Chinese energy firms face increased litigation risk abroad

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In recent decades, public interest lawsuits have significantly promoted the global governance of climate change in Western countries.

According to statistics from the Center for Climate Change Economics and Policy (CCCEP), 1,841 climate change lawsuits had been filed around the world by last May, including 58 cases in the EU, 73 in the UK, 115 in Australia, and 1,384 in the US.

More than half of these cases were filed by environmental NGOs; one fifth by local governments; and a small percentage by individuals, companies or industry associations.

The most frequent defendants were central or federal governments, which were prosecuted in 73 percent of the lawsuits; followed by local or provincial governments (17 percent) and businesses (10 percent).

Since the early 2000s, energy companies have often been sued for extreme weather events that caused damage to vulnerable areas.

While claiming to be helping with the transition to a low-carbon future, their advertisements run the risk of getting them sued for misleading the public if they are not strictly accurate.

Energy giants such as British Petroleum, Exxon Mobil, Chevron, Shell, and Total have all been accused of this.

It’s quite possible that Chinese companies will face the same scrutiny as their Western counterparts. For example, Sinopec ranked 11th for total greenhouse gas emissions from 1965 to 2017 according to the Climate Accountability Institute, with the top 10 already regulars in the dock.

In addition, Chinese companies participating in infrastructure construction projects in developing countries are also likely to be involved in regional environmental issues, trade and legal disputes.

Going forward, Chinese firms should not only improve their ability to deal with overseas public interest lawsuits, but also the whole Chinese judicial community should encourage the practice of domestic environmental litigation so that Chinese society can raise its awareness of environmental protection, and alllow Chinese companies to better connect with the international community.