The Law Firm of Piacentile, Stefanowski & Malherbe LLP

Protection for Climate Change Whistleblowers

Massive empirical evidence supports the scientific consensus that the Earth’s climate is changing, and that human activity is a substantial factor contributing to this change. Overall global temperatures are increasing, polar ice is melting, sea levels are rising, all leading to a change in precipitation patterns and increasing weather volatility. Greenhouse gases produced by human activity, such as carbon dioxide, methane and nitrous oxide, lead to the greenhouse effect that is a major cause of these changes. Furthermore, activities such as agriculture, road construction, and deforestation can change the reflectivity of the earth's surface, leading to local warming or cooling. In fact, deforestation has more than one impact on global climate change, as not only do forests provide more reflective cooling than pavement or other artificial surfaces, but forests are a major carbon trap, replacing carbon dioxide with oxygen through photosynthesis. In particular, the vast deforestation of the Amazon basin rainforest is considered to be a major accelerator of climate change.

Though all of us are responsible for this change to some extent, certain industries are more significantly implicated than others. Fossil fuel companies—oil, gas and coal—and lumber companies in particular engage in activities that have a significant climate impact. Moreover, these industries have been alleged to have consciously engaged in prohibited or wrongful activities that exacerbate the climate crisis, actions that are illegal under U.S. law. For instance, in 2021 Global Plywood and Lumber Trading LLC pleaded guilty to importing illegal lumber from the Peruvian Amazon. In addition, these industries are alleged to have engaged in efforts to hide the impact of their actions. As long ago as the 1970s, the American Petroleum Institute formed a secret committee including representative of many major oil companies called the “CO2 and Climate Task Force,” to monitor and discuss the latest developments in climate science. In 1980, a scientist from Stanford University, John Laurmann, briefed the committee on the state of climate science, and he warned that if fossil fuels continued to be used, global warming would have “globally catastrophic effects” by the midpoint of the twenty-first century. Yet that same year, the American Petroleum Institute called on governments to triple coal production worldwide, claiming there would be no adverse consequences. The fossil fuel companies’ purpose for hiding what their research showed was, of course, maintenance of short-term profits at the expense of longer-term harms, and the consequent maintenance of share prices.

The best source for exposing these wrongful activities is often persons with inside knowledge of the companies’ actions—whistleblowers. Whistleblowers, however, need protection from retaliation at the very least, and in addition some personal incentives to encourage them to act. There are several statutes protecting and rewarding whistleblowers that can apply to those concerned with climate change. One such statute is the Lacey Act, originally enacted in 1900 prohibiting the importation of certain wildlife. In 1981, Congress added a provision protecting and rewarding whistleblowers who expose violations of the Act leading to successful enforcement actions. The Lacey Act originally only protected wildlife, but in 2008 it was amended to include a ban on trade in illegally sourced plants or plant products, including timber, wood, and paper. Timber from regions suffering devasting deforestation like the Amazon are such illegally sourced products.

Other statutes also may protect climate change whistleblowers in slightly less obvious ways. For example, persons who reveal how corporations have deceived the investing public about facts that could affect share prices are protected under the whistleblower protections of the Dodd-Frank Act, enacted in 2010, which protects and rewards whistleblowers who expose securities fraud. Under Dodd-Frank, hundreds of millions of dollars have been awarded to whistleblowers. When fossil fuel companies hide the impact of their product’s environmental impacts, despite their own internal research showing significant adverse consequences to the use of such fuels, they are not only contributing to climate change but are fraudulently concealing information that would have long-term effects on the companies’ share value. Such deceit could well be securities fraud. As noted, Dodd-Frank not only protects those who expose deceptive practices that could deceive investors but provides for financial rewards to them. Dodd-Frank also could protect and reward whistleblowers who expose lumber companies that fail to disclose their illegal sources of lumber; in hiding the source, they are of course lying to shareholders about criminal activity that could greatly impact share price.

The Foreign Corrupt Practices Act (“FCPA”) also provides protection to whistleblowers exposing companies that bribe foreign officials. After China, the country most involved in FCPA cases is Brazil, the heart of Amazonia. Illegal logging in the Amazon basis is a major contributor to adverse climate change, and there certainly could be a substantial likelihood that obtaining such illegal lumber will involve bribing corrupt Brazilian officials. Fossil fuel companies also are frequently involved in FCPA cases. Again, though these provisions may not be specifically focused on climate change, the wrongful acts the whistleblower exposes can contribute a great deal to the climate problem, and stopping those actions can be a part of our efforts to ameliorate the harm done to our planet.