Global Goals, Local Interests Spark Environmental Cases

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By Steven M. Sellers

Nov. 2 — Transboundary pollution is a matter of increasing global concern, and the adoption of new international, national and local environmental laws are presenting challenges for businesses and litigators, a panel of lawyers and academics said Oct. 29.

Differences between global pollution standards and the laws of individual nations are driving an increase in litigation, the lawyers said.

“Environmental questions are becoming increasingly global,” said environmental lawyer Jonathan Kahn, of Blake, Cassels & Graydon in Toronto, Canada.

The global growth of corporations and citizen concern for the environment are fueling an uptick in international environmental agreements, action by nongovernmental organizations and public pressure via social media, according to Robert Percival, director of the environmental law program at the University of Maryland law school, Baltimore, Md.

“We're seeing globalization have a profound effect on environmental law, blurring the distinction between public and private interests,” Percival said. “We're also seeing more transnational litigation.”

Percival referred to social pressures which simultaneously animate private business decisions and governments' public policy choices.

The blur includes the boundaries between international and national environmental governance that arise in environmental cases, panel member Erin Daly, a professor at the Widener University Delaware Law School, Wilmington, Del., told Bloomberg BNA Nov. 3.

Transparency Creates Accountability

Questionable environmental practices have caught the eye of social media worldwide—and that creates challenges for business and fodder for litigation, according to Percival.

He cited as two examples a database of toxic chemicals created by Chinese citizens concerned about environmental risks in their country, and a social media campaign by two Michigan Girl Scouts over palm oil used in Girl Scout cookies.

That petition called on Girl Scouts of the U.S.A. to stop using the oil—citing global warming caused by deforestation of palm trees in Indonesia and Malaysia—and it prompted the organization to take steps to change the ingredients in its cookies.

These citizen efforts are a powerful motivator for businesses to carefully assess the environmental impact of their activities in other countries, Percival said. “A YouTube video can change the world,” he said.

“You're seeing corporate responsibility extending to the supply chain, so you must use your marketing power to influence those suppliers,” he said.

“It's not only important to win in court, but also the court of public opinion,” Percival said. Engagement of non-governmental organizations is important to ensure compliance with foreign environmental laws, he said.

Environmental, Social Issues Blend

Social issues also should inform a company's assessment of local environmental laws, according to Charles DiLeva, chief counsel of the Environmental and International Law Practice Group for the World Bank in Washington, D.C.

“There is an immediate blending of the environmental issues and the social issues, such as indigenous peoples' rights,” DiLeva said.

Even when there's theoretical agreement among nations about global pollution risks, national sovereignty can create areas of quick disagreement.

“Are the new standards affecting the growth of developing countries, or are they interfering with its sovereignty?” DiLeva asked. “Some things we see as socially progressive may be a problem for some of these countries.”

Chevron, Chinese Drywall Judgments Cited

Corporate accountability for international contamination is finding its way to the world's courts, too, and enforcement of foreign judgments is on the rise, Percival said.

That means U.S. companies that operate in other countries, or who have suppliers that do, may be held responsible for environmental harm in a forum other than the nation where the harm occurred.

The Supreme Court of Canada ruled in September that Ecuadorian villagers could use Canada's courts to try to enforce a $9.5 billion judgment against Chevron Corp. issued by an Ecuadorian trial court in 2011. The court cited a need for comity among national judicial systems in a time of burgeoning cross-border commerce (30 TXLR 871, 9/10/15).

Another example, Percival said, was the agreement last March by Taishan Gypsum Co., the Chinese manufacturer of contaminated drywall used in American homes, to pay a $2.76 million default judgment and rejoin the multi-district drywall litigation in the U.S. District Court for the Eastern District of Louisiana (16 CLASS 343, 3/27/15).

Taishan had ignored U.S. court orders to participate in the litigation as a defendant, but relented “because of its need to continue economic relations with the United States,” Percival said.

“In the future, you're going to see a lot of litigation over whether you can enforce these judgments in other courts,” Percival said.

State Sovereignty May Complicate Things

Global environmental interests and state sovereignty interests sometimes collide, Daly said.

“We're seeing more countries adopting or amending constitutions in many areas, and they are addressing more rights,” including environmental rights, said Daly, who writes extensively on comparative constitutional law.

The tension between national interests is evident in a pending U.S. Court of Appeals for the Ninth Circuit case, Pakootas v. Teck Cominco Metals Ltd.,No. 15-35228, in which the Canadian government argues that legal issues stemming from the airborne contaminants from a smelter in British Columbia were governed by a treaty, not the Comprehensive Environmental Response, Compensation, and Liability Act (30 TXLR 1025, 10/22/15).

The Department of Justice rebuked Canada's amicus curiae argument that U.S. courts were an improper venue, arguing in its own amicus brief that the treaty, at most, “resolved a narrow set of questions, and a wholly discretionary process, based on the mutual consent of the Governments, that the United States potentially could use to raise additional damage claims arising from” the smelter.

“In a way, it's a great example of the uncertain boundaries of international and national environmental governance,” Daly told Bloomberg BNA in a Nov. 3 e-mail.

“Both are potentially relevant but may impose inconsistent obligations and the questions of applicability can be particularly thorny in transboundary disputes. It's also a good example of how a nation's environmental law can embody and advance its sovereignty interests,” Daly said.

“It's going to be an American court deciding the law; the only question is whether U.S. law or international law applies. So, as in any other case, the parties here will rely on the law that advances their interests,” Daly said.

“Both the U.S. and Canada want to protect their sovereignty and both have environmental laws—though neither has environmental constitutional law—but here the international agreement advances Canada's particular interests, while the U.S. statutory law” advances U.S. interests, Daly said.

‘Environmental Constitutionalism.'

The stakes become higher still when a nation's constitution conflicts with—or adds conditions to—inherently broad transnational environmental laws.

“Environmental constitutionalism is a growing phenomenon around the world,” Daly said. She said 147 nations had environmental constitutional protections as of 2012, up from 135 in 2005.

“About half of the world's population lives in a nation where the environment has constitutional protection on some level,” she said.

Daly added that some nations' constitutions explicitly protect the right to a healthful environment.

“Read the constitutions and case law in the countries where you do business, and be mindful of the fact that constitutional obligations don't just run to governments, but also to private parties,” Daly said.

Future in the Air?

One of the next global environmental frontiers is literally in the air, according to Percival.

“The EPA is taking the first steps to address greenhouse gas emissions from aircraft as a result of European Union regulations,” Percival said.

He referred to a regulatory announcement of the agency last June proposing regulations over carbon monoxide emissions from certain aircraft engines that “contribute to the air pollution that causes climate change and endangers public health and welfare” under the Clean Air Act (112 DEN A-1, 6/11/15).

The airline industry, while not contesting the EPA's determination that greenhouse gas emissions from aircraft endanger human health and the environment, has urged the agency to hew to international standards being developed by the United Nations' International Civil Aviation Organization (46 ER 2643, 9/11/15).

To contact the reporter on this story: Steven M. Sellers in Washington at ssellers@bna.com

To contact the editor responsible for this story: Peter Hayes at phayes@bna.com