Briefing for climate lawsuit Friends of the Earth Netherlands vs Shell

Tuesday 15 December and Thursday 17 December are the third and fourth days of hearings in the lawsuit of Friends of the Earth NL vs. Shell.

Shell can easily avoid a lengthy legal process by accepting the Follow This climate resolution, as Friends of the Earth NL uses Shell’s systematic rejection of this climate resolution as evidence. Follow This just filed their 6th climate resolution for 2021.

“Shell’s defence is based on the notion that there are no substitutes for fossil fuels, an idea that apparently is still current with Shell’s top management.”

  • Climate lawyer Roger Cox is not asking Shell for damages compensation, but rather to commit itself to the Paris Climate Agreement. *
  • The lawsuit is comparable to the lawsuit against the Dutch government (the Urgenda case) that was won by the same lawyer. #
  • The claim in the case is comparable to the request made of Shell by the Follow This climate resolution.
  • Follow This just filed their 6th climate resolution that will come to vote at Shell’s AGM in May 2021.
  • Cox therefore uses Shell’s rejection of the climate resolution as “hard and formal proof that Shell deliberately does not incorporate the Paris objectives into their policies.” (press conference in 2018)
  • Cox also uses the reaction to the Follow This resolution by Shell CEO Ben van Beurden “We have ambitions that are completely consistent and compatible with the Paris agreement” (shareholders meeting in 2018) as evidence that the CEO is misleading his shareholders https://www.follow-this.org/agm-2018-debate/.
  • The shareholder activism of Follow This and the Friends of the Earth lawsuit are interrelated but independent of each other.
  • Judgment will be couple of months after the hearings.
  • Shell’s most important substantive defence is that “if the court forces us to produce less oil and gas, then other companies will produce it that are even more polluting,” based on one report ##.

Follow This comments on the lawsuit:

  • “Shell’s defence is based on the notion that there are no substitutes for fossil fuels, an idea that apparently is still current with Shell’s top management. Oil and gas companies do not have to stop providing energy, but they must replace fossil energy with renewable energy.” “If motorists charge their electric cars using wind energy, they no longer need fossil fuels to drive.”
  • “Shell’s argument against Roger Cox: ‘You should not be going after us; you should go after the entire oil and gas industry, or rather the whole world’ is one that we have heard often enough, but you have to begin somewhere.”
  • “The only thing that the world, the shareholders, and the plaintiffs in this case ask of Shell, and what the court will decide in the end: go along with Paris and replace fossil fuels with renewable energy – a course that is both technologically and economically feasible.”
  • “Friends of the Earth will win this case in the end, unless Shell simply commits itself to emissions reductions in line with the Paris Agreement.”

Shell’s defence

Shell’s defence relies heavily on a report by the University of Groningen commissioned by Shell, in which Machiel Mulder and three other economists claim that restrictions in production of oil and gas by one company will always be compensated by other companies. As evidence, they argue that the production restrictions by Iran after the revolution (1978) and by Kuwait after the invasion by Iraq (1990) have not led to less production of oil on a global scale; other countries filled in the gap. Shell’s lawyers cite this report repeatedly in their defence: https://www.rug.nl/news/2020/11/minder-olie-en-gaswinning-door-shell-geen-effect-op-wereldwijd-verbruik

* This would mean emissions reductions of 45% by 2020, based on a 1.5°C scenario.

# The legal argument: if one party (a company or government) causes danger and knows how to avert that danger, a judge can force that party to act. Dutch case law is the so-called basement hatch judgment: although there is no Dutch law that requires closing basement hatches, a court ordered someone to shut an open basement hatch because it posed a preventable danger.

## Shell also has procedural objections: (1) the courts are not the place to solve the climate problem, and (2) one court in one country is not the right court to conduct a case against a company operating in 90 countries/

Read more? Q&A by Friends of the Earth (English): https://en.milieudefensie.nl/climate-case-shell/frequently-asked-questions-about-the-climate-lawsuit-against-shell

Dutch version