UK and US legal decisions against fossil fuels

High Court overturns decision approving new UK coal mine:  The High Court has overturned the December 2022 planning permission granted by former Secretary of State for Housing, Communities and Levelling Up, Michael Gove, for West Cumbria Mining’ (WCM) proposed Whitehaven mine. Mr Justice Holgate ruled in favour of the appeal brought by Friends of the Earth and South Lakes Action on Climate Change. Holgate rejected WCM’s claim that coal from the Whitehaven mine would substitute for coal produced elsewhere and would not increase greenhouse gas emissions. He also agreed that Gove had unlawfully agreed the mine would be ‘net zero’ and would not affect the UK’s compliance with its emissions reduction target as the company would purchase international carbon credits. WCM said it would consider the decision. The company could ask the Secretary of State, Angela Rayner, to reconsider the application. (The Guardian, Friends of the Earth, South Lakes Action on Climate Change [Pdf],Cornerstone Barristers)

AND

US utility pays US$100 million fine to settle bribery case: The US Securities and Exchange Commission (SEC) has agreed to accept FirstEnergy’s offer of US$100 million to settle charges over its role in the Ohio bribery scandal. FirstEnergy acknowledged it paid about US$60 million to GenNow, a group controlled by Republican candidate Larry Householder, who was campaigning to be speaker of the Ohio House of Representatives. Householder routed some funding to other Republican candidates. Shortly after he was elected speaker in early 2019, Householder and FirstEnergy executives worked to pass House Bill 6, which provided a subsidy for FirstEnergy’s loss-making nuclear plants. The final bill included subsidies for two coal plants. Householder is currently serving a 20-year prison sentence for his role in the affair. The SEC also announced it is suing former FirstEnergy CEO Chuck Jones and accused him of committing securities fraud. In July 2021, FirstEnergy paid US$230 million to settle criminal charges over the bribery scandal. (Cleveland.com, US Securities and Exchange Commission)

 

from Bob Burton in Coalwire


Judgment on the Whitehaven coal mine: September 2024 legal briefing

In a blow to the fossil fuel industry, Friends of the Earth and South Lakes Action on Climate Change have won their court cases against plans to build a coal mine in Cumbria. Read our legal briefing and find out why the plans were unlawful, as well as destructive and unnecessary.
  Published:  13 Sep 2024    |      10 minute read

Key points

  • Friends of the Earth and South Lakes Action on Climate Change have won their legal cases against plans for a controversial new coal mine Whitehaven, Cumbria. The High Court has quashed the planning permission granted by former Secretary of State for Housing, Communities and Levelling Up, Michael Gove.
  • This result is a resounding victory for climate justice, and it shows the power of communities in standing up to the fossil fuel industry. It represents a serious blow to the fossil fuel industry.
  • Friends of the Earth’s legal case won on all grounds. We successfully argued that the then Secretary of State’s decision was unlawful given his approach to carbon offsetting, his finding that the mine would be “net zero”, his failure to consider the inevitable emissions from burning the coal extracted from the mine (the greater part of 220 million tonnes of carbon dioxide equivalent), and his reasoning on the international impact of the mine.
  • This is the first case on fossil fuel development in this country to be decided since the landmark Supreme Court judgment in the Horse Hill oil case brought by Sarah Finch(“the Finch case”), which Friends of the Earth supported as a legal intervener. It shows the huge significance of that judgment, and how it has fundamentally changed the process for considering proposed fossil fuel projects.
  • As a direct result of the Horse Hill judgment, the new Secretary of State and Deputy Prime Minister Angela Rayner withdrew from the legal challenge, as she accepted that Michael Gove’s decision had been unlawful. Friends of the Earth and SLACC had to proceed to trial anyway, as the mining company persisted in defending the legal challenge in spite of this.
  • This judgment is likely to further strengthen similar, ongoing legal cases against other fossil fuel developments, particularly in this country. And quite possibly abroad too.
  • Unless the mining company withdraws its application, the new government will now have to reconsider whether to allow the mine to be built. West Cumbria desperately needs new investment and new jobs, but Friends of the Earth doesn’t believe that a new coal mine is the right way to do this. They should be long-term, green jobs for the future.

