The Weekend Wonk: Growing Legal Wolfpack Hunting Oil Industry on Climate, Corruption

January 28, 2018

It took a long time and many failures before legal challenges finally began to bite into the tobacco industry.
Similarly, legal challenges to the global fossil fuel industry and its practices of distorting and suppressing climate science – sometimes from their own researchers, have met with little success.
But now, with New York City putting its full weight behind the efforts, climate legal teams have the kind of firepower and funding sufficient to take on the world’s most powerful industries.

Washington Post:

The New York City government is suing the world’s five largest publicly traded oil companies, seeking to hold them responsible for present and future damage to the city from climate change.

The suit, filed Tuesday against BP, Chevron, Conoco-Phillips, ExxonMobil and Royal Dutch Shell, claims the companies together produced 11 percent of all of global-warming gases through the oil and gas products they have sold over the years. It also charges that the companies and the industry they are part of have known for some time about the consequences but sought to obscure them.

“In this litigation, the City seeks to shift the costs of protecting the City from climate change impacts back onto the companies that have done nearly all they could to create this existential threat,” reads the lawsuit, brought by New York corporation counsel Zachary Carter and filed in U.S. District Court for the Southern District of New York.


It remains unclear whether a new wave of litigation — propelled by stronger climate science, reports about how much some companies knew about climate change decades ago, and somewhat divergent legal strategies — will succeed where those efforts failed.

In California last year, Marin County, San Mateo County and the city of Imperial Beach similarly sued a group of fossil fuel companies over damage related to climate change — citing a theory called “public nuisance,” which basically argues that companies are causing an injury to the localities under common law. The cities of San Francisco and Oakland and the city and county of Santa Cruz have also filed suit.

“I think the significant development here is that this is the first of these cases in this last year that’s filed outside of California,” said Michael Burger, who directs the Sabin Center for Climate Change Law at Columbia University. If more and more localities sue, “we might be able to see adequate pressure applied to these companies to inspire action on climate change,” he said.

So far, that has not been the response. ExxonMobil has instead reacted strongly to the claims, seeking in Texas court to depose California state officials and others involved in bringing the cases for “potential claims of abuse of process, civil conspiracy, and violation of ExxonMobil’s civil rights.”

Climate change “is a complex societal challenge that should be addressed through sound government policy and cultural change to drive low-carbon choices for businesses and consumers,” Curtis Smith, head of U.S. media relations for Shell, wrote by email, “not by the courts.”

BP and ConocoPhillips, two other defendants named in the lawsuit, declined to comment.

Exxon responded to New York’s lawsuit on its blog, where the firm has also challenged investigative reports from InsideClimate News and the Los Angeles Times that showed the company was an early pioneer in climate-change science in the 1980s, reports that were cited in the suit.

“ExxonMobil welcomes any well-meaning and good faith attempt to address the risks of climate change,” wrote Suzanne McCarron, Exxon’s vice president of public and government affairs. “Reducing greenhouse gas emissions is a global issue and requires global participation and actions. Lawsuits of this kind — filed by trial attorneys against an industry that provides products we all rely upon to power the economy and enable our domestic life — simply do not do that.”


Richmond, California has become the ninth city in less than a year to bring major fossil fuel companies to court over climate change. On Monday, the city announced that it was filing a lawsuit against 29 oil, gas, and coal companies — including Chevron, BP, and Exxon — to try and hold them accountable for their role in climate change and its impacts on the community.

The lawsuit comes less than two weeks after New York City became the largest city to file a lawsuit against fossil fuel companies for their role in climate change in the hopes of obtaining funds to help offset the cost of adaptation and mitigation projects related to sea level rise. Alongside New York, seven other California cities and counties have filed lawsuits against a range of oil, gas, and coal companies, each seeking damages worth billions of dollars to help pay for current and future infrastructure updates necessitated by climate change. Los Angeles’ city council has also introduced a motion asking the city attorney to look into potentially filing a similar lawsuit on behalf of the city.

Unlike other cities and counties that have filed lawsuits, however, Richmond argues that it is uniquely vulnerable to the impacts of climate change because of both its location and its particular economic reality. Richmond is surrounded on three sides by water, and is home to some of the poorest communities in the San Francisco Bay Area, with a median household income of $55,102 and poverty rate of 17.5 percent, according to the U.S. Census. Richmond is also a predominantly Hispanic and black community that has struggled with industrial pollution due to the presence of several oil refineries and plants operated by Chevron.

In previous instances, climate litigation has found little success because of how difficult it has been to tie particular events or consequences to specific actors. In 2008, for instance, the Alaskan village of Kivalina filed a lawsuit against fossil fuel companies for their role in sea level rise; a year later, a district court dismissed the lawsuit because of a lack of evidence linking sea level rise to the actions of particular fossil fuel companies. Because greenhouse gas emissions are created by almost everyone — from companies extracting oil to people driving cars — it’s impossible, the court claimed, to pin the consequences of climate change on a single, or handful, of particularly bad actors.

The body of science attributing specific events or consequences to climate change has evolved significantly in the years since the Kivalina lawsuit, however. Scientists can now determine to what extent climate change made a particular event such as a hurricane, wildfires, or drought more likely or more extreme. Additionally, a growing body of science now exists tying a handful of major fossil fuel companies, known as the Carbon Majors, to post-industrial greenhouse gas emissions. According to a 2017 report from the CDP and the Climate Accountability Institute, just 100 companies are responsible for 70 percent of the world’s greenhouse gas emissions since 1988.

.Not just climate concerns, but long time practices of cooperation with corrupt regimes are now coming back to haunt Oil companies.

Houston Chronicle:

WASHINGTON – It started with Brazil’s national oil company, then the clients of a consulting firm in Monaco and two of Europe’s largest oil companies, and with each revelation came new investigations involving new companies.

