TotalEnergies [TTE:FP], a French oil major, could face a landmark case in which a French court may order the company to cease the development of an east African pipeline, as reported by Reuters on February 27. The case is based on the 2017 French Corporate Duty of Vigilance Law that holds large companies liable for environmental and human rights risks. The suit accuses TotalEnergies of drilling in a natural park that is home to endangered species and expropriating land from over 100,000 people without providing sufficient compensation. TotalEnergies claims that its relocation, compensation, and vigilance plans are fair and legal, and that the French court does not have jurisdiction over its subsidiary TotalEnergies EP Uganda’s overseas operations.

The case centers on the USD3.5bn East African Crude Oil Pipeline, which is currently being developed in Uganda and Tanzania, and in which TotalEnergies holds a 62% stake. The court’s decision will be the first in a case invoking the 2017 French law, which requires large companies to identify environmental and human rights risks in their global operations and supply chains and to develop strategies to mitigate those risks. The lawsuit seeks an emergency suspension of TotalEnergies’ east African projects until financial compensation has been paid to those affected by the company’s activities. The suit also demands that TotalEnergies rewrites its “vigilance plan” to address specific environmental risks associated with its operations in Uganda and Tanzania.

Sources:

https://www.reuters.com/business/energy/french-court-rule-landmark-totalenergies-uganda-case-2023-02-27/

https://www.ropesgray.com/en/newsroom/alerts/2021/january/an-overview-of-french-corporate-social-responsibility-legislation-for-us-based-multinationals