Background and context

It’s been a long road to get to this result at the High Court. Our involvement in resisting this mine started over 7 years ago.

West Cumbria Mining Ltd (“WCM”) submitted a planning application for the mine to Cumbria County Council. Their proposal was to build the UK’s first new deep coal mine in over 30 years at a former chemical works site in Whitehaven, on the Cumbrian coast. At full production, the mine would produce 2.78 million tonnes a year of metallurgical coal, also known as coking coal, solely for the steel industry, until its scheduled closure in 2049.

However, following pressure from the Climate Change Committee  and campaigners, the former Conservative government decided it would be the decision maker, rather than the council. In 2021 it held a planning inquiry, by which point the council, formerly in favour of the mine, had withdrawn its backing. Friends of the Earth, and locally based opponents South Lakes Action on Climate Change (SLACC) participated as main parties (Rule 6 parties) in the inquiry, and provided detailed submissions to oppose the mine.

Disappointingly, in late 2022 Michael Gove granted planning permission.  This was widely criticised, including by Chris Stark, then chief executive of the Climate Change Committee, who called it “a very bad decision”.  Rain Newton-Smith, then chief economist and now Director-General of influential business group the CBI, described it as “a huge step backwards”. 

Friends of the Earth and SLACC brought legal challenges against Mr Gove’s decision. The cases were heard in the High Court from 16-18 July 2024. In a dramatic twist, the government announced on 11 July 2024  that it would not defend our legal challenges, and accepted that the planning permission was unlawful. This was a direct result of the Supreme Court’s landmark judgment in the Horse Hill oil case, published in June 2024, that the full climate impacts of proposed fossil fuel developments must be assessed in the environmental impact assessment. However, WCM refused to concede our legal challenges as well, and so the hearing in July had to go ahead.

Why do we oppose the mine?

We oppose the mine because it would have huge and unacceptable climate impacts. And the coal won’t even be needed. The Climate Change Committee, the government’s independent experts, have said  opening the mine “will increase global emissions and have an appreciable impact on the UK’s legally binding carbon budgets”. The mine’s total lifetime emissions, including from the burning of the coal, will exceed 220 million tonnes of carbon dioxide (CO2) equivalent.  That’s more than half of the UK’s total emissions for 2022. 

Also, we strongly disagree with WCM’s claim that the mine would be “net zero”. In making this claim, they planned to purchase carbon offsets from the Gold Standard Foundation (offsets finance projects which aim to remove carbon from the atmosphere, such as tree planting for example). However, the Foundation strongly opposes WCM’s plans, calling them  “greenwashing nonsense” and likening them to “smoke and mirrors accounting”.

Furthermore, the coal won’t be needed. The UK and EU steel industries (the main markets identified by WCM) are planning to move away from coal-based steelmaking. At the global level, the International Energy Agency has said  that if the world is to reach net zero by 2050, “No new coal mines […] are needed […] existing sources of production are sufficient to cover demand through to 2050”.

Cumbria needs long-term jobs for the future. A report by Cumbria Action for Sustainability says investing in green solutions could create 9,000 jobs in Cumbria over the next 15 years, in sectors like renewable energy, insulation and waste management.

The judgment

In a detailed judgment given by the Hon Mr Justice Holgate on 13 September 2024:

  1. The Judge agreed with Friends of the Earth and SLACC that the carbon emissions from burning the extracted coal – 99% of the emissions from the mine – were not properly considered during the planning process. The Judge concluded that “it is plain, following the decision of the Supreme Court in Finch, that the GHG emissions from that combustion are significant, likely, indirect effects of the project the subject of the planning application”. Furthermore, given the “scale and significance of those emissions”…they were an “obviously material consideration” which the Secretary of State should have taken into account [judgment at paras. 101 and 102; emphasis added].
  2. The Judge dismissed the arguments to the contrary made by the developer. WCM had argued that the Finch ruling did not mean that the Whitehaven planning permission was unlawful. It had sought to distinguish Finch on the facts, saying that whilst it had not provided any information on the coal’s combustion emissions in its environmental statement, the Inspector and the Secretary of State knew what these were because Friends of the Earth and SLACC had supplied the figures during the planning inquiry. However, Justice Holgate rejected this argument, holding that “it is the applicant who is responsible for producing information which is legally essential for a compliant ES” [para. 115, judgment].
  3. In doing so, the Judge emphasised the fundamental importance of public participation in environmental assessment process. In relation to effects of the proposed development, the judge held [para 116; emphasis added] that “The public was entitled to participate in a EIA process in which they could respond to such material. It was not for the public to have to produce key components of that information.” The Judge concluded that WCM’s environmental statement was “so deficient that it failed to comply with the 2011 Regulations” on environmental impact assessment [judgment at para. 187(i)]
  4. The Judge agreed with Friends of the Earth that the Secretary of State acted unlawfully in accepting WCM’s claim that the mine would be ‘net zero’ and have no impact on the country’s ability to meet the emissions cuts required under the Climate Change Act 2008 (CCA). The mining company had claimed it would ‘offset’ the emissions from its mine through purchasing carbon credits from abroad. However, UK government policy does not allow reliance on international offsets to address UK carbon emissions. This point had been made by Friends of the Earth at the inquiry [judgment at para.217], but had not been addressed in either the Inspector’s Recommendation or in the Secretary of State’s decision [para. 219]. That was unlawful, as the point was a “principal important controversial issue” and an “obviously material consideration” to assessing WCM’s claim that the mine was “net zero” [para. 220].
  5. The Judge also agreed with both Friends of the Earth and SLACC that the Secretary of State’s approach to substitution was inconsistent and legally flawed, in multiple ways. WCM had contended in the inquiry that Whitehaven coal would simply ‘substitute’ for coal that would otherwise be extracted elsewhere in the world, so there would be no net increase in global carbon emissions. In court, WCM argued that the Secretary of State had accepted their proposition that Whitehaven coal would result in perfect (as in 100%) or virtually perfect substitution. Both Friends of the Earth and SLACC disputed this. And the Judge agreed, concluding in relation to the Inspector’s and Secretary of State’s reasoning on this issue: “With great respect, I find it impossible to reconcile the inconsistencies and muddle” [para. 175]. At para. 176, the judgment refers to a “patent contradiction” between on the one hand, the Secretary of State’s statement that if the mine didn’t go ahead, then “equivalent emissions” would occur from coal extracted elsewhere, but then at the same time, that emissions from the use of coking coal are “to some extent inevitable whether coal from the proposed development or other sources are used”.
  6. The Judge also held that the Secretary of State and the Inspector failed to address the claimants’ evidence in relation to demand from the Asian market for coal. That evidence again contradicted WCM’s claim that the Whitehaven mine would be ‘net zero’ [para. 183 and 185; judgment]. Furthermore, the Secretary of State had failed to give “legally adequate reasons” which had caused “substantial prejudice” [para. 187(vi)].
  7. The Judge further agreed with both claimants that the Secretary of State had not grappled with the evidence before him that a new coal mine would set a negative precedent internationally. This had included evidence from John Ashton CBE, a former Special Representative for Climate Change at the Foreign and Commonwealth Office, and Sir Robert Watson, former Chair of the UN’s Intergovernmental Panel on Climate Change. The Secretary of State’s finding that the mine would cause no net increase in carbon emissions was, the Judge concluded, “legally flawed” [ para. 208].
  8. Even if that assumption had been correct, the Judge held that the Secretary of State had failed to grapple with Friends of the Earth and SLACC’s further argument that it was fundamentally inappropriate to use carbon offsets, which are a finite/limited resource to justify a new coal mine. That was however, a “substantial point” and failing to address it was unlawful [para. 210; judgment].
  9. Finally, the Judge rejected WCM’s argument that had these legal errors not occurred, the result would inevitably have been the same [para. 188]. He ordered that the planning permission be quashed.

Wider implications

WCM has suffered a resounding defeat in court. Today’s judgment sends a powerful signal about the importance of the Finch Supreme Court ruling for fossil fuel projects. It shows unequivocally that the process for seeking permission for these climate-wrecking projects has fundamentally changed. The Judge’s findings in relation to carbon offsetting and substitution are very important as well. WCM had been relying on these points to support what in our view was a ludicrous and dangerous claim, that this would be a “net zero” coal mine. Friends of the Earth’s position is that there is no such thing. Carbon offsetting cannot be used to justify new fossil fuel developments. And once a fossil fuel is extracted from the ground, and burnt, those emissions contribute to climate change. The ruling on these points is very significant. Reliance on ‘substitution’-type arguments is a common ploy of fossil fuel promoters. And Friends of the Earth believes that carbon offsetting is a dangerous distraction from the urgent need to reduce carbon emissions, and is being used by some to justify business as usual.

This judgment strengthens the hand of other, ongoing legal challenges to other fossil fuel developments, such as that against the Rosebank oil field. There may well be implications internationally, given similar challenges are underway abroad as well. For example, Natur og Ungdom (Young Friends of the Earth Norway) and Greenpeace Nordic have a live court case against the Norwegian Government  over its failure to assess the end-use emissions of three oil and gas fields.

The Judge makes a reference to the relevance of a “precautionary approach” by decision-makers where the risk of harm is more serious [para. 112]. The precautionary principle is a principle under EU and international law, and this is a useful reference in a domestic case following the UK’s departure from the EU.

Finally, it’s incredible that we’ve come back to win on all grounds, after Justice Cranston originally refused us permission on all of our grounds, finding on the papers (not at a hearing) in April 2023 that our case was not even arguable. Following our hearing at the High Court in July 2024, this judgment really shows how wrong that initial appraisal was. Other environmental claimants who are advised that their claims have merit, should bear this in mind if their cases are refused permission at the first round. Given WCM persisted in defending this challenge after the government withdrew – they, as well as the Government, have been ordered to pay both Friends of the Earth and SLACC’s costs (subject to Aarhus costs caps – caps in environmental claims). Again, it may be useful for other environmental claimants to be aware of this, if they find themselves in court against multiple defendants, as we did, and the government concedes before the hearing.

Next steps

Friends of the Earth believes this unnecessary and destructive mine must be stopped. This fantastic victory in court is a critically important step to making sure that happens. It is also a further nail in the coffin for other new fossil fuel developments.

It remains to be seen if WCM will try to appeal the Judge’s decision. If they do, then we will defend our victory in court.

We believe that WCM should give up the ghost and withdraw its application for permission for this mine. If it doesn’t do this, then Deputy PM and Secretary of State Angela Rayner will need to reconsider whether to grant permission for the mine. She could make a call for further evidence, or begin a new planning inquiry. Given the overwhelming evidence on the climate impacts of this mine, we believe there can only be one answer: a refusal of planning permission. Whatever happens, we will continue to oppose this mine, alongside community groups in Cumbria.

Labour HQ has been clear in its opposition to the mine. Responding to the previous government’s decision to approve the mine, Ed Miliband, then shadow energy secretary, said:  “A Labour government will leave no stone unturned in seeking to prevent the opening of this climate-destroying coal mine, and instead ensure we deliver the green jobs that people in Cumbria deserve.” This was echoed by shadow justice minister Alex Cunningham, who in 2023 told the BBC:  “We’ll be in government before they get to that stage and believe you me – we will not allow that project to go ahead.”

The new government must ensure that West Cumbria and areas like it are at the forefront of building a clean and green future and get the investment, the business opportunities and the new jobs that are so desperately needed. There are clear opportunities in this regard. Friends of the Earth calculated that a programme to insulate homes in West Cumbria could create as many jobs as the mine and could also save households hundreds of pounds a year in energy bills. Recent analysis by Friends of the Earth also shows that Cumbria is one of the top 3 areas in England with the potential for the development of onshore wind. This again could create many jobs.

Legal briefing by Katie de Kauwe and Niall Toru, Lawyers at Friends of the Earth.

Further information

Friends of the Earth was represented in the legal challenge by barristers Paul Brown KC, Alex Shattock (both of Landmark Chambers), and Toby Fisher (Matrix Chambers) and by Rowan Smith and Julia Eriksen at the law firm Leigh Day. The in-house lawyers at Friends of the Earth are Niall Toru and Katie de Kauwe, as well as former lawyer Acland Bryant. The following Phil Michaels Legal Scholars have worked on our case and campaign at different times: Savannah Harper, Gabhan O’Tighearnaigh, Vivian Aiyedogbon, Flora Hausammann, Millie John-Pierre, Ava Lockyear and Alex Musset.

SLACC was represented by barristers Estelle Dehon KC and Rowan Clapp, of Cornerstone Barristers, and by Matthew McFeeley and Holly Law at Richard Buxton Solicitors.

For further information and for media enquiries, please contact the Friends of the Earth press team.


SEC sues former FirstEnergy CEO Chuck Jones over HB6 bribery scandal

AKRON, Ohio— The U.S. Securities and Exchange Commission on Thursday sued former FirstEnergy Corp. CEO Chuck Jones and accused him of committing securities fraud in connection with the House Bill 6 bribery scandal that landed Ohio’s former House speaker in prison for two decades.

Also on Thursday, the SEC settled its investigation into FirstEnergy, having accused the company of securities fraud. The company, as expected, agreed to pay a $100 million penalty that the settlement said would have been higher if not for the FirstEnergy’s cooperation in the investigation and “in a related enforcement action.”

Current FirstEnergy CEO Brian Tierney said in a statement about the company’s settlement that he was “pleased to have reached a resolution with the SEC as we continue to turn a new chapter.”

The lawsuit against Jones, filed in federal court in Akron, seeks a judge’s order to force the former CEO to pay back any money he earned from the scheme along with imposing unspecified civil penalties.

SEC attorneys wrote in the lawsuit that Jones received a $1.6 million bonus in 2019 and stock valued at $18.1 million around the time he and FirstEnergy bribed former Ohio House Speaker Larry Householder with $60 million. The money went to pass legislation worth $1.3 billion to bail out two nuclear plants that were owned at the time by a FirstEnergy subsidiary.

Messages were left for one of Jones’ attorneys, Carole Rendon. A FirstEnergy spokeswoman declined to comment on Jones’ lawsuit.

Jones helped carry out the bribery scheme after the company reported some $6 billion in losses in 2016, according to the lawsuit.

The lawsuit accuses Jones of lying to investors and the public regarding the bribe payments to Householder, which records show were made through dark-money channels that were shielded from the public for years.

Jones also misled FirstEnergy’s internal auditor when he failed to disclose the payments, according to the lawsuit. The SEC said that Jones later told the auditor that he was unaware of FirstEnergy’s law-breaking and that Jones as CEO failed to come up with internal controls to prevent misconduct.

Jones also lied on SEC filings when he failed to disclose the secret payments made to Householder and later lied to investors following arrests in the case when he said on a shareholder call that FirstEnergy had nothing to do with the payments to Householder, the lawsuit said.

“Both FirstEnergy’s secret payments, and Jones’s misrepresentations and omissions about them, would have been important to FirstEnergy’s investors,” SEC attorneys wrote. “Such payments—and the misrepresentations and omissions that followed—cast doubt on the integrity and judgment of FirstEnergy’s management, including Jones, and exposed both the company and its CEO to criminal and civil liability.”

Jones, 68, was FirstEnergy’s CEO from 2015 until he was fired in 2020, just months after FBI agents arrested Householder and four others in connection with the scheme, which prosecutors at the time called the largest bribery scandal in Ohio history.

Householder was sentenced to 20 years in prison and former FirstEnergy lobbyist Matt Borges was sentenced to five years in prison.

Four other were charged in the case. Two pleaded guilty and two, lobbyist Neil Clark and former Public Utilities Commission of Ohio chairman Sam Randazzo, died by suicide.

Federal prosecutors also secured a $230 million fine against FirstEnergy in a non-prosecution agreement in which the company admitted to paying the bribes.

As part of that agreement, the Akron-based utility agreed to cooperate with investigators.

No federal charges have been filed against Jones, but Ohio Attorney General Dave Yost’s office has charged Jones and former FirstEnergy Vice President Michael Dowling with racketeering, conspiracy and bribery in connection with a $4.3 million payment made to Randazzo.

Jones has pleaded not guilty in the case in Summit County Common Pleas Court. That case is on-going.

FirstEnergy also agreed to pay $20 million in a non-prosecution agreement with Yost’s office, bringing the total fines and penalties against FirstEnergy to $350 million.

The scandal also prompted shareholder lawsuits against the company, which settled for $180 million.

Adam Ferrise covers federal courts at cleveland.com and The Plain Dealer. You can find his work here.

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