An international legal case could expose Australian coal and gas companies to billions of dollars in climate litigation
By Dr Seema Javed
A lawsuit, in which German energy company RWE could be held liable for climate change damages, is reaching its final stages with the German court visiting Peru this week to inspect a glacier and lake at the centre of the case. This climate litigation case is currently before the German court and could have wide-reaching implications for Australia and the rest of the world. The case is likely to be in public view in the next few weeks, as the German court travels to Peru to hear evidence.
This the first international case to quantify the contribution that fossil fuels companies have made to global warming, and potentially allow people affected by the impacts of climate disasters to sue for damages, with implications for climate litigation in Australia. The prosecution is arguing that a Peruvian farmer, Saúl Luciano Lliuya is at risk from a melting glacier above his town and that German energy company RWE is partially responsible due to its historical emissions. RWE is also a major purchaser of Woodside’s LNG production.
RWE is one of Europe’s largest carbon polluters, responsible for 0.47% of global historical carbon emissions.
A Peruvian farmer, Saúl Luciano Lliuya, issued RWE for a share of the costs needed to prevent a devastating flood from a lake near his home. Lliuya lives in Huaraz, a city that is at risk from a glacial lake outburst flood due to the melting of a glacier. They need to reduce the water levels in the lake, an intervention with an estimated cost of $3.5 million.
Lliuya argues that the melting of the glacier is caused by climate change – a claim that is backed up by a peer-reviewed scientific study – and that RWE should pay a proportional share of the cost of protecting the city, amounting to €17,000.
The court has already agreed that RWE would be liable for the damages if it can be proved that the glacier poses a flood risk and that climate change has caused it to melt – this is a groundbreaking decision that had not been made in any other case.
The German court handling the case will visit Peru between May 24-27 to assess whether the glacier is indeed at risk of causing a flood.
The case began in 2015 and is now reaching its final stages: it is expected to reach a verdict in late 2022/early 2023.
Australian fossil fuel companies are watching the result of the case – which if successful could set a legal precedent where victims of climate change could sue these companies for damages. It could mean that victims of the Lismore floods or the black summer bushfires could sue Australian companies such as BHP, which are among the world’s 90 private companies that are known to have caused two-thirds of all global greenhouse gas emissions since the start of industrialisation.
The implications of this case for Australia are significant, with 2 Australian companies on the list of those most responsible for global emissions. This includes BHP, which was found to have caused 0.52% of global emissions, and Rio Tinto with 0.43%. Gas giant Woodside would also be significantly exposed to this litigation, having recently voted to merge with BHPs oil and gas portfolio to fund its plans for new gas wells in Western Australia: BP is another company on the list.
If this test case is successful, there could be a flood of similar cases in Australia, with flood and bushfire victims able to sue BHP and Rio Tinto for a percentage of their costs that are directly linked to climate change-induced natural disasters. While the individual damages for a house destroyed by a climate disaster would be modest, the sheer number of people affected would add up to very significant liability for these companies. It would also open them up to continued future litigation, for climate impacts in the future.
Dr Seema Javed
Environmentalist & Communicator for Climate Change