environmental damage

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Consultations are underway on a proposed law to prohibit large UK businesses from using products sourced from illegally deforested lands.

By Paul A. Davies and Michael D. Green

On 25 August 2020, the Department for Environment, Food and Rural Affairs (Defra) launched a consultation on a new law aimed at preventing large companies from using commodities grown on land that has been illegally deforested (known as forest risk commodities). The consultation includes seven questions to assess whether large companies should be obligated to perform due diligence on their supply chains, and whether large companies should be prohibited from using forest risk commodities. Key forest risk commodities include palm oil, cocoa, soy, and rubber.

Officials seek to “improve the efficiency and cost effectiveness” of NRDAs — which could help expedite the resolution of claims.

By Janice M. Schneider, Gary P. Gengel, Joel C. Beauvais, Kegan A. Brown, and Thomas C. Pearce

On August 27, 2018, the US Department of the Interior (DOI) issued an Advance Notice of Proposed Rulemaking (ANPR) requesting comments by October 26, 2018 on potential changes to its natural resource damage assessment (NRDA) regulations under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). This law authorizes federal, state, and tribal trustees to recover natural resource damages (NRD) for injuries to natural resources resulting from hazardous substance releases. NRDAs that follow the DOI regulations are entitled to a rebuttable presumption of validity in later court proceedings.

In the ANPR, DOI seeks input on how to “improve the efficiency and cost effectiveness” of NRDAs and accelerate restoration of injured natural resources. While there are many areas in which to improve the regulations that will be considered, DOI specifically requests comment on the following six issues:

China’s uneven distribution of water sources presents unique difficulties to China as demand for water is increasing rapidly.

By Paul A. Davies and R. Andrew Westgate

China’s water supply problems are well-known globally. However, the main problem facing China is how to distribute its water, rather than lack of water per se. 80% of China’s water supply lies in southern China. But this water cannot be used by the population of 12 Chinese provinces representing 41% of its total population, 38% of Chinese agriculture, 46% of its industry, and 50% of its power generation. Eight of these provinces are currently experiencing acute water scarcity, while in four provinces water is merely “scarce,” and two provinces are largely desert. Moreover, the problem is getting worse, with 28,000 rivers in China having dried up over the past 25 years. And China’s appetite for water continues to grow, with consumption forecast to rise to 670 billion cubic meters a year by the early 2020s.

Adding to the problem is the fact that coal mining is a water-intensive as well as polluting process, and 85% of coal reserves in China are located in provinces where water is scarce and must be shared with a large agriculture industry. Reportedly 20% of all water use in China is for mining, processing, or consumption of coal, and almost 70% is for agricultural purposes. Rapid growth in water demand, combined with a reliance on groundwater drawn from aquifers, has resulted in a new problem — subsidence. This poses a threat to over 50 cities in China and is being closely monitored by the government.

By Joern Kassow and Patrick Braasch

Latham has previously written about the Lliuya v. RWE AG case, in which a Peruvian farmer has sought damages from German energy giant RWE for climate change effects in his home country. The Higher Regional Court of Hamm indicated during oral hearings that it would likely proceed to take evidence. The court has since issued its decision, providing further insight and analysis of the case.

RWE claimed that it could not be held liable for damages, as the company held valid environmental permits under emission control regulations relating to the operations of its material CO2 emitting plants — and therefore the emissions were legal. However, the court rejected RWE’s claim, noting that Mr. Lliuya did not seek to shut down or limit RWE’s operation of business. The court further explained the fundamental legal principle that anyone who causes damages to third party property — even through lawful acts — generally may be liable. That RWE obtained, and presumably complied, with all required permits under German environmental law would therefore not preclude liability for the potential damage caused by the company’s lawful emissions.

By Jörn Kassow and Patrick Braasch

A German appeals court has indicated in a groundbreaking civil action that major CO2 producers may be directly liable for global environmental damage caused by climate change.

Mr Saúl Luciano Lliuya, a Peruvian farmer, has alleged that RWE AG, Germany’s second-largest electricity producer, is responsible for the impact of climate change in the Peruvian city of Huaraz — even though RWE does not operate in Peru. His claim invokes German civil law rules, according to which, property owners may claim damages from the person responsible for causing the pollution to the extent that the pollution in question would constitute unlawful interference. These rules generally correspond to the “polluter pays” principle that polluters should bear the costs of managing pollution to prevent damaging human health or the environment. Although the relevant legal principles are firmly established in German case law, the courts have not yet applied them to hold a single emitter of fossil fuels financially responsible for climate change impacts.