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Climate Change Litigation in Brazil and Latin America: an Increasing Trend That Companies Must Be Prepared For

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Climate Change Litigation in Brazil and Latin America: an Increasing Trend That Companies Must Be Prepared For Climate Change Litigation in Brazil and Latin America: An Increasing Trend That Companies Must Be Prepared For By Luiz Gustavo Bezerra, Gedham Gomes and Victor Rodrigues Summary Climate change litigation is Nations Framework Convention on Luiz Gustavo Bezerra already a firmly established trend in Climate Change (“UNFCCC”); the [email protected] North American and European coun- Kyoto Protocol; the 17 Sustainable Rio de Janeiro (T&C) tries, but it is still not widespread in Development Goals (one of which is Brazil and Latin America. However, climate action, along with others that +55 21 2127 4231 recent developments—as recently as also relate to environmental matters); São Paulo (T&C) June and August 2020 in Brazil—sug- the Paris Agreement and its nationally +55 11 2504 4214 gest that an increase in climate-related determined contributions (“NDCs”); lawsuits is just around the corner and and the incorporation of environmen- that companies should get prepared. tal, social and corporate governance Gedham Gomes (“ESG”) indicators to measure the The year of 2020 will certainly be [email protected] remembered as a landmark to the sustainability and societal impact of Rio de Janeiro strengthening of global awareness businesses. regarding climate change, as the In January 2020, the World Economic +55 21 2127 4254 COVID-19 pandemic and the resulting Forum published The Global Risks 2 confinement measures proved that Report 2020 , listing the major global Victor Rodrigues reducing carbon emissions is possible. risks in terms of likelihood and impact. Data gathered during the first months For the first time in almost two [email protected] of the pandemic showed that decline decades, the top five most probable Rio de Janeiro (T&C) in ground transportation, airline traffic risks were related to environmental +55 21 2127 4253 and electricity use were the main matters,3 and climate action failure factors that contributed to the reduc- occupied the distinct position of tion of greenhouse gas (“GHG”) second-most probable risk and first- emissions, causing them to drop by most significant risk in terms of impact. 8.3 percent in the first four months of On a side note, it is remarkable that the 2020 in relation to 2019.1 risk of “rapid and massive spread of Climate change, of course, is not a infectious diseases” appeared only at new concern. Governments, corpora- the 10th position in terms of impact tions and society have long ago come and did not even appear in the likeli- to recognize climate change risk as a hood list—at the time the report was social and financial issue, and several published, COVID-19 was already a steps have been taken during the reality in China. past 30 years to address the issue. This sends a clear message on how Just to name a few: the United non-financial matters can cause devastating impacts to corporations, countries, their realities. One of the first successful cases of climate people and economies, especially when it comes to litigation in Latin America is Colombian: represented environmental issues and, in particular, climate by Dejusticia, a think tank focused on promoting change. Still, despite international efforts to push human rights in Colombia, a group of 25 young forward a global response, governments and major people, from seven to 26 years old, filed a lawsuit companies are failing to provide concrete and against the Colombian government seeking the integrated measures to ensure GHG reduction goals protection of the Colombian Amazon against are met and climate change is slowed down. deforestation. In 2018, the Supreme Court of Justice For this reason, the last few years have seen a surge of Colombia acknowledged the government’s in climate-related litigation worldwide, a relatively omission in preventing deforestation and its impacts new class of litigation seeking that governments and on climate change and the protection of future companies adopt and ramp up effective measures to generations, demanding the government to take address climate change, such as complying with appropriate measures to protect the forest and meet NDCs, reducing carbon footprint and controlling its NDC, pursuant to the Paris Agreement. deforestation, human rights being commonly used In Brazil, climate litigation cases are more incipient as grounds for several of these claims. One example and begin to take form as courts, public prosecutors of successful climate litigation is the landmark ruling and NGOs become aware of the matter. The first issued in Urgenda Foundation v. Dutch government, signs of climate change awareness in Brazilian courts where the Dutch Supreme Court upheld previous began to appear in the background of rulings, such lower court decisions and established that, by the as when the São Paulo State Court of Appeals end of 2020, the Dutch government must reduce prohibited the use of fire in sugar cane plantations