Big names in Houston’s energy world, like KBR, Shell and SBM Offshore, were suddenly having to explain how they came to win drilling rights and contracts worth billions of dollars in countries like Nigeria, Angola and Brazil.

For close to a century oil fortunes have been made and lost in the developing world, but a series of sprawling corruption investigations has thrown wrench into that paradigm, ensnaring oil and gas corporations around the world, while putting a microscope on how countries come to sign over rights to their oil and mineral deposits.

Nations – developed and developing alike – are taking a harder line on bribes and self-dealing long swept under the rug. At the same time, digital leaks such as the Panama Papers are making public vast troves of incriminating corporate and government documents that in an earlier age might never seen the light of day.

Such investigations have touched a multitude of industries – from telecom to technology and health care. But considering its long history operating in the developing world, none are as exposed as the oil and gas industry, which is centered in Houston and drives the Texas economy.

“I don’t want to say this is the new normal, but this should not be viewed as a high water mark,” said Jason Varnado, a former U.S. prosecutor in Houston and now an attorney with international law firm Jones Day. “No industry operates in more high risk markets than the energy industry.”

In the span of less than a month last year, the Houston-based subsidiaries of oil equipment giants Keppel Offshore & Marine and SBM Offshore both pleaded guilty to bribery charges stemming from a long-running Brazilian corruption investigation. The companies agreed to pay the U.S. Justice Department a combined $660 million in penalties.

British and American prosecutors, meanwhile, are moving ahead on an investigation into how a Monaco firm came to arrange contracts across the Middle East, Africa and Central Asia. The case has drawn in players from across the global oil industry, including the Houston firms FMC Technologies, Weatherford International and KBR, a former subsidiary of Haliburton.

In March, top executives from Royal Dutch Shell and the Italian oil major Eni will go on trial in Milan in what is billed as the largest corporate bribery case in history. Among the accused are Shell’s former head of international oil development, Malcolm Brinded, and Eni’s CEO Claudio Descalzi, who are alleged to have paid $1.1 billion to a former Nigerian oil minister to gain access to a lucrative oil field off the West African coast.

Driving the trials and plea deals are two scandals. In Brazil, an ongoing corruption investigation has uncovered that executives at the state-owned oil company Petrobras took billions of dollars in bribes in exchange for awarding lucrative oil field contracts, part of a sweeping network of graft that has led to charges against numerous Brazilian government officials, including former president Luiz Inácio Lula da Silva.

In 2016, the Australian newspaper The Age and the Huffington Post published a damning report that an obscure family-owned company in Monaco, named Unaoil, had paid millions of dollars in bribes Iraq, Iran, Angola, Lybia and other countries. In exchange, billions of dollars in oil field contracts went to some of the world’s largest corporations, including the British manufacturer Rolls Royce and the Korean conglomerate Samsung, in addition to a laundry list oil and gas companies.

The publications cited a “a vast cache of leaked emails and documents,” setting off multiple investigations around the globe.


4 Responses to “The Weekend Wonk: Growing Legal Wolfpack Hunting Oil Industry on Climate, Corruption”

  1. Gingerbaker Says:

    One would think that with all the billionaires out there, some of them would still have ethics, and would have formed not only think tanks but legal shark tanks to pursue social justice.

    It’s about fracking time this sort of thing was literally prosecuted – there are a lot of people and corporations who deserve to be sued into oblivion.

    • rhymeswithgoalie Says:

      “One would think that with all the billionaires out there, some of them would still have ethics…”

      The Bill and Melinda Gates Foundation (with additional donations from Warren Buffet) has done a shitload of the long, steady and costly boots-on-the-ground work that it takes to improve the lives of millions of people. It’s boring, unglamorous and tedious in a way that keeps it out of the nightly news.

      • Gingerbaker Says:

        Ah, yes, the Gates foundation. That will not fund abortion, but supports Common Core – is that the one? The subject of this report:

        Click to access gjn_gates_report_june_2016_web_final_version_2.pdf

        OK, nobody is perfect. They do some good work.

        But we have been watching the Republicans steal the very basis of democracy for two decades. It takes money to fight them. And I do not see them being cut off at the knees. Legally. Tactically.

        How can a billionaire with real ethics support the DNC? Why must we live in this bearded Spock universe? Does anyone on the left with real money have any real fight in them?

        • J4Zonian Says:

          “The foundation reinforces the myth that charity and not justice is the key to development”

          Good reading, Gingerbaker,

          I don’t know much about what the Gates Foundation does, but what I’ve heard Gates say (and this piece reinforces it) is woefully misguided–looking to help fund more of the same problems instead of looking for actual solutions.

          We can’t count on villainaires to do what’s needed; even those few who overcome the addiction to more are almost all relentlessly focused on conventional things, exactly the things that have caused the mess we’re in.

          That said, there are a few people with money doing good things. Bill and Lynne Twist fund the Pachamama Alliance, who do several excellent education/activist training programs, the Awakening the Dreamer Symposium and Game Changers Intensive.

          And anyone making anywhere near the median income in the US ($59,000) is fantastically wealthy–globally and by any rational standard of needs. According to the PA’s ATD Symposium, if you have 4 things–a roof, a bed, clothes in a closet and food in a refrigerator, you have more than 85% of the people in the world have. So everyone making anywhere near that $60K has the power to do more good with it than more than 90% of the people in the world. (You have to have a lot more than the 4 things to have significant disposable income or usually, time, to spend on causes.) However, ecological (and I think social) harm is directly linked to income, so the trick is for society to drastically reduce the income and wealth of the rich, somewhat increase the income of the poor, while ensuring security, health care and education.

          Full disclosure: I’ve been involved in both the programs mentioned.

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