Could Fossil Fuel Execs be Personally Liable for Climate Damages?

June 5, 2014

A correspondent writes me – “I think I want to practice law again.”

Fierce Energy:

Corporate executives of major fossil fuel companies, including oil, gas, and coal, could face personal liability for opposing policies to fight climate change, and are being put on notice via letter sent jointly by Greenpeace International, World Wildlife Federation (WWF) and the Center for International Environmental Law.

The letters, aimed at both fossil fuel companies and their insurance providers, pose the question: “Who will pay the bill if such a lawsuit is brought against their directors or officers?”

“[From] asbestos to tobacco to oil spills, history shows that those who mislead the public, the market or the government about the risks of their products, or the availability of safer alternatives, can face substantial legal liability, both as companies and as individuals,” said Carroll Muffett, president of the Center for International Environmental Law. “As the impacts of climate denialism and regulatory obstruction become clear, we want to understand how corporations, insurers, and officers and directors are allocating those risks among themselves. Just as importantly, we ask what steps they’re taking to prevent the misconduct that creates those risks in the first place.”

Generally, liability policies provide coverage for claims that put individual directors’ and officers’ assets at risk. These liability policies protect individuals who are conducting their business in good faith but are at risk of being held liable for undesirable business occurrences, which may be beyond their control. However, Greenpeace and the others raise the question of whether these policies would cover a director facing a climate-related claim.

The organizations say they hope that the letter will lead to the truth about the effects of climate change.

“Sooner or later, those who hide the facts and oppose policies to fight climate change will be held to account by the courts,” said Samantha Smith, head of WWF’s Global Climate and Energy Initiative. “By signing this letter, we hope to bring attention to the importance of truthful, transparent and responsible corporate reporting and policy engagement on climate change.”

The cost of climate change is personal to victims of typhoons and droughts, according to Leanne Minshull, Greenpeace International’s Climate and Energy Campaigner, and she wants individual executives to pay the price.

“It should also be personal for any oil, gas and coal company directors who mislead the public by funding climate denialism and stopping action on climate change,” Minshull said. “The responsibility — not just the devastating effects — should be personal.”

Greenpeace:

Amsterdam, 28 May 2014 – Corporate executives of major fossil fuel companies could face personal liability for funding climate denialism and opposing policies to fight climate change, say NGOs.

Greenpeace International, WWF International and the Center for International Environmental Law have written to the executives of large insurance corporations as well as fossil fuel and other carbon major companies [1], seeking clarity on who will pay the bill if such a lawsuit is brought against their directors or officers [2].

Generally, liability policies provide coverage for claims that put individual directors’ and officers’ assets at risk. These liability policies protect individuals who are conducting their business in good faith but are at risk of being held liable for undesirable business occurrences, which may be beyond their control.  However, a serious question is whether these policies would cover a director facing a climate-related claim [3].

Leanne Minshull, Greenpeace International’s Climate and Energy Campaigner, says the cost of climate change is personal. “It’s personal to the victims of super typhoon Haiyan who lost family members and homes in the Philippines. It’s personal to farmers in California and Australia whose land is now too dry for farming. It should also be personal for any oil, gas and coal company directors who mislead the public by funding climate denialism and stopping action on climate change. The responsibility – not just the devastating effects – should be personal.”

Carroll Muffett, President of the Center for International Environmental Law, says from“asbestos to tobacco to oil spills, history shows that those who mislead the public, the market or the government about the risks of their products, or the availability of safer alternatives, can face substantial legal liability, both as companies and as individuals. As the impacts of climate denialism and regulatory obstruction become clear, we want to understand how corporations, insurers, and officers and directors are allocating those risks among themselves.  Just as importantly, we ask what steps they’re taking to prevent the misconduct that creates those risks in the first place.”

Samantha Smith, leader of WWF International‘s Global Climate and Energy Initiative, says fossil fuel companies owe it to their shareholders and the public to tell us the truth about the devastating impacts of their activities on our shared climate. “Sooner or later, those who hide the facts and oppose policies to fight climate change will be held to account by the courts. By signing this letter, we hope to bring attention to the importance of truthful, transparent and responsible corporate reporting and policy engagement on climate change.”

The responses from the fossil fuel companies and insurers and will be published on the Greenpeace International website.

 

 

 

 

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36 Responses to “Could Fossil Fuel Execs be Personally Liable for Climate Damages?”

  1. andrewfez Says:

    One of those international courts found Bush and Cheney guilty of war crimes the other day. Now they don’t leave the country for fear of being held accountable by foreign powers, so i understand.

    Figure out a way to do the same thing with some of these multinationals, where the CEO’s can’t leave the US for business trips and that may count as a little progress…

  2. rayduray Says:

    Re: “Could Fossil Fuel Execs be Personally Liable for Climate Damages?”

    I believe the short answer is no. When the tobacco industry was forced to disgorge $175 Billion in class action civil suits, their insurance and their corporate treasuries were tapped. The guilty executives were neither liable for damages nor criminally prosecuted.

