Leon Gettler from G Online wrote an interesting article on litigation and climate change today, which I’ve summarised below and added some of my own thoughts.
Already there are signs that investors, communities and non government organisations will be taking companies to court over their claims on the environment.
As I wrote a few posts back, the Australian Conservation Foundation lodged a complaint with the Australian Competition and Consumer Commission asking it to investigate whether six companies – Rio Tinto, Woodside, Xstrata, Boral, Caltex and BlueScope Steel – had misled investors with their claims about the impact of the Australian Government’s Carbon Pollution Reduction Scheme.
Then we have reports from America that there has been a rise in companies getting sued for greenwashing and making bogus claims about their products being environment-friendly. Lawyers say these sorts of claims are really a case of false advertising. See my earlier post ‘Ad Land to the Rescue?’ for my take on greenwashing in Australia.
It’s not hard to see climate change triggering a spate of law suits.
Consider these scenarios: a utility has a power blackout caused by a climate change-related event about extreme weather. The area is plunged into darkness and chaos, businesses lose a fortune and launch a lawsuit against the utility.
Or shareholders who sue a company for ignoring their resolutions calling on the business to tackle climate change. The plaintiffs might claim the company sat on its hands, and as a result the business was hit hard by climate change-related events, and the share price tanked.
Impossible? Think of the lawsuits taken out against tobacco and fast food companies. Think asbestos.
Indeed, we have a report (pdf here) from Insurance giant Swiss Re now warning that climate change litigation will develop faster than asbestos related claims.
There have been a number of cases in the US, where lawsuits have been brought against coal producers (and others) for their role in driving climate change. For now, none of these types of claims have been successful on the basis of non-justiciability, or lack of specificity, but it can’t be long til someone makes a compelling case. Plus, this kind of thing hasn’t happened here in Australia, so we don’t know whether it would be easier to apportion blame under Australian law.
Already in Australia we have seen claims brought against property companies for developing in areas prone to future impacts of climate change. In other news, property owners on the NSW North Coast have been fighting council to do more to protect their property from king tides and coastal inundation.
Of course, the Council doesn’t want to do very much to assist, perhaps in fear this will create a legal precedent, and obligate them to compensate anyone that loses out from rising sea levels. Just think what will happen to the billions of dollars worth of real estate fronting Australia’s beaches and waterways if sea levels continue to rise. There will be a huge number of angry former coastal dwellers looking to point the finger of blame at someone, and there is a good chance it will be the local government authority for allowing development in the first place.
If nothing else, this wave of litigation will be another reminder to companies that taking care of the environment is actually good business.
