By: Jochem de Hoop, Junior Research Associate, PILPG-NL
On May 26, 2021, the District Court of The Hague ordered Royal Dutch Shell (RDS) to reduce the CO2 emissions of the Shell Group by a net 45% before 2030, compared to 2019 levels. The court considered that the CO2 emissions of the Shell Group, its suppliers, and customers exceed those of many states. This contributes to global warming, which causes climate change and creates serious risks to human rights, such as the right to life and the right to respect for private and family life. While individuals and civil society organizations cannot directly invoke international and European human rights obligations against companies, they still should respect human rights and apply the relevant standards. The court decided that the Shell Group has an obligation to comply with international human rights obligations, the UN Guiding Principles on Business and Human Rights (UNGP), and the goals of the 2015 Paris Agreement, in accordance with the unwritten standard of care under Dutch tort law.
This blog post focuses on the responsibility of the Royal Dutch Shell to ensure its policies comply with human rights obligations under international and European law and the interpretation of the unwritten standard of care under Dutch tort law.
Background of the Case
In 2019, a group of seven NGOs, including Milieudefensie and Greenpeace, and 17,379 individuals filed a class-action lawsuit against RDS. The claimants argued that RDS failed to reduce CO2 emissions by not investing more in renewable energy. On this basis, they argued that RDS violated the unwritten standard of care laid down in Book 6 Section 162 of the Dutch Civil Code, which implies a duty of care for individuals and companies to act in accordance with generally accepted norms of social conduct, and the right to life and the right to family life under Articles 2 and 8 of the European Convention on Human Rights (ECHR).
As one of the world’s largest producers and suppliers of fossil fuels, RDS, which is the parent company of the Shell Group and is headquartered in the Netherlands, is responsible for a significant amount of CO2 emissions that exceed those of many states, including the Netherlands. RDS endorses the climate goals of the Paris Agreement and expressed support for the European Green Deal, which contains the European Union’s climate policies, and expressed support for the National Climate Agreement, which is part of the Dutch climate policy. However, Milieudefensie et al. argued that RDS instead increases investments in oil and gas and therefore fails to adhere to the climate targets in accordance with the Paris Agreement.
Responsibility of Corporations to Comply with Human Rights Obligations
In the decision, the court addressed the question of whether RDS has a legal obligation to reduce CO2 emissions in accordance with the goals of the Paris Agreement. The court decided that it would interpret the unwritten standard of care under Dutch tort law based on the relevant facts and circumstances of the case, scientific reports on climate change, the international consensus that human rights offer protection against climate change and environmental harm, and that companies must respect human rights.
Based on the Urgenda judgment, a climate litigation case against the Dutch government, the court reiterated that Articles 2 and 8 ECHR offer protection against the impact of dangerous climate change as a result of CO2 emissions. Similarly, the UN Human Rights Committee determined that Articles 6 and 17 of the International Covenant on Civil and Political Rights (ICCPR) offer protection against environmental harm, climate change, and unsustainable development. The court considered that the impact of dangerous climate change includes health risks and deaths due to heat waves, deterioration of air quality, increase of UV exposure and water-related problems due to rising sea levels. These serious and irreversible consequences of dangerous climate change pose a threat to the human rights of current and future generations of Dutch residents and inhabitants of the Wadden region, an archipelago along the Northwestern coast of the Netherlands, Germany, and Denmark.
In addition, the court followed the UNGP, which is an authoritative and internationally recognized non-binding instrument that outlines the responsibilities of states and businesses in relation to human rights. Interestingly, the court considered that even though the UNGP does not create new rights or legally binding obligations, it can provide a guideline for the interpretation of the unwritten standard of care. In accordance with the UNGP, the court decided that companies have a duty to respect human rights. This duty requires companies to avoid causing or contributing to negative human rights impacts through their own activities. Moreover, it requires companies to prevent or mitigate negative human rights impacts that result from their operations, products or services. Even though the court acknowledged that RDS is not the only actor responsible for mitigating the impact of dangerous climate change, it concluded that RDS has an individual responsibility to respect human rights, which also extends to its suppliers and customers. This means that RDS has to ensure through its corporate policy that its own activities result in a reduction of CO2 emissions. Moreover, it has a “significant best-efforts obligation” with respect to its suppliers and customers, which means that RDS should try to mitigate or prevent the serious human rights risks resulting from the CO2 emissions generated by its suppliers and customers as much as possible.
Implications for Future Climate Litigation Cases
The decision by the Dutch district court has unprecedented implications for future climate litigation cases against big oil companies. It is the first time that a court decided that a company has a legal obligation to reduce CO2 emissions in accordance with the goals of the Paris Agreement. Furthermore, it is the first time that a court applied international human rights standards and soft law instruments to impose a legally binding obligation for a company to reduce CO2 emissions. While the decision does not have direct consequences for climate litigation cases abroad, other domestic courts could replicate the arguments in relation to the application of international human rights standards and international environmental law. Considering that the concept of a standard of care exists in other legal systems in Europe and other parts of the world, these courts could similarly apply international human rights standards and soft law instruments to companies. For instance, French NGOs and local authorities have filed a lawsuit against Total for violating the duty of vigilance under French law, which stipulates that large companies have to take appropriate measures to prevent any human rights violations or environmental damage resulting from their activities.
Concluding Remarks
While there have been previous lawsuits against states for violations of human rights obligations and environmental law in relation to climate change, the Milieudefensie et al. v. RDS decision is the first case in which a court decided that a multinational company has the responsibility to reduce CO2 emissions in accordance with international human rights obligations and environmental law. The application of international human rights standards and soft law instruments in interpreting the unwritten standard of care provides an interesting approach to hold companies responsible using international law. While this could set a legal precedent for future climate litigation cases, it is important to note that RDS has announced that it will appeal the decision in the Dutch Court of Appeal. So it remains to be seen whether this decision will have a lasting effect on global climate litigation.