Energy giants ‘using Dutch treaties to stop climate change laws’

The Dutch government was sued after it decided to shut its coal-fired power stations. Photo: Depositphotos.com

Multinational energy companies such as Shell, ExxonMobil and Total are using bilateral treaties signed by the Netherlands to block environmental laws in developing countries, researchers have claimed.

The investigative agency Somo, which monitors the activities of multinationals, said 71% of trade disputes under the terms of the treaties were started by letterbox companies registered in the Netherlands.

The Dutch government has signed 75 bilateral trade treaties since 1963, starting with an agreement with Tunisia.

The treaties are supposed to protect foreign investors from having their assets expropriated, but Somo says energy firms are misusing them to stop governments carrying out reforms to curb pollution and protect the environment.

“It is unacceptable that the Netherlands continues to play a pivotal role in claims against governments in the global South,” researcher Bart-Jan Verbeek told Trouw.

Companies have claimed a total of €55 bn via the Netherlands against states including Nigeria, the Philippines and Venezuela, under the treaties’ arbitration procedure, Somo found, while €11.5 bn had been paid out. Fossil fuel providers are involved in one-fifth of Dutch cases.

The Netherlands is the second most popular jurisdiction for bilateral trade disputes, after the United States, according to Somo. But 40% of cases involved Dutch-registered companies that were otherwise inactive – so-called letterbox firms – while three-quarters were initiated by non-Dutch enterprises.

Somo described the use of arbitration procedures to influence countries’ environmental policies as “legal blackmail”, while the United Nations’ climate panel warned against the practice last year.

The Netherlands withdrew from the Energy Charter Treaty last year after it German companies RWE and Uniper filed claims for damages over the government’s decision to close its coal-fired power stations. Energy minister Rob Jetten said the treaty was incompatible with the climate change targets set out in the Paris Agreements.

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