The differences between the approach taken by the Courts in Fonterra and Milieudefensie are striking. In our previous article on this topic we noted that there was a similarity between Milieudefensie and the approach taken in Fonterra in the New Zealand High Court: now the two claims stand in stark contrast to one and other.
By way of a recap, Milieudefensie was a class action spearheaded by several environmental NGOs and was brought against Royal Dutch Shell ("RDS"), the head of a multinational group of companies headquartered in the Netherlands and the UK (the "Shell Group"). As in Fonterra, the claimants argued that RDS owed a duty to Dutch citizens to protect them from the adverse effects of climate change (although in Milieudefensie the duty was expressly against all Dutch citizens whereas in Fonterra the duty was to an individual, who brought a claim on behalf of himself and an undefined class of similar people). The duty in question was based on a provision of the Dutch Civil Code, somewhat analogous to English law tortious concepts, that provides for a private law cause of action should a defendant breach an "unwritten standard of care" owed by it to a claimant. The claimants alleged that RDS breached the unwritten standard of care it owed to them by failing, in implementing globally applicable Shell Group corporate policies, to commit sufficiently to reducing its level of emissions to an appropriate level by 2030.
The Dutch District Court agreed with the claimants and held that RDS had breached the unwritten standard of care it owed by failing to implement appropriate corporate policies. It considered the existing policies to be "intangible, undefined and non-binding". The Court also considered the policies, which focused on carbon reduction by 2050, to be insufficient: RDS needed to implement policies that would strive for a reduction by 2030 across the entire Shell Group.
Accepting, of course, that there are different legal traditions between the Netherlands and New Zealand, the Court of Appeal's ruling in Fonterra takes the opposite approach, on similar issues, to that adopted in Milieudefensie. For example, the Court in Milieudefensie was very comfortable in both (i) creating a new private law duty and (ii) making an order with global consequences — whereas in Fonterra the claim was expressly struck out because the Court of Appeal was unwilling to do so. One particularly interesting difference between the two cases was how the Courts in the respective jurisdictions dealt with the issue of whether greenhouse gas emissions, generally, were "unlawful". In both cases, the Courts considered that the simple act of emitting greenhouse gases was lawful, but:
- in Fonterra, the claimant accepted that emissions themselves were lawful but instead argued that the defendants should be required to reach a point of net zero emissions by 2030 (under supervision of the Court). The Court of Appeal had difficulties with this approach because the claimant would not be seeking the prohibition of an act that is lawful until it reached a particular court-mandated level, subject to any offsetting. The Court considered this would amount to some form of judicial "emissions trading scheme" and this would be outside of the domain of tort law because, essentially, the claimant was not seeking redress flowing from an inherently harmful act but, rather, asking the Court to declare that a lawful act becomes unlawful once it hits a certain threshold; whereas
- in Milieudefensie the Court acknowledged that RDS's emissions were not "currently unlawful" but nevertheless ordered RDS to "limit or cause to be limited the aggregate volume of all CO2 emissions into the atmosphere … by at least net 45% at end 2030…". In essence, the Dutch Court was willing to make an order to reduce emissions even in circumstances where the underlying act by RDS (i.e. the emission of greenhouse gases into the atmosphere) was lawful.