    When the asbestos industry was found responsible for excess deaths, it simply created its own convenient death, a la the W.R. Grace bankruptcy which wiped out the obligations of the never-charged yet criminally negligent executives.

    Let’s face it, America is a game rigged to allow criminals, once they achieve a certain level of operations, to simply be above the law. Cf. the banking industry, or government as exampled here: http://www.commondreams.org/view/2014/06/05-3

    • miffedmax Says:

      Yes, but the threat of such an action might actually make these executives accountable to shareholders who (at least in my case) would rather see funds invested in alternative energy research than in lobbying and funding disinformation.


    • If they lie to their shareholders then the shareholders can sue the executive and the board as persons for failure of fiduciary duties.

      • rayduray Says:

        Doug,

        I think you are correct, theoretically speaking. But in practical terms, executives and board members are essentially above the law today.

        The best to be hoped for is the current pattern where banks in egregious violation of many laws find that breaking them and paying fines is far more profitable than abiding by the rules.

        The fines are merely a cost of doing business, and the government only in the rarest of instances goes after the executive. Thus we have Bernie Madoff in prison, but the equally criminal heads of the major banks walk scot free and are sought out for advice by our congresscritters, eg. Jamie Dimon lecturing Congress on budgeting when he appeared for hearings about losing JPM-Chase $6 Billion in a capital management cockup.

    • andrewfez Says:

      Oil is too big to fail for the moment (and the moment after).


      • Don’t be so sure.  Many oil companies, including Statoil, are pulling back investment because it just costs too much to go for what little oil is still out there.  If their “reserves” aren’t investment grade it won’t be long before they have to stop classifying them as reserves, the company has to downgrade its assets….

        • MorinMoss Says:

          I’m waiting for the truth about Gwahar to become public knowledge.
          The Saudis have been lying about their proven reserves for a long time and their biggest fields must be well past their best years by now.

          Their oil ministers used to threaten that they could sink the price of oil just by turning the taps up and rapidly increasing production by 1/2 or more.

          I haven’t heard that threat in quite a while and I suspect it’s because they simply can’t, not any more.


          • That was the big thing on The Oil Drum around 2007.

          • MorinMoss Says:

            And yet it didn’t make a dent in the public consciousness then and I’m still not hearing about it now.

            Why is that?


          • The Bakken, no doubt.

          • andrewfez Says:

            You’d think if they could, they would have increased production as the emerging markets came online in greater magnitude, so as not to decimate the first world economies with high fuel prices; after all aren’t they one of big buyers of treasuries, &c.? And why would they purposefully invite competition with fracking at >$75 a barrel if they could help it? Maybe those two thoughts smash together to form some sort of answer…


          • Whether or not they could increase production, they almost certainly don’t want to.  Oil is scarce enough in the rest of the world that the ME can’t be undercut; a million bbl/d from the Bakken is nothing.  And what would it get them?  Far less money for their irreplaceable resource.

            Saudi Arabia and the UAE are building nuclear reactors so they can sell the oil and gas they’re currently burning for electricity and desalinated water.  They know which side their bread is buttered on.

        • andrewfez Says:

          I bet if the situation deteriorates too rapidly we’ll bail them (the first ‘American’ company to get into trouble) out, a la Bank of America, et alia style. We’ll print the money, and instead of ramping up EVs with it, we’ll just give it straight to the wounded oil pusher under the cover of darkness.

          Wasn’t it Mexico that denied their peak production to the public up until a fairly rapid decline was starkly obvious?

          (Long BP, XOM)

    • mbrysonb Says:

      I agree on your conclusion, but I’ve always wondered about just what level of public anger would have been enough to at least get contempt of Congress charges against tobacco executives filed. After all, documents later released show clearly that they were lying to Congress when they denied that nicotine is addictive.

      Perhaps documents produced under similar investigations of the internal deliberations of Exxon-Mobil and other big oil companies will reveal a conspiracy to delude the public and bribe politicians to prevent any serious climate legislation from passing… Will people be angry enough, soon enough, for that sort of investigation to lead to charges? It may depend on just how rough the ride turns out to be. For instance, an unexpectedly rapid collapse of WAIS (leading to sea level rise at 3 m / 100 years or more– or 1′ per decade in American units, which is not out of line with past melt water pulses) just might be enough.

      • rayduray Says:

        mbrysonb,

        I think the “system” is pretty well immune to revolutionary change for now. Your example, of WAIS causing sea level rise is simply not going to impact enough of the population to make a difference in policy. Humanity will continually seek to adapt.

        We live in an age where polticians are beholden to “them’s that brung ’em to the party”. I.e. the donor class. And all the action lately, eg. Citizens United, super PACs, McCutcheon v. FEC are all pointing to ever greater concentration of political power in the hands of the rich.

        I don’t see your scenario of a large public outcry making much difference. We’re an oligarchy now, here in the U.S.A.

        • andrewfez Says:

          Any revolutionaries would be automagically painted by the press as ‘terrorists’ and the drones would be unleashed with postage paid.

