fusion

The UK and the US have agreed on a new strategic partnership to accelerate fusion energy development. The joint statement is available here.

Both countries have a history of collaboration in generating scientific and technological progress in fusion energy research and development. However, the main focus of this new partnership will be on making fusion energy commercially viable, and will pursue the following objectives:

• address the technical challenges of delivering commercially viable fusion energy, pursuant to the existing Agreement between the UK and US on Scientific and Technological Cooperation,
• focus on shared access to and development of major new national facilities required for fusion research and development, and how a coordinated, strategic approach can maximise value for the UK and the US,
• explore opportunities to support the international harmonisation of regulatory frameworks and codes and standards,
• identify and support the development of resilient supply chains that will be necessary for commercial fusion deployment,
• support public engagement with communities, including equity and energy justice, to facilitate social license for deploying fusion energy, and
• promote skills development to ensure the people and talent growth necessary for the robust, inclusive and diverse workforce required by the fusion sector into the next decade and beyond.

This is the first formal international fusion collaboration since the launch of the Fusion Futures Programme providing £650 million for funding fusion companies. This funding is on top of the £700 million allocated in the UK for fusion energy programmes between 2022 and 2025.

This agreement, together with the governmental funding for fusion energy, and the recent activity from Great British Nuclear in promoting Small Modular Reactors (SMRs) are a good indication of the government’s intentions to rely on nuclear energy for the UK’s energy security and for achieving its net zero commitments.