emissions by at least 25 percent compared to 1990 due to its implication in global warming, and when emissions, in line with its human rights obligations. the Paraná State Court of Appeals acknowledged Climate litigation can also be cross-border. In 2015, the obligation to preserve mangroves, considering Saúl Luciano Lliuya, a Peruvian farmer, filed a claim in their important role against climate change. a German court against RWE AG, the largest electric- Nevertheless, even though Brazilian courts are yet to ity producer in Germany, seeking compensation for issue decisions in actions directly related to climate damages caused by the rising of Lake Palcacocha, a change, Brazil has been increasingly showing signifi- glacial lake located above his town of Huaraz, Peru. cant signs that climate litigation is a trend that According to Lliuya, RWE, as a major GHG emitter in cannot be ignored. As early as 2010, the São Paulo Europe, contributed to the melting of Peruvian State Public Prosecutor’s Office filed actions against mountain glaciers. Although a lower court dismissed more than 30 airline companies seeking compensa- the claim due to the impossibility of establishing a tion for GHG emissions. Ten years later, none of the “linear causal chain” between alleged damages and companies were considered liable, but one of those RWG’s activities, in 2017 the Higher Regional Court of actions, filed against KLM Royal Dutch Airlines, is Hamm overruled such decision and allowed the claim pending analysis by the Superior Court of Justice5. 4 to continue and advance to discovery. Regardless of In 2019, IBAMA, which is the Brazilian equivalent of its outcome, the fact that the court of appeal allowed the United States Environment Protection Agency Lliuya v. RWE AG to continue shows a horizon of (“EPA”), filed an action against a steel company and possibilities to impose liabilities on companies its shareholders seeking compensation for climate resulting from GHG emissions. damages caused by the burning of illegal coal in the Although prominent and far more common in the production of steel. In June 2020, opposition United States and Europe, climate change litigation political parties filed lawsuits against the Brazilian is a trend that has already set foot in Brazil and Latin government due to its lack of action in connection America in general, which are taking their first steps with the Climate Fund and Amazon Fund, which in in learning from international experience and trying practice has been leading to the suspension of the to replicate and translate such efforts to their local funds’ operations, impacting projects, research and 2 MAYER BROWN | Climate Change Litigation in Brazil and Latin America: An Increasing Trend That Companies Must Be Prepared For activities that seek to mitigate climate change and global warming, ESG and climate change awareness that otherwise could be benefited by the fund’s increasingly occupy global agenda, it is natural that reserves. Public hearings are expected to be held Brazil and Latin America follow the same path of soon by the Brazilian Supreme Court to discuss North American and European nations. Particularly in these actions. Brazil, recent developments suggest that it is fairly Lastly, as recently as August 2020, the Brazilian reasonable to expect a steep increase of climate Association of Environmental Public Prosecutors change litigation, both against the Brazilian govern- partnered with the Institute for Climate and Society ment, which is currently widely perceived to neglect to promote a climate litigation capacitation course environmental and climate change matters, as well as for prosecutors, for purposes of discussing and major corporations from carbon-intensive industries. aligning strategies for combating climate change in The fact that Brazilian prosecutors are being capaci- the Brazilian context. tated nationwide to that end speaks volumes about the perspectives of climate litigation in Brazil, and it is There is no doubt that climate-related litigation has just a matter of time before climate-related actions come to stay and presents itself as an additional tool become a top priority issue in the agenda of compa- for compelling governments and companies to nies with a presence in Brazil and Latin America. tackle climate change with effective measures. As Endnotes 1 Liu, Z. et al. COVID-19 causes record decline in global CO2 emissions. Preprint at https://arxiv.org/abs/ 2004.13614 (2020). 2 World Economic Forum, The Global Risks Report 2020, at http://www3.weforum.org/docs/ WEF_Global_Risk_Report_2020.pdf (2020). 3 In order of likelihood: extreme weather, climate action failure, natural disasters, biodiversity loss and human-made environmental disasters. 4 Climate Case Chart, Luciano Lliuya v. RWE AG, at http://climatecasechart.com/non-us-case/lliuya-v-rwe-ag/ (last visited on August 25, 2020). 5 Appeal No. 1856031, Proceeding No. 0046991-68.2012.4.03.9999 / SP (2020/0001750-7). Mayer Brown is a distinctively global law firm, uniquely positioned to advise the world’s leading companies and financial institutions on their most complex deals and disputes.
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