          Wolf PAC continues to make progress with Vermont being the first state to call for a constitutional convention to get money out of politics. Congress took note of this and brought up some vanilla talk about campaign finance reform recently. Wolf PAC was unimpressed.

          wolf-pac.com


  3. The certainly should be given the vast and sweeping liability. It’s a whole new class of damage. Imagine cities and states taking on fossil fuel companies for punitive damages in courts.

    • rayduray Says:

      Re: “Imagine cities and states taking on fossil fuel companies for punitive damages in courts.”

      Imagine further fossil fuel companies bankrupting themselves in order to protect the guilty behind the corporate veil and the “Superfund” sites just mounting up awaiting the public’s money to clean them up or ameliorate the loss to sea level rise, etc.

      Imagine a world where corporations shirk their social responsibilities? We don’t have to imagine such a world. We already live in it.

  4. jimbills Says:

    I suspect they’ll be treated as harshly as the Wall Street execs were after 2007.

    In other news, as usual, the BBC (a public company rather than private) has a raft of environmental news not widely reported here in the States:
    http://www.bbc.com/news/science_and_environment/

    A lot of interesting stuff there today. Here’s a wild one:
    http://www.bbc.com/news/science-environment-27702401

    • rayduray Says:

      Jim,

      Your “wild one”, i.e. the leveling of large tracts of hilly terrain is a well-established practice is southern California where hundreds of sub-divisions have been created by this same means of leveling the hills. The native materials are perhaps somewhat more compactable and thereby stable in SoCal, but the Chinese Yan’an is only slightly more risky in that it consists of relatively weak silt fill. No problem until it gets saturated, eh?

      ***
      By the way, similarly to the BBC the Guardian has quite a good environmental section:

      http://www.theguardian.com/environment

      Why a person can even dial down to the arcane. Today’s Environment/Flooding page is claiming it is wet in England. Again.

      http://www.theguardian.com/uk-news/2014/jun/06/flood-alerts-most-of-uk-saturday

  5. astrostevo Says:

    They should be made liable. Ethically they certainly are. But with the legal system being as rigged as it is in so many places including the USA I’m not all that optimistic unfortunately.

    Hopefully things will change in the future and we will get to hold them accountable maybe?


  6. There will be criminal trials for crimes against humanity.

    Civil actions would naturally follow.

    • rayduray Says:

      Re: “There will be criminal trials for crimes against humanity.”

      The recent record seem to indicate the opposite. Clearly George Bush, Dick Cheney and Tony Blair are war criminals guilty of the most egregious of crimes, the aggressive invasion of another sovereign nation perpetrated on the basis of lies.

      Will they be prosecuted in any serious fashion? No. Not as long as the International Criminal Court is a kangaroo court that only attacks enemies of the Western system, such as the Yugoslavs who are the ICCs usual suspects. The ICC is a joke. But then again, so is the U.S. Supreme Court.


  7. Not only the executives but the elected officials they bought. You know, the ones who were elected by the people and for the people. That’s what I hope anyway.


    • Elected official news:

      “While we all strive to be good stewards of the earth, ‘climate change’ is a political agenda which attempts to control every aspect of our lives. We urge government at all levels to ignore any plea for money to fund global climate change or ‘climate justice’ initiatives.” – June 4, 2014 proposed Texas Republican Party Platform

      https://s3.amazonaws.com/s3.documentcloud.org/documents/1182339/temporary-platform-committee-report.pdf

      • MorinMoss Says:

        How exactly do they justify being “good stewards of the earth” when there’s a group called ConservAmerica, formerly known as Republicans for Environmental Protection, that’s been around for 20 years and has almost no buy-in from the heavy hitters & young guns of the GOP incl those from Texas?


        • Hypocrisy: “the claim or pretense of holding beliefs, feelings, standards, qualities, opinions, behaviors, virtues, motivations, or other characteristics that one does not in actual fact hold.”

  8. Gingerbaker Says:

    The leaders of corporations used to be held personally liable for actions of the corporation. The Founding Fathers were very fearful of the power of corporations and would not have stood for the shenanigans committed by Exxon-Mobil, the Koch brothers, etc.

    Thom Hartmann has written extensively on the topic, and links to this synopsis:

    http://www.addictinginfo.org/2013/06/09/founding-fathers/

    • rayduray Says:

      Gingerbaker,

      Thanks for citing Thom Hartmann. He’s a fine journalist. One of the best. 🙂

  9. Duane Nash Says:

    I would like to call an “air strike” on the blog climate change dispatch (you will see my comments under a different name there). Seems like I am the only person over on this denier blog fighting the misinformation promulgated there. As several have stated this IS a war. Deniers have no problem waging their war of misinformation anywhere. It is time science aggressively takes the fight to them on their own turf.

    http://www.climatechangedispatch.com/


  10. […] 2014/06/05: PSinclair: Could Fossil Fuel Execs be Personally Liable for Climate Damages? […]


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