Re-Subjectification of Nature? The (Missing) Legal Foundations of Transition Justice

Investment protection takes precedence over environmental protection, and international treaties ensure that companies can still profit even from climate measures by suing against the “curtailment of their profits.” A movement that elevates nature to a legal subject opposes this, as Kevin Rittberger and Fabian Flues show in their contribution to the BG text series “After Extractivism.”


Mr. Flues, you talk about the collision of investment protection treaties and climate protection. Prominent is the EU Energy Charter Treaty (ECT) from the 1990s, which currently allows RWE to sue the Netherlands for compensation of 2.4 billion because the Netherlands wants to achieve the Paris Agreement by phasing out coal, but RWE says our future profits are more important to us. Yet RWE was already able to increase profits by 50% in the first half of 2022 due to higher electricity prices. The reform of the Energy Charter that is currently under discussion sounds unconvincing. What are you advocating?

I advocate an exit from the Energy Charter Treaty. The reform does not fix the fundamental problems of the Treaty. Even the reformed treaty allows investors to file lawsuits in private arbitration courts if government measures restrict their profits. And the treaty is also to be extended to new technologies and energy carriers such as hydrogen, which is likely to lead to even more lawsuits. Especially in the case of new technologies, where the cost development is not yet foreseeable, it can quickly happen that state support mechanisms have to be adapted so that they remain financially viable. The Energy Charter Treaty makes this considerably more difficult, which is why there have been many lawsuits in the renewable energy sector. From this perspective, too, withdrawal is therefore the best solution.

However, it is not easy to withdraw from the Energy Charter. The British oil and gas company Rockhopper was able to sue Italy despite the exit thanks to the “sunset” clause, which guarantees companies rights for another 20 years and now allows them to continue drilling for gas off the coast. Is there also good news? And how are you trying to point out the urgency of exiting the growth logic of fossil capitalism?

In fact, this clause is a big problem, but it could be mitigated by a joint exit of many countries. In addition, new investments are no longer protected after an exit, and especially in times when a lot of money is being invested in liquefied natural gas terminals, this is very important. Some countries, such as Spain, Poland or France, are also repeatedly bringing a withdrawal into play – so a lot could happen in this respect in the next few months.

Investment protection treaties like the Energy Charter Treaty are a building block in the growth logic of fossil capitalism, because they make it considerably more difficult for governments to intervene decisively in the fossil sector. As a result, they can slow down the fossil fuel phase-out and allow companies to gold-plate fossil fuel misinvestments that they have made despite the looming climate crisis with taxpayer money. Thus, a break with the fossil age becomes more difficult and profiteers of the fossil order can rake in high profits for as long as possible.

In France, a climate protection law was torpedoed in 2017 by the oil company Vermillion from Canada simply by referring to the ECT agreement. In Pakistan in 2019, a mining company from Australia was able to defy national law and sue for 6 billion. Yet Pakistan had just received a loan of the same amount from the International Monetary Fund. The International Centre for Settlement of Investment Disputes, ICSID, has premises in Washington, under the umbrella of the World Bank. Once ICSID issues an arbitration award, it cannot be challenged at all in a national court. Are you also aware of any arbitration cases that have been won in the interests of climate protection?

While a lot is at stake for the states in such lawsuits, in some cases many billions, for the plaintiff investors it is only the procedural and legal costs. However, it regularly happens that states do not lose the proceedings. In about 20% of the cases, the arbitration court has no jurisdiction at all. However, when it does make a decision, investors win much more often than they lose. In the case of a lawsuit filed by a coal company against Canada for lack of compensation in connection with the coal phase-out, the arbitration court found that the legal requirements for a lawsuit had not been met. However, the fact that the case involved a climate measure by the Canadian government played no role in the dismissal of the case.

Germany, meanwhile, is the world leader in investment protection agreements. The EU Energy Charter is only one of 2,500 agreements worldwide, and the fossil fuel industry relies most frequently on arbitration. However, we have long since ceased to live in a “global risk society,” as sociologist Ulrich Beck once put it, but in what Jens Kersten, Professor of Public Law and Administrative Sciences at Ludwig Maximilian University in Munich, calls a “global danger community.”

The dangers are becoming more palpable, with new articles on the climate crisis appearing every day, ranging from warning to apocalyptic. The consequences of the current energy crisis and inflation are not even foreseeable yet. The question of distribution is being raised again. And the climate activists of “Ende Gelände” are more determined than ever before. Faced with the unbroken power of corporations in a climate that continues to be investment-friendly, it is hard not to fall into resigned cynicism. What is your strategy: pouring oil on the fire or calming the waves of alarmism?

My strategy lies in between: I don’t want to spread alarmism, because research on climate change communication has shown that this tends to discourage people. At the same time, it is of course necessary to point out the problems and dangers with all clarity. In my work with the NGO Power Shift, I try to combine this with concrete political demands that are both implementable and have a transformative effect. Withdrawing from the Energy Charter Treaty and other investment protection agreements is one such demand, and we are very happy that it is shared by many people. As a result, we were able to collect over one million signatures across Europe for an exit from the treaty.

Artwork: Colnate Group (cc by nc)

The concept of “transition justice” poses “legal and political questions of accountability” and urges “responsibility for the consequences of the slow violence of ecological devastation” (Magdalena Taube/Krystian Woznicki). Is there actually an international judiciary that could undermine the power of the arbitral tribunals that protect investment agreements?

I am not aware of any such jurisdiction, but it is very important to remember that the states that sign such treaties remain “”masters of the treaties” even after they have signed them. Not only can they withdraw from them, but they can also amend them or even dissolve them. This is what has happened in some cases. The European Court of Justice has declared the use of such arbitration tribunals within the EU illegal. Now all investment treaties between EU member states must be terminated, and for some this has already happened. This shows: We are not helplessly at the mercy of the arbitration courts – we can act and end the treaties.

There are also exciting initiatives to impose binding standards on internationally operating companies. The UN Human Rights Council is working on an agreement that would make it possible to hold transnational companies accountable for human rights violations or environmental destruction. Unfortunately, the countries of the Global North are putting the brakes on this.

In many jurisdictions around the world, we can see how natural objects are becoming legal subjects, such as a lake in Florida (Mary Jane) defending itself against investors, a river in Australia (Yard River Protection Act), an entire Amazon region in Colombia, and a sea bay in southern Spain (Mar Menor). In Ecuador, nature has already made it into the constitution as a rights holder. In Switzerland, the Federal Constitution is now to be amended in this regard.

In Germany, too, there is now a discussion about how the constitutional order could recognize the legal subjectivity of nature unfortunately, not even the Greens have included this in their party program. The state constitution of Brandenburg already goes one step further. Here it says: “Animals and plants are respected as living beings. Species and species-appropriate habitat are to be preserved and protected.” Thereby, with the use of the term “respect,” nature receives “a subjective-legal legal position.” What makes you hopeful when you think about this global trend? And, with regard to said transitional justice, do you think the transformation of legal foundations necessary in this context is local, global, or glocal?

I think that the law is catching up here with a development that has been taking place in wider society and culture for many years: The recognition of the importance of nature to our own (survival) lives, but also of the value of nature itself. How exactly this can be reflected in law and jurisprudence remains to be seen, but it reflects our own shift in consciousness and culture.

What I also find exciting about it is that it contrasts so strongly with international investment law, which I deal with a lot. Here, only property rights are protected, and far more so than in most national legal systems. In contrast, the movement to recognize nature as a legal subject is an important and desirable countermovement.

Note from the editors: This text is a contribution to the Berliner Gazette’s “After Extractivism” text series; its German version is available here. You can find more contents on the English-language “After Extractivism” website. Have a look here:

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