A company that does not respond to Milieudefensie is already morally disadvantaged

What now? The directors of 29 large companies active in the Netherlands must have all asked themselves this question when they received a letter from Milieudefensie almost two weeks ago. In it, the Dutch environmental organization asks for a clear climate plan that complies with the Paris Climate Agreement (2015) and the Glasgow Climate Pact (2021).

In the letter, Milieudefensie refers to the judgment of the court in The Hague in the case it had brought against Shell. The court ruled in favor of Milieudefensie in May last year and ruled that Shell’s CO₂emissions by 2030 must have been reduced by 45 percent compared to 2019. Major polluters have a responsibility to prevent dangerous climate change, Milieudefensie writes. „The verdict in the lawsuit between Milieudefensie and Royal Dutch Shell confirms that […] companies have a partial responsibility to prevent dangerous climate change.” Action is an obligation, Milieudefensie writes, “the law demands that of you”.

That is very ‘certain and oversimplified’, says Gerrit van der Veen, partner at law firm AKD and endowed professor of environmental law in Groningen. “In civil law, every case has to be reassessed. So you cannot say: what applies to Shell now applies to all companies.”

Lodewijk Smeehuijzen, professor of private law at the Free University in Amsterdam, agrees. He will soon publish an article on ‘effectiveness and legitimacy’ of the Shell judgment in the Netherlands Dutch Lawyers Magazine. In it he writes that the judge ‘cannot go beyond the facts alleged by the parties. That is problematic for a judgment that affects others than just those parties.”

Now Milieudefensie does not intend to start 29 lawsuits either. In the first instance, the letter is an invitation to start a conversation. “It is neither our goal nor our wish to enter into legal disputes with all the major polluters in the Netherlands,” writes Milieudefensie. But if it can’t be done willingly, it must be unwillingly. She doesn’t rule out going to court.

The letter can therefore be seen as a first step towards possible lawsuits. A necessary step, says Laura Burgers, assistant professor at the University of Amsterdam, where she obtained her PhD in 2020 on research into the democratic legitimacy of climate justice. According to her, an organization such as Milieudefensie is not allowed to ‘roughly summons’, as it is legally called. That is, going to court without warning. “Then the judge would declare Milieudefensie inadmissible,” says Burgers.

According to her, it is more attractive for all parties to reach an ‘amicable settlement’ – which in practice would amount to a climate plan that can be approved by Milieudefensie. “Shell’s defeat was partly due to Milieudefensie’s thorough preparations, which took years and in which a lot of information about the company was collected.”

The lawsuit began in April 2018 with a letter and then a draft subpoena, and did not lead to a ruling until more than three years later. That takes a lot of time, manpower and money.

Appeal

Van der Veen of law firm AKD goes one step further. He calls the letter “a smart move” pending the decision on appeal in the Shell case. “It may well be that the case ends differently than Milieudefensie would like. Then the organization is left empty-handed,” he says. “Now you set out, as it were, a parallel track: see how far you get in consultation, in getting plans on the table, assessing them and holding them accountable for implementation.”

According to Van der Veen, if Milieudefensie succeeds in this set-up, companies will find themselves in a self-binding trap. Perhaps they will be in a position from which they can no longer return, because they themselves have embarked on that path.”

Milieudefensie points out to the directors of the companies that they run a company ‘that can and must contribute to the systemic change that is necessary to prevent dangerous climate change’. For that reason, the companies should do the same as Shell.

The lawyers doubt whether that reasoning is correct. But according to university lecturer Burgers, although the Shell judgment is not legally binding for judges at home and abroad, it does have “persuasiveness because it will count as an apparently reasonable judgment”. She expects that on appeal “Shell will continue to have a climate obligation”. That was the most important conclusion of the verdict for Burgers anyway.

Van der Veen and Smeehuijzen cite as one of the most remarkable elements of the Shell judgment the great importance that is attached to ‘soft law‘ when implementing the unwritten standard of due care that applies to Shell. This concerns unwritten rules – and therefore not laws – about what is socially acceptable in a particular case, what we should do. For example, the court refers to the ‘Guiding Principles‘ for United Nations companies and to guidelines formulated by the University of Oxford for non-state actors.

“The judge has not observed any restrictions on the effect of this soft law,” says Smeehuijzen. “The guidelines drawn up by the University of Oxford have been adopted one-on-one. The judge says: this is what you have to do as Shell. That exercise is adventurous to say the least.”

“The verdict calls the soft law binding on Shell. You can seriously ask yourself whether that is the case,” says Van der Veen. “But it’s a verdict, so as long as another judge doesn’t think otherwise, this is applicable law. For Shell, and therefore also for other companies.”

Negative publicity

What should the 29 companies do now?

“They don’t have to do that much,” says Van der Veen. “You can’t just force companies to inspect their business operations. They do not have to comply with the request to come up with a detailed climate plan. In my opinion, companies that only send a note with the signature of the chairman of the board and a link to their website on which their climate plans are described are not acting unlawfully.”

Nevertheless, the companies would probably do well to sit down with Milieudefensie. “A party that doesn’t want anything is morally in a worse position, I suspect also in court,” said Van der Veen.

Moreover, litigation is also unattractive for a company, says Burgers. “It gives negative publicity and can lead to long-term uncertainty about what a judge will decide.”

Also read this story about multinationals after the Shell case

Smeehuijzen cannot well imagine that a situation will arise in which the civil court will regulate the climate problem, as in fact happened in the Shell case. “I don’t think that fits in our system. This must be coordinated by the legislator. But yes, if it doesn’t work, cracks can appear in how we are used to arrange this. I do not rule out the possibility that we will receive more such disruptive